Stockbrokers in the Philippines have appealed to the Securities and Exchange Commission (SEC) to delay the removal of minimum commission fees on stock trades. They believe this should be postponed until the stock transaction tax is reduced to protect both brokers and investors during challenging market conditions.
The Philippine Association of Securities Brokers and Dealers Inc. (PASBDI) has called for the simultaneous implementation of reduced commission fees and a lower stock transaction tax, from 0.6 percent to 0.1 percent, in order to boost trading activity. In a letter dated April 18 addressed to SEC Chair Emilio Aquino, Philippine Stock Exchange (PSE) president Ramon Monzon, Finance Secretary Ralph Recto, and Investment and Economic Affairs czar Frederick Go, PASBDI emphasized the importance of these reforms.
PASBDI, a 50-year-old organization with 122 PSE trading participants as members, expressed concern about the decline in the number of broker-members due to current market conditions. They believe that reducing the broker commission charge alone will not significantly increase transaction volume but when coupled with the reduction of sales tax, it could lead to a more impactful reform appreciated by a broader investor base.
Lawmakers have been pushing for a reduction in the stock transaction tax to 0.1 percent through House Bill No. 9277, which was approved by the House of Representatives on its third and final reading last month. PASBDI’s letter comes in response to an SEC memorandum circular allowing brokers to set their own commission schedules for transactions with investors, eliminating the previous minimum fees required by the agency.
The SEC justified its decision citing the rise of online trading platforms that have made transactions more cost-efficient. The regulator also noted that neighboring jurisdictions do not impose minimum stock broker commission requirements. PASBDI remains committed to supporting its members through market changes and investing in technology, education, and collaboration to ensure the long-term sustainability of the stock market ecosystem.
