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Senate approval of CMEPA to encourage more investments in capital markets–Gatchalian 

Senator Win Gatchalian said the enactment of the proposed Capital Markets Efficiency Promotion Act (CMEPA) is expected to draw more Filipinos to invest in the country’s capital markets.

“CMEPA will not only make investments more affordable, but it will also empower our countrymen to take control of their financial futures,” Gatchalian said following the Senate’s approval of the proposed measure on third and final reading. 

Once enacted, the measure will reduce stock transaction tax from 0.6% to 0.1%. “By slashing this rate to 0.1%, we dramatically reduce the cost of investing and trading, allowing us to align more closely with our regional peers who offer more competitive rates,” said Gatchalian, chairperson of the Senate Committee on Ways and Means. 

The senator emphasized that strengthening the capital market would give people the chance to grow their savings and encourage more investments. 

“We cannot ignore the reality that investing in the Philippines is more expensive compared to many of our neighboring countries, which creates barriers for more Filipinos to participate in our capital markets, thus the need for the enactment of CMEPA,” Gatchalian said. 

He disclosed that the country’s stock market capitalization to Gross Domestic Product (GDP) stands at only 54.1%, significantly lower than the average of 78.3% in other major economies in Southeast Asia. 

“Kapag mas maliit ang stock market capitalization, nangangahulugang mas limitado ang daloy ng pera sa merkado na magagamit sana ng mga negosyante sa pamumuhunan. Ang mga datos ay malinaw na nagpapakita na ang Pilipinas ay napag-iiwanan sa ating mga kapitbahay na bansa,” he said. 

Based on the 2021 Financial Inclusion Survey conducted by the Bangko Sentral ng Pilipinas, only 1 out of 10 Filipino adults have investment products as many Filipinos often view the capital market as something inaccessible to ordinary people and available only to affluent individuals or entities. 

Another crucial provision of the proposed measure includes lowering the documentary stamp tax on the original issue of shares of stocks to 0.75% from the current 1%. 

Photo by Mark Cayabyab/OS WIN GATCHALIAN