How to Invest in the Stock Market in the Philippines?

What is stock market investing?

Investing in the stock market involves buying financial securities – primarily stocks or bonds – with the aim of making a profit in the medium or long term. These securities are traded on financial markets, where buyers and sellers meet.

Investing in the stock market allows you to become a shareholder in a company (through stocks) or a creditor (through bonds). In return, the investor can receive income (dividends or interest) and hope for a capital gain when reselling the securities. This type of investment is therefore a way to grow your savings by taking advantage of the development of companies and the economy in the Philippines.

Unlike speculation, which relies on short-term operations that are often riskier, investing in the stock market is a long-term strategy. It requires a good understanding of how the markets work, accepting a degree of risk, and diversifying investments to limit exposure to losses.

What are the different accounts for investing in the Stock Market in the Philippines?

To invest in the stock market, it is essential to open a proper investment account that will hold your financial assets (such as stocks, bonds, ETFs) and centralise your trading activities. In the Philippines, several types of investment accounts are available, each offering different tax implications, contribution rules, and investment objectives:

Here’s an updated comparative table, including an "Investor Profile" column to help you better match the account type to your goals and experience:

Once you have opened your investment account, you must select a financial intermediary to place your stock market orders. Here are the main options available in the Philippines:

• A licensed stockbroker: Ideal for investors who value human advice and support. Major players include COL Financial, BDO Securities, and FirstMetroSec.
• An online brokerage platform: Best for self-directed investors seeking low-cost access to the PSE and international markets. Popular platforms include COL Financial, BPI Trade, and AB Capital Securities.
• A robo-advisor: Emerging in the Philippines, offering automated portfolio management based on your risk profile (e.g., Seedbox Philippines).
• A CFD broker (international only): Suitable for experienced traders wishing to speculate on short-term market movements using leverage, though not regulated by local authorities (e.g., eToro, IG International).

What to Invest in on the Stock Market?

The Stock Market offers a wide range of financial products allowing you to diversify your portfolio according to your objectives, risk appetite, and investment horizon. Here are the main types of assets in which it is possible to invest:

Stock Trading

Shares represent a portion of a company's capital. By buying a share, you become a shareholder and may receive dividends (a portion of the profits) and hope for a capital gain on resale if the price increases. Shares are investments with high potential returns, but also high risk, as their value depends on many factors (company results, economic situation, geopolitics, etc.).

The best stocks to invest in the stock market depend on your goals and investment style. Thus, you will not invest in the same stocks whether you are looking for a regular return or a significant capital gain.

• For a steady return: you should favor the most stable stocks such as Astrazeneca, Total, or McDonald's.
• For significant capital gain potential: you should favor growth stocks such as Tesla, NVidia, Apple, or Airbus.

Our Opinion

Stocks are suitable for investors willing to accept market volatility in exchange for the prospect of higher long-term gains. Sector and geographic diversification is essential to limit risk.

ETF (trackers)

ETFs (Exchange Traded Funds) are index funds listed on the stock exchange. They replicate the performance of an index (such as the CAC 40, the S&P 500, or the MSCI World) by investing in all the securities that compose it. ETFs are traded like stocks, in real time, and allow for broad diversification at a lower cost.

Our opinion

ETFs are particularly suitable for beginner or intermediate investors who want to easily gain exposure to a market or a sector, without having to choose each security individually. It is an excellent tool for long-term passive management.

Mutual Funds

FCPs are collective investments actively managed by professionals. They pool the savings of multiple investors to create a diversified portfolio, according to a defined strategy (stocks, bonds, mixed, thematic, geographic, etc.). Unlike ETFs, their valuation is done once a day, and their fees are generally higher.

Our opinion

Mutual Funds are for investors who prefer to delegate the management of their portfolio to experts. They are well suited to those who wish to benefit from a structured management framework, at the cost of a return often lower than ETFs, due to fees.

Obligations

Bonds are debt securities issued by governments or companies. By buying a bond, you lend money to the issuer, who agrees to repay you at maturity, with the payment of regular interest (coupon). Bonds are generally less risky than stocks, but offer a more moderate return.

Our opinion

Bonds are an essential component of a balanced portfolio, especially for cautious investors or those close to retirement. They help stabilize overall performance and ensure regular income.

How to invest in the stock market when you are a beginner?

More and more young people are now getting into stock market investing, but there is no age limit to starting in this field. However, as a beginner investor, it is necessary to take some precautions before starting.

• The simplest solution is to entrust the management of your investments to a third party whose job it is, such as a financial advisor or software specially developed for this purpose, such as a robo-advisor.
• It is also possible to make your own investments in the stock market, but in this case, it is preferable to take the time to train and take an interest in the functioning of the markets before starting to invest your money.
• Since an investor does not become profitable overnight, it is also preferable to not invest money in the stock market that you may need to live on or to cope with unforeseen expenses.
• Similarly, it is necessary to put in place a precise investment strategy and ideally in the long term by setting achievable objectives and taking risk into account.

When to Invest in the Stock Market?

While it is possible to make stock market investments at any time, it is necessary to identify good opportunities before buying stocks. To know if it's the right time to buy one or more stocks in the stock market, you need to ask yourself these simple questions:

• What is the current economic situation? Is there growth, or are we in a period of crisis?
• What level of risk are you willing to take? An investor with a high-risk appetite will frequently find interesting opportunities in the stock markets, while a cautious investor will prefer to wait before investing.
• What is a listed stock really worth? The intrinsic value of companies listed on the stock exchange must be defined in order to know if it is the right time to acquire the shares.
• When does the company pay its dividends? Finally, if you have opted for a yield strategy with stocks that allow you to receive a dividend, you must hold these shares no later than the day before the ex-dividend date.

Why Invest in the Stock Market?

Investing in the stock market offers numerous advantages for growing your wealth, protecting your capital against inflation, and diversifying your income streams. Here are the main reasons to invest in the financial markets:

• Grow your savings in the long term: Stock markets have historically generated attractive returns over several decades. Regular, long-term investment allows you to benefit from the growth of companies and the economy.
• Protect your capital against inflation: Uninvested savings lose value over time. By aiming for a return higher than inflation, the stock market makes it possible to maintain or even increase the purchasing power of your capital.
• Generate passive income: Some stocks distribute regular dividends. Bonds pay coupons, offering a stable income to the investor.
• Diversify your assets: The stock market can complement real estate investments or secure savings products.
• Good diversification reduces exposure to a single type of asset or risk.
• Easily access global markets: With online brokers and ETFs, it is possible to invest in thousands of companies around the world. This makes it possible to position oneself in different sectors, geographical areas and levels of economic development.

Good to know

The stock market is a powerful tool for investors ready to adopt a long-term vision. Well managed, a stock portfolio can become a lever for sustainable growth and a pillar of your wealth strategy.

Which broker to choose to invest in the Stock Market in the Philippines?

To invest in the stock market, it is essential to go through an accredited financial intermediary, called a broker. They transmit your buy and sell orders to the markets. The choice of broker directly influences your investment experience, the fees you pay, the products available, and the tools at your disposal.

Here are the main categories of brokers available in the Philippines, with their characteristics:

Expert's Opinion:

• An independent investor who wants to diversify at a lower cost will prefer an online broker.
• An active trader will opt for a CFD broker, being aware of the risks.
• A beginner or long-term saver will prefer automated management with a robo-advisor.
• Finally, a cautious profile or someone attached to their bank will use a bank broker, despite higher fees.

How Much Money Do You Need to Invest in the Stock Market?

The amount of money needed to invest in the stock market will depend on various factors, especially your personal financial situation. Here are the rules to follow if you want to get started:

• Invest a portion of your savings in the stock market: It's important not to put all of your savings into your stock market investments. You should keep some of your savings to use in case of need. Ideally, if you can, keep 20% of your capital in a secure investment or a classic savings vehicle and invest 80% in the stock market.
• Invest in the stock market with a small budget: It is entirely possible to invest in the stock market with a small budget. It is not necessary to have a large capital to start building a stock portfolio. PHP 30,000 to PHP 60,000 will be enough to create the basis of it and you can then reinvest your income from dividends or capital gains to buy new securities.
• Don't put all your eggs in one basket: If the stock market is attractive in terms of return and investment, it is necessary to properly distribute the money you invest in the stock market, ensuring that your portfolio is diversified. For example, you can invest part of it in stocks, another part in one or more funds, and another part in bonds.

Investing in the Stock Market with a Small Budget: Our Tips

If you are a beginner investor and want to invest small amounts in the stock market, you have two solutions:

• Invest your current savings: this is possible from ₱30,000
• Invest a small amount each month : you can also freely make payments to your stock investment accounts, such as a securities account, to gradually fund it.

What is the taxation on income from stock market investments in the Philippines?

Income generated from stock market investments — including capital gains, dividends, and interest — is subject to taxation in the Philippines. Investors must be aware of several types of taxes applied depending on the nature of the income and the type of account used. Here’s an overview of the applicable tax rules:

1. Capital Gains Tax (CGT) and Stock Transaction Tax (STT)

In the Philippines:

• Capital gains tax (CGT) on the sale of shares not traded on the Philippine Stock Exchange (PSE) is 15% based on the net gain.
• For shares traded on the PSE, Capital Gains Tax does not apply. Instead, a Stock Transaction Tax (STT) of 0.6% of the gross selling price is levied on every sale, regardless of profit or loss.
• Dividends received from Philippine corporations are subject to a 10% final withholding tax.
• Interest income from bonds or time deposits is taxed at 20% final withholding tax.

Note:
Gains on foreign securities (non-PSE listed) are subject to normal capital gains tax rules.

2. Tax Treatment by Type of Account

3. Treatment of Losses

• Capital losses on PSE transactions cannot offset the Stock Transaction Tax (STT), since STT applies regardless of loss.
• Losses from the sale of non-PSE listed shares (private shares) may be offset against capital gains from other private share sales in the same year.
• No carryover of unused capital losses to future years is generally allowed in the Philippines.

Important

Only losses on transactions subject to CGT can be used to offset gains subject to the same tax.

4. Special Case: Dividends

• Dividends from domestic corporations are generally subject to a 10% final withholding tax.
• Foreign dividends are taxed at the individual's regular income tax rates, with possible foreign tax credits depending on applicable tax treaties.

Example

If you receive PHP 10,000 in dividends from a listed Philippine company, PHP 1,000 (10%) will be withheld automatically as tax, and you will receive PHP 9,000.

Our 5 Tips for Smart Stock Market Investing

Now that you know the basic rules of stock market investing, here are five simple tips to follow to quickly become a profitable investor:

• Set achievable goals: Every investor should set financial goals for their different investments. These goals will depend on the objective of the investment. Is it to prepare for retirement, finance a purchase, or a specific project? A motivating goal will be an engine that allows you to dedicate yourself to your investment with passion.
• Learn about the stock markets: Good knowledge about the stock markets and how they work is essential if you want to make profitable investments. So take some time each week to inform yourself and train yourself. There are many online training modules that allow you to learn analysis methods, and you can also consult targeted financial news feeds.
• Favor a long-term investment horizon: Unless you are an expert in the financial markets and want to speculate in the short term to generate maximum profits in a short time, it is more prudent to invest with a long investment horizon. Speculation presents many risks that you can avoid with progressive investment.
• Know your risk tolerance: You must define as precisely as possible the level of losses and variability of your capital that you are willing to assume. Remember that the higher the potential return of an asset or market, the higher its level of risk. A strong aversion to risk should guide you towards the least risky instruments, such as bonds or certain secured funds. If you have a high tolerance for risk, you can try riskier investments such as stocks or https://hellosafe.fr/investissement/crypto-monnaie/prometteuses>.
• Don't let your emotions take over: Finally, investing in the stock market is an activity that can generate all sorts of emotions such as stress, infatuation, or fear. A good investor must not let these feelings make them make bad decisions and must always keep their initial strategy in mind and stick to it.

Want to invest in the stock market on your own and independently? Join a quality online broker now and start placing your orders on the market.

All our guides on stock market investment

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.