PSE Stock Trading Fees and Charges (with Computations)

How much do you need to start buying stocks in the Philippine Stock Exchange (PSE)?

Interestingly, the answer to that question is that “there’s no fixed minimum amount” as the amount you need depends on (1) the stock’s price and (2) minimum amount of shares you’re allowed to buy.

We’ve prepared an article to help you determine the minimum amount of shares you can buy (which you can read in the article How to Use the PSE Board Lot), but you also need to consider fees and charges applicable to stock transactions as these fees increase your buying costs or decrease your selling cash proceeds.

That’s what we’ll discuss in this article. We’ll explain the fees and taxes charged on buying and selling transactions, and show you sample computations on how much exactly you’ll pay if you’re gonna buy stocks and how much cash you’ll receive if you’ll sell stocks.

So what are the fees and charges if I’m buying or selling stocks in the PSE? You’ll need to pay the broker’s commission, the PSE transaction fee, and clearing fee — regardless if you’re buying or selling stocks — and an additional stock transaction tax if you’re selling stocks in the PSE.

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Fees when buying and selling stocks in the PSE

1. Broker’s Commission

The broker’s commission is simply the fee charged by stock brokerage companies whenever a trader buys or sells stocks using their platform. This is basically how brokers make money, and they charge this fee for every trade made — regardless if the customer is making a profitable or losing trade. Simply put, as long as your trade order is filled, you’ll have to pay the broker’s commission.

Most online stockbrokers, such as COL Financial, BPI Trade, First Metro Securities, etc., charge 0.25% commission on the transaction amount. Broker’s commissions may vary per broker, but the maximum a broker can charge is 1.5% of the traded value. Trades coursed through a live broker or person-assisted broker are usually charged 1% to 1.5% commission.

The actual rule for broker’s commission is this: the commission rate that the broker charges or a fixed fee of P20.00, whichever is higher. If the broker’s commission fee is less than P20.00, you’ll still be charged P20.00 regardless.

Take note that the broker’s commission is also charged the government Value-Added Tax (VAT) rate of 12%.

2. SCCP Fee or Clearing Fee

The clearing fee refers to the fee charged by the Securities Clearing Corporation of the Philippines (SCCP), a wholly-owned subsidiary of the PSE, which facilitates clearing and settlement of stock transactions.

When you buy a stock, you pay money of course and, in return, you get ownership of that stock. if you’re selling a stock, you turn over your stocks to the new owner and you get cash proceeds in return. There is an agency, the SCCP, that facilitates stock clearing and settlement to make it easy for all parties. In simple terms, the SCCP ensures that your payment as buyer goes to the seller and the stock you purchased are properly transferred to your name.

All buying and selling trades are charged a clearing fee or SCCP fee of 0.01% of the transaction amount.

3. PSE Transaction Fee

All buying and selling trades of publicly listed companies have to be coursed through the Philippine Stock Exchange (PSE). For that, the PSE charges 0.005% of the gross trade amount of every completed stock order.

4. Stock Transaction Tax or Sales Tax (For Sellers Only)

Are traders required to pay capital gains tax on the sale of stocks in the PSE? Simple answer: No. Stock traders do not have to pay capital gains tax (CGT) or even report their profits or gains in their Income Tax Return (ITR) submitted to the BIR.

So how does the government make money from each selling transaction? By charging a stock transaction tax of 0.60% of the gross trade amount.

Take note that, in general, capital gains tax (CGT) are typically charged on transactions that resulted in a profit or gain. Sometimes when you sell stocks in the PSE, you’ll sell them at a loss, therefore, no capital gains or profits for you.

But regardless, the government will tax you on your selling transaction. This is the 0.60% stock transaction tax which you’ll have to pay whether your selling trade resulted in profits or loss. Again, if you sold your stocks at a loss, you still have to pay the stock transaction tax.

Summary of PSE Trading Fee and Charges

Here’s a table summarizing the commissions, fees, and taxes charged on a buy or sell transaction in the PSE.

Fees and Charges	Rate or Amount	Charged to
Broker’s Commission	Max of 0.25% of gross trade amount or P20, whichever is higher	Buyers and Sellers of stocks
VAT on Broker’s Commission	12% of Broker’s Commission	Buyers and Sellers of stocks
SCCP or Clearing Fee	0.01% of gross trade amount	Buyers and Sellers of stocks
PSE Transaction Fee	0.005% of gross trade amount	Buyers and Sellers of stocks
Stock Transaction Tax	0.60% of gross trade amount	Sellers only

Sample Computation: Buying Stocks in the PSE

How much exactly do you need to pay if you’re buying stocks in the PSE?

Example 1. Let’s assume you want to buy 10 shares of Globe Telecom (Stock Code: GLO) at a price of P2,500.00. Let’s also assume that the broker’s fee is 0.25% — similar to what most online stockbrokers in the Philippines are charging. How much is your actual cash-out for this buying transaction?

It’s not just P25,000.00 (10 x P2,500.00) because you need to factor in the commissions, fees, and taxes.

The computation is as follows:

Gross Transaction Amount: 10 shares of GLO * P2,500 share price = P25,000.00

Add: Broker's Commission: 0.25% * P25,000 = P62.50

Add: VAT on Broker's Commission: 12% * P62.50 = P7.50

Add: SCCP or Clearing Fee: P25,000 * 0.01% = P2.50

Add: PSE Transaction Fee: 0.005% * P25,000 = P1.25

TOTAL BUYING TRANSACTION COST: P25,000.00 + P62.50 + P7.50  + P2.50 + P1.25 = P25,073.75

In short, to buy 10 shares of GLO at P2,500, you need to pay the total amount of P25,073.75.

Sample Computation: Selling Stocks in the PSE

If you are to sell stocks, how much cash will you receive, net of all fees and charges?

Basically, you will be paying the same fees above, plus the 0.6% stock transaction or sales tax. For a sample computation, let’s use the same assumptions in the first example.

Example 2. Instead of buying Globe Telecom (GLO), we will sell our 10 shares of GLO at P2,500.00 each. If the broker’s commission rate is 0.25%, how much will our net cash proceeds be?

Gross Transaction Amount: 10 shares * P2,500 share price = P25,000.00

Less: Broker's Commission: 0.25% * P25,000 = P62.50

Less: VAT on Broker's Commission: 12% * P62.50 = P7.50

Less: SCCP or Clearing Fee: P25,000 * 0.01% = P2.50

Less: PSE Transaction Fee: 0.005% * P25,000 = P1.25

Less: Stock Transaction Tax: 0.6% * P25,000 = P150.00

TOTAL CASH PROCEEDS FROM SALE OF STOCKS: P25,000.00 - P62.50 - P7.50 - P2.50 - P1.25 - P150.00 = P24,776.25

In summary, the total amount you’ll receive for this selling transaction is P24,776.25.

How much should stock prices rise to break even and start to make a profit?

Before you sell your stocks, make sure your selling price incorporates the fees and charges you paid when you bought the stock and also the fees you’ll have to pay when you sell it. Otherwise, even if you sold your stock at a slightly higher price than your original price, it might be possible that you will book a loss, instead of a gain.

So at what price should your stock rise before you sell it to be assured of profit? The breakeven point varies depending on the broker’s commission, but for typical online brokers that charge a 0.25% commission, the stock price needs to rise at least 1.19% in order to book a profit.

In short, the stock price should increase by at least 1.19% (versus your acquisition price) before you can book net profits.