Online gambling tainting investment culture — Quevedo

Online gambling may be the easier thrill, but it’s eating into the country’s investment culture, said Securities and Exchange Commission (SEC) Commissioner Roger Quevedo, who urged Filipinos — especially overseas Filipino workers (OFWs) — to put their money in stocks.

“The competition of our stock market is online gambling,” Quevedo said on Straight Talk, DAILY TRIBUNE’s online show, noting how easy it is to place bets on online gaming platforms compared to opening an investment account.

“You have to create an account with a stockbroker, then there’s KYC, so there’s a lot of information,” he explained.

“We know the effects of e-sabong —there are no controls in online gaming,” Quevedo said.

He pointed to the lack of investor awareness as a key barrier to capital market growth.

“The stock market is hard to understand, but OFWs need to be encouraged to invest instead of going in for Ponzi schemes. We can’t say they don’t have money — they just don’t know where to put it,” he said. “Some don’t even want to invest in banks anymore because of the interest rates.”

To provide a safer, regulated investment environment, Quevedo stressed that brokers must meet strict standards. “The brokers need to be accredited by the Philippine Stock Exchange and licensed by the SEC. We must ensure the surety.”

He said that growth stocks and companies with strong governance structures are ideal entry points for small investors.

“We have what we call growth stocks — that’s where I want to encourage OFWs to place their money,” he said. “I want to see to it that corporate governance is inculcated in the culture of the publicly listed companies.”

Transparency pushed

Quevedo urged listed firms to improve transparency in declaring dividends to help attract retail investors.

“You should be able to encourage them to be more comfortable with the capital market and encourage corporations to be more transparent in the declaration of their cash dividends,” he said. “You’re hoping your stocks will go up.”

He emphasized that the SEC is a resource for all Filipinos. “I hope our fellow countrymen understand that the SEC is not just for the wealthy — we are your go-to. We are here to help you, and we do not have other requirements other than verifying that your identity is legitimate.”

Quevedo made these statements in the context of the recently enacted Capital Market Efficiency Promotion Act (CEMEPA), which aims to broaden investor participation and improve the competitiveness of the Philippine capital market.

“CEMEPA is a good law in the sense that it will rationalize the market. One of its objectives is to stimulate our capital market,” he said.

Signed into law in July, CEMEPA amends the National Internal Revenue Code to remove tax exemptions previously given to long-term deposits and investments exceeding five years. It standardizes the 20-percent final withholding tax on interest income regardless of term, addressing what economic managers previously described as an uneven playing field.

“That tax has been around since about 1997 — there’s already a 20-percent withholding tax on interest earned from bank accounts, not the entire savings, just the interest,” Quevedo noted.

“Before, time deposits exceeding five years weren’t subject to withholding tax. Now, the exception for five years or more has been removed,” he added.

The law is also expected to generate additional revenue for the government while encouraging Filipinos to explore higher yielding and more productive financial instruments such as equities, bonds and mutual funds.