The Philippine Stock Exchange, or PSE, one of the oldest exchanges in Asia, has been a key driver of economic growth in the Philippines for decades.
However, it has traditionally been seen as a platform exclusive for wealthy investors since it is not accessible to ordinary Filipinos.
Yet now, in an effort to bring the capital market closer to Filipinos wanting to grow their hard-earned money, no less than PSE president and CEO Ramon S. Monzon committed to democratizing the market through policy and program reforms.
The PSE’s strategic priorities for 2024-2026 include expanding our product portfolio, improving market liquidity, and pursuing new growth areas.
“Let’s democratize investment. It is part of our strategy to increase market liquidity and that will be achieved by boosting the participation of the retail market. One of the things we did, which was opposed by many, was the board lot amendment which allows investments to be as low as P100,” Monzon said during an episode of Straight Talk on Wednesday, an online program of the Daily Tribune.
Once approved by the Securities and Exchange Commission, the amendment will allow retail investors with a limited budget to have access to a wider range of stocks to invest in; thereby increasing their overall participation in the market.
“Additionally, part of our democratizing access to the market is we came up with a new product which we call PSE Equip, which tells you what the company is doing and how much they are earning,” he added.
P11B, January 2021 peak
Monzon pointed out that the aggressive efforts to ramp up local market investments were prompted by the significant decline in trading volume, which peaked at about P11 billion worth of daily trading in January 2021.
“You know, in 2021, in January 2021, when we were under lockdowns, the stock exchange had one of the highest daily volumes, we were averaging in January with about 11 billion of trading a day. But now, it notably declined,” he said.
To further lure investments in the capital market, Monzon vowed that the PSE will continue to collaborate with regulators and government entities to implement regulatory reforms aimed at fostering stock market investment.
Among the reforms that the PSE will pursue this year are the reduction of the stock transaction tax from 0.6 percent to 0.1 percent and the reduction of the dividend tax to non-resident aliens from 25 percent to 10 percent to harmonize the cash and property dividend rate.
Additionally, PSE vowed to strengthen its partnerships with financial technology service providers to encourage more people to invest in the capital market.
In August last year, the PSE, in partnership with GCash and AB Capital, launched GStocks to activate the untapped potential of the Philippine equities market by launching an in-app stock trading platform in GCash, with the PSE as a technology provider.
Meanwhile, Maya launched its Maya Stocks feature with Philstocks as the partner broker in November 2023. Maya is set to include 2TradeAsia, DragonFi, and Seedbox in the lineup, allowing users to choose their preferred broker.
These reforms have helped to make the PSE more accessible to retail investors, but there is still more work to be done. The PSE needs to continue to educate investors about the risks of investing in the stock market, and it needs to make sure that the market is fair and transparent.
If the PSE can continue to democratize the market, it will help to boost economic growth and make the stock market a more accessible and equitable investment platform for all Filipinos.
Amid an improving market, the PSE anticipates capital raising toreach P175 billion, P40 billion of which would come from maiden listings, this year.
According to Monzon, the expected rate cuts by the central bank, aggressive spending on infrastructure projects, and continued increase in foreign investment pledges are expected to stimulate consumption, generate job opportunities, and encourage additional investment.