The Philippine Stock Exchange (PSE) is the only stock exchange in

the Philippines. It is one of the oldest stock exchanges in Asia, having

been in continuous operation since the establishment of the Manila
Stock Exchange in 1927. It currently maintains two trading floors, one
at the PSE Centre (Tektite), Ortigas Center in Pasig City, and one at its
principal office at the Ayala Tower One in Makati City''s Central
Business District. The PSE is composed of a 15-man Board of Directors
with Jose T. Pardo as Chairman.
The main index for PSE is the PSEi, which is composed of a fixed basket
of thirty (30) listed companies. The PSEi measures the relative changes
in the free float-adjusted market capitalization of the 30 largest and
most active common stocks listed at the PSE. The selection of
companies in the PSEi is based on a specific set of public float, liquidity
and market capitalization criteria. There are also six sector-based
indices as well as a broader all shares index.
HISTORY
 The Philippine Stock Exchange was formed from the country''s two former stock
exchanges, the Manila Stock Exchange (MSE), established on August 8, 1927, and the
Makati Stock Exchange (MkSE), which was established on May 27, 1963.
Although both the MSE and the MkSE traded the same stocks of the same companies,
the bourses were separate stock exchanges for nearly 30 years until December 23, 1992,
when both exchanges were unified to become the present-day Philippine Stock
Exchange.
In June 1998, the Securities and Exchange Commission (SEC) granted the PSE a ""Self-
Regulatory Organization"" (SRO) status, which meant that the bourse can implement its
own rules and establish penalties on erring trading participants (TPs) and listed
companies.
In 2001, one year after the enactment of the Securities Regulation Code, the PSE was
transformed from a non-profit, non-stock, member-governed organization into a
shareholder-based, revenue-earning corporation headed by a president and a board of
directors. The PSE eventually listed its own shares on the exchange (traded under the
ticker symbol PSE) by way of introduction on December 15, 2003.
 VISION
 A premier exchange with world-class standards for trading securities
and raising capital that serves as a strong engine for a robust economy.

MISSION
Offer products and services responsive to the needs of investors and
other stake holders. Provide a facility for fair, accurate, complete and
timely information about listed companies, while extending market
education and awareness programs to investors.
Be a preferred venue for raising capital.
Practice and promote good governance within the Exchange and
among listed companies and trading participants.
Operate efficiently to optimize shareholder value.
Adopt world-class systems and global best practices for an efficient, fair
and orderly market.
Develop a highly motivated and professional workforce, committed to
serve and excel.
 Corporate Values

Professionalism in delivering quality service and in

meeting the highest standards of excellence. Integrity,
transparency and accountability in implementing
business programs and enforcing decisions. Teamwork
in working towards a common and favorable goal for
the market. Mutual respect in relating with fellow
employees. Inner strength in prioritizing the common
good of the market instead of individual interest.
Corporate responsibility in promoting market growth
hand in hand with community welfare.
TRADING SYSTEM
 On July 26, 2010, PSE`s New Trading System (NTS) now known as PSEtrade was
launched to replace the Maktrade System. One of the activities done prior to its launch
was ensuring that all PSEtrade users including Trading Participants` (TP) traders, back-
office staff, nominees, directors and executives were ready. To ensure their readiness, PSE
conducted a series of trainings on related systems namely: (1) PAM (Poste D'Access Aux
Marche); (2) Broker Utility; (3) Client Code Generation; (4) Trade Amendments; (5)
Trade Unbundling.

PAM is the trading terminal used by traders in sending orders to the Exchange. It is
critical that all users of PAM have passed all the certifications needed. By the end of 2010,
PSE trained and certified a total of 700 PAM Users. A total of 480 Trading Accounts were
issued to the certified PAM users to access the Exchange trading system.

PAM terminals can be deployed on the Exchange trading floors or at the Trading
Participants` offices or branches. The PSE deployed over 200 remote PAM trading
terminals all over the country. The PSE also enhanced the remote PAM security access by
implementing the 2-factor authentication system with a Security Token which was
required to authenticate offsite traders and protect them against hackers. As of
December 2010, a total of 140 Security Tokens were processed and released.
 Aside from trading via PAM terminal, a trading participant can also send orders via the
Customer Common Gateway (CCG) of the Exchange. The CCG allows trading
participants to connect their own Front-End Order Management System (FEOMS) to the
Exchange. TPs are given the option to either develop their own trading terminal to send
orders or purchase solution from any of the PSE-certified FEOMS vendors. As of 2010,
five (5) FEOMS vendors were certified with 17 TPs connected to the CCG.

During the launch of PSEtrade, the PSE Support Staff were strategically stationed to
provide immediate support to all PSEtrade-related systems and to conduct initial
diagnosis of the problems encountered. In order to further enhance customer service to
the TPs, the PSE also provided a centralized email address (helpdesk@pse.com.ph) and a
hotline (819-4450). All pertinent PSE personnel, who were recipients of the emails,
catered to all trading-related emails and calls. As a result, all trading-related issues,
inquiries and concerns were addressed immediately.

A dedicated website was also developed where all PSEtrade-related memos,

announcements, presentations, technical requirements, documentations, training
schedules and schedule of events were uploaded is still being maintained and updated.

Along with the introduction of the PSEtrade is the implementation of a new set of
Trading Rules. Following are some of the major adjustments on the trading rules and
regulation as a result of the new functional features that goes with the new System:
 New Trading Hours. The Exchange has introduced the
pre-close phase which is the period wherein the
closing price for a Security is determined.

Dynamic Threshold. This price control mechanism

replaced the system embedded three-tick rule which
the former trading system offers. The Dynamic
Threshold is the permitted difference in price between
two Last Traded Price updates for a given Security.

Inter-broker Deal. Block sale between two Trading

Participants is now permitted.
 Dynamic Threshold. This price control mechanism replaced the system
embedded three-tick rule which the former trading system offers. The
Dynamic Threshold is the permitted difference in price between two Last
Traded Price updates for a given Security.
Inter-broker Deal. Block sale between two Trading Participants is now
permitted.
Order Types and Validities. These features of the new System are designed to
serve as added strategic tool for the Trading Participants. While all the validity
types have already been introduced, only limit order type is currently set off
until the PSEtrade Project Committee transitions to the next phase of the
project implementation plan.

Board Lot Table. The Exchange has introduced a new Board Lot Table which
goal is to promote liquidity. The said new table has a far narrowed tick size
compared to the previous, the purpose of which is to provide more point of
entries for average investors.
Since PSEtrade was launched during the middle of the year 2010, the PSE still
supported all users of the old Trading System, MakTrade. Trading system
availability for the Y2010 is 99.67%, with Total Downtime of 55.7 mins for
Maktrade and 188.8 mins for PSEtrade.
Investing Procedure
1. Choose a stockbroker. The PSE has a complete list of
information about all its trading participants who are
authorized and qualified to trade securities for you. This
list is also available on the PSE's website and the
telephone directory's Government and Business listings
yellow pages under the category of stock and bond
brokers. Aside from representing you in the stock
market, a stockbroker can also offer you services such as
access to market reports/studies, on-time delivery of
important documents, and advise on your investments.
It is then important that you trust your stockbroker and
that you are satisfied with its services.
2. You shall be required to open an account and fill out a
Customer Account Information Form and to submit
identification papers for verification. The stockbroker
will then assign a trader or agent to assist you in either
buying or selling any listed security. There are also
stockbrokers who have an online trading facility that
allows you to post orders by yourself, but sufficient
understanding of how the stock market works is key. If
you choose to be assisted by a trader or agent, you can
discuss with him/her what stocks you want to buy or sell.
3. Give the order to your trader, and then ask for the
confirmation receipt. Your buy or sell orders are relayed
to the stockbroker's dealer for execution. In an
automated system as in PSE, the order is keyed in
through a trading terminal and automatically matched.
Confirmation of done trades - via phone, email or online
- is made as soon as possible and subsequently, an
official confirmation or invoice should be delivered to
you.
4. Pay before settlement date. The delivery or payment
should be made before the settlement date of T+3. For
traditional stockbrokers, settlement of transactions is
usually done after three (3) working days from the
transaction date. This means that for transactions done
on Monday, as an illustration, payment should be
received by Thursday. Meanwhile for online
stockbrokers, settlement of all transactions is done on
the transaction date. Settlement of accounts is
performed by the clearing house
 You shall receive from your broker either the proceeds of
sale of your stocks (after 3 business days) or proofs of
ownership of stocks you bought (confirmation receipt and
invoice). If you wish to have a physical certificate of the
stocks you bought, you can give instructions to your broker
and pay the required upliftment fee.
You can purchase shares of stocks either through an initial
public offering (IPO) or through the open market (also
referred to as the secondary market). Shares sold through
IPOs are offered for the first time to the public by the
company (primary market) whereby proceeds of the sale go
directly to the company. Shares of listed or publicly traded
companies are only bought during trading hours. These
shares have since been transferred from one owner to
another and proceeds of the sales do not go directly to the
company but to the owners of the shares.
8:45 am National Anthem

9:00 am Pre-Open Auction Period

9:15 am Pre-Open No-Cancel Period

9:30 am Opening Period - Continuous Trading

12:00 nn Market Recess

1:30 pm Continuous Trading

3:15 pm Pre-Close Auction Period

3:18 pm Pre-Close No-Cancel Period

3:20 pm Closing Period - Run-off/Trading-at-Last

3:30 pm Market Close

Current Philippine Stock Exchange
Index
Current Philippine Stock Exchange
Index
 PSEI – composed of the top 30 companies selected by
the Philippine Stock Exchange
 Sectors Indices – composed of 6 sectors (Financial,
Industrial, Holding Firms, Property, Service, Mining &
Oil)
 All Shares Index – complements everything and it
includes all the common stocks of companies listed in
the PSE.
Current Philippine Stock Exchange
Index

PSEI is just a slice of the pie of the Philippine Stock Exchange

PSEi, the 6 sectors and All Shares index are used to determine the stock market
capitalization, growth and stability.
Board Lot System

 Equity trading is done by board lot or round lot

system. The Board Lot Table determines the minimum
number of shares an investor can buy or sell at a
specific price range. Therefore, the minimum amount
of initial investment varies and will depend on the
market price of the stock as well as its corresponding
board lot. Prices of stocks move through a scale of
minimum price fluctuations.
Table 1. Board Lot Table
Market Price (in Php) Tick Size Lot Size
0.0001 to 0.0099 0.0001 1,000,000

0.0100 to 0.0490 0.0010 100,000

0.0500 to 0.2490 0.0010 10,000

0.2500 to 0.4950 0.0050 10,000

0.5000 to 4.9900 0.0100 1,000

5.0000 to 9.9900 0.0100 100

10.0000 to 19.9800 0.0200 100

20.0000 to 49.9500 0.0500 100

50.0000 to 99.9500 0.0500 10

100.0000 to 199.9000 0.1000 10

200.0000 to 499.8000 0.2000 10

500.0000 to 999.5000 0.5000 10

1000.000 to 1999.000 1.0000 5

2000.000 to 4998.000 2.0000 5

5000.000 and UP 5.0000 5

Board Lot System

Buying Transaction
 Mr. X wishes to buy a stock whose market price is
P10.00. Based on the Board Lot Table, the number of
shares he can buy at a regular transaction should be in
multiples of 100 shares. In this case, if Mr. X wants to
buy 1,000 shares (which is a multiple of 100 shares) his
required cash outflow will be as follows:
Buying Transaction
Market price/share P 10.00

Number of shares to be bought x 1,000

P 10,000.00

Broker's Commission* (0.25% + 12% VAT) + 28.00

SEC Fee (Transaction Value x 0.005%) + 0.50

PSE Transaction Fee (Transaction Value x 0.005%) + 0.50

SCCP Fee (Transaction Value x 0.01%) + 1.00

Total Cash Outlay P 10,030.00

Selling Transaction
 Ms. Y wishes to sell a stock that is trading at P10.00.
Based on the Board Lot Table, the number of shares
she can sell at a regular transaction should be in
multiples of 100 shares. In this case, if Ms. Y wants to
sell 1,000 shares (which is a multiple of 100 shares), her
cash inflow will be as follows:
Selling Transaction
Market price/share P 10.00

Number of shares to be sold x 1,000

P 10,000.00

Broker's Commission* (0.25% + 12% VAT) - 28.00

Stock Transaction Tax** (Transaction Value x 0.5%) - 50.00

SEC Fee (Transaction Value x 0.005%) - 0.50

PSE Transaction Fee (Transaction Value x 0.005%) - 0.50

SCCP Fee (Transaction Value x 0.01%) - 1.00

Net Cash Receivable P 9,920.00

TRADING/ TRANSACTION FEES
AND TAXES
 Brokerage Commission

 A stockbroker is compensated for his services in executing

orders on the Exchange through commission charges,
which are paid by both the buyer and seller to their
respective brokers.
 For trade transactions covering equity and equity-related
products, the maximum commission rate is 1.5% of the
total transaction cost plus 12% value added tax (VAT). The
minimum commission rates depend on the amount of the
transaction. (See Table 2)
TRADING/ TRANSACTION FEES
AND TAXES
 Upliftment/Withdrawal Fee

 If a buying client opts for a stock certificate to be issued in

his name, he must make the request through his broker
who will then issue the upliftment request through the
PDTC system. Upon receipt, PDTC will then submit the
request to the transfer agent for the issuance of the
certificate. PDTC will charge the broker an
upliftment/withdrawal fee of Php50 per certificate issuance
request. The transfer agent will charge their usual issuance
fee per certificate on top of PDTC's upliftment/withdrawal
fee.
TRADING/ TRANSACTION FEES
AND TAXES
 Cancellation Fee

 If a selling client has physical certificates, he must have the

certificates converted into book-entry form in the PDTC
system by requesting, through his broker, for a direct
transfer (DT) with the transfer agent, which costs Php100
(plus 12% VAT) per certificate for the transfer of ownership
of shares to PDTC Nominee Corporation (PCNC).
 In addition to the DT fee, a client must pay cancellation fee
of Php20 (plus 12% VAT) to the transfer agent for
cancellation of the certificates to be lodged in PDTC (for
lodgment of shares). This is applicable only to listed
equities.
TRADING/ TRANSACTION FEES
AND TAXES
 Stock Transaction Tax

 Sales of equities listed and traded on the Exchange are

subject to a stock transaction tax of ½ of 1% (50 basis
points) of the value of transaction charged to the
seller, in lieu of the capital gains tax. The sale, barter or
exchange of shares of stock listed and traded at the
PSE are exempt from documentary stamp tax.
TRADING/ TRANSACTION FEES
AND TAXES
 Withholding Tax

 Under the National Internal Revenue Code of 1997, and except in cases
where tax treaties are in force, dividends received from domestic
corporations are subject to a withholding tax of 10% if the recipient is a
citizen or resident alien, 20% if the recipient is a non-resident
individual engaged in trade or business in the Philippines, 25% if the
recipient is a non-resident individual not engaged in trade or business
in the Philippines, and 30% if the recipient is a non-resident foreign
corporation. Dividends received by domestic and resident foreign
corporations are not subject to tax. The rate of income tax withheld on
dividends paid to a non-resident foreign corporation may be reduced to
15% if the country in which the non-resident foreign corporation is
domiciled (a) imposes no taxes on foreign-source dividends or (b)
allows a credit against the tax due from the foreign non-resident
corporation for taxes deemed to have been paid in the Philippines
equivalent to 15% of such dividends.
 Type of Fee Rate
Brokerage Commission (Min.)1

Transaction Value Minimum Commission

Php100 million and below
Above Php100 million up to Php500
million
Above Php500 million up to Php1
billion
Above Php1 billion up to Php5
billion
Above Php5 billion up to Php10
billion
Above Php10 billion
Upliftment/ Withdrawal Fee
Cancellation Fee
Stock Transaction tax
Withholding Tax
0.25%
0.15% but not less than Php250,000
0.125% but not less than Php750,000
0.1% but not less than Php1.25 million
0.075% but not less than Php5 million
0.05% but not less than Php7.5 million
Php50 per certificate
Php20 + 12% VAT
0.5% of the value of transaction
Filipino citizen or resident alien: 10% of dividends received

Filipino citizen or resident alien: Non-resident individual engaged in trade or business in the Philippines: 20% of dividends received
10% of dividends received
Non-resident individual engaged in Non-resident individual not engaged in trade or business in the Philippines: 25% of dividends received
trade or business in the Philippines:

TRADING/ TRANSACTION FEES

20% of dividends received
Non-resident individual not
engaged in trade or business in the
Non-resident foreign corporation: 30% of dividends received

AND TAXES
Philippines: 25% of dividends
received
What is IPO?

 IPO or Initial Public Offering is the first time a

company’s stocks is offered to the public for purchase,
the issuing company being the only seller and with a
set IPO price. This price is announced before the offer
period, wherein excitement in the market is generated
prior the grand listing date. After this process, the
company becomes ‘publicly-listed’ or ‘publicly-traded’.
Once the IPO period is over, the sold shares are then
traded just like other stocks with both the buyers and
sellers coming from the investing public, or retail
investors.
What’s the role of IPO in PSE?
 The number of IPOs being issued is usually a sign of
the stock market’s and economy’s health. During an
economic downturn, the number of IPOs drop
because it’s not worth the hassle to list a company
when share prices are depressed.
 When IPOs increase, it usually means the economy is
getting back on its feet again. The PSE index has
recently breached the 8,300 mark on the back of
improving corporate earnings and the country’s
economic fundamentals.
What are the forthcoming and the
latest IPOs for this year?
 Wilcon Depot (₱7 billion)
 Cement maker Eagle Cement (₱8.6 billion)
 Property developer Cebu Landmasters (₱3 billion)
 Dennis Uy’s Chelsea Logistics Corp. (₱8 billion)
 Financial service aggregator ExpressPay (₱528 million)
Others in the pipeline include:

 Technology firm Audiowav (₱2.7 billion)

 Investment holding company Pure Energy Holdings
(₱1.5 billion)
 Xeleb, a subsidiary of listed gaming technology
company Xurpas Inc. (₱736 million)
 Fruit shake chain The Big Chill (₱500 million to ₱600
million)
How to invest in IPO’s

 There are two ways to participate in an IPO. The first way is

through an online broker subscription. If you already have a
trading account with an online broker, chances are they will offer
some number of shares to clients like you by announcing it on
their website. However, the challenge here is the limited number
of shares that the broker can offer, and so allocation of shares is
not guaranteed. If there are more buy requests than the number
of available IPO shares allotted to your broker, a raffle is usually
conducted to distribute the same. If you do not get chosen, then
you will end up with no shares of the IPO. As such, you can try
the second method, which is the Local Small Investors Program
(LSIP).LSIP is PSE’s own initiative to encourage more small
investors to participate in IPO’s and a direct way to buy IPO
shares from the underwriters or a bank or any other financial
institution that pledges to buy all the unsold shares in an issue of
new shares.
How to invest in IPO’s

 A company going through an IPO must allocate shares for this

program. The program is also designed to reach out to as many
small investors as possible with its ₱25,000 maximum
investment limit and accepts minimum board lot. Most clients
have a higher chance of securing IPO shares with the LSIP.But
you have to take into consideration that investing in an IPO is
just like buying regular stock and needs careful research. The key
to profitable IPO investing is to know the company behind the
stock. Most of the information you will need can be found in the
IPO’s prospectus: the business model of the company,
performance of the industry where the company belongs,
earning power reliability of the firm based on its financial
history, trustworthiness of the controlling shareholders, and the
capability of the members of the management team.