DOF chief vows efficient rollout of capital markets reform

The Department of Finance (DOF) has committed to the swift and effective implementation of the Capital Markets Efficiency Promotion Act (CMEPA), a newly signed law intended to expand public participation in capital markets and boost long-term economic growth.

Speaking Wednesday, Finance Secretary Ralph Recto said CMEPA represents a significant step toward making the Philippine capital market more accessible, inclusive, and competitive on the global stage. Republic Act No. 12214 introduces structural reforms to reduce trading costs, enhance market liquidity, and simplify investment processes.

“Today, we are building a Philippine capital market that is truly dependable, inclusive, and a robust engine of national development,” Recto said. He added that the law was designed to instill greater confidence in the investing public and ensure that capital market opportunities extend beyond institutional players to include average Filipino investors.

Signed into law by President Ferdinand Marcos Jr., CMEPA notably lowers the stock transaction tax from 0.6 percent to 0.1 percent, aligning with rates in regional markets. It also eliminates the documentary stamp tax on mutual funds and unit investment trust funds, both of which are popular with retail investors.

Additional tax reductions include the DST on the original issue of shares of stock—from 1 percent to 0.75 percent—and the imposition of a uniform DST on bonds and other financial instruments issued abroad. The law also clarifies tax treatment of passive income and securities, and standardizes the tax on interest income at 20 percent.

To support retirement savings, private employers will now receive a 50 percent additional tax deduction on contributions that match or exceed their employees’ deposits to Personal Equity and Retirement Accounts (PERA).

The Department of Finance estimates the reforms could generate over PHP25 billion in revenue between 2025 and 2030, which would help fund infrastructure and social programs, including roads, bridges, and healthcare.

The law took effect on July 1, 2025, marked by a ceremonial bell-ringing at the Philippine Stock Exchange led by President Marcos and Secretary Recto.

“It [CMEPA] is for every Filipino who dreams of better financial security,” the President said during the event, emphasizing the importance of empowering small investors, overseas workers, and young professionals to take part in the nation’s economic future.