Did you know that Filipino households spend around one-third of their income every month on food and groceries? Without a doubt, food represents one of ... Read More

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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 ... Read More

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Good news to all government employees! There’s a new round of automatic salary increases for the year 2023! This is definitely a welcome development but take note that SSL 2023 is going to be the fourth and final tranche of automatic salary increases for government employees. Background: On January 8, 2020, the “Salary Standardization Law ... Read more

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Excited to begin trading? Before you do, make sure you first understand how the Philippine Stock Exchange (PSE) operates. Unlike other investments that are relatively safe, stock trading is risky which means loss of money is a possibility. So before you deep dive into the exciting world of stock trading, be sure to browse our […]

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The planned delisting of Metro Pacific Investments Corp. (MPI) appears to be in peril with the announcement of state-run pension fund Government Service Insurance System (GSIS) that it has acquired a total of 11.98% of MPI shares. MPI submitted a disclosure to the Philippine Stock Exchange (PSE) today that it has received a letter from ... Read more

The post Hindi tuloy? Delisting of MPI (Metro Pacific Investments Corp.) in peril? appeared first on Pinoy Money Talk.

Did the Philippine Amusement and Gaming Corporation (PAGCOR) decide to award the P3-million logo procurement contract to a chosen supplier, without undergoing public or competitive bidding? Public documents from PAGCOR’s official website seem to confirm this as its “Procurement Monitoring Report for the First (1st) Semester of 2023” shows that the approved mode of procurement ... Read more

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The price of Bitcoin (BTC) dropped by more than 10% today after the Wall Street Journal reported that U.S. Securities and Exchange Commission (SEC) had found the filings for a Bitcoin spot exchange-traded fund (ETF) to be “inadequate.” Bitcoin saw a staggering price decrease of more than $1,000 today to trade below $30,000 after reaching ... Read more

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In a not-so-surprising move, the U.S. Federal Reserve (Fed) yesterday raised interest rates by 75 basis points (bps) or 0.75% in a bid to tame rising inflation in the United States. This was the third consecutive 0.75% rate hike by the Fed, which brings the federal funds rate, the central bank’s benchmark interest rate, to ... Read more

The post PSEi support seen at 6,200 and 6,000 amid weaker Peso appeared first on Pinoy Money Talk.

When sending cash remittances or wire transfer to a bank account in the Philippines (such as BDO, BPI, Metrobank, Landbank, DBP, etc.), you’ll surely need the SWIFT Code of the bank. Look no further because you can find all the SWIFT Codes you need in this list! Make sure you’re using the right bank code ... Read more

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Without a doubt, one of the most annoying fees that credit cardholders have to pay is the annual fee. Majority of cardholders are familiar with this fee and majority of us likely pay this grudgingly year after year after year. In the case of my credit card with BPI (Bank of the Philippine Islands), I’m ... Read more

The post How to Waive your Credit Card Annual Fee (BDO, BPI, Metrobank, RCBC, Citibank, UnionBank) appeared first on Pinoy Money Talk.

For a majority of Filipinos, entrepreneurship does not seem to be a typical, expected path. This is not surprising, considering that in school, students are primarily taught to become employees after graduation. Students train for years to become staff workers, reporting to a supervisor, and just waiting to receive their wages or salaries every month. ...

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I started investing in mutual funds when I was 22 years old. As an Overseas Filipino Worker (OFW) then, I was fortunate to be able to save some money at that young age because of my work abroad. One time while I was on vacation in the Philippines, I saw a large billboard in EDSA ... Read more

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The Philippines’ new tax reform bill, known as TRAIN or Tax Reform for Acceleration and Inclusion, was signed into law on December 19, 2017 and its implementation began on January 1, 2018.

What are the new income tax rates under the TRAIN law? How will TRAIN affect income taxes of individuals and corporations? How is the TRAIN tax system different from the previous Philippine tax system?

In this article, we focus on these items. Below you’ll find the new TRAIN Income Tax Tables adopted by the Bureau of Internal Revenue (BIR) with sample computations showing how income taxes will be determined under TRAIN.

First off, take note that in the new TRAIN tax law, there are two (2) sets of income tax tables to be implemented:

(1) Income Tax Tables that will be used from 2018 to 2022; and

(2) Income Tax Tables that will be used from year 2023 onwards.

NOTE: We compiled all articles related to the TRAIN law on this page: TRAIN Tax Law, Sample Computations, and BIR Implementing Guidelines. Click the link to access relevant information, such as the following useful articles on Philippine taxation.

• Are Online Sellers & YouTubers Required to Pay Taxes to BIR?
• Top 10 Highest Paid YouTubers in the Philippines
• 10 TRAIN Tax Reform Items that You Probably Didn’t Know
• BIR Sample Computations: How to Compute Taxes under TRAIN

New Income Tax Rates under TRAIN (2018-2022)

Here are highlights of the first part of the approved TRAIN tax reform law to be implemented from the year 2018 until the year 2022:

• (i) Those earning an annual salary of P250,000 or below will no longer pay income tax (zero income tax).
• (ii) Those earning between P250,000 and P400,000 per year will be charged an income tax rate of 20% on the excess over P250,000.
• (iii) Those earning annual incomes between P400,000 and P800,000 will pay a fixed amount of P30,000 plus 25% of the excess over P400,000.
• (iv) Those with yearly salaries between P800,000 and P2 million will be charged a fixed amount of P130,000 plus 30% on the excess over P800,000.
• (v) High-income earners receiving salaries between P2 million and P8 million annually will pay a fixed amount of P490,000 plus 32% of the excess over P2 million.
• (vi) Finally, the highest income tier receiving salaries of at least P8 million per year will have withholding taxes of P2.41 million plus 35% of the excess over P8 million.

The new TRAIN tax rates are as follows. Again, these rates will govern income taxes to be paid from 2018 until 2022.

Beginning 2023, however, there will be new income tax rates that are actually lower than those implemented from 2018 to 2022.

BIR Income Tax Rates under TRAIN (2023 onwards)

From year 2023 onwards, the income tax rates will be further adjusted, that is, they will actually be lower, shown as follows:

• (i) Those earning annual salary of P250,000 or below will continue to be exempted from paying income tax.
• (ii) Those earning between P250,000 and P400,000 per year will be charged a lower income tax rate of 15% on the excess over P250,000.
• (iii) Those with annual salaries from P400,000 to P800,000 will have withholding taxes of P22,500 plus 20% of the excess over P400,000.
• (iv) Salaried employees with annual incomes between P800,000 and P2 million will be charged a fixed amount of P102,500 plus 25% on the excess over P800,000.
• (v) Those receiving salaries between P2 million and P8 million per year will be charged P402,500 plus 30% of the excess over P2 million.
• (vi) Finally, the highest income segment of employees with annual salaries of at least P8 million will pay P2.2025 million plus 35% of the excess over P8 million.

The new income tax rates from year 2023 onwards, as per the TRAIN law, are as follows.

New TRAIN Income Tax Rates vs. Old Income Tax Rates

What changed in the new TRAIN tax law versus the old income tax law?

Prior to the approval of the TRAIN bill in 2018, the following tax tables were in use until the end of 2017. The income tax rates before TRAIN, which are relatively higher than the post-TRAIN tax rates, are shown below.

Here are major items that changed when we compare the old (pre-TRAIN) tax tables versus the new TRAIN income tax tables.

• 1) income brackets were streamlined and reduced to just six (6) from seven (7) brackets;
• 2) taxable income threshold per bracket has been adjusted upwards;
• 3) tax rate charged on each taxable income bracket was revised, mostly lowered;
• 4) annual gross income eligible for tax exemption has been adjusted upwards from the amount of minimum wage previously to P250,000 in the new tax tables; and
• 5) personal exemption (P50,000) and additional exemptions (maximum of P100,000, if taxpayer has four dependents) were removed.

Under the TRAIN law, salaried individuals earning annual gross compensation of P250,000 or below are now exempted from paying income taxes. This is a drastic change from the past, wherein only minimum wage earners were exempted.

What happened to personal and additional exemptions in the new TRAIN Income Tax law? The new TRAIN tax law removed these monetary exemptions previously enjoyed under the old Philippine tax system.

The Personal Exemption, amounting to P50,000, and additional exemption of P25,000 per qualified dependent (maximum of P100,000 additional exemptions for a taxpayer with four (4) dependents) are now gone under the TRAIN law.

Sample Income Tax Computations under TRAIN (2018 to 2022)

How to compute income taxes under the new TRAIN law?

The Bureau of Internal Revenue (BIR) explained this in Revenue Regulation No. 8-2018 (RR 2018) which the BIR released in 2018. The formula to follow is simple. The formula to compute income tax due, under the graduated income tax rates of TRAIN, is:

INCOME TAX DUE = a + (b x c)

where: a = Basic Amount of Annual Income;

b = Additional Rate; and

c = Of the Excess over

To recap, here’s the graduated income tax tables under TRAIN to be implemented from 2018 until 2022.

The income tax payable can be computed as follows:

So, for example, an employee with taxable income of P300,000 per year, will fall under the income bracket P250,000-P400,000. The income tax due is as follows:

• a = Basic Amount of Annual Income = Zero (0)
• b = Additional Rate = 20%
• c = Of the Excess over P250,000 = P50,000
• INCOME TAX DUE = 0 + (20% * P50,000) = P10,000

Thus, an employee earning taxable income of P300,000 per year will pay income tax amounting to P10,000 under TRAIN.

With tax due of P10,000 on annual income of P300,000, the effective income tax rate charged to this taxpayer is only 3.33%.

How about someone making P1 Million a year? What’s the income tax payable? Same formula to use.

Using the table above, we can see that the taxpayer falls under the tax bracket P800,000-P2,000,000. Thus, the tax due is:

• a = Basic Amount of Annual Income = P130,000
• b = Additional Rate = 30%
• c = Of the Excess over P800,000 = P200,000
• INCOME TAX DUE = P130,000 + (30% * P200,000) = P190,000

The salaried employee earning P1 Million will thus pay income tax of P190,000 under the new TRAIN tax tables.

Paying P190,000 income tax on taxable income of P1 Million, the taxpayer is therefore charged an effective income tax rate of 19%.

Sample Income Tax Computations under TRAIN (2023 Onwards)

Take note that part 2 of the TRAIN tax rates will take effect beginning year 2023.

The formula to follow, though, is still the same:

INCOME TAX DUE = a + (b x c)

where: a = Basic Amount of Annual Income;

b = Additional Rate; and

c = Of the Excess over

So in the year 2023, an employee earning P300,000 annual salary will be paying income tax of:

• a = Basic Amount of Annual Income = Zero (0)
• b = Additional Rate = 15%
• c = Of the Excess over P250,000 = P50,000
• INCOME TAX DUE = 0 + (15% * P50,000) = P7,500

You’ll notice that the tax due of P7,500 is much lower than the income tax due of P10,000 during the implementation of TRAIN in 2018 to 2022. This is because the TRAIN law further reduced income tax rates from 2023 onwards.

Previously, the effective income tax rate charged to this taxpayer was 3.33%. From 2023 onwards, the new effective income tax rate, paying P7,500 income tax on P300,000 annual income, is down to just 2.5%.

How about the employee making P1 Million a year? From 2018 to 2022, that employee paid income tax in the amount of P190,000 during the implementation of TRAIN.

Using the new graduated income tax tables for 2023 onwards, the new income tax payable is as follows:

• a = Basic Amount of Annual Income = P102,500
• b = Additional Rate = 25%
• c = Of the Excess over P800,000 = P200,000
• INCOME TAX DUE = P102,500 + (25% * P200,000) = P152,500

Paying P152,500 income tax on P1 Million annual salary, this taxpayer is paying an effective income tax rate of 15.25%, lower than the 19% effective income tax rate during the implementation of TRAIN in 2018 to 2022.

Now you know how to compute your own income tax under TRAIN! Good job!

You must read these other awesome articles!

• Are Online Sellers & YouTubers Required to Pay Taxes to BIR?
• Top 10 Highest Paid YouTubers in the Philippines
• 10 TRAIN Tax Reform Items that You Probably Didn’t Know
• BIR Sample Computations: How to Compute Taxes under TRAIN

The post Income Tax Tables in the Philippines (2022) appeared first on Pinoy Money Talk.

Did you know that Philippine stocks were able to achieve an astounding growth of 800% in a span of 30 years?

From 1987 until 2018, the Philippine Stock Exchange index (PSEi) rose from 1,000 points to a peak of 9,000 points — generating a return of 800% over 30 years.

(The PSEi is an index comprised of 30 companies listed in the Philippine Stock Exchange (PSE) and is normally considered a barometer of the Philippine economy.)

This return means if you invested P100,000 in the PSEi back in 1987 and just left it there for 30 years, this money would be worth close to a million pesos in 2018!

From a mere 1,000 points in 1987 during the administration of Pres. Cory Aquino, the PSEi grew to its highest level of 9,000 points in 2018 during the term of Pres. Rodrigo Duterte.

Unfortunately, though, the momentum faltered starting 2018 and the index is yet to breach the 10,000 level until now.

By the end of the year 2021, the PSEi was at the 7,100+ level.

The chart below shows a rundown of when the PSEi achieved the 1,000 round-number breakouts in the past 30 years.

Highest PSEi Level in History: 9,078.37 points

The all-time high level reached by the PSEi was 9,078.37 points — an intra-day achievement recorded on Monday, January 29, 2018.

Just a week before that, on Friday, January 26, 2018, Philippine stocks closed at an all-time high of 9,041.20 points. This was also recorded as the highest-ever closing price of the PSEi in history.

Compare that with the PSEi’s level 30 years ago, on July 2, 1987, with the index hovering at just 1,000 points.

Going from 1,000 to 9,000 points is an 800% increase, so if you decided to invest P100,000 in the PSEi back then and opted to just leave your money there and did nothing afterwards, you’ll be surprised to know that, in 2018, your P100,000 would have been worth almost P1 million pesos, i.e., P900,000. Not bad!

Here are the exact dates of and the Philippine President during those PSEi breakout levels.

PSE Breakout Levels from 1,000 to 9,000

Stocks Performance under each Philippine President

Some interesting facts from the data above:

1. During the time of Pres. Cory Aquino, the first 1,000 breakout level of the PSEi was recorded on July 2, 1987, a little over a year after she assumed the presidency.

2. During the administration of Pres. Fidel Ramos, Philippine stocks achieved two new breakout levels just three months apart. The PSEi’s 2,000-point level was reached on September 13, 1993 while the 3,000-point level was reached on December 23, 1993.

3. During the administrations of Pres. Joseph “Erap” Estrada and Pres. Gloria Macapagal Arroyo (GMA), the PSE never reached any new 1,000-point milestone.

The sluggish performance of the Philippine stock market was partly due to market meltdowns resulting from the aftermath of the Asian financial crisis in 1997 (during Pres. Estrada’s term) and the subprime mortgage and global economic crisis in 2007 (during Pres. GMA’s term). Both major events imposed a heavy toll on Philippine stocks lasting almost two decades.

4. It took the PSEi a long 17 years, from 1993 to 2010, to increase by just 1,000 points from 3,000 to 4,000 level.

5. While it took the PSEi 17 years to go from 3,000 to 4,000, it only took less than two years to jump from 4,000 to 5,000 points. This happened during the administration of Pres. Noynoy Aquino when the local index grew from 4,000 in September 2010 to 5,000 in March 2012.

6. Philippine stocks managed to breach the 1,000-point hurdle five (5) times from the 4,000 level in 2010 to 8,000 level in 2015. During this time, under the term of Pres. Noynoy Aquino, the PSEi doubled its value from 4,000 to 8,000 points.

7. It took the local stock market index three years (from March 2015 to January 2018) to reach a new milestone from 8,000 to 9,000 points. The 9,000-point level was reached on January 26, 2018, almost two years into the administration of Pres. Rodrigo Duterte.

8. In 2020, Philippine stocks plummeted alongside global markets because of the COVID-19 pandemic. The PSE suffered its biggest one-day decline of -13.34% on March 19, 2020 following the national government’s announcement of lockdowns and mobility restrictions.

PSE Stocks Performance in 2021

At the last trading day of 2021, the index closed at 7,122.63 points.

The 1-year return of the PSEi in 2021 was -0.24%, relatively flat compared to the previous year 2020.

Best Performing Stocks (Top Gainers) in 2021

The top gainers or top 10 stocks with the biggest price appreciation in 2021 are as follows.

Worst Performing Stocks (Top Losers) in 2021

Meanwhile, the stocks with biggest price declines in 2021 are as follows.

Closing Prices of PSEi every year

The table below shows the closing prices of the PSEi at the last trading day of the year from 2001 until 2021 and the corresponding 1-year return (profit/loss percentage).

The data above shows that Philippine stocks generated an annual return of 9.46% over a 20-year period. Simply put, if you invested in the PSEi from 2001 to 2021, you would have earned 9.46% every year.

Again, not a bad performance, but to earn this, you’ll have to ride out both the bull and bear cycles of the stock market in that 20-year period.

Market Return of Philippine Stock Market

If you’re doing an equity research or valuation report, you may use this 9.46% as “Expected Market Return (r_m)” of Philippine equities which can be plugged into your Capital Asset Pricing Model (CAPM) when using the Discounted Cash Flow (DCF) model.

The market return (r_m) in CAPM represents the expected return of the investor from Philippine stocks, represented by the PSEi benchmark index.

Of course, it’s always better to use expected or forecasted market returns (i.e., forward-looking data) but if data is unavailable or you don’t feel confident to use your forecasted market returns, the historical performance of the stock market index, in this case the PSEi, may suffice.

The value of the market return (r_m) will vary depending on the time horizon you’re considering. Based on the data above, if you’re to consider the 20-year period from 2001 to 2021, the expected market return or r_m of the Philippine stock market which you can use in CAPM is 9.46%.

You may use the following table as guide if you plan on using a different time period for your expected market return (r_m) of Philippine equities.

Shall we see a return of the PSEi to 8,000 or even 9,000 points in the next few months? More importantly, will the PSEi achieve a brand-new 1,000-point milestone at 10,000? Let’s hope it will come very soon!

Other awesome articles you should be reading right now!

• Why People Lose Money in Stocks: The Emotional Cycle of Investing
• How to Use the PSE Board Lot Table
• Should you invest in Backdoor Listing of Stocks?
• FREE Stock Tips and Brokers’ Recommendations

The post PSE Stocks Performance under each Philippine President (1987-2021) appeared first on Pinoy Money Talk.

Good news to all government employees! There’s a new round of salary increases beginning January 1, 2022!

Millions of employees of the Philippine government — including public school teachers, nurses and staff of government hospitals, and workers in local and national government agencies, etc. — will be getting an automatic salary adjustment this 2022 under the approved Salary Standardization Law (SSL).

Background: On January 8, 2020, the “Salary Standardization Law of 2019” was signed into law which rolled out four (4) tranches of automatic salary increases every year from 2020 until 2023.

For 2022, all government employees will receive adjusted salaries under the new SSL beginning January 1, 2022.

Check here how much your salary will increase this year and in upcoming years!

Salary Grade (SG) Pay Increase in 2022

What’s the new salary of a government employee with rank Salary Grade 1 Step 1 or SG 1-1 under the approved Salary Standardization Law?

Based on the SSL 2022 table below, a government employee ranked SG 1-1 will receive a new monthly salary of P12,517.00 — a P483.00 increase from the previous salary of P12,034.00 in 2021.

SG 10-1 employees, meanwhile, will receive a new monthly salary of P22,190.00 in 2022, an adjustment of P985.00 from the P21,205.00 salary in 2021.

Another example: SG 20-1 employees will be getting an additional monthly salary of P1,548.00 with their new monthly pay of P55,799.00 from P54,251.00 in 2021.

The highest-ranked government employees, i.e., those ranked SG 33 Step 2, will see their salary grow to a whopping P423,723.00 per month in 2022 from P415,728.00 in 2021– a P7,995.00 salary increase per month.

How to Check your Salary in the SSL 2022 Table

How to use the SSL table below to check your salary? Just follow these simple steps.

1. First, you should know your Salary Grade (SG) and Step. If you don’t know this yet, check your appointment paper or pay slip.
2. Now, look for the row corresponding to your Salary Grade (SG) in the table below.
3. Now check the column corresponding to your Salary Step.
4. The intersection between your SG and Step is the amount of your monthly salary.

Here are the SSL tables showing the new monthly salaries of government employees.

SSL 2022 Salary Table for Government Employees

The third tranche of salary increases, SSL 2022, will roll out effective January 1, 2022.

SSL 2023 Salary Table for Government Employees

The fourth and final tranche of salary increases, under SSL 2023, will take effect beginning January 1, 2023.

SSL 2021 Salary Table for Government Employees

Government employees received the second tranche of salary increases under SSL 6 or SSL 2021 beginning January 1, 2021.

SSL 2020 Salary Table for Government Employees

The first tranche of salary increases under the approved Salary Standardization Law of 2019 took effect starting January 1, 2020.

Starting salary for nurses in public hospitals: SG-15

Filipino nurses will finally receive a much-deserved salary increase at a time when frontliners like them work diligently to help address the COVID-19 pandemic in the country.

This is after the Department of Budget and Management (DBM) finally decided to implement Section 32 of the Philippine Nursing Act of 2002 (RA 9173), which set a minimum base pay of SG-15 for nurses working in public institutions and government hospitals.

Although DBM Circular 2020-4 was released in July 2020, the DBM memo stated that the salary adjustment for nurses will be retroactive to January 1, 2020. This means government nurses will be receiving salary differentials as if they already have the new SG salaries beginning January 1, 2020.

The salary increase is for all public health nurses in the Philippines — regardless if regular, casual or contractual, full-time or part-time — working in national government agencies, including state universities and colleges and state corporations, as well as local government units (LGUs) covered by the Compensation and Position Classification System (CPCS) under Republic Act (RA) No. 6758 or the Compensation and Position Classification Act of 1989.

What’s the new starting salary for government nurses?

Entry-level nurses (Nurse 1), originally ranked Salary Grade (SG) 11, will now have a base salary grade of SG 15.

In 2022, nurses working in government hospitals will be receiving the following monthly salary.

New Monthly Salary of Government Nurses in 2022

New Monthly Salary of Government Nurses in 2023

New Monthly Salary of Government Nurses in 2021

New SG Table & Monthly Salary of Nurses in 2020

With the new SSL tables beginning 2020, all government employees — but excluding armed and military personnel below who already received separate salary increases — certainly benefited and will continue to benefit from automatic salary bumps until 2023.

Teachers teaching in public educational schools in the country, however, are still stuck in their existing Salary Grades (SG) and given the low SG ranks, these teachers continue to be paid deplorably low salaries. Take a look at the monthly salaries of some public school teachers in the Philippines.

Monthly Salary of Public School Teachers in 2022

The Salary Standardization Law prescribes the salary increase for “all civilian government personnel in the Executive, Legislative and Judicial Branches, Constitutional Commissions and other Constitutional Offices, Government-owned or Controlled Corporations (GOCCs) not covered by Republic Act (R.A.) No. 10149, and local government units (LGUs)”

All government personnel — regardless if regular, contractual or casual, appointive or elective, and on full-time or part-time contract — are covered by the law.

Payment for employees engaged on a part-time basis shall receive compensation proportionate to the actual services rendered.

Casual personnel, meanwhile, shall receive daily wage which shall be computed by dividing the applicable monthly salary rate by twenty-two (22) working days.

However, the following employees are excluded from the law and shall receive salaries based on separate laws applicable to their compensation:

• (a) Military and uniformed personnel;
• (b) GOCCs under R.A. No. 10149 which shall be covered by a Compensation and Position Classification System (CPCS) established by the Governance Commission for GOCCs (GCG) and approved by the President of the Philippines; and
• (c) Individuals whose services are engaged through job orders, contracts of service, consultancy or service contracts with no employer-employee relationship.

Continuation of Pres. Noynoy Aquino’s SSL Salary Increases

Upon full implementation in 2023, basic salaries would have increased by a weighted average of 23.24%.

Employees ranked from Salary Grade (SG) 1 to 10 will receive a salary increase from 17.5% to 20.5% from 2020 until 2023.

Those ranked SG 11 to 15 will receive the highest increase, with their salaries growing by 20% to 30% over four years.

Meanwhile, those with higher ranks, specifically from SG 25 to 33, were allocated the lowest salary percentage increase at just 8%.

By signing the law, Pres. Duterte continued the annual salary increase for government workers initiated by former Pres. Noynoy Aquino, which started with SSL 1 in 2016 ending with SSL 4 in 2019.

The post SSL 2022: Salary Increases for Teachers, Nurses, Gov’t Employees appeared first on Pinoy Money Talk.

Before you take the plunge into stock trading and investing, make sure you understand what stocks are and how the Philippine stock market operates.

Unlike other investments that are relatively safe, stock trading is risky and loss of money is a possibility. So if you want an easy-to-understand primer on stock trading, head over to PinoyMoneyTalk’s Guide on Stock Trading and Investing.

If you don’t have much time to read, here’s a brief overview of everything you need to know about trading stocks in the Philippine Stock Exchange (PSE), including when the PSE is open and in which times you can do stock trading.

What are stocks?

Shares of stocks represent ownership in a company. As a stockholder, you are a part-owner of a company.

As part-owner, you get certain rights, including the right to vote and the right to receive dividends when distributed by the company.

How do I make money in stocks?

As a stock investor, you can make money through one or all of these ways:

1. Capital appreciation – the change in price from the time you bought the stock to the time you will sell it. Of course, you only make money when you sell the stock at a price higher than the price you bought it. This is the reason why the basic stock trading mantra is “Buy low, sell high”.

2. Dividends – this is your share in the earnings of the company which may be distributed to shareholders in the form of cash or stock dividends; and

3. Stock Rights – the right given to you as a shareholder to buy additional shares of the company at a lower price compared to the market price.

What’s the minimum amount needed to invest in stocks?

Every stock trading transaction is governed by the Board Lot. This means the minimum amount of money needed to start trading stocks will actually depend on the stock you wish to buy and its price.

The PSE Board Lot shows the minimum number of shares that you can buy or sell at any time. The cost of the minimum amount of shares you’ll buy represent your minimum investment in stocks. However, in order to trade using a broker, some brokers require a certain deposit amount before you can open an account with them.

Check out sample computations of how much money you need to begin trading stocks in our article How to Use the PSE Board Lot Table.

PSE Stock Trading Hours in 2022

What time is the Philippine Stock Exchange (PSE) open? In 2022, stock trading in the Philippines officially opens at 9:30 AM and ends at 3:00 PM.

Beginning December 6, 2021, the PSE went back to its full-day trading hours that has been implemented prior to the COVID-19 pandemic. From March 16, 2020 until December 3, 2021, the trading day in the PSE was just a short 3 1/2 hours, from 9:30 AM until 1:00 PM. because of the pandemic.

The full PSE stock trading schedule in 2022 is as follows.

What does it mean by Pre-Open, Market Recess, or Market Run-off in the PSE? Here’s a short description of these stock market activities.

Pre-Open (9:00 AM – 9:29 AM). Stock trading orders can already be entered with your stock brokerage account but no matching of trades will occur yet.

Market Open (9:30 AM). Official start of order matching and stock trading in the PSE.

Continuous Trading (9:31 AM – 11:59 AM). Regular stock trading hours where orders are continuously accepted, processed, and matched by the PSE.

Market Recess (12:00 PM – 12:59 PM). Market is closed for one (1) hour, with no ordering and matching allowed.

Trading Resumption (1:00 PM). Trading officially resumes after the 1-hour market recess.

Continuous Trading (1:00 PM – 2:44 PM). Regular stock trading hours where orders are continuously accepted, processed, and matched by the PSE.

Pre-Close (2:45 PM – 2:49 PM). Stock closing prices are set and posted orders cannot anymore be cancelled or modified.

Market Run-off (2:50 PM – 2:59 PM). Remaining orders are matched at a fixed price determined during the Market Pre-Close.

Market Close (3:00 PM). Market is closed with no stock trading. Order matching is also not occurring, but some brokers may accept after-hour orders to be processed during the next trading day.

PSE Trading Hours in 2020 and 2021

As mentioned earlier, stock trading in the PSE in 2020 was shortened from 9:30 AM to 1:00 PM due to the COVID-19 pandemic. This means total trading hours in the Philippines then were just 3 and 1/2 hours in a day.

This rule was adopted from March 16, 2020, the first day the entire country was placed in lockdown or enhanced community quarantine (ECQ), until December 3, 2021.

During the COVID-19 pandemic, the stock trading schedule was as follows.

PSE Trading Hours before COVID Pandemic

In contrast, from 2012 until before the COVID-19 lockdowns, stock trading was open from 9:00 AM until 3:30 PM.

Specifically from January 2, 2012 until March 13, 2020, PSE trading hours were as follows.

PSE Trading Hours Before 2012

Stock trading in the PSE before 2012 were for a mere 2 and 1/2 hours, from 9:30 a.m. until 12:10 p.m.

In a bid to adopt longer trading hours, the PSE had a trial run from October 2011 to December 2011 of its extended trading hours from 9:30 a.m. until 1 p.m. They eventually implemented a 9:00 AM to 3:30 PM trading schedule from 2012 until 2020.

Other stock trading articles you should read right now!

• How to Use the “PSE Board Lot Table”
• PSE Performance under each Philippine President
• Why People Lose Money in Stocks: The Emotional Cycle of Investing
• FREE Stock Tips and Brokers’ Recommendations

The post PSE Trading Hours in 2022: What time open, when closed? appeared first on Pinoy Money Talk.

What are Price Trading Bands in the Philippine Stock Exchange (PSE)?

A “trading band” is a limit on the price fluctuation of a stock or security. This means there is price control imposed with regard to how much the price can rise or fall on a given trading day. 

These price limits are intended to provide investors protection in case prices change drastically — especially if there is no relevant information that should cause dramatic stock price fluctuations.

Trading bands come in two forms: Price Ceiling, or the upper price limit, and Price Floor, or the lower price limit.

Price Ceiling in the PSE

What’s the ceiling price for stocks traded in the Philippine Stock Exchange (PSE)?

The ceiling price is fifty percent (50%) — which means a stock price, compared to its previous closing price, can only increase by up to 50% during a given trading day.

What happens when the ceiling price is hit? Is trading of the stock halted? Nope, trading still continues — people can still buy and sell the stock — but the price can no longer increase beyond the Ceiling Price.

Is it possible for the stock price to fall below ceiling price during trading? Yes, in the PSE, stock prices can move within the price trading bands with the price ceiling as upper limit and price floor as lower limit.

Price Floor in the PSE

What about the price floor? The price floor, or lower price limit, in the PSE is thirty percent (30%).

This means a stock price can only fall by as much as 30% on a given trading day.

As mentioned earlier, this price limit helps protect investors because, technically speaking, an investor can only lose up to 30% on a stock every trading day. Imagine if there’s no price floor. An investor can practically have his or her capital wiped out in a day if there is no floor price limit.

Let’s see examples of how Price Ceiling and Price Floor are applied in the PSE.

Examples of Price Ceiling in the PSE

Price ceilings are typically seen in cases of successful Initial Public Offerings or IPOs in the PSE.

On November 2, 2021, AllDay Marts Inc. (stock code: ALLDY) traded in the PSE for the first time and closed at its ceiling price of P0.90 per share.

The P0.90 closing price is a 50% increase — thus, hitting the price ceiling — over its IPO price of P0.60.

ALLDY’s ceiling mirrored the price performance of another supermarket chain which IPO’d in 2020. On June 15, 2020, MerryMart Consumer Corp. (stock code: MM) zoomed to its price ceiling of P1.50 on the first trading day — a 50% rise over its P1.00 IPO price.

On April 7, 2014, Double Dragon Properties (stock code: DD) also closed at the ceiling on its first trading day after the IPO. DD’s stock closed at P3.00 — a 50% increase from its P2.00 IPO offer price.

Examples of Price Floor in the PSE

The floor price limit in the PSE is 30%, which means a stock price cannot fall below 30% on any given trading day.

For example, given ALLDY’s initial price of P0.60 per share, its price floor is P0.42 — computed as (P0.60 * 0.70) or, alternatively, (P0.60 -(P0.60*.30)).

Let’s take a look at another example. Let’s assume that the stock price of PLDT – Philippine Long Distance Telephone Company (stock code: TEL) during the previous trading day was P1,642.00.

In the next trading day, given the 30% price floor, TEL’s price can only decrease by as much as 30%. Specifically, the lowest price TEL can go supposedly is P1,149.40 — computed as P1,642.00 * 0.70 or, alternatively, (P1,642.00-(P1,642.00*.30)).

But take note, the ceiling and floor prices we computed may be slightly different from what we’ll see in the PSE since prices are still dictated by the PSE Board Lot table.

PSE Board Lot and Price Floor and Ceiling

How does the PSE Board Lot table impact the price floor and price ceiling rule? The Board Lot table identifies the minimum increments a stock price can fluctuate.

In the case of our PLDT example (stock price: P1,415.00), according to the PSE Board Lot table, a stock whose price is trading between P1,000 and P1,999 can fluctuate by a minimum of P1.00.

Thus TEL’s floor price of P1,149.40 must be rounded up to the nearest P1.00 to become a “valid” stock price. The actual floor price, then, of TEL is P1,150.00.

Why round up to P1,150.00 and not round down to P1,149.00?

If TEL’s price falls to P1,149.00, then this price is already a decrease of 30.02% from the previous P1,642.00 closing price — a violation of the 30% ceiling price rule of the PSE.

Now that you know these price trading bands, we hope you’ll now become a smart investor. Happy trading!

The post Price Floor and Price Ceiling of PSE Stocks appeared first on Pinoy Money Talk.

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

How many shares of Globe Telecom (GLO), Ayala REIT Inc. (AREIT), DITO CME Holdings (DITO), or Megaworld (MEG) can you buy or sell at any given time?

You probably don’t know it, but these questions can be answered by simply using the PSE Board Lot Table.

What is the PSE Board Lot Table?

The Board Lot table of the Philippine Stock Exchange (PSE) is a guide for investors showing the:

1. Minimum number of shares that can be bought or sold at any given time; and
2. Minimum price increments for each stock traded in the PSE.

Here’s what the PSE Board Lot table looks like.

How to Read the PSE Board Lot Table

The “Stock Price” column shows the range of prices of a given stock and, depending on its current price, its corresponding row will show the fluctuations in price and the minimum number of shares that can be sold or bought.

So for a stock trading at, say, P3.00 per share, the important row to look at is Row E (P0.50 – P4.99).

The “Fluctuations in Price” column, meanwhile, shows the allowed fluctuation or price change of a given stock.

For example, if the fluctuation in price (also called tick size) is P5.00 — same as in the final Row O — the stock price can only move by increments of P5.00.

So a stock currently trading at P5,100.00 can become P5,105.00 or P5,500.00 or even P6,500.00 or P4,500.00 — because all these figures are divisible by P5.00.

But the stock cannot be priced at P5,103.00 or P5,501.25 or P6,557.00 because these numbers are NOT divisible by the required tick size of P5.00.

Finally, the “Board Lot” column represents the minimum number of shares that can be traded depending on the stock’s current price.

If for example, the required board lot is 1,000 — as in Row E — you can buy or sell stocks as long as the number is divisible by 1,000. This means you can buy 2,000 shares or 5,000 shares or even 30,000 shares.

We’ll see a clearer application of the Board Lot table in our practical examples below.

For now, just take note that this table governs only “Normal Lot” trades in the PSE. The “Normal Lot” is still slightly different from the “Odd Lot” market, which we will discuss in a separate article.

Don’t worry because in most cases you’ll just be trading “normally” so you’ll only need to understand the “Normal Lot” version of the PSE Board Lot table.

3 Uses of the PSE Board Lot Table

The PSE Board Lot Table can be used to determine three things:

• (1) the minimum number of shares that can be traded for each stock;
• (2) the minimum price fluctuation or increment applicable to each stock; and
• (3) the minimum amount of money needed to buy any PSE-traded stock.

Let’s look at three examples showing how we can use the PSE Board Lot table to determine these three things.

1. Minimum number of stocks I can buy (or sell) in the PSE

To know the minimum number of shares that can be bought or sold, you need to determine the current stock price and check its corresponding board lot in the Board Lot Table.

For a more detailed guide how to do this, follow the steps below.

Step 1: Get the current price of the stock. Let’s say you want to know the minimum number of shares of Globe Telecom (GLO) that you can buy or sell. Check the PSE website or your broker’s website to get GLO’s current price. Let’s say GLO is currently trading at P2,200.00.

Step 2:  Check the row in the PSE Board Lot table corresponding to this stock price. GLO’s stock price of P2,200.00 corresponds to “Row N”. This is because the price falls within the range P2,000.00 to P4,998.00.

Step 3: In this row, check the corresponding Board Lot (Lot Size) column. The lot size represents the minimum number of shares that can be traded for any stock.

In the case of GLO, the lot size is 5 — meaning, a minimum of five (5) shares of GLO can be bought or sold at any time.

Can you sell 50 shares? Yes!

Remember, the Lot Size shown is just minimum. The number of shares trades can be higher than 5, as long as the number of shares being traded is divisible by 5.

Can you sell just 2 shares of GLO? No!

How about buying 120 shares of GLO? Yes, that’s possible because 120 is divisible by 5.

Easy, right? Let’s move on to the next application of the Board Lot table.

2. Allowed stock price changes in the PSE

Let’s say you bought shares of SM Prime Holdings (SMPH) at P20.00 and now you want to sell those to lock in the profit. The stock currently trades at P36.15 per share. Can you sell it at P36.48? How about at P37.25?

To determine the allowed price increment or price change for any give PSE-traded stock, use the Board Lot Table and check the Tick Size or Minimum Fluctuations column. Follow this step-by-step guide if you need more details.

Step 1: Get the current price of the stock. Just like in Example 1 above, you can check the PSE website or your broker’s website to get the current price of your stock. In the case of SMPH, let’s assume its current stock price is P36.15.

Step 2:  Check the row in the PSE Board Lot table corresponding to this stock price. If SMPH’s stock price is P36.15, which row in the Board Lot table corresponds to this price?

If you answered “Row H”, you are correct. SMPH’s stock price is within the price range of that row (P20.00 to P49.95), so we will use this row in Step 3.

Step 3: Determine the Minimum Price Fluctuations (Tick Size) for that stock. The “Tick Size” column represents the minimum price change or price increment allowed for any given stock.

With SMPH trading at P36.15 per share, the relevant row is “Row H” which tells us that the tick size is PHP 0.05. This means the allowed prices to buy or sell SMPH must be in increments of or divisible by 0.05.

So, going back to the question earlier: can you sell SMPH at a price of P36.48? Since it’s not divisible by 0.05, this is not allowed.

Can you sell it at P37.25? Yes! Since this price is divisible by 0.05.

But take note, whether the sale will be a done trade will, of course, depend on the presence of buyers willing to purchase SMPH shares at your asking price.

As you can see, knowing the Board Lot Table is especially useful if you are making a Limit Order, wherein you’ll manually input your own preferred buying or selling price of a stock.

3. How much money needed to invest in the PSE

So how much money do you need to begin trading stocks?

Actually in the PSE, there is no fixed minimum amount of money needed to begin investing in stocks. The minimum amount will depend on the price of the stock that you want to buy.

Let’s see an example below.

Let’s say we want to know how much we need in order to make our very first trade: buy the minimum number of shares of Megaworld Corp. (MEG).

Step 1: Get the current price of the stock. Again you can simply check the PSE website or your broker’s website to get the current price of your stock. In the case of MEG, let’s say its current price is P3.35.

Step 2:  Determine the lot size in the PSE Board Lot table. To do this, refer back to the step-by-step process explained in Example 1 above. Checking MEG in the Board Lot table, we see that its minimum lot size is 1,000 shares in “Row E”.

Step 3: Multiply the current price by the minimum lot size. The product of the current price and the stock’s minimum lot size equals the minimum amount of money you need to buy that stock.

In the case of MEG, this is P3.35 current price multiplied by 1,000 minimum shares = P3,350. This means you need P3,350 to start buying the allowed minimum number of MEG shares.

See, a very useful application of the PSE Board Lot table is determining the minimum amount of money needed for you to begin trading stocks.

Wait, there’s more!

Take note that stockbrokers such as COL Financial, BPI Trade, PhilStocks, First Metro Securities, etc. charge trading fees and commissions so this amount will surely increase.

Read our article on PSE Stock Trading Fees and Charges to find out what these specific fees and charges are.

Congratulations! Now you know how to use the PSE Board Lot table. Happy smart investing!

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