PSE Stock Trading Fees and Charges (Sample Computation)



In another article, we talked about various fees and charges applicable to stock transactions in the Philippines. (See Fees and Charges when trading PSE stocks)

Before we give an example how these fees affect stock investors, let’s briefly recap what these costs and commissions are.

Fees and Charges in a PSE Stock Transaction

1. Broker’s Commission

The fee charged by a stock broker (such as COL, BPI Trade, Accord Capital, First Metro Securities, etc.) whenever a customer buys or sells stocks using their platform.

This is basically how brokers make money, and they charge this fee for every trade make, regardless if the customer is making a profit or loss. Broker’s commissions vary per broker, but the maximum they can charge is 1.5% of the transaction amount or a fixed minimum fee of P20, whichever is higher. The transaction is also charged the government tax of 12% VAT.

2. SCCP or Clearing Fee

The fee charged by the Securities Clearing Corporation of the Philippines (SCCP), a wholly-owned subsidiary of the PSE, which facilitates clearing and settlement of stock transactions. The clearing fee is 0.01% of the transaction amount.

3. PSE Transaction Fee

All stock trades go through the exchange or the PSE, and for that, the PSE charges 0.005% of the gross trade amount of every transaction.

4. Sales Tax

Charged only to sellers of stocks, the sales tax is 0.5% of the gross sales amount. Take note that this tax is charged even if the transaction resulted in a loss for the seller.

Table of Fees and Charges when Buying and Selling Stocks

To easily understand these fees, here’s a table summarizing the costs when buying or selling stocks in the PSE.

Fees and ChargesRate or AmountCharged to
Broker's CommissionMax of 0.25% of gross trade amount or P20, whichever is higherBuyers and Sellers of stocks
VAT on Broker's Commission12% of Broker's CommissionBuyers and Sellers of stocks
SCCP or Clearing Fee0.01% of gross trade amountBuyers and Sellers of stocks
PSE Transaction Fee0.005% of gross trade amountBuyers and Sellers of stocks
Stock Transaction Tax0.5% of gross trade amountSellers only

Sample Computation of Fees for a Buying Transaction 

Now, how much do you need to pay if you are to buy stocks in the PSE?

Let’s assume you want to buy 10 shares of Globe Telecom (Stock Code: GLO) at a price of P2,500. Let’s also assume, for this example, that the broker’s fee is 0.25% — similar to what most online stockbrokers in the Philippines are charging.

The fee computation is as follows:

  • Gross Transaction Amount: 10 shares * P2,500 share price = P25,000.00
  • Add: Broker’s Commission: 0.25% * P25,000 = P62.50
  • Add: VAT on Broker’s Commission: 12% * P62.50 = P7.50
  • Add: SCCP Fee: P25,000 * 0.01% = P2.50
  • Add: PSE Transaction Fee: 0.005% * P25,000 = P1.25
  • TOTAL BUYING TRANSACTION COST: P25,073.75

SUMMARY: To buy 10 shares of GLO at P2,500, one has to shell out a total of P25,073.75.

Sample Computation of Fees for a Selling Transaction 

If you are to sell stocks, how much proceeds will you receive, net of all fees and charges?

Basically, you will be paying the same fees above, plus the 0.5% stock transaction or sales tax. For a sample computation, let’s use the same assumptions above (sell GLO shares at P2,500, with the same broker’s commission rate of 0.25%). This time, there is an additional fee, the stock transaction or sales tax charged to sellers of stocks.

  • Gross Transaction Amount: 10 shares * P2,500 share price = P25,000.00
  • Less: Broker’s Commission: 0.25% * P25,000 = P62.50
  • Less: VAT on Broker’s Commission: 12% * P62.50 = P7.50
  • Less:SCCP Fee: P25,000 * 0.01% = P2.50
  • Less: PSE Transaction Fee: 0.005% * P25,000 = P1.25
  • Less: Stock Transaction Tax: 0.5% * P25,000 = P125.00
  • TOTAL PROCEEDS FROM SELLING TRANSACTION: P24,801.25

SUMMARY: The total amount you’ll receive for this selling transaction is P24,801.25 [computed as P25,000 gross proceeds less P198.75 total fees and charges].

Breakeven Point: How much should stock price rise so that you’ll have profit?

Before selling your stocks, make sure your selling price incorporates the fees and charges when you bought the stock and the fees you’ll have to pay once you sell it.

Otherwise, even if you sold your stock at a slightly higher price than your original price, it is possible that you actually might have booked a loss, instead of a gain.

So at what price or how much should your stock rise before you sell it to be assured of profit?

The breakeven point varies depending on the broker’s commission rate, but for a 0.25% commission, the stock price needs to rise at least 1.10% in order to book a profit.

This means the stock price should increase by at least 1.10% (versus the acquisition price) before you can really see profits.

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3 thoughts on “PSE Stock Trading Fees and Charges (Sample Computation)”

    • Hi Kristine, Merry Christmas to you too!

      Regarding your question, no, the abovementioned fees and charges do not apply to unsuccessful trades. The fees are charged only when there is a successful Buy or Sell stock transaction.

      Reply

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