Index rallies on TRAIN approval

MANILA, Philippines — The stock market cheered the much awaited and highly anticipated ratification of the Duterte administration’s tax reform package.

The benchmark Philippine Stock Exchange index (PSEi) cheered the news, rallyiing 101.45 points, or 1.21 percent, to finish at 8,461.06 while the broader All Shares index gained 56.56 points, or 1.15 percent, to finish at 4,938.54.

Most sectors ended in positive territory except for the mining and oil index, which would be affected by the increase in coal taxes.

Total value turnover reached P7.615 billion as advancing stocks outnumbered decliners, 110 to 103 while 33 issues were left unchanged.

Congress on Wednesday ratified the final version of the proposed Tax Reform for Acceleration and Inclusion (TRAIN), which is expected to generate P130 billion in revenue.

Part of the tax reform package is in increase in stock transaction tax from 0.5 percent of one percent on its gross selling price to 0.6 percent.

Monzon said this is not negligible and could really affect investment activities in the market.

The approved tax package also called for an increase in the take-home pay of workers but also hiked taxes on fuel, vehicles and sugar-sweetened beverages while expanding the value-added tax (VAT) base.

President Duterte is expected to sign the package into law on Dec. 19.

The expected approval of the so-called tax reform bill was delayed by a last-minute disagreement over exempting local coal from the proposed higher levy on coal taxes.

The TRAIN was supposed to be ratified as early as last Tuesday.