How to Invest in Philippine Stock Market

I still encounter this question despite several resources available online. So here are the basics: Stock broker, settlement account, and funds.

Stock broker. There are several stock brokers in the Philippines which offers both traditional and online trading. Traditional trading is when you call your agent and she/he will do the actual buying and selling of stocks in your account. Online trading is logging in to your broker account and doing the actual buying or selling of stocks

Settlement bank account. These are existing or new bank accounts that you can use to transfer fund or receive funds from you stock broker account. Majority of local bank accounts can be used as a settlement account linked to specific stock broker accounts. Recently, payment apps can also be used in funding stock broker accounts.

Funds. Of course in order to buy stocks you need cash. Initial funding varies per broker, minimums of 5,000; 1,000 or 10,000 are common among online stockbroker.

After determining which stock broker and settlement bank account is matched to your needs or preference. You then open an account. Usual requirements are the following: Application form, valid government ID, signature cards.

Application Form. These application forms can be downloaded or filled up in the websites of stockbrokers. It requires basic information like name, addresses, TIN, ID number

Valid Government ID. Acceptable IDs in most stock brokers are SSS ID, GSIS ID, UMID, Passport.

Signature Cards. The same requirement with banks wherein you will need to sign multiple times in order to verify signatures for transactions. These documents together with application form and copy of valid IDs are needed to be submitted to the office of the broker as a requirement of government under the know your customer policy in compliance with the anti money laundering.

So you already have a stock broker after submission of requirements and depositing the funds. You are now ready to buy stocks. Basic consideration before buying is the following: lot size, stock price, bid price, and ask price.

Lot Size. Also called boardlot. This is the minimum size a stock can be bought. Usually in multiples of 5, 10, 100, 1000. The price of the stock is the main consideration for the lot size is the price range. Below is the actual table.

Price Range (Pesos)			Board Lot (Min # of shares)
0.0001	to	0.0099	1,000,000
0.010	to	0.049	100,000
0.050	to	0.249	10,000
0.250	to	0.495	10,000
0.50	to	4.99	1,000
5.00	to	9.99	100
10.00	to	19.98	100
20.00	to	49.95	100
50.00	to	99.95	10
100.00	to	199.90	10
200.00	to	499.80	10
500.00	to	999.50	10
1,000	to	1,999	5
2,000	to	4,998	5
5,000	to	UP	5

Stock price. This is the amount of a stock in pesos per share. For example, the price for share of Meralco with stock code MER cost around 216 pesos per share. In the table above, it is in the 200 to 499.80 range and the minimum lot size is 10. The minimum amount that can be bought is 216x10 = 2160 Pesos. Considering commission and taxes, it is around 2,200 Pesos you can buy 10 shares of Meralco.

Bid Price. Bid is the size and price a buyer or buyers are willing to purchase a particular stock. In the example below, buyers are willing to purchase 55,090 shares of Meralco at 216.20.

Ask Price. Ask is the size and price a seller or sellers are willing to sell their shares of stock. In the example below 1,020 shares are available at 218.20 pesos. 

In order for a sale to happen, there should be a match between bid and ask. So if you are a buyer and wish to quickly execute a buy transaction. You can buy a minimum of 10 shares in the available 1,020 shares at 218.20 pesos. If you wish a quick sell of the shares you have, you can sell it at 216.20 pesos.

These are the basics of investing directly in Philippine stock market. Of course, there are several other considerations before buying and selling a stock, but these are the basics in order to start trading.