Understanding CMEPA: A tax reform to benefit Filipino investors
Republic Act No. 12214, or the Capital Markets Efficiency Promotion Act (CMEPA), was signed into law by President Ferdinand Marcos Jr. on May 29, 2025. CMEPA is a modern reform that brings the Philippines in line with global practices. It helps grow our economy by making it easier for businesses to raise money, ensures the government can manage its finances wisely, and encourages more people—including individuals and institutions—to invest in the local financial markets. Investors can also now enjoy a streamlined, more predictable tax regime.
Frequently Asked Questions
What is the Capital Markets Efficiency Promotion Act (CMEPA)?
CMEPA or Republic Act No. 12214 is a new law that will help make the Philippine investment market more competitive, makes taxes on investment earnings simpler, and supports the country’s finances by updating parts of the tax code. This was signed into law by President Ferdinand Marcos Jr. on May 29, 2025 and takes effect on July 1, 2025.
What’s the objective of CMEPA?
The new law aims to make taxes on investment earnings fairer, attract more foreign investors by keeping key tax perks, lower the costs of buying and selling investments, and help the government raise funds responsibly without overtaxing people.
What’s the expected impact of CMEPA?
CMEPA aims to modernize the Philippine capital markets by:
- Making investment channels more affordable and accessible, CMEPA will enable more Filipinos to participate in the capital markets.
- Aligning the Philippines more closely with regional peers, making the market more competitive and encouraging Filipinos to invest locally.
- Encouraging more capital circulation into a wider range of products, contribute to stronger market liquidity, and benefiting not just individual investors, but the investment environment as a whole.
What Security Bank products and services are affected?
Below products and services are affected by CMEPA:
| Product/Service | CMEPA impact |
| Peso Deposits and Foreign Currency Deposit | Interest subject to a uniform 20% final tax |
| Stocks Trading | Stock transaction tax cut to 0.1% |
| Mutual Funds/UITFs | DST exemption on issuance/redemption; tax‑exempt gains |
How are my outstanding transactions impacted by the implementation of the CMEPA law?
The effectivity of the CMEPA law is prospective starting July 1, 2025. Any outstanding investment that has not yet matured will still be subjected to the previous tax. Any new transaction made on or after July 1, 2025, will be subject to the new tax.
We’ll advise you if there are any changes arising from the Implementing Guidelines to be issued by the Bureau of Internal Revenue.
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