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2019: Forex Trading In The Philippines — What Is LEGAL, What Is NOT

On October 30, 2018, the Philippines Securities and Exchange Commission (SEC) Issued it’s latest advisory stating categorically that “Forex Trading Is Illegal In The Philippines” For Context, here are the highlights of that advisory:

October 30, 2018

FOREIGN EXCHANGE TRADING IS ILLEGAL IN THE PHILIPPINES.

The public is hereby advised to STOP engaging in Foreign Exchange Trading and to STOP investing in foreign-registered investment platforms of commodity futures, contracts for difference, indices, binary options and the like. Further, the SEC advises the public that persons and entities acting as brokers, salesmen or agents of these securities have NO LICENSE to engage or deal in any manner with these securities and should therefore be AVOIDED or IGNORED…

…The public is encouraged to report to the Commission entities and/or persons operating Foreign Exchange Trading platforms and those acting as brokers, salesmen or agents of these operators to the Enforcement and Investor Protection Department (EIPD) at telephone numbers 818-76-50 and 818-63-37.”

My name is Mark So and I have been trading the Forex Market online for approximately 15 years already. I am based in the Philippines and I have been educating our fellow Filipino’s on the dangers as well as facts about this highly speculative industry.

When this advisory came out, I had a lot of people ask me questions, but a lot more people keeping quiet and slowly move away from Forex trading. I would therefore like to share some more information and clarification on this topic in a simple Q and A (Question and Answer) format.

Q: “Is Studying and Analyzing Currency Movements Illegal in The Philippines?”

A: “NO”

Q: “I have an existing trading account with a Foreign registered broker, am I in trouble?”

A: “NO”

Q: “Can I still trade my forex account? Or should I just withdraw the funds”

A: “Yes you can still trade your account. You can also just withdraw the funds if you do not want to trade anymore”

Q: But what about the advisory of SEC that Forex trading is illegal in the Philippines, what aspect is considered illegal?

A: As the Advisory states, the public should not invest in actual foreign exchange trading. This would literally mean that you should not open a trading account with any Foreign registered investment platform moving forward. Attending a seminar on understanding what it is all about is not considered illegal.

Q: Why did SEC issue this advisory?

A: The advisory came about because of a lot of complaints from investors who lost money trading forex due to entities acting as brokers, salesmen or agents and have no regulatory licenses in the Philippines. So please beware of entities and personalities that use deceptive advertising and marketing tactics that lure a lot of unsuspecting investors giving them false hopes. 

Q: Are you concerned that the SEC may pursue a case against you and your education in Forex?

A: NO. My intentions are very clear. My purpose is to educate and protect people in this industry, not to deceive and scam people.

In fact, a few days after the SEC advisory came out, I placed a call directly to the Enforcement and Investor Protection Department (EIPD) at telephone numbers 818-76-50 and 818-63-37 and talked to the person in charge of pursuing those in violation of this advisory and clarified. I stated my name and what I do.

From my understanding, the priority for the EIPD is to pursue cases where there are complaints of fraudulent activities which have come to their attention. Realistically, this is what the SEC can do at this point. Reading between the lines However, if you already have a trading account and have no complaints, there really is nothing the EIPD can and will do.

Q: What is your plan as a Forex Trainer in the future?

A: I have already volunteered to be a resource person for the SEC to get policies in place to regulate the Forex Market in the Philippines. I’ve had ongoing productive phone conversations with the EIPD in 2018 and stating this year 2019 with the Markets and Securities Regulatory Division (MSRD) who will be issuing policy guidelines for properly regulating Forex in the Philippines. I have offered my help in several key issues in getting these policies done and from how our conversations are going, they are open to collaborate with me. 

I do understand the plight of uninformed investors who want to get into the Forex trading space. I also have a deep appreciation of what the SEC is trying to do to protect the investment public in general.

We are still early stages but according to the MSRD, they’ve been wanting to release policy guidelines already since last year, but they still need some more research. Needless to say, I will be doing my very best to help the SEC get Forex Trading and Investing in the Philippines legal and regulated already and STOP those who victimize people in our industry.

Q: “Will the SEC Regulate the Forex Market In The Philippines?”

A: “According to the MSRD of SEC, Yes, however there is no definite time table yet for this.”

Q: “What Should I do Now If I’m Really Interested In Forex?”

A:  “Study first, when the regulations or clearer guidelines are in place in the Philippines, then start trading.”

Q: “What’s the point of studying and Analyzing Currency Movements If I Can’t Trade Yet?”

A: “Understanding when to exchange your USD to Pesos or Pesos to Euros or Yen or Pounds and other currency movements is important when it comes to mainstream businesses and Overseas Filipino Workers who regularly transact businesses in foreign currencies. Money Changers and forex remittance companies, even regular tourists and travelers who want to minimize foreign conversion losses due to fluctuations can also benefit from what I teach. Furthermore, Understanding currency movements is the foundation that is needed when learning to invest outside of the Philippines.”

Do you have questions? Leave a comment below and I will try my best to answer them.

You May Also Want to Read This Article: “3 Ways Scams Come Into The Forex Market, And How To Protect Yourself”

155 thoughts on “2019: Forex Trading In The Philippines — What Is LEGAL, What Is NOT”

  1. what is illegal is that if acted as investment company asking investor with the assurance of return of invesment without authority by law. there is no mention of individual who want to trade their own money in any form of foreign forex platform.

  2. Hi! So can I still trade CFDs on a foreign investment platform? What i am doubtful now is how to withdraw the funds to a local bank… they will ask where the money come from for sure…Knowing SEC just banned foreign exchanges trading….and how should i declare my capital gains to Income Tax Returns if this is “illegal”??
    I just want to be an honest citizen as much as possible and follow the law. Better to do everything legal than regretting it later on…
    Thank you.

    • The default withdrawal method is usually back to your funding source. So if you deposited through debit card, it goes back to your debit card, same goes for credit card or us dollar savings. They will usually only ask if you withdraw through bank wire transfer. But in any case, if they do ask just tell them the truth, that it is profits from your online trading of cfd’s. With regards to declaring taxes, you will need to ask your accountant how you want to declare it. But generally, it will fall under additional income. Hope this clarifies

      • Do we need to submit documents sa bank if ever magwithdraw ng funds from foreign investment platform? kelangan pa po ba ng license or certificate? im using wire transfer.

        • Usually banks just need to know the purpose of the withdrawal so just say that it is from your investments abroad. If they ask for supporting docs just give them the withdrawal forms you used with your broker

          • E kung small amounts lang naman po meron pa bang documents? Im expecting kc diretso lang sa bank account if ever magwithdraw ng funds

    • Your broker is remitting money to your bank account with supporting document to prove it’s legal. SEC is not banning but informing the public through Advisory that we don’t have regulation in the Philippines for Forex or CFD trading in the Philippines. If you say in the Philippines, the transaction has been made in the Philippines through any acting agent, expert or brokers based in the Philippines. If you have a foreign broker, verify if you can transact with them. Foreign brokers have list to which countries they are banned. The foreign brokers are paying taxes where they are based. Since our transaction is buy and sell, we are charged based on commission or by spreads. Our transaction cycle is, you are sending money to your foreign broker to deposit in your trading account using either credit/debit/ewallet/wire transfer..is this illegal or is this subject to tax or do you pay the transaction charge?..then next you trade it by buying and selling..don’t you pay your transaction fee with your broker?..when you took profit and want to withdraw, your broker will send it back to your local bank account through the same process. Our local bank is charging tax in our account. Why should we be charged of Income Tax if our foreign broker is not under the regulation of Philippines and our transaction has been done only through online? Same in the Philippines Stocks Exchange, do traders and investors really need to pay income tax? Of course not. It’s a buy and sell so we pay taxes like VAT and sales tax. Likewise, our foreign broker is charging us which already included in the transaction fee.

  3. What kind of Philippine government we have, we just need a simple and regulated laws on forex trading, how’s can we know if certain forex broker is legitimate or not. If lawmakers are concerned with the Filipino people they should pass a law to regulate and give protection to those who will want to engage in forex trading so that they can help to uplift the financial status of ordinary people. Why other countries can do that, why our Legislative body cannot including this stupid department or institutional heads in order us to be confident in making additional passive incomes. Trading is only for rich and powerful people, and the poor become more poorer? What the heck you people in the government, protect us, do your job.

    • Yes but not automatically, you have to declare it in your income tax return as other income. Ask your accountant on details na lang

  4. Hi Sir… How much is the average cost for coaching forex tradign.. And what will be the remedy in case that I was not qualified as per the company but i already invested money..pls do help me…thank u

      • Me too sir Mark been this full time trader for almost 5 years… and planning to share my real world experience to our fellows not online but lecture base.. Tend to have this office for 15 seats this early 2020.. Do you any idea what are the requirements needed aside from DTI and local permit… for Forex Learning Centre. thank you much for your time Sir Mark.

  5. Sir, I sent you an email. Though I would like to post my concerns here as well. Here is the content of the email I sent to you:

    Hello Sir Mark!

    I am Dayanara Delos Angeles and I started doing binary options last month using IQ Options as my platform. I’ve been doing pretty great about it. However, I need help on the following matters:

    Although there is an alternative way to withdraw my profits using Skrill – Gcash, I would still like to use my bank account for my profits in the long run. However according to the bank (BPI), I need to secure business permits first before they allow the bank account to be used for trading purposes. My questions are

    1) You as a Forex Trader, what permits or license did you secure in order to trade legitimately in the country?
    2) How do you present your income from trading in your Income Tax Return? (I think this has already been answered, as you said it is presented as Other Income)
    3) Are there any Filipinos who were able to secure business permits for options trading? (or for forex trading)
    4) How can I become a legitimate binary options trader in the Philippines?

    Thank you so much for taking the time in reading this email. I’m conducting this research before I go through the hassle of securing business permits. And I don’t know my chance of being granted permits, I’m trying to avoid unneccessary expenses.

    I hope for your immediate response. Have a great day Sir!

    Regards,
    Dayanara, CPA

  6. Kindly comment on my interest re Binary Option Trading which I found very productive on my working peers when I was out of Pinas. I researched that this BOT is not LEGAL here in Pinas But Brokers (foreign & Local personnel) invite me to deal with them for a minimum fee of $50, Please comment on this ASAP, Thanks & God Bless

    • Hi Jesse, thanks for reaching out, unfortunately I do not trade binary options so I can’t answer you here properly. Just make sure that you keep your risks small. Good luck

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