Forex trading is illegal in the Philippines. Even though there exists a special regulatory body that oversees the financial markets, including the securities in the country, trading Forex is not legally acceptable business activity. The authority that is responsible for regulating the market is the Securities and Exchange Commission of the Philippines (SEC), which has been closely monitoring the development of different financial markets. Due to an alarmingly increasing number of scams, frauds, and money laundering-related crimes, the SEC has banned trading Forex at all.
However, the abolishment of Forex trading in the country has not stopped Filipinos from trading the currency pairs on international markets. They found a decent solution of trading with multinational brokerage companies that are regulated by the regional financial authorities. The majority of Philippines Forex traders deal with brokers that are licensed by the Financial Services Agency in Japan (FSA). The FSA is a highly valued and recognized regulatory body licensing and authorizing hundreds of brokers and protecting the rights and funds of millions of traders worldwide.
One of the advantages that Filipinos find with trading Forex is that there are no taxes payable. However, the reason behind it is somewhat worrisome. Since trading Forex is not legal in the country, traders cannot file their Forex earnings to the Revenue Authority of the Philippines. Therefore, Forex traders are illegally avoiding the tax fees, which could result in legal consequences if revealed by the respective authority.
The Philippine peso is the national currency of the country. Even though the Philippine Peso is regarded as one of the most stable currencies in the Asian region, it is still not available for trading Forex. The reason why PHP is not a Forex asset is purely due to the lack of demand for the currency. However, there are numerous regional currencies that Filipinos like to trade. The Japanese yen, Singapore dollar, or Hong Kong dollar are three of the most popular currencies traded in Forex by the Forex traders Philippines.
When it comes to payment systems, most of the top Forex brokers in Philippines have a wide range of solutions available for their clients. Philippine Forex traders can use traditional systems like Visa/Mastercard payment methods or online wallet and payment solutions like Skrill, Neteller, PayPal and etc.
Since there are no SEC regulated Forex brokers in Philippines, due to the fact that trading currency pairs in the country illegal, we recommend trading with international brokers. The international Forex brokers that work with the clients from the Philippines should hold the licenses from regional market regulators such as the FSA in Japan, DFSA in Dubai, SEBI in India, or similar. The majority of the leading brokerage companies operating in the region will hold several authorizations and licenses from different market regulators, which makes trading Fore with them extremely secure. Below is the list of the best Forex brokers for Filipino traders:
5$
CySEC, FCA, ASIC
30$, 50%+20%
30:1
2009
MT4, MT5, WebTrader
$100
CySEC, CBI, FSA, FFAJ, BVI FSC, FSCA, FSRA
1:400
2006
MT4, MT5, WebTrader, AvaTradeGO
USD 5,000
FINMA, FCA, ASIC, FSA, MAS, AFM
N/A
1:30
1992
SaxoTraderGo, SaxoTraderPro
$5
SVGFSA, FCA, DFSA, FSCA, FSA
From 30% to 100%
1:1000
2010
MT4, MT5
15
CySEC
30%
1:500
2015
MT4, WebTrader
$250
FSCA
1:200
2012
MT4, WebTrader
100$
FCA
N/A
30:1
2008
Custom
$10
Risk Warning: YOUR CAPITAL MIGHT BE AT RISK
N/A
1:1000
2013
Proprietary
10 USD
FCA, CySEC, FSA
N/A
1:Unlimited
2008
MT4, MT5, WebTerminal
$10
N/A
N/A
1:500
2019
MT4, custom
$10
1:500
MT4
250$
FCA, NFA
N/A
200:1
1999
MT4
$25
ASIC, CySEC, FSA, BVI
50%
1:400
2001
WebTrader, MT4, TradingView
100
FCA, CySEC, DIFC, CIMA
N/A
500:1
1977
MT4, MT5
$100 AUD
ASIC
N/A
500:1
2005
WebTrader, MT4, MT5, IRESS
AUD$200
ASIC, SCB, CMA, CySEC, FCA, BaFin and DFSA
N/A
1:400
2010
MT4, MT5, cTrader, TradingView
$50
N/A
N/A
1:500
2015
MT4
1 USD
ASIC, FCA
10 USD
1:500
2005
MT4, MT5, WebTrader
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The main regulatory body of the country, the Securities and Exchange Commission made a significant statement a few years ago that affected the local brokerage companies a lot. In 2018, the SEC actually announced that it advises stopping trading Forex with both local and international brokerage companies that have no licenses to engage with the following securities: binary options, indices, commodity futures, and Contracts for Difference (CFDs). The reason is that there were multiple cases when Filipino traders got scammed by the non-legit brokerage companies and there was nothing the SEC could do to help the victims of the scam brokers. The legal framework in terms of Forex trading in the Philippines remains the same. SEC has not changed its mind in terms of making Forex trading legal.
There is another market regulator in the country – the National Bank of the Philippines, or Bangko Sentral ng Pilipinas (BSP). The bank has the responsibility of overseeing and monitoring the monetary policies and foreign exchange rates in the country. However, similar to SEC, you will not be able to find any BSP regulated Forex broker in the Philippines. For that reason, many Filipino traders will approach Asian Forex brokers with licenses from several notorious regulatory organs operating on the continent. We recommend that you choose Forex brokers that hold licenses either from FSA Japan or DFSA Dubai, since these two regulators are known for their best regulatory and legal frameworks in the Forex industry.
Financial Services Agency of Japan (FSA) is a governmental organization formed in 2000, which is responsible for monitoring the various financial sectors and securities markets. The institution is constantly updating the laws applicable to financial companies operating in the region, as well as the restrictions or benefits that they are entitled to. Several major brokerage companies are regulated by the FSA and follow the strict guidelines of the regulator. Therefore, FSA-regulated brokers are recognized worldwide and serve millions of Forex traders within different jurisdictions.
DFSA has a strong reputation in all corners of the world. It has a relatively liberal approach towards regulating the Forex and securities markets compared to other financial regulators. However, DFSA Forex brokers are some of the most reliable and transparent brokerage companies existing in the world. DFSA has multiple requirements that establish the international standards for brokers. The brokers have to provide segregated client accounts, conduct regular financial audits and offer Negative Balance Protection to their clients, as well.
Register with DFSA-regulated broker XM
Forex traders do not pay taxes in the Philippines. Even though the capital gains tax is considerably low in the country – 6% of the net gains, it does not apply to Forex assets for a simple reason – Forex trading is illegal. Therefore, if a person were to report his or her Forex earnings in the revenue authority, he or she would face legal consequences. That is why Forex traders do not file their tax reports on Forex income and rather retain it to themselves completely.
However, trading in any other securities and capital assets is taxed in the country. For instance, stock traders would have to pay a Capital Gains Tax (CGT) of 6% on the net earnings.
Philippine peso is not available for trading in the Forex industry. Even though, Philippine peso is a free currency and is not currently pegged to any other foreign currencies the demand on it is not sufficiently high to attract the investments of Forex traders. That is why you would not be able to find Forex currency pairs containing the Philippine peso. However, many Filipino Forex traders invest in Asian dominant currencies that are widely available across the platforms of the best brokers in Philippines. One of the most frequently traded currencies in the country is the Japanese yen.
Japanese yen represents a major currency asset on the Forex market. It is part of the seven major currency pairs together with USD, AUD, CAD, EUR, and GBP. The average spreads will vary according to the currency pair, however, most of the JPY currency pairs range between 1 to 3 pips with the top Forex brokers.
Trade JPY currency pairs with XM
There is no cap on leverage in the Philippines as Forex is illegal in the country. Therefore, there are no further restrictions on the usage of Forex assets or brokerage services. However, it is important to understand that leverages contain a high risk for your trades. Therefore, do not be tricked by the sky-high leverages that often come from the unregulated Forex brokers. Look at it as a loan from the broker. You do not want to owe your broker much more money than you actually have available in your financial assets. For example, the leverage of 1:2000 is incredibly risky and should be avoided at all costs, even if you have considerable knowledge and expertise in trading Forex. The leverage of 1:1000 is acceptable in few cases only. 1:500 and 1:200 leverages are less risky and are considered to be optimal for the Forex market.
Filipino traders can access the most popular payment solutions ranging from traditional methods to innovative online payment systems. However, since Forex is not a legally allowed financial activity, we do not recommend using bank wire transfers as your primary payment solution. The banks will record the transactions and if they notice frequent deposits from the unidentified sources it could later trace back to a broker and you might end up being questioned on how are you earning your income. Therefore, it is better to stick to online payment solutions that provide extra security and safety for your private data and transactions. You can choose among the most common payment platforms of PayPal, Skrill, Neteller, or others. Most of the Philippines best Forex brokers will offer at least ten different payment methods available for their clients.
Use Skrill and Neteller payments with XM
Unfortunately, Forex scams are frequent in the Philippines. The Securities and Exchange Commission has been working actively to reveal the frauds and scams and that became one of the reasons why the institution banned trading Forex at all. One of the recent cases involved the scam Forex broker OnlineBiz which took away millions of Philippine pesos from the traders. OnlineBiz asked for 19,000 pesos of investment in exchange for 5,000-50,000 pesos weekly earnings along with the insurance plan and free travels. The broker was identified as a scam by the SEC in few months and the owners of the company faced severe charges.
Since the scams became frequent, traders from the Philippines have to make sure that they are trading with the legit brokers in Philippines. To do so, they must check the individual reviews of the brokers and see if they are regulated by any official financial authority. Preferably, these brokers should hold at least one license from the top Asian market regulator. If you trade with regulated Forex brokers in the Philippines then you are guaranteed to avoid scams.
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