Under the Tax Reform Act (R.A. 8424), interest income from peso-denominated government or corporate debt securities is subject to a 20% final withholding tax. The withholding tax rate applies to both resident and non-resident alien engaged in trade or business in the country.

Government securities are exempt from capital gains tax while a 5% to 10% tax rate is levied on other debt securities.

In February 2004, a new Documentary Stamp Tax Bill (R.A. 9243) was passed which temporarily waives document stamp taxes levied on secondary debt trading of debt and equity instruments, and on borrowing or lending securities traded at a registered exchange.

A summary of tax rate for individual and corporate investors provided at the table below.