Sample Computation of Fees for a Buying Transaction in PSE

Sample Computation of Fees for a Buying Transaction

How much do you need to pay if you are to buy stocks in the PSE?

Let’s assume you want to buy 10 shares of PLDT (Stock Code: TEL) at a price of P2,500. Let’s also assume, for this example, that the broker’s fee is 0.25% — similar to what most online stockbrokers in the Philippines are charging.

The fee computation is as follows:

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Gross Transaction Amount: 10 shares * P2,500 share price = P25,000.00
Add: Broker’s Commission: 0.25% * P25,000 = P62.50
Add: VAT on Broker’s Commission: 12% * P62.50 = P7.50
Add: SCCP Fee: P25,000 * 0.01% = P2.50
Add: PSE Transaction Fee: 0.005% * P25,000 = P1.25
TOTAL BUYING TRANSACTION COST: P25,073.75

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Thus, to buy 10 shares of PLDT shares at P2,500 share price, one has to shell out a total of P25,073.75.
Sample Computation of Fees for a Selling Transaction

If you are to sell stocks, how much proceeds will you receive, net of all fees and charges?

Basically, you will be paying the same fees above, plus the 0.5% stock transaction or sales tax. For a sample computation, let’s use the same assumptions above (sell TEL shares at P2,500, with the same broker’s commission rate of 0.25%). This time, there is an additional fee, the stock transactionor sales tax charged to sellers of stocks.

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Gross Transaction Amount: 10 shares * P2,500 share price = P25,000.00
Less: Broker’s Commission: 0.25% * P25,000 = P62.50
Less: VAT on Broker’s Commission: 12% * P62.50 = P7.50
Less:SCCP Fee: P25,000 * 0.01% = P2.50
Less: PSE Transaction Fee: 0.005% * P25,000 = P1.25
Less: Stock Transaction Tax: 0.5% * P25,000 = P125.00
TOTAL PROCEEDS FROM SELLING TRANSACTION: P24,801.25

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The total amount you will receive for this selling transaction is P24,801.25 [computed as P25,000 gross proceeds less P198.75 total fees and charges].
Breakeven Point

Thus, before selling your stock, make sure your selling price incorporates not just your acquisition cost but also the fees and charges paid when you bought the stock and other fees you will have to pay once you sell it. Otherwise, even if you sold your stock at a slightly higher price than your original price, it is possible that you actually might have booked a loss, instead of a gain.

So at what price or how much should your stock rise before you sell it to be assured of profit?

The breakeven point would vary depending on the broker’s rate of commission but for a 0.25% commission, your stock price needs to rise above 1.09% in order to book a profit. That means the stock price, compared to your acquisition price, should increase by at least 1.09% before you sell it so that you will make money.

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