Category Archives: Personal Finance

Tax-loss harvesting in the Philippine stock market?

Personal Finance, Stocks, Uncategorized, ,

In the US, losses incurred from selling stocks from losing investments can be used to lower capital gains from winning trades.Short-term capital gains are taxed as though they are ordinary income which is taxed based on a progressive tax table. Near the end of the year, if you already have realized some gains (that you’ll have to pay taxes on) and are still holding on to some losing positions, you may decide to cut your losses and sell your losing stock positions. This will allow you to harvest losses to offset some of your gains, thereby reducing taxes that you’ll have to pay. If you don’t have any gains to offset, you can also reduce your ordinary income (wages, etc.) by up to $3,000 of your losses. In a way, this may encourage you to stop holding to that losing stock and cut your losses, and also reduce your tax bill. On the other hand, the stock might recover and you’ll miss out on it. You’re not allowed to buy the stock again within 30 days of selling it, and still be able to harvest the loss, because of wash sale rules.

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Opening a Charles Schwab Brokerage Account from the Philippines

Personal Finance, Stocks, , ,

In the process of moving from the US back home to the Philippines, I had to make certain arrangements with regard to my financial assets in the US. I maintained taxable equity accounts with Wealthfront and Robinhood, both of which do not cater to non-resident aliens. While I was a “resident alien for tax purposes” while I was living in the US, I am now properly classified as a non-resident alien after returning to the Philippines.

Many such brokerages in the US do not cater to non-resident aliens and even US citizens living abroad because there are a lot of regulations to comply with (FATCA, among others). Fortunately, the bigger online brokers like Charles Schwab, TD Ameritrade, and Interactive Brokers do make their services available to non-resident aliens.

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Costs of stock trading in the Philippines

Personal Finance, Stocks

Having been used to the mechanics of trading stocks in the US stock market, there’s a bit of a learning curve in understanding how trading stocks in the Philippine Stock Exchange works.

The first major difference is with regards to online broker commissions. In the US, flat-rate commissions typically ranging from $4.95 to $7.95 have been commonplace for the past several years. These were paid for each buy and sell transaction regardless of transaction size. Zero-free commissions were popularized by Robinhood. In October 2019, more established brokers like Charles Schwab, TD Ameritrade, E*TRADE, and others followed suit by reducing their commissions to zero. So it’s now practically free to trade stocks in the US stock market. You’ll just have to take care of paying capital gains taxes when you file your tax return.

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Philippine Banking Culture Shock: Unsolicited Ready-to-Activate Credit Cards

Personal Finance, ,

After coming back home to the Philippines, I decided to open a bank account with Banco de Oro (BDO). I chose BDO because it has several branches and, in fact, there is one five minutes away from where I live. I first opened a Peso (PHP) account followed by a US dollar account a few months later. Since opening those accounts, my average combined balance did not exceed the equivalent of $3,000.

About 10 months after I opened the account, I was surprised to receive a ready-to-activate BDO credit card by courier. I did not apply for any such credit card. I had no intention of applying for any credit card since I am not currently working and these credit card applications require some form of employment certificate. I also still have active US credit cards that I can use.

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