DOF shrugs off concerns over ‘alphalist’

The Department of Finance (DOF) over the weekend shrugged off the concerns of those opposed to the recently issued rules on the so-called “alphalist” of portfolio investors, saying that the critics’ claims were “not supported by facts” and that the stock market continues to be robust.

The opponents claimed that the new rules would trigger capital flight from the country.

“Ten months since the amendment took effect, relevant indicators show that the regulation has produced none of the negative effects feared by investors. In fact, the Philippine Stock Exchange (PSE) is maintaining its all-time high, the monthly inflow of foreign portfolio investments has surpassed outflow since April this year, and foreign trading in the PSE has increased as a share of total trading over the past few months. The facts simply do not support the undue fears being raised,” Finance Secretary Cesar V. Purisima said in a statement.

The amendment Purisima referred to was the Bureau of Internal Revenue’s Revenue Regulation 1-2014, which required brokers to submit an alphabetical list of dividend income recipients.

Revenue Commissioner Kim S. Jacinto-Henares earlier explained that RR 1-2014 was “nothing new” and was “just a stricter implementation” of the provisions of RRs 2-1998 and 10-2008 issued in 1998 and 2008, respectively.

The PSE was among those opposed to the alphalist rules, along with Bankers Association of the Philippines, Fund Managers Association of the Philippines, Philippine Association of Securities and Dealers Inc. and Trust Officers Association of the Philippines.

But according to Teresita J. Herbosa, SEC chair, RR 1-2104 “facilitates a transparent and professional market.”

No privacy rights of the investors “are compromised since tax-paying investors have all along provided the information sought in the said BIR revenue regulation,” Herbosa said, adding that only those “seeking to avoid taxes need to be concerned.”