Tax updates as of July 2025

IMPORTANT TAX ADVISORY

This is to inform the public about the recent development in the Philippine financial landscape that may impact some of your banking transactions. Republic Act No. 12214, or the Capital Markets Efficiency Promotion Act (CMEPA), was signed into law by President Ferdinand Marcos Jr. on May 29, 2025. This landmark legislation seeks to enhance the competitiveness of the Philippine capital markets, simplify the taxation of passive income, and reinforce fiscal stability by further amending multiple sections of the National Internal Revenue Code of 1997 (NIRC), as amended. It helps grow our economy by making it easier for businesses to raise money, ensures the government can manage its finances wisely, and encourages more people—including individuals and institutions—to invest in the local financial markets. Investors can also now enjoy a streamlined, more predictable tax regime. As such, be advised of the upcoming adjustments in tax rates on products and services of GM Bank of Luzon, Inc. (A Rural Bank), effective July 1, 2025.

Long-term (5 years or more) time deposit accounts opened prior to July 1, 2025 will retain its prevailing tax-exempt status until term maturity, including the use of pre-CMEPA FWT rates in case of account pre-termination. Accounts opened on or after July 1, 2025 will follow the new FWT rate on interest income earned.

We’ll advise you if there are any changes arising from the Implementing Guidelines to be issued by the Bureau of Internal Revenue.

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