Chapter 5 of 7 · 6 min read
Getting paid to hold a stock, the one date that decides whether you qualify, and every peso that comes off a trade before the money is yours.
What you'll learn
Key terms in this chapter
In one sentence: some companies pay you cash just for holding their shares, one specific date decides whether you qualify, and every trade carries small costs that matter far more when you trade often.
A cash dividend is a slice of a company's profit paid directly to shareholders, usually once or twice a year, though not every company pays one and the amount is never guaranteed. Three dates matter, in this order.
The company's board announces that a dividend is happening, and how much per share it will be. Nothing has been paid yet, and nothing is owed to you yet.
The first day the stock trades WITHOUT the right to that dividend. You must already own the shares before this date to qualify. Buying on the ex-date, or after it, means this particular payout goes to the seller, not to you.
The cash actually lands in your brokerage account, typically several weeks after the ex-date, already net of the 10% withholding tax.
The ex-dividend date is the one that trips people up. Buying the day before qualifies you; buying that morning does not. Note also that a stock's price typically drops by roughly the dividend amount on the ex-date, because the buyer is no longer getting that payout. Buying purely to capture a dividend is therefore not free money.
A company can also pay a stock dividend instead of, or alongside, a cash one: additional shares handed out in proportion to what you already hold. It doesn't by itself make you richer, since the total value of your holding is unchanged, just more shares at a proportionally lower price each, but it does raise your share count for any future cash dividend calculated per share.
A stock page's dividend yield figure on PSEye is trailing twelve months, meaning what a share actually paid out over the last year, not a promise of what it will pay next. See every upcoming ex-dividend date across all 282 tracked companies on the calendar.
Beyond the price of the shares themselves, three costs apply to a typical trade: your broker's own commission (a small percentage of trade value, often with a minimum peso fee, plus VAT, the exact rate varies by broker), a PSE and SCCP clearing fee, and, on the sell side only, a 0.6% stock transaction tax deducted automatically from the proceeds. Cash dividends have their own separate 10% final withholding tax deducted before they reach your account, so a stock page's dividend yield is the gross figure, not what actually lands in your bank. None of these are something you calculate or file yourself, your broker handles the deductions, and none of this is tax advice for your specific situation.
Say a broker charges a 0.25% commission (an illustrative rate only, not any real broker's actual fee) on a ₱10,000 buy order. That's roughly ₱25 in commission, plus VAT on the commission and a small clearing fee, so your total cost lands a little above ₱10,000. Selling that same position later adds the 0.6% stock transaction tax on top of commission, roughly ₱60 on a ₱10,000 sale by itself. Round trip, you are down something like ₱100 before the price has moved at all, so the stock has to rise about 1% just to break even. Confirm your own broker's actual commission schedule directly, since it varies and changes over time.
That break-even figure is the practical reason the next chapter warns against overtrading. The costs are small in isolation and quietly large in repetition: the same ₱10,000 moved twelve times a year pays that round trip twelve times.
Good to know
Yes. Cash dividends from PSE-listed companies carry a 10% final withholding tax, deducted automatically before the cash reaches your account. You don't calculate or file this yourself, and it's separate from the 0.6% stock transaction tax charged when you sell shares. See upcoming ex-dividend dates →
This guide is general information, not personalized advice. More on what PSEye is and isn't.