Starting July 1, 2025, banks in the Philippines are now taking 20% tax from the interest you earn on your savings accounts. This is part of a new law called the Capital Markets Efficiency Promotion Act (CMEPA) or Republic Act No. 12214.
Before this law, the tax on interest from bank deposits was different depending on how long you kept the money. Some savings had lower taxes or were even tax-free if you saved for 5 years or more. But now, no matter how long you save or what currency you use, all interest earned will be taxed 20%.
This rule affects both peso and foreign currency accounts. Major banks like Metrobank, UnionBank, and Security Bank have already started applying this tax.
What Does This Mean for You?
- If you open a new savings or time deposit account now, the interest you earn will automatically be reduced by 20% tax.
- If you already had a deposit before July 1, the old tax rules still apply until it matures (ends).
- This change is part of the government’s plan to make taxes simpler and easier to understand for both banks and investors.
Why Was This Done?
The government says CMEPA will:
- Make our financial system more modern and fair
- Help people and businesses invest more easily
- Bring in more money for the government (about ₱25 billion by 2030)
- Encourage more Filipinos to save and invest
Banks also said this tax change will help people make better long-term financial plans because it’s now easier to predict how much tax will be taken from savings.
What’s Next?
The Bureau of Internal Revenue (BIR) is expected to release more detailed rules soon. Banks also say more changes may happen once BIR gives full guidelines.
Read: DepEd to Improve Education After Philippines Ranks 74th in Global Study
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