Capital Market Efficiency Promotion Act (CMEPA) Explained: Why the Proposed Tax Reform May Hurt Filipino Savers

Wazzup Pilipinas!?

THE CLAIM:

"The government is now planning to tax our savings — the little money we try to set aside after taxes, inflation, and bills."

WHAT’S FALSE OR MISLEADING ABOUT THIS CLAIM:

There is no current law or finalized proposal under Ralph Recto’s leadership that directly imposes a new tax on personal savings like the money you store in your bank account, piggy bank, or emergency fund.

However, what sparked public outrage was a Department of Finance (DOF) proposal that includes removing certain tax exemptions or harmonizing taxes across financial instruments — particularly on:

Interest income from long-term deposits (currently tax-exempt if held for 5 years)

Time deposits and trust funds

Passive income from investments

This means the DOF may seek to remove the tax exemption that encourages long-term saving — which is not yet law and must still go through Congress.

Senate President Ralph Recto, as a longtime fiscal policy leader, has supported various tax reform packages. While he hasn't authored a direct “tax on savings” bill, some speculate he may support parts of the DOF’s broader tax rationalization goals — but this remains to be seen.

THE CONTEXT YOU SHOULD KNOW:

Under the current tax code:

Savings accounts already earn interest subject to a 20% final withholding tax.

But long-term investments (5+ years) are tax-exempt to encourage financial planning and discipline.

The DOF’s new Comprehensive Tax Reform Package (CTRP) includes revisiting these exemptions under the guise of “efficiency” and “broadening the tax base.”

Critics argue that such a move would hurt the middle class, especially those saving for retirement or their children’s future — and erode trust in government promises of rewarding discipline and prudence.

WHAT TO WATCH FOR:

No new taxes are being implemented yet. Everything is still in proposal stage.

Any changes must pass through both the House and the Senate, and will require public hearings.

You have the right to voice opposition now — while it's being debated.

Let’s expound on the real issue and explain what CMEPA actually is — especially in the context of the current financial and tax reform proposals in the Philippines that have stirred public concern.

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What Is CMEPA?

CMEPA stands for the Capital Market Efficiency Promotion Act — a legislative measure currently being proposed as part of the government’s Comprehensive Tax Reform Program (CTRP) spearheaded by the Department of Finance (DOF).

It is not yet a law, but is part of the Package 4 of the tax reform agenda aimed at rationalizing taxes on passive income, financial instruments, and other capital assets.

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What Is the Real Issue Behind CMEPA?

The main issue lies in the removal or reduction of current tax exemptions that protect ordinary Filipinos who save or invest for the long term.

CMEPA’s goal is to simplify and harmonize the tax system involving passive income, such as:

• Interest on bank deposits

• Dividends

• Capital gains from stocks

• Profits from bonds, mutual funds, unit investment trust funds (UITFs), and other financial instruments.

But here’s the catch:

Many of these income streams are currently either:

• Taxed at lower rates, or

• Tax-exempt, especially long-term savings instruments (those held for 5 years or more).

CMEPA proposes to remove these exemptions, arguing that the system is:

• Inefficient

• Full of loopholes

• Favoring the rich who can exploit these tools

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How Does This Affect Ordinary Filipinos?

If CMEPA becomes law without key protections, it will:

1. Remove the tax exemption on long-term bank deposits and investments.

   • Currently, if you put your money in a 5-year time deposit, your interest is tax-free.

   • Under CMEPA, this exemption may be removed, meaning even long-term savers will pay 20% tax on their interest income — just like short-term savings.

2. Hurt middle-class and working Filipinos trying to prepare for:

   • Education

   • Emergencies

   • Retirement

3. Discourage saving and financial discipline, as the tax incentives for responsible money behavior are stripped away.

4.  Potentially divert people away from formal financial institutions and into informal or riskier investments to escape taxes — ironically undermining the capital markets CMEPA aims to strengthen.

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Why Is the Government Doing This?

The Department of Finance justifies CMEPA with the following points:

• The current tax system is fragmented and full of exemptions that benefit the rich.

• There are over 80 tax rates and exemptions for various financial instruments, creating inefficiency.

• Harmonizing rates will simplify the system and increase fairness and revenue.

However, critics say:

• The proposal is not targeted well.

• Middle-class savers, not just the ultra-wealthy, will bear the brunt of the burden.

• It punishes people who followed the rules and saved diligently in the hopes of tax-free long-term growth.

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Reality Check: What CMEPA Is Not

CMEPA does NOT impose a direct “tax on savings” in the literal sense of taxing the amount in your bank account.

But it removes the incentive that previously allowed people to grow their savings tax-free if they kept it invested long-term — which is effectively a penalty on prudent financial behavior.

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What Can Be Done?

It’s not too late to act. CMEPA is still in the legislative pipeline and may be amended or blocked:

•  Demand public hearings where real stakeholders — not just corporations and bankers — have a voice.

•  Pressure lawmakers to retain exemptions for small and middle-income savers.

•  Propose thresholds: exempt savings/investments under a certain amount (e.g., ₱1 million) from tax.

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Final Word

The Capital Market Efficiency Promotion Act (CMEPA) may be efficient in the eyes of technocrats, but for everyday Filipinos struggling with inflation and stagnant wages, it could be the final straw — yet another way the system seems stacked against those simply trying to do the right thing.

The government must be reminded: Simplification should not come at the cost of justice. Efficiency must serve equity — not replace it.

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Would you like me to help you write a position paper, blog article, or social media post to educate others and mobilize support against the worst parts of CMEPA?

BOTTOM LINE:

Yes — there is reason to be concerned about proposals that remove tax exemptions for long-term savings.

But — there is no new tax law yet targeting your basic bank savings or deposit accounts.

So while your emotions are valid, let’s direct them toward informed public discourse, organized advocacy, and demanding transparency and protection for middle-class earners and savers.

Toxic Beauty: EcoWaste Coalition Sounds Alarm on Mercury-Laced Cosmetics Still Sold Online Despite New Law

Wazzup Pilipinas!?

QUEZON CITY, 18 July 2025 — In the dark corners of the internet where viral marketing meets consumer desire, a dangerous trade thrives unchecked: mercury-laced cosmetics disguised as miracle skin-lightening products. Despite the full enforcement of Republic Act No. 11967, or the Internet Transactions Act, unscrupulous sellers continue to exploit e-commerce platforms to promote and peddle adulterated beauty products that pose grave threats to public health.

EcoWaste Coalition, a staunch environmental health watchdog, is once again sounding the alarm.

Promos of Poison

Skin whitening creams with high levels of toxic mercury are being marketed aggressively through enticing online promos: “Buy 5, Get 1 Free,” “Super Flash Sale,” “Only ₱150 Today,” and similar gimmicks that cloak poison in affordability. These cosmetic contraband items—illegally imported from Thailand and Pakistan—have all been flagged as dangerous by the Food and Drug Administration (FDA).

The notorious Goree Beauty Cream with Lycopene, Goree Day & Night Beauty Cream, and Goree Gold 24K Beauty Cream, along with the 88 Total White Underarm Cream, are being sold with impunity on Shopee, Lazada, Facebook, and TikTok despite being explicitly banned years ago due to their toxic mercury content.

“Digital dealers are manipulating the system, exploiting the aesthetics-driven aspirations of consumers while willfully disregarding public health,” said Aileen Lucero, National Coordinator of the EcoWaste Coalition. “These promos are more than just false advertising—they are public health landmines.”

The Law Is In Effect, But Is It Enforced?

Republic Act No. 11967 was envisioned to safeguard consumers in the ever-evolving digital marketplace. With its full implementation taking effect just last June 20 after an 18-month transition period, advocates had high hopes it would rein in unlawful online transactions.

But the grim reality remains: enforcement is faltering.

“The internet is not a lawless jungle,” emphasized Atty. Grip Bueta, legal counsel of EcoWaste. “Now that RA 11967 is in full effect, e-commerce platforms must be held accountable if they turn a blind eye to illegal and unethical sales happening within their domains. Our laws must evolve with technology, not trail behind it.”

The Internet Transactions Act also established the E-Commerce Bureau (ECB) under the Department of Trade and Industry (DTI), tasked with implementing the law and monitoring online marketplaces for compliance. But the EcoWaste Coalition says the ECB must now show it has teeth—and bite.

“We are pinning our hopes on the ECB’s capacity to act decisively,” Lucero added. “Online marketplaces should not be safe havens for toxic trade. The people deserve better.”

The Mercury Menace

Mercury is not just another banned substance—it is a known neurotoxin. Exposure can lead to kidney damage, skin disorders, and long-term neurological impairments. Women of childbearing age, adolescents, and babies in the womb are especially vulnerable to its toxic effects.

Despite decades of advocacy and bans by the World Health Organization and local regulatory bodies, mercury-laden skin lightening products continue to circulate—often smuggled, repackaged, and disguised to evade detection.

“These products are silent killers,” said Lucero. “The damage is not always immediate. But it accumulates—day by day, layer by layer—under the false promise of fairness and beauty.”

The Hidden Cost of Online Convenience

The digital revolution brought convenience, speed, and access. But it also brought risks. Online sellers can now reach thousands—if not millions—of consumers at the click of a button. And with weak enforcement, dangerous goods can be moved faster than regulators can react.

“This is why regulation in the digital era must be agile, proactive, and uncompromising,” said Bueta. “The online marketplace should not be a blind spot in our country’s fight for consumer safety.”

The EcoWaste Coalition urges consumers to remain vigilant. It calls on digital platforms not just to comply with the law, but to become proactive allies in protecting public health.

Hope Through Vigilance

Though frustrated by ongoing violations, the EcoWaste Coalition remains hopeful. The group believes that with strengthened coordination among the DTI, FDA, Bureau of Customs, and civil society—and with the support of alert consumers—the tide can still turn.

Their message is clear: beauty should never come at the cost of health.

“Lazada, Shopee, TikTok, Facebook—you are not just tech companies. You are gatekeepers of public trust,” Lucero declared. “If you let these toxins slip through your platforms, you’re complicit.”

In the era of likes, shares, and flash sales, the digital world may seem intangible. But its consequences are all too real.

Let the new law be more than words on paper. Let it be a shield for every Filipino scrolling for skincare, unaware that behind the glow, a hidden danger waits.

SIDEBAR: How to Spot Mercury-Laced Cosmetics Online

Too-good-to-be-true skin whitening promises

Lack of FDA registration number

Packaging written in foreign languages only

No manufacturer or distributor information

Heavy discounts, bundles, or flash sale gimmicks

If you suspect a product is unsafe, report it to the FDA and avoid sharing or promoting links that could endanger others.

Stay informed. Stay safe. Let’s build a toxic-free digital marketplace—together.

Deadly Adornments: The Hidden Peril Lurking in Children's Hair Clips

Wazzup Pilipinas!?

They are bright, cute, and seemingly harmless—those little plastic hair clips that adorn the heads of young children, tucked lovingly into ponytails and braids. But beneath the colorful bows and playful shapes lies an invisible danger that parents across the Philippines can no longer afford to ignore.

Toxics Watchdog BAN Toxics has issued a chilling warning: children’s hair accessories sold in budget shops and sidewalk stalls may be laced with brain-damaging chemicals.

In a recent market monitoring operation, the group purchased 30 sets of children’s hair clips—priced affordably between ₱60 and ₱80—and tested them using a state-of-the-art Vanta C Series Handheld XRF Analyzer. The findings were nothing short of alarming. Every single sample contained dangerously high levels of lead, with some reaching a staggering 1,830 parts per million (ppm)—a figure exponentially higher than globally recognized safety limits.

The hair clips were made of polyvinyl chloride (PVC), a cheap synthetic plastic linked to numerous health risks. But for children, whose small bodies are more vulnerable to environmental toxins, the consequences of exposure can be devastating.

“These products are not just unsafe—they're silent weapons against our children’s health,” warned Thony Dizon, Advocacy and Campaign Officer of BAN Toxics.

The Invisible Threat

Hair clips seem innocent enough, but Dizon explains that their danger lies in the way they are used: “Hair clips rest directly on the scalp, sometimes for hours. Toxic chemicals in the plastic can leach into the skin and hair, especially under heat and sweat.”

It’s a pathway of exposure that many would never suspect. And yet, the effects can be life-altering.

According to the World Health Organization (WHO), even minimal lead exposure can impair a child’s IQ, learning ability, and behavior. It can delay development, shorten attention spans, and in severe cases, lead to irreversible brain damage.

The United States is taking action. In May 2025, the US Consumer Product Safety Commission issued a sweeping recall of children’s painted hair clips due to elevated lead levels. But here in the Philippines, the regulatory landscape remains dangerously lax.

“We still have no comprehensive law that ensures children’s products are tested for toxic content before they reach store shelves,” Dizon stressed.

A Call for Legislative Action

BAN Toxics is now urging lawmakers to treat this issue with the urgency it demands. The group has long advocated for a “Children’s Products Safety Law” that would:

Require pre- and post-market chemical testing

Enforce clear labeling of materials and chemical content

Mandate regular inspections of imported goods

Penalize violators with stronger sanctions

Such legislation, they argue, could prevent a public health crisis hiding in plain sight.

“What we’re seeing is a systemic failure to protect our children from daily toxic exposures. This cannot continue,” Dizon added.

What Parents Can Do Now

While waiting for lawmakers to act, BAN Toxics encourages parents and guardians to be vigilant. Here are five immediate steps families can take:

Buy only FDA-registered or notified children’s products

Choose accessories that have passed safety standards for toxic substances

Opt for natural materials like wood, bamboo, or organic cotton fabric

Avoid cheap, multi-colored, or metallic-finished items that may contain unsafe dyes or coatings

Purchase from reputable brands that practice ethical and transparent manufacturing

“Parents shouldn’t have to gamble with their children’s health just to save a few pesos,” said Dizon.

A Poisoned Innocence

Hair clips are supposed to be expressions of joy, youth, and personality. Yet behind the glitter and sparkle of these decorative trinkets lurks a poison that science has long condemned. The tragedy lies in how ordinary the threat appears—how something so small, so decorative, could cause such deep and irreversible harm.

The findings of BAN Toxics serve as a wake-up call: if we continue to allow toxic products to flood our markets unchecked, then we are complicit in poisoning the very generation we are supposed to protect.

The question now is not just what is in our children's accessories—but why nothing has been done to stop it.

Let this not be just another headline. Let it be a turning point. For every child whose tiny fingers reach for a pretty hair clip, may we finally say: “This is safe. This is clean. This is just.”