Forex Trading in the Philippines

Think you’ve had a bad year?

If you’re in the Philippines, chances are you’ve had an exceptionally tough year. Unemployment rates surged due to COVID-19 and the recent typhoon Goni was one of the worst natural disasters in recent years. All in all, it hasn’t been an easy year by any stretch of the imagination.

Millions around the world have turned to forex trading to generate income amid this eventful, yet uninspiring year. But this is a bit harder in the Philippines—the SEC has advised people not to engage in online trade and has implemented many restrictions for local retailers and brokers.

Nevertheless, you can still trade forex from the Philippines, but you have to use a foreign international brokerage to do so. And choosing the right broker isn’t a small matter—with all the forex scams in the country, signing up with a trustworthy service is paramount.

Fortunately, the top brokers on the list we’ve made for you are more than just safe. A good forex trader should offer low prices, a reliable trading platform, and an overall user-friendly experience—but it also pays to find one that is perfect for you and your trading style.

In this article, we shall discuss what exactly is legal and illegal when it comes to forex trading in the Philippines, how you can jump into the market—and most importantly, which broker is the best for your needs.

This won’t take long, so let’s get straight to it.

Best Forex Brokers in the Philippines 🇵🇭

1. FOREX.com: Best Overall

As the name implies, FOREX.com is a broker with a focus on currency trading—the brokerage offers 91 currency pairs, but you can also trade 9 cryptocurrencies and 380 stock CFDs, as well as other CFD types. The intuitiveness of the platform, low trading fees, as well as the powerful research tools at your disposal make this our top pick overall.

If forex trading is your goal, FOREX.com has some of the lowest trading fees for currency pairs. The average spread on the EUR/USD and GBP/USD pairs are 1.4 pips and 2.1 pips respectively and there are no transfer fees. The inactivity fee is also on the cheap side—you only have to pay $15 per month after one year of inactivity.

Transfers are available via bank and card, as well as PayPal, which makes managing your withdrawals and deposits through the trading platform easier. The trading software is very beginner-friendly and highly customizable—there are numerous charting tools and order types, and the workspace is clear and easy to maneuver.

The broker also offers interactive charts, trading ideas, and numerous market reports—this should cover most bases when it comes to research, as you have the tools to analyze products and news to stay in the loop. Unfortunately, there is no fundamental data on the platform, so you have to find it elsewhere – that being, more or less, the only drawback of this brokerage. 

If you’re unclear on how to grasp the full functionality of this platform, FOREX.com has numerous tutorials on how to use it, as well as educational videos on how to trade, and a demo account you can use to practice. All in all, FOREX.com is solid all-around – the combination of a user-friendly platform, low prices, and powerful charting tools mean that all traders should give this brokerage serious consideration.

2. Pepperstone: Best for Fees

If you are a beginner and are looking to boost your trading skills, Pepperstone might be a good pick for you. The Australian broker has a superb educational offer that includes video tutorials, webinars, as well as a complete course on how to use the trading platform.

Pepperstone’s trading fees are lower than average for forex and CFDs alike, but can also be very low—for example, the EUR/USD pair average spread can go as low as 0.1 pips during peak trading hours. Moreover, if you like your relationship with the broker, you can upgrade your account which will lower commissions even further for most products.

There are no inactivity and deposit fees, and you can fund your account and withdraw money via Skrill and Neteller in addition to the standard wire and card transfers. This means you don’t have to go through a bank directly and gives you some much-needed flexibility with managing your money.

Once you learn the basics, Pepperstone’s platforms will be seamless to use as they are well-organized and have a logical workflow. You can choose from 3 platforms—Metatrader 4, Metatrader 5, and cTrader which is the most highly appraised amongst users for its beginner-friendliness and abundance of features.

Pepperstone offers 62 currency pairs and over 1,200+ CFDs in total, as well as11 cryptocurrencies and three cryptocurrency index CFDs. When we consider both the pros and cons of Pepperstone, we see that it lacks in the number of available products but excels in terms of pricing, user-friendliness, and educational resources for beginner traders.

3. Saxo Bank: Best Premium Service

As one of the household names among European brokers, Saxo Bank has everything you would expect from a top-notch brokerage—except accessibility. The minimum initial deposit varies from country to country, but for the Philippines and most other places it is $10,000.

Trading fees are very competitive if you are interested in trading forex and not options and futures, which are on the pricey side. Forex fees are low—the EUR/USD pair has an average spread of 0.8 pips, and you can bring that price down to 0.4 pips if you get the VIP account.

Also, there are no deposit and withdrawal fees, but there is a hefty inactivity fee of $100 per month for accounts that have been inactive for half a year or more—this is very high, so don’t open an account here if you’re not planning on being active. Another drawback is that you can’t use e-wallets to withdraw or deposit—all transfers must go through a bank.

Other than the high entry barrier, Saxo Bank is as good as they get. The broker’s platform is powerful and very easy to use, and you can trade 182 currency pairs, as well as CFDs, stocks, ETFs, and most other financial instruments, including Bitcoin and Ethereum ETNs.

All Saxo users also have access to the brokerage’s proprietary research feed, and if that is not enough, you can use a plethora of tools to analyze products yourself. 

All in all, Saxo Bank isn’t as accessible as other brokers here, but if you afford to pay for their services, there is no better premium brokerage available in the Philippines.

4. IG: Best Trading Platform

When it comes to handy, user-friendly trading platforms, IG stands out from the competition. The trading software is well-designed, customizable, and very easy to grasp for beginners—IG has won 3 awards for the best trading software and mobile app in the past two years and is among the leaders for trading forex in terms of growth.

In fact, the trading app is one of the broker’s strongest qualities. It has the same high level of functionality as the desktop platform and is one of the finest mediums for trading forex on your feet in the world at the moment. 

Forex trading fees range from average to high, with the EUR/USD pair having an average spread of 0.75 pips. However, for this price you get a very impressive list of products—on IG’s platform, you can trade 205 currency pairs, 8 cryptocurrencies, and over 10,000 stock CFDs, to name a few. The only area where this offer is lacking is bonds and mutual funds which are far in between.

Also, non-trading fees are about as low as they get—deposits and withdrawals are free, and the $12 inactivity fee only gets charged after 2 years of not trading, so it is hardly cause for worry. Transfer options include bank and card transfers, as well as PayPal, which allows for more flexibility when trading from the Philippines.

All in all, IG’s forex platform isn’t the cheapest but you get one of the top trading apps and just about every financial product you can think of.

5. XM: Best for Beginners

XM is a reputable broker that boasts over 2.5 million clients worldwide. The company was founded in 2009, and has steadily grown since then – and it now does business in 196 countries around the globe. XM offers clients low, transparent fees, a wide range of asset classes to trade, as well as access to valuable educational material and tutorials. 

Opening an account with XM doesn’t take more than a single day’s work, and the process is fully digital. 

Before you commit, you have the option of opening a free demo account that will give you access to the MT4 and MT5 platforms, as well as $100 000 of virtual cash. In fact, you can open up to 5 demo accounts.

Those that do end up choosing XM will have the option of choosing between four different account types: Standard, Micro, Shares Account, and XM Ultra Low. 

The minimum deposit for opening a Standard or Micro account is $5, while the XM Ultra Low account will require a $50 minimum deposit. Shares accounts have a much steeper minimum – $10 000. 

All of the account types except the Shares Account also give you access to both the MT4 and MT5 trading platforms. They do differ among each other with regard to fees – but every option offers competitive pricing. 

One of the benefits of XM is that the company is very transparent with pricing – so figuring out which account type is best suited to your needs won’t be a hassle.

XM offers tight spreads – as low as 0.6 pips for the major currency pairs, and the broker doesn’t charge hidden fees. Leverage varies from 1:1 to 888:1, depending on asset type, account type, and the size of the trade.

XM is transparent with its fees – but that doesn’t mean that the company doesn’t charge the odd fee here and there. A monthly $5 inactivity fee will be charged if your account doesn’t have any trading activity for 90 days. If your account value hits $0, your account will be archived. 

On top of that, withdrawals below $200 will incur a $15 carry fee. On the other hand, there is no account fee associated with any XM account type.

The broker offers a pretty wide range of investment options. Clients have access to over 1,000 instruments that span 7 asset classes, as well as 57 forex pairs, five futures CFDs, eight commodities through futures CFDs, and two spot metals.

We’ve chosen XM as our top pick for beginners – so let’s take a deeper look at why they earned that spot. An easy account opening process, low fees, low account minimums, and transparent pricing figure into it – but it doesn’t end there. 

XM has a very helpful research and education center that is available in a variety of languages, and which is full of well-produced material. Their customer support service is available 24/5 via phone and live chat in over 25 languages, and they are generally helpful and quick to respond.

We recommend picking the Micro account if you’re a beginner. It can hold EUR, USD, GBP, JPY, AUD, HUF, RUB, SGD, and ZAR, and also lacks commission charges, as well as negative protection and trading bonuses. If XM has piqued your interest, take a look at our in-depth XM review.

6. Interactive Brokers: Most Versatile

IBKR is a versatile stock brokerage but is also one of the top forex brokers in the US—and internationally. The American broker has one of the broadest and most impressive range of offerings that includes 105 currency pairs and about 7400 CFDs, along with regular stocks, ETFs, and other securities.

The brokerage is also well-known for its low prices—IBKR didn’t publish their average spread prices, but trading EUR/USD usually incur about 0.4 pips in commissions per lot, which is very competitive. Moreover, Interactive Brokers has recently removed its minimum initial deposit requirement, but you will pay a $20 per month account maintenance fee if your balance is below $2,000.

In addition to the uninspiring maintenance fee, IBKR’s biggest drawbacks is probably the lack of transfer options—you can only deposit and withdraw money via wire transfer. If this isn’t a problem for you, deposits cost nothing and you get one free withdrawal each month.

The lack of transfer options is unfortunate, but IBKR doesn’t have any other real downsides. The trading platform is user-friendly and has a wealth of research and charting tools—it easily compares to the very best investing software out and about today.

The educational offer is also very robust and includes video courses, webinars, and a demo account—everything new traders need to find their feet. All things considered, Interactive Brokers’ full offer has a large selection of financial instruments, some of the lowest prices in the world, and all-around great platform and research tools—everything is good once you get past the limited transfer options and high non-trading fees.

A Guide to Trade Forex in the Philippines 💱

Currency trading has been becoming more and more popular in recent years, but retail traders in the Philippines have to go through a few loops before you can get started. Trading currencies in the Philippines was banned in 2018 which means you can’t trade via a local forex broker like in most countries—but you can use an international brokerage.

The ban was introduced due to reports of heavy losses by retail traders and fraud, and we don’t know if it will be lifted anytime soon. However, it is possible to open a demo account and practice trading—there is no illegality if you’re not trading with real money from the Philippines.

Moreover, if you get an account with one of the international brokers in the list above, you’ll be able to learn and practice but also trade using your own money—however, you won’t get any protection from the authorities and there are no forex regulations in place at the moment. But for that you need a broker that suits your trading preferences and goals.

What to Look for in a Forex Broker 🔎

The brokerage you need depends on what kind of trader you are. If you are a new trader, you should sign up with a broker that has a low minimum deposit requirement, and easy-to-use platform and comprehensive educational content to give you a clue as to how forex trading works.

Most forex brokerages offer extensive video courses that can take a relative beginner and turn him into someone who knows what every number means and what every chart represents. All of the top forex brokers for beginners have good education, but also low prices and user-friendly platforms—all these factors are necessary if you want to have a successful first year of trading.

As you get more advanced in your skillset, you might want a broker with a wide range of offerings. Having an abundance of tradable assets available through your brokerage means more options, and consequently, more flexibility when it comes to developing a strategy.

Finally, if you want to devote enough time to forex trading to make it a day job, then you should only trade with specialized companies. What makes these brokers for day trading so special is a combination of pro-level research tools, a reliable platform, and the lowest prices you can come across. Naturally, if you’re making multiple trades each day, losing money on large spreads and commissions is out of the question.

Another feature that comes in handy regardless of your trading preferences is a good trading app. The top forex trading apps nowadays are so well-made that they are often just as accessible and feature-rich as their desktop counterparts—and having your broker available on your phone at all times can be very useful if you spend little time at home.

Is Trading Forex Legal in the Philippines? 🏛

Trading forex on a local brokerage account of any sort was made illegal in the Philippines—this is because of various forex scams and fake financial gurus that have cost thousands of Filipinos a lot of money. However, there are ways to overcome this legal barrier without doing anything that can get you in trouble, although it’s a bit more complicated than in most countries.

For starters, it is completely fine to learn about forex, attend seminars, and even get a demo account with a foreign forex broker to practice. Strictly speaking, it is only illegal to solicit funds from groups of people in the Philippines to trade forex and to run a forex trading business or brokerage.

This means you can still trade forex if you’re using a foreign brokerage but you will not be insured and protected by the SEC—you can only trade on your own responsibility. The SEC has advised the public not to open brokerage accounts, but this is not forbidden, just advised.

To summarize, trading with a foreign international broker with your own money is OK, but trading for other people is not. Also, since there is no forex regulation in the Philippines at the moment, you cannot start a brokerage—but educating, as well as providing research and advice is perfectly legal.

How to Start Trading Forex in the Philippines 💡

First, you need a computer or phone with internet access and then you have to open an account with an international brokerage. Afterwards you need to make a deposit—the best way to do this is via an e-wallet like PayPal or Skrill. 

Making deposits on your brokerage account will be easy but your bank might ask questions when you try to withdraw your hard-earned profits. In that case, say the profits are from your investments abroad and provide your trading records if necessary. 

The bank might want these records to check if you’ve done anything illegal, so don’t worry. Moreover, most brokers have clear fee reports, which means they will give you a detailed list of all your trades on the trading platform that you can show to anyone that wants a look.

Once all that is covered, just make the first deposit, and you can start trading. However, keep in mind that these restrictions weren’t implemented for no reason—even if you avoid scams by going to reputable brokers like the ones listed above, be very careful with risky financial instruments like binary options and CFDs, and make sure you have a solid forex trading strategy to follow.

Forex Terms You Should Know 📚

Trading forex isn’t complicated once you get used to it—but to get used to it, you need to know what all the technical words mean. Here are some of the most important terms you need to know to make sense of forex trading platforms and strategies.

• Pip – “Pip” stands for “percentage in point” and it is used to measure the change in prices. One pip is exactly 0.0001 of a currency and you can use this measurement to determine what your profits are and how much a currency has gone up or down in price. For example, saying that the EUR/USD has gone up by 5 pips means the EUR has gone up by 0.05% in relation to the USD.
  
• Currency Pair – Trading forex means exchanging one currency for another. A currency pair is simply the two currencies you are exchanging.
  
• Major Pair – The “majors” are the most popular currency pairs that make up as much as 85% of the entire market, so they are extremely liquid and easy to trade. Major pairs include EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD, and  NZD/USD.
  
• Cross Pairs and Exotic Pairs – These are all other currency pairs. Non-majors don’t have the USD in them and usually have higher volatility, lower liquidity, and higher trading fees due to their being less popular.
  
• Bid and Ask Price – The bid price is the price at which the buyer will agree to buy something. Opposite to that, the ask price is the price at which sellers are willing to sell—it is the price they are “asking” for to sell you what you want.
  
• Spreads – This is the difference between the bid and the ask price. For example, if the bid price is 0.99997 and the ask price is 0.99992, the spread is 0.00005 (or 5 pips). The spread will determine how much money you win or lose in a trade.
  
• Leverage – Trading forex requires a lot of money to be profitable, but you don’t have to use your own. Every Forex broker offers you leverage, which means you can borrow trading money based on your current balance. For example, if you have $1,000 on your account, and your available leverage is 30:1, you can make a $30,000 trade. However, leveraging also means you can get your balance into the negative—make sure your broker has negative balance protection so that this cannot happen.
  
• Lot – A “lot” is equal to 100,000 units of the currency you’re trading—this is a big number but currency traders are usually large in forex trading because of leverage. There are also smaller units of trade: Mini, Micro, and Nano lots are 10,000, and 1,000, and 100 units of currency respectively.
  
• Margins – This is the minimum amount of funds you need to have to get access to leverage. Brokers need a level of insurance before they borrow your money so they set margins. If you are leveraged and go below the set limit, you will get a margin call which means you will have to fund your account—if you fail to do meet the requirement, you won’t be able to use the same level of leverage.
  
• Trading Platform – All brokerages have some sort of software you can use to trade via your computer or smartphone. These platforms usually have lists of tradable products, price charts, research tools, and even news feeds and other handy features. Some of the popular platforms you will likely come across are Metatrader 4, Metatrader 5, and cTrader.
  
• Volatility – When a price is volatile it means that it can go up and down a lot. Volatility makes prices unpredictable and wrought with risks, but also very potentially profitable. For example, investing in Bitcoin is risk due to its volatility. In other words, its price can jump and drop by hundreds of dollars on an hourly level.

COVID-19’s Impact on Forex Trading in the Philippines

Like the rest of the world, the Philippines have not come out unscaved from the pandemic. The markets still haven’t recovered after the initial economic drop in late February 2020, and high unemployment rates have made it harder to make a living the normal way.

However, things have started to turn recently. The Philippines are sitting on their largest USD reserve ever which means it will be easier to take care of foreign debt in the future. Moreover, the housing market is rallying exceptionally well with a 15% jump just in November.

All these factors indicate that the economy is healthy and that means that forex traders around the world have more reason to trust in the Philippines’ currency. This is a boon for Filipino forex traders—the PHP/USD pair has jumped since the pandemic began, which means it is more profitable to turn pesos into dollars and trade.

Moreover, the government is planning to speed up the vaccination process which will likely boost foreign investment and make trading more viable for Filipinos. All in all, the global forex market is volatile right now which makes trading relatively risky, but the Philippine Peso is strong, giving an opportunity to local traders to make the best out of this unfortunate moment in the world’s history.

About the author

Tim Fries

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Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.