How to buy S&P 500 from Philippines?

The S&P 500 is one of the world’s best-known stock market indices and a popular way to invest in the US stock market.

If you live in the Philippines, you may wonder what the best way to invest in the S&P 500 is.

In this guide, we explain step by step how to buy the S&P 500 from the Philippines, from choosing an S&P 500 ETF to picking a broker, plus the tax points to keep in mind.

How to invest in the S&P 500 from the Philippines (step-by-step guide)

1. Pick an ETF tracking the S&P 500

The S&P 500 tracks 500 large US companies, such as Apple, Microsoft and Amazon, across all sectors. Investing in it gives you exposure to a broad slice of the US stock market and can be the core of a diversified portfolio.

Buying 500 shares separately would be expensive and impractical. Exchange-traded funds (ETFs) solve this: with a single purchase, you get the performance of the whole index.

There are no ETFs listed on the Philippine Stock Exchange (PSE) that track the S&P 500. Some Philippine banks offer unit investment trust funds (UITFs) that invest in S&P 500 funds, but their fees are usually higher than those of ETFs. Most investors therefore buy ETFs listed abroad. The table below shows some of the largest S&P 500 ETFs:

Don’t worry if you are not familiar with the terms “Replication” and “Income” (use of income). We explain them later in this guide. Also note that the first three ETFs are US-domiciled and the last two are Irish-domiciled, which matters for taxes, as we explain below.

2. Choose a good ETF broker

After picking an ETF, you need a reliable broker that lets you buy it. Here is which S&P 500 ETFs each broker offers:

Fees, minimum deposit and regulation also matter when choosing a broker. Here is a summary for each one:

Keep in mind that none of these brokers is licensed by the Philippine Securities and Exchange Commission (SEC). Filipino residents can hold foreign shares, but your account will be protected by the rules of the country where the broker is regulated, not by Philippine regulation. Check which entity opens your account before you fund it.

3. Place a buy order

Once you have chosen a broker and funded your account, you can place a buy order for your S&P 500 ETF. In this example, we use Interactive Brokers, but the steps are similar with any broker:

a) Search for your S&P 500 ETF

Use the search function to find the ETF you picked. Use the ticker to find the right one (in our example, we searched for SPY).

A broker may offer the same ETF on several exchanges, in different currencies such as USD, EUR or GBP. Choose the one in your account currency to avoid currency conversion fees. For example, if your account is in USD, pick the USD listing.

b) Click on “Buy”

You will usually find this button on the ETF page, next to the chart and key information about the fund.

c) Choose the order details

Now choose the order type:

• Limit order: the default on IBKR. You set the maximum price you are willing to pay, and the order only executes at that price or lower.
• Market order: executes immediately at the current market price.
• Amount or units: enter the amount of money or the number of shares you want to buy.

d) Place the order

Finally, click “Submit Buy Order”. The broker will then process your order and try to execute it with the details you chose.

What to look for in any ETF?

Not all ETFs are the same. These are the main factors to compare:

1. Fees (TER)

Each provider charges an annual fee that is taken directly from the fund’s assets. It is called the total expense ratio (TER) or ongoing charge (OCF). A lower fee leaves more of the return for you. For example, a 0.03% TER costs $3 a year for every $10,000 invested, while 0.0945% costs about $9.45.

2. Replication method

ETFs can replicate their index in two ways:

• Physical replication: the fund buys the shares in the index.
• Synthetic replication: the fund uses swap contracts with banks to deliver the index return.

Physical replication is simpler to understand and is the most common for the S&P 500. Synthetic ETFs carry counterparty risk, which UCITS rules limit, but they can be cheaper and, in the case of US shares, avoid the withholding tax on dividends inside the fund.

3. Use of income

ETFs also differ in what they do with the dividends paid by the companies in the index:

• Accumulating ETFs reinvest the dividends automatically, which increases the ETF’s price. You don’t pay transaction costs to reinvest.
• Distributing ETFs pay the dividends into your brokerage account, and you need to declare them.

The choice depends on your goals. If you don’t need regular income, an accumulating ETF is usually more convenient. If you want regular income, a distributing ETF is the better fit.

4. Taxes and domicile

The ETF’s domicile, the country where it is registered, affects the taxes you pay.

Dividends: US-source dividends paid to Philippine residents are subject to US withholding tax (30% by default, which can be reduced to 25% under the US-Philippines tax treaty if treaty relief is properly claimed). Irish-domiciled ETFs like CSPX pay 15% withholding tax at fund level on US dividends, thanks to the US-Ireland treaty, and Ireland doesn’t withhold tax on distributions to non-residents.

US estate tax: US-domiciled ETFs such as VOO, IVV and SPY are US assets. For non-US residents, US estate tax can apply to US assets above $60,000 at death. Irish-domiciled ETFs are generally not treated as US assets, which is one reason many international investors prefer them.

Philippine taxes: the taxation of foreign-listed ETFs for Philippine resident individuals is not entirely clear-cut, and it was reshaped by the Capital Markets Efficiency Promotion Act (CMEPA, Republic Act No. 12214), which took effect on 1 July 2025. CMEPA standardised many passive income tax rates, including a 20% final withholding tax on most interest income and a 15% capital gains tax on shares of stock in domestic or foreign corporations not traded on a local or foreign stock exchange.

ETFs listed on foreign exchanges (for example, the NYSE or LSE) are generally not covered by that 15% capital gains tax, and the BIR has not issued specific guidance on capital gains from foreign-listed ETFs for resident individuals. Some practitioners treat them as ordinary income subject to graduated rates.

Given the complexity and the recent changes, we strongly recommend consulting a Philippine tax adviser before investing.

5. Size

Look at the fund size. Larger funds usually trade with tighter spreads and have a lower risk of being closed. If a fund closes, it sells its holdings and returns the money to investors, which can create a taxable event at a bad time.

6. Currency hedging

Some ETFs use derivatives to reduce the impact of currency movements. This protects against large currency swings but adds a cost. S&P 500 ETFs in US dollars are not hedged, so your return in pesos also depends on the USD/PHP exchange rate.

Bottom line

Investing in the S&P 500 from the Philippines is a popular way to get exposure to the US stock market. Here’s a summary of the steps:

1. Pick an ETF tracking the S&P 500: compare fees, domicile and use of income. Irish-domiciled ETFs such as CSPX can be more tax-efficient for non-US investors than US-domiciled ETFs such as VOO or SPY.
2. Find a suitable broker: check which ETFs it offers, its fees, its minimum deposit and who regulates your account.
3. Open an account and deposit money: complete the account opening process and fund your account, ideally in the currency of the ETF you want to buy.
4. Place a buy order: search for the ETF, choose the order type and the amount, and submit the order.

We hope this guide helps. Do your own research to find the approach that best suits your needs.

Happy investing!

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