Rationale: Documentary Stamp Tax (DST) is a tax on documents, instruments and papers as a proof of acceptance, assignment, sale or transfer of an obligation rights or property. In the Philippines, DST is paid each time a document is first issued, change hands or is transferred. Failure to attach the stamp will render the document unacceptable in third party transaction nor it may be used as evidence in court. > A problem however arises when DST is imposed on secondary trading of financial instruments. Net loss is estimated at P3.2B but should be made up for by the release of long term capital needed by businesses into the financial system at substantial multiples. Moreover, the measure will greatly encourage the development of a secondarymarket and eventually increase tax revenues as more capital markets instruments are issued and transactions flourish. > This distortionary effect of imposing DST on secondary trading is the single most serious constraint to the establishment of an ac