Unicapital Securities, Inc. sees the local stock market turning the corner in the second semester from the weakness in the first half and forecasts the Philippine Stock Exchange index (PSEi to rise to 7,100 by year-end although this is lower than its projection of 7,800 earlier this year.

After falling three percent in the first half of the year, the PSEi recovered to around 6,350 in July, boosted by calmer inflation and growth-supportive policies.

During its mid-year briefing, Unicapital said it expects the PSEi to potentially reach 7,100 by year-end, influenced by strong corporate earnings and attractive share prices.

“The PSEi’s rebound to 6,350 is more than just a market correction. It reflects an eight percent earnings growth outlook and sector resilience in areas like Consumer, REITs, and Utilities,” said Unicapital Securities President Marlyne Fernandez.

She added that, “Our role is to translate these numbers into actionable strategies for investors, so they can position ahead of the curve and benefit from the industries shaping the Philippines’ growth story. We believe the Philippines is not just turning the corner but is positioning to lead SEA’s growth race in 2025.”

Unicapital Research Analyst Peter Louise D. Garnace said that, “With inflation on a downtrend and the market sentiment bouncing back, the country is moving past early-year headwinds towards a steadier and more confident path forward.”

“We expect the BSP (Bangko Sentral ng Pilipinas) to continue easing policy rates, following a 50bps cut in the first half of 2025, with a further 25 to 50bps reduction likely by year-end as inflation remains well within the two percent to four percent target despite risks from global uncertainties and potential fuel and electricity price hikes.

“Inflation averaged 1.8 percent in the first half of 2025, prompting a downward revision of our full-year forecast to 2.0 percent (from 3.1 percent), supported by falling rice prices after the government slashed import tariffs under EO No. 62. Oil prices are expected to average $60 to $70 a barrel in 2025, below 2024 levels, though geopolitical tensions could cause short-term spikes, posing inflation and current account risks.

“We also lowered our 2025 GDP (gross domestic product) growth forecast to 5.5 percent (from 6.3 percent), at the low end of the government's 5.5 percent to 6.0 percent target, due to headwinds,”he noted.

However, Garnace said “the Philippines is still poised to lead ASEAN in growth, driven by strong consumption, robust infrastructure spending, private investments, tourism recovery, and resilient remittances.”

For sectors that will stand out in the second semester, Unicapital Research Analyst Jeri R. Alfonso said “the REIT secto presents a compelling opportunity driven by favorable yield spreads amid a downtrend in interest rates.

“Robust occupancy rates and sound financial positions further strengthen the sector’s growth prospects over the medium term.”

She also favors the consumer sector, retailers in particular since “Filipino households could find more breathing room in their budgets this 2025” because “inflation has eased to just 0.9 percent in July, which could enable stronger consumer spending ahead.

“We are keeping our bets on retailers” since, “unlike manufacturers which face pressure from higher input costs, retailers typically enjoy steadier demand and more resilient business models.”

Alfonso also has a positive view of the mining industry, particularly gold miners since trade uncertainties are expected to persist in the second half so “we continue to adopt a bullish stance on precious metals, particularly gold, as demand for safe-haven assets remain robust.”