The Philippine Stock Exchange index (PSEi) crashed to its lowest level in three years, wiping out gains amid a market-wide panic triggered by persistent inflation fears and weaker-than-expected economic performance.

The main index fell by 101.62 points, or 1.71 percent, closing the session at 5,828.06 on Monday, Nov. 3. The level marked a new three-year low, hitting a point last seen on Oct. 3, 2022, and touching the lowest valuation in over five years, dating back to September 2020.

Banks led the retreat, while the Services sector provided a small buffer, managing to hold its ground against the broad-market slump.

Trading volume surged, indicating a rush to exit positions, with 802 million shares changing hands for a total value of ₱9.8 billion. Market breadth was decisively negative, as losers swamped gainers 134 to 56, with 62 stocks closing unchanged.

Market strategists attributed the decline to preemptive selling ahead of key economic indicators due later this week, exacerbated by ongoing domestic concerns.

“The PSEi gapped down as sellers heavily influenced the market early in the session,” said Luis Limlingan, Managing Director at Regina Capital Development Corp. “Traders are likely already pricing in the upcoming GDP and inflation data to be released this week, while overall sentiment remains cautious.”

Philstocks Financial Research Manager Japhet Tantiangco echoed the bearish sentiment, stating the plunge comes as investors anticipate “dismal third quarter GDP [gross domestic product] data to be released later this week amid government underspending and tempered business confidence caused by the country's corruption issues.”

The October 2025 inflation report is slated for release on Wednesday, Nov. 5, with expectations for the data to be “slightly higher versus the previous 1.7 percent in September 2025,” according to Rizal Commercial Banking Corp. Chief Economist Michael Ricafort.

Ricafort noted the index is now down for the second straight trading day, settling ahead of the anticipated third-quarter GDP figures on Nov. 7.

The growth number is expected to be softer than the 5.5 percent seen in the second quarter, partly due to political noise slowing down government spending, particularly on infrastructure.

The local market is also grappling with global monetary signals. The decline follows more cautious signals from United States (US) Federal Reserve officials, including Chairman Jerome Powell, indicating that a 0.25 percent rate cut in December 2025 is not guaranteed, even after the recent cut to four percent (upper end of the target) on Oct. 29, 2025.

Any subsequent Fed decision is closely watched, Ricafort said as the Bangko Sentral ng Pilipinas (BSP) may match moves to maintain healthy interest rate differentials.

Further pressure on local costs comes from the US dollar/peso exchange rate, which is near record highs.

Though stable at ₱58.7, Ricafort said the strong dollar risks increasing importation costs and overall inflation.

In corporate news, the market is preparing for the ₱34.3 billion Maynilad Water initial public offering (IPO), which is scheduled for listing on Nov. 7, following the end of its offering period.

Looking ahead, analysts see the next important support level at 5,804.56, a low posted last April 7, with a potential re-test of the 5,400 level, and a severe downside scenario targeting the 4,000 Covid-19 pandemic lows.

Initial resistance is pegged at the psychological 5,900-6,000 mark.