PSEi set for gains as twin rate cuts drive risk appetite
Published Dec 8, 2025 12:35 pm
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Updated Dec 8, 2025 01:12 pm
The local stock market is poised to gain momentum this week, driven by expected rate cuts from the United States (U.S.) Federal Reserve and the Bangko Sentral ng Pilipinas (BSP), alongside influential domestic labor and foreign investment data.
Philstocks Financial Research Manager Japhet Tantiangco noted that the local market failed to hold its position above the 6,000 level last week, citing local economic worries that dampened investor confidence.
Tantiangco said this week, investors are expected to look forward to the interest rate decisions of the US Fed and BSP, with hopes of easing by both central banks potentially helping the market bounce back. However, he cautioned that investors are also expected to monitor the movements of the peso. A further decline against the US dollar may weigh on the local bourse.
Investors are also expected to watch out for the Philippines’ upcoming foreign direct investment data and labor force survey for clues on the local economy.
Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan Arce anticipates a “cautiously optimistic tone” for the Philippine stock market during the shortened trading week of Dec. 9 to 12.
He pointed to investors positioning ahead of and reacting to the major monetary policy decisions from the US Fed and the BSP.
With the Philippine Stock Exchange Index (PSEi) recently regaining the 5,800–6,000 zone on improved sentiment, Arce suggested the twin rate meetings could determine whether the market sustains its recovery or faces another bout of profit-taking.
Market participants widely expect both central banks to deliver rate cuts: the Fed is anticipated to implement its third and final 25-basis-point reduction for the year, and the BSP is expected to pursue a fifth consecutive 25-bp cut to further support domestic growth amid subdued inflation.
“If these expectations materialize, they could underpin risk appetite and fuel a short-term rally, especially in rate-sensitive sectors such as property, banking, and consumer discretionary,” Arce stated.
He did, however, caution that “these policy moves will occur against a backdrop of weakening global growth, a fragile peso, and lingering governance concerns domestically—factors that may temper enthusiasm and cap upside momentum.”
Even as volume thins and year-end window-dressing begins, Arce believes, “A dovish tone from both the Fed and the BSP could still encourage some year-end buying, particularly from funds seeking to rebalance portfolios before the holidays.”
Online brokerage 2TradeAsia.com advised caution, stating, “As 2026 approaches, we underscore still-elevated country risk from ongoing scandals and typhoon disruptions to temper broader market optimism.”
It noted that while, “Holiday liquidity and window dressing season may provide short-term lifts, but ultimately, we reiterate that this is a season of volatile and directionless spirits.”
The brokerage concluded that with the PSEi consolidating near three-year lows, “this trading band rewards patient allocators eyeing 2026 mean reversion themes. Monitor those that break higher on volume for conviction buys.”
Abacus Securities Corp. recommended the PSE itself as a viable dividend play. While the stock is somewhat illiquid, it is suitable for investors who prefer stability over potentially more volatile payouts.
Abacus projects PSE’s net income this year could reach ₱900 million, boosted by the Philippine Dealing & Exchange Corp. (PDEx) which offsets the scarcity of initial public offerings (IPOs) and falling market capitalization. The next dividend in February might be between ₱11 to ₱12, offering a yield of up to 5.9 percent.
Unicapital Securities maintained a bullish view on Jollibee Foods Corp. (JFC). Unicapital Research Analyst Jeri Alfonso set a rolled-over target price of ₱306.20 per share, representing a 68 percent upside from current levels.
The revised target is four percent lower than the previous estimate of ₱320.40 following an adjustment of assumptions on the group’s inventories.
“Despite this slight downgrade, the company’s growth story remains intact. We expect double-digit earnings growth next year, powered by the accelerating Coffee and Tea segment, the resilient domestic business, and the expanding reach of its international units. We see the group turning more aggressively on international expansion next year,” Alfonso said.