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PSEi ends 2025 in red: A year of corruption scandals, missed targets
Business
The Stock Market
PSEi ends 2025 in red: A year of corruption scandals, missed targets
PSEi ends 2025 in red: A year of corruption scandals, missed targets
Published Dec 31, 2025 01:34 am
Despite an upbeat start in January, capital market observers agree that 2025 was a disappointing year for the Philippine Stock Exchange (PSE) as the local bourse underperformed significantly while its regional peers rallied.
The PSE index closed the final trading day of 2025 at 6,052.92 points, down 12.72 points or 0.21 percent. Year-to-date, the main index shed 7.29 percent. While many analysts believe the PSEi has hit rock bottom after a battery of negative news, they expect investors to remain cautious—and even bearish—heading into 2026.
“The PSEi’s decline this year is not just about numbers—it’s about trust and confidence,” noted PSE President and Chief Executive Officer Ramon S. Monzon.
“The corruption scandal, the deteriorating Peso, and disappointing GDP [gross domestic product] performance for the third-quarter clouded the economic outlook and triggered persistent selling by foreign investors,” Monzon added.
Capital raising and missed expectations
The bourse recorded a 75 percent surge in total capital raised—from primary and secondary shares and warrants—to ₱144.14 billion in 2025, from ₱82.37 billion the previous year. Despite the growth, this remained below the exchange’s ₱186-billion target.
The PSE also saw only two initial public offerings (IPO) in 2025: Top Line Business Development Corp. and Maynilad Water Services, Inc. Other capital-raising activities included eight follow-on offerings and 14 private placements.
Japhet Tantiangco, Research Manager at Philstocks Financial, described the year as decidedly bearish.
“The Philippines’ economic growth decelerated to 5.0 percent in the first nine months of 2025, including a multi-year low of 4.0 percent in the third quarter due to the fall in public infrastructure spending amid the investigation of the flood control corruption issues,” Tantiangco said.
Growth projections were also further trimmed due to domestic corruption issues and trade frictions with the United States (US) sparked by its tariff policies.
Tantiangco added that the weak peso exacerbated the situation by driving an exit of foreign funds. Notably, the PSEi also missed out on the global Artificial Intelligence trend due to its minimal exposure to the tech sector.
Meanwhile, COL Financial Chief Equity Strategist April Lynn Tan called 2025 “clearly disappointing.” Many had entered the year bullish, anticipating interest rate cuts, higher consumer spending from the midterm elections, and investments spurred by the CREATE MORE law or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act.
However, Tan noted that aggressive US tariffs caused global volatility and dampened business confidence. Domestically, corporate earnings fell short, and the corruption scandal forced a scale-back in government spending.
Nicky Franco, Vice President and Head of Research at Abacus Securities Corp., emphasized the need for reflection.
In our market outlook eleven months ago, our call was that there would be ‘great rotation’ from fixed income into equities which obviously didn't happen,” Franco said. He attributed this to “sticky” interest rates; despite the Bangko Sentral ng Pilipinas (BSP) cutting 175 basis points since August 2024, the shortest tenors showed a maximum yield decline of only 114 bps.
Franco also cited other headwinds: geopolitical concerns, the political schism between the country’s top two officials, and the diversion of retail funds into cryptocurrencies and foreign equities.
Outlook for 2026
Looking ahead, Franco suggested the third quarter might mark an inflection point for earnings, though he expects nominal earnings per share (EPS) growth to be moderate at 10 to 12 percent in 2026.
He warned that the rift between the President and Vice President could worsen when the one-year ban on impeachment proceedings expires in mid-February.
In contrast, Monzon remains optimistic. “There are a lot of positives to look forward to in 2026. Earnings of listed companies are poised to continue growing, making valuations and dividend yields quite attractive,” he said, citing looming changes in real estate investment trust rules and IPO float requirements as potential catalysts for new listings.
Rizal Commercial Banking Corp. Chief Economist Michael Ricafort agreed that a recovery is possible if the government takes anti-corruption measures seriously, calling governance “the missing link” to boosting investor confidence.
Divergent views
While SB Equities expects a rebound based on a more favorable macro environment, Chinabank Capital Corp. Managing Director Juan Paolo Colet is more measured.
“As things stand today, the PSEi may just consolidate in 2026,” Colet said. He projected the index could rise to 6,600 to 6,700 with decisive governance action, but warned it could revisit 5,600 if growth stalls. Colet anticipates at most four IPOs in 2026, likely from REITs or defensive sectors, but warned that delistings will likely persist due to market undervaluation and thin liquidity.
In the immediate term, Unicapital Securities Research Analyst Jeri R. Alfonso expects investors to begin positioning for the February PSEi rebalancing. “The release of FY2025 GDP figures in January will be closely monitored, as it could set the tone for market sentiment at the start of the year,” Alfonso concluded.