Despite the turmoil the local stock market is currently going through, stock brokerage Philstocks Financial still expects the Philippine Stock Exchange’s benchmark index (PSEi) to rise to over 1,200 points to the 7,274.49 to 7,620 range by the end of 2025.

“We maintain a bullish yet cautious outlook for the PSEi in 2025… supported by projected earnings growth of five to 10 percent. While the local economy remains healthy, global and domestic uncertainties persist, making a cautious approach advisable,” said Philstocks Assistant Research Manager Claire Alviar.

Philstocks Research Manager Japhet Tantiangco said inflation is expected to stay within the government’s target range of two to four percent, supporting consumer spending and business activity.

This stability will likely encourage the Bangko Sentral ng Pilipinas (BSP) to adopt a more accommodative monetary policy stance. Both the BSP and the US Federal Reserve are expected to implement interest rate cuts this year.

In addition to the anticipated manageable inflation in the Philippines, weaker-than-expected economic growth in 2024 provides more room for monetary easing.

In the US, the Federal Reserve is anticipated to closely monitor risks to the inflation rate, primarily those stemming from the Trump administration’s planned protectionist policies.

Tantiangco said increased government spending and consumption following the Philippine midterm elections could stimulate economic growth. Apart from that, investors will closely monitor the election results to assess their impact on government policies and stability.

While last year’s weaker growth provides room for rate cuts, he said sustained economic recovery will be crucial to maintaining investor confidence.

Lingering uncertainties surrounding US policies under President Donald Trump may push investors to remain cautious this year.

“While we do not foresee a direct impact on the Philippines, there could be indirect effects if these policies disrupt our trading partners or the global economy. This cautious sentiment may lead to heightened market volatility,” Tantiangco said.

Meanwhile, Alviar said that “from a fundamental standpoint, based on our fair value estimates of the PSE index members, the local market should be at 8,559.62.”

“However, reaching this level this year may be unlikely given the lingering uncertainties that are weighing on sentiment. In addition, the PSEi’s technicals are generally still bearish,” she said.

While the index is still in a bearish phase, Alviar said it is showing signs of stabilization around 6,000-6,150.

“A break above 6,400 could trigger a recovery, while a drop below 5,700 may extend losses. Short-term traders may look for bounce plays at support, while long-term investors may accumulate shares cautiously or wait for conformation of a trend reversal,” she advised.