Philippine stocks took another beating on Monday, with the benchmark Philippine Stock Exchange Index sinking to a seven-month low as investors braced for weak third-quarter economic data.
With only two months left in the year, investors are growing impatient for decisive action to steady sentiment and revive growth amid a protracted corruption probe into anomalous budget spending. This came to light after the discovery of “ghost” flood-control projects.
“The government has a lot of work to do to restore market confidence. They need to right the ship quickly before the negative narrative gets worse,” Juan Paolo Colet, managing director at China Bank Capital, told InsiderPH.
Foreigners cashing out
The sell-off also underscores how fragile investor confidence has become.
“The sharp market drop was triggered by mounting concerns about a Philippine economic slowdown,” Colet explained.
“Investors are worried about the upcoming [third quarter gross domestic product or GDP] print, and some of them have taken money off the table in anticipation of lackluster results. Foreigners have also been aggressively cashing out of local stocks on expectations of domestic economic weakness as well as better prospects elsewhere,” he added.
Foreign investors bought P5.56 billion worth of stocks against P6.87 billion in sales, resulting in net foreign selling of P1.33 billion on Monday.
PSE index loses almost 11% in 2025
The PSEi fell as much as 2.44 percent to 5,761.32 before finishing the session at 5,828.06, down about 1.7 percent.
This brought losses since the start of the year to 10.7 percent, and nearly 20 percent over the past 12 months.
“This could also be de-risking on the part of investors, ahead of big data coming out,” said Alfred Benjamin R. Garcia, research head at AP Securities.
He said inflation data due Wednesday is expected to be “fairly benign,” while Friday’s GDP report will likely show a slowdown due to recent calamities and a slower infrastructure rollout.
“Looks like a classic capitulation to me. My gut feel is telling me that we might have just hit the bottom,” Garcia told InsiderPH.
Razon’s ICTSI fell over 9% before recovering
A major reason for Monday’s market drop was the selloff in Razon-led International Container Terminal Services Inc. (ICTSI), the most valuable member of the PSEi.
ICTSI, the world’s largest independent port operator, briefly lost its P1-trillion market valuation when its stock plunged as much as 9.4 percent to P485.
It later recovered, closing at P529—down just 0.19 percent from the previous session—on trading value of more than P2 billion, data from the stock exchange showed.
Can the PSE bounce back from the lost decade?
Over the past decade, the Philippine Stock Exchange Index has been the world’s worst performer, plunging 17 percent even as most Asia-Pacific indices rallied, according to a report by Bloomberg News.
Colet said regaining market confidence will require clear, credible action from the government.
“The government has a lot of work to do to restore market confidence. They need to right the ship quickly before the negative narrative gets worse,” Colet said.
“Some of the steps they can take to boost market sentiment are rolling out credible budget and procurement reforms, rebooting ‘Build Better More’ to accelerate and expand spending for quality infrastructure, and winning trade terms from the US that puts us in a better position relative to our regional peers,” he added.
When a bargain is a warning
In his Oct. 31 column in The Manila Times, investments expert Stephen CuUnjieng warned that the Philippine market risks becoming a value trap unless confidence, liquidity, and governance issues are urgently addressed.
“If political uncertainty over the flood control and related corruption issues is thoroughly addressed and the people are satisfied, this is a bargain and buying opportunity with dividends for some above time deposit rates to pay you to wait for the recovery,” wrote CuUnjieng, who recently joined the state-run Maharlika Investment Corp. as independent director.
“If it continues and worsens, then the economic backdrop will be more uncertain and sourer, and then even the bargain valuations may drop further as will profits and sentiment. Then it is a value trap,” he added, referring to cases where a market appears cheap but prices keep falling as fundamentals weaken.
Taking urgent action
With confidence eroding, both the government and market stakeholders need to act before the slide becomes irreversible.
“Loss of consumer confidence in a consumption driven economy is not a good thing,” a fund manager told InsiderPH.
“As Mark Twain said, slowly then all of a sudden,” he said.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
