PSEi may approach 7,000 in 2026 on supportive macro, regulatory factors — ICCP

THE PHILIPPINE Stock Exchange index (PSEi) may approach the 7,000 mark this year, supported by falling interest rates, steady economic conditions, and regulatory reforms, according to the Investment & Capital Corporation of the Philippines (ICCP).

ICCP President and Chief Operating Officer Manny Ocampo said he is “cautiously optimistic” about the market but warned that full-year 2025 corporate results could trigger short-term volatility.

“We are cautiously optimistic for the market, maybe looking at the PSEi hitting 7,000 for 2026, bearing no big negative surprises,” he said in a statement on Tuesday.

The PSEi closed at 6,052.92 on Dec. 29, 7.3% lower than the 6,528.79 close on Dec. 27, 2024. However, the benchmark index recently staged a strong rebound, rising 1.52% or 97.72 points to 6,487.53 on Jan. 15, its highest finish in six months. The broader all-share index also gained 0.68% or 24.76 points to 3,660.7.

Mr. Ocampo said the recent rise in the PSEi reflects a “catch-up” phase compared with regional peers, noting that market momentum could build further barring major external shocks.

He also noted that slower business activity in certain sectors and unforeseen disruptions could lead to temporary swings.

From a macroeconomic perspective, 2026 is expected to be a year of consolidation, he said, with inflation projected by the Bangko Sentral ng Pilipinas (BSP) to accelerate to 3.2% before cooling to 3% in 2027, gross domestic product growth forecast at 5.5%-6.5%, and interest rates set for another 25-basis-point (bp) reduction.

The BSP on Dec. 11 delivered a fifth straight 25-bp reduction in benchmark interest rates, bringing the policy rate to an over three-year low of 4.5%. It has lowered borrowing costs by a total of 200 bps since its rate cut cycle began in August 2024.

“Starting this year, we will see a lot of the renewable energy projects coming online. That should have a positive impact on energy costs overall,” Mr. Ocampo said, citing the ongoing shift toward non-fossil fuel energy.

Regulatory reforms are also expected to provide a boost to the market.

Recent changes to real estate investment trusts (REITs) rules expand eligible income-generating assets beyond traditional offices and malls to include tollways, water systems, data centers, telecom towers, and other infrastructure, the ICCP noted.

The Securities and Exchange Commission (SEC) has also extended reinvestment deadlines and strengthened disclosure and governance requirements.

The Philippines currently has eight listed REITs covering offices, hotels, malls, land, renewable energy, and infrastructure segments, including AREIT, Inc., DDMP REIT, Inc., Filinvest REIT Corp., RL Commercial REIT, Inc., MREIT, Inc., VistaREIT, Inc., Citicore Energy REIT Corp., and Premier Island Power REIT Corp.

In addition to REITs, ICCP is monitoring potential initial public offerings (IPOs) this year.

The PSE is targeting four potential listings this year, doubling last year’s two IPOs.

Companies that are eyeing going public, according to the exchange, include electronic wallet platform GCash and PNB Holdings Corp.’s planned listing by way of introduction.

On Tuesday, the PSEi went down by 1.31% or 84.92 points to close at 6,352.86, while the all shares index declined by 1.02% or 37.39 points to finish at 3,606.81. — A.G.C. Magno