Philippine Stock Exchange (PSE) president and CEO Ramon Monzon says the local market is poised for recovery, yet remains weighed down by weak investor sentiment and governance concerns.

In an exclusive interview with the Daily Tribune, Monzon likened the current state of the market to planes in a holding pattern on an airport runway.

“We’re waiting for the go-signal from the tower if we can take off or not,” Monzon said, referring to the uncertainty surrounding investor confidence.

A blow to investors

He noted that the recent corruption controversy involving government flood control projects has dealt a blow to both local and foreign investors. “What moves the market is sentiment. More than fundamentals, [it’s] sentiment,” he said. “Ang problema natin (Our problem is), foreign investors don’t see governance. Public corruption is really a governance issue.”

Monzon compared the Philippines’ situation to Thailand’s ongoing market downturn, which he described as having “good fundamentals ruined by political instability.”

President Ferdinand Marcos Jr.’s exposé in his 28 July 2025 State of the Nation Address — where the Chief Executive flagged “failed and non-existent” flood control projects — triggered a chain of investigations that eroded market confidence.

Monzon recounted that some large companies deferred their initial public offerings (IPOs) around the same time the scandal initially broke out.

He also pointed out that the government’s reliance on debt to fund public expenditures could worsen the economy’s long-term health. “We need to increase our income. We have to develop new revenue streams,” he said, citing responsible mining as one potential source.

Little room for investment growth

Monzon added that the Philippine economy’s structure leaves little room for investment growth, with about 75 percent of the country’s GDP driven by consumption.

“You have $38-39 billion of total OFW remittances. That’s all being spent. You have another $38 billion (in 2024) from the IT-BPMs, Business Process Management employees, the young people. That’s all being spent. That’s why you have a very high GDP growth. If it’s consumption-based, the corollary must be true. What is the corollary or opposite of consumption? Savings. Our savings [are] very low. And where do investments come from? Savings.”

Bright spots

Despite these challenges, Monzon remains cautiously optimistic. “Well, there are bright spots. Not all is gloom and doom,” he said. “Our GDP is 5.6 percent. Inflation last September was 1.7 percent. Our money managers are doing good. That’s why we got another red cap. Corporate earnings are up about 18 percent for the first half,”

Monzon said the PSE remains on track to raise P180 billion in capital by the end of 2025.

A key contributor to this is the anticipated initial public offering of Maynilad Water Services Inc., scheduled for November 7. The utility firm’s P45.8-billion IPO — comprising 1.93 billion primary and 354.7 million secondary shares at a maximum price of P20 per share — is set to be the largest listing in the Philippines this year. Proceeds are expected to fund Maynilad’s expansion projects and debt repayment, a move that could help boost overall market activity.

Monzon also drew parallels with Vietnam, whose stock market has rebounded strongly amid reforms aimed at improving transparency and regulatory efficiency.

Vietnam’s VN-Index has surged by more than 30 percent year-to-date, buoyed by expectations of an upgrade to “emerging market” status by FTSE Russell in 2026. The reclassification is forecast to attract up to $6 billion in new foreign investments, reflecting global confidence in Vietnam’s regulatory and technological modernization.

Learn from Vietnam

For Monzon, the Philippines could learn from Vietnam’s example. “That’s why we are waiting for the takeoff signal from the tower,” he said, emphasizing that the path forward lies in restoring investor confidence, strengthening governance, and building a market environment where transparency and trust can fuel long-term growth.