The Philippine Stock Exchange Index (PSEi) closed the year on Monday, 29 December, ahead of the New Year holidays, at 6,052.92, down 475.87 points from end-2024 — a 7.29 percent decline year on year.

Amid souring investor sentiment driven largely by the economic downturn linked to ongoing corruption issues hounding the administration of President Ferdinand R. Marcos Jr., the local bourse ended the year at its weakest level since 2013.

The PSEi entered 2025 already under pressure as foreign investors pared exposure to Philippine equities amid policy uncertainty, still-elevated interest rates, and a weakening peso, which eroded foreign returns and weighed heavily on index heavyweights such as banks and property stocks.

Market valuations had earlier priced in expectations of aggressive rate cuts, leaving equities vulnerable when the Bangko Sentral ng Pilipinas (BSP) signaled only gradual, data-dependent easing, even as global funds rotated toward higher-yielding U.S. assets and larger ASEAN markets.

Although the PSEi rebounded in the second quarter to 6,364.94 following the BSP’s first policy rate cut and manageable inflation, inconsistent foreign inflows and cautious corporate earnings outlooks prevented a sustained recovery to end-2024 levels.

The rebound proved short-lived. The third quarter opened with President Marcos Jr.’s flagging of anomalous flood control projects during his State of the Nation Address in late July — widely viewed as the trigger for the broader economic slowdown.

Subsequent developments in the ongoing floodgate saga dragged the market to near pandemic-era levels. Third-quarter gross domestic product (GDP) growth slowed sharply to 4.0 percent, while heightened currency volatility further dented investor confidence.

Political risks intensified on 14 November, as renewed attention on the Senate’s revived probe into the flood control scandal coincided with a surprise video exposé by former congressman Zaldy Co. The PSEi fell to 5,584.35, its lowest level in five years.

Despite a difficult year, the market showed signs of resilience toward yearend, buoyed by renewed bargain hunting. Philippine Stock Exchange (PSE) reported a 75.0 percent surge in total capital raised from primary and secondary share and warrant sales to P144.14 billion in 2025, up from P82.37 billion in 2024.

The Exchange recorded two initial public offerings during the year: Top Line Business Development Corp. and Maynilad Water Services, Inc. The latter raised P34.3 billion, the largest IPO since Monde Nissin’s 2021 listing, providing much-needed funding for water and wastewater infrastructure upgrades.

While the benchmark index declined, other market gauges outperformed. The PSE MidCap Index and PSE Dividend Yield Index rose by 20.17 percent and 2.37 percent, respectively, year on year.

Average daily value turnover climbed 20.10 percent to P7.33 billion, from P6.10 billion in 2024. However, total domestic market capitalization fell 6.29 percent to P13.65 trillion, from P14.57 trillion a year earlier.

“The PSEi’s decline this year is not just about numbers — it’s about trust and confidence,” said PSE President and CEO Ramon S. Monzon.

“The corruption scandal, the weakening peso, and disappointing third-quarter GDP performance have clouded the economic outlook and triggered persistent foreign selling,” he added. “If the government succeeds in holding the corrupt accountable and instituting lasting reforms in transparency and governance, our market could be among the region’s best performers next year."