Successful investigations and governance reforms addressing corruption are critical to restoring investor confidence in capital markets, according to Philippine Stock Exchange (PSE) president and CEO Ramon S. Monzon.

Speaking to reporters Friday evening at the PSE headquarters in Bonifacio Global City, Monzon said the administration of Ferdinand R. Marcos Jr. must get to the bottom of the ongoing corruption scandal stemming from anomalous flood control projects to revive market confidence.

“The corruption issue has to be resolved,” Monzon said, noting that ongoing probes must be successful to restore market momentum in the new year. “They just have to jail some people as they indicated.”

Market rally

The Philippine Stock Exchange Index (PSEi) has rallied to start the year, finishing in the green on all but one trading day since reopening on 2 January.

Analysts attribute the rebound to renewed bargain hunting following under-target inflation data from the Philippine Statistics Authority and a dovish tone from Bangko Sentral ng Pilipinas Governor Eli M. Remolona Jr. on the possibility of a February rate cut.

Last year told a different story. The PSEi sank to pandemic-era lows amid developments in the floodgate saga, hitting 5,584.35 on 14 November 2025 — the same day fugitive former lawmaker Zaldy Co released a video implicating the President as the alleged mastermind behind roughly P100 billion in budget insertions linked to flood control projects. The index closed 2025 at 6,052.92, down 475.87 points from end-2024 and its weakest year-end finish since 2013.

The scandal also weighed heavily on economic growth, with third-quarter gross domestic product (GDP) slowing to 4.0 percent. Remolona has said fourth-quarter growth would be “less than that.” Both domestic and foreign investor sentiment have deteriorated, reflected in the BSP’s latest business and consumer confidence surveys.

“If nobody goes to jail, nothing will change,” Monzon said. “All we can do as the Exchange is to provide the means. We cannot dictate confidence, we cannot dictate trust.”

Sentiment, over fundamnentals, drives markets

Monzon has consistently stressed that sentiment — more than fundamentals — drives markets. In an exclusive roundtable interview with DAILY TRIBUNE in October, he said political discord has directly undermined investor confidence.

“What moves the market is [investor] sentiment. More than fundamentals, [it’s] sentiment,” Monzon told TRIBUNE’s business team.

As of press time, several high-profile figures implicated in the scandal remain without formal charges. Contractor Sarah Discaya and several DPWH officials were arrested in December over an alleged P95.5-million ghost flood control project in Davao Occidental, while her husband, Curlee Discaya, remains detained at the Senate for contempt. However, other named individuals — including lawmakers and former senators — have yet to face cases, despite growing public clamor.

PSE year-end resilience

Despite these headwinds, the local bourse showed signs of resilience toward the end of 2025. The PSE recorded a 75.0 percent surge in total capital raised from primary and secondary share and warrant sales to P144.14 billion, up from P82.37 billion in 2024.

The Exchange also hosted two IPOs — Top Line Business Development Corp. and Maynilad Water Services Inc., the latter raising P34.3 billion, the largest since Monde Nissin’s 2021 listing.

Monzon said the PSE is targeting four IPOs this year, but emphasized that confidence must improve for companies’ anxieties to ease. His 2025 year-end message underscores his call — a call most Filipinos have echoed over the past few months.

“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,” he said.