Philippine Stock Market Ranks Second Worst Performer in Southeast Asia

The Philippine Stock Exchange index (PSEi) continues to lag behind its regional peers, ranking as the second worst performer in Southeast and East Asia, a situation exacerbated by revised economic growth forecasts for 2026. As of the end of August, the PSEi had registered a year-to-date (YTD) decline of 1.6% and a year-on-year (YoY) drop of 3.78%, allowing emerging markets like Vietnam to surpass the Philippines in total market capitalization. However, the market showed a flicker of hope by the week ending September 11, breaking into positive territory with marginal YTD and YoY gains of 0.15% and 0.29% respectively. This rally, driven by bargain hunting and an influx of foreign net buying, briefly pushed the market higher on Monday, September 14. Yet, this momentum proved fragile, as the market lost all its gains by Tuesday, September 15, closing down 1.11%. The downward trend continued on Wednesday, September 16, with the market slipping further by 1.51% to close below the crucial 5,950-point psychological support level. In stark contrast, regional markets present a more robust picture. China's stock market is booming, fueled by domestic economic optimism and state-backed investment in hyper-localized technology. Malaysia is experiencing a strong growth story with a 6% GDP expansion and a thriving IPO market. Vietnam's economy surged by 8.39% year-on-year in the second quarter of 2026, positioning it as the region's top performer. Taiwan and South Korea have seen significant rallies driven by global demand for semiconductors, while Singapore maintained a strong growth rate supported by fiscal buffers. Analysts attribute the PSEi's weakness not primarily to global macroeconomic factors, but to persistent domestic structural issues. Chief among these is systemic corruption, exemplified by a major flood-control scandal in late 2025, which has chilled confidence in state-driven infrastructure and public-private partnerships, starving critical national projects of investment. The country's leap from industrialization to a services-heavy economy has resulted in logistical bottlenecks and weak domestic supply chains, leading to heavy reliance on imports and remittances. This failure to achieve manufacturing scale has limited job creation, forcing millions into low-paying informal work or to seek employment abroad as Overseas Filipino Workers (OFWs). Furthermore, high electricity rates and urban gridlock make doing business prohibitively expensive and erode household disposable income. The perpetuation of political dynasties also creates feudal patronage networks that shield monopolies and hinder pro-competitive reforms. Information source: Rappler Business