The Philippine Stock Exchange (PSE) is taking steps to revitalize the country’s exchange traded fund (ETF) market, citing persistent liquidity challenges that have undermined the performance of its sole ETF product. The First Metro Philippine Equity Exchange Traded Fund (FMETF), which tracks the PSEi benchmark, has seen lackluster trading, with shares closing at P105.60 on Friday—down from a 52-week high of P121.50.
PSE president and CEO Ramon S. Monzon admitted the market has struggled to sustain interest in the ETF space, calling FMETF’s liquidity issues a learning experience. “We only have one ETF product, and I hate to say it, that does not work out very well,” Monzon said.
To address these issues, the PSE is in discussions with the Taiwan Stock Exchange, which lists around 100 ETFs, to gain insights into product diversification and retail appeal. Among the ideas floated are ETFs tied to gold or those offering monthly dividend payouts.
In parallel, the PSE is preparing for a merger with the Philippine Dealing and Exchange Corp. (PDEx), with plans to roll out a broader range of products, including bond ETFs, multi-asset ETFs, and derivatives based on interest rates, currencies, and bonds. Monzon emphasized the goal of integrating technology and enhancing risk management and investor protection through improved infrastructure and expanded depository services.
Monzon also revealed ongoing amendments to ETF rules to facilitate new product offerings, with potential launches expected by late 2025. The broader strategy aims to deepen the capital markets, attract retail investors, and improve trading liquidity in the Philippines’ ETF segment.
