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The Philippine stock market faces a more subdued outlook for 2025 as leading brokerages sharply lower their year-end forecasts for the Philippine Stock Exchange index (PSEi), citing disappointing foreign direct investment (FDI) inflows and muted corporate earnings growth.
COL Financial Group Inc. cut its PSEi target to 7,700 from 8,100, while Abacus Securities slashed its year-end projection even further to 6,900, a steep downgrade from its 8,500 forecast in January.
At COL Financial’s mid-year market briefing, head of research April Lynn Tan attributed the revised forecast to a 41 percent drop in first-quarter FDI, which fell to US$1.76 billion from US$2.99 billion a year earlier. The decline undermines expectations that the recently enacted CREATE MORE law (RA12066) would attract new foreign capital and support investor sentiment.
“We expected more from CREATE MORE, but the FDI numbers are disappointing,” Tan said. She emphasized that the lack of foreign capital inflows has dampened hopes of a PSEi rerating, which should bolster investor confidence and support the government’s 6–7 percent GDP growth target.
Further weighing on sentiment is subdued earnings growth, with the market posting a modest 6.4 percent increase, failing to excite investors. Sectoral performance was also underwhelming, with telcos down 5.8 percent and the power sector tumbling 28.3 percent, despite expectations of resilience.
Tan also warned of cautious business expansion plans amid global uncertainties, including rising U.S. tariffs, as reflected in the Bangko Sentral ng Pilipinas’ business sentiment index.
The outlook signals a challenging environment for Philippine equities, shaped by tepid investment flows, underperforming sectors, and cautious corporate behavior.
