After a decade of weak performance and a 20% market decline, the Philippine Stock Exchange remains stuck in one of the region’s driest liquidity cycles. Daily value turnover has dropped to around ₱100 million—barely half of its 2013 level.
As Security Bank vice president and head of equities Basil Go noted in an interview with Bilyonaryo News Channel, the trend is unmistakable: “If you just look at the PSE value turnover, it’s around ₱100 million. In 2013, it was ₱193 million. So, it’s not a good trend.”
Across Southeast Asia, neighboring exchanges generate ten times the activity. Retail participation in the Philippines remains among the region’s weakest, with only 2% of Filipinos holding brokerage accounts—far below participation in crypto, which stands at 14%.
Initial public offerings have nearly vanished, as conglomerates see little incentive to list. Even awaited names like GCash have held off, partly due to a minimum public float rule that Go argues is too steep.
“That’s a bit too high,” he said, warning that the market cannot absorb such large capital demands.
Attempts to lower trading costs also fizzled. Despite the removal of the commission floor, Go noted that “the big retail brokerage houses are still implementing the 25-basis-point commission,” limiting any benefit to small investors. Short selling exists on paper but remains unused due to incomplete infrastructure.
Unlike regional peers, the Philippines lacks a value-up program that pushes companies to improve returns, strengthen governance, and reward shareholders—factors proven to lift market performance.
This absence of momentum has fed a cycle of low confidence.
As Go put it, “It’s a chicken-and-egg thing. If retail investors see the market performing well, they’ll open brokerage accounts. But without them, liquidity stays low.”
The turning point, he suggested, may come from institutions that already hold massive capital: GSIS and SSS, which together manage roughly ₱53 billion—20% of it in equities. A small shift in allocation could be transformative.
“If they just increase their asset allocation by 1% in equities, that’s already ₱30 billion of dry powder,” Go said.
Unlike foreign funds, they benefit from steady monthly contributions that must be deployed.
With Philippine stocks trading at around nine times earnings—among the cheapest in Southeast Asia—the opportunity is clear. Many index names are priced below global financial crisis levels. Even with a strong rebound, Go emphasized, the market “would still be the cheapest in the region.”
He offered no stock picks but said the winners have been consistent: firms with solid balance sheets, disciplined capital management, dependable dividends, and strong returns on equity.
After years of stagnation, the path to recovery may hinge less on global sentiment and more on decisive action at home.
“Valuations are so cheap,” Go said. “That amount of capital could really make a difference.”