PHL market may kick off 2026 on cautious note

PHILIPPINE STOCKS may start 2026 moving mostly sideways as trading activity is expected to remain thin due to the holidays and as the market awaits developments on the National Government’s budget for the year.

On Dec. 29, the last trading day for 2025, the bellwether Philippine Stock Exchange index (PSEi) dropped by 0.21% or 12.72 points to end at 6,052.92. Meanwhile, the broader all shares index increased by 0.24% or 8.58 points to 3,473.24.

Year on year, the PSEi was down by 7.29% or 475.87 points from its end-2024 finish of 6,528.79.

Philippine financial markets were closed on Dec. 30, Dec. 31, and Jan. 1 for Rizal Day and the New Year holidays.

As trading resumes on Friday, the market is expected to start the year on a quiet note amid the holiday lull, F. Yap Securities Investment Analyst Marky Carunungan said.

“For the first trading day of 2026, we expect the market to trade cautiously with a slight downside bias given a thin holiday liquidity and lingering uncertainty around the delayed signing of the 2026 budget,” he said.

“While broader fundamentals point to a gradual recovery later in the year, near-term sentiment may still remain fragile until there’s clarity on fiscal execution.”

Executive Secretary Ralph G. Recto said on Tuesday that President Ferdinand R. Marcos, Jr. and his team are reviewing the 2026 General Appropriations Act (GAA) and the changes made by lawmakers. Mr. Marcos is expected to sign the GAA on Jan. 5, forcing the country to operate on a reenacted budget in the first few days of 2026.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said players could take cues from how other stock markets performed over the Philippine bourse’s three-day trading break.

“There is a chance for a start-of-the-year rally, depending on forecasts, especially on reform measures on anti-corruption and further improving governance standards — especially if these priority reform measures are taken seriously,” Mr. Ricafort said.

Meanwhile, for this year, analysts said the PSEi could continue to struggle to find its footing as economic uncertainties linger.

“There’s a chance that the market could rise to around 6,600-6,700 if we see decisive action on governance issues as well as a sustained trend of GDP (gross domestic product) growth above 5%. Conversely, there’s a risk of the index revisiting 5,600 or lower if economic growth stalls or fresh governance concerns emerge,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said.

“We expect the index to tread sideways between the 6,000 and 6,400 range as a multitude of headwinds, such as the slowdown in manufacturing activities, softer consumer spending, and tightening infrastructure disbursements which could taper economic growth once again,” AP Securities, Inc. Equity Research Analyst Shawn Ray R. Atienza added. — Alexandria Grace C. Magno