‘Rate cuts, reforms to fuel market recovery’

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January 21, 2026 | 12:00am

MANILA, Philippines — The local stock market is seen advancing toward the 7,000 mark this year as easing interest rates, improving capital market regulations and a more stable macroeconomic environment support a gradual recovery, according to the Investment & Capital Corp. of the Philippines.

ICCP president and CEO Manny Ocampo expects market momentum to build further, barring major external shocks.

He said the recent rise in the Philippine Stock Exchange index (PSEi) reflects a catch-up phase compared with regional peers.

“We are cautiously optimistic for the market, maybe looking at the PSEi hitting 7,000 for 2026, bearing no big negative surprises,” Ocampo said.

However, Ocampo warned that volatility may emerge once companies begin releasing their full year 2025 performance.

He said the results might “surprise on the downside” as business activity slowed down starting in the third trimester of last year amid news regarding corruption and other disruptions.

Ocampo said this could prompt periods of profit taking even as the broader outlook improves.

ICCP expects 2026 to be characterized by consolidation rather than sharp swings, with inflation seen remaining manageable, while energy costs may ease as more renewable energy projects come online.

“Starting this year, we will see a lot of the renewable energy projects coming online. That should have a positive impact on energy costs overall,” Ocampo said.

As yields on fixed income begin to come down, Ocampo believes that it is a “good time to bet on equities.”

He suggested investors consider adding about 20 percent into their investment portfolios for equities while maintaining some cash as “dry powder.”

Despite a quiet start to the year, ICCP also remains optimistic about the primary market outlook.

The investment house is looking at four companies currently in the pipeline, which would double the number of initial public offerings compared to the two listings seen last year.

Companies from sectors such as construction, retail and renewable energy are expected to tap the market.

“Expectations on maxing out value are being tempered already by bankers and advisors. That leaves a lot on the plate for people to enjoy an upside,” Ocampo said.