MANILA — Philippine stocks extended their losing streak on Thursday, with the benchmark Philippine Stock Exchange index (PSEi) falling to its lowest level in more than 10 months as investors reacted to sharply reduced economic growth forecasts and renewed concerns over the domestic outlook.
The PSEi dropped 1.12%, or 65.12 points, to close at 5,730.02. It was the index’s fifth consecutive decline and its weakest finish since Nov. 14, 2025, when it closed at 5,584.35. The broader All Shares index also declined 1.10% to 3,210.72.
The sell-off followed major downward revisions to Philippine economic growth forecasts. S&P Global Ratings cut its 2026 growth projection for the Philippines to 2.9% from 4.1%, while the Asian Development Bank reduced its forecast to 3.3% from 3.8%. The revisions heightened concerns about the pace of economic recovery and the potential impact on corporate earnings.
The ADB cited tighter global financial conditions, energy-related risks linked to the Middle East conflict and an expected strong El Niño episode as factors clouding the outlook. S&P, meanwhile, pointed to weaker domestic economic activity, adding to concerns that growth could remain below earlier expectations.
The latest market decline was broad-based. Mining and oil stocks suffered the biggest drop, with the sector index falling 3.79%. Industrial shares declined 1.64%, services fell 1.52%, financials dropped 1.33% and property stocks lost 1.15%. Holding firms were the only sector to finish higher, gaining 0.43%.
Trading activity was also relatively subdued. About 863.67 million shares changed hands, generating roughly ₱5.09 billion in value turnover. Decliners overwhelmed advancers, 131 to 61, while 57 issues were unchanged.
Foreign investors also remained cautious. Data reported by Philstar showed foreign investors were net sellers, with net outflows of about ₱749.31 million during the session.
Market weakness was not limited to domestic concerns. Rising US Treasury yields also weighed on sentiment as investors reassessed expectations for US monetary policy. Higher US yields can make dollar-denominated assets more attractive relative to emerging-market equities and bonds, potentially increasing pressure on markets such as the Philippines.
The weaker peso added another layer of uncertainty. The local currency fell to ₱62.735 against the US dollar on Thursday from ₱62.585 a day earlier, while oil prices remained elevated. A weaker peso can increase the local cost of imported fuel and other goods, potentially adding to inflationary pressures and corporate expenses.
The combination of slower growth, elevated inflation risks and expensive energy creates a difficult environment for Philippine companies. Businesses facing weaker consumer demand may also have less room to pass higher input costs on to customers, potentially putting pressure on profit margins.
Investors are therefore watching upcoming economic data and corporate earnings for signs of whether the weaker growth outlook is beginning to translate into slower business activity. Monetary-policy decisions will also remain important as the Bangko Sentral ng Pilipinas balances inflation risks against a weakening growth environment.
The latest decline leaves the PSEi considerably below its recent levels and underscores how quickly market sentiment can shift when economic forecasts deteriorate.
The bigger question now is whether the PSEi’s 10-month low will prove to be a temporary reaction to worsening growth expectations—or whether weaker economic activity, elevated energy costs and global market pressures will continue to weigh on Philippine stocks in the months ahead.
