The Philippine Stock Exchange (PSE) has reported a significant surge in capital generation for 2025, a bright spot in a year where the main index faced headwinds from persistent foreign selling.
Capital Raising Defies Market Sentiment
The total capital raised from primary and secondary shares, along with warrants, jumped by an impressive 75 percent in 2025 to reach P144.14 billion (approximately $2.6 billion). This notable achievement unfolded against a challenging backdrop for the benchmark index.
The exchange facilitated a total of 24 fundraising activities throughout the year. This included two initial public offerings (IPOs) from Top Line Business Development Corp. and Maynilad Water Services, Inc. They were joined by eight follow-on offerings and 14 private placements, demonstrating diverse avenues for companies to secure funding.
Mixed Performance Across Indices and Sectors
In contrast to the strong capital raising, the Philippine Stock Exchange index (PSEi) ended the year on a lower note. The main index closed at 6,052.92 points on the final trading day of 2025, marking a daily dip of 0.21 percent. More significantly, the PSEi recorded a full-year decline of 7.29 percent.
However, not all market segments suffered. The MidCap and Dividend indices provided a counter-narrative, posting robust year-on-year gains of 20.17 percent and 2.37 percent, respectively. This indicates that investor interest remained active in specific areas of the market.
Sector performance was also a tale of two halves. The Mining & Oil sector led the charge with an extraordinary advance of 92.34 percent, followed by the Services sector. Meanwhile, average daily value turnover increased by 20.10 percent to P7.33 billion. On the downside, the total domestic market capitalization contracted by 6.29 percent to P13.65 trillion by year-end.
Foreign Outflows and the CEO's Perspective
A key pressure point for the market was sustained foreign selling. The market logged a net foreign selling position of P51.78 billion for the entire year of 2025, which weighed heavily on large index components.
PSE President and CEO Ramon S. Monzon contextualized the PSEi's decline, stating it was not merely a numerical event but one tied to trust and confidence. He pointed to a combination of factors that dampened investor sentiment and triggered foreign fund outflows. These included a domestic corruption scandal, the persistent weakness of the Philippine peso, and a softer-than-expected gross domestic product (GDP) print for the third quarter.
Looking forward to 2026, Monzon outlined several potential catalysts for a market recovery. He cited anticipated corporate earnings growth, currently attractive stock valuations and dividend yields, as well as prospective regulatory changes. Potential modifications to rules governing Real Estate Investment Trusts (REITs) and IPO public float requirements could spur new listings and support overall market performance, provided ongoing governance reforms continue to gain traction among investors.
