PSE revises index rules ahead of 2027 rebalancing

The Philippine Stock Exchange (PSE) has overhauled its index management policy, introducing new eligibility and liquidity rules that it said would align its benchmark indices with global standards while adapting to the evolving needs of the local market.

In a memorandum issued on Tuesday, the local bourse said the revised policy would take effect during the February 2027 index rebalancing, giving listed firms and investors time to prepare.

Among the key amendments is the adoption of a 98-percent cumulative market capitalization threshold as an additional requirement for inclusion in the PSE Index Series.

Under the updated policy, only firms that fall within the top 98 percent of the cumulative market capitalization of eligible securities may qualify for membership in the PSEi, PSE Dividend Yield Index, PSE MidCap Index and sector indices.

Two new measures

The exchange also replaced its previous liquidity criterion with two new measures—the Median Trading Activity Ratio (MTAR) or the 12-month sum of a company’s monthly trading activity ratios, and the Monthly Average Daily Value Turnover or its average daily value traded each month.

To qualify for the PSEi, PSE MidCap and PSE Dividend Yield Index, a company must post an MTAR of at least 15 percent, although the threshold is reduced to 10 percent for existing index constituents.

Firms must also rank among the top 25 percent in average daily value traded for at least nine of the 12 months under review. Separate thresholds apply to sector indices.

The revised policy also introduces an exception to the exchange’s minimum public float requirement.