PSEi slides 2.08% after Q4 GDP slowdown
Local shares plunged on Thursday as investors reacted negatively to the weaker-than-expected economic growth data and a softer peso following the US Federal Reserve’s decision to keep interest rates unchanged.
The benchmark Philippine Stock Exchange Index (PSEi) fell by 2.08 percent or 132.42 points to close at 6,223.36, retreating sharply after the release of the country’s disappointing fourth-quarter and full-year 2025 gross domestic product (GDP) figures.
Data showed the Philippine economy grew by just 3 percent in the fourth quarter, slowing further from the previous quarter’s 3.9 percent expansion, reinforcing concerns over the pace of domestic recovery.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the fourth quarter’s figures were the slowest in nearly five years.
“Philippine GDP growth came in lower than expected, marking its slowest pace in nearly five years,” Ricafort said.
“The economy grew an average of 4.4 percent for the full year in 2025, down from 5.7 percent in 2024—its weakest performance since the 2020 contraction of 9.5 percent at the height of the COVID-19 pandemic,” he added.
Philstocks financial research manager Japhet Tantiangco said market sentiment was further dampened by the depreciation of the peso, which followed the Federal Reserve’s move to hold policy rates steady, prompting risk-off behavior among investors.
Mining, oil sector up
Despite the sell-off, trading activity remained strong, with net value turnover reaching P7.05 billion.
Foreign investors were net sellers during the session, posting net outflows of P406.24 million.
Sectoral performance was broadly negative, with only the mining and oil sector ending in the green, rising 1.17 percent.
Banking stocks led the declines, tumbling 2.49 percent. Market breadth was weak, as decliners outpaced advancers, 124 to 75.
Alliance Global Group Inc. emerged as the day’s top index gainer, advancing 1.53 percent to P7.29.
Meanwhile, Century Pacific Food Inc. weighed heavily on the market after plunging 5 percent to P38.00, making it the session’s worst-performing index stock.
Analysts said the sharp decline in local stocks contrasted with the more muted performance of Wall Street overnight.
US stocks moved largely sideways after the Federal Reserve kept interest rates unchanged, with investors shrugging off the central bank’s low-key policy meeting and opting to wait for clearer economic signals.
Asian markets, meanwhile, were mixed as investors across the region also assessed the Fed’s policy stance alongside their own domestic growth concerns.
Some regional bourses managed modest gains, while others slipped, reflecting cautious sentiment rather than broad-based risk aversion.
Against this backdrop, the Philippine market largely bucked the regional trend, as selling pressure intensified following the release of weaker domestic growth data.
The sharper drop in the PSEi underscored investor sensitivity to local economic indicators, even as global markets showed relative stability.
On the brighter side, Ricafort said stronger investor confidence could still hinge on the government’s commitment to anti-corruption efforts and other priority reforms aimed at improving governance standards.
He noted that taking these measures seriously could serve as a key catalyst in restoring market sentiment, particularly at a time when investors remain cautious about both global and domestic risks.
“If anti-corruption measures and other related priority reforms that further level up governance standards would be taken seriously, these would be the missing and remaining important catalyst that would help improve investor confidence or sentiment,” he said.
