PSEi to rebound to 7,100 this year–Philstocks

The benchmark Philippine Stock Exchange Index (PSEi) may climb to 7,100 this year on the back of improving corporate earnings and a more supportive macroeconomic environment, according to Philstocks Financial Inc.

Philstocks said the projected market advance would be driven by robust corporate fundamentals, with earnings of index members expected to grow by an average of 15 percent in 2026.

In 2025, the PSEi fell by 7.29 percent to 6,052.92.

Corporate revenues this year are seen to benefit from healthier demand amid economic growth and controlled inflation, while operating efficiency is expected to improve as firms expand capacity and integrate technology into production.

This year, Philstocks believes the market has room to recover as valuations remain attractive, with the PSEi trading at a price-to-earnings ratio of 10.5 times as of Jan. 30. This is below both the 2021 to 2025 average of 14.4 times and the regional average of 19.0 times.

Sector-wise, Philstocks expects property developers to benefit from stronger residential demand amid low borrowing costs, while sustained loan growth is projected to support banks.

Consumer firms are also seen remaining sound as employment recovers and remittances bolster spending.

Nickel miners, meanwhile, may outperform on potentially higher nickel prices, driven by robust global demand and possible supply cuts from Indonesia.

Overall, the brokerage said market opportunities this year would hinge on restoring investor confidence, even as sound corporate fundamentals provide a supportive backdrop for growth.

Philstocks projects gross domestic product to expand by 5 percent this year, quicker than the 4.4-percent growth recorded in 2025, the slowest pace since 2011 outside of the pandemic contraction.

The previous year’s growth was dragged mainly by a 2.1-percent contraction in investments following reduced public infrastructure spending amid investigations into flood control corruption issues.

Household consumption, the main driver of the local economy, grew by 4.6 percent but was weighed down by weaker consumer confidence tied to a tempered economic outlook.

Inflation averaged 1.7 percent in 2025, allowing the Bangko Sentral ng Pilipinas (BSP) to cut policy rates by a total of 1.25 percentage points to 4.5 percent to stimulate demand.

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For 2026, Philstocks expects the rebound in public infrastructure outlays—supported by government measures against corruption—to help revive the labor market and boost capital formation.

The lagged impact of BSP rate cuts is also seen to encourage borrowing, supporting household spending and private investments.

Still, risks are seen to remain. Inflation is forecast to accelerate to 3.2 percent due to stronger demand, rising food prices and a weaker peso, though it is expected to stay manageable.

Exports may also face pressure from the United States’ 19-percent tariffs on some Philippine goods and slower growth among key trading partners.

The peso is projected to depreciate further to an average of 59.50 against the US dollar from 57.5 last year, as the country is likely to post another balance of payments deficit.

Meanwhile, the BSP is projected to deliver one more rate cut, bringing the overnight reverse repurchase rate to 4.25 percent to support medium- to long-term growth.