Confidence before capital

The Philippine Stock Exchange index (PSEi) has declined by 17% over the past decade, even as the economy expanded and corporate profits grew and as our Asia-Pacific peers grew by around 70%.

- EJ QUA HIANSEN

At around 6,200-6,800 in late 2025, the index remains below its 2018 peak of over 9,000 points. Meanwhile, Philippine equities trade at roughly nine times earnings, far below the historical average of fifteen and well under the regional average of thirteen to fourteen. This discount reflects weak confidence in future earnings, not weak fundamentals.

While policymakers often talk about increasing listings, enhancing infrastructure, or introducing new investment products, these supply-side measures miss the root cause: a shortage of investor demand. Companies will list only if investors are willing to buy, and investors will buy only if they believe the market is fair, liquid, and well-regulated.

Recent data underscore this imbalance. The Philippines has only about 2.8 million stock market accounts, compared with 16 million crypto users and over 40 million online gaming accounts. As Ron Acoba of Trading Edge observed, more Filipinos are comfortable with the risk and reward of gambling or crypto speculation than with long-term equity investing. This is a symptom of distrust.