THE stock market plunged and the peso also closed lower on Thursday following news that the country’s economic growth had markedly slowed last year.
The benchmark Philippine Stock Exchange index (PSEi) fell by 2.08 percent, or 132.42 points, to 6,223.36, while the peso weakened by 20 and a half centavos to P58.945 to the dollar.
The currency opened the day at P58.78 to the dollar and traded in the P58.75 to P59.95 range. Volume dropped to $1.33 billion from $1.46 billion.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso had fallen after the government reported a 2025 economic growth slowdown to 4.4 percent from 5.7 percent a year earlier.
Gross domestic product growth (GDP) was weighed down by a massive corruption scandal and missed the 5.5- to 6.5-percent target for the year. Fourth-quarter growth alone slumped to 3.0 percent from 3.9 percent in July-September.
“The local market plunged as investors digested the Philippines’ disappointing Q4/FY 2025 GDP print,” Philstocks Financial Inc. research manager Japhet Tantiangco said.
“Trading was strong with net value turnover at P7.05 billion. Foreigners were net sellers with net outflows of P406.24 million.”
Jarrod Tin, equity research analyst at Dragonfi Securities, said the significant miss was likely to weigh on near-term sentiment and trigger broad-based selling pressure.
Still, he said the impact was likely to be “largely short-term, with sentiment likely to stabilize as transitory headwinds — particularly the flood control issue — wind down and recovery expectations reemerge.”
Ricafort noted that the fourth-quarter slowdown was due to factors such as reduced government spending due to the corruption scandal, bad weather, political noise and global trade tensions.
He said a catch-up in government spending in early 2026, along with continued governance reforms, could improve investor confidence and drive economic recovery.
Wendy Estacio-Cruz, research head at Unicapital Securities, said the weaker GDP outcome suggested that the PSEi could remain range-bound in the near term.
“Subdued growth and delayed public spending weigh on earnings visibility and investor risk appetite,” she said.
“However, the downside may be cushioned by rising expectations of policy easing, which could support valuations for rate-sensitive sectors such as utilities, REITs (real estate investment trusts) and high-dividend stocks.”
Mining was the only gainer on Thursday, up 1.17 percent, while banks suffered the largest decline of 2.49 percent. Decliners outnumbered advancers.