The Philippine Stock Exchange Index (PSEi) closed higher at 6,108.86, a 1.4% weekly gain driven by bargain hunting and a firmer peso, which appreciated by 0.4% against the US dollar. On the surface, it looks like a positive week for equities.
But beneath the optimism lies a concerning trend: foreign investors were net sellers, pulling out PHP4.3 billion after posting inflows the previous week. This highlights a continuing trust deficit among global funds, even as local investors try to lift valuations.
Analysts note that Philippine stocks remain undervalued compared to regional peers. Yet persistent foreign selling underscores deeper concerns around governance, credibility, and structural reforms. Until these are addressed, global investors may keep looking elsewhere in ASEAN for higher returns with fewer risks.
Impact: For retail investors, bargain opportunities remain, but volatility is likely to persist. For workers whose pensions, insurance, or retirement funds are linked to equities, sustained foreign outflows could limit long-term growth. For companies, the challenge is clear: convincing foreign capital to return requires not just cheap valuations, but also restored credibility in markets and institutions.