Philippine stocks forecast to continue decline amid political turmoil and weak economic data

Philippine stocks are expected to continue their decline this week due to ongoing political turmoil and weak economic data that are dampening investor confidence.

The Philippine Stock Exchange index (PSEi) recently fell to a five-year low, closing at 5,584.35 on Friday, its weakest performance since May 2020.

Analysts attribute the market's downtrend to persistent negative developments, including fresh controversies surrounding a flood-control scandal that has intensified pressure on the administration of President Ferdinand R. Marcos, Jr.

The weak macroeconomic backdrop is further exacerbated by political noise, contributing to deteriorating investor confidence.

This bearish sentiment is intensified by the country's third-quarter economic growth of 4%, which fell short of expectations and was impacted by the government's anti-graft campaign that disrupted public spending.

Further compounding the issue, net foreign direct investment inflows saw a significant drop of 40.5% in August, continuing a year-on-year decline.

However, the PSEi advanced on Monday, climbing 3.48% to 5,779.12 as bargain-hunters stepped in after last week's sell-off.