PSEi gains momentum despite Asia's worst-performing index tag

The Philippine Stock Exchange Index (PSEi) is currently one of Asia's worst-performing indices, down 4% year-to-date, but has since gained momentum, finishing last Friday up by 2.5% week-on-week.

Despite facing challenges like adverse weather, corruption in flood control projects, political instability, and low foreign direct investment, the Philippine economy continues to grow at a rate exceeding five percent.

Robust domestic consumption, supported by consistent remittances from Overseas Filipino Workers (OFW) and growth in the Business Process Outsourcing (BPO) sector, is sustaining economic activity.

Consequently, corporate earnings are projected to increase, and large conglomerates are trading at a significant discount to their net asset values.

Maybank International research highlights corruption in flood control projects as a major factor dampening investor sentiment.

Potential catalysts for improvement include government initiatives, such as reducing transaction taxes, aimed at enhancing stock market liquidity and attracting investment, and the expectation of further lowering of interest rates by the Bangko Sentral ng Pilipinas.

However, gains may remain limited as investor sentiment turns cautious amid the fifth straight week of rising oil prices, which could stoke renewed inflation concerns.