Stock index seen to rise to 7,100

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February 5, 2026 | 12:00am

MANILA, Philippines —  Brokerage firm Philstocks Financial Inc. expects a strong recovery in the Philippine stock market this year following last year’s dismal showing, where the local bourse was one of the worst-performing markets in East and Southeast Asia.

Philstocks is projecting the Philippine Stock Exchange index (PSEi) to hit the 7,100 level in 2026, supported by robust corporate fundamentals with the earnings of index members projected to increase by 15 percent on average.

“Revenues are expected to be backed by healthy demand amid our economic growth and controlled inflation coupled with our firms’ capacity expansion,” Philstocks said in a report.

“Operating efficiency among firms are also expected amid the economies of scale brought by expansion and further integration of technology in production methods,” it said.

Last year, Philstocks said the local bourse has been one of the worst performing markets in East and Southeast Asia.

“Aside from the local headwinds that restrained the market from catching up with its regional peers, the PSEi was also left behind the global artificial intelligence trend, as it has little exposure to the said sector,” it said.

In terms of sectors, Philstocks expects stronger residential property demand this year benefiting property developers with interest rates now lower following further policy easing by the Bangko Sentral ng Pilipinas (BSP).

The financial performance of the banking sector, meanwhile, is seen supported by the strong loan demand that is expected to be sustained this year.

“Household consumption growth may reaccelerate this year hinged on the expected recovery of the number of employed, low borrowing costs and OFW cash remittances. This is expected to aid the performance of our consumer manufacturing and consumer retail firms,” the brokerage firm said.

For 2026, Philstocks is forecasting the Philippine economy to expand by five percent, faster than the 4.4 percent growth in 2025.

It said the faster economic growth is hinged on the expected improvements in public infrastructure spending and the effects of the BSP’s monetary policy easing.

Inflation, meanwhile, is projected to accelerate to 3.2 percent from 2025’s 1.7 percent amid a combination of low-base effects, rising household demand and a depreciated currency.

Philstocks sees the local currency depreciating further against the dollar this year, averaging 59.5, compared to 2025’s 57.5 as the Philippines is seen posting another balance of payments deficit position.

“With the dismal growth our local economy has shown in 2025 and the tempered inflation seen for 2026, we project the BSP to deliver one more policy rate cut this year bringing the overnight reverse repurchase rate to 4.25 percent,” it said.