LOCAL BROKERAGE Unicapital Securities, Inc. has lowered its year-end forecast for the Philippine Stock Exchange index (PSEi) to 7,100 from 7,800, citing slower corporate earnings growth.
“We forecast the PSEi to reach 7,100 by yearend as we expect corporate earnings to increase by 8% in 2025, with an implied price-to-earnings ratio of 12x,” Unicapital Securities Equity Research Analyst Peter Louise D.C. Garnace said in a briefing on Wednesday.
“We reduced our earnings per share assumption from 10% to 8% given the uncertainties related to global trade tensions,” he added.
Mr. Garnace said the PSEi would be supported by easing inflation, prospects of further interest rate cuts, resilient economic growth, and “undemanding” valuations.
“Moving into the second half, we continue to see policy easing as a key tailwind for the market, underpinned by continued easing of inflation rate, and the government’s target to spur the local economy,” he said.
“We continue to see the disinflationary trend for price levels, and this is driven by the decline in rice and oil prices,” he added.
Philippine inflation slowed to a near six-year low of 0.9% in July as utilities and food costs continued to ease.
However, Mr. Garnace noted risks to the projection, including inflationary pressure from United States tariffs, global oil price volatility, trade disruptions, and geopolitical tensions.
Unicapital Securities Equity Research Analyst Jeri R. Alfonso said the PSEi projection relies on the resilience of sectors such as consumer, real estate investment trusts (REITs), and utilities.
“We see the Filipino household seeing a bit more cash in their pockets this year because of the inflation stabilizing. Aside from that, we want to note that the recent minimum wage increase will help the consumer sector narrative,” she said.
“Our role is to translate these numbers into actionable strategies for investors, so they can position ahead of the curve and benefit from the industries shaping the Philippines’ growth story. We believe the Philippines is not just turning the corner but is positioning to lead Southeast Asia’s growth race in 2025,” Unicapital Securities President Maria Concepcion Y. Fernandez said.
The main PSE index inched up by 0.003% or 0.20 point to 6,277.87, while the broader all shares index slipped by 0.07% or 2.76 points to 3,735.14 on Wednesday. — Revin Mikhael D. Ochave