ICCP Sees PSEi Gradually Advancing Toward 7,000 in 2026 on Rate Cuts, Market Reforms

The Philippine stock market has room to move higher in 2026 as easing interest rates, improving capital market regulations, and a more stable macroeconomic environment support a gradual recovery, according to the Investment & Capital Corporation of the Philippines (ICCP).

ICCP President and COO Manny Ocampo said the recent rise in the Philippine Stock Exchange index reflects a “catch-up” phase compared with regional peers, noting that market momentum could build further barring major external shocks.

“We are cautiously optimistic for the market, maybe looking at the PSEi hitting 7,000 for 2026, bearing no big negative surprises,” Ocampo said. He noted that for the average Filipino, lower interest rates should be positive for consumption and spending, which in turn supports overall market sentiment.

Ocampo cautioned, however, that volatility may emerge once companies begin releasing full-year 2025 results. He specifically pointed out that results might “surprise on the downside” because starting the third trimester of last year,  business activity slowed down amid news regarding corruption and other disruptions. This could prompt periods of profit-taking even as the broader outlook improves.

From a macroeconomic perspective, ICCP expects 2026 to be characterized by consolidation rather than sharp swings. Inflation is seen remaining manageable, while energy costs may ease as more renewable energy projects come online.

“Starting this year, we will see a lot of the renewable energy projects coming online,” Ocampo said. “That should have a positive impact on energy costs overall.” He added that the shift toward non-fossil fuel-based energy is a positive development that supports both business and consumer activity.

Ocampo also pointed to regulatory reforms as a key tailwind, particularly recent amendments to REIT rules that broaden the range of eligible assets beyond traditional office and retail properties.

“The SEC is pretty much opening the doors wide open for tollways, water systems, data centers, telecom towers, and even fiber optic networks,” he said. He described the move toward an infrastructure-biased regulation as very progressive, as it allows companies to recycle capital more efficiently to support high-spending projects.

In terms of asset allocation, Ocampo noted that as yields on fixed income begin to come down, it is a “good time to bet on equities”. He suggested investors consider adding about 20% into their investment portfolios for equities while maintaining some cash as “dry powder”.

Despite a quiet start to the year, ICCP remains optimistic about the primary market outlook. Ocampo stated that the firm is looking at four companies currently in the pipeline, which would represent a 100% growth in the number of IPOs compared to the two listings seen last year. Companies from sectors such as construction, retail, and renewable energy are expected to tap the market.

“Expectations on maxing out value are being tempered already by bankers and advisors,” Ocampo said. “That leaves a lot on the plate for people to enjoy an upside”