Stocks in the Philippine’s market tumbled 1.7% to reach its lowest point since early October 2022, as the benchmark Philippine index extended its slide to more than 11% so far this year, cementing its position as one of the region’s poorest performers.
Philippine equities continue to face mounting pressure amid sustained capital outflows, with lackluster economic prospects and deteriorating investor sentiment further exacerbated by a high-profile government scandal that has accelerated the exodus of funds from the country.
The main scandal in the Philippines involves widespread corruption in flood control projects by the Department of Public Works and Highways, implicating officials and lawmakers in massive kickbacks and “ghost” projects.
The resulting anti-graft crackdown, a government-led effort to combat corruption, has caused significant government underspending on infrastructure. This, in turn, has weakened business sentiment and is a key factor causing economists to project a subdued economic growth outlook below the government’s target for the year.
Glenn Yin, director of research at AC Capital Market, noted that the ongoing scandal involving public infrastructure projects and the country’s subdued growth outlook have combined to undermine investor confidence and keep the market under heavy selling pressure.
Additionally, he pointed out that the outflow of foreign capital is not likely to subside soon, with technical indicators and regulatory apprehension suggesting continued weakness for Philippine stocks.
