The Philippine Stock Exchange Index (PSEi) fell to a two-year low on Friday, January 31, plunging into bear market territory as funds rebalanced portfolios ahead of index recomposition.
The PSEi fell 45.81 points–or 0.74 percent–by the closing bell, closing at 6,107.66. Additionally, the Philippines' weak economic growth rate for 2024 depressed investor sentiment.
27-month low
The PSEi, the benchmark Philippine Stock Exchange Index, fell 245.07 points, or 4.01 percent, to close at 5,862.59, the lowest level in 27 months.
From its most recent peak of 7,554 in October, it has dropped by 22.4 percent. A decline of at least 20% from the most recent peak is considered a bear market.
Factors that resulted in the latest plunge
The market’s crash was due to a multitude of macroeconomic variables, according to economists.
Despite being marginally stronger than the 5.5 percent growth in 2023, the average GDP growth of 5.6 percent in 2024 was still below the 6 to 6.5 percent target set by the Marcos government.
Meanwhile, REITs and dividend-yielding companies were able to entice investors with their greater yields and dividend promises, particularly during bear markets.
