The Philippine stock market is set for a significant rebound in 2024 as key reforms aimed at attracting foreign investment and improving liquidity take shape. Following a challenging year marked by low trading volumes and delayed IPOs, the Philippine Stock Exchange (PSE) has outlined strategic initiatives to enhance market attractiveness and resilience.
PSE President and CEO Ramon S. Monzon expressed optimism during a recent forum, highlighting several efforts underway to reduce friction costs for foreign investors. Among the proposed changes are reductions in the stock transaction tax and dividends for foreign investors, which could serve as a game-changer for the market.
“These reforms are crucial in leveling the playing field and making the Philippine market more appealing to international investors,” Monzon said. “We are hopeful that legislative efforts will push these changes through by the first quarter of 2024.”
Monzon also addressed the introduction of short selling, a long-awaited product in the Philippine market. This mechanism, designed to allow investors to hedge their portfolios, is expected to boost market liquidity and attract institutional investors back to the market.
In addition to these reforms, the PSE is focused on fostering an environment conducive to small and medium enterprises (SMEs). The liberalization of listing rules, combined with the Listing Engagement and Assistance Program (LEAP), is aimed at encouraging more SMEs to go public.
“We’ve seen strong earnings reports from major banks, and with inflation expected to decline, we anticipate an even stronger performance in 2024,” Monzon said.
The stock market’s digitalization, driven by fintech platforms like GCash, has also contributed to financial inclusivity. Retail investors, who previously represented a smaller portion of market activity, are now becoming a key part of the trading ecosystem.
As the PSE continues to expand its product offerings, including plans for derivative trading by 2025, investors are encouraged to consider the historical outperformance of the stock market compared to bank deposits, especially in a high-interest-rate environment.
With reforms on the horizon and optimism growing, the Philippine stock market is poised for a dynamic year ahead, offering opportunities for both local and international investors.
