PSEi seen at 7,000-7,500 range this year

MANILA, Philippines — The Philippine Stock Exchange Index (PSEi) is expected to trade between 7,000 and 7,500 this year, with market direction largely influenced by interest rate cuts, inflation trends and external risks, according to Insular Life (InLife).

In a conference held for InLife’s Amorsolo Circle, Ronald Joseph Lantin, fund manager of Insular Life’s Investment Management Division, said the stock market would face continued volatility and persistent risks this year.

“We see 7,000 to 7,500 as a reasonable range for the index this year based on guidance from our counterparts,” Lantin said.

“But as long-term investors, we focus more on company fundamentals rather than index targets,” he said.

Lantin said that despite external risks amid uncertainties in US policies, local market sentiment would continue to be affected by inflation and rate cuts from the Bangko Sentral ng Pilipinas (BSP).

He said that inflation has been improving with rice and electricity prices easing.

Headline inflation is expected to remain within the two to four percent target of the BSP for the year. This, combined with expected interest rate cuts, could provide much-needed support for market sentiment.

“The BSP has been good at managing expectations,” Lantin said.

“We expect a 25-basis-point rate cut this Thursday, and a total of 50 basis points in the first half of the year. Whether we see additional cuts will depend on how global conditions, especially Trump’s policies, affect inflation,” he added.

Beyond inflation control, Lantin said that economic growth in the Philippines has been sluggish, making policy intervention crucial.

“Gross domestic product (GDP) hasn’t been impressive, so there’s reason to believe the government will push for measures to stimulate growth. Rate cuts would be very helpful in this regard,” he added.

One of the biggest external uncertainties for the market is the return of Donald Trump to the White House.

While many analysts initially saw this as a negative development, Lantin said the Philippines might still benefit depending on how the country navigates US policy changes.

“If you look back at Trump 1.0, business process outsourcing revenues and remittances did not really suffer,” he said.

“There’s reason to believe the same scenario will play out this time. The relationship between the US and the Philippine government remains strong, and that could work in our favor.”

Despite market risks, Lantin remains optimistic, emphasizing that Insular Life takes a selective and opportunity-driven approach to investing.

“We remain reactive. We have our views, but we’re always monitoring the market and ready to adjust as needed,” he said.

“The key is to focus on companies with strong fundamentals, rather than chasing index levels,” Lantin said.