The Philippine Stock Exchange (PSE) announced reforms to its exchange-traded fund framework, lowering capital requirements and allowing actively managed ETFs, as the bourse faces scrutiny over market performance during Ramon Monzon's nearly nine-year tenure as president. On Monday, the PSE surged 300 points following news of a potential US-Iran peace breakthrough that boosted global risk appetite. The reforms come as the PSEi closed 2025 at 6,052.92, nearly 30% below levels when Monzon assumed leadership in 2017, with the benchmark falling to 70.7 on an indexed basis from 2017 to 2025 while regional peers including Vietnam and Indonesia posted stronger gains. The article questions whether product innovations can address deeper issues of liquidity, foreign investor participation, and market confidence that have persisted despite multiple reform initiatives over the past decade. Bloomberg previously described the Philippine market as the worst-performing major stock market over the preceding decade, according to the source.
PSE Announces ETF Framework Reforms
The Philippine Stock Exchange unveiled a reform package aimed at its exchange-traded fund framework by lowering capital requirements, allowing actively managed ETFs, broadening participation, and simplifying procedures for investment companies to bring products to market. The exchange has pursued multiple reforms during Monzon's tenure, including the acquisition of the fixed-income platform Product Disclosure Sheet (PDS), promotion of Real Estate Investment Trusts (REITs), sustainability reporting requirements, trading infrastructure modernization, securities lending and borrowing support, short-selling advocacy, and encouragement of digital participation and retail investing.
PSEi Performance Lags Regional Peers Since 2017
From 2017 to 2025, the PSEi fell to 70.7 on an indexed basis, while Vietnam's market nearly doubled and Indonesia rose strongly during the same period. The PSEi closed 2025 at 6,052.92, compared to Indonesia's JCI at 8,646.94, Vietnam's VN-Index at 1,784.49, Thailand's SET at 1,259.67, and Malaysia's KLCI at 1,680.11. Ramon Monzon became PSE president in 2017 when the benchmark index had breached 8,500. Only two companies completed initial public offerings in 2025. The article notes that the PSE remains nearly 30% below where it stood when Monzon assumed leadership, despite years of economic growth in the Philippines.
Market Confidence Issues Persist Despite Reform Efforts
Foreign investors have become consistent net sellers in the Philippine market. Daily trading remains minimal and concentrated in a small number of blue-chip stocks, with many listed firms trading only sporadically. Several companies have opted to delist, and the listing pipeline has been described as anemic compared to other Southeast Asian markets. The PSE continues to face chronic illiquidity, shrinking relevance, and declining foreign participation. The article cites these structural challenges as ongoing concerns despite the implementation of multiple reform initiatives over nearly a decade.
FAQ
What ETF reforms did the Philippine Stock Exchange announce?
The PSE announced reforms to lower capital requirements for ETFs, allow actively managed ETFs, broaden participation, and simplify procedures for investment companies to launch products.
How has the PSEi performed compared to regional markets since 2017?
From 2017 to 2025, the PSEi fell to 70.7 on an indexed basis and closed 2025 at 6,052.92, nearly 30% below 2017 levels when Ramon Monzon became president. During the same period, Vietnam's market nearly doubled and Indonesia posted strong gains, with Indonesia's JCI closing 2025 at 8,646.94 and Vietnam's VN-Index at 1,784.49.
What market challenges does the article identify for the PSE?
The article cites chronic illiquidity, shrinking relevance, declining foreign participation, an anemic listing pipeline with only two IPOs in 2025, consistent foreign investor net selling, minimal daily trading concentrated in few blue-chip stocks, and multiple company delistings as ongoing structural challenges.
