PHL market may kick off 2026 on cautious note
PHILIPPINE STOCKS may start 2026 moving mostly sideways as trading activity is expected to remain thin due to the holidays and as the market awaits developments on the National Government’s budget for the year.
On Dec. 29, the last trading day for 2025, the bellwether Philippine Stock Exchange index (PSEi) dropped by 0.21% or 12.72 points to end at 6,052.92. Meanwhile, the broader all shares index increased by 0.24% or 8.58 points to 3,473.24.
Year on year, the PSEi was down by 7.29% or 475.87 points from its end-2024 finish of 6,528.79.
Philippine financial markets were closed on Dec. 30, Dec. 31, and Jan. 1 for Rizal Day and the New Year holidays.
As trading resumes on Friday, the market is expected to start the year on a quiet note amid the holiday lull, F. Yap Securities Investment Analyst Marky Carunungan said.
“For the first trading day of 2026, we expect the market to trade cautiously with a slight downside bias given a thin holiday liquidity and lingering uncertainty around the delayed signing of the 2026 budget,” he said.
“While broader fundamentals point to a gradual recovery later in the year, near-term sentiment may still remain fragile until there’s clarity on fiscal execution.”
Executive Secretary Ralph G. Recto said on Tuesday that President Ferdinand R. Marcos, Jr. and his team are reviewing the 2026 General Appropriations Act (GAA) and the changes made by lawmakers. Mr. Marcos is expected to sign the GAA on Jan. 5, forcing the country to operate on a reenacted budget in the first few days of 2026.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said players could take cues from how other stock markets performed over the Philippine bourse’s three-day trading break.
“There is a chance for a start-of-the-year rally, depending on forecasts, especially on reform measures on anti-corruption and further improving governance standards — especially if these priority reform measures are taken seriously,” Mr. Ricafort said.
Meanwhile, for this year, analysts said the PSEi could continue to struggle to find its footing as economic uncertainties linger.
“There’s a chance that the market could rise to around 6,600-6,700 if we see decisive action on governance issues as well as a sustained trend of GDP (gross domestic product) growth above 5%. Conversely, there’s a risk of the index revisiting 5,600 or lower if economic growth stalls or fresh governance concerns emerge,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said.
“We expect the index to tread sideways between the 6,000 and 6,400 range as a multitude of headwinds, such as the slowdown in manufacturing activities, softer consumer spending, and tightening infrastructure disbursements which could taper economic growth once again,” AP Securities, Inc. Equity Research Analyst Shawn Ray R. Atienza added. — Alexandria Grace C. Magno
China eyes stricter Scarborough Shoal measures, accuses PHL of reef damage
By Kenneth Christiane L. Basilio, Reporter
CHINA will impose “strict protection measures” at the disputed Scarborough Shoal to prevent further environmental damage there, according to a Chinese government report, which also accused the Philippines of damaging the maritime feature’s ecosystem.
Chinese authorities will enhance their monitoring of the shoal while carrying out conservation work to strengthen its nature reserve in the feature, based on the report compiled by research groups under Beijing’s Ministry of Natural Resources, a copy of which was obtained by BusinessWorld.
“China will further improve the regular alerting and monitoring mechanism on Huangyan Dao, and consistently carry out surveys, studies, conservation and restoration to maintain and enhance the diversity, stability and sustainability of the coral reef ecosystem,” it said, referring to the shoal by its Chinese name, which the Philippines calls Panatag.
The Philippines and China both claim Scarborough Shoal, which is prized for its rich ecosystem and proximity to key shipping lanes. The dispute over its ownership is part of the wider South China Sea tensions that have strained ties between Beijing, Manila and their allies.
In September, China approved the creation of a 3,500-hectare reserve at the northeast rim of Scarborough Shoal, which it said is intended to preserve the ecological diversity of one of the waterway’s most contested areas. Manila has called the plan a “clear pretext for occupation.”
China has built man-made islands featuring runways, hangars, radar systems and ports on numerous submerged features in the South China Sea to strengthen its naval presence in the resource-rich waters.
The report said “rigorous conservation management” would be introduced at Scarborough Shoal to counter threats to its coral reef ecosystem, including climate change and rising sea temperatures, while partly blaming the Philippines for harmful activities.
“Illegal fishing activities and frequent intrusions by the Philippines have also induced a great stress on the ecosystem,” it said. “Unsustainable illegal fishing activities and frequent intrusions have brought about abandoned materials and pollutant discharge, adversely affecting the health of Huangyan Dao ecosystem.”
China took control of the shoal in 2012 after a standoff with Philippine forces. It has since stationed its coast guard and fishing vessels there, blocking Filipino fishermen despite a 2016 ruling by a United Nations-backed tribunal that declared it a traditional fishing ground.
The Philippine government has rolled out schemes to aid fishermen in the South China Sea, offering incentives, fuel subsidies, food and equipment to encourage their presence in the disputed waters.
The Philippines’ Defense department did not immediately reply to a Viber message seeking comment. BusinessWorld also sought comment from National Security Adviser Eduardo M. Año and Presidential Assistant for Maritime Concerns Andres C. Centino, who did not immediately reply.
SHIFTING BLAME
Manila’s Maritime Council Spokesman Alexander S. Lopez said China’s claim of reef damage at the contested shoal was propaganda, pointing out that previous Chinese maritime activities in the area had harmed the area.
“As part of the 2016 ruling, it was determined that China was the one responsible for the ecological damage of Bajo de Masinloc,” he told BusinessWorld in a Viber message on Monday, referring to another Filipino name for Scarborough Shoal and citing the decision that invalidated Beijing’s sweeping sea claim.
Chinese fishermen’s “illegal harvesting” of giant clams at the feature has caused ecological damage, he said. “They are the ones depleting the giant clams.”
Sherwin E. Ona, an international fellow at Taiwan’s Institute for National Defense and Security Research, said China’s nature reserve plan in Scarborough Shoal and the recent report gives it “legal cover” to occupy the feature.
“This is a ‘lawfare’ approach from China… as the natural marine reserve gives them legal cover for eventual occupation,” he said in a Viber message, adding that the ecological report could provide Beijing with justification to assert authority over Scarborough.
He said Philippine authorities should bolster their presence near the shoal by conducting regular patrols to hinder Beijing from asserting greater control over the feature.
“This should be combined with constant information-sharing and diplomatic efforts to deter China,” said Mr. Ona.
Philippines ‘concerned’ over China’s drills near Taiwan, says they undermine regional stability
THE Philippine Defense department on Wednesday said it was “deeply concerned” over China’s massive military drills off Taiwan, warning that they undermine regional peace and stability.
In a statement, Defense Secretary Gilberto C. Teodoro, Jr. said China’s coercive activities around Taiwan have implications beyond the region and could affect stability in the Indo-Pacific.
“This heightened scale of coercion has implications that extend beyond cross-strait relations and into the broader Indo-Pacific community,” he said, adding that the military exercises risked “further creating cracks in an already fragile geopolitical environment.”
China fired dozens of rockets toward Taiwan and deployed warships and jets near the island in a show of force simulating an encirclement of the self-ruled island and aimed at deterring foreign intervention in the event of conflict.
The exercise, named “Justice Mission 2025,” was the largest by area so far and the closest yet to Taiwan, which deployed jets and warships to monitor them.
It began just 11 days after the US announced a record $11.1-billion arms package for Taipei that included missile and communications systems; and concluded on Wednesday as China pulled its ships back. Despite this, Taiwan remained on high alert, a Reuters report noted.
Taiwan’s ex-Defense Minister Chiu Kuo-cheng in 2021 said China could be ready to mount a full-scale invasion of the island state by this year, while former US Indo-Pacific Commander John C. Aquilino said indications point to the possibility of a Taiwan invasion by 2027.
Philippine officials have said the country could be involved in any conflict over Taiwan.
In April, Military Chief Romeo S. Brawner, Jr. directed the armed forces to prepare for a possible invasion of the island, while President Ferdinand R. Marcos, Jr. warned in August the Philippines would be dragged “kicking and screaming” into any confrontation, with Taiwan lying less than 200 kilometers from its northernmost islands.
Manila’s National Security Policy 2023-2028 identified a possible Taiwan conflict as a potential flashpoint due to the Philippines’ proximity from the island, which could not only affect Filipinos in Taiwan but also lead to an influx of refugees.
“Basic principles of self-restraint must be observed, and the rule of international law must not be distorted,” Mr. Teodoro said. “The Philippines underscores the importance of upholding international law and regional norms, including the principles of peaceful management of disputes. “
“We reaffirm our support for a free, open, stable, and rules-based Indo-Pacific, where differences are resolved through peaceful means without deception, coercion, or intimidation,” he added. — Kenneth Christiane L. Basilio
Budget reforms fall short in absence of participatory, accountability mechanisms
By Adrian H. Halili, Reporter
THE country’s budget process remained “opaque” even as the government introduced several transparency reforms last year, analysts said, as the recently ratified 2026 national budget awaits President Ferdinand R. Marcos, Jr.’s approval.
“The general condition of the budget process remains opaque. Only a portion was televised. No efforts to enable participation and accountability in any part of the budget process,” Joy G. Aceron, convenor-director of transparency group G-Watch, said in a Facebook Messenger chat.
Lawmakers ratified the P6.793-trillion national budget for 2026 last Dec. 29, with critics noting that government aid and unprogrammed funding remained prone to misuse and politization due to weak accountability mechanisms.
Ederson DT. Tapia, a political science professor at the University of Makati, said that last year’s process showed more transparency, noting an increase in disclosures, stronger public messaging, and repeated invocations of openness.
“Yet transparency is not just about visibility alone. It is also about explainability,” he said in a Messenger chat.
“While procedures became more open, the rationale behind late-stage changes remained difficult for the public to fully grasp,” he added.
The deliberations for the 2026 budget have been marked by the implementation of several transparency measures, as a reaction from public outrage over a corruption scandal involving congressional insertions and opaque budget allocations.
These measures included the uploading of budget documents on online platforms, the livestreaming of bicameral proceedings, and the involvement of civil society in budget deliberations.
“In that sense, we saw improvements in procedural transparency, but deliberative transparency, such as clear articulation of trade-offs and policy priorities, remains incomplete,” Mr. Tapia said.
Ms. Aceron added transparency alone remains meaningless without responsiveness and accountability in budget deliberations.
“Transparency is only a means or tool,” she said, noting that transparency mechanisms serve only as tools if they don’t pave the way for civil society to influence decisions or hold legislators to account.
She added that last year’s budget process offered little room for public accountability, with allocations still prone to patronage and corruption.
“The budget continues to have allocations that perpetuate patronage, like the ayuda (social aid) programs and those prone to corruption, like the unprogrammed allocations,” she said.
Social aid programs like the Medical Assistance to Indigent and Financially Incapacitated Patients remained funded under the 2026 national spending plan, at P51.65 billion.
The program was previously flagged as it required patients to secure guarantee letters from politicians to avail of assistance.
Unprogrammed allocations are now set at P243.4 billion close to the P250-billion funding under the National Expenditure Plan. These standby funds for pre-planned government projects or emergency contingencies have been flagged for potential sources of corruption.
Selective accountability threatens to undercut Philippine anti-graft push
By Chloe Mari A. Hufana, Reporter
PHILIPPINE anti-corruption efforts risk losing their deterrent effect unless investigations begin to reach senior political and business figures, a failure that could further erode public trust and shape behavior within the government in the years ahead, an analyst said.
The public is less unsettled by the absence of arrests than by a pattern in which enforcement actions appear to stop short of individuals with real political or economic weight, political science professor at the University of Makati Ederson DT. Tapia said.
Unless that boundary shifts, accountability will continue to be perceived as conditional, he warned, raising doubts about how far future probes will go.
“People feel that, even if they don’t always articulate it in sophisticated and legal terms. There’s a quiet question that hangs in the air: up to where does accountability actually go?” he said via Facebook Messenger.
The country is probing a multibillion-peso flood control scandal after President Ferdinand R. Marcos, Jr. exposed that high-ranking public officials have been colluding with private contractors to receive kickback money in return.
Only former Public Works officials and government contractors have so far been jailed since the President flagged anomalous flood control projects in August.
As climate risks intensify and infrastructure spending rise, Mr. Tapia said unresolved questions about responsibility could fuel deeper public skepticism.
That perception, if left unaddressed, may gradually alter how citizens and officials engage with institutions. Mr. Tapia said confidence may not collapse abruptly, but its slow erosion is expected, in which anti-corruption campaigns are increasingly viewed as symbolic.
Over time, this risks weakening their ability to deter misconduct as the government rolls out larger and more complex public works programs.
Mr. Tapia said political patronage and elite networks are likely to remain decisive factors, unless reforms disrupt the advantages of delay and distance from accountability.
Those with political and economic capital often do not need to interfere directly, he said, as prolonged investigations and procedural complexity can be enough to diffuse urgency and public pressure.
Looking ahead, Mr. Tapia warned that predictable enforcement outcomes could reshape incentives within the bureaucracy. Lower-level officials may continue to face immediate exposure, while those closer to power remain insulated, reinforcing an uneven risk landscape.
“Once that pattern becomes predictable, it stops deterring behavior,” he said. “It starts shaping it.”
For the government, Mr. Tapia said, the credibility of future anti-corruption drives will hinge on whether accountability visibly extends beyond familiar limits.
Without that shift, he warned, integrity may remain part of official rhetoric, but proximity to power will continue to be seen as the safer long-term strategy.
Marcos calls for discipline, unity
PRESIDENT Ferdinand R. Marcos, Jr. urged Filipinos to approach 2026 with discipline, unity and a shared sense of purpose, framing the new year as a test of collective resolve as his administration probes a massive corruption scandal.
In his New Year’s message on Thursday, Mr. Marcos said the months ahead will require both personal discipline and national solidarity to translate lessons from the past year into progress, calling on citizens to see their choices as shaping the country’s direction.
“As we step into the unfolding days ahead, may we move forward with a clearer understanding of our role in each other’s lives and a renewed commitment to building a future shaped not by circumstance but by the strength of our will and the clarity of our collective purpose,” he said.
The President signaled that his government would press on with policies aimed at fostering unity and social cohesion, casting empathy and service as pillars of nation-building at a time when public trust and economic expectations remain under strain.
“A society thrives when its people choose empathy over indifference, service over self-interest, and hope over despair,” he said. “It is thus our commitment in the government to be relentless in pursuing a Bagong Pilipinas that nurtures unity, fosters compassion, and showcases the greatness of our kababayans.” — Chloe Mari A. Hufana
235 firework-related injuries logged
THE Philippines logged 235 fireworks-related injuries during the latest New Year period, according to its Health department on Thursday, a sharp decline from a year earlier.
The Department of Health (DoH) said the cases were recorded from Dec. 21, 2025, to 4 a.m. on Jan. 1, 2026, including 62 injuries reported during New Year’s Eve celebrations.
The tally is 42% lower than the 403 cases recorded during the 2025 year-end festivities.
Health Spokesman Albert Francis E. Domingo said the lower number is encouraging but not final, as nationwide surveillance will continue until Jan. 5 to capture late hospital submissions.
“Even as we see today a lower [count] than last year’s count for fireworks-related injuries, the DoH anticipates that late reports will come in from today Jan. 1 all the way to Jan. 5. We hope the lower count will stay,” he said in a statement.
He warned that even minor burns or wounds caused by fireworks can lead to tetanus, a potentially fatal infection whose symptoms typically appear about eight days after injury and, in some cases, as late as three weeks.
Mr. Domingo urged those injured to seek immediate medical consultation, noting that tetanus vaccination is available at hospitals nationwide. — Chloe Mari A. Hufana
35 scam hub victims return to PHL
THE Department of Migrant Workers (DMW) said that 35 Filipinos who fell victim to scam hubs in Cambodia have safely returned to the Philippines.
“Their safe repatriation was achieved through the coordinated efforts of the Philippine Embassy in Phnom Penh and the Migrant Workers Offices in Singapore and Thailand,” the DMW said in a statement.
The returnees arrived in three batches at Ninoy Aquino International Airport on Dec. 31. Two of the batches flew through Kuala Lumpur, Malaysia, while the third batch went through Phnom Penh, Cambodia.
“The DMW reiterated its warning to Filipinos to remain alert to fraudulent job offers, especially those shared on social media platforms,” the agency said.
It also urged jobseekers to verify the legitimacy of overseas employment opportunities and to ensure they are properly approved and registered with the DMW before accepting any offer.
The agency noted the repatriation forms part of an ongoing inter-agency effort to assist Filipino victims of illegal recruitment, human trafficking, and scam hub operations. — Adrian H. Halili
Mayon Volcano raised to Alert Level 2
THE state seismology agency raised Mayon Volcano’s alert status to Level 2 on Thursday amid increased seismic activity and rockfall in the volcano, warning citizens of potential eruption.
In a 6 a.m. bulletin, the Philippine Institute of Volcanology and Seismology (Phivolcs) said that Mayon was showing increasing unrest and heavy rockfall shedding at its summit since November.
“This means that there is current unrest driven by shallow magmatic processes that could lead to hazardous magmatic eruption,” it added.
Phivolcs said that it had recorded 599 rockfall events in the last two months of 2025, noting the highest incidence occurred on Dec. 31 with 41 rockfall events.
“Increased rockfall at Mayon has been a precursory sign of magmatic dome growth within the upper edifice preceding an eruption,” the agency said, citing the same conditions before the volcano’s 2023 eruption.
The seismology agency also noted rising cases of ground swelling, mainly caused by rising magma and gas pressurization.
It added that the persistent rockfall coupled with ground swelling “may indicate increased chances of an eruption occurring at the summit of Mayon, generating life-threatening volcanic hazards that may impact surrounding communities.”
Phivolcs called on the public to remain vigilant and refrain from entering within six-kilometer radius of the volcano to minimize risks from sudden explosions, pyroclastic density currents (PDC), rockfall, landslides and ballistic projectiles.
“Local government units must prepare communities within the PDC hazard zone for subsequent evacuation in case unrest suddenly escalates and the Alert Level is further raised,” it added.
Civil aviation authorities are also advised to warn pilots to avoid flying close to the volcano’s summit, noting that ash and ballistic fragments from any sudden eruption can be hazardous to aircraft. — Adrian H. Halili
22 hurt in Cotabato New Year’s Eve grenade attack
COTABATO CITY — Two men riding a motorcycle together left 22 revelers, including children, wounded after a grenade attack at Barangay Dalapitan in Matalam town in Cotabato at about midnight on Wednesday.
Lt. Col. Arniel C. Melocotones, Matalam police chief, and local executives separately told reporters on Thursday morning that one of the two motorcycle-riding men threw a fragmentation grenade at the victims, then setting off firecrackers and pyrotechnics along a highway in Sitio Ipil-Ipil in Barangay Dalapitan, and motored away immediately.
Barangay officials and police investigators who responded to the incident said the grenade blast that ripped through the area hurting 22 revelers, among them grade school children.
The incident triggered panic among villagers in Barangay Dalapitan.
The victims, who sustained shrapnel wounds in different parts of their bodies, were immediately transported by policemen and emergency responders from the Matalam local government unit to different hospitals for treatment.
Governor Emmylou Taliño-Mendoza, chairperson of the multi-sector Cotabato Provincial Peace and Order Council, has condemned the bombing and urged local officials in Matalam and residents of Barangay Dalapitan to help the police identify its perpetrators.
“Our provincial government will provide the victims essential support that they will need for the treatment of their injuries,” Ms. Mendoza said.
Brig. Gen. Arnold P. Ardiente, director of the Police Regional Office 12, said Mr. Melocotones and his subordinates in the Matalam Municipal Police Station, intelligence agents from the Cotabato Provincial Police Office and local officials are cooperating in identifying the two men behind the bombing for prosecution.
Army Brig. Gen. Ricky P. Bunayog, commander of the 602nd Infantry Brigade, and his superior, Major Gen. Jose Vladimir R. Cagara, commander of the 6th Infantry Division, separately said plainclothes operatives from their intelligence units in the province are helping the police put a closure to the incident. — John Felix M. Unson
Colliers says housing prices may have recovered in Q4
RESIDENTIAL property prices may have picked up in the fourth quarter after the slump a quarter earlier, Colliers Philippines said.
“Similar to what we have seen previously, the fourth quarter is traditionally a strong quarter for residential take-up whether within or outside Metro Manila, whether it’s condominiums or horizontal,” Joey Roi H. Bondoc, director and head of research at Colliers Philippines, told BusinessWorld by telephone.
The Bangko Sentral ng Pilipinas (BSP) Residential Property Price Index indicated that housing prices nationwide posted its weakest growth ever in the third quarter at 1.9%.
This was a sharp slowdown from the 7.5% growth posted in the three months to June and the year-earlier 7.6%.
The BSP also reported that lower real estate investment brought banks and trust entities’ real estate exposure down to 19.54% at the end of September from 19.61% at the end of June and 19.55% a year earlier.
Real estate loans climbed 8.9% year on year to P3.096 trillion at the end of September, but real estate investment slipped 5.75% to P354.749 billion.
Mr. Bondoc said yearend bonuses and inflows of remittances from overseas Filipino workers could have spurred demand for residential property in the fourth quarter.
He also noted that the peso’s recent weakness may prompt migrants, especially those from North America, to send more money home.
The peso has been trading between P58 to P59 to the dollar since October, hitting a fresh record low of P59.22 on Dec. 9.
However, Mr. Bondoc said elevated mortgage rates may still continue to dampen housing price growth in the near term, but any potential rate reduction could help property take up and price growth by this quarter next year.
“I think we need to watch out for the… possible reduction in mortgage rates, given that there has been a substantial decline in basic policy rates by the central bank,” he added. “And if that happens, that will provide a better impetus for a spike in residential demand, and therefore residential prices, starting (in the) first quarter of 2026.”
The BSP ended the year with a fifth straight 25 basis-point (bp) cut on Dec. 11, bringing its total reductions on key borrowing costs to 200 bps since August 2024. The benchmark policy rate is currently at an over three-year low of 4.5%.
Mr. Bondoc said lowering the mortgage rate between 6% and 6.5% from the current 7.8% could help the property industry by raising confidence among buyers.
“But the concern is that they have not been lowering their mortgage rates,” he added. “If they start doing that next year, 2026, I think (that will be) a very good sign that demand and then prices might recover faster because of this lower mortgage rate.” — Katherine K. Chan
Balance of CARS program funding worth P3.99 billion due for release this year — BoI
THE Board of Investments (BoI) said it expects to fulfill its remaining P3.99-billion obligation to fund the Comprehensive Automotive Resurgence Strategy (CARS) program within the year.
Under the CARS program, the government provides participating automotive firms with fixed investment support and production volume incentives. Of the P5.43-billion total commitment, P1.44 billion has been released so far.
BoI Managing Head Ceferino S. Rodolfo expressed confidence that the government’s obligations will be fulfilled this year.
“In 2026, it’ll be finished… it is not dependent on savings before it can be issued,” he told reporters.
Mr. Rodolfo said the BoI has begun releasing tax payment certificates (TPC) to program participants.
Participants can use the TPC at the Bureau of Internal Revenue (BIR) or the Bureau of Customs (BoC) to offset their duties, Mr. Rodolfo said.
The BIR and the BoC will then bill the BoI for the amount equivalent to the TPC presented, and the Department of Budget and Management will issue the necessary Special Allotment Release Order to cover the payment. — Vonn Andrei E. Villamiel