Philippines capital markets set for gradual recovery through 2026

The Philippine capital markets are poised for a gradual recovery heading into 2026, buoyed by the Bangko Sentral ng Pilipinas’ (BSP) dovish monetary stance, stable property values and investor-friendly reforms, according to the third-quarter Philippine Property Market Report by Leechiu Property Consultants.

Despite the Philippine Stock Exchange index (PSEi) underperforming its regional peers with an 18.2-percent year-to-date decline, the country’s market fundamentals remain sound, the property consultant said.

The BSP’s successive rate cuts, lowering policy rates to five percent in August, have eased borrowing costs and supported renewed investor appetite for income-generating assets such as real estate investment trusts (REITs), Leechiu said.

Among the top-performing REITs, AREIT Inc. (AREIT), RL Commercial REIT, Inc. (RCR) and DDMP REIT, Inc. (DDMPR) posted double-digit returns in the third quarter.

The performances, coupled with stable accommodation values in major business districts, have provided an anchor of stability amid volatile equity conditions.

“While the PSEi remains an underperformer among Asian indices, REITs shine as a strong defensive play in Q3,” said Leechiu Property Consultants investment sales manager Renzo De Guzman.

“The sector continues to offer an attractive risk premium, with dividend yields steadily outpacing bonds with lowering interest rates,” said De Guzman.

Leechiu Property Consultants also highlighted the enactment of the 99-Year Land Lease Law (Republic Act No. 12252) as a major policy breakthrough expected to attract long-term foreign investments, particularly in tourism, manufacturing and property development.

“This law provides the needed leniency and long-term security compared to regional peers, serving as the crucial catalyst to boost the property sector to the next level,” De Guzman said.

Meanwhile, the Philippine tourism sector continued its steady recovery in the third quarter of 2025, buoyed by rising domestic travel, new hotel developments and anticipated improving investor sentiment following the passage of the 99-year foreign lease law.

Leechiu Property Consultants (LPC) said that while international arrivals remain below pre-pandemic peaks, domestic travel is surging toward historic highs.

Domestic tourists are projected to reach 58.7 million in 2025, rising further to 62.2 million in 2026.

This rising demand has spurred a wave of hotel development, with a total of 5,210 new keys to be added in 2025—over 4,300 of which are expected to open in the fourth quarter.

The newly approved 99-year lease law has created a strong foundation for long-term tourism investment, providing global investors with the security to pursue large-scale resort and mixed-use developments, it said.

“With the anticipated growth in domestic and long-haul tourism, along with increased hospitality FDIs driven by the newly-approved 99-year lease to foreign investors, the tourism sector is poised to strengthen its position as a key investment area and a vital pillar of the Philippine economy,” said Leechiu Property Consultants director of hotels, tourism and leisure Alfred Lay.

Source: Manila Standard

Slowing population growth opens window for faster economic growth

As the Philippines’ population growth rate has drastically slowed down, the country now has a window of opportunity to experience faster economic growth, as the working population makes up a larger share of the total population, according to an expert.

“We have an opportunity to experience an economic growth that we have not seen before or could not have imagined,” said Jose “Oying” G. Rimon II, founding director of the William H. Gates Sr. Institute for Population and Reproductive Health at Johns Hopkins University’s Bloomberg School of Public Health. He said at the sidelines of the National Population, Health and Environment Conference.

“This will happen if we do the right policies and the right investment. The right investment must be in education and in health,” Mr. Rimon added.

According to the Philippine Statistics Authority (PSA), the country’s population growth rate (PGR) slowed to 0.8% annually between 2020 and 2024, from 1.63% in the 2015–2020 period.

Mr. Rimon said the lower population growth rate could lead to a decline in the young dependent population (aged 14 and below) and an increase in the working-age population, which could further support economic growth, a trend referred to as the demographic dividend.

According to the Philippine Statistics Authority (PSA), the share of the working-age population rose by one percentage point to 64% in 2020 from 63% in 2015, while the proportion of the young dependent population declined to 31% from 32% over the same period.

Meanwhile, the ASEAN+3 Macroeconomic Research Office (AMRO) said the Philippines recorded the third-fastest average growth in its working-age population at 2.27%, behind Malaysia (2.41%) and Laos (2.39%).

Mr. Rimon said the demographic dividend in the Philippines is expected to last for about 25 years—a period the government must maximize, as neighboring countries like China, Singapore, and Malaysia achieved significant growth during similar windows.

To maximize this window of opportunity, he said the government must invest in quality education, particularly by strengthening the country’s technical-vocational programs and specialized schools, especially those focused on technology.

He also emphasized the need for smoother internship programs for emerging talents.

To further expand the country’s universal healthcare access, Mr. Rimon said the Philippines could also check how government health insurance systems operate abroad.

To further expand the country’s universal healthcare access, Mr. Rimon said the Philippines could also study how government health insurance systems operate abroad. He added that the government must also ensure the health and well-being of the young dependent population.

Source: Business World

Philippines found most dishonest in region on money matters

Financial education gaps, economic stress and “face-saving” cultural norms have forced Filipinos to misrepresent their finances, making the Philippines the most dishonest country in Southeast Asia when it comes to money, according to a study.

ROSHI, a Singapore-based fintech firm, said in its Financial Honesty Study: Southeast Asia report that the Philippines had the highest financial misreporting rate in the region at 47 percent, which means that about half are not likely to give an accurate picture of their financial situation.

Indonesia came second at 45 percent, then Singapore at 41 percent.

Vietnam was the most honest, with a dishonesty rate of only 34 percent, followed by Thailand at 36 percent.

The problem, ROSHI noted, was that Philippine society tended to place strong emphasis on social reputation despite financial hardship and literacy gaps, making it hard for financially challenged individuals to seek help.

In Philippine culture, ROSHI pointed out that there was “enormous” pressure to keep face despite financial struggles.

“Admitting difficulties brings shame to the entire family and risks exclusion from social support networks that provide vital help,” ROSHI noted in its report based on a survey across different age groups in six Southeast Asian markets.

This makes misrepresentation of finances a “rational way to preserve social standing and maintain access to economic opportunities,” it added.

Economic challenges are also directly connected with financial dishonesty. The Philippines currently has limited economic opportunities, along with a high cost of living.

Vietnam, on the other hand, has a strong anticorruption focus and expanding opportunities. Its culture also emphasizes trust and community accountability, which both sustain “honest financial behavior.”

Overconfidence bias, or believing that one is better at handling finances than they actually are, is also among the factors that can affect financial transparency.

The Philippines had a high level of overconfidence at 60 percent, while that of Vietnam, which was the most financially honest country in the region, was at around 40 percent.

Risky investments

According to ROSHI, overconfidence can lead to risky investments, low savings and poor spending habits.

At the same time, the Philippines had the highest “present bias” at 68 percent, entailing that people would rather spend money now than save for retirement.

“This reflects the reality that when people struggle to meet daily needs, planning for the future becomes nearly impossible,” ROSHI said.

In terms of age groups, young adults (21 to 34 years old) were the most dishonest in their finances, while older adults (50 to 65 years old) were the most honest. This is a pattern that is present across all countries in Southeast Asia.

It still all boils down to social pressures, ROSHI found.

For example, social media trends often tie financial image to personal identity.

“As a result, many young adults make financial decisions in environments that reward displays of material success, making it costly to acknowledge financial constraints openly,” ROSHI said.

In all, there is a need to intertwine financial education and policy with cultural values and economic realities.

“Markets that achieve natural alignment between cultural values and economic incentives around financial transparency create lasting advantages, while those facing cultural-economic conflicts require recognition and adaptation strategies that acknowledge underlying behavioral patterns,” ROSHI noted.

Source: Inquirer