MANILA – First Metro Securities (FMS) has forecasted a base case target of 6,500 for the Philippine Stock Exchange index (PSEi) by the end of 2026, reflecting a measured recovery outlook after a challenging 2025 marked by natural calamities, governance issues, and currency pressures. The projection, detailed in FMS’s year-ahead strategy report released ahead of Christmas 2025, outlines three scenarios: a bear case at 5,500, base at 6,500, and bull case at 7,500.
Analysts led by Mark Angeles and Estella Dhel Villamiel premised the outlook on gradual economic stabilization, modest earnings growth (+5% CAGR estimate), and improving investor sentiment. “In the year ahead, we see three themes: dividends and defensives, selective large-cap cyclicals, and AI diffusion beneficiaries,” the report stated, recommending a barbell strategy to balance protection with upside potential.
Key Investment Themes for 2026
- Dividends & Defensives: Stable yield plays for downside cushion.
- Selective Large-Cap Cyclicals: Stocks poised for rebound if confidence returns (e.g., Ayala Land P28, BPI P143, BDO P170, Jollibee P330, SM Investments P880, SM Prime P28).
- AI Adoption Beneficiaries: Productivity gainers like Converge ICT P20.30, Globe P1,880, Meralco P650, PLDT P1,490.
The forecast assumes benign inflation, sustained remittances, and policy continuity, though persistent risks (e.g., global slowdowns, domestic reforms) could tilt toward the lower end.
For investors navigating post-2025 bruises—PSEi hovering ~6,000 amid scandals and peso weakness—this outlook offers cautious hope: A simmer toward recovery, not a full boil, but with selective opportunities for purposeful positioning.
PSEi Scenarios Snapshot (End-2026):
| Scenario | Target Level | Key Assumption |
|---|---|---|
| Bear | 5,500 | Prolonged headwinds; slow recovery |
| Base | 6,500 | Modest growth; theme-driven upside |
| Bull | 7,500 | Strong rebound; AI/earnings surge |