Aurora Borealis
5 May 2021 Article

The Emerging Asia Pacific Capital Markets: The Philippines

  1. April Lynn Tan, CFA
  2. Mark Ilao, CFA, CIPM

The Philippines’ recent rapid economic growth has not translated to capital markets, which remain small relative to Asian peers. The country is implementing projects to improve liquidity and broaden the investor base, among other developments.

The Philippine economy has enjoyed one of the fastest growth rates in the world during the past decade, doubling its output from 2010 to 2020. Notwithstanding this economic growth as well as the deep history of its stock market (which dates back to 1927), the Philippine capital markets as a whole remain relatively small compared with other Asian peers.

In fact, as of year-end 2019, the Philippine Stock Exchange (PSE) had the lowest number of listed companies in Asia at 267. The combined market capitalization of listed companies totaled USD324.4 billion, which is equivalent to 84% of the country’s GDP. Meanwhile, the Philippine bond market was equivalent to only 34% of the country’s GDP in 2019, with a total size of USD131.2 billion.

Nonetheless, recent developments point to a very promising future for the Philippine capital markets. These changes would improve the country’s overall market liquidity and broaden its investor base. In 2020, the PSE listed its first REIT and also relaxed its listing rules aimed at enticing smaller and younger companies to go public. The Philippines has also taken part in regional partnerships to deepen its local bond market by implementing the ASEAN+3 Multi-Currency Bond Issuance Framework. The advent of online platforms for both stock and bond investing has also greatly accelerated the growth of individual investors in the Philippines, with even higher retail participation expected to materialize in response to financial education campaigns and new financial products coming to the market.

This article is from "The Emerging Asia Pacific Capital Markets: Challenges and Opportunities," published by CFA Institute Research Foundation.


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