BDO Capital chief warns PH market becoming ‘negligible’ as foreign funds pull out

Abi Sarabia M., Philippine Canadian Inquirer
September 03, 2026

Photo courtesy: Esquire Philippines

MANILA — The Philippines is losing ground among foreign investors as weak economic growth, political uncertainty and limited stock market activity weigh on the country’s investment appeal, according to BDO Capital & Investment Corp. President Eduardo Francisco.

In an interview on One News’ Money Talks, Francisco said the Philippines has become increasingly small in the portfolios of foreign fund managers.

“We’re really negligible as part of the overall index,” he said.

His warning comes as the Philippine economy grew just 2.3% in the second quarter of 2026, tying Thailand for the slowest growth among the ASEAN-6. Vietnam, meanwhile, posted the strongest growth in the region.

Foreign portfolio investment data also point to weaker investor sentiment.

The Philippines recorded only $66.47 million in net foreign portfolio inflows in July, down about 91% from $742.56 million a year earlier.

From January to July, the country posted $3.94 billion in net foreign portfolio outflows, a sharp reversal from the $2.25 billion in net inflows recorded during the same period in 2025.

The local stock market is also struggling to attract new listings.

The Philippine Stock Exchange recorded no IPOs in the first half of 2026, while markets such as Malaysia and Vietnam raised billions of dollars from new listings.

Francisco warned that if Philippine stocks continue trading at depressed valuations, more companies could eventually consider delisting rather than remain publicly listed at prices they believe undervalue their businesses.

The figures highlight the challenge facing the Philippines as it competes with faster-growing Southeast Asian economies for foreign capital.