IPO activity stalls in Philippines amid market slump and fallout from flood control scandal

By Alexandria Grace C. Magno

INITIAL PUBLIC OFFERINGS (IPOs) on the Philippine Stock Exchange (PSE) slumped to just two this year as uncertainty over US tariffs and a high-profile corruption scandal weighed on investor sentiment, according to analysts.

Only two companies completed their IPOs this year, one less than in 2024. It was also lower than the six IPOs expected this year by PSE President and Chief Executive Officer Ramon S. Monzon.

“There were too much uncertainty and disruption this year. First it was Trump and his policies, then the midterm elections, and now the flood control scandal,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

“Some potential IPO candidates also backed out because market valuations were not enticing enough,” he added.

Top Line Business Development Corp., a fuel distributor and retailer based in Cebu, completed the first IPO of the year on April 8, while Maynilad Water Services, Inc. made its market debut on Nov. 7.

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said the weak IPO listing performance this year is mainly due to the poor overall market conditions.

“Year-to-date, the local market is down by 7.25%. Net value turnover is averaging P5.92 billion per day. The numbers show that investors don’t have that much confidence in the market given the headwinds that we are facing,” Mr. Tantiangco said.

“Without confidence, there is no appetite. This in turn is what makes companies hesitant on raising funds in the stock market.”

Recent cuts by the Bangko Sentral ng Pilipinas (BSP) have reduced the benchmark rate to 4.5%, the lowest in over three years.

“Interest rates are currently declining, in turn, giving companies a good alternative if they want to raise capital,” Mr. Tantiangco said.

Unicapital Securities, Inc. Equity Research Analyst Peter Louise D. Garnace said 2025 was an extremely volatile year for the markets due to local and global headwinds.

“This in turn dampened investor confidence, positioning the Philippine equities market as the region’s worst-performing index. This myriad of uncertainties compelled companies to defer their IPO plans, as they wait for more favorable market conditions,” he said in a Viber message.

UNDERVALUATION ISSUES
AP Securities, Inc. Equity Research Analyst Shawn Ray R. Atienza said that the PSE fell short of its IPO target this year amid low equity valuations.

“The broader market took a big hit from the recent delistings valuation-wise, as market perception plays a key role on where the overall market will be priced in. Further delistings could exacerbate the undervaluation issue facing the local market,” Mr. Atienza said in a Viber message.

For companies, undervaluation would make it unlikely the IPO would meet its funding goal, undermining plans to finance future expansion, he said.

Three companies have delisted from the stock exchange this year, namely, Keppel Philippines Holdings, Inc., Philab Holdings Corp., and 8990 Holdings, Inc.

“Subdued market sentiment and thin liquidity have made equity valuations weak and underwriting windows narrow (many issuers delayed plans), while higher interest rates and global volatility pushed risk-adjusted return requirements up and discouraged listings

that would likely be poorly priced,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

Last August, Hann Holdings, Inc. deferred its P13-billion IPO, which was originally scheduled for listing in September, saying the current market environment was “not conducive for a successful offering that would best reflect the value and prospects of the company.”

Several companies have also shelved their IPO plans, including SM Prime Holdings’ real estate investment trust and Razon-led Prime Infrastructure Capital, Inc.

“Regulatory and market-structure frictions such as public-float rules, disclosure burdens, and limited investor depth combined with corporate choices to refinance privately or pursue M&A (mergers and acquisitions) and delisting routes, have further siphoned supply,” Mr. Arce said.

Earlier this month, the Securities and Exchange Commission (SEC) released a draft memorandum circular proposing a tiered minimum public ownership framework for companies seeking to list shares on the stock exchange.

Under the proposed rules, a 12% public float level would be required for companies with an expected market value of over P150 billion, while a 33% float would be required for companies with a market capitalization of P500 million or less.

These rule changes could pave the way for financial technology (fintech) giant GCash’s planned IPO next year. Earlier, GCash said the current 20% minimum public float requirement is too high, especially as the IPO would peg the company’s value at $8 billion.

“This year, we’ve seen the PSE relax its minimum public float requirement for companies offering P5 billion or more in the market. But even that was not enough. Even if the PSE and SEC make more changes next year, if the confidence problem is not resolved, IPO listings could remain limited next year,” Mr. Tantiangco said.

CORRUPTION MESS
The government’s sweeping corruption crackdown since August has weighed on economic growth. Allegations that government officials, lawmakers and private contractors received billions in kickbacks also hurt consumer and investor confidence, as reflected in the stock market slump.

“Locally, the impact of a high-profile corruption scandal further dampened economic growth and investor confidence, compounding the challenges faced by potential issuers. As a result, companies have opted to delay or defer listing plans, given the difficulty of achieving favorable pricing in such conditions,” BDO Securities First Vice-President and Head of Marketing and Institutional Sales John Tristan Guillermo D. Reyes said in an e-mailed statement.

Global trade tensions arising from the US tariffs and geopolitical uncertainty have also weighed on investor confidence.

“Aside from easing global trade uncertainties, we believe that the most critical local headwind is the pervasive governance risk, particularly the fallout from corruption crackdowns on major public works projects. A credible and transparent resolution, coupled with a full resumption of public infrastructure spending, is essential to restore institutional trust and investment inflows,” Mr. Garnace said.

For IPO listings to be “vibrant” again, Mr. Tantiangco said investor confidence needs to return.

“For this, we need progress with respect to the challenges that we are currently facing: corruption issues, global trade frictions, and most importantly, a re-acceleration of our local economy’s growth,” Mr. Tantiangco said.

For 2026, analysts expect IPOs from utilities, infrastructure companies, real estate investment trusts (REITs), and fintech firms.

“We might have at most four IPOs in 2026. The most likely candidates are REITs and defensive plays,” Mr. Colet said.

He noted proposed amendments to the REIT rules and lower interest rates could encourage certain sponsors to push through with the IPO for their REITs.

Mr. Garnace said he sees some companies in fintech, gaming, infrastructure, and renewable energy that may tap capital markets in 2026.

“The strongest IPO pipeline likely sits in utilities and infrastructure like water, tollroads, renewables, as well as energy and resources, and selected consumer/logistics and gaming/resorts names that have strategic scale and clearer cash-flow stories,” Mr. Arce said.

However, Mr. Arce said more reforms, such as time-bound transitional rules, tax and investor incentives and measures to deepen post-IPO trading, may be needed to lift IPO activity next year to beyond 2025 levels.