Protests, impeachment biggest negatives for stock market in 2025, BSP says

POLITICAL UNREST was an unusually strong negative influence on the stock market last year after the public works corruption scandal sparked protests, increasing market volatility alongside the still-ongoing moves to impeach the country’s top two officials, Bangko Sentral ng Pilipinas (BSP) researchers found.

A discussion paper written by analysts from the BSP Research Academy concluded that the unrest that manifested last year was more hard-hitting than usual, increasing volatility in the stock market. 

“Political instability, in general, has no significant relationship with the level of stock market returns,” BSP researchers Tristan A. Canarea, Carl Francis C. Maliwat and Elisa G. Nebres said. “However, some forms of political instability — particularly those related to strikes, protests, rallies, impeachment, coup d’etat, and rebellion — are associated with higher stock return volatility.”

In September, thousands of protesters gathered across Metro Manila after extensive flooding nationwide revealed billions of pesos in fraud and waste tied to flood control projects.

Public works officials, legislators, and contractors were accused of colluding to win projects that turned out to be substandard or even non-existent, generating billions of pesos in kickbacks, thereby damaging investor interest and consumer sentiment.

This led to a stock market to slump in 2025, with the benchmark Philippine Stock Exchange index (PSEi) falling 7.29% or 475.87 points over 12 months to end the year at 6,052.92.

The central bank researchers also noted that impeachment trials negatively impact stock returns.

Earlier this year, the PSEi slumped anew following attempts to impeach President Ferdinand R. Marcos, Jr. over the flood control corruption scandal.

Vice-President Sara Duterte-Carpio has for her part faced a long-running impeachment campaign over allegations of fund misuse at the Office of the Vice-President and from her stint as Education Secretary.

“Whether a specific political instability event has an effect on stock returns — and the direction of effect — depends on conditions surrounding such events and on the level of uncertainty, instability, and unrest that it created,” the researchers concluded. — Katherine K. Chan