In late 2024, a former accountant faced an unsettling reality: job loss. She channeled her savings into the market, hopeful for growth. But by early 2026, a chilling realization forced a complete withdrawal – a stark lesson in the brutal volatility of investing, especially when relying on stocks or balanced funds.
The Philippine Stock Exchange (PSE) index had plummeted in 2025, closing at 6,052.92, a disheartening 7.3% drop from the previous year. A particularly grim day, November 14th, saw the index sink to 5,584.35 – a level not seen in over five years. This contrasted sharply with the robust 22.6% rise of the S&P 500, highlighting a widening disparity in global market performance.
Her experience wasn’t isolated. A wave of caution swept through Philippine wealth management as a major scandal began to unravel. President Marcos Jr.’s revelation of irregularities in approximately 6,000 flood control projects, totaling an estimated ₱350 billion, sent shockwaves through the nation’s economy.
The fallout extended far beyond infrastructure. The Philippine economy slowed dramatically, registering just 3% growth in the fourth quarter of 2025 – the weakest pace since the height of the pandemic. Full-year growth settled at a disappointing 4.4%, falling short of government targets.
Foreign investment dried up, plummeting by 50.1% – the steepest decline in five years. Even the central bank responded with a surprise interest rate cut, acknowledging the weakening economic outlook and eroding business confidence. A noticeable shift towards liquidity and flexibility became apparent across the financial landscape.
Investor confidence evaporated. Many prioritized preserving capital, flocking to money market products and short-term investments. Approximately 90% of Sun Life’s assets under management in unit investment trust funds were parked in money market products, a clear indication of the prevailing risk aversion.
The former accountant, deeply shaken by the market’s performance, fundamentally altered her saving strategy. She now favors tangible assets like land and, if possible, gold – investments that offer a sense of stability and long-term appreciation, a stark contrast to the perceived risks of the stock market.
However, not everyone retreated. An investment banker, recognizing the downturn as an opportunity, strategically invested in undervalued stocks. He saw the crash as a chance to acquire companies at significant discounts, even below their book value, though even his gains were modest.
Wealth managers pinpointed emotional decision-making as the biggest threat to investors during turbulent times. Panic selling and excessive defensiveness, often triggered by sensational headlines, can severely undermine long-term returns. A lack of clearly defined financial goals further exacerbates the problem.
“When you ask them why they invest, they don’t know,” one portfolio manager observed. Investing for retirement demands a different approach than saving for a short-term goal. Without a plan, investors become vulnerable to market swings and susceptible to fleeting investment fads.
The corruption scandal fueled a sense of disillusionment, prompting some to question the very purpose of saving. Yet, experts emphasize the importance of focusing on what *can* be controlled: consistent saving and thoughtful investment choices, independent of external circumstances.
Banks are now prioritizing thorough client assessments, tailoring investment recommendations to individual goals, time horizons, and risk tolerance. For conservative investors, government securities and investment-grade bonds offer stability and regular income. Diversification remains key, with a growing emphasis on global exposure.
Filipino investors are increasingly recognizing the benefits of diversification, particularly after witnessing the Philippine market’s underperformance compared to global markets. Access to international funds is expanding, now often available in local currency to reach a wider audience.
Despite the challenges, wealth managers see potential for recovery in 2026, contingent on a few key factors: a strengthening peso, a return of foreign investment, and, crucially, a swift and sustained economic recovery. But a fundamental shift in governance is also needed.
Accountability is paramount. The former accountant advocates for an independent watchdog, free from political or corporate influence, to proactively investigate and prevent corruption. Protecting whistleblowers is essential to encourage reporting without fear of retribution.
Ultimately, both wealth managers and investors agree on one thing: discipline and a long-term perspective are crucial. Staying invested through volatility, maintaining diversification, and focusing on personal financial goals are the cornerstones of successful investing, even in the face of uncertainty.
