The Philippine Stock Exchange (PSE) is actively pursuing reforms to enhance its appeal to retail investors and bolster local stock market activity. PSE President and CEO Ramon Monzon highlighted the need to make the market more accessible and attractive, citing stiff competition from cryptocurrencies, foreign exchange trading, and online gambling that divert retail investor funds. The exchange aims to deepen participation in the Philippine capital market and improve trading volumes by encouraging more individual investors to engage with stocks.
Key areas of reform include revisiting the country’s margin trading rules, which Monzon described as significantly more restrictive than those in neighboring markets like Vietnam. Current regulations require investors to maintain collateral equivalent to 150 percent of their exposure and a minimum of P50,000 in their account, which makes margin trading less accessible, especially for retail investors. Monzon emphasized that loosening these rules is crucial to encouraging more volume from this segment.
Another reform area involves the certification process for stock market agents. Monzon noted that the current qualification requirements, which include an SEC exam, make it challenging to expand the network of accredited agents. He drew comparisons to the insurance industry, which benefits from a large network of licensed agents, suggesting that a review of the stock market's licensing framework could make it more accessible and enable more agents to actively assist retail investors in making investment decisions. PSE officials have also met with Vietnamese brokers to understand their success in attracting and serving retail clients, as approximately 80 percent of stock market trading in Vietnam comes from individual investors.
The PSE's push for reforms comes amidst the growing popularity of cryptocurrencies in the Philippines, with a 2024 survey indicating that 10.6 percent of Filipinos had participated in the crypto sector. The projected gross transaction value for cryptocurrency in the Philippines was estimated at P8.8 trillion in 2025, potentially reaching P45.2 trillion by 2030, significantly overshadowing the P1.78 trillion traded on the PSE. Monzon stressed that the PSE's response is not to resist competitors but to make the stock market more attractive for ordinary Filipinos, thereby fighting to bring back liquidity, which he believes comes predominantly from retail investors.
