Introduction
If you’re exploring investments in the Philippines, one term you’ll often encounter is the PSEi, or Philippine Stock Exchange Index.
It’s the country’s main benchmark index, used to measure the overall performance of the Philippine stock market.
In this article, we’ll explain what the PSEi is, how it works, and why it’s important for both local and foreign investors.
What Is the PSEi?
The PSEi (Philippine Stock Exchange Index) is a market-capitalization weighted index that tracks the performance of the top 30 publicly listed companies on the Philippine Stock Exchange (PSE).
These companies are chosen based on:
- Market capitalization
- Liquidity (trading activity)
- Free float level (publicly available shares)
- Industry representation
In short, the PSEi represents the 30 most influential companies in the Philippines — including well-known names like SM Investments, Ayala Corporation, BDO Unibank, and Globe Telecom.
Why the PSEi Matters
The PSEi serves as a barometer of the Philippine economy.
When it rises, it reflects investor confidence and growth expectations.
When it drops, it often signals caution or uncertainty in the market.
Here’s why it matters:
- Economic Indicator: Reflects the health and direction of the stock market.
- Investment Benchmark: Used by mutual funds, ETFs, and fund managers to compare performance.
- Global Reference: Helps foreign investors evaluate the Philippines compared to other ASEAN markets.
How Is the PSEi Calculated?
The PSEi uses a free-float market capitalization formula — meaning it only counts shares that are available to the public (not owned by insiders or major shareholders).
The calculation includes:
- Market cap of each company
- Free-float adjustment factor
- A base index value of 1,000 points (set in 1986)
As a result, big players like SM Investments (SM) or BDO Unibank (BDO) can strongly influence the index’s daily movements.
How Often Is the PSEi Updated?
The PSEi composition is reviewed twice a year, usually every February and August.
During these reviews, companies may be added or removed depending on:
- Trading volume and liquidity
- Market capitalization ranking
- Compliance with exchange requirements
This ensures the PSEi always represents the most active and valuable companies in the Philippine market.
Current PSEi Companies (as of 2025)
(Note: The list may change during semi-annual reviews. Verify through the official Philippine Stock Exchange website.)
- SM Investments Corporation (SM)
- Ayala Corporation (AC)
- BDO Unibank, Inc. (BDO)
- JG Summit Holdings, Inc. (JGS)
- Globe Telecom, Inc. (GLO)
- Universal Robina Corporation (URC)
- PLDT Inc. (TEL)
- Bank of the Philippine Islands (BPI)
- Aboitiz Equity Ventures, Inc. (AEV)
- Ayala Land, Inc. (ALI)
… and more leading firms across finance, real estate, telecommunications, and consumer sectors.
How to Invest in the PSEi
Investors can gain exposure to the PSEi in two main ways:
1. Buy PSEi Stocks Directly
Open a trading account with a licensed broker such as:
- COL Financial
- AB Capital Securities
- FirstMetroSec
- BDO Securities
Once approved, you can directly purchase shares of any PSEi component company.
2. Invest via ETF (Exchange-Traded Fund)
If you prefer diversification, consider the First Metro Philippine Equity Exchange-Traded Fund (FMETF) — the only ETF in the Philippines that mirrors the PSEi’s performance.
This allows investors to own a single fund that tracks the movement of all 30 PSEi companies.
Why Foreign Investors Follow the PSEi
Foreign investors often use the PSEi to:
- Gauge the economic strength of the Philippines
- Compare returns and volatility with other Asian markets
- Identify large-cap opportunities for long-term growth
Because the PSEi includes major conglomerates, it gives a strong picture of national business confidence and consumer trends.
Final Thoughts
The PSEi isn’t just a number — it’s the heartbeat of the Philippine stock market.
By tracking the PSEi, investors can understand how the market — and by extension, the economy — is performing.
Whether you invest directly in PSEi companies or through an ETF like FMETF, understanding this index is the first step to investing wisely in the Philippines.
🔑 Key Takeaways
- The PSEi tracks the 30 largest and most actively traded companies on the PSE.
- It’s a benchmark index that reflects overall market performance.
- The index is updated semi-annually to stay current.
- Investors can buy PSEi stocks directly or invest via FMETF.
