PSEi 5,761: The Rotational Pump: When the Index Rises and the Market Doesn’t

 

Central banks can, and do, intervene to prop up stock markets and failing institutions. In 2008, the government rescued or supported AIG, Citigroup, and Bank of America, among others, when Congress approved the $700 billion Troubled Asset Relief Program (TARP). You may recall the banking emergency of March 2023, when regulators bailed out Silicon Valley Bank and Signature Bank. It was great for the tech nerds; not so great for the average citizen—Doug Casey

PSEi 5,761: The Rotational Pump: When the Index Rises and the Market Doesn’t 

ICTSI sold off, five heavyweights took the baton, and the rest of the market was left on the bench.

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The PSEi closed the week ending November 6 up 81.6 points, or 1.44%. Read the headline and you’d think the market improved. Read the internals and you find an index being held up while the market beneath it isn’t.

The Scorecard: an Advancing Index, a Declining Market

Figure 1

ICTSI fell 2.62%, taking 37.89 points off the index. Five of the top ten more than offset it: SM (+4.08%), BDO (+5.93%), BPI (+5.21%), Ayala Corp (+3.74%) and Meralco (+5.44%) contributed 91.61 points. The other constituents split the residual gains. Breadth among the 30 members was 22 advancers to 8 decliners, and the average member return was 1.52%. (Figure 1 upper chart) 

Across the whole exchange, advancers numbered 364 and decliners 373 on the main board. On that count, more stocks fell than rose while the index gained. 

Zoom out and the bounce looks smaller. The 5,761.95 close leaves the PSEi down ~8%+ over three months, 4.81% year to date, and about ~13+% below its 52-week high. 

Participation was thin as well. Average daily main board volume fell 23.75% from Php 7.339B to Php 5.595B as of November 6. (Figure 1, lower graph) 

Prices rose on less money. 

Where the Money Actually Went 

Relative to main board volume:

Figure 2

• Top 10 brokers: 65.8% last week, against a 2026 daily average above 62.66% in 2026.
• ICTSI alone: 27.47% daily average of 24.2% since July 1, 2026
• Top 3 banks: 17.4%, up from 12.2% the week before
• Top 10 most active issues: 69.2% vs daily average of 65.7% in 2026
• Top 20 most active issues: 83.65% vs daily average of 81.5% in 2026 (Figure 2, upper image) 

This is structural, not a one-week blip. 

The rally didn’t find buyers across the board. Turnover funneled into a few names. 

Passing the Baton: From ICTSI To SM and the Banks 

ICTSI’s weight in the PSEi has slipped to 24.74% from a record above 28% after the PSE feted its 2 trillion cap. Trading didn’t leave the index. It moved. 

As of November 5, the top 5 (SM, BDO, BPI, SMPH and ICTSI) hold 55.33% of the PSEi’s free float market cap, and that share has risen for a fifth straight week. 

The top 10 hold 73.5%, which makes the other 20 members benchwarmers. 

The Sy Group’s free float share climbed from 22.61% to 23.25%, a seventh straight weekly increase. 

Figure 3

The banks show the same pattern. Their share of the PSEi rose from a recent low of 18.6% to 19.51%. They hold 81.4% of the Finance index (November 6^th), which gained 4% WoW, while their share of volume jumped from 12.2% to 17.4%. (Figure 3, upper diagram) 

The pumping focus moved from one big cap to several, and the index kept its shape. 

The PSEi is a free float cap-weighted benchmark, not a measure of the average listed company. That is what makes the trick possible: heavyweights can take turns carrying the index while the rest of the market struggles. 

121 Brokers, 280 Issues, A Handful Of Winners 

The PSE’s Q3 infographic lists 121 trading participants and 280 listed companies. (Figure 3, lower image) 

When the top 10 brokers handle 60-65% of a thin turnover, the other 111 split the leftovers. 

When the top 20 issues take about 80% of volume, the other 260 are left barely any bids. A stock can stay listed while attracting almost no depth. 

Two caveats. One investor can hold accounts at many brokers, so broker rankings understate real concentration. And many top brokers serve institutions more than retail, so some institutional flow may sit just outside the top 10 (e.g done thru trades). 

What matters for the argument is that the top 10 broker names are nearly the same week after week, and so are the names behind the pre-closing pumps/dumps. 

A market where the names and the timing repeat doesn’t behave like a crowd of independent buyers. That is circumstantial. It doesn’t prove coordination, and the same brokers could be executing for the same large clients. But it is a pattern, and patterns deserve explanation. 

Support, Or Price Control? 

Figure 4

In technical analysis, a level where buyers keep stepping in is called “support.” The PSEi has been holding off that 5,600-level since October—bouncing in what others would call trading range. (Figure 4, upper visual) 

But in my framework, it is something else: a price control. 

Any price held away from where voluntary buyers and sellers would put it must be defended by someone. The defender has to keep buying what real buyers won’t, and the inventory piles up on a balance sheet. 

Genuine support is spontaneous: many independent participants each decide the price is attractive. What we see (the same few brokers, pre-closing activities, rotating bids) looks more like management than spontaneity. 

I don’t know who they are, and it isn’t my job to find out. Forensics belong to the regulators: PSE, the SEC and the BSP. But our task is to trace the economic consequences. Call them the Philippine version of a “national team” (commonly alluded to unofficial stock market interventions by Chinese authorities) or the US “Plunge Protection Team,” the informal name for officials or allied institutions quietly propping up markets in a selloff. 

The motives aren’t mysterious. Share prices serve as collateral, so a falling index tightens credit for anyone who pledged shares. 

There are also “confidence” goals: a healthy-looking market flatters the GDP narrative and the administration’s popularity. 

Together, these motives can reinforce market illiquidity, as declining collateral values transmit financial stress from equity markets to the broader financial system. 

No Free Lunch: Who Absorbs the Losses 

There is precedent for political direction of public investment funds. During the pandemic crash, the finance chief ordered the GSIS and SSS to support the market. Pension funds are public institutions, and public institutions answer to political direction. (Figure 4, news clip image) 

I can’t say whether the SSS is part of today’s national team, and the argument doesn’t depend on it. But its books show what an equity bet costs: its 2025 audited statements, as reported by the Commission on Audit, show about ₱39.99B in unrealized equity losses (cost ₱121.47B against market value ₱81.47B). These are paper losses, but they are paper losses on retirement money. 

The constraint is general. Domestic savings are strained, deficits are persistent, and capital does not appear because someone wants an outcome. 

A defended price makes the defenders absorb the difference as mark-to-market losses. Losses lead to more borrowing, tighter liquidity or dilution elsewhere, and eventually a solvency question. There is no free lunch. 

No Free Lunch: Sauve Qui Peut 

The rotational pump can momentarily preserve the benchmark's appearance of stability or what I call benchmarkism, but it cannot eliminate the underlying pressures. It merely transfers exposure to whoever supplies the capital. 

The Philippine economy already faces strained domestic savings, twin (fiscal and trade) deficits, and competing demands for financing. Institutions cannot indefinitely absorb securities that the broader market is unwilling to buy at prevailing prices. As losses accumulate and liquidity tightens, the capacity to sustain support diminishes. 

This is where historian Charles Kindleberger's account of financial crisis, sauve qui peut becomes relevant: the late-cycle transition from collective efforts to preserve market confidence toward an every-man-for-himself scramble for liquidity and balance-sheet survival.

The same institutions that participate in preserving the benchmark eventually have to protect their own balance sheets.

The PSEi rose for the week. But shrinking turnover, negative broader-market breadth, and concentrated trading reveal the fragility beneath the advance. 

The preservation of the benchmark is not the preservation of the market. There is no free lunch.

Three Markets, One Signal: How the PSEi, Peso and BVAL Priced Suppression in October

  

Price controls take some time for their flaws and distortions to develop: for the longer they last, the more do their controlled prices diverge from the prices that would be obtaining on the free market—Murray N. Rothbard 

In this issue: 

Three Markets, One Signal: How the PSEi, Peso and BVAL Priced Suppression in October

I. The PSEi’s “Rotation” Is the Cover Story

II. A Floor Is a Price Control

III. GCASH: The IPO With a Subsidy Bid Underneath

IV. “Don’t Panic” Is a Policy

V. The Yield Curve Takes No Orders

VI. Whac-a-Mole Economics

VII. Periphery to Core

VIII. What October Priced: The Cost of Suppressing Adjustment

VIII. Conclusion: October’s Cost of Suppressing Adjustment 

Three Markets, One Signal: How the PSEi, Peso and BVAL Priced Suppression in October 

Every intervention bought stability in one market and billed another. In October, the bill is showing up in bond yields and FX reserves as global liquidity drains from the outside 

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I. The PSEi’s “Rotation” Is the Cover Story

Figure 1

The PSEi 30 ended October almost unchanged month on month (-0.02%). It is still down 6.16% year to date and 4.2% year on year. The headline hides a redistribution of index leadership. (Figure 1, table) 

ICTSI, the largest heavyweight, surrendered 89.54 gross points (-5.84%). The next four largest names (SM +7.84%, BDO +4.42%, BPI +1.08%, SMPH +10.34%) contributed 91.23 points and more than offset it. Breadth tilted positive at 18 advancers against 12 decliners. Yet heavier losses in SCC, DMC and CNPF dragged the simple average change across the 30 members to -0.66%. (Figure 1, middle image) 

The gap between -0.02% and -0.66% comes from free-float market-cap weighting. A handful of names decide the headline. After ICTSI’s drop, the five largest still command 55.24% of the index. (Figure 1, lowest graph) 

Figure 2 

The wider PSE tells the real story. 

Breadth was 1,811 advancers against 2,113 decliners, which extends broad-market selling to eight of the first ten months of 2026. (Figure 2, topmost pane) 

Main Board volume (MBV) rose 20.4% year on year to Php 129.67 billion, but cross transactions took 27.71% of it. (Figure 2, middle diagram) SM’s Php 8.736 billion block alone was about 24% of the month’s cross volume. 

ICTSI’s share of Main Board volume (MBV) climbed from 19% in September to 23.75% in October, while foreigners net sold about Php 1.3 billion of the stock as it fell. Local institutional buying absorbed the selling. (Figure 2, lowest chart) 

The index’s “stability” rests on an engineered domestic support for a heavyweight under foreign liquidation. 

II. A Floor Is a Price Control

Figure 3 

The top 10 brokers averaged 66.8% of daily MBV, and the top 10 issues averaged 72%. That concentration put an implicit floor near 5,600 under the PSEi all month. (Figure 3, topmost visual) 

A floor held by a few brokers and a few issues is a price control, whatever name it goes by. 

The PSEi is a free float market capitalization-weighted benchmark. It does not measure the breadth or health of the equity market. The media and the establishment treat it as if it did, though five issues decide most daily outcomes. Confusing the two is how benchmarkism disguises concentration as stability. 

Leadership rotated in October, but concentration did not go away. It only changed where the support was pointed. Extreme trading concentration, persistent negative breadth and thinning liquidity are the symptoms, and the distorted price signals they produce misallocate capital. 

Ironically, almost no one comments on it—as if it is a taboo. 

III. GCASH: The IPO With a Subsidy Bid Underneath 

The GCash listing offered another illustration of the market's dependence on concentrated liquidity. 

GCASH’s weekly share of Main Board volume fell from 34.9% to 9.22%. The stock swung -5% on the week of October 23 and +5.42% the following week. It closed at Php 6.61, a hair above the Php 6.60 offer price. The price is where it is because someone is buying it. (Figure 3, middle image) 

UBS, the sole stabilizing agent, bought 786.57 million shares at an average of Php 6.571 in the week ending October 23. That cost about Php 5.17 billion and used up 65% of its maximum stabilization buying capacity in the first trading week. The budget is the 1.204 billion overallotment shares, worth Php 7.95 billion at the offer price. That leaves about 417.5 million shares, roughly Php 2.75 billion. The support window runs about 30 days from the October 20 listing. There is no update on this as of October 30th. 

The mechanism is simple. The agent sells the overallotment shares short at the offer price, then buys them back in the open market to defend it. A bid sits just under Php 6.60 until the money runs out. It is the PSEi’s floor in miniature: a price held by a dedicated buyer and not by savings. 

An IPO can generate enormous turnover and retail participation without leaving behind durable secondary-market liquidity. The question is what happens when the support expires. 

IV. “Don’t Panic” Is a Policy 

The peso is the second signal. 

The peso touched Php 64.17 per dollar on October 27. That was its 33rd record low of 2026, the eighth in October, and the fifth consecutive record session from October 21 to 27. The President then said, “Don’t panic...we have defenses,” and USDPHP retreated to Php 63.74 by the week’s close. 

No leader makes that statement without his agencies behind it. It signals that the political leadership will do what it takes to “stabilize” the peso. The motive is to look stable. The policy is intervention. The effects arrive later… or in other prices. 

A managed retreat does not touch the cause, which is the savings-investment gap. Free-lunch politics and the policies behind it sustain spending beyond what the economy can finance from its own production. 

The USDPHP rose 1.76% in October, taking its gain to 8.42% year to date and 8.31% year on year. That was the second biggest monthly rise of 2026 after March’s 5.35% (from February's 57.665 to March's 60.748). (Figure 3, lowest diagram) 

The external side of the gap is tightening. OFW remittances, tourism, FDI and portfolio inflows have all weakened. BPO and AI-linked electronics exports help but cannot close the gap, and they carry their own exposure. 

A reversal in AI capital spending would move from global markets into Philippine export receipts and widen the deficit. 

Administered prices, regulatory relief, FX management and accommodative monetary measures have postponed the recognition of the imbalance. Postponement is not resolution. The pressure surfaces through other prices, balance sheets and markets. 

With the balance of payments (BoP) under record pressure and reserves falling, the BSP’s quasi-soft peg has given way to a low-volume, low-volatility crawl. The string of records is that adjustment showing up. 

The BSP still has “tools,” but none is free. It can run down reserves, lever up through repos and derivatives, monetize part of its gold, borrow more (via the National Governnment) or turn to trade and price controls. These extend the process, but none creates dollars, domestic savings or productive resources. 

September shows the cost. Gross international reserves fell from $104.846 billion to $99.494 billion, a $5.352 billion drop to a three-year low. 

Figure 4 

The BSP attributes it mainly to its net foreign exchange operations. The composition is the tell. Other Reserve Assets, the bucket that holds net derivative positions, repo assets and investment pools, fell from $15.471 billion to $9.985 billion, about $5.5 billion and 35% in one month. That is larger than the entire decline. Gold valuation took off another $1.287 billion. Total currency and deposits rose about $1.54 billion. The drain came from the derivative and repo positions behind the peso defense, not from the plain securities and deposits the headline suggests. (Figure 4, topmost image) 

The September BOP deficit was a record $3.144 billion, taking the year-to-date deficit to a historic $9.087 billion—which is just a hairline short of the DBCC’s revised 2026 target of US$9.2 billion (1.8 percent of GDP) with a quarter to go. Borrowed support can defer the adjustment. It cannot remove the financing constraint. (Figure 4, middle chart) 

V. The Yield Curve Takes No Orders 

The sovereign bond market supplied the third signal. 

The public watches the PSEi and the peso. It pays little attention to government bonds, and that is where the cost of financing the state shows up. 

More than anything else, these pressures are most clearly reflected in the interest rate environment, as evidenced by the Philippine Treasury's BVAL yield curve. 

The yield curve shifted upward across all tenors in October compared with September, with positive spreads and the largest increases concentrated in the belly of the curve—a bulge. (Figure 4, lowest chart) 

More importantly, from the one-year tenor onward, yields are at or near multi-year highs. Rising yields are the market’s way of repricing inflation, duration risk and the cost of financing the state. 

The fiscal connection is direct. Government borrowing competes with private investment for finite pools of savings. As financing needs rise, the state’s demand for funds presses against the resources available to businesses (and even banks) seeking capital for production and expansion. 

This is the crowding out effect—and it does not require a textbook interest-rate shock to operate. 

Financial repression adds another channel. Directed credit, captive institutional demand and policies that steer savings toward government or favored borrowers can suppress the visible cost of financing while displacing alternative uses of capital. The allocation changes even when the headline rate does not fully reveal the pressure. 

The result is a distorted investment process: financing follows political and institutional priorities rather than the unrestrained signals of market prices, risk and expected returns. 

The rising yield curve is the market pushing back against that arrangement. Government can influence the terms under which savings are mobilized. It cannot command away scarcity.

Figure 5 

Equities hide the weakness through benchmark concentration. The peso absorbs external pressure through intervention. Bonds reprice the cost of the state. As evidence, the Philippine 10-year Treasury yield has climbed to multi-year highs even as the PSEi tests its 2025 lows (Figure 5, topmost window) 

Three markets, one imbalance. 

VI. Whac-a-Mole Economics 

This is the intervention spiral I call Whac-a-Mole Economics. Support the PSEi and the pressure moves to the peso and bonds. Lean on the peso and the valve opens in equities and bonds. Suppress one price and the imbalance resurfaces in another. 

The mechanism is not mysterious. Prices coordinate competing claims over scarce resources. Interfering with their adjustment does not remove the scarcity. It changes where the pressure builds, who absorbs it and when the cost becomes visible. 

The price signal is not the disease. It is the information that reveals scarcity. Suppress the signal and the distortion grows while its symptoms migrate across markets and time. 

VII. Periphery to Core 

The Philippines is not alone in this. 

The magnified paroxysm across several equity benchmarks—the Indonesian JKSE, Korea’s AI-heavy KOSPI, and, more recently, Brazil’s Bovespa—exhibits a common denominator.  (Figure 5, middle visual) 

As an aside, in Brazil, Lula's reelection triggered a rout in Brazilian stocks, deepening an already prolonged contraction in Latin America's equity-fund industry, where more than 400 equity funds have disappeared and IPO activity has stalled. (Figure 5, lowest image) 

Yet each crash has a local headline, whether politics or AI, but they share the global liquidity cycle. 

The crashes did not need to arrive on the same day to demonstrate this. Peaks came at different points in the year, and the common condition is liquidity withdrawal. 

I call this periphery-to-core transmission. 

Withdrawal first exposes the weakest links: the markets, sectors, and balance sheets most dependent on cheap financing, leverage, and steady inflows. Rising yields then collide with accumulated malinvestments and balance-sheet mismatches. The war economy, supply disruptions, incumbent monetary policies, and fiscal conditions add further pressure.

Figure 6 

Even gold has become an ATM for liquidity-strapped investors. Its sharp declines alongside Bitcoin reflect forced liquidation and the demand for cash, not a change in its long-term monetary role. (Figure 6, upper chart) 

The core is now under pressure. This week’s AI dumpfest hit the Nasdaq Composite with a 2.0% weekly loss, its third consecutive weekly decline, and a 7.04% slide over three weeks. Friday’s 2.9% drop was its largest one-day percentage decline since June 5, following disappointing results from Intel and Amazon. 

Meanwhile, hyperscalers are financing build-outs in debt markets, adding leverage to an already capital-intensive cycle. AI off balance sheet commitments hits $4.1 trillion: Up 1 trillion in 90 days.  (Figure 6, lower graph) 

When the cost of capital rises, the expected returns on long-duration investments become harder to justify. What starts as an equity repricing can migrate into corporate credit, debt servicing, and investment spending. 

The danger is contagion: falling asset prices, tighter financing, forced deleveraging, and contracting credit. A global recession is the risk embedded in this process, and a broader debt crisis is becoming highly probable. 

The periphery is not insulated from the core, and the core is not immune to the financing constraints already visible at the periphery. 

VIII. Conclusion: October’s Cost of Suppressing Adjustment 

Free lunch politics is NEVER FREE. 

The PSEi is held up by the five biggest market caps, a persistent concentrated broker bid and a stabilizing agent for GCASH. 

The peso crawls to records while the BSP burns reserves and the President says don’t panic.

Yields rise from the one-year tenor outward to multi-year highs. 

The motive behind each intervention is the same: to show stability before the financing gap is closed. The policy is price support, administered relief and reserve burn. The effect is that pressure moves to the next price. Postponement has a cost, and the cost compounds. 

Almost everyone has been programmed to believe that spending drives the economy. Spending is the visible half. Before anyone can spend, someone has to have made something others want: a harvest, a service, a product, an export. A fisherman buys rice with the fish he sold. Money is the claim ticket, and the claim is worth only what stands behind it. What you can buy is set by what you or others produced. Or imagine booking a vacation at a resort on the Moon. There may be demand, but there is no supply. 

So printed money, borrowed money and extended credit can raise spending today. They cannot create the rice, or the dollars, that the spending needs to meet. They only change who gets the existing output and push the bill onto future output. 

That is why the pressure shows up where it does. Dollars come from selling something to the world. Savings come from producing more than you consume. When spending commitments outrun both, the gap appears as a record BOP deficit, a weaker peso and higher yields, because savings are scarce and the state is bidding for them. 

A stock, a peso and a bond are all claims on real output and real savings. A floor can hold a quote, but it cannot create the output behind the claim. Indices, GDP and gross savings add up claims into one number and hide who actually produces and who just holds paper. That is the difference between accounting stability and economic resilience. 

The three markets are not telling three different stories. In October, they converged on one signal: the growing cost of suppressing adjustment. Support the PSEi and the pressure shows up in the peso. Lean on the peso and it shows up in the bond curve. 

Close one valve in a system under rising pressure and the pressure does not disappear. It finds the weakest seam. In October, the seams were the PSE’s market internals, the peso and the bond curve. 

The next one may not be in Philippines’ hands at all. Global liquidity is draining, and the pressure is now being fed from outside.

PSEi 30’s Illusion of Stability: Benchmarkism Meets the Whac-a-Mole Markets

 

When a game is rigged, it’s usually the game’s organizer, the house, that does the rigging. In today’s world, the rigging is done by Deep State types, who are close to power, close to people who can change the rules when it suits—Doug Casey 

In this issue:

PSEi 30’s Illusion of Stability: Benchmarkism Meets the Whac-a-Mole Markets

I. The PSEi’s 30s Weekly Print: A Recoil, Not a Recovery

II. Breadth Doesn't Lie: Four Weeks of Deterioration

III. Where the Volume Went (and Didn't)

IV. Concentration by the Numbers, Foreign Money Keeps Walking

V. The Real Story Was in Bonds and CDS: Whac-a-Mole

VI. Conclusion: Prices Distortion Compounds Risk of Crash 

PSEi 30’s Illusion of Stability: Benchmarkism Meets the Whac-a-Mole Markets 

When concentration, weak breadth, thin liquidity and policy support make a falling market look more stable than it really is 

Nota Bene:

• I was supposed to be on a break. Instead, I have become increasingly active on Substack Notes—a somewhat longer version of X.
• This was supposed to be a Note. It became too long, so here we are.
• Here is the link to my Substack Note 

I. The PSEi’s 30s Weekly Print: A Recoil, Not a Recovery 

The PSEi 30 closed the week down only 0.51%. That headline, however, conceals considerably more than it reveals.

Figure 1

Friday's 1.67% pump — driven by low-volume buying concentrated in the top four issues — primarily by ICTSI— was a recoil off Thursday's low of 5,730, not a change in trend. (Figure 1) 

Strip out that single session and the week reads as a continuation of the selloff — a third week of decline — not an interruption of it. 

II. Breadth Doesn't Lie: Four Weeks of Deterioration 

The index's net decline of 29.94 points understates the damage because it nets out an unusually lopsided internal split. 

ICTSI alone contributed 25.82 gross points (+1.66%), with SM adding another 6.68 points (+1.39%). Those two names absorbed losses of 17.54 points from Meralco (-7.46%), 11.5 from BPI (-2.95%), 8.81 from SMPH (-3.03%), and 7.94 from AC (-2.96%). The index-level number is the residue of two offsetting forces, not a description of how the market actually traded 

PSEi breadth was negative at an aggregate 66-72—where marginal contribution in the net points from decliners eclipsed advancers.  

Figure 2

The broader breadth figures make the underlying weakness explicit: a 420-520 losers-to-gainers split across the week, four down days out of five sessions, and — critically — the fourth consecutive week of breadth deterioration. (Figure 2, topmost visual) 

Average constituent performance came in at -1.64% (19 decliners, 11 gainers), nearly three times worse than the headline index move.  (Figure 2, middle image) 

The gap between that average and the index's -0.51% print is a function of market-cap weighting doing its job — plus a 14.92% single-week crash in SCC that the index barely registered because SCC isn't a big enough weight to matter. 

This is the mechanism worth naming plainly: when an index is dominated by a handful of names, the index number stops describing "the market" and starts describing whatever those names are doing. 

The PSEi’s other twenty-five stocks have been hemorrhaging, yet the headline has remained calm—which has been the benchmark’s legerdemain for the past few years.

III. Where the Volume Went (and Didn't) 

Average daily main board volume collapsed 46.4% week-on-week, from Php 10.722B to Php 5.75B — driven mainly by a pullback in cross trades. (Figure 2, lowest graph) 

The listing of PNB Holdings on Friday didn’t stoke much of the market’s risk appetite. 

Even so, cross trades still made up 29.45% of main board volume and 23.32% of gross turnover. 

Read that pairing correctly: it's not that cross-trading disappeared, it's that everything else diminished faster, leaving the residual volume even more dominated by whatever mechanism cross trades represent — deliberate accumulation/distribution rather than organic price discovery. Cross trades are negotiated transactions. 

Still, ICTSI alone accounted for 15.16% of main board volume. The top 10 and top 20 most-traded issues made up 69% and 82% of volume respectively, and the top 10 brokers handled 63.63% of it. 

Three separate concentration metrics — by stock, by issue count, and by broker — all point the same direction in the same week. That's not noise. 

IV. Concentration by the Numbers, Foreign Money Keeps Walking 

 

Figure 3

ICTSI's index weight sat at 26.6% as of September 24, with the top five market cap issues at 54.72% of the free-float index — both near record levels. (Figure 3, upper window) 

A market where one company is more than a quarter of the benchmark, and five companies are more than half of it, is not measuring "the Philippine economy." 

Pragmatically, it's measuring the balance sheets of a handful of conglomerates whose collateral value depends on the index staying elevated. 

Foreign investors registered Php 816.3 million in net outflows — the sixth consecutive week — with foreign trades comprising 46.1% of gross turnover. (Figure 3, lower chart) 

Foreign capital left in a week when the broader market got no support from the broader PSEi constitutents; the negative breadth and the foreign exodus are the same story told from two different vantage points. 

V. The Real Story Was in Bonds and CDS: Whac-a-Mole 

Here's where the week's real signal sits, and it didn't happen on the PSE.  

Figure 4

YIELDs of US Treasury and advanced-economy surged to multi-year highs, while ASEAN 10-year yields responded with a softer, divergent move — either delayed transmission, or most likely active policy suppression of bond-vigilante pressure. (Figure 4, upper pane) 

Either explanation implies the same thing: the adjustment is being deferred, not avoided. 

The CDS market is less forgiving of deferral. Most Asian sovereign spreads widened as global yields rose, with Vietnam, Indonesia, and the Philippines among the most affected. (Figure 4, lower diagram) 

Credit Bubble Bulletin’s Doug Noland flagged the same pattern in dollar-denominated paper:

EM dollar-denominated bonds (in particular) were taken out to the woodshed… In Asia, dollar-denominated Philippine yields jumped 23 bps to 6.04% - the high back to 2008. Indonesia ($) yields rose 18 bps to a three-year high of 6.04%. (bold added)

 

Figure 5

That’s right. The sequencing matters more than any single number. This was a selloff that started in USDPHP and the bond market, then spilled into equities. (Figure 5, upper graph) 

Paradoxically, this runs counter to the mainstream’s expectation that ICTSI’s share melt-up would lead the broader PSEi higher. 

Instead, if local-currency yields are being held down by policy while dollar credit and CDS repricing move regardless, the pressure hasn't been eliminated — it's been redirected. 

Yes, this reinforces what I call the Whac-a-Mole dynamic: suppress the signal in one market, and it resurfaces in another, usually the one that’s harder to manage administratively. 

Bond vigilantes showing up first in CDS, dollar credit and in foreign portfolio outflows, ahead of the equity market, is the tell that the PSEi and local bond market's calm is manufactured rather than earned. 

Of course, the crux here is what determines the sustained run-up in global yields, and how that pressure transmits not only to the peso, but through global and domestic liquidity, the Philippine banking system, domestic bond prices, and eventually the PSE. 

VI. Conclusion: Prices Distortion Compounds Risk of Crash 

Friday's bounce may simply be an oversold recoil, or it may get written up as a "false breakdown" — a framing that conveniently supports the financial architecture’s broader project of keeping asset prices elevated so balance sheet collateral values hold up and the credit cycle keeps financing the savings-investment gap. 

But the degree of trade and price concentration documented above tells a different story than the headline index number does. 

Prices convey information. When policy—through index mechanics, cross-trading patterns, or bond-yield suppression—prevents that information from being priced in cleanly or prevents markets from clearing, the resulting distortions do NOT disappear. 

They compound on existing imbalances until something forces a repricing anyway, usually somewhere less convenient than where the distortions started. 

Bluntly, the bigger the distortions, the greater the eventual disorder—amplifying the risk of a market crash. 

Concentration is a symptom. Policy is the disease.

The PSEi-ICTSI Show, Part III: The Fulcrum Cracks—Benchmark-ism Unravels

 

You can't do well in investments unless you think independently. And the truth is, you're neither right nor wrong because people agree with you. You're right because your facts and your reasoning are right. In the end, that's all that counts. And there wasn't any question about the facts or reasoning being correct—Warren Buffett 

In this issue: 

The PSEi-ICTSI Show, Part III: The Fulcrum Cracks—Benchmark-ism Unravels

I. Ghost Month, Real Losses

II. The ICTSI Fulcrum Cracks

III. Breadth Confirms the Divergence

IV. From Prop to Drag: The Mechanics of Concentration in Reverse

V. Rotation Without Broadening: Speculative Capital in Search of the Next Punt

VI. The Arrière-Pensée: Confidence Is the Cover Story, Collateral Is the Point

VII. Conclusion: Benchmark-ism Meets Its Own Arithmetic 

The PSEi-ICTSI Show, Part III: The Fulcrum Cracks—Benchmark-ism Unravels 

When one stock becomes the market, its reversal becomes the market's problem: August exposes the concentration, liquidity, and benchmark-ism beneath the PSEi's manufactured confidence 

In Part I we flagged ICTSI as the PSEi 30's single point of vulnerability. In Part II we showed how that vulnerability had metastasized into concentrated liquidity, shrinking participation, and outright benchmark-ism. August supplied the arithmetic Part II warned was coming. 

I. Ghost Month, Real Losses

Figure 1

August is conventionally excused as the market's "ghost month"—a superstition with Chinese roots, ironically applied by the establishment commentaries to a market that isn't Chinese. The historical record hardly justifies the fear: from 2010 through 2025, August produced gains in only six of sixteen years, with an average loss of a marginal -0.33%. Mostly noise. (Figure 1, upper window)  

This August wasn't noise. The PSEi 30 fell 4.49% month-on-month—the fourth-largest monthly loss since 2010—dragging the year-to-date return to roughly -1.60% and the year-on-year figure to -3.24%. (Figure 1, lower table)

Figure 2 

The damage was compressed: a single closing week's 4.52% plunge erased three months of the index's ICTSI-driven advance. (Figure 2, upper image) 

Ghost month or not, the mechanism behind the reversal is the one this series has tracked for some time, but which intensified last June: ICTSI had become the fulcrum propping up the PSEi 30, and a fulcrum that lifts a benchmark on the way up can just as easily accelerate its fall. 

The timing again matters. 

The final week's plunge did not arrive in isolation. 

On Friday, the USDPHP closed at Php 62.265, a record, extending Thursday's prior record-low close of Php 61.888. Markets were also absorbing the BSP's latest policy signals, and the 7-month record fiscal and trade deficits. (Figure 2, lower chart) 

The PSEi 30 fell in lockstep, down for a fourth consecutive session and closing below 6,000, erasing gains since June. 

A rate hike aimed at defending the currency and a benchmark sliding on the same day are not coincidences to be filed separately from the ICTSI story. They are another expression of the same "resistance to adjustment" pattern this (stagflation) series has tracked across fiscal, monetary, and FX-regime policy: administrative efforts to keep the peso, the yield curve, and the index from clearing at levels the underlying imbalances would otherwise dictate. 

When that resistance gives way on the currency side, it rarely leaves the equity side untouched—not when equity "confidence" was doing double duty as collateral support in the first place. 

II. The ICTSI Fulcrum Cracks 

The same stock that manufactured the June-July rally supplied most of August's decline. ICTSI fell 7.86% week-on-week and 8.1% month-on-month, accounting for roughly 46% and 48%, respectively, of the PSEi's weekly and monthly losses. 

This is simply capitalization-weighting running in reverse. The identical arithmetic that let one company's 57% first-half return mask a negative-6.8% average constituent return in Part II is now transmitting one company's reversal directly into the headline index. 

A benchmark built to amplify a single stock's ascent is, by the same construction, built to amplify its descent.

Figure 3

ICTSI's share of the PSEi's free-float market cap slipped to 25.58% by month's end, down from a peak of 27.37% in the first week of August. (Figure 3, upper pane)         

The combined weight of the top five constituents eased from July's peak of 56.12% to about 54.7%. 

Small retreats in percentage terms—large in what they signal: the "national team" support that Part II documented in the daily trading choreography appears to be losing its grip on the tape. 

III. Breadth Confirms the Divergence 

Beneath the headline, the market's breadth told a different story from the index. 

Only 10 of the PSEi's 30 constituents rose in August; the average constituent decline was roughly -2.92%—materially less than the benchmark's -4.49%, as ICTSI's outsized free-float market-cap weight amplified its decline in the headline index. (Figure 3, lower visual)

Figure 4

The divergence was even more pronounced during the final week's meltdown: only 7 of the 23 constituents that traded that week rose, while the average change was -2.78%—another example of how free-float market-cap weighting magnified the impact of ICTSI's decline on the benchmark. (Figure 4, upper diagram) 

Exchange-wide breadth stayed only marginally negative—1,783 advances against 1,818 declines—a spread nowhere near as lopsided as the ICTSI-driven index move would suggest. (Figure 4, lower image) 

That gap between a nearly even advance-decline line and a sharply negative benchmark is itself the tell: the index and the market it purports to summarize are increasingly telling two different stories, exactly as Part II's mid-year data showed in reverse. 

IV. From Prop to Drag: The Mechanics of Concentration in Reverse

Figure 5 

The unraveling wasn't confined to price. It showed up in the plumbing of trading activity too. ICTSI's % share of Main Board volume fell sharply from 28.23% in July to 21.91% in August as foreign flows shifted from net buying (Php 5.265B in July) to net selling (Php 1.59B in August). (Figure 5, upper graph) 

The same expansion in ICTSI's trading dominance that Part II attributed to both rising ICTSI activity and shrinking activity elsewhere is now reversing on both counts at once: as ICTSI volume recedes, there is no offsetting pickup in the rest of the market to cushion the loss of liquidity. 

The pattern increasingly resembles South Korea's KOSPI, where Samsung and SK Hynix now function as the index in practice. The difference is that Korea's concentration rides a global AI-hardware cycle with real earnings behind it; ICTSI's had no comparable confirmation from global port-operator peers, a point already established in Part II. (Figure 5, lower chart) 

Main Board volume fell 17.24% year-on-year to about Php 113.108 billion; aggregate turnover fell 4.5% to Php 142.976 billion. Cross trades made up 18.74% of Main Board volume, a four-month high—more of the exchange's already-shrinking activity conducted off the central order book, away from open price discovery. 

V. Rotation Without Broadening: Speculative Capital in Search of the Next Punt 

As the dominant ICTSI trade weakened, the other big caps failed to fill the gap—or the expected ‘rotation’ didn’t happen. Instead, trading activity shifted toward smaller, more speculative names—restructuring rumors, backdoor-listing chatter, M&A gossip—even as overall volume contracted. 

Near-even breadth on falling volume is not a healthy broadening of participation. It looks more like speculative capital searching for the next short-term story once the previous market leader loses momentum, not new capital entering the market on improved fundamentals. 

The extraordinary ICTSI ascent that carried the PSEi through June and July appears to have reached its inflection point. What follows this kind of top is rarely a broad-based handoff to the rest of the index; it's usually a scramble among smaller, thinner names while the index itself searches for a new prop. 

The progression is telling: from speculation to outright gambling, as capital searches less for value than for the next trade capable of replacing the momentum it has lost—more recipe for capital consumption. 

VI. The Arrière-Pensée: Confidence Is the Cover Story, Collateral Is the Point 

In Part II, we named this dynamic “benchmark-ism”: political and institutional narrative management that uses market and economic statistics to manufacture the appearance of stability—or to keep the Overton window of acceptable economic outcomes from shifting toward adjustment. 

August is the moment that narrative met its own arithmetic. 

Gains have always been projected as "confidence"—a rising PSEi as evidence of "resilience," useful for a leadership with sagging approval ratings and an economy absorbing the mounting tensions from the aftershocks of the Iran-war oil shock, EO 110's price-suppression architecture, and a cascade of BSP relief measures already tracked in this series. But confidence was never the only objective, and arguably not the primary one. 

Elevated equity prices are collateral. They support asset values on bank and corporate balance sheets, cushioning a financial system already leaning on the BSP's regulatory relief and foreign-exchange interventions to keep the credit cycle turning. 

Put bluntly: a rising PSEi, and specifically a rising ICTSI, was never just about optics. It was about propping up the collateral base that a decaying credit cycle depends on to keep rolling over. That is the arrière-pensée behind the applause Part II described—the second, unstated motive sitting behind the first. 

The trouble with using one stock as collateral infrastructure for an entire financial system is that the mechanism is symmetric. 

What inflates the collateral on the way up can deplete it on the way down, potentially at a leveraged pace 

August didn't just cost the PSEi 4.49%. It cost the system a slice of the very collateral cushion the whole exercise was designed to build. 

VII. Conclusion: Benchmark-ism Meets Its Own Arithmetic 

This isn't the first time a single Philippine equity story has been mistaken for—or dressed up as—a market. The DigiPlus [PSE: PLUS] gaming-stock bubble of 2025 ran on the same logic: a policy-fueled speculative vehicle inflated past any relationship to its fundamentals, celebrated rather than examined, until the arithmetic of momentum reversed on its own. 

We called that top in real time and traced its roots back to the same boom-bust pattern that took down BW Resources in 1999. 

ICTSI is a larger, more systemically consequential version of the same mechanism—dressed in blue-chip legitimacy instead of casino-stock notoriety, but running on identical fuel: concentrated, momentum-driven flows mistaken for confidence. 

• Part I called ICTSI the PSEi's single point of vulnerability. 
• Part II showed that vulnerability metastasizing into concentrated liquidity and narrative management.
• Part III shows what happens when the fulcrum that was doing the lifting starts doing the dropping instead. 

The PSEi was supposed to represent the market. But once the representation itself becomes something to be managed—because it communicates confidence and supports financial conditions—it begins to substitute for the reality it was meant to represent. That is the simulacrum. 

The episode reconfirms why the PSEi is becoming an increasingly unreliable gauge of the broader Philippine equity market—and, equally, a more fragile one: susceptible to substantial mispricing, disproportionate liquidity exposure, asset-bubble formation, rising concentration risk, and hidden leverage. 

Benchmark-ism can manufacture confidence for a while. It cannot repeal the arithmetic of the index it's built on.

___

References:

Prudent Investor Newsletters, The PSEi-ICTSI Show, Part II: When One Stock Becomes the Market, July 19,2026 

Prudent Investor Newsletters, PSEi 30: The ICTSI Show, June 7, 2026