Why Globe Telecom is worth paying attention to amid the dilemma of the Philippines stock market PSEi Chart

2025: Multiple Pressures Facing the Market

The Philippine stock market faced challenges right at the start of 2025. The PSEi index opened at 6,052.92 points, a seemingly solid figure, but compared to the end of 2024 at 6,528.79 points, it declined by 7.29%, making it one of the worst-performing markets in the Asia-Pacific region. From the trend shown in the PSEi chart, 2025 has become the most difficult year since the pandemic.

On the surface, the daily net trading volume increased slightly from P5.15 billion in 2024 to P5.91 billion, indicating a modest improvement in trading activity. However, this cannot mask deeper issues: on November 14, the PSEi dropped to a five-year low of 5,584.35 points, just slightly above the bottom seen in May 2020.

Two Forces Dragging Down the Market

Domestic factors are at the forefront. The corruption scandal involving flood control projects dealt a heavy blow to investor confidence. Investigations revealed billions of pesos embezzled, with “ghost projects” emerging frequently, widespread use of substandard materials, and a few contractors monopolizing contracts. This scandal shook the market’s foundation.

Even more concerning is the slowdown in economic growth. The third quarter GDP grew by only 4%, the lowest in four years, below the government’s target of 5.5%-6.5%. This dragged the nine-month average growth rate down to 5%.

External capital outflows became the second major pressure. Net foreign outflows reached P47.13 billion, a surge of 86.6% from P25.25 billion in 2024. Governance concerns and regional markets performing better drove foreign investors away. The peso depreciated to P58.79 per USD (touching a low of P59.22, a historical low), further fueling pessimism.

Policy Optimism and Market Recovery

However, a turning point is emerging. In November, S&P Global assigned the Philippines a BBB+ rating, optimistic about the country’s strong economic recovery potential, effective fiscal discipline, measures by the central bank to curb inflation, and progress in reforms like PPP. This leaves room for future upgrades.

The central bank and the Federal Reserve’s rate cuts in December helped the market rebound. Although “fiscal and political risks” still trouble analysts like First Metro Sec’s Mark Angilius, selective opportunities remain within defensive strategies.

Globe Telecom: From Telecom Giant to Tech Enterprise

Against this backdrop, Globe Telecom (GLO) stands out, ranking among the top ten preferred stocks by institutions.

The company has evolved from a traditional telecom operator into a diversified digital ecosystem. Its 5G network leads in mobile video, gaming, and voice applications. The Postpaid “Platinum” plan offers airport lounge access, 24-hour digital concierge, and health benefits. GFiber broadband reaches 1.5Gbps, bundled with Disney+ and 24/7 telemedicine services (KonsultaMD).

Dividend performance is impeccable. Globe maintains a core net profit payout ratio of 70%-76%, with an annual dividend yield stable between 5.42%-5.8%, making it attractive for investors seeking cash flow.

The Value of Digital Assets Comes to the Fore

Globe’s stake in Mynt (operator of GCash) is a true trump card. GCash claims to be the “Philippines’ first unicorn” (valuation of $500 million), dominating the cashless payment market with over 6 million merchant partners. Its IPO will significantly boost Globe’s valuation.

Additionally, Globe is involved in telemedicine through KonsultaMD, has investments in Adtech and e-commerce via 917Ventures, and collaborates with ST Telemedia and Ayala to develop data centers. As a result: Globe is both the Philippines’ largest mobile operator (by users and market cap) and holds key assets in digital finance and technology.

MSCI ESG ratings give it an AA, and it has been included in the FTSE4Good index for nine consecutive years, reflecting its commitment to sustainability.

Risks and Opportunities Coexist

Not to be overlooked: PLDT leads in enterprise and fixed-line markets, while new entrant DITO challenges Globe’s network speed in some regions. Some analysts believe its fintech assets may be overvalued, making its stock price sensitive to GCash’s growth fluctuations.

Conclusion: A Balanced Growth and Income Portfolio

Globe Telecom exemplifies a successful strategic transformation—from a connectivity provider to a builder of digital ecosystems. Its 2024 revenue hit a record high, with robust EBITDA margins. The management’s generous dividend policy ensures shareholder benefits. With increased AI investments, growing demand for health tech, and the global ESG wave, Globe is poised to benefit.

In a challenging market, this offers an investment that combines stable income with growth potential.

Happy New Year! – Rappler.com

(This article is for public reference only and does not constitute investment advice for securities or financial instruments. The author and related investors may have conflicts of interest; please exercise caution. Contact the author: densomera@yahoo.com)