THE House of Representatives Committee on Infrastructure co-chairman on Thursday urged Securities and Exchange Commission (SEC) Chairman Francis Lim to clarify his recent statement attributing an alleged P1.7-trillion market value loss to the flood control project scandal, saying it does not reflect the actual performance and historical trends of the Philippine stock market.
Party-list Rep. Terry Ridon of Bicol Saro was referring to Lim’s remarks during a forum of the Financial Executives Institute of the Philippines (Finex), where he said, ‘The flood control project scandal has shaken public confidence, wiping out an extraordinary P1.7 trillion in market value of our publicly listed companies in just three weeks, despite rising corporate earnings.’
‘Investors aren’t fleeing because of weak fundamentals; they’re fleeing because of weak integrity. It’s a stark reminder that corruption is a weapon of mass wealth destruction,’ Lim added.
However, Ridon pointed out that Lim’s statement ‘does not accurately reflect current and historical conditions of the Philippine capital market.’
‘While it is true that over the last three months the Philippine Stock Exchange index [PSEi] declined from a high of 6,525.04 in July to a low of 5,953.46 in September-an 8.75 percent drop-an objective review of PSEi movements over various timelines shows that weak fundamentals, not the flood control scandal, remain the principal reason for market underperformance,’ Ridon said.
On a six-month view (April 10-October 9), the PSEi had already reached 6,077.82 as early as April 11, 2025. Although a short recovery followed, the broader decline began after July 14, or two weeks before President Marcos exposed the flood control corruption scandal in his State of the Nation Address.
‘In other words,’ Ridon said, ‘the market’s weakening predated the scandal.’
‘These figures demonstrate that the ongoing corruption scandal is a convenient but inaccurate explanation for the market’s weakness and the broader slowdown in the economy,’ Ridon said.
He stressed that while good governance is vital in maintaining investor confidence, market performance primarily depends on sound economic management and private sector response to fundamental growth challenges.
‘The responsibility for improving market performance rests primarily with our economic managers and private-sector leaders in addressing fundamental growth constraints,’ he added.