A 'sound' banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him—John Maynard Keynes
In this
issue:
GCash IPO: Oversubscribed, Underbid
I. Blockbuster, by the Numbers
II. Follow the IPO proceeds
III. The Savings-Investment Gap is Not Weather
IV. The IPO Pitch and Its Circles
V. What Digitization Can and Cannot Do
VI. Big Names, Small Incentives
VII. PSEi Benchmarkism
VIII. The State at the GCash’s IPO’s Bell
IX. GCASH IPO: WHY NOW?
X. Benefiting Whose Balance Sheet?
XI. Conclusion: A Record IPO Is Not a Substitute for Savings
GCash IPO: Oversubscribed, Underbid
A record IPO met a thin bid: benchmarkism, the
saving–investment gap, and whose balance sheet gets the mark
Disclosure:
The author has not subscribed to the IPO nor holds its
shares as of this writing.
I. Blockbuster, by the Numbers
Blockbuster IPO, they say.
At Php 60.9 billion with the greenshoe (Php 53 billion base), Mynt’s GCASH is the largest IPO in PSE history, ahead of Monde Nissin’s Php 55.9 billion (June 2021), Maynilad’s Php 34.3 billion (November 2025) and Converge ICT’s Php 29.08 billion (October 2020).
Yet the trading debut disappointed. Shares closed flat at
Php 6.60 on day one, then slid to Php 6.27, down 5%, over the first four
sessions.
Figure 1
Interestingly, the PSE’s weekly average daily main board volume jumped 17.15%, from Php 5.380 billion to Php 6.303 billion. But that is smaller than the Php 10.722 billion in the week ending September 25 and the Php 7.698 billion in the week ending August 28. (Figure 1, upper chart)
Ironically, in those four sessions GCASH generated Php 10.996 billion in turnover, or 40.9% of the Php 26.883 billion total. Four pesos of every ten went through GCASH, and that includes cross trades. (Figure 1, lower image)
The concentration in the PSE manifested a trade-off: volume shifted in support of GCASH and ICTSI at the expense of the general market. Breadth was dominated by sellers, 405 decliners against 474 advancers.
Yet despite a 40.9% share of turnover, GCASH could not generate a positive return.
The data set is the tell: negative breadth, a negative return, an enormous share of turnover and unimpressive main board growth, for a supposedly monumental event. All of it points to a critical shortfall: the paucity of real savings.
But of course, as a caveat, four days don’t make a trend.
II. Follow the IPO proceeds
Look at who got the money.
Of the Php 53 billion base, only about Php 10.6 billion was new shares sold by Mynt. The other Php 42.4 billion was existing shares sold by private equity funds and other holders, and the greenshoe was secondary too. About one peso in five is new capital. The rest is savings changing hands so someone can exit.
Savings are supposed to fund capital formation. Here, most of them funded a cash-out.
Even the new money has a direction. The prospectus plan includes expanding Mynt’s lending business. In an economy short of savings, the one peso in five of fresh capital is meant, in part, to make more credit.
III. The Savings-Investment Gap is Not Weather
Some GCash advocates invoke the Philippines' saving–investment gap and prescribe more savings, as if the gap simply appeared in the national accounts.
That is accounting masquerading as economics.
The gap reflects the interaction of economic decisions, incentives, and policies. Easy money, deficit financing, and the diversion of resources toward “build and they will come” malinvestments, consumption and politically favored investments or projects affect how much income is saved, where capital flows, and whether investment generates sustainable returns.
The problem is not merely how to mobilize savings, but how policies shape their creation and allocation. When credit expansion (unbacked by savings) and debt-financed activity distort economic calculation, financial claims proliferate while the underlying capital base weakens.
Moreover, GDP-based savings-investment gap ratios inherit the limitations of the GDP denominator. Adding foreign income or OFW remittances changes the accounting perimeter; it does not explain the causal forces shaping saving relative to investment.
Cite a statistic and call it economics.
Yet, the GCASH IPO didn’t emerge from a vacuum. It is a response to years of easy-money policy and
the pandemic lockdown that pushed transactions onto digital platforms.
Financial
mobilization cannot substitute for real savings, and a listing cannot
repair capital consumed by distorted allocation.
IV. The IPO Pitch and Its Circles
The case for the IPO as a savings vehicle leans on three fallacies.
The first is appeal to authority: the big names.
The second is circular reasoning or begging the question: demand is real because the funds came in, and the funds came in because demand is real.
One banker says strong appetite at Php 6.60 proves solid fundamentals. That is the circle. The same banker expects modest, mature-company returns at a Php 442 billion valuation, which is a growth price for a slowing business.
The third is appeal to majority: millions of
users, so it must be sound.
V. What Digitization Can and Cannot Do
Sure, GCASH may be the first major digital platform to list.
It may help digitize the economy: faster and cheaper payments, less cash drag, more convenience.
It may reach the informal economy, not just for transactions but for investments (GSave, GFunds, GStocks PH, GBonds, GCrypto, GInsure) and credit (GCredit, GLoan, GGives, GLoan Negosyo).
But digitization carries its own risks: hacking, system breakdowns, power loss.
Worse, it can become a political surveillance tool in an
increasingly surveillance-driven economy. When every payment is tied to a
verified identity, a ledger of conduct is one policy memo away, whatever political
label it goes by: war on cash, social credit, infringement of liberty.
Figure 2
GCASH is also subject to the S-curve of technology adoption, assuming consumer conditions stay the same. Adoption peaks, as growth does, and that is another risk. (Figure 2, upper window)
Take SWS: self-rated poverty ratings reached 55% in September (Q3), up from 49% in June, with another 9% on the borderline. Hunger rates also surged from 20.3% to 22.6% in September (Q3). (Figure 2, lower diagram)
That doesn’t bode well for GCASH.
Deepening stagflation—as this series has discussed—not only consumes savings but also undermines consumers’ health.
Even the IPO’s boosters concede the curve is flattening. The platform has reached nearly every smartphone user, so growth must now come from extracting more revenue from each existing user. Those are the same users reporting 55% self-rated poverty.
While GCASH may improve the current picture, it remains subject to prevailing economic conditions. If the saving–investment gap keeps draining savings and encourage balance sheet leveraging, GCASH’s source of growth is jeopardized. Sorry.
A digital platform is only as good as the financial condition of its users.
The real test is whether digitization improves price discovery, economic calculation, entrepreneurial investment and capital allocation. Faster payments alone don’t show it.
Besides, first movers alone don’t guarantee a business model. They face competition within the industry and in technology.
VI. Big Names, Small Incentives
Many say GCASH has a solid roster of bookrunners and cornerstone investors: foreign funds, the IFC, domestic banks. Proponents say we should ‘trust’ them.
But a roster of big names does not guarantee corporate viability or the welfare of those who buy alongside it.
Bear Stearns and Lehman Brothers were big names too, and they vanished in the Great Recession.
Recently, COA flagged SSS equity losses of Php 40 billion. Big name, big losses.
After the 2008 crisis, Queen Elizabeth II asked why no one saw it coming. Author and mathematician Nassim Taleb’s answer is that a black swan is relative to the observer. It is a surprise to the dominant majority exposed to it and not to the few who saw the fragility. Crises don’t arrive while everyone is alert to them.
Easy money feeds herding. Investors chase returns by leveraging up, the crowd defines the acceptable range of opinion, and risks outside it get dismissed as outliers. That is the pattern economist Hyman Minsky described (long calm breeds leverage as lenders extrapolate stability), Kindleberger (manias ride on credit expansion) and Reinhart and Rogoff (every boom is defended with “this time is different”).
Number crunching is ex post. Theory is ex ante. Past performance doesn’t guarantee future results.
On the day GCASH listed, South Korea’s data center Elice fell about 32% by the close of its trading debut, despite retail books 400x covered and institutional demand near 389x!
Book-building demand is rationing, and the free market clears at a different price.
Should global events bring tighter financial conditions, mass fund redemptions or a liquidity crunch, blessings may morph into a curse and the big names could be the major sellers. About 87% of post-IPO shares are under a 180-day lock-up, so the tradable float stays thin until roughly mid-April 2027.
Besides, big names are involved for different reasons: some for profit, some for connections, some for exposure to a country or more. Naturally, there will be no evidence for personal affairs. Everything else is sold to the public as skin-in-the game.
Buy-side and sell-side institutions (fees, commissions) also have different incentives from clients (returns). That is the principal–agent problem: the agent is paid on the transaction while the client bears the outcome.
Relying on big
names for the security of one’s portfolio is gambling, banking on appeal to
authority and begging the question is a recipe for investment losses.
VII. PSEi Benchmarkism
Figure 3
As of October 22, ICTSI carried 25.39% of PSEi weight and the top five (ICTSI, SM, BDO, BPI, SMPH) carried 55.06%, against under 3% and 42% in January 2020. (Figure 3, upper pane)
Trading, liquidity and broker activity are concentrated the same way. The pattern looks very much like coordination, and since nobody publishes the minutes, inference is all anyone has.
Benchmarkism is the engineered substitution of index performance for the condition of the market beneath it.
The PSE’s 2025 investor profile shows its unintended consequence: record enrollment, yet a historic low participation of only 11.8% of accounts active (institutions 14.6%, retail 11.7%). More registrations are not more capital. (Figure 3, lower visual)
Concentration is
the symptom. Benchmarkism is the disease.
VIII. The State at the GCash’s IPO’s Bell
Why has government been involved in promoting GCASH? The President rang the opening bell and said the timing mattered because the stock market needs renewed investor interest. The DTI cited MSME gains. Will they promote all IPOs?
The President attended the last big one, Maynilad in November 2025, which also closed its debut slightly under its offer price—but closed at Php 16.9 (October 23rd) above its offered price at 15.
Yet, note what the President conceded: the market is short of investors. If real demand existed, government’s say would not matter.
Let there be no mistake: benchmarkism is happening at the political margins.
The rules were also rewritten around the deal.
The SEC lowered the minimum float for giant listings (MC 11, s. 2026), and GCASH was the first to use it, at 12%. In July, the PSE cut the PSEi float requirement from 20% to 15% for market caps of Php 250 billion and above, clearing the way for index entry.
The PSE has since rewritten its index rules so a stock with a float this small can qualify for the PSEi. If Mynt gets in, every fund that tracks the index must buy it, whatever the price.
Mandatory demand
meeting thin supply is benchmarkism by design: the index mechanics set the
price, and the price then passes for confidence.
IX. GCASH IPO: WHY NOW?
The biggest question is WHY NOW.
Globe had teased the listing in 2024 and 2025, and the board and shareholders approved it on June 17, 2026, when the PSEi stood at 6,404. Given a depressed (bear) market, why even list?
Three answers.
The rules were ready, as above.
Mynt’s growth is decelerating: net income rose 56% in 2025 but only 7.3% in the first half of 2026, so a listing at the top of the S-curve sells the growth, not the future.
And the window: the maximum price filed in June was Php 10, and the final price
was Php 6.60, a 34% cut that
took valuation from about Php 669 billion to about Php 442 billion. A
discount that size sits oddly beside a “super oversubscribed” book.
Figure 4
As an aside, from June 17 (GCASH IPO announcement) to
October 23 the PSEi returned -6.3%, AC +35% and GLO -14.32%. All things equal,
that tells us the listing benefited Ayala Corp most. (Figure 4)
Why not Globe?
X. Benefiting Whose Balance Sheet?
Figure 5
Globe’s Q2 revenue rose 8.02% to Php 46.954 billion, but income rose only 0.43% to Php 5.485 billion. Debt stood at a record Php 261.67 billion, up 5.56%, while interest expense and financing costs surged 16.7% to a record Php 4.67 billion. Cash was Php 19.7 billion, against Php 42.353 billion in Q1. (Figure 5)
Globe’s equity share in Mynt’s net income was Php 3.7 billion in the first half, slightly below Php 3.8 billion a year earlier, and about 28% of its pre-tax income.
The sale-leaseback of some 7,500 cell sites (2022–2025, Php 96.4 billion) didn’t stop debt from rising.
Notice what the IPO did not do: Globe sold no shares, so no IPO cash reached it. This is not a cash bailout. The benefit runs through the value of what Globe already owns.
Start with the 28%. Globe’s Php 3.7 billion share of Mynt’s first-half profit is a bookkeeping entry. The cash stays inside Mynt unless Mynt pays it out as a dividend.
Now the stake. Globe holds about a third of Mynt. At the final price of Php 6.60, the market values all of Mynt at about Php 442 billion, so Globe’s third is worth roughly Php 145–150 billion on paper. Until the listing, that stake had no daily market price. Now it does, and a quoted price lets Globe borrow against the stake, sell part of it later, and record accounting gains.
Globe’s own results show how much that matters. Its first-half profit fell 11% to Php 11.04 billion, and Globe blamed mainly a smaller “dilution gain” from Mynt than last year’s. A dilution gain is a paper gain Globe books when Mynt sells new shares at a higher price. Globe ends up with a smaller slice, but each slice is worth more. No cash comes in, yet reported profit moves, and the IPO’s new shares may generate another such gain.
Now set the stake against the debt. Globe owes about Php 261.7 billion. Lenders watch a ratio: gross debt divided by EBITDA, which is roughly how many years of operating earnings it would take to repay what the company owes. Globe’s is 2.68x, and its loan agreements cap it at 3.5x.
Our estimates suggest that this leaves room for roughly Php 80 billion more debt at today’s earnings. So this is not yet distress. It is collateral engineering: a bigger, quoted number on one side of the balance sheet to carry the debt on the other.
Whose welfare? The one whose balance sheet gets the
quoted mark.
XI. Conclusion: A Record IPO Is Not a Substitute for Savings
A record IPO needs a record bid. Instead, it got a rationed one: a price 34% under the filing ceiling, a flat debut, a slide to Php 6.27, four of every ten pesos of four-day turnover pulled from the rest of the market, four-fifths of the base deal an exit, and a President at the bell saying the market needs participants.
That isn’t demand discovering a price. It’s a fixed pool of savings being re-sorted toward the issue the establishment needed priced.
The platform may digitize payments. It cannot digitize savings into existence. A record listing is a
financial event. A deeper capital market is an economic achievement. Collateral
is not capital, and a listing is not a saving.
