The Metro Manila Film Festival (MMFF) is a beloved Filipino tradition that showcases local films and entertains millions during the holiday season. But beyond its entertainment value, the MMFF can serve as an incredible barometer of social mood, and perhaps even as a predictor of stock market trends.
According to social economics, a theory developed by Robert Prechter, social moods drive social trends, including stock market movements, cultural preferences, and even political events. The premise is simple but impactful. When optimism prevails, people gravitate towards fun and entertaining forms of entertainment such as comedy and fantasy.
Conversely, during periods of pessimism, dark genres such as drama and horror become dominant, reflecting the general anxiety of society. If history is any indication, the themes and genres of the MMFF’s top-grossing films can provide valuable insight into the prevailing social mood, which is why the Philippine Stock Exchange Index (PSEi) direction.
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The relationship between social mood and box office trends is evident in the history of the MMFF. In times of economic instability, festivals tend to be dominated by genre dramas and horror films that resonate with themes of hardship and fear.
For example, after the Asian financial crisis of 1997, films such as “Tangin Yaman” (2000), “Bagong Buwan” (2001), and “Mano Po” (2002) became box office hits. These films, along with the plight of the PSEi, which lost 52.5 percent of its value during the same period, reflected the cautious and somber mood of the country grappling with its economic challenges.
On the other hand, periods of optimism and economic recovery are often accompanied by changes in popular genres. In the mid-2000s, Vic Sotto’s Enteng Kabisote series and Vice Ganda’s films such as Girl Boy Bakula Tomboy (2013) and The Amazing Preybait Benjamin (2014) Escapist and comedy films such as the director’s hits were on the rise. “Beauty and Best Friends” (2015), “Gandarapid” (2017), and “Fantastica” (2018) all reflect society’s upbeat mood.
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This positive social mood coincided with strong stock market performance, with renewed market optimism and a rebound in the PSEi. During this period, the economy recorded an average annual growth rate of 5.9%, and the PSEi achieved an impressive annual growth rate of 14.8%.
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Since the start of the COVID-19 pandemic, the themes of box office hits at the Metropolitan Manila Film Festival (MMFF) have changed dramatically, reflecting trends in the economy and stock market. It highlights a consistent and persistent negative social mood.
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This change began in 2019, when the usual domination of comedies at the festival gave way to the tear-jerking drama “Miracle in Cell 7,” starring Aga Moorak. This shift in viewer preferences suggests a more serious negative social mood, which has become even more pronounced during the pandemic years.
Even after the economy reopened in 2022, the negative mood in society continued. Despite analysts expecting a recovery in the stock market, the PSEi ended the year down 7.8%. The highest-grossing film at the MMFF that year was a horror film called “Deleter,” which interestingly won the Best Picture award at the time.
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In 2023, this trend continued with the emotional drama film “Rewind” dominating the MMFF box office, followed by the horror film “Malari” and the historical drama “Gomburuza”. These top-grossing films suggest that the social mood in early 2024 remains cautious and pessimistic.
Last year, when the central bank started cutting interest rates, the PSEi initially rebounded strongly, rising above the 7,500 level. However, as the negative mood in society persisted, these gains reversed, and the stock market declined, ending the year with a 14% decline from its peak.
The latest MMFF lineup offers a compelling glimpse into the prevailing social mood in the country. Economic growth slowed in the third quarter of 2023, at 5.2% year-on-year, the lowest growth rate for the period since 2011, excluding the pandemic-hit 2020, but without drama. Horror films dominated the festival.
This continuing trend reflects a negative social mood that influences moviegoers’ choices. Vice Ganda’s film “And the Breadwinner Is…” is a drama with comedic elements and is currently the top-grossing film at MMFF, along with another serious drama “And the Breadwinner Is…” starring comedian Vic Sotto. This was followed by “Kingdom,” and “Espantajo,” starring comedian Vic Sotto. Horror movie.
The domination of these films at the MMFF box office could signal a cautious year ahead for PSEi. These dark themes reflect a sense of pessimism in the market’s collective psychology. Sociologically speaking, such negative social moods are often preceded by periods of reduced consumer spending, increased risk aversion, and slower economic growth, all of which influence stock market performance. can have a significant impact.
PSEi faces the possibility of further challenges, and the persistence of negative social mood could be a headwind for economic recovery and market stability in 2025.
Although the direction of investor sentiment remains uncertain, the congruence between social mood and market performance is a strong reminder of their deep interconnectedness. Understanding these signals will help you better manage the risks and opportunities the market presents this year.
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Henry Ong is a Registered Financial Planner with RFP Philippines. Stock data and tools provided by First Metro Securities. If you would like to learn more about investment planning, please join us for the 110th batch of the RFP program in March 2025. To register, please email (email protected).
