Manulife Investment Management is cautiously optimistic of the Philippine equities market, underpinned by stabilizing macroeconomic indicators and signs of a post-election economic rebound. The investment firm points to aligned first-quarter corporate earnings, falling inflation, and anticipated interest rate cuts by the Bangko Sentral ng Pilipinas (BSP) as key market drivers.
“We anticipate that a recovery in consumer spending will boost growth expectations in the medium term, alongside any tailwinds from the recent lower policy rates,” said Mark Canizares, head of equities at Manulife Investments, in a research note.
The firm’s outlook holds particular weight for corporate and institutional investors looking to reallocate capital amid shifting monetary conditions. A recovery in the benchmark Philippine Stock Exchange Index (PSEi) further underscores growing confidence, after April marked the third consecutive month of market gains, narrowing the year-to-date decline to 1.7 percent.
Manulife’s positive tone comes as the BSP continues signaling an accommodative policy stance. April’s annual inflation slowed to 1.4 percent—down from 1.8 percent in March and well below the central bank’s 2–4 percent target range. Governor Eli Remolona recently indicated that benchmark rates could fall by up to 75 basis points this year, potentially bringing them to 4.75 percent from the current 5.5 percent, contingent on macroeconomic development.
Lower interest rates would ease financing costs and support business expansion—factors particularly relevant to capital-intensive industries and leveraged corporates.
Manulife’s portfolio preferences reflect a mix of defensive positioning and selective growth plays. Canizares noted the firm’s continued favor for financials, utilities, and real estate investment trusts (REITs), along with a renewed interest in consumer staples, buoyed by falling prices in food and oil.
“We have also become more positive on consumer staples stocks, as falling inflation, the recent drop in oil and other major commodity prices may further enhance the earnings outlook for consumer stocks,” he said.
April’s inflation report noted a particularly sharp slowdown in food inflation—up just 0.7 percent—with declines in prices of rice, vegetables, fruits, and fish. On the non-food side, transportation costs also eased due to successive pump price rollbacks.
Manulife’s tempered optimism provides a key signal to insurers, asset managers, and corporate investors recalibrating strategies in the wake of global volatility. While the PSEi dipped to a monthly low of 5,822.85 earlier in April amid global market shocks, it rallied 9 percent thereafter, supported by a recovering peso and stabilizing inflation.
For insurance-linked investment portfolios—often bound by capital preservation requirements—Manulife’s preference for defensives and core financials reflects a pragmatic approach amid continued global uncertainty. The firm’s outlook highlights how macroeconomic stability, even modest, can recalibrate capital flows toward emerging market equities.
As the BSP’s easing cycle progresses and post-election policy clarity takes hold, Manulife’s views offer a barometer for broader institutional sentiment in the Philippine financial sector.
