Manulife Investment Management is urging investors to adopt a flexible, diversified approach to bond investing, balancing short- and long-duration bonds while closely watching inflation trends and potential policy moves from the Bangko Sentral ng Pilipinas (BSP).
Jean de Castro, Manulife’s head of fixed income, said that if the BSP maintains its supportive monetary stance, it could create “numerous opportunities” in the local bond market, including stable yields and increased demand for government securities.
“In this environment, investors could favor the short-end of the curve for flexibility while selectively adding longer-duration exposure if inflation risks appear contained,” de Castro said Wednesday.
She added that if inflation remains within the BSP’s 2–4 percent target, it could allow room for further easing, supporting long-term bonds. However, risks such as food supply shocks, rice import restrictions, rising oil prices, and peso volatility may push inflation higher and prompt the BSP to pause rate cuts.
De Castro noted that recent business and consumer sentiment surveys point to a possible economic slowdown, which may keep the Monetary Board cautious on further easing. Still, seasonal factors like holiday spending and overseas remittances could offset some of the weakness in domestic demand.
With the BSP expected to release updated third-quarter survey results and a September inflation forecast soon, de Castro emphasized staying nimble. “We expect inflation to remain within target, with borrowing costs supportive of growth,” she said.
