Philippine equities continue to show underlying strength despite the PSEi’s recent mild pullback, which analysts view as a natural bout of profit-taking after a sharp advance.
The Philippine stock market’s main performance barometer remains comfortably above the 6,000 mark and near six-month highs, a sign that selling pressure has been absorbed and that the market has stabilized after last year’s volatility. This resilience is reinforcing confidence that the index has already carved out a near-term base as the year unfolds.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the steady recovery of local equities reflects a clear improvement in investor sentiment, supported by consistent net foreign buying since the start of the year. He pointed to policy continuity, easing inflation, and rising expectations of lower interest rates as key forces restoring appetite for risk assets.
Together, these factors are improving visibility for earnings and encouraging selective accumulation across core sectors.
Ricafort added that the possibility of a Bangko Sentral ng Pilipinas (BSP) rate cut, lower bank reserve requirements, and sustained foreign inflows could further reinforce the market’s momentum.
Such shifts would help ease financing costs, unlock investment spending, and lift economic activity, creating a more supportive backdrop for equities over the medium term.
Valuations also remain compelling. 2TradeAsia noted that local equities are trading at sub-10x forward price-to-earnings, near historic lows, tilting the risk-reward balance in favor of patient investors. With GDP growth expected to stay above 5 percent through 2027 and monetary conditions gradually turning friendlier, the brokerage sees room for the PSEi to gravitate toward the 6,500 level.
2TradeAsia added that disciplined accumulation of oversold blue chips could drive a sustained re-rating in the second half, with support at 6,350 and resistance at 6,500–6,600.
The peso’s modest slip to 59.35 against the US dollar was described by Ricafort as a healthy correction after a five-day rally. Its continued stability near the 59 level reflects measured forex intervention, steady foreign inflows, and solid reserves, helping anchor sentiment even as global uncertainties persist.
