Manulife Investments Philippines sees opportunities for investors to lock in elevated yields while preparing portfolios for an eventual shift in the country’s monetary cycle, favoring income, diversification, and flexibility over aggressive bets on an imminent rate cut.
The investment manager said the strategy reflects continued uncertainty over inflation, oil and food prices, and peso movements, even as the yield curve suggests interest rates may be nearing their peak.
Jean Olivia De Castro, head of fixed income at Manulife Investments Philippines, said the steepening yield curve indicates yields are likely near their peak compared with the early stages of the rate-hiking cycle.
“However, it’s important to note that the market is not pricing a pivot or an easing cycle, just a pause from the BSP,” De Castro said in a commentary.
For fixed-income investors, she said shorter-dated bonds remain attractive because they offer relatively high yields while preserving flexibility if interest rates rise further.
But concentrating too heavily on short maturities could create reinvestment risk when yields eventually fall, De Castro said. Investors should instead consider a diversified maturity profile and extend duration when longer-term yields adequately compensate for inflation and interest-rate risks.
In equities, Manulife head of equities Elle Jamil said companies with predictable cash flows and strong dividend payouts could provide relative shelter in a rangebound market.
Utilities and businesses with strong brands, dominant market positions, and pricing power may remain resilient despite elevated borrowing costs, she said.
Property companies and highly leveraged businesses, meanwhile, could remain under pressure as financing costs stay high.
For longer-term investors, Jamil sees opportunities among beaten-down consumer stocks, which could benefit once inflation eases and economic growth strengthens.
The broader strategy reflects a market in transition, with investors urged to capture today’s income opportunities without overcommitting to a particular timing for the next BSP policy move.
