Philippine stocks could face more turbulence toward year-end as a weaker peso, surging oil prices and the prospect of further interest rate hikes raise questions about corporate earnings and investment spending in 2027.
The Philippine Stock Exchange index ended at 5,680.35 on Oct. 30, down 0.84 percent for the week, as investors weighed a more difficult backdrop for companies and consumers.
2TradeAsia said higher funding costs and a peso hovering near record lows could prompt property developers and conglomerates to trim or defer capital expenditures next year. Borrowing costs have risen by 125 basis points since April, according to the brokerage.
“Funding costs are up 125 bps since April and the peso is near record lows, so we expect capex plans for 2027 to be trimmed or pushed out,” it said.
That could have effects beyond individual corporate balance sheets. Delayed construction projects would reduce demand for cement and other building materials, while companies facing tighter cash flows could also reconsider dividend payouts to preserve liquidity.
The brokerage said it remains in “sit-out mode,” favoring dollar earners and companies with strong balance sheets that are better positioned to absorb currency and financing shocks.
RCBC chief economist Michael Ricafort likewise flagged the peso and crude prices as key risks to inflation and corporate profitability. Brent crude has climbed to about USD116 a barrel amid renewed geopolitical tensions involving the US and Iran, raising the possibility of another cost shock for an economy heavily dependent on imported fuel.
Still, the market is not without potential cushions. Ricafort pointed to continued export growth, overseas Filipino remittances and the planned inclusion of Philippine bonds in JPMorgan’s emerging-market benchmarks in January 2027 as possible sources of support.
For equities, 2TradeAsia sees 5,600 as a critical support level. A break below it could invite another wave of selling, while a sustained move above 5,800 would suggest that investor confidence is beginning to recover.
For now, however, the market appears more interested in protection than prediction. With currency, oil and interest-rate risks moving in the same direction, 2027 investment plans may have to wait for clearer skies.
