ASEAN Financials: Philippine Banks: Await Greater Clarity Before Re-Engaging

Research evidence excerpt

ASEAN Financials: Philippine Banks: Await Greater Clarity Before Re-Engaging

Idea

May 13, 2026 05:09 PM GMT

Morgan Stanley Asia (Singapore) Pte.+MASEAN Financials | Asia Pacific Selvie Jusman, CFA

Equity Analyst

Philippine Banks: Await Greater Selvie.Jusman@morganstanley.comNick Lord +65 6834-6517

Nick.Lord@morganstanley.com +65 6834-6746

Clarity Before Re-Engaging Aitong Li

Research Associate

Aitong.Li@morganstanley.com +65 6834-6295

We are downgrading the Philippine banking group to least

ASEAN Financials

preferred in ASEAN and moving BDO and BPI to Equal-weight, Asia Pacific

driven largely by a cyclical deterioration in near‑term Industry View In-Line

risk‑reward amid the ongoing energy crisis. What’s Changed

BDO Unibank (BDO.PS) From To

Rating Overweight Equal-weight

Key Takeaways Price Target PP184.00 PP118.00

Our new order of preference in ASEAN banks is Singapore > Malaysia > Thailand Bank of the Philippine Islands

> Indonesia > Philippines. (BPI.PS) From To

Price Target PP157.00 PP102.00

We take a more defensive stance on the Philippine group over the next 6–12

months: We still see Philippine banks as long‑term beneficiaries of sound

regulatory frameworks, digitalization, and financial inclusion—but we note emerging Exhibit 1 : Earnings estimate revisions

medium‑term uncertainties around structural growth. In particular, rapid advances

in AI pose risks to a key Philippine industry, BPO. Near-term, the energy crisis creates

headwinds to growth and potentially asset quality.

We are cutting our earnings estimates for BDO and BPI – most deeply in 2027:

While 1Q26 results remained resilient, forward-looking indicators suggest that

deterioration is underway. Both BDO and BPI posted modest earnings growth in

Source: Morgan Stanley Research estimates