Philippine Equity Strategy "Word on the Street—local conviction still soft" Te

Research evidence excerpt

Philippine Equity Strategy "Word on the Street—local conviction still soft" Te

Global Research

14 July 2026ab

Philippine Equity Strategy Equity Strategy

PhilippinesWord on the Street—local conviction still soft

John Te, CFA

Analyst

Investor positioning remains defensive john.te@ubs.com

+632-8784 8814

Following local investor meetings last week, conviction on the Philippine market appears

limited, with little pushback on our regional UW view and 6,500 index target. Despite Grace Lim

Economistmodestly increasing their index targets after the initial US-Iran ceasefire, institutions

grace-k.lim@ubs.com

remain defensive, citing limited PE re-rating potential amid near-zero 2026 EPS growth. +65-6495 5965

Ongoing reallocations from domestic to global equities remain a headwind. Separately,

net foreign inflow returned in July 2026, concentrated in ICT, BDO, and BPI. Mica Abaquita

Positioning: Clients remain largely defensive, though many local investors are mica.abaquita@ubs.com

closing or trimming long-standing UW positions in banks. Utilities remain the +632-8784 8827

consensus OW. Interest in property and telecoms is limited, while consumer Gabriel Madrid

positioning is increasingly stock-specific. A minority maintains aggressive UW Analyst

cyclical positions, reflecting their expectations of more aggressive rate hikes and gabriel.madrid@ubs.com

weaker growth. +632-8784 8884

Aakash Rawat, CFA

Macro: Local consensus expects 1–2 hikes in 2026 (UBS: 1), followed by 1–2 cuts

in 2027 (UBS: 2), though a few see a more aggressive path. Our 6.4% 2H26 aakash.rawat@ubs.com

inflation forecast received little pushback, but investors were less concerned than +65-6495 8283

UBS about El Niño risks, while concerns over the 7% minimum wage increase were

widespread.