Philippine Equity Strategy "Balancing tactical upside and macro constraints" Te

研报英文原文证据摘录

Philippine Equity Strategy "Balancing tactical upside and macro constraints" Te

Global Research

26 June 2026ab

Philippine Equity Strategy Equity Strategy

PhilippinesBalancing tactical upside and macro constraints

John Te, CFA

Analyst

We recommend a barbell positioning strategy in 2H26 john.te@ubs.com

+632-8784 8814

We set our PSE Index target at 6,500, based on 10x 2027E PE, or 7% above current

levels. While a US-Iran peace deal could unwind risk premiums, we think the rare Grace Lim

Economistconvergence of low growth, El Nino-driven inflation and political uncertainty likely limits

grace-k.lim@ubs.com

a sustained rally, despite 20-year low valuations. We expect flat EPS in 2026. We are +65-6495 5965

tactically OW banks and consumer ahead of potential peak rates by 3Q26, while adding

a modest defensive tilt absent a structural catalyst. BDO, BPI, JFC, MONDE, MER and Mica Abaquita

MYNLD screen as our top undervalued ideas. We present five pivotal questions:

mica.abaquita@ubs.com

How will the PSE Index perform under high rates and weak growth? +632-8784 8827

Tightening cycles in 2018 and 2023 saw the index decline 11% in each period. Gabriel Madrid

Our regression suggests a 100bp increase in 10Y yields reduces PSEi returns by Analyst

6%. With the index (ex-ICT) down 10% in 1H26, alongside dividend support, light gabriel.madrid@ubs.com

foreign positioning, and a final 25bp hike expected in 3Q26, we see limited scope +632-8784 8884

for meaningful drawdown. Aakash Rawat, CFA

How should investors position across the tightening cycle? Banks and aakash.rawat@ubs.com

consumer have typically begun to outperform at least six months ahead of peak +65-6495 8283

rates - we look to tactically OW these sectors. We do not expect material utilities

Claire Long