[ANALYSIS] Will the Philippine inventory market get well in 2026?

Analysts see the Philippine inventory market standing at a crossroads: it’s set to take the acquainted muddle-through path that’s lined with warning spilling over into the subsequent 12 months.

The financial system is ending 2025 on an upswing pushed once more by vacation spending and robust Abroad Filipino Staff (OFW) remittances however positively with a slower-than-expected progress fee under the federal government’s goal of 5.5% to 6.5%. S&P World set it at 4.8% on the premise of the non permanent discount in public infrastructure spending, whereas personal native financial establishments like UA&P and the World Financial institution are putting it at 5.1% and 5.3%, respectively.  

The final outlook for 2026 is extra optimistic albeit cautious. Public spending is anticipated to speed up whereas inflation is anticipated to remain low throughout the 12 months and world situations stabilize. Gross Home Product (GDP) progress is seen to speed up to round 6.2%.

Whereas estimates are nonetheless blended with some analysts even predicting additional weak point, the Philippine peso might preserve its parity with the US greenback within the excessive 50s however just under 60 following an anticipated rebound in authorities spending that might enhance investor confidence and buttressed by the persevering with heavy influx of OFW remittances. 

Market sectors anticipated to outperform

Once more, progress in 2026 is anticipated to be primarily pushed by robust home consumption, bolstered by low inflation estimated at round 3% for 2026, rising employment, and robust remittance inflows from OFWs. This may end in quantity of progress within the sector dealing in meals, retail, and shopper staples.  

The financials, particularly banking, are subsequent. Continued financial growth will gasoline sustained credit score demand from each company and shopper segments. Furthermore, steady financial coverage and favorable rate of interest situations are anticipated to permit main banks to maintain robust earnings progress.

Anticipated to additionally do effectively is infrastructure and development. The federal government has dedicated to take care of excessive infrastructure spending, concentrating on 5% to 6% of GDP over the medium time period. This sector is projected to register a big annual progress fee, estimated at over 7% all over 2029 as big-ticket public-private partnership (PPP) tasks, together with railways, ports, and bridges, transfer ahead.

Then come the Actual Property Funding Trusts or REITs. The REIT sector advantages from steady money flows generated by properties used for infrastructure and logistics. They may proceed to offer engaging dividend yields to traders.

Contemplating that there’s a critical home shift in authorities coverage towards sustainable and significant vitality sources – in line with the worldwide pattern – the vitality and renewable assets sector can be poised to grow to be key funding progress areas for the 12 months and onwards.  

The sector will probably be closely supported by native funding facilitation boards. This may encourage firms centered on photo voltaic, wind, and geothermal energy to broaden quickly to each meet the rising clear vitality demand and have to transition away from fossil fuels.

Mining and extraction might discover traction presently, too. Continued world demand for essential minerals and industrial metals is anticipated to extend and maintain the mining and extraction sector sturdy, particularly with authorities reforms geared toward boosting the trade.

Lastly, the companies sector can be estimated to play a key function in catering to long-term world tendencies on the identical time stay as the most important part of the financial system, accounting for about 61.5% of GDP.  

Along with the entry of Synthetic Intelligence (AI) infrastructure, the Info Know-how and Enterprise Course of Outsourcing (IT-BPO) sector is anticipated to maintain progress, adapting to world demand tendencies, together with these associated to electronics and semiconductors. World demand for AI-related digital merchandise is anticipated to spice up merchandise commerce, straight benefiting the Philippines’ substantial electronics meeting and export trade.

First MetroSec’s playbook

First MetroSec’s head analyst Mark Angeles and assistant colleague Estella Dhel Villamiel, who have been liable for the manufacturing of the suggestions, premised their stockbrokerage home’s technique and sport plan referencing Robert Frost’s 1915 poem “The Highway Not Taken.”  

Angeles and Villamiel see the market standing in some crossroads and is about to take what it calls because the acquainted muddle-through path that’s lined with warning spilling over into the subsequent 12 months. 

For 2026, the index goal vary is positioned between 5,500 to 7,500, with a base case of 6,500, pushed by an earnings per share (EPS) progress of +5% compound annual progress fee (CAGR) somewhat than by valuation growth. Threat premium is assumed to stay elevated at 600bps, close to +2SD above the technical historic imply of the market contemplating the lingering confidence considerations, usually. 

If the above rationalization was complicated than enlightening, simply do not forget that First MetroSec is estimating that the market might hit the excessive of seven,500 of the market’s most important index (which is the Philippine Inventory Trade index or PSEi) or fall as low to five,500 in 2026 however is assured to see it thread at 6,500 on the premise of an EPS progress estimate of +5% CAGR somewhat than by market valuation efficiency.

What’s vital, in accordance with Angeles, “a lot of the valuation injury is already priced in, which ought to restrict draw back threat.”

Elements that might steer the market upwards embody governance reforms and normalization of public spending, macro stability with GDP progress returning to pattern, and renewed international fund inflows.

Shares endorsed to play with

Supply: First Metro Securities, Refinitiv Closing worth as of 27 November 2025

In abstract, Angeles and Villamiel of First MetroSec reiterate their barbell technique, whereby “One foot stays on the acquainted highway with dividend performs and defensives for cashflow/earnings visibility, whereas the opposite steps onto the highway much less travelled with large-cap cyclicals positioned for financial and confidence restoration.”

Additionally, they advocate “an unmarked path with AI diffusion as an rising structural theme, favoring sectors with excessive working leverage.” – Rappler.com

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