Inside the Philippine Market Outlook for 2026 | Mark Angeles | Follow The Money

Añadido: 2026-05-13

[00:00:18]Good morning. I'm Robert Tan. Join us as we follow the money from the financial choices that shape your daily life to the bitter forces driving the economy.

[00:00:29]The headlines, lower airfares ahead. Airlines are cutting fuel search charges in the second half of May.

[00:00:39]US President Donald Trump heads to Beijing for highstakes talks with Chinese President Xiinping. Will the meeting reset trade ties or keep markets on edge?

[00:00:51]And the local stock market is facing a tough test with slower growth, higher inflation, and weaker investor confidence. We got the market outlook of First Metro Securities First Vice President and Head of Equity Research Mark Anales.

[00:01:08]Planning a trip? Your next plane ticket could cost a little less, but don't expect pre-war prices just yet. The civil aeronautics board lowered the passenger and cargo fuel search charge to level 15 for the second half of May.

[00:01:22]This means passengers could save around 100 to 300 pesos on a one-way domestic flight and as much as 2,500 pesos on some international routes. That is a drop from level 18 in the first half of May and level 19 in late April. But before the Middle East crisis, the search charge was only at level four.

[00:01:45]In our corporate stories, Lucatan the third's LT Group records higher first quarter profits, increasing 3% to nearly 7.5 billion pesos. This is on the back of high earnings from its banking and tobacco units. Gong Wayi led JG Summit Holdings also reported stronger first quarter revenues supported by record passenger numbers in its air transport unit. Steady growth in branded foods and higher residential revenues from its real estate business.

[00:02:17]DMCI Holdings expects an uneven recovery this year with geopolitical volatility and possible rate hikes seemed to pressure its construction and property businesses. But the Konoohi le group sees opportunities in off-grid energy and nickel mining. And Shell Filipinas is warning that government imposed fuel price caps could weigh on long-term investor confidence.

[00:02:43]Digital digital banks are ranking ahead in a new customer satisfaction survey of Philippine banks. Marbank Philippines and Go Time Bank took the top two spots in Forbes World best bank's 2026 list for the Philippines. The ranking was compiled with Statista based on a global survey of more than 54,000 customers.

[00:03:05]Banks were evaluated on customer satisfaction, customer service, digital services, and financial advice among others. But legacy banks are still in the game. BPI placed third, the highest ranked traditional bank on the list. The results point to a shift in what some bank customers value from branchbased banking to faster apps, easier access, and stronger digital services.

[00:03:33]The Maci Business Club names its first ever female executive director, former cabinet secretary Julia Abad. She formerly takes over the position on July 1, succeeding outgoing executive director and business 360 anchor Apa Pin. Abad is best known for serving as chief of staff to former President Benign no Aino III. The embassy says Abad brings more than two decades of experience in governance, public policy, de development work and strategic leadership across multiple sectors.

[00:04:08]US President Donald Trump is heading to Beijing for highstakes talks with Chinese leader Xiinping. The meeting comes as the world's two biggest economies try to stabilize ties that have been strained by trade tariffs and the war with Iran. China is a major buyer of Iranian oil and Trump has been pressing Beijing to use its influence on Thran to make a deal with Washington.

[00:04:32]though Trump had this to say earlier.

[00:04:36]>> I have a great relationship with President Xi and I think it's going to remain that way. We have a lot of things to discuss. Uh I I wouldn't say Iran is one of them to be honest with you because we have Iran very much under control.

[00:04:52]Artificial intelligence is also in focus as the US and China compete on who leads the next wave of global growth.

[00:05:03]Coming up with growth, high prices, low confidence. The PSCI is facing a tough test and first metro securities Mark Angel joins us on what investors should watch next.

[00:05:16]Keep following the money.

[00:05:35]Welcome back. First quarter GDP 2.8%, April inflation 7.2%, PSI below 6,000 and struggling. The data this year has been brutal and the market knows it. And joining us this morning is Mark Angel, first vice president and head of equity research at First Metro Securities. His team set the base case for this market built on earnings, not optimism. Today we find out if it still holds. Good morning, Mark. Welcome to Follow the Money.

[00:06:05]>> Morning, Robert. Thanks for having me again.

[00:06:07]>> Thanks for joining us. Uh especially now, uh it's, you know, crunching numbers and all that.

[00:06:13]>> Earning season actually. seasons. But Mark, first Metro set a range uh for the P PSCI this year, a floor, a base case, and a bull target. Correct. Where do we stand against that range right now? Has it changed or are we sticking to that?

[00:06:29]>> Well, that range seems to be appears to be valid at the moment. We're in the middle of that.

[00:06:34]>> Uh we're between the uh the bear and the bull. I think the market is still uh holding up hopes that once we resolve the problem within the US and Iran, oil prices will come down and then we go back to some normal uh some normalization in terms of oil prices and also for inflation in the economy.

[00:06:55]>> And I I think from from our perspective right we are still maintaining that 65 number and that 65 number in our view already takes into account a lot of the risk involved. It is at plus two standard deviation in terms of equity risk premium. So it prices in a lot of the risk.

[00:07:13]>> So very optimistic. We'll get to that range soon.

[00:07:16]>> Yes.

[00:07:17]>> Now first quarter GDP is at 2.8% a slowdown the weakest outside the pandemic. What does that number tell you about Philippine corporates right now?

[00:07:26]>> Well first of all if you listen to uh the briefings of Philippine corporates, they're very cautious.

[00:07:33]>> Mhm. I mean from what I picked up is that they they're running a lot of scenarios in their in in their models.

[00:07:40]Uh looking at ways to cut costs and looking at ways to have a to to maintain core demand drivers >> and that and also looking at ways to make sure that that their supply chain remains intact >> and I think that's the tone that that the market is telling us is that this is an uncertainty but the corporates are cautious there. It's not something that there will be earnings collapse. It's more like the corporates are preparing.

[00:08:07]>> They're getting ready just in case this gets dragged on uh well into >> longer than expected.

[00:08:13]>> Yes. Longer than expected.

[00:08:14]>> But earning seasons uh what does the data show you?

[00:08:18]>> Well, so far right now First Metro has been quite on the conservative side. So most of the numbers are coming in in line with our expectations. However, guidance has was somewhat muted. So we have to review our numbers >> to see if even our conservative expectations remains still remains valid for the time being.

[00:08:36]>> Now another number that uh actually shocked everyone when it came out inflation rate at 7.2 uh in April uh a big jump from the 4.1 but it was also a big jump from the 2.4 uh that that we had but the BSP seems to be under pressure. What do you foresee from their uh previous actions? Um are we going to see more rate hikes? Are we going to see a uh pause? Uh where are we?

[00:09:01]>> Well, actually remember the last time I was here, we we talked about the BSP has a sequencing problem.

[00:09:08]>> They know that growth is going to slow and we they also know that the inflation is going to spike.

[00:09:13]>> It's it's about timing those policy.

[00:09:15]It's not about the direction. It's more on timing when you act on it. Mhm.

[00:09:19]>> And what we saw is that with inflation spike the BSP had to react in in terms of raising rates >> and they they are somewhat reactive to that and in a way uh later on when inflation starts to roll over meaning there's demand destruction then they will they will have to cut rates in order to support growth. But for the time being our view is higher for longer until inflation rolls over uh in the next few quarters. But if if we still see like geopolitics issue with um in the Middle East and also what's happening here on uh the local environment uh with the flood control scandal and everything that's happening uh what do you see do you see inflation spiking again? Well 7.2 2 is quite high already, right? It will take another spike in oil price closer to the 150 level or higher, which so far right now that's uh we are at around below $100 a a barrel for the bread.

[00:10:19]>> So you need that to happen in order for inflation to spike. But we don't discount the probability of uh second round inflation effects. As we have seen in uh the last inflation numbers, we saw food.

[00:10:31]>> It's the weather's very hot. So the harvest might not be good moving forward and also from a from a base perspective that inflation was low base last year.

[00:10:42]>> So adding all the inflationary pressures then and potentially an oil at 150 or higher then potentially we could see inflation spike again.

[00:10:51]>> Some would argue that we can no longer use geopolitics as an an excuse with the issues. Sometimes it becomes more structural. Um what needs to be done uh on the local scene? Well, the goal for each country is to be self- sustaining, right? it should not rely on external factors to drive growth uh especially to drive uh food supply etc etc right >> so I think what you need to do is have a have a plan a structural plan for uh to remove those dependence from structural uh from external factors >> very hard to do very easy to say I'm missing it but very hard to execute >> I think the time for the time being >> energy security is number one food is number to once you get that under control then you will see uh inflation somewhat uh less uh reactive to what is happening in terms of uh global prices.

[00:11:45]>> Well, those are the two biggest problems we're having right now at the moment.

[00:11:48]We're in an energy crisis.

[00:11:49]>> Yeah. But uh it's it's uh the structural uh uh things are underway. For example, we are we see a lot of re coming online some starting this year and in the next two years. So that will augment the power supply situation in the Philippines. Food is a problem that >> we have for a very long time and very hard to solve. And the main reason for that is that we are >> an we're composed of islands. We're the first line of defense in terms of typhoons coming in the Pacific. So very hard to be a farmer in this environment.

[00:12:24]>> Yeah, it's true. Now let let's look at the foreign investors. Uh Mark, um uh they seem to be net sellers. Now what can actually bring them back?

[00:12:33]>> Well, actually you need the pesos to stabilize first, right? Important.

[00:12:37]That's very important because it's one of the main reason I mean the gate where foreign investors come in, right? If your if your currency is very volatile then the returns on the portfolio of foreign investors will also be volatile on exchange rate perspective. then you need to have inflation under control and you need and and BSP needs to provide stability in in terms of their outlook for for for rates.

[00:13:03]>> When when you talk to your clients or even those uh foreign investors who are still looking at opportunities here, what are they saying? What are their sentiments right now?

[00:13:13]>> Well, actually I I recall we just talked to one foreign client in the UK and he seems very bullish on the Philippines. He looks at it from a long-term perspective.

[00:13:24]like I know that the market is down. I know that you have problems, but I know that there's value and I am not here to trade your market. I am here to invest.

[00:13:34]>> So that's something on on on the bright side. Other investors as as well that are have that mindset are running out of patience. We've been in the market for this long. We haven't seen our returns uh after being invested for a significant amount of time. So you have those investors that are quite still bullish on the market, still patient and you have those foreign investors that are running out of patience in this market.

[00:14:00]>> But what we tell them is that >> this is still an emerging market. It is a growing market.

[00:14:05]>> Uh the government is doing its best to to create a a very strong capital markets and they have done that in the past.

[00:14:13]>> To those saying telling you that they're lo losing their patience, uh what do they say? what what what kind of changes are are they looking for?

[00:14:20]>> Well, actually they're looking more than the liquidity side, >> right? Uh another thing is that they they're looking for more >> like more exposure for Philippines like more exposure for Philippines in in the global scene. And today we had an MSI rebal. Uh we saw the Philippines weight dropped again and an index removal uh from large cap to uh from standard to small cap which is Jollibee and that is not good for the market.

[00:14:49]>> It the market shrinks because of that.

[00:14:52]>> So again from from our perspective we need to somewhat anchor those stocks in the Msei in order to provide a support for for those names. M but at least we we're still seeing uh a lot of the foreign investors still looking looking at opportunities here and not uh not saying yes selectively. Now now you've said valuation damage is largely priced in. Now where exactly is the value?

[00:15:17]Well, the again the value lies in those names with strong balance sheet >> uh strong demand those companies that can pass on price price increase in this environment pricing power to be exact and the balancing strength is very important especially nowadays that interest rates is rising uh with I believe that the 10-year Philippine bond is well above the 7% level so it puts pressure on a lot of corporates that have relied on debt to grow their revenue. revenues.

[00:15:48]>> So strong balance sheet is somewhat paramount now nowadays.

[00:15:54]>> That's why a lot of a lot of them are cautious and u holding on expansion right now. Correct. So they're they're putting a hold on capex expansion just in case >> uh something bad happens to the economy in the next few.

[00:16:04]>> Well hopefully it doesn't.

[00:16:05]>> Hopefully it doesn't. Now Mark, your team laid out three themes for this market. Defensive selective cyclicals and AI diffusion. Now in this environment which theme is doing the work and which is on hold >> the defensives as you can see the ICTs the moral coast the uh the mall at least one of the mall operators like RLC they're doing well uh if you look at the numbers from the first quarter uh reports I think the malls did pretty well this this one uh you see pure gold coming in really really strong uh for first quarter so that is where the bulk of the work is is being done uh cyclical I think you have to wait until the the inflation rolls over and then we see a cypical upturn.

[00:16:49]>> The AI diffusion winners, you look at that more as a they're not a macro hedge, but more as structural. It's not going to have an impact in the next quarter. It will have an impact in the next few 12 24 months from now, assuming they implemented it already.

[00:17:06]>> Now, some analysts are calling for a test of 5,500. Now, what gets us there and what stops it?

[00:17:14]>> Yeah. Um 55 peso at 65, oil at 150. Uh and then and the BSP raises rates higher than expected.

[00:17:25]>> What stops it? Again, it's all about the peso stabilizing. inflation as I mentioned inflation needs to roll over and to provide some leeway for the BSP to uh to promote uh to have more of a dobbish approach in terms of monetary policy settings.

[00:17:41]>> But what while waiting for everything to ease out um geopolitics and also what's happening here um what what can we do what the business sector um what does uh what what can we do on the local scene here that gets us up to speed? Well, actually, if you look at what's happening, right, the MEI is a very important index.

[00:18:03]>> And the reason behind that is because it it puts Philippine companies in the radar of foreign investors. If you're out of that index means they don't know you, they don't care about you.

[00:18:16]>> And now, and now the number has shrunk from a high of 20 plus now 10. So we lost 10 stocks in the index already in the Msei standard index. What what we can do is support the local market.

[00:18:32]>> I mean be have that retail investor anchor the local market.

[00:18:37]>> Patriotism you're mentioning >> I think so right I think that's the term in a way that you support the local market. You you buy the Ayalas, the Metro banks, the SM there are good companies you stay there for a long So when you mention that, you know, to the Filipino investors sitting on the sidelines right now, what do you tell them? What are the top um uh equity stocks uh um can they uh invest in right now uh to help? Because as as you say, if nobody invests, you know, the market will uh will collapse not and smaller until we we become irrelevant to foreign investors. So again, we need to sustain our own equities market.

[00:19:18]>> What's your strategy? Well, we are promoting the Msei names, right?

[00:19:22]>> Uh to make sure that they're not taken out. Uh the likes of uh the banks, the BDOS's, the Metro banks, the BPIs, the the property developers, which you only have two Ayalan SM Prime.

[00:19:35]>> Uh now that Jollibee is taking off, it's a sad day for consumers cuz you no longer have a >> pure play consumer play in the MEI Philippines index.

[00:19:43]>> So really the the strong companies who have uh stood the test of time, who've seen crisis before and know what to do.

[00:19:49]Yes, you you you put your money there.

[00:19:52]>> I mean, if I were a betting man, right, if I can invest in the Philippine equity market, which we can I cannot since I am a I I am working at a brokerage, >> right? I would put my money right now on those quality names.

[00:20:05]>> Look for quality, have a long-term horizon. Uh this oil crisis will will improve next year. either the straight of horos is open up or closed altogether because we will find a way to move oil out of Saudi Arabia by then. So there's time to move it out.

[00:20:22]>> So this will the situation will improve and and those names that are battered right now will improve as well.

[00:20:28]>> How can we explain it better to to the viewers?

[00:20:31]>> I mean look at it from a uh when it when you talk of a stock market right there's what called trading.

[00:20:38]>> Yes. which you trade, you have a low short-term view and there's what we call investing where you take a position on the stock right based on fundamentals.

[00:20:47]This is the time to look at it.

[00:20:49]>> Look for those quality names.

[00:20:52]>> Make that bet on those quality names, right? Rest assured by the next two to three years that that number is going to be uh the price is going to be up and focus on divs, >> right? If you need that sustainable income.

[00:21:05]>> Yeah. Because right now um uh during this crisis people will say you have to be liquid.

[00:21:09]>> Yes. So the dividends will help your liquidity but again >> investing means money that you don't need right you don't invest your your child's tuition or >> Yeah. Easier said than done. Yes. Easier said than done. But then again if a money that you don't need you invest.

[00:21:26]>> But as you're saying you know patriotism you have we have to help each other out.

[00:21:29]>> Yes. I mean the local market, the local investors has to support the local market.

[00:21:35]>> And finally, Mark, as you crunch the numbers and analyze the market environment today, where and how do you follow the money?

[00:21:41]>> First, follow the liquidity.

[00:21:43]>> Right? Look for stocks that are uh that are less sold by the foreign or being bought by the foreign.

[00:21:50]>> Uh follow pricing power in this environment with a rising inflation. Uh companies that have strong pricing power will do well in this environment. On that note, thank you very much uh Mark for joining us this morning, your insights and your advice and hopefully those watching those uh patriotic investors will start investing uh in equities that you've mentioned to help the market uh so so as it doesn't slow down and uh you know get us where we are. Correct. Thank you.

[00:22:16]>> Thank you.

[00:22:18]>> And that's all for today. I'm Robert S.

[00:22:20]Every day will help you make sense of the financial choices and economic forces that shape everyday life. Thank you for watching. Keep it here on the Billy News channel and always follow the money.