Philippine equities remain “undervalued” or below their peers in Southeast Asia, according to a latest paper from Maybank Investment Banking Group (IBG).
However, investor sentiment somehow remains affected by the current political climate, especially with the public outrage over the corruption being uncovered in ghost or substandard flood projects.
According to Maybank IBG, Philippine equities are currently trading at 9 times (x) price-to-earnings ratio (PER) based on estimates for fiscal year 2026 (FY26E).
“PH Equity market has remained cheap, trading at only 9x FY26E PER and below ASEAN peers; PH is also one of the cheapest markets in Asia,” according to Maybank IBG.
“We believe any weakness brought about by concerns over the corruption allegations would be a good opportunity to pick up the market – especially with fundamentals remaining intact,” it added.
Maybank IBG noted that there has still been no major conviction from the flood control project scams.
“Overall, investigations are still ongoing and still gathering evidence. Several officials in Congress, Senate and various departments have already been cited but there was no major convictions or verdicts yet,” it said.
Maybank IBG, however, believes that economic growth, in terms of gross domestic product (GDP), remains robust while there are listed firms that continue to post double-digit growth earnings.
“GDP growth remains robust at above 5 percent, driven by domestic consumption. Corporates are still expecting double digit earnings growth especially for consumer and property stocks,” it added.
The investment bank also maintained its “Magic 8” picks for the Philippine stock market, namely: International Container Terminal Services Inc. (ICT), Ayala Land Inc. (ALI); Jollibee Food Corporation (JFC); Universal Robina Corporation (URC); SM Prime Holdings Inc. (SMPJ), SM Investments (SM); Cebu Air Inc. (CEB), and BDO Unibank Inc. (BDO).