70% Fixed Income — 30% Equity

We maintained a balanced portfolio positioning in April as domestic markets navigated heightened volatility driven by rising inflation, policy tightening, and external geopolitical developments. Local asset allocation remains unchanged at 52.5% Fixed Income and 47.5% Equities.

For Fixed Income, local yields showed a mixed movement across the curve, with declines at the short end and upward pressure across medium-term tenors. Early-month optimism, supported by easing geopolitical tensions and increased investor interest following the Philippines’ inclusion in a JPMorgan bond index effective January 2027, led to buying activity particularly in shorter-dated securities. However, sentiment turned more cautious toward month-end as inflation accelerated sharply and the BSP raised policy rates by 25 basis points to 4.50%, accompanied by a more hawkish forward guidance. Portfolio positioning remains slightly underweight duration versus benchmark, with a continued bias toward shorter-dated securities to manage volatility and capture carry amid evolving rate expectations.

For Equities, we maintain a neutral stance as market sentiment remains fragile amid persistent foreign outflows, Peso weakness, and a more challenging macro backdrop. The market declined during the month, with performance largely driven by risk-off conditions and earnings concerns. Portfolio positioning remains selective, with a preference for defensive and dividend-oriented names in sectors such as utilities, telecommunications, and consumer staples, while reducing exposure to more cyclical and beta-driven segments. We continue to monitor earnings developments and macro signals for clearer indications of a sustained market recovery.