For the first half of 2026, the outlook for Philippine equities remains defensive. Metrobank forecasts gross domestic product to grow 5.4% this year. Although, investors are expected to look past this and focus on persistent softness in corporate earnings.

The Bangko Sentral ng Pilipinas (BSP) to cut the key policy rate to 4%, according to Metrobank forecasts, likely causing the yield curve to steepen. Monetary authorities’ easing bias is tempered by headwinds such as currency weakness and price pressure. Metrobank estimates the peso to depreciate to the 60 per dollar level.

In this environment, a defensive stance favors high-yielding stocks such as real estate investment trusts and utilities alongside companies with established earnings. Banks face a more measured outlook due to tapering loan growth and muted capital expenditures, shifting opportunities toward selective consumer lending pockets. The property sector remains a conviction pick supported by an improving fundamental outlook and attractive valuations.