PH stock, peso rally a ‘reset, not a rerating’ amid policy uncertainty

Insider Spotlight

• Jonathan Ravelas said the recent rise in Philippine stocks and the peso reflects a market reset rather than a sustained rerating
• Investors are rapidly removing geopolitical risk premiums, particularly in local bonds, amid easing global tensions
• Upcoming policy decisions from the BOJ, Fed, and BSP could determine whether the rally gains stronger footing
  
  
  

Philippine financial markets climbed on Tuesday, with the benchmark Philippine Stock Exchange index (PSEi) and the peso advancing as investors responded to easing geopolitical concerns and improving risk sentiment across the region.

However, market analyst Jonathan Ravelas cautioned that the latest gains should be viewed as a reset rather than the start of a prolonged bull run.

“I see the current move as a reset, not a full-blown rerating yet. Markets are quickly pricing out the war-risk premium—especially in PH bonds—but we’re not out of the woods,” he said.

The comments come as investors reassess regional assets following signs of easing tensions in the Middle East, prompting renewed interest in ASEAN markets and helping support local equities and currencies.

Why it matters

While risk appetite has improved, Ravelas noted that several domestic challenges remain unresolved

“Inflation remains sticky, the peso is still vulnerable, and with import season underway, price and FX pressures will linger,” he said.

Jonathan Ravelas

The veteran market watcher remains cautious amid the rebound in local financial markets.

He added that lingering issues such as the flood control scandal continue to weigh on investor sentiment, limiting the scope for a broader market rerating.

Despite those concerns, Ravelas sees opportunities in sectors that have lagged during recent market weakness.

“Near term, there’s a tactical opportunity—flows are turning back into ASEAN, and oversold sectors like banks, property, and consumers can catch up. But conviction will depend on what happens next,” he said.

The big picture

Investors are entering a critical week marked by major policy decisions and geopolitical developments that could influence market direction.

“We have a critical week ahead with the BOJ, Fed, BSP, and the US-Iran peace (deal) signing, and the BSP could still deliver an insurance hike,” Ravelas said.

As a result, he urged investors to remain selective rather than aggressively chase the rally.

“So the message is simple: respect the bounce, but stay nimble—buy on weakness, don’t chase strength until the macro and policy signals become clearer,” he said.

Ravelas likened the market rebound to a patient recovering from illness, warning that the improvement in sentiment does not necessarily mean underlying risks have disappeared.

“It could be more of a technical rebound. Imagine a patient given meds for COVID. Being discharged does not mean you are well prior to the [infection]. There are consequences. But market seems to think everything will be the same before Feb. 28, 2026,” he said. —Daxim L. Lucas| Ed: Corrie S. Narisma