Why Macro Comes First
A low P/E can vanish if inflation spikes or the peso weakens. In the Philippines, macro drives earnings for banks, property, utilities, and consumers. Start with BSP’s official data (https://www.bsp.gov.ph/) on inflation and policy rates. Macro is not background noise; it is the operating environment for every cash flow forecast.
Inflation and Real Rates
When inflation falls, real rates rise if nominal rates stay high. That can hurt borrowers and property demand. When BSP cuts, banks may see margin pressure but loan demand improves. Value investors should model both scenarios. A company that needs rate cuts to survive is not a value stock; it is a refinancing risk.
Peso and Foreign Flows
A weaker peso can help exporters and OFW remittances but hurt importers. Foreign portfolio flows often follow currency stability. PSE market data (https://www.pse.com.ph/) shows how foreign buying shifts across sectors. A sudden outflow can depress prices even when fundamentals are intact, creating opportunities for patient buyers.
GDP, Remittances, and Infrastructure
Philippine GDP growth depends on consumption, remittances, and government infrastructure. The Marcos administration’s infrastructure program and CREATE MORE incentives can support construction, utilities, and consumer names. But execution risk remains. Value investors should track budget disbursement, not just announcements.
A Macro Checklist for Stock Selection
- Is inflation trending toward the BSP target?
- Are policy rates falling or paused?
- Is the peso stable or volatile?
- Are remittances growing?
- Is fiscal spending reaching projects?
- Are foreign flows returning to PSE?
