BANKING and consumer stocks are expected to do well in 2025 amid lower interest rates and faster economic growth.
“Banks should continue to do well,” April Lynn Lee-Tan, chief equity strategist at COL Financial Group, Inc., said in a Viber message. “Lower interest rates plus faster gross domestic product (GDP) growth will lead to higher demand for loans. Buy on pullbacks.”
Investors should consider banking companies like BDO Unibank, Inc., Bank of the Philippines Islands and Metropolitan Bank & Trust Co., she added.
Ms. Tan said consumer companies like Monde Nissin Corp. and Jollibee Foods Corp. also stand to benefit this year. “Consumer stocks should benefit from lower inflation, faster economic growth and very attractive valuations.”
Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. has said the central bank would likely keep slashing rates in “baby steps” as it carefully monitors risks to inflation. He added that 100 basis points (bps) worth of rate cuts for 2025 might be “too much.”
The BSP lowered benchmark rates by 75 bps in 2024.
The Philippine Stock Exchange Index ended 2024 at 6,528.79, up 1.2% or 78.75 points from 2023, the first yearly advance since 2019.
“We would be on the lookout for bargains across sectors especially in banking, consumer, conglomerate and real estate,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
Telecommunications and consumer companies could also outperform this year, Alfred Benjamin R. Garcia, research head at AP Securities, Inc., said in a Viber message.
The property sector might also start showing signs of recovery. “But that might happen later in the year.”
Leechiu Property Consultants earlier said vacated office spaces rose 65% in 2024 to 690,000 square meters (sqm) from 418,000 sqm last year, mainly due to the total ban on Philippine offshore gaming operators.
“The midterm elections could benefit businesses that have higher sales, earnings and overall valuations as seen for many years,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
The local bourse raised P82.37 billion in capital last year, 42% lower than in 2023. The service index had the fastest growth among sectoral indices at 29.7%. — Revin Mikhael D. Ochave
