Listed firms rise above the challenges

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How Philippine companies weathered a tumultuous first half

MANILA, Philippines — Resiliency amid adversity. That has been the defining story for Philippine-listed companies in the first half.

The year began on a hopeful note, with the first quarter offering  signs of a sustained recovery.  But the outbreak of war in the Middle East in late February quicky dampened that  optimism, derailing growth aspirations and forcing many companies to reassess their expansion plans for the rest of the year.

While some firms fared better than others during the tumultuous first half, most, if not all, managed to live another day, bearing the battle scars as they enter the second half of 2026.

“Overall, listed companies showed remarkable resilience in the first half,” economist Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said.

Ravelas said that while the Middle East conflict created volatility in oil prices, freight costs and investor sentiment, the impact was largely cushioned by strong domestic consumption, easing inflation, lower interest rates and continued infrastructure spending.

He said consumer, banking, property and select infrastructure-related companies generally held up well, while firms with direct exposure to fuel and logistics costs faced greater pressure.

“The impact was more indirect than direct. The primary transmission channel was higher energy prices and increased uncertainty rather than a significant disruption to revenues,” Ravelas said.

Among listed firms, Ravelas said conglomerates were generally better positioned because their diversified business portfolios allowed gains in one segment to offset weaknesses in another.

Meanwhile, smaller standalone firms, especially those with thinner margins and greater dependence on imported fuel  were more vulnerable to cost pressures.

“In short, the crisis was felt across the board, but diversification helped soften the blow for the larger groups,” he said.

With second quarter/first half financial results of companies still unavailable, Chinabank Securities believes that most companies likely experienced softer demand during the period as consumers and businesses became more cautious with spending and prioritized essential purchases.

It said higher energy prices resulting from supply disruptions likely weighed on margins through increased transportation, freight and raw material costs.

“We think the impact of the Middle East crisis on revenues and profitability was felt across various sectors and companies, although the magnitude of the impact varied depending on each firm’s exposure to higher energy and input costs, as well as the resilience of demand for its products and services,” Chinabank Securities said.

Larger companies with greater scale, stronger balance sheets and raw material cost lock-in arrangements, however, were generally seen as better positioned to mitigate the impact of rising costs and supply chain disruptions.

Jarrod Leighton Tin, equity research analyst at DragonFi Securities, explained that the crisis rippled  through the economy via three key channels:  higher fuel and power costs, the peso’s depreciation beyond 61 to the dollar, and demand destruction as inflation spiked to 7.2 percent in April, its highest in three years, forcing the Bangko Sentral ng Pilipinas to resume raising interest rates.

But for Tin, whether conglomerates fared better is best seen by comparing a parent against its own separately listed units, citing the Ayala group as an example.

“Within the same family, the crisis produced completely different outcomes. Ayala Land was among the 10 worst performers of the entire market this semester, sliding on capital preservation concerns after deferring residential launches – property carried the full weight of higher rates, costlier construction inputs and squeezed household budgets,” Tin said.

“BPI, by contrast, held up far better: banks were natural beneficiaries of the higher-for-longer rate environment, with margins supported even as loan growth moderated and BPI sustained its dividend through the volatility,” he said.

Tin said Globe Telecom, for its part, sat in the middle as a defensive, utility-like business, although the weak peso inflated its dollar-linked capex and debt costs.

Parent firm Ayala Corp., therefore, traded like a blended portfolio, he said, declining less than its property arm but could not match its banking arm, which is precisely the shock-absorption that conglomerate structures provide.

“The impact was felt across all segments – no one was fully immune, and even holding company sub-indices led declines on the worst days of the conflict,” Tin said.

“But diversified groups had internal hedges that standalone firms lacked. A standalone property developer or consumer play had nowhere to hide; a conglomerate could lean on its bank, its utility, or its dollar-earning unit,” he added.

You win some, you lose some

Aside from earnings, most companies’ share prices also took a beating as the Middle East crisis intensified. Then again, there were those who remained steady, even thriving at some point.

Mark Alan Canizares, head of equities at Sun Life Investment Management and Trust Corp., said listed firms reacted swiftly to the Middle East crisis, with the index seeing lows similar to 2022 and 2025, but started showing signs of meaningful recovery mid-June as the path to resolution started to crystallize.

Canizares said banking giant BDO of the Sy family, for example, saw its lowest price-to-book valuations in the ASEAN region since the pandemic, but has managed to preserve its five-year return.

But it was ICTSI of tycoon Enrique Razon Jr. that emerged as the biggest standout and  undisputed winner in the first half, with its shares climbing by 57 percent to P890 apiece as of end-June, as strong earnings momentum, global diversification and dollar-denominated revenues amid a record-low peso kept investors locked in.

Canizares said exposure to the power and water sectors also did well through the first semester due to their defensive qualities, with conglomerate Aboitiz Equity Ventures and Maynilad serving as standouts.

“We likewise saw resiliency shine through for consumer companies Monde Nissin and Puregold due to their consumer staple offerings,” Canizares said.

Monde Nissin was among the top price performers, rallying by 24.3 percent in the first semester. Chinabank Securities said the company’s staples-heavy product portfolio, which includes instant noodles and biscuits, is expected to see resilient demand, while raw material cost lock-in arrangements should provide protection against margin pressures.

At the index level, Tin said the market proved surprisingly resilient, with the benchmark Philippine Stock Exchange index (PSEi) closing the first half at 6,037.17, down by just 0.26 percent from end-2025 level despite  having fallen to as low as 5,860  during the height of the US-Iran conflict.

“Beneath the flat headline, however, was one of the most bifurcated markets we’ve seen in years. Notably, the biggest winners were driven by company-specific stories powerful enough to overpower the geopolitical gloom,” he said.

Tin said a standout was Dominion Holdings, which skyrocketed by 438 percent to end the first half at P7.48 per share.

He attributed the surge to aggressive accumulation on expectations that the company would become the backdoor listing vehicle for the Sy family’s mining interests and the revival of the Tampakan copper-gold project with the Consunji group, with tycoon Isidro Consunji’s appointment as chairman in March adding fuel.

PhilWeb also surged by 126 percent to P14 per share on its return to profitability and renewed strategic-investor interest in digital gaming.

Synergy Grid for its part rose by 78 percent after the regulator approved the recovery of past transmission under-collections, while Robinsons Retail jumped by 43 percent to P47.20 on privatization moves.

Share prices weaken in H1

Still, most index names registered share price declines in the first half.

On the losing side, Tin said crisis-sensitive and domestically geared names dominated, with Ayala Land the most significant blue-chip casualty, sliding into the market’s bottom 10 after it deferred select residential projects to preserve capital.

He said Converge tumbled on a double whammy of potential PSEi deletion and a heavy capex program losing appeal in a high-rate environment, while Bloomberry declined  as high inflation crowded out discretionary and gaming spend.

Tin said DigiPlus was able to endure arguably the most painful de-rating among liquid stocks as analysts slashed  forecasts for its consumer-dependent gaming business.

“The pattern of the first half: dollar earners and special-situation plays thrived, while consumer-facing, leveraged, peso-cost businesses absorbed the brunt of the oil shock,” he said.

Overall, Ravelas said the strongest performers were generally those linked to domestic demand, banking, infrastructure and selected power and energy plays.

He said large banks benefited from sustained loan growth and healthy balance sheets, while several power and utility companies gained from the renewed focus on energy security amid geopolitical tensions.

Also seen was investor preference for quality blue chips within major conglomerates, given their earnings visibility and ability to navigate external shocks better than smaller firms.

Ravelas said the market’s preference during the first half was clearly toward companies with strong cash flows, pricing power and resilient business models.

“The key takeaway from the first half is that the Philippine corporate sector proved more resilient than many expected. The Middle East crisis created headwinds, but it was not severe enough to derail earnings growth. Companies with diversification, strong balance sheets and exposure to the domestic economy were the clear winners,” he said.

“Beneath the flat headline, however, was one of the most bifurcated markets we’ve seen in years. Notably, the biggest winners were driven by company-specific stories powerful enough to overpower the geopolitical gloom.”