Stock investors will focus on the Philippine peso’s movement against the dollar and the latest remittance report this week for clues on whether to buy bargains in a bearish market.

“The local market remains bearishly biased, as seen in its direction and value turnover. The market is still in a downtrend as corruption issues and the peso’s weakening continue to weigh. Trading remains tepid, implying weak investor confidence,” said Japhet Tantiangco, research manager at Philstocks Financial.

As of last week’s close, the local market was undervalued with a price-to-earnings ratio of 10.1 times, below its five-year historical average of 17.3 times and the regional average of 18.6 times. The Philippine Stock Exchange Index (PSEi) still has the lowest P/E ratio among its peers.

While there are opportunities for bargain hunting, the local bourse may still move with a downward bias. Bearish sentiment is expected to linger, fueled by concerns over the Philippines’ corruption issues and their impact on the economic growth outlook, Tantiangco said.

“Investors are also expected to monitor the movement of the local currency against the U.S. dollar. A further depreciation for the peso is expected to drag the local bourse,” he added. Revived global economic worries, as the U.S. imposes new tariffs against China, are also expected to aggravate market pessimism.

Online brokerage 2TradeAsia.com said investors are also looking toward the next Federal Reserve meeting on Oct. 28-29, where a 25-basis-point trim to 3.75% to 4% “appears extremely likely.”

However, the brokerage noted that follow-through data points from the U.S. government shutdown could introduce added volatility over the next few weeks. This could be exacerbated by regional pressures amid recent sharp gradients in currencies.

For the short term, 2TradeAsia.com said Maynilad Water Services Inc.'s initial public offering (the largest since 2021) may inject fresh liquidity and underscore utility sector resilience in an otherwise lethargic era for local equities.

“Brace for some headline volatility come pricing (Oct. 20) as the mere size of the issue is material to market volume,” the brokerage added.

For stock picks, Unicapital Securities Inc. has a Buy rating for Puregold Price Club Inc., citing a potential upside of around 22 percent as the company’s first-half 2025 results remain well on track with its estimates.

“What we like about PGOLD is its ability to maintain stable margins and their resilient consumer demand. The company’s strategy of implementing aggressive promos while maintaining scale has clearly resonated with consumers, allowing it to protect its market share while sustaining profitability,” said Jeri R. Alfonso, a research analyst at Unicapital Securities.

She also noted that as the inflation rate remains within target, “we believe this favorable environment will likely translate to stronger household spending, particularly as we move into the holiday season.”