As the holiday merry-making draws to a close, it is not surprising that we embrace 2026 still feeling the pinch of the “floodgate scandal”—a continuing telenovela with unfolding episodes that keep twisting and thickening the plot.

If there’s a silver lining to all this negativity, it is that the country is approaching a “capitulation zone.” It’s not that we’re giving up or becoming callous, but we have reached a point where we’re no longer shocked by the newbie actors enmeshed with the major dramatis personae.

From the sidelines comes the vehement opposition of House Senior Deputy Minority Leader and Caloocan 2nd District Representative Edgar “Egay” Erice to the proposed ₱6.7 trillion 2026 General Appropriations Act (GAA). As I write this, the budget has been ratified by both houses of Congress and is expected to be signed by the President next week.

Despite assurances from the bicameral committee that this year’s budget has been carefully combed and is sans insertions, the congressman insists the GAA contains ₱243 billion worth of unprogrammed appropriations. Already, the alarm bells have been rung, as the good congressman plans to elevate the issue to the Supreme Court.

For us journalists, there is no let-up in coverage. Slack is out; we have to be more vigilant, as this impasse may lead to a re-enacted budget. The situation is starting to reek, and it speaks volumes about the state of clarity and good governance.

Yes, Virginia, the lingering concerns hounding good governance, policy execution, and institutional credibility are among the domestic “key headwinds” for this new year.

I fully subscribe to the assessment of one of my favorite market gurus, Andro Leo “Andoy” Beltran of First Metro Securities Brokerage Corp., who notes that “fragile investor confidence” remains a primary concern—one he believes will “continue to cap valuation re-ratings and delay foreign inflows.”

For Andoy, the vulnerability of the peso to global rate differentials and shifting capital flows—particularly as the U.S. Federal Reserve’s monetary policy normalization remains uneven—are among the external pressures that could influence the financial markets in particular and the economy in general.

The apprehension and hesitation shown by investors is absolutely understandable; this is the market reality. As Andoy puts it: Investor confidence has been “tested by a confluence of natural calamities, governance concerns, and peso weakness driven by the narrower interest rate gap between the BSP (Bangko Sentral ng Pilipinas) and the US Fed. These factors have weighed heavily on sentiment and kept many investors on the sidelines.”

And the tailwinds? The anticipation of continued monetary easing by the BSP, coupled with moderating inflation and compelling valuations. These factors will support consumption, credit growth, and equity valuations. At the close of 2025, Philippine equities were trading at historically undemanding multiples, offering a margin of safety for long-term investors.

But as we journey through 2026, will the headwinds dominate the tailwinds? No one can predict the future. However, history tells us that when sentiment feels this grim, long-term opportunities start to emerge.

That’s right, Virginia: uncertainty and risk aversion are high, but this is not the time to veer away and stay on the sidelines.

As we look ahead at a financial market peppered with everything in between, the view of FirstMetroSec is to approach the new year with the clarity that “much of the bad news is already priced in.”

Certainly, valuations remain compressed, but low valuations do not equate to a broken market. Rather, they suggest a market waiting for clarity and confidence. Markets do not reward certainty; they reward preparation. By balancing stability on one side and growth on the other, investors can take advantage of today’s depressed valuations.

Yes, Virginia, instead of being weighed down by uncertainty and doubt, let’s embrace 2026 cautiously but with resolve, tenacity, and an aspiration for better things. Take the aspiration of Weng, an entrepreneur: “This 2026, I am focused on becoming the best version of myself, both at work and at home. I plan to take big, bold steps to grow my business by hiring more staff and expanding my team, while ensuring my health and family always come first. Success doesn’t mean much if I’m not healthy enough to enjoy it or present enough to share it with the people I love.”

That is what the New Year is—hope following the remembrance of the passing year.