Equities market is shifting into a defensive crouch as investors pivot from a broad-based rally toward a granular assessment of corporate earnings and macroeconomic stability.

After a volatile start to the year, market participants are scouring fourth-quarter results, foreign direct investment (FDI) data, and the Philippine peso’s performance to determine if the local bourse can sustain its recent momentum.

The benchmark Philippine Stock Exchange index (PSEi) found support last week following favorable inflation prints, yet the momentum appears to be tapering.

“The local market bounced back last week on satisfactory inflation figures and hopes of economic growth recovery. Trading has weakened, however, implying that many investors are turning more cautious,” said Japhet Tantiangco, research manager at Philstocks Financial. Tantiangco noted that the focus for the current week will likely remain on full-year 2025 corporate earnings, which will act as litmus test for the economy’s underlying health.

Currency dynamics remain a central theme for equity valuations. Analysts suggested that any sustained appreciation of the peso against the United States (US) dollar could provide much-needed tailwind for the market, potentially attracting foreign flows that have been hesitant amid global interest rate uncertainty.

The macroeconomic backdrop remains complicated by divergence in monetary expectations. While Philippine inflation showed slight uptick in January, 2TradeAsia.com noted that subdued growth in the final quarter of 2025 has restricted the Bangko Sentral ng Pilipinas’s (BSP) room for maneuver. This domestic tightening of “breathing room” stands in contrast to more hawkish tone from the US Federal Reserve.

However, the brokerage emphasized that the current environment represents a maturing easing cycle rather than total reversal of policy direction.

In terms of strategy, 2TradeAsia.com advised investors to adopt defensive posture, favoring undervalued cyclicals and resilient safe havens. The firm cautioned against misinterpreting the current consolidation phase as the start of a bear market, instead suggesting that investors seek entry points in value plays.

Individual stock stories are providing specific pockets of opportunity as Abacus Securities Corp. is urging investors to accumulate shares of Jollibee Foods Corp. (JFC) ahead of what is expected to be a robust fourth-quarter report.

While the fast-food giant faces potential removal from the MSCI index during this week’s recomposition, Abacus views any resulting price dip as a buying opportunity. The brokerage remains optimistic about JFC’s 2026 outlook, citing improved domestic consumer spending and a recovery in its Chinese operations.

Further bolstering the case for JFC is the proposed corporate restructuring. Jeri Alfonso, a research analyst at Unicapital Securities, noted that the planned spin-off of JFC’s international business could unlock value by leaving the high-growth domestic operations listed on the PSE.

Beyond the fast-food sector, Puregold Price Club Inc. has emerged as a preferred pick within the consumer space. Trading at 9.1 times price-to-earnings—a 38 percent discount to the sector average—the retailer is seen as a “robust” earnings play.

Alfonso noted that Puregold's record-high earnings could also sustain its practice of issuing special dividends, offering a yield cushion for investors navigating the broader market's cautious turn.