50% Fixed Income — 50% Equity

We maintained a balanced portfolio positioning as markets continue to navigate elevated inflation, geopolitical uncertainty, and evolving monetary policy expectations. Local asset allocation remains unchanged at 52.5% Fixed Income and 47.5% Equities.

For Fixed Income, Philippine government bond yields remained elevated, with the yield curve continuing to flatten as investors priced in persistent inflation risks, expectations of further BSP policy tightening, and uncertainty surrounding developments in the Middle East. We maintained a near-neutral duration position while selectively deploying funds during market corrections to capture attractive yields, with a preference for short- to medium-term securities over longer-dated bonds.

For Equities, we maintain a neutral stance despite continued market volatility driven by inflation concerns, currency weakness, and geopolitical risks. While foreign investors remained net sellers, domestic earnings expectations continue to provide support, with investors rotating toward companies offering resilient earnings visibility. Portfolio positioning remains focused on defensive sectors such as utilities and selected infrastructure-related names, while maintaining a cautious view on more cyclical sectors including banks and real estate. We continue to monitor macroeconomic developments and market valuations for opportunities to increase exposure.