First Gen: P35-per-share bid rejected

From AB Capital's The Opening Bell: Three Moves

Event

Cash remittances rose 1.7% YoY to US$3.04 billion in June, the slowest growth since February 2022, while 1H26 inflows still increased 2.4% to US$17.15 billion. We do not view this as a collapse, since the monthly level reached a six-month high and growth remains positive.

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We think the more important signal is that remittances are losing momentum just as household consumption has weakened. Even if peso depreciation cushions the local-currency value of overseas Filipino worker (OFW) income, 6%+ inflation erodes real purchasing power, so the consumption support from remittances is becoming less powerful than in prior years.

Catalyst

For the external account, slower remittances reduce the secondary-income buffer against the wider oil import bill. If 2026 growth were flat rather than the Bangko Sentral ng Pilipinas' (BSP) 2.7% forecast, annual inflows would be roughly US$1 billion lower, adding modest pressure to the current account and US$/Php, especially if oil stays elevated.

Action

In our view, the data reinforce a selective consumer stance. PGOLD remains relatively resilient because spending should stay concentrated on staples, while discretionary names face greater sensitivity if real remittance growth weakens further. For the peso, remittances remain a stabilizer, but the buffer is thinning alongside higher energy-related dollar demand.

Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.