Asia is set to remain a primary destination for investors seeking growth and diversification in the first half of 2026 as domestic demand and structural reforms offset global economic volatility, according to Manulife Investment Management.
The firm’s latest market outlook suggests that the region’s policy flexibility and resilient internal markets continue to support long-term investment appeal despite persistent geopolitical risks and fiscal hurdles. Manulife maintains a constructive view on Asian assets, noting that equities outside of Japan performed strongly in 2025 due to a weaker US dollar and improved financial conditions.
Manulife head of multi-asset solutions in Asia Luke Browne said the firm enters 2026 with a modest overweight position in equities relative to fixed income. This stance reflects resilient corporate earnings and supportive government spending, though Browne cautioned that asset allocation must remain dynamic.
“At the same time, elevated valuations, inflation, geopolitics, the AI trade debate, energy transition and a new Fed composition mean asset allocation decisions need to remain selective,” Browne said.
He said Asian assets provide essential diversification because their growth drivers are increasingly independent of developed market cycles.
In the fixed income sector, Manulife head of Asian fixed income Murray Collis said positive momentum from early 2026 is expected to persist.
Collis pointed to a lower US interest rate environment and a shift away from US dollar dominance as factors creating attractive opportunities within the Asian high-yield universe.
For the Philippines, Collis expects economic growth to rebound by the second half of 2026. This recovery is anticipated to be fueled by government spending, a robust labor market and steady remittances from overseas workers.
However, the outlook for the Philippines includes a bias for yields to rise in the short term.
Collis said risks such as US tariff policies and weather-related disruptions could impact the market. He suggested that further monetary easing by the central bank is unlikely unless growth falls below 5 percent, as policymakers move toward the end of their easing cycle.
Collis said the Bangko Sentral ng Pilipinas would focus on balancing currency stability and inflation control throughout the year. Within the broader ASEAN region, markets like the Philippines continue to benefit from infrastructure investment and the ongoing diversification of global supply chains.
