PANIC OR OPPORTUNITY?

The share prices of the Philippines’ two largest property developers — Ayala Land Inc. (ALI) and SM Prime Holdings Inc. (SMPH) — have now fallen below their pandemic-era lows. The broader market in the Philippines isn’t far behind.

You can interpret this in several ways:

1.⁠ ⁠Pandemic-level panic

When COVID-19 first hit, global markets collapsed almost overnight. Investor psychology shifted from “growth forever” to “what if everything stops.” Fast-forward to today: the Philippine real-estate equities are trading as though we’re back in that moment of fear.

2.⁠ ⁠Contrarian value opportunity

For the optimists: if you believe in the long-term strength of real‐estate in the Philippines, this could be a rare buying window.

Ayala Land’s price-to-book (P/B) ratio is below 1.0×, meaning the market is valuing the company at less than its net asset value. Ayala’s P/E (price-to-earnings) sits around ~10×.

SM Prime’s P/B ratio is about 1.4× and its P/E ratio ~12–14×.

These valuations are at the “discounted” end of their respective historical ranges — meaning: pay less today for the same company. “Buy when others are fearful.”

3.⁠ ⁠Bubble bursting signal

For the cautious: the fall might not be a buy-signal but an early warning. In the past decade, much of the real-estate price escalation was driven by investor speculation, not end-users. Now that flipping has cooled and interest rates are elevated, that speculative support is fading. Without that engine, valuations may continue downward.

Take Your Pick.

Is this capitulation or the beginning of a new cycle?

Either way, the market has spoken — Philippine real estate equities are back to pandemic panic levels.