The shadow of U.S. tariffs looms over the Philippines stock market, with the discount of regional stock indexes hitting the largest margin in 16 years.

The Philippines stock market has reached its largest discount level since 2009 compared to major stock markets in the Asia region. This is due to the uncertainty surrounding the tariff policies of the Trump administration, which has heightened concerns in the market for the Philippines economy that relies on exports. With net selling from foreign investors, the Philippine Stock Exchange PSEi index has dropped by about 7% since its peak in May, making it the worst performing major stock index in Asia for the same period. The expected price-earnings ratio for this index is around 9 times, while the MSCI Asia Pacific index has an expected price-earnings ratio of 16 times. The valuation discount phenomenon may continue to exist, as concerns grow in Washington over the possible imposition of tariffs on semiconductor and electronic products from the Philippines.