A smooth election and political transition could help revive foreign investor interest in the Philippines and improve market sentiment, BDO Capital and Investment Corp. President Eduardo V. Francisco said.

He said foreign portfolio funds have been flowing into the Philippines more slowly than in previous years, even as several local companies continue to post strong earnings. For markets that often look beyond individual corporate results, he said the broader political backdrop can still shape how attractive Philippine assets appear relative to other opportunities worldwide.

“I think we need the major — I guess — news eruption for people to be buoyant and positive. I am not sure what that will be because for me, the big catalyst that can move the needle is — you know — smooth elections,” Mr. Francisco said in a Money Talks with Cathy Yang interview on Tuesday.

He said a favorable political transition could encourage foreign investors and business leaders to increase their exposure to Philippine assets.

“The index can easily double back or it can go back to 7,000, 8,000 in a matter of weeks with a good new president,” Mr. Francisco said.

He added that foreign portfolio managers are paying less attention to the Philippine market despite the performance of some local companies.

“Despite these gems of these outstanding Philippine companies, they’re not investing anymore or they’re reducing their exposure and all this political noise is not helping us because instead of wanting to invest here, it’s giving them an excuse to stay out,” he said.

He said the Philippines is competing with investment opportunities worldwide and has lost some of its appeal as economic growth has slowed.

Mr. Francisco said recent gross domestic product (GDP) figures have raised questions among investors about the durability of the country’s consumption-led growth story.

The Philippine economy grew by 2.3% in the second quarter from a year earlier, slower than the 5.4% expansion in the same quarter last year and the 2.8% growth in the first quarter.

Mr. Francisco said multinational companies and retailers are seeing consumers become more cautious, with some buyers shifting from smaller product formats to cheaper brands.

He said consumers are also saving more, which he viewed as a sign of weaker optimism about the economic outlook.

Mr. Francisco said stronger Christmas spending could support economic growth, corporate earnings, and stock valuations toward the end of the year.

He also said continued political disputes could give foreign investors another reason to remain on the sidelines instead of focusing on developments in Philippine businesses and the broader economy.

Mr. Francisco warned that weak stock market valuations could eventually prompt some listed companies to consider delisting.

He said some listed companies have been buying back shares and reducing their public float without seeing sufficient increases in their stock prices, which could leave them frustrated with remaining listed.

“The capital markets are important, but we’re being marginalized,” Mr. Francisco said.

He said reversing the trend would require closer coordination among the government, regulators, and the private sector, including greater efforts to explain the country’s investment prospects to international investors. — Alexandria Grace C. Magno