What are Blue Chip stocks in the Philippines?

James Ryan Jonas

You’ve probably heard it before: Blue Chip stocks are good investments because they are safe and with high potential for profits. But what are blue chips in the first place, why are they called such, and what stocks are considered “blue chips” in the context of the Philippine stock market?

What are Blue Chip stocks?

Simply speaking, “blue chips” in the stock market refer to companies that are well-known, large, and with a history of sound financial performance. That definition still sounds a bit abstract, though, so we’re providing below more detailed characteristics of blue chip companies.

The PinoyMoneyTalk definition of Blue Chip stocks are those companies that are:

  • typically large, as measured by asset size or market capitalization;
  • generally the market leader or one of the top three companies in its industry;
  • with history of stable and reliable financial growth;
  • with reputation of quality earnings; and
  • relatively low-risk, with reduced stock price fluctuations and volatility

The term “Blue Chips” is believed to have originated from the game of poker, where blue ones are the most expensive in the simplest set of white, red, and blue poker chips. Recently, however, blue chips are no longer the most expensive, with the addition of other colored chips — sometimes white or brown or black — that carry a higher price value than their blue counterparts.

Blue Chip Stocks in the Philippines

Strictly speaking, there is no clear and fixed set of “Blue Chip” companies in the Philippine Stock Exchange (PSE). But following our definition above, we can identify possible “blue chip companies” by looking at two distinct categorization:

  1. Those comprising the PSE index or PSEi; or
  2. Those with the higher market capitalization

If we use these categories, the blue chip companies in the Philippines are the following.

1. Blue Chip companies belonging to the PSEi

If we’re looking for blue chip companies that are typically large, highly liquid, and with reliable earnings and sound financial performance, we could refer to the 30-company PSE index generally considered to be the barometer of Philippine business and economic conditions.

As of 2018, the PSEi is composed of the following stocks, which some might say are their “blue chip” stocks.

PSE Index (PSEi) StocksCompanyStock Code
1Ayala CorporationAC
2Aboitiz Equity VenturesAEV
3Alliance Global Group, Inc.AGI
4Ayala Land Inc.ALI
5Aboitiz PowerAP
6Banco de Oro Unibank, Inc.BDO
7Bank of the Philippine IslandsBPI
8Bloomberry Resorts Corp.BLOOM
9DMCI HoldingsDMC
10First Gen CorporationFGEN
11Globe TelecomGLO
12GT Capital HoldingsGTCAP
13International Container Terminal Services Inc.ICT
14Jollibee Foods CorporationJFC
15JG Summit HoldingsJGS
16LT GroupLTG
17Metropolitan Bank and Trust CompanyMBT
18Megaworld CorporationMEG
19Manila Electric CompanyMER
20Metro Pacific Investments CorporationMPI
21Puregold Price Club, Inc.PGOLD
22Robinsons Retail Holdings Inc.RRHI
23Robinsons Land CorporationRLC
24Semirara Mining CorporationSCC
25Security BankSECB
26SM Investments CorporationSM
27San Miguel CorporationSMC
28SM Prime HoldingsSMPH
29Philippine Long Distance Telephone CompanyTEL
30Universal Robina CorporationURC

* See also: PSEi Stock Composition (UPDATED)

2. Blue Chip companies with the highest Market Capitalization

If we stick to the definition of blue chip companies as those that are large and well-established, we can refer to our list of the biggest Philippine companies based on market capitalization.

Market capitalization is computed by multiplying the company’s current stock price and its total number of shares outstanding. As of 2018, the top 10 PSE companies with the biggest market capitalization are the following.

StockCompanyMarket CapitalizationLast Traded PriceNo. of Shares
1MFCManulife Financial Corp.1,833,751,289,050925.001,982,433,826
2SMSM Investments Corp.1,196,150,786,931993.001,204,582,867
3SLFSun Life Financial Inc.1,147,780,895,640 1,880.00 610,521,753
4SMPHSM Prime Holdings, Inc.1,042,540,264,15336.1028,879,231,694
5BDOBDO Unibank, Inc.668,499,425,982153.004,369,277,294
6ALIAyala Land, Inc.664,095,134,86645.1014,724,947,558
7ACAyala Corp.646,037,895,360 1,040.00 621,190,284
8JGSJG Summit Holdings, Inc.533,631,703,44774.507,162,841,657
9BPIBank of the Philippine Islands467,561,756,767119.003,929,090,393
10AEVAboitiz Equity Ventures, Inc.422,534,441,77575.005,633,792,557

* See also: Market Capitalization of Philippine Companies (UPDATED)

Just a caveat: investing in blue chip stocks is not a guarantee that you will make money. There’s also no guarantee that a blue chip stock will not produce a loss. Stocks — whether they are blue chips or not — are risky investments, so invest only an amount appropriate to your risk appetite.

Happy smart investing!

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James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.