A stepping stone on predictability studies: Discovering the connection between stock returns and selected leading financial measures among Philippine publicly-listed companies in the service sector

Date of Publication


Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Accountancy


Ramon V. Del Rosario College of Business



Defense Panel Member

Wilfredo A. Baltazar
Mark Vincent B. Bendo


The Philippine economy has been classified as one of the world's emerging markets. With such a gorgeous opportunity for growth, profit-seekers will not let this chance of making their portfolios grow slip between their fingers. Investors need a set of indicators to use as fundamental measures to assess the financial performance of organizations particularly those in the service industry (firms) for this paper, and help them make sound investment decisions. Different financial ratios are used to measure financial performance. Investors become even more interested on these measures when past studies have proven that these measures are able to predict stock returns as revealed by studies conducted in Japan, USA, UK, France, Malaysia, Romania, Pakistan, Iran, and Indi. This has led the researchers into looking for those financial measures best used by investors for predicting returns in the Philippine market, particularly in the service sector. Data were gathered and analyzed from publicly-listed companies in the service sector, from year 2006 to 2012. After serious bouts with panel data regression analysis and forecast accuracy metrics examination, results indicate that earnings-price ratio exhibits a significant role in predicting stock returns in the Philippines. In contrast, no consistent evidence of predictability is found when considering the return on equity, return on assets, debt-to equity ratio, EVA and EVA momentum, and book-to-market ratio as predictors.

Abstract Format






Accession Number


Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

188 leaves : illustrations (some color) ; 28 cm. + 1 computer disc ; 4 3/4 in.


Price-earnings ratio--Philippines; Stock price forecasting--Philippines; Stocks--Prices--Philippines

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