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(Bloomberg) -- Philippine equities are poised for a turnaround after notching the steepest drop in Asia since Donald Trump’s election win, with higher domestic spending expected to boost earnings.

The benchmark Philippine Stock Exchange Index is trading about 10% lower since the US elections, more than double the losses in the regional Asia Pacific gauge, after concerns about trade wars sent money managers fleeing. But a number of catalysts could lure investors back to its shores, with several analysts forecasting the benchmark could rise more than 20% by year end.

The recent declines are proving to be a buying opportunity, according to Kervin Sisayan, an analyst at Maybank Kim Eng Securities Pte, who predicts a 26% climb in stocks this year. “We could see sustained economic growth into 2025 and higher corporate earnings growth, which will hopefully push the Philippines’ equity market higher.”

Uncertainty over Trump’s protectionist rhetoric since early November has forced global funds to trim holdings across emerging markets due to the strong dollar. But nowhere in Asia has the impact been stronger than in the Philippines, given its heavy dependence on imports as well as vulnerability to currency swings due to its budget deficit.

There are a few bright spots ahead. The Philippine central bank will probably cut its policy interest rate at a meeting next month. Increased private and government spending leading into the May mid-term national elections may also help equities bounce back, said Michael Ricafort, chief economist at Rizal Commercial Banking Corp. in Manila.

The earnings season may also provide a boost. Morgan Stanley said in a report this week that the property market could recover this year, with earnings growth to average more than 8% thanks to sustained economic growth. Citigroup Inc. also this week said that Philippine earnings are predicted to show one of the most positive fourth-quarter surprises across Asia.

Those bullish fundamentals will help the market recover from perceived headwinds posed by the new US leadership, said Wendy Estacio-Cruz, head of research at Unicapital Securities Inc. The benchmark index may touch 8,000 this year, she said, which implies a 23% rise from the end-2024 level.