The Philippines country-specific exchange traded has been among the best performing emerging markets this year. After the recent rally, the country’s largest money manager is beginning to cut back on equity positions as valuations are now among the most expensive in Asia.

The iShares MSCI Philippines ETF (NYSEArca: EPHE) has increased 18.6% year-to-date.

Fitzgerald Aclan, a vice president in the money management unit of BDO Unibank Inc., contends that the Philippine Stock Exchange Index could face a correction in the coming months, reports Ian Sayson for Bloomberg.

The benchmark touched an intra-day high of 6,906.63 on May 14, gaining 20% from an Aug. 28 low.

The Philippine equity market has been strengthening as the economy posted its strongest two-year expansion since the 1950s and on a Standard & Poor’s ratings upgrade, which helped attract greater overseas investors. [Philippines ETF Asserts Itself…Again]

Consequently, valuations stood at around 18.1 times estimated earnings last week, the highest level since August, making Philippine stocks the most expensive in the region. EPHE shows a price-to-prospective earnings of 18.2. In comparison, the S&P 500 has a P/E ratio of 16.7.

“We are opportunistic on certain sectors and stocks that we can take profit on,” Aclan said in the article. “Even as we remain positive on the market, we are not ruling out a correction in the near term. Share prices have gone up sharply.”