Portfolio Selection utilizing Analytical Hierarchy Process (AHP): A Study on the Top 30 Blue Chip Companies in the Philippine Stock Exchange

This study employs the Analytical Hierarchy Process (AHP) to improve portfolio selection in the Philippine Stock Exchange (PSE), focusing on the top 30 blue-chip companies. In response to the unique challenges of emerging markets, the research integrates AHP with established financial criteria—return, volatility, beta, and liquidity—to evaluate and rank the top 10 investments. AHP, known for its multi-criteria decision-making capabilities, combines both qualitative and quantitative factors, offering a balanced framework that aligns with investor needs in volatile markets. The methodology involves a structured three-tier model: defining the goal, establishing key criteria, and evaluating alternatives. The study's results show that AHP consistently provides robust rankings across different normalization methods (Distributive and Ideal modes), demonstrating its reliability for decision-making under diverse market conditions. Notably, portfolios with high rankings reflect stable returns and liquidity, affirming the relevance of AHP in emerging financial environments where traditional models may falter. This research highlights AHP as an adaptable tool for financial decision-making, especially in markets with high economic volatility. Future studies are encouraged to extend the model by incorporating ESG (Environmental, Social, and Governance) criteria, enhancing its relevance for investors aiming for sustainable, data-driven portfolio strategies in the PSE.