Begin by poaching the chicken. In a large pot (kaldero), arrange chicken breasts in a single layer and add salt (asin), peppercorns (paminta), pounded garlic, bay leaves (dahon ng laurel), sherry wine, and water (tubig). The water temperature should be around 180°F/82°C - just below simmering. Bring to a gentle boil (205°F/96°C), then reduce heat to low, cover, and cook for 15 minutes or until internal temperature reaches 165°F/74°C.
Remove chicken and let cool slightly before cutting into 1-inch cubes. Strain and reserve 2 cups of the broth (sabaw ng manok) for the sauce.
For the sauce, melt butter (mantikilya) in a large pan over medium heat (350°F/175°C). Sauté chopped onions (sibuyas) and minced garlic (dinurog na bawang) until softened, about 3-4 minutes. Add chopped bell peppers (bell pepper) and sliced mushrooms (kabute), cooking until tender, 5-6 minutes.
Sprinkle flour (harina) over the vegetables and cook while stirring for 1-2 minutes. Gradually whisk in the reserved warm broth and heavy cream, stirring constantly to prevent lumps. Add the cubed chicken and simmer until the sauce thickens, 5-7 minutes. Season with salt and pepper (asin at paminta) to taste.
Serve hot over steaming rice (kanin), toasted bread, or noodles (pancit). For best results, let the dish rest for 5 minutes before serving to allow the sauce to thicken further.