Before starting, gather all your ingredients and equipment. You'll need a sharp knife, cutting board, large pan for frying, and a medium pot for the stew.
Take your fish out of the refrigerator 15 minutes before cooking to bring it to room temperature. While waiting, cut your fish into 1-inch cubes. Pat the pieces dry with paper towels and season them with salt and pepper.
Cut your vegetables: slice the onion, mince the garlic, cube the potatoes and carrots into similar sizes, quarter the mushrooms, and dice the bell peppers. Having everything ready will make cooking smoother.
Heat 2 tablespoons of olive oil in your pan over medium-high heat. Once hot (you'll see slight ripples in the oil), carefully add your seasoned fish cubes. Cook until golden brown, about 2-3 minutes per side. Remove the fish and set aside.
In a pot, heat the remaining ½ tablespoon of olive oil over medium heat. Add minced garlic and cook for 30 seconds until fragrant. Add sliced onions and cook for 3-5 minutes until they become soft and clear.
Carefully return the cooked fish to the pot with the garlic and onions. Cover and let it cook gently for 2-3 minutes to let the flavors combine.
Add your cubed potatoes and carrots first, then the quartered mushrooms. Pour in the spaghetti sauce, water, and banana ketchup. Stir everything very gently so you don't break up the fish.
When the sauce starts to bubble, lower the heat to a simmer. Cook for about 10-12 minutes or until you can easily pierce the potatoes and carrots with a fork.
If you're using peanut butter, add it now along with the grated cheese and diced bell peppers. Keep simmering and stirring occasionally for another 5-10 minutes. You'll know it's done when you see tiny spots of oil appearing on top of the sauce.
Taste the sauce and add salt and pepper if needed. If you like it sweet and spicy (tamis-anghang), you can add a pinch of sugar and some chili flakes.
Let the dish rest for 5 minutes before serving. This gives the sauce time to thicken slightly and helps all the flavors come together.
Serve hot over steamed white rice. You can garnish with some fresh cilantro (wansoy) if you like, and serve with calamansi on the side.