Positive Economic News

[grabehbebe]

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Market continues to rise on positive economic news


Share prices rose yesterday following a slew of positive economic news, including reports of higher bank lending in January.

The benchmark 30-company Philippine Stock Exchange Index rose 13.86 points, or 0.7 percent, to 2,141.77, adding to Wednesday’s 0.3 percent advance.

Providing a strong boost to the index was blue chip Bank of the Philippine Islands, which rose 3.4 percent to P61 following the declaration of a 20-percent stock dividend.

A local newspaper reported Thursday that Congress’ bicameral conference committee has approved extending a law that provides incentives to banks unloading idle assets. Analysts said the measure could help the banking sector further improve asset quality.

Under the Special Purpose Vehicle Law that expired in April last year, banks were allowed to dispose of idle assets with neither the buyer nor the seller paying documentary stamp tax, capital gains or value-added tax.

"This move by Congress would encourage banks to sell more of their idle assets, and should further boost the financial sector’s already improving fundamentals," said Mark Alan Canizares of Citiseconline.

Apart from giving banks the opportunity to unload bad assets that have been weighing on their profitability, the law will also help stimulate the property market by making properties more affordable as they will be able to be purchased at substantial discounts.

Other good news for the banking sector was the latest central bank report that showed lending by the country’s 42 commercial banks rose three percent on year in January compared to the 0.9 percent on year expansion in December.

Also benefitting from the good banking news was Equitable PCI, up 5.8 percent at P73. Metropolitan Bank, however, fell 1.4 percent to P36.50, falling victim to profit-taking, analysts said.

"The good news on the economic front supports our bullish call on banks, because they’re one of the main beneficiaries of an improving economy," said Citiseconline investment analyst Mark Alan Canizares.

Another positive development was the latest report by the central bank Wednesday saying that overseas workers’ remittances in January were up 17 percent on year.

SM Prime, the country’s largest mall operator, rose 1.3 percent to P8, while fast-food operator Jollibee was up 5.5 percent at P38.50.

Philex Mining B gained 6.8 percent at P2.20, as analysts are bullish over its earnings prospects given rising metal prices. – AP, AFP




----http://www.philstar.com/philstar/NEWS200603170703.htm
The Philippine Star 03/17/2006

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JdV bares plan for RP-S. Korea economic tieup

http://www.mb.com.ph/MAIN2006032059212.html

Speaker Jose de Venecia Jr. said yesterday the Arroyo government has proposed an economic partnership between the Philippines and South Korea.

Korean investments in the country hit more than billion topped by a proposed major ship-repair facility in Subic, Olongapo City, he said.

De Venecia said President Arroyo hailed Korea’s major investments, including those in the power sector and the Bicol railway, during the recent visit by Speaker of the Korean National Assembly Kim Won-ki.

Kim called on the President at Malacañang, accompanied by the Philippines Speaker De Venecia.
The South Korean government is financing the construction of the first segment of the SouthRail or Bicol railway from Manila to Calamba City, a major project envisioned to go all the way to Sorsogon as the mass transport backbone of the Bicol region.

The Bicol line will eventually link with the NorthRail, a double-track line running initially from Manila to Malolos and eventually to Clark, whose construction is being funded by the Chinese government.
Both rail systems are expected to transform the economies of provinces near Metro Manila by expanding commerce and providing commuters with a fast, efficient, safe, and affordable mass-transport system.

De Venecia said the current expansion in the political and economic relations between the Philippines and South Korea is "the beginning of a golden period in the relations between our two countries."
Earlier, De Venecia honored Kim with the Congressional Medal of Achievement, the highest decoration given by the House of Representatives, in ceremonies attended by senior House leaders and members of Kim’s delegation that included members of the administration and opposition parties in South Korea and his wife, Mrs. Yoon Chung Sim.

The Korean government is building a power plant in Cebu and expanding the capacity of its power plant in Batangas City.

During a visit to Seoul last year, De Venecia proposed an undersea cable to bring excess power from Batangas City to Mindoro, where a major agro-industrial park could be built.
De Venecia said that former President Fidel V. Ramos and Veterans Freedom Party Rep. Ernesto Gidaya were among the 7,000 Filipino soldiers who fought gallantly in the Korean War in the early 1950s in defense of freedom and democracy.

The Korean Speaker said it was then congressman Diosdado Macapagal, as chairman of the House Foreign Relations Committee, who filed a resolution to dispatch Filipino troops to the Korean Peninsula under the command of the United Nations.
The Korean Speaker asked De Venecia to call the fourth conference of the International Conference of Asian Political Parties (ICAPP) in Seoul this September.

As ICAPP’s founding father, De Venecia is chairman of the Standing Committee of the ICAPP, with almost 100 political parties, ruling and opposition, as members.

[tolstoi]

Stocks up 22.40 points, peso at 51.083:$ mid-trade

Shares finished higher Tuesday, with the main index adding 1.0355 percent, or 22.40 points, at 2,185.71.

All sectorial indicators advanced. Gainers outnumbered losers, 63 to 31, while 44 stocks were unchanged. Volume was pegged at P1.49 billion.

Traders said the bullish sentiment prevailing in the market could help the Phisix breach the 2200 level in the coming sessions.

Top-traded Ayala Corp. rose P5 to P350.

Telecoms giant Philippine Long Distance Telephone Co. jumped P35 to P1,865 tracking the advance in its American Depositary Receipts.

Philex Mining A and B shares surged P0.16 each to P2.22 and P2.36 on expectations that the company will report a robust profit growth for the first quarter.

Petron Corp. gained P0.05 to P4.60 after the oil giant disclosed that it earned a record P6 billion last year, a 77 percent rise from its 2004 net profit.

At the currency market, the peso averaged 51.083 against the US dollar, marginally lower than Monday's close of 51.03.

The peso opened 51.03 and the dollar was traded from P51.03 to P51.14. Volume has reached $300 million.

Dutch bank ING earlier predicted that the peso, the best performing Asian currency last year, may advance to 45-to-the-dollar level in the next 12 months.

Asian currencies held steady on Tuesday as a much anticipated speech by US Federal Reserve Chairman Ben Bernanke failed to provide fresh clues as to whether the Fed will raise rates further after this month's meeting.

A sustained rise in US rates was the key driver of the US dollar against the yen and other major currencies in 2005.

[grabehbebe]

GMA sees steady decline of RP debt


President Gloria Macapagal Arroyo yesterday expressed confidence that public debt will steadily decline until the end of her term as an offshoot of improved revenues made possible by fiscal reforms.

The President noted that public debt totalled P3.89 trillion at the end of 2005 which was equivalent to 72 percent of the gross domestic product.

Although the amount of public debt was slightly in 2004—P3.81 trillion—it was equivalent to 79 percent of the GDP, the President said in a televised roundtable discussion with Finance Secretary Margarito Teves and Deputy National Treasurer Christine Sanchez.

Teves said that if the government will be able to reduce its budget deficit to P125 billion this year, the public debt to GDP will be further pared down to 69 percent.

The President said the deficit target was realizable, pointing out that for January and February this year, the deficit was P7 billion below the programmed level.

She said the government’s goal is to bring down the public debt to 50 percent of the GDP by the time she steps down in 2010. She said this is the debt-t-GDP ratio of neighboring countries in East Asia.

“Government revenues must increase faster than debt so that enough money can be channeled for infrastructure and social services,” the President said.

She lamented that before, the bulk of the national budget was eaten up by salaries and allowances of civil servant interest payments on loans and internal revenue allotments for local government units.

“Very little money was left for infrastructure and social services. Worse, we had to incur new loans to repay outstanding loans,” Mrs. Arroyo said.

Deputy Treasurer Sanchez said that the government is saving a lot of money from debt payments since the peso appreciated from P56 to the US dollar last year to P51 to the dollar this month.

Teves emphasized that the rates of GDP growth should grow so that the government can collect more revenues and allocate more funds for infrastructure and social services. The government is targeting a 5.5 percent to 6 percent GDP growth this year.

Teves said that due to insufficient revenues, the government could not avail of financing from external leaders and it could not put up counterpart funds.

Noting that 42 percent of public borrowings are now derived from foreign sources and 58 percent from domestic sources, the President said a traditional lending-country which has complained that the Philippines has refrained from securing any loan from them for the last two years.

Teves said that the percentage of domestic borrowings may even increase to 60 percent given the reduction of interest rate from 10 to 5 percent for the 91-day treasury bills.

-Fel V. Maragay
http://www.manilastandardtoday.com/?...s01_mar22_2006

[samsungster]

i hope it will continue...

[grabehbebe]

Merrill raises RP rating

New York-based investment bank Bear Stearns & Co. Inc. is bullish on the Philippines, saying the domestic economy will expand by close to 6 percent this year after President Gloria Macapagal Arroyo successfully thwarted a coup attempt.

Merrill Lynch, meanwhile, increased its Philippine exposure to overweight while scaling back Peru to underweight from market weight—citing further selling ahead of April’s presidential elections.

The bank said that lack of stability amid changes in political strategies and new exchanges in the media between candidates Ollanta Humala and Lourdes Flores in Peru may cause more selling.

“In our model portfolio, we choose to scale back our Peru exposure to underweight. We think that there is more compelling value elsewhere, notably in the Philippines, where we have an overweight
recommendation,” the bank said in a report.

The bank cited the Philippines’ attractive valuations and the government’s progress on the fiscal and debt sustainability fronts for the upgrade.

“We implement this in the cash market by selling Peru ’12s and buying Philippines ’30s with the proceeds,” the bank said, referring to bonds maturing in 2012 and 2030.

Bear Stearns said in its Emerging Market Asia & Pacific Rim report that investors are impressed by the growing optimism on how the Philippine economy will perform over the next one to two years.

“We expect GDP growth to approach 6 percent in 2006,” the investment bank said in the report.

Economic managers expect the domestic economy to expand between 5.3 percent and 6.3 percent this year. The country’s domestic economy expanded 5.1 percent last year from 6.1 percent in 2004 after the agriculture sector failed to meet its projected growth due to El Niño.

The American investment bank said a rise in foreign direct investments, particularly in the electronic sector, and liberalized conditions in the mining sector are buoying the economy.

The report noted that the Philippines attracted $700 million in new investments in the electronics sector last year despite the decision of some companies to move their operations to China.

It added that the shipment of the industry is expected to grow between 5 and 7 percent this year, noting that the 2.2 percent decline in the January figure was seasonal.

Bear Stearns said additional revenues from the new value added tax law would help the Philippines improve its poor physical infrastructure.

“This is an important issue, because compression of the budget deficit over the last two years has been achieved largely on the back of drastically reducing public infrastructure investment,” the investment bank said.

Bear Stearns also expects inflation to hit around 7 percent this year from 7.6 percent last year and the peso to settle around 54 to $1 from the current tight level of 51 to 52 versus the greenback.



-By Lawrence Agcaoili
http://www.manilastandardtoday.com/?...s01_mar23_2006