NEWS

Thursday, November 06, 2003
Forex - Philippine peso closes stronger on inflows, exporters' dollar sales
Philippines' Fortune Cement to spend 700 mln pesos for plant upgrade
Philippine Ginebra San Miguel 9 mth net profit up 8.0 pct yr/yr
Philippines' Ginebra San Miguel cash div 0.375 pesos
Manila shares close mixed; index lower on profit-taking, politics
Philippines sticks to economic targets despite political woes - Buenaventura
Philippine end-Oct forex reserves 16.887 bln usd vs 16.162 bln in Sept
Philippines may tighten monetary policy if budget gap widens - Buenaventura
Philippines' Grand Plaza FY Sept net profit 62.84 mln pesos vs 80.86 mln
Forex - Philippine peso weaker along with regionals after Snow's comments
Manila shares flat in mid-trade on consolidation, profit-taking
STOCK ALERT - Philippines' Ayala Corp up on expected higher Globe earnings

Wednesday, November 05, 2003
Philippines' Mondragon denies considering buy-out option for Mimosa project
Philippine president faces snag in bid to defuse constitutional crisis
Philippine Trust sets Nov 25 payment date for stock dividend
Forex - Philippine peso ends firmer versus US dollar on profit-taking
Philippine food exporters earn 35 mln usd in Germany food fair - Roxas
Philippine CPI to rise by avg 3.10 pct in Nov-Dec period - Neri
BROKER CALL - Philippines' PLDT target price raised to 1,000 pesos - ING
Manila shares close slightly lower on profit-taking
Pro-Estrada forces rally for impeachment of Philippine chief justice
Philippine Ayala Corp 95.35 mln shares crossed
Philippine Realty creditors agree to payment-in-kind mode to settle loans
Philippine exchange says 95.35 mln Ayala Corp shares cross sold
DATAWATCH -Weak peso, fuel price hikes to put pressure on Philippine CPI - DBS
Philippine Trust declares 145.53 pct stock dividend
Philippines' Banco de Oro 9 mths net profit 965.1 mln pesos, up 15 pct yr/yr
Philippines Oct CPI up 3.10 pct yr-on-yr, 0.10 pct mth-on-mth
UK's LNM Hldngs offers 7.0-bln peso bid for Philippines' NSC - report
Philippines' Mondragon in buy-out talks with foreign group - report
Philippine central bank sees forex reserves at 16 bln usd in 2004 - report
Philippines' San Miguel completes acquisition of Taiwan Tea's TTCV Investment
Philippine oil firms announce 0.40 pesos/liter fuel price hike
Philippines' Bureau of Customs exceeds October collection target

November 3 - 4

Forex - Philippine peso closes stronger on inflows, exporters' dollar sales

     MANILA (AFX-ASIA) - The peso closed stronger, recovering from early losses against the US dollar, on fresh inflows and moves by exporters to sell their dollars in anticipation of the peso strengthening before the year ends, dealers said.
     The peso closed at 55.090 to the dollar, after trading between 55.040 and 55.340 on volume of 264.70 mln usd. It closed at 55.200 yesterday.
     Early in the session, the peso lost ground, tracking weak regional currencies led by the yen, in what was a knee-jerk reaction to comments by US Treasury Secretary John Snow's comments that the US economy has entered a new growth phase.
     "We saw some inflows in the afternoon session, while exporters have also decided to sell dollars at close to 55.300 levels," a commercial bank dealer said.
     Dealers said exporters probably think it is time to sell dollars as the volume of remittances from Filipinos working overseas are expected to pick up in the coming days and then peak during the Christmas holidays.
     The central bank expects the peso to settle at about 54.000 by year-end despite the current volatility in the market.
     In Hong Kong, central bank governor Rafael Buenaventura said the country's economic fundamentals remain strong.
     He said the government is sticking to its economic targets this year and the next, despite the prevailing political tension arising from the opposition-led move in the House of Representatives to impeach Supreme Court Chief Justice Hilario Davide.
     Buenaventura added that fresh borrowings by the central bank and the national government before the year ends should help boost the country's dollar reserves and result in a balance-of-payment deficit of less than 1.00 bln usd instead of an earlier forecast of 1.30 bln.
     "Expectations of more inflows in the coming days prompted some market participants, such as exporters, to reduce their dollar positions," a second dealer said.
     The dealer added that importers, on the other hand, are delaying their dollar purchases also in anticipation of a stronger peso during the Christmas season.
     They said they did not see the central bank in the market today.
     The dollar is seen traded between 54.900 and 55.300 tomorrow.
     edelacruz@afxasia.com

Philippines' Fortune Cement to spend 700 mln pesos for plant upgrade

     MANILA (AFX-ASIA) - Fortune Cement Corp said it will invest around 700 mln pesos for a plant upgrade slated from next month until next year to improve efficiency.
     The company said it is securing bank financing to fund the capital expenditure.
     Of the amount, 400 mln pesos will be spent for capital equipment, while 260 mln will cover technical efficiency and 40 mln for environmental improvements, it told the stock exchange.
     (1 usd = 55.272 pesos)
     edelacruz@afxasia.com

Philippine Ginebra San Miguel 9 mth net profit up 8.0 pct yr/yr

     MANILA (AFX-ASIA) - Ginebra San Miguel Inc (GSMI) reported a nine month to September net profit of 1.20 bln pesos, up 8.00 pct from a year earlier, on the back of higher sales.
     GSMI, a unit of San Miguel Corp, said its third quarter to September net profit stood at 323.00 mln pesos, but gave no comparative figure.
     It had previously reported a net profit of 347.00 mln pesos for the same period in 2002.
     Consolidated sales volume improved 6.00 pct year-on-year during the January to September period, while revenues were up 5.00 pct year-on-year. No absolute figures were provided.
     "GSMI's international business operations generated substantial volumes and revenues," the company said in a statement.
     It said it exported around 100,000 cases of liquor to Thailand, increasing export volumes and revenues in the third quarter by 133.00 pct and 53.00 pct year-on-year, respectively.
     Liquor operations in the southern Philippines improved significantly due to the strong performance of its gin variant Vino Kulafu and reduced fixed costs.
     It reported a 43 pct year-on-year growth in Vino Kulafu's sales volume "due to a more effective advertising and promotions and improved product distribution."
     Meanwhile, it reported a 5.0 pct year-on-year growth in its year-to-date sales volume in northern Philippines thanks to its Frasco and Frasquito liquor variants.
     GSMI said it sees a stronger performance in the fourth quarter.
     "Volumes are expected to improve further in the fourth quarter with the approach of the holiday season, and as GSMI's international business operations continue to generate significant volumes from new contracts," the company said.
     (1 usd = 55.272 pesos)
     afxmanila@afxasia.com

Philippines' Ginebra San Miguel cash div 0.375 pesos

     MANILA (AFX-ASIA) - Ginebra San Miguel Corp said it will pay a cash dividend of 0.375 pesos per share to stockholders on record as of Dec 5.
     The payment date is set for Dec 22.
     (1 usd = 55.272 pesos)
     edelacruz@afxasia.com

Manila shares close mixed; index lower on profit-taking, politics

     MANILA (AFX-ASIA) - Share prices closed slightly lower in a mixed session as investors locked in profits from recent gains, dealers said.
     Political concerns related to the bid to impeach Supreme Court Chief Justice Hilario Davide also weighed on sentiment, they added.
     The 30-company composite index closed down 2.48 points or 0.17 pct at 1, 423.39, on 193.24 mln shares worth 412.67 mln pesos. It traded between 1,420. 20 and 1,427.19.
     Gainers edged out losers 26 to 24, with 48 stocks unchanged.
     Dealers said investors have cashed out of select stocks, while others have opted to stay on the sidelines awaiting more corporate earnings results.
     "Some investors have sold on news, particularly after PLDT released its much-awaited third quarter data. Still, there are those taking position ahead of more earnings releases," Accord Capital Equities analyst Ron Rodrigo said.
     Ayala-led companies such as Globe Telecom, Ayala Land and their parent Ayala Corp will release their third quarter reports next week.
     Rodrigo added investors have also taken a wait-and-see stance ahead of the Nov 10 session of the House of Representatives, where lawmakers are expected to formally endorse their impeachment complaint against Davide to the Senate.
     "That date is very crucial... It's the integrity of the judiciary system that is at stake here," Rodrigo added.
     President Gloria Arroyo said yesterday that she was facing problems defusing a constitutional crisis that has shaken business confidence and provoked fears of a military coup.
     Chinabank was top-traded, flat at 660 pesos on volume of 158,760 shares, most of which were sold in cross sales.
     Ayala Corp was up 0.10 at 5.60 on 14.47 mln shares, while unit Ayala Land was steady at 6.40 on 7.47 mln shares.
     Globe Telecom was down 10.00 pesos at 825 on 11,130 shares, on profit-taking ahead of its third quarter earnings, seen by most analysts as substantially higher than a year earlier.
     Meralco B, open to foreigners, was up 0.75 pesos at 20.50 on 1.23 mln shares. Meralco A was up 0.50 at 14.25 on 168,400 shares.
     SM Prime was up 0.10 at 7.30 on 2.7 mln shares.
     San Miguel A was down 0.50 at 56.00 on 262,100 shares. San Miguel B ended flat at 63.00 on 85,800 shares.
     The all-shares index was down 2.31 points at 857.11.
     The commercial-industrial index was down 0.70 at 2,110.17.
     Property was up 3.95 at 620.92, while mining was down 2.37 at 1,638.37.
     Oil was up 0.01 at 1.37.
     Banking and financial services shed 6.16 to 441.23.
     (1 usd = 55.272 pesos)
     cecille.yap@afxasia.com

Philippines sticks to economic targets despite political woes - Buenaventura

     HONG KONG (AFX-ASIA) - The Philippine government is sticking to its economic targets this year and the next despite the shaky political environment ahead of the May 2004 elections, central bank governor Rafael Buenaventura said.
     Despite the "political noise" generated by such a divisive issue as the constitutionality of the impeachment of Supreme Court Chief Justice Hilario Davide, he said the country's economic fundamentals "continue to be strong" and "internally driven by investments and growth in consumption."
     "The Philippines has not deviated from its economic goals," Buenaventura said in a speech at a forum here.
     While he admitted that the current political environment in the country has been "a little bit unwieldy and a little bit inefficient," Buenaventura stressed that "in the end, the process gets carried out."
     In Manila, the Supreme Court is hearing oral arguments on the legality of the impeachment of Davide by the House of Representatives, which is set to submit the Articles of Impeachment to the Senate when Congress resumes session on Nov 10.
     Congressmen impeached Davide for alleged misuse of government funds, but he strongly denied the accusation.
     President Gloria Arroyo has admitted she faces problems defusing what has turned out to be a constitutional crisis that has shaken business confidence and provoked fears of a military coup.
     The government is targeting a 4.2-5.2 pct growth in gross domestic product this year and 4.9-5.8 pct in 2004.
     afxmanila@afxasia.com

Philippine end-Oct forex reserves 16.887 bln usd vs 16.162 bln in Sept

     MANILA (AFX-ASIA) - The country's gross international reserves (GIR) stood at a preliminary 16.887 bln usd as of end-October compared with 16.162 bln at end-September, central bank governor Rafael Buenaventura said.
     He explained the increase in reserves was primarily due to the proceeds of the national government's 1.05 bln usd global bonds issued recently and new borrowings by the central bank.
     The inflow was partly offset by certain repayments, Buenaventura said, without elaborating.
     The central bank aims to keep the GIR within 14.00-15.00 bln usd this year.
     Buenaventura added higher borrowings, resulting from the government's decision to pre-fund its 2004 financing requirement as early as this year, will reduce the country's balance-of-payment (BOP) deficit to less than 1.0 bln usd, lower than the earlier forecast of a 1.3 bln usd deficit, by the end of the year.
     The country recorded a BOP deficit of 130 mln usd in September and 783 mln usd for the January-September period.
     (1 usd = 55.200 pesos)
     afxmanila@afxasia.com

Philippines may tighten monetary policy if budget gap widens - Buenaventura

     HONG KONG (AFX-ASIA) - The central bank may be forced to tighten monetary policy if inflationary pressures emerge as a result of the government overshooting its 2003 budget deficit ceiling of 202 bln pesos, Philippine central bank governor Rafael Buenaventura said.
     "Obviously, we may have to take countermeasures (involving) interest rate levels and liquidity levels if the budget overshooting then leads to inflationary pressure," he told reporters on the sidelines of a conference he is attending in Hong Kong.
     Despite the continuing volatility of the peso, the policy-making Monetary Board has kept the central bank's policy interest rates unchanged, citing a benign inflation environment and outlook.
     The central bank's overnight interest rates are maintained at 6.750 pct for borrowing and 9.000 pct for lending.
     Finance Secretary Jose Isidro Camacho has expressed confidence the budget deficit for October will be kept within target, denying earlier reports the ceiling may be breached for the third straight month.
     Preliminary figures from the Bureau of Internal Revenue and the Bureau of Customs show the agencies have complied with their monthly revenue goals of 34.0 bln pesos and 9.21 bln, respectively.
     The government's spending cap for the month has been set at 70.3 bln pesos.
     Despite below-target revenues and bigger-than-programmed spending in recent months, the government has kept its budget deficit within the 149-bln peso ceiling in the nine months to September at 142 bln pesos.
     "If (the national government) doesn't meet (the fiscal targets) this year then their credibility will be tested. That's why it is very important that they meet the target to establish a baseline for meeting the balanced budget by 2009. It's more of a perception," Buenaventura said.
     Such a potential fiscal problem may also hurt the peso, he said.
     "It could also mean a volatile exchange rate situation."
     A government official who has declined to be identified earlier said the government's deficit may shoot up to 210 bln pesos this year if expenditures were not controlled.
     The government deliberately spent more than programmed levels in previous months in order to spur economic activity after seeing slow growth in the first half.
     (1 usd = 55.274 pesos)
     afxmanila@afxasia.com

Philippines' Grand Plaza FY Sept net profit 62.84 mln pesos vs 80.86 mln

     MANILA (AFX-ASIA) - Grand Plaza Hotel Corp year to September 30 results:
      Revenue - 352.49 mln pesos vs 418.43 mln
      Cost of sales - 37.62 mln pesos vs 55.14 mln
      Gross profit - 314.87 mln pesos vs 363.29 mln
      Opg expenses - 247.66 mln pesos vs 268.48 mln
      Net opg profit - 67.21 mln pesos vs 94.80 mln
      Net profit - 62.84 mln pesos vs 80.86 mln
      Earnings per share - 0.76 pesos vs 0.98
     (1 usd = 55.284 pesos)
     edelacruz@afxasia.com

Forex - Philippine peso weaker along with regionals after Snow's comments

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     MANILA (AFX-ASIA) - The peso was lower against the US dollar early in line with regional currencies, which led by the yen, slid against the greenback following Treasury Secretary John Snow's comments that the American economy has entered a new phase of growth, dealers said.
     At 9.54 am, the peso averaged 55.281 to the dollar after trading at a low of 55.340 and a high of 55.230 on volume of 64.40 mln usd. It closed at 55. 200 yesterday.
     "There was a knee-jerk reaction to Snow's comments and the dollar-yen has hit 110. We're following the regionals," a commercial bank dealer said.
     Political concerns arising from the impeachment case against Supreme Court Chief Justice Hilario Davide also remain.
     The dealer sees the dollar traded at 55.200-55.350 range today.
     The US economy expanded at a 19-year record annual pace of 7.2 pct in the third quarter of this year, according to preliminary government figures.
     edelacruz@afxasia.com

Manila shares flat in mid-trade on consolidation, profit-taking

     MANILA (AFX-ASIA) - Share prices were flat in mid-trade as the market consolidates and investors take profit after previous gains, dealers said.
     At 10.31 am, the composite index was marginally down 1.92 points or 0.13 pct at 1,423.95 on volume of 49.10 mln shares worth 225.79 mln pesos. It has so far traded between 1,423.72 and 1,427.19 so far.
     Dealers said political concerns related to the impeachment complaint against Supreme Court Chief Justice Hilario Davide Jr and worries that the government may breach its budget deficit for the third straight month in October have also weighed on sentiment.
     Philippine President Gloria Arroyo admitted she was facing problems defusing the constitutional crisis brought about by the impeachment complaint that has shaken business confidence and provoked fears of a military coup.
     Opposition lawmakers have accused Davide of alleged misuse of government funds, which the Chief Justice strongly denies. Once ratified by the House of Representatives, the impeachment complaint will be transmitted to the Senate, which will then convert itself into an impeachment body.
     "Congress has yet to resolve the Davide impeachment issue, and investors are hoping they do it with a sense of urgency," Regina Capital Development analyst Gomer Tan said.
     Among others, a crucial piece of legislation seeking to remove the documentary stamp tax (DST) imposed on the secondary trading of equities is still awaiting the approval of both houses of Congress. The bill will have to undergo a bicameral conference before a final version of the measure can be signed into law.
     Tan said the DST bill is widely expected to increase transaction volume in the stock market and aid the economy's recovery.
     Ayala Corp was top-traded, up 0.10 pesos at 5.60 on volume of 7.38 mln shares. Analysts said investors have started to take position ahead of Ayala Corp's third quarter earnings result due on Nov 12.
     The company is expected to report improved earnings during the period on the back of unit Globe Telecom's sterling performance.
     Globe was down 5.00 pesos at 830.00 on profit-taking after recent gains.
     Ayala Land was flat at 6.40 on 3.82 mln shares.
     PLDT was up 5.00 pesos at 825 on 22,550 shares.
     Manila Electric B, open to foreigners, was up 0.25 at 20.00 at 501,900 shares. Meralco A was flat at 13.75 on 1,000 shares.
     Metrobank was flat at 27.00 on 110,000 shares.
     International Container Terminal Services was up 0.05 pesos at 3.20 on 900,000 shares.
     The all-shares index was down 0.02 points at 859.40.
     The commercial-industrial index was down 1.22 at 2,109.65.
     Property was up 0.09 at 617.06, while mining was down 13.02 at 1,627.72.
     Oil was unchanged at 1.36.
     Banking and financial services shed 2.53 to 444.86.
     (1 usd = 55.282 pesos)
     cecille.yap@afxasia.com

STOCK ALERT - Philippines' Ayala Corp up on expected higher Globe earnings

     MANILA (AFX-ASIA) - Ayala Corp was firmer in early trade on hopes of higher earnings contribution from unit Globe Telecom Inc, which is widely expected to report a substantial improvement in revenues on the back of growth in its mobile subscriber base, dealers said.
     Ayala Corp was top-traded and up 0.10 pesos at 5.60 on volume of 5.56 mln shares.
     Dealers said investors are taking positions ahead of Ayala Corp's third quarter earnings result due on Nov 12.
     Ayala Corp recently purchased an additional 10.03 mln Globe shares from former partner DeTeAsia Holdings GmbH to increase its shares in the country's second largest telecom firm to 42.70 pct.
     The shares were bought at 680.00 pesos each, a 23 pct discount to Globe's current price of 835.00.
     (1 usd = 55.281 pesos)
     cecille.yap@afxasia.com

Philippines' Mondragon denies considering buy-out option for Mimosa project

     MANILA (AFX-ASIA) - Mondragon International Philippines Inc said it is not considering a buy-out deal with a foreign group, although it may look for a possible "white knight" for its Mimosa project.
     The company issued the statement following newspaper reports that it was discussing a possible buy-out deal with an unidentified foreign group.
     Mondragon chairman and chief executive officer Jose Antonio Gonzales told the stock exchange in a letter that "there were several options (about the company's Mimosa Project) among which was a possible 'white knight'."
     He did not elaborate.
     The government took over Mimosa Leisure Estate in the former Clark airbase in Pampanga province, north of manila, after Mondragon failed to pay its rental arrears.
     Mondragon has been seeking to restructure its debt of about 7.00 bln pesos.
     (1 usd = 55.20 pesos)
     edelacruz@afxasia.com

Philippine president faces snag in bid to defuse constitutional crisis

     MANILA (AFX-ASIA) - Philippine President Gloria Arroyo said today she is facing problems defusing a constitutional crisis that has shaken business confidence and provoked fears of a military coup.
     A two-week old standoff was provoked by lawmakers' moves to fire the country's most senior judge, Supreme Court chief justice Hilario Davide, for alleged misuse of government funds.
     "I have tried a common solution but it is meeting obstacles," Arroyo revealed in a statement Wednesday, without elaborating on those impediments.
     Arroyo, who faces a presidential election in six months, is under pressure to defuse the crisis after the peso plunged to near record lows and sparked fears military opportunists could use the standoff as a pretext for a coup.
     She survived a military rebellion in July and there have been fears of continuing restiveness in the armed forces since.
     Earlier this week Arroyo tabled a proposed "covenant" under which the lower House of Representatives would drop the impeachment complaint in return for the Supreme Court opening its financial accounts to legislators for inspection.
     Davide has previously refused this compromise.
     Lawmakers have threatened to launch the impeachment on Monday. If it is successful, Davide has to face a trial in the Senate and could lose his job.
     Meanwhile, at a public hearing by 14 Supreme Court judges on the legality of the landmark impeachment complaint, legal experts who helped draft the 1987 constitution advised the court to strike it down, describing it as technically "flawed".
     Expert Regalado Maambong said the House could not legally transmit the complaint to the Senate as the constitution required it to be signed by at least 76 of the 226 members of the House.
     The proposed impeachment resolution only had the signatures of two legislators, Maambong said, adding that more than 80 others had signed what he called a "resolution of endorsement", which he said was different from the actual complaint.
     As the public hearing opened to a packed gallery, riot police blocked about 1,000 supporters of deposed Philippine president Joseph Estrada from marching on the Supreme Court building.
     Estrada has long blamed Davide for having legitimized his removal in a military-led popular uprising in 2001 amid a corruption scandal.
     Earlier this year, Congress dismissed an impeachment complaint filed by Estrada against Davide and seven other Supreme Court justices, who he accused of conspiring with Arroyo to remove him from office.

Philippine Trust sets Nov 25 payment date for stock dividend

MANILA (AFX-ASIA) - Philippine Trust Co said it has set Nov 25 as the payment date of its 145.53 pct stock dividend to shareholders.
afxmanila@afxasia.com

Forex - Philippine peso ends firmer versus US dollar on profit-taking

     MANILA (AFX-ASIA) - The peso was firmer against the US dollar, ending higher for the second straight day, as banks locked in profits from recent gains, dealers said.
     Some exporters were also seen selling the US currency on fresh remittances from overseas and on the back of improved exports data for September.
     The peso closed at 55.200, its highest for the day, after hitting an intra-day low of 55.360 on volume of 138.00 mln usd. It closed at 55.360 yesterday.
     "There was follow-through selling from yesterday, led by exporters who are now more confident that there will be a stable dollar supply," a local bank dealer said.
     The government reported merchandise exports went up 2.30 pct year-on-year in September, given the slight recovery in sales of electronic products overseas.
     The country's exports are expected to recover further in the fourth quarter as demand for electronics from the United States picks up, Economic Planning Secretary Romulo Neri said.
     Dealers said the peso will likely extend its recovery, after posting a record closing low of 55.500 last week, on the back of a fresh supply of dollars.
     It is seen trading within the 54.950-55.200 range.
     cecille.yap@afxasia.com

Philippine food exporters earn 35 mln usd in Germany food fair - Roxas

     MANILA (AFX-ASIA) - Twenty-one top food exporters from the Philippines earned at least 35 mln usd in booked and negotiated sales in the world's biggest food trade fair held recently in Cologne, Germany, the Trade and Industry department reported.
     Trade and Industry secretary Manuel Roxas II said the Filipino firms' sales in this year's ANUGA fair represent a 40 pct increase from a year earlier.
     The country's best selling food items include tuna, pineapple and fruit cocktail, coconut products, banana chips, frozen and dried mango, pineapple and papaya fruit.
     Roxas said the Philippines' wine variant derived from sugar palm and called "lambanog" was also recognized in the trade fair's category of new and innovative food and beverage products.
     (1 usd = 55.27 pesos)
     cecille.yap@afxasia.com

Philippine CPI to rise by avg 3.10 pct in Nov-Dec period - Neri

     MANILA (AFX-ASIA) - The Philippine consumer price index (CPI) is expected to rise by an average 3.10 pct in the remaining two months of the year, Economic Planning Secretary Romulo Neri said.
     This would bring the full-year average to 3.0 pct, or below the government's 4.50-5.50 pct target.
     Neri cited the weak peso, higher crude oil prices and the seasonal uptick in food items as the main sources of inflationary pressure in November and December.
     "With only two months remaining in the year, inflation is expected to remain stable and average at three percent ... for 2003," he said in a statement.
     "Inflation pressure is expected to average around 3.10 pct in the next two months."
     The National Statistics Office today reported that the October inflation rate rose 3.10 pct year-on-year and 0.10 pct month-on-month compared with the 3.10 pct and 0.10 pct rise in September.
     edelacruz@afxasia.com

BROKER CALL - Philippines' PLDT target price raised to 1,000 pesos - ING

     MANILA (AFX-ASIA) - ING Financial Markets said it is maintaining its "buy" call on Philippine Long Distance Telephone Co (PLDT), with a higher 12-month price target of 1,000 pesos following the company's better-than-expected third quarter earnings.
     ING's previous target price was 780 pesos.
     PLDT closed today down 5.00 pesos at 820, after reaching 845 early in the session.
     PLDT reported yesterday its net profit before provisions surged 140.00 pct year-on-year to 11.30 bln pesos in the nine months to September. After provisions related to job cuts and certain investments, net profit stood at 5. 80 bln pesos, 58.00 pct higher than the year-earlier level.
     Third-quarter net profit was a record 4.015 bln pesos versus 958 mln pesos in the same period last year, boosted mainly by gains in the wireless business.
     ING said it sees the competitive environment in the Philippine mobile market remaining benign at least for the next 12 months.
     It said the outperformance of PLDT's wireless unit Smart Communications Inc "easily eclipsed" additional provisions by PLDT in the third quarter.
     ING said it sees PLDT's earnings per share at 47.11 pesos this year, up 441.8 pct from 2002, and doubling to 93.19 pesos in 2004.
     (1 usd = 55.26 pesos)
     edelacruz@afxasia.com

Manila shares close slightly lower on profit-taking

     MANILA (AFX-ASIA) - Share prices closed marginally lower as investors locked in gains in select stocks led by Philippine Long Distance Telephone Co, taking their cue from Wall Street's weakness last night, dealers said.
     Gains in Ayala Corp, which is expected to announce its third quarter results next week along with units Globe Telecom Inc and Ayala Land Inc, limited the market's downside.
     The composite index closed down 1.33 points or 0.09 pct at 1,430.94 on volume of 442.10 mln shares valued at 965.91 mln pesos. It traded between 1, 424.67 and 1,435.12.
     In the broader market, losers led gainers 28 to 22, with 44 stocks unchanged.
     Dealers said investors were cautiously watching developments on the shaky political arena. Oral arguments regarding the constitutionality of the impeachment of Chief Justice Hilario Davide began at the Supreme Court today.
     They said the market also needed to undergo a technical correction after its sustained rally that pulled up the key index to its highest level in 19 months yesterday.
     "The market took a breather and decided to re-assess its performance in the past few days," Westlink Global Equities chairman Rommel Macapagal said.
     "Wall Street's weakness and concerns over the political situation also weighed on sentiment."
     Ayala Corp was up 0.30 pesos at 5.50 on 113.67 mln shares following a series of cross sales.
     Macapagal said there could be some rotational play with investors cashing out of stocks bought up recently on expectations of strong third quarter earnings and putting their money into those that are likely to report improved results in the next few days.
     PLDT was down 5.00 pesos at 820 on 109,460 shares following gains early in the session in line with the strong advance of its New York-listed American Depositary Receipts (ADR) last night.
     Its ADRs rose 0.75 usd to 15.20 after it reported yesterday a 58.00 pct year-on-year rise in net profit to 5.8 bln pesos in the nine months to September and a record 4.0 bln net profit in the third quarter.
     PLDT's strong earnings performance, on the back of gains in the wireless business, enabled it to book provisions related to job cuts and certain investments.
     GLobe Telecom, which also posted gains ahead of the release of its third quarter results on Nov 11, was down 5.00 at 835 on 22,440 shares.
     SM Prime Holdings was down 0.20 at 7.20 on 3.4 mln shares.
     Equitable PCI Bank was up 0.50 at 37.00.
     Pilipino Telephone was down 0.04 at 0.88 on 11.71 mln shares.
     The A shares of San Miguel Corp, which may announce its third quarter results before the week ends, were down 0.50 at 56.50, while San Miguel B, open to foreign investors, was unchanged at 63.00.
     The all-shares index was down 2.11 points at 860.49.
     The commercial-industrial index rose 6.58 to 2,118.42.
     Property was down 8.71 at 616.97 and mining down 30.39 at 1,640.74.
     Oil was unchanged at 1.36.
     Banking and financial services shed 1.32 to 447.39.
     (1 usd = 55.260 pesos)
     edelacruz@afxasia.com

Pro-Estrada forces rally for impeachment of Philippine chief justice

     MANILA (AFX-ASIA) - About 1,000 supporters of deposed Philippine president Joseph Estrada were blocked by riot police from marching on the Supreme Court today to back calls for the impeachment of chief justice Hilario Davide.
     Police said Estrada's supporters wanted to mob the Supreme Court building, where judges were hearing a case on the impeachment bid by some lawmakers that has led to a constitutional crisis.
     The hearing was over the legality of attempts by opposition-led members of the House of Representatives to impeach Davide for alleged mismanagement of a judicial fund.
     Scores of riot police, backed by fire trucks, stopped members of the Estrada-linked People's Movement Against Poverty (PMAP) about a block from the Supreme Court building, Manila police said.
     The rallyists, shouting anti-government slogans, settled for staging their protest in a cordoned off area.
     Radio reports said another group of marchers had reached the area to show their support for Davide but that police had kept the two sides separated.
     PMAP is a group of urban poor supporters of Estrada, who was ousted by a military-backed, popular uprising in 2001 due to a corruption scandal.
     He is now in detention while being tried for corruption.
     Estrada has long blamed Davide for having legitimized his ouster.
     Earlier this year, Estrada filed an impeachment complaint in the House of Representatives against Davide and other Supreme Court judges for allegedly violating the constitution in endorsing his removal from office.
     However his complaint was dismissed by a House committee.
     In the current controversy, Davide has rejected allegations of misuse of funds and said the legislature has no power to control the judiciary.
     The Supreme Court last week issued a writ against a potential impeachment.
     President Gloria Arroyo is desparately trying to mediate to avoid any "destabilization" attempts.
     Arroyo in July survived a military uprising and there have been fears of continuing restiveness in the armed forces.

Philippine Ayala Corp 95.35 mln shares crossed

     MANILA (AFX-ASIA) - A total of 95.35 mln shares of Ayala Corp, worth a total of 486.45 mln pesos, were sold in several cross transactions today, data from the stock exchange show.
     The shares were sold at 5.10-5.40 pesos each.
     No other details were available.
     At 11.12 am, Ayala Corp was top traded and 0.10 pesos at 5.30 on volume of 105.41 mln shares.
     (1 usd = 55.272 pesos)
     edelacruz@afxasia.com

Philippine Realty creditors agree to payment-in-kind mode to settle loans

     MANILA (AFX-ASIA) - Philippine Realty & Holdings Corp said majority of its creditor banks agreed to a payment in kind arrangement to settle its loan obligations.
     The company has filed a petition for corporate rehabilitation before the Regional Trial Court of Quezon City, under which it presented three options for creditors for the full settlement of its loan obligations.
     The proposed options included debt-to-equity conversion and full restructuring at soft terms.
     "After several hearings, a majority of our creditor banks manifested that they are agreeable to a payment in Philippine Realty & Holdings Corp said majority of its creditor banks agreed to a payment in kind arrangement to settle its loan obligations kind mode of settlement, provided that the valuation of the properties offered for this mode of payment is acceptable," PhilRealty told the stock exchange.
     The court has thus instructed the company to amend the rehabilitation plan to center on this mode of payment, with a restructuring, if necessary, it said.
     PhilRealty said that to date, it has reached preliminary agreements with two of its five creditor banks, which will settle a total of 329 mln pesos out of its unspecified total loan obligations.
     The two banks also agreed not to charge interest from the time PhilRealty filed its petition with the court, and to lower the rate of interest for the period before the filing.
     "With regard to our remaining three creditor banks, while they all agreed to a payment in kind mode of settlement, the main stumbling block of our negotiations is the valuation of the properties offered for payment in kind," the company said.
     It said the court will have to settle any conflict about the valuation of the properties.
     The company, however, hopes to reach agreements with the remaining three creditors before the end of the year, with the amount to be restructured between 500 mln and 1.0 bln pesos.
     It also said that third parties have expressed interest in joint venture agreements for the development of its Fort Bonifacio and other properties.
     "To date, there are on-going negotiations with the said parties for an equitable sharing of proceeds from the said proposed joint venture agreements, which we plan to use for the completion of the Skyline Tower or our Andrea North project in Quezon City," PhilRealty said.
     Based on these developments, the company believes it remains viable and sees its assets sufficient to support its operations.
     At the end of June, it said its stockholders' equity stood at 1.822 bln pesos, which it expects to be boosted by the reversal of interest expense that continued to accrue even after it filed its petition for corporate rehabilitation.
     (1 usd = 55.272 pesos)
     edelacruz@afxasia.com

Philippine exchange says 95.35 mln Ayala Corp shares cross sold

     MANILA (AFX-ASIA) - A total of 95.35 mln shares of Ayala Corp, worth a total of 486.45 mln pesos, were sold in several cross transactions today, data from the stock exchange show.
     The shares were sold at 5.10-5.40 pesos each.
     No other details were available.
     At 11.12 am, Ayala Corp was top traded and 0.10 pesos up at 5.30 on volume of 105.41 mln shares.
     (1 usd = 55.272 pesos)
     edelacruz@afxasia.com

DATAWATCH -Weak peso, fuel price hikes to put pressure on Philippine CPI - DBS

     MANILA (AFX-ASIA) - The consumer price index is expected to show a continued rise in the next two months given the inflationary pressures posted by a weaker peso and higher fuel prices, DBS Bank economist Wong Chee Seng said.
     Production shortages in the agriculture sector would also increase food prices ahead of the year end Christmas season, he added.
     October CPI rose 3.1 pct year-on-year, after a rise of 2.9 pct in September, the National Statistics Office reported.
     Month-on-month, CPI was up 0.1 pct versus the same rate in September.
     "Price pressures would continue in the next two months and until the first half of the next year," Wong said.
     He said the impact of the peso's weakness, which posted a record closing low of 55.500 to the US dollar recently, is expected to last until the first half of 2004 in the run-up to the May elections.
     CPI is seen rising at 3.3 pct year-on-year in the next two months to December, and by 0.5 pct month-on-month, he said.
     "The peso will likely maintain its weakness as political concerns heighten in the run-up to the May election," Wong said.
     Fuel prices continue to rise as oil production in Iraq fails to take off as scheduled, with crude costs seen hitting more than 28 usd per barrel.
     The NSO said the CPI rise was largely due to increases in food, beverage and tobacco (FBT) prices.
     "The central bank is expected to keep its monetary policy steady," said Wong, who is projecting a full-year CPI growth of 3.2 pct.
     The central bank expects CPI to rise by 3.0-3.5 pct this year, while the government has kept its 4.5-5.5 pct full-year target.
     (1 usd = 55.272 pesos)
     cecille.yap@afxasia.com

Philippine Trust declares 145.53 pct stock dividend

     MANILA (AFX-ASIA) - Philippine Trust Co said it will pay a 145.53 pct stock dividend to shareholders on record as of Nov 18.
     The payment date will be announced later.
     The dividend declaration came after Philtrust secured approvals of the central bank and the Securities and Exchange Commission for its application to increase authorized capital stock to 17.0 bln pesos from 5.0 bln.
     At 9.56 am, Philtrust was untraded after closing previously at 60.00 pesos.
     (1 usd = 55.272 pesos)
     edelacruz@afxasia.com

Philippines' Banco de Oro 9 mths net profit up 15 pct yr-on-yr

     MANILA (AFX-ASIA) - Banco de Oro Universal Bank said it posted an unaudited net profit of 965.1 mln pesos in the nine months to September, up 15 pct from 842.1 mln in the year-earlier period, aided by interest gains.
     Net interest income rose 69 pct year-on-year to 2.78 bln pesos, the bank said in a statement.
     Other income declined 5.0 pct year-on-year to 1.91 bln pesos, although the bank said the year-ago level included a one-time gain from the sale of secondary shares during the its initial public offering in May 2002.
     The bank did not provide comparative absolute amounts for its results.
     It said operating expenses rose 72.00 pct year-on-year to 3.39 bln pesos, largely due to costs related to the integration and operations of the additional branches Banco de Oro acquired from First E-Bank, and the consolidation of Banco Santander Philippines Inc in July.
     The bank set aside 466.4 mln pesos in loan loss provisions in the nine-month period.
     Its non-performing loans accounted for 7.14 pct of total loans as of end-September.
     At end-September, the bank's total resources stood at 134.00 bln pesos, up 11.00 pct from end-2002 level, with total deposits rising by 5.2 bln to 97. 6 bln. Net loans expanded to 55.5 bln pesos, up 3.0 bln from end-2002 level.
     At 9.48 am, Banco de Oro was untraded after closing previously at 17.50 pesos.
     (1 usd = 55.272 pesos)
     edelacruz@afxasia.com

Philippines Oct CPI up 3.10 pct yr-on-yr, 0.10 pct mth-on-mth

     MANILA (AFX-ASIA) - The consumer price index rose 3.10 pct year-on-year in October, accelerating from the 2.90 pct rise posted in September, the National Statistics Office (NSO) said.
     The figure was in line with analyst expectations.
     Month-on-month, the CPI inched up 0.10 pct, the same rate as in September.
     The inflation rate averaged 3.0 pct in the first 10 months of the year, still below the government's full-year target of 4.50-5.50 pct.
     Economists AFX-Asia polled had expected a year-on-year CPI rise of 3.0-3. 2 pct in October as they saw price pressures beginning to build up ahead of the Christmas holidays.
     They also saw the impact of recent fuel price increases showing in the October inflation rate, as well as mild price pressures from a weak peso.
     The central bank had projected the October inflation rate at 2.9-3.1 pct year-on-year.
     The NSO said the year-on-year rise in inflation was primarily brought about by a 0.50-percentage point increase in the rate for food, beverage and tobacco (FBT) index, as well as higher rates posted in housing and repairs, and miscellaneous items.
     The inflation rate for FBT picked up to 1.90 pct year-on-year in October from 1.40 pct in the previous month; with housing and repairs at 3.20 pct from 3.00 pct; and miscellaneous items at 2.00 pct from 1.90 pct.
     For food alone, the inflation rate was recorded at 1.90 pct from 1.40 pct in September.
     However, the rate for fuel, light and water slowed down to 8.10 pct from 9.60 pct in September, and services, to 5.80 pct from 5.90 pct.
     Clothing saw 2.40 pct increase in October, the same rate posted in the previous month.
     afxmanila@afxasia.com

Philippines' Banco de Oro 9 mths net profit 965.1 mln pesos, up 15 pct yr/yr

Philippines Oct CPI up 3.10 pct yr-on-yr, 0.10 pct mth-on-mth

UK's LNM Hldngs offers 7.0-bln peso bid for Philippines' NSC - report

     MANILA (AFX-ASIA) - British firm LNM Holdings NV, the world's second largest steel producer, has submitted a 7.0-bln peso bid to rehabilitate and reopen the Philippines' National Steel Corp (NSC), the Philippine Daily Inquirer reported, citing unidentified government sources.
     LNM is willing to pay 2.9 bln pesos upfront out of its 7.0-bln price offer, the report said.
     LNM general manager for marketing Eric Tiere earlier said LNM had submitted a bid with an option to buy the assets of NSC.
     He said LNM intends to operate NSC as a long-term investor, by injecting fresh capital in it and ensuring its operation in full capacity within two years.
     The NSC facility in Iligan province has reportedly attracted at least two other interested parties -- Brazilian steel trader Duferco and India's Global Infrastructure Holdings Ltd.
     (1 usd = 55.36 pesos)
     edelacruz@afxasia.com

Philippines' Mondragon in buy-out talks with foreign group - report

     MANILA (AFX-ASIA) - Mondragon International Philippines Inc is discussing a possible buy-out deal with a foreign group, the Philippine Daily Inquirer reported, citing company chairman and chief executive officer Jose Antonio Gonzales.
     He did not identify the foreign company.
     Mondragon had postponed its annual meeting, originally scheduled for September, to March 15, 2004 as it pursues negotiations with the government and investors on the operation of the Mimosa Leisure Estate in the former Clark airbase in Pampanga province, north of Manila.
     Mondragon earlier rescinded a memorandum of understanding with state-run Clark Development Corp (CDC), which involved a new rental and payment scheme of its back rentals to CDC. The government took over Mimosa after Mondragon failed to pay its rental arrears.
     Mondragon has been seeking to restructure its debt of about 7.00 bln pesos.
     (1 usd = 55.36 pesos)
     edelacruz@afxasia.com

Philippine central bank sees forex reserves at 16 bln usd in 2004 - report

     MANILA (AFX-ASIA) - The central bank expects the country's gross international reserves (GIR) to reach 16.00 bln usd in 2004, boosted by an increase in foreign direct investments and exports earnings, the Philippine Star reported.
     The central bank is targeting a GIR level of 14.00-15.00 bln usd by the year-end.
     Citing central bank deputy governor Amando Tetangco Jr, the report said the GIR is also seen boosted by an expected increase in remittances from Filipinos working overseas.
     As of end-September, the GIR stood at 16.16 bln usd, enough to cover 4.4 months of imports of goods and payments of services and income.
     It was also 2.5 times the country's short-term debt based on original maturity, and 1.3 times based on residual maturity.
     edelacruz@afxasia.com

Philippines' San Miguel completes acquisition of Taiwan Tea's TTCV Investment

     MANILA (AFX-ASIA) - San Miguel Corp said it completed today its acquisition of Taiwan Tea Corp's 100-pct stake in TTCV Investment (BVI) Co Ltd.
     The deal effectively gives San Miguel 100-pct ownership of TTC (Vietnam) Co Ltd, a company engaged in pig farming and feed milling operations in Vietnam.
     San Miguel earlier disclosed the acquisition cost as 35.50 mln usd.
     The Philippines' food and beverage conglomerate intends to continue running the Vietnam firm with a majority of its 500-strong Vietnamese workforce, supported by a core management team to oversee a smooth integration.
     San Miguel aims to enter Vietnam's basic and processed meats market, and create a stronghold in the acquired company's growing animal and aquatic feeds market.
     The acquisition is part of San Miguel's regional expansion plan, which involves the setting up of food and beverage complexes in at least seven Asian markets, such as Thailand, China, Vietnam, Indonesia, Australia, Malaysia and Taiwan.
     It earlier announced an agreement with Thai developer Amata City Co Ltd for the purchase of an industrial complex in Amata City, Rayong, in Thailand for 20.00 mln usd.
     The business in Thailand will involve manufacturing beverage products, such as packaged water, carbonated soft drinks, carbo-natural drinks, juice, tea and energy drinks, as well as snack and feed mill operations.
     San Miguel intends to invest 100.00 mln usd in each of these markets, and expects sales there to boost the company's annual revenue by 300.00 mln usd.
     edelacruz@afxasia.com

Philippine oil firms announce 0.40 pesos/liter fuel price hike

     MANILA (AFX-ASIA) - Petron Corp, Pilipinas Shell Petroleum Corp and Caltex Philippines Inc said they will implement an across-the-board increase in fuel prices by 0.40 pesos per liter effective tomorrow.
     They said local pump prices have to be adjusted to recover additional costs due to higher crude prices in the international market.
     Petron said it will also increase the price of its liquefied petroleum gas by 1.00 peso per kilogram.
     (1 usd = 55.36 pesos)
     afxmanila@afxasia.com

Philippines' Bureau of Customs exceeds October collection target

     MANILA (AFX-ASIA) - The Bureau of Customs said it slightly exceeded its collection target for the month of October, up 191.00 mln pesos at 9.252 bln pesos versus its 9.061 bln goal for the month.
     For the 10 months to October, actual collections reached 87.564 bln pesos, 5.40 pct higher than the 83.085 bln pesos target during the period, it said.
     The figures were based on preliminary reports submitted by the agency's collection districts, it said.
     (1 usd = 55.36 pesos)
     cecille.yap@afxasia.com