NEWS & ADVISORY
ARCHIVE

FEATURES NEWS/ADVISORY CHARTS CONTACT

Friday, November 28, 2003
Forex - Philippine peso ends at record low close on domestic concerns
Philippines' Meralco says no final borrowing plans as yet
Philippines' Arroyo orders ERC to resolve Meralco commercial clients refund
Philippine President leaves weak peso management in central bank hands-Saludo
Philippines' Prime Orion to appeal court ruling on Amari
Manila shares close down on political concerns; index at 7-week low
Philippine sovereign ratings remain despite Camacho resignation - S&P - UPDATE
ADB to offer 270 mln usd loan for transport projects in China's Xi'an
Philippines' Vulcan Industrial signs marketing deal with Malaysian firm

Thursday, November 27, 2003
Philippine Treasury raises 1.555 bln pesos via 3-yr retail bonds auction
DATAWATCH- Political risks may hamper Philippines' economic growth - ABCapital
Philippines economic and corporate news summary PSW69
Manila shares close sharply weaker on political, economic concerns
Forex - Philippine peso hits record low on political concerns, Moody's review
Philippines Q3 GDP up 4.40 pct yr-on-yr, up 1.70 pct from Q2
Philippine peso hits record intra-day low on political concerns,Moody's report
Philippine Q3 GDP growth better than expected on farm output, services
Philippines Nov CPI seen up 3.30 pct yr-on-yr vs 3.10 pct in Oct - NEDA
Philippines' Security Bank names new president, CEO
Philippines' Meralco says 2004 capex budget under review
Philippine oil firms hike prices by 0.30 pesos/liter
Philippine San Miguel may finalize Indonesia investment by year-end - report
Philippine rating under review for possible downgrade - Moody's

November 25 - 26 
November 21 - 24 
November 19 - 20 
November 17 - 18 
November 13 - 14 
November 11 - 12 
November 7 - 10 
November 5 - 6 
November 3 - 4 


 

 

Forex - Philippine peso ends at record low close on domestic concerns


     MANILA (AFX-ASIA) - The peso ended at a record low close of 55.73 to the US unit in range-bound trade due to persistent political and economic concerns, dealers said.
     The peso had hit a record intra-day low of 55.85 yesterday morning.
     They said Wednesday's announcement of popular movie actor Fernando Poe Jr's candidacy in the May 2004 presidential election and Moody's Investors Service's possible downgrades of the country's ratings continued to spook investors.
     Corporates were also involved in heavy buying of US dollars to meet their month-end financing requirements, dealers added.
     The peso closed at 55.73 after trading in a narrow range of 55.70-55.74 on volume of 107.70 mln usd. It closed at 55.69 yesterday.
     "Domestic concerns are hounding the market," a local bank dealer said.
     The peso is seen trading between 55.60 and 55.80 on Monday, with demand for the US dollar expected to ease, given the projected inflows from overseas and dollar-selling among exporters.
     The central bank was not seen in the market today, dealers said.
     cecille.yap@afxasia.com

 

Philippines' Meralco says no final borrowing plans as yet


     MANILA (AFX-ASIA) - Manila Electric Co said it has yet to finalize any new borrowing plans, adding the reported 200 mln usd bond issue it is considering for early 2004 is just one of its many financing options.
     "To date, the company has not made a final determination on any particular transaction and shall make the appropriate disclosures when such a decision to undertake new financing has been reached," Meralco treasurer Rafael Andrada said.
     A newspaper report today quoted Oscar Lopez, chairman and chief executive officer of Meralco parent First Philippine Holdings Corp, as saying Meralco is looking to issue early next year 200 mln usd worth of seven-year bonds, the proceeds of which will be used to settle maturing short-term loans.
     (1 usd = 55.73 pesos)
     edelacruz@afxasia.com

 

Philippines' Arroyo orders ERC to resolve Meralco commercial clients refund


     MANILA (AFX-ASIA) - President Gloria Arroyo said she has instructed the Energy Regulatory Commission (ERC) to work with the Manila Electric Co and the 18,000-strong Philippine Chamber of Commerce and Industry (PCCI) to formulate an acceptable refund program for commercial clients.
     The order follows ERC's pronouncement that it is seriously studying a proposal from some business groups that a foundation be set up to manage the proceeds of 18 bln pesos from the last phase of Meralco's refund program.
     The fourth phase of Meralco's ongoing 30.5 bln pesos refund program covers commercial and industrial customers.
     The refund was effected on the order of the Supreme Court, which found that the country's largest power distributor overcharged customers by including income taxes in its operating expenses.
     ERC chairman Manuel Sanchez said the proposal sounds palatable since the amount to be refunded has already been passed on to consumers.
     However, the proposal does not sit well with some business groups and PCCI members have urged government to formulate a refund program "that explores financial instruments, in accelerating the timetable of refund through some form and process mutually acceptable to all parties concerned."
     (1 usd = 55.73 pesos)
     cecille.yap@afxasia.com

 

Philippine President leaves weak peso management in central bank hands-Saludo


     MANILA (AFX-ASIA) - President Gloria Arroyo has left management of the sliding peso, which fell to its lowest level ever yesterday due to lingering political concerns, solely in the hands of the Philippine central bank, presidential deputy spokesman Ricardo Saludo said.
     "She leaves that to the central bank... The central bank is the one who handles monetary and currency issues. It is independent (from the government), as you know," Saludo told AFX-Asia on the sidelines of the 29th Philippine Business Conference.
     He said that it is up to the monetary authority "to maintain stability and (remove) speculation in the currency market."
     The peso yesterday fell to a record low 55.850 to the US dollar due to market worries about political and economic issues.
     Popular movie star Fernando Poe Jr has announced his intention to run in the 2004 presidential race against Arroyo and Moody's Investors Service warned of a possible downgrade in the country's sovereign debt ratings due to heightened political uncertainties.
     A stronger US dollar across-the-board, following a better-than-expected GDP data in the US, was partly to blame for the local unit's weakness yesterday, dealers said.
     The peso recovered in late afternoon trade yesterday, but nevertheless ended at a record closing low of 55.69.
     Central bank governor Rafael Buenaventura had maintained the market corrected on its own, denying having intervened to help the peso recover.
     He said the central bank's projection of a 54.000 to the dollar level by year-end is "a little difficult, but it's still achievable."
     (1 usd = 55.72 pesos)
     cecille.yap@afxasia.com

 

Philippines' Prime Orion to appeal court ruling on Amari


     MANILA (AFX-ASIA) - Prime Orion Philippines Inc said it will again ask the Supreme Court to be allowed to argue orally its case against the nullification of the government's Manila Bay land reclamation deal with company affiliate Cyber Bay Corp.
     In a disclosure to the stock exchange, Prime Orion said it "will appeal again for the opportunity to argue orally its case so that the remaining justices (who voted against the project) will be convinced that (project) is legal and good for the country and the economy."
     The Supreme Court upheld its earlier decision nullifying the government's deal with Amari Coastal Bay Development Corp, which was renamed Central Bay Reclamation and Development Corp, a wholly-owned subsidiary of Cyber Bay.
     Cyber Bay earlier asked the Supreme Court to reconsider the May 6 ruling nullifying the company's purchase of 367.5 hectares of reclaimed and submerged land in the Manila Bay area from the government through the Public Estates Authority.
     The high court had ruled the contract violated the Philippine Constitution's prohibition of the sale of public land to private corporations.
     Under the law, private corporations cannot hold, except through leases, alienable lands of the public domain, it said.
     edelacruz@afxasia.com

 

Manila shares close down on political concerns; index at 7-week low


     MANILA (AFX-ASIA) - Share prices closed lower, pulling the key index down to its lowest level in seven weeks, with political uncertainties in the run-up to the May elections still undermining sentiment, dealers said.
     The absence of fresh leads and the peso's weakness also prompted investors to stay on the sidelines, although the rate of decline was not as strong as yesterday, they added.
     The composite index closed down 5.55 points, or 0.42 pct, at 1,313.87 on volume of 188.19 mln shares valued at 628.1 mln pesos. It moved between 1,308. 24 and 1,323.38 points.
     It is the index's weakest close since Oct 9, when it ended at 1,303.66.
     In the broader market, losers outnumbered gainers 27 to 23, while 37 stocks were unchanged.
     At the Philippine Dealing System, the peso averaged 55.720 to the US dollar at noon, after touching a record intra-day low of 55.850 yesterday. It ended at 55.690 yesterday, a record closing low.
     "Political uncertainties ahead of the elections are still causing nervousness among investors. We should expect political developments to be a major factor in shaping investor sentiment until next year," Accord Capital Equities analyst Lawrence de Leon said.
     "I think investors are now looking at the bigger political picture, the uncertain political landscape, rather than specific issues or certain individuals joining the political race."
     But dealers said that worries particularly over the candidacy of movie actor Fernando Poe Jr remain.
     Besides his lack of experience in government service, they said businessmen are looking negatively at Poe's candidacy because he has yet to announce his economic program and political platform.
     De Leon said selling pressure subsided as some stocks staged a technical rebound, following yesterday's sharp losses, including shopping mall operator SM Prime Holdings.
     SM Prime was up 0.10 at 6.50 on 17.9 mln shares.
     Top-traded Philippine Long Distance Telephone was down 5.00 pesos at 755 on volume of 214,150 shares.
     Ayala Corp was down 0.15 at 4.75 on 15.79 mln shares.
     Mabuhay Vinyl was up 0.18, or 18 pct, at 1.18, on volume of 36.03 mln shares, mostly covered by cross sales.
     Globe Telecom was down 15 at 720.
     Ayala Land was down 0.10 at 5.40 on 5.87 mln shares.
     Petron Corp was down 0.02 at 2.10 on 6.6 mln shares.
     The all-shares index was up 3.11 points at 836.35.
     The commercial-industrial index fell 6.89 to 1,962.11.
     Property was down 0.21 at 543.45, while mining dropped 32.76 to 1,610.22.
     Oil was up 0.02 at 1.33.
     Banking and financial services shed 4.20 to 416.86.
     Accord's de Leon said the market's direction is uncertain.
     "I think the market will be listless early next week. The direction will depend on fresh developments, including the foreign exchange rate movement," he said.
     He added that with the country's economic fundamentals generally remaining sound despite the peso's volatility, investors may decided take advantage of the low share prices.
     edelacruz@afxasia.com

 

Philippine sovereign ratings remain despite Camacho resignation - S&P - UPDATE


     MANILA (AFX-ASIA) - Standard & Poor's Ratings Services said it has decided to maintain the Philippines' sovereign credit ratings of BB for foreign currency and BBB for local currency, with a stable outlook, despite Finance Secretary Jose Isidro Camacho's resignation.
     "There is no indication the resignation of Mr Camacho, under whom the initial deterioration and subsequent pickup of tax collections occurred, will lead to unfavorable economic or fiscal outcomes," S&P said in a statement issued in Singapore.
     S&P said it will, however, continue to evaluate, in particular, the Philippines' fiscal policy, as well as trends in the exchange rates, given the uncertain political landscape in the run-up to next year's presidential election.
     The agency said, when it lowered the Philippines' ratings in April this year, it took into account the country's relatively high debt levels and its difficulty in maintaining fiscal discipline.
     "Since that time, tax collection has improved and the deficit brought under control," it added.
     In a news briefing early this week, Camacho said the government will continue to observe fiscal discipline even during next year's election as President Gloria Arroyo is committed to maintaining this policy.
     Camacho, whose resignation from the Arroyo cabinet takes effect November 30, said concerns of some sectors that the government will disregard fiscal discipline and spend more to win votes for administration candidates are "baseless."
     He announced his resignation last Friday, saying he was leaving due to the "frustration (that) comes with the job." He declined to be more specific.
     His decision follows the release of the October fiscal figures, which showed the budget deficit at 21.172 bln pesos, lower than the ceiling of 22. 333 bln, mostly due to higher revenue collection.
     For the January-October period, the deficit came in at 163.875 bln pesos, below the ceiling of 171.88 bln.
     Camacho said the favorable fiscal performance in October makes the government even "more optimistic" about containing the budget deficit level to within the full-year target of 202.00 bln pesos.
     Yesterday, Camacho said he did not expect both S&P and Fitch Ratings to downgrade the country's ratings, as the two agencies have already factored in political uncertainties and their impact on the economy when the announced downgrades in the first half of the year.
     Moody's Investors Service said on Wednesday it has placed on review for a possible downgrades the Philippines' long-term foreign and local currency ceilings and ratings amid heightened political uncertainties.
     Camacho, however, said that Moody's "is only moving to a rating aligning itself with the two others."
     On political uncertainties, S&P credit analyst Chih Wai Liew said it has noted in the past the personality-based nature of Philippine politics.
     "The weakness and fractiousness of the country's institutions," could undermine confidence and the predictability of economic policy, he added.
     "With much of the country's external debt denominated in foreign currency, any collapse and rapid fall in the value of the peso could cause financial disruption," S&P said.
     The stock market dropped nearly 2.0 pct, while the peso touched a record low of 55.850 to the US dollar on Thursday, a day after popular movie actor Fernando Poe Jr announced he will run for the presidency in May, and Moody's ratings downgrades.
     edelacruz@afxasia.com

 

ADB to offer 270 mln usd loan for transport projects in China's Xi'an


     BEIJING (AFX-ASIA) - The Asian Development Bank (ADB) said it has agreed to provide a 270 mln usd loan for transport projects in Xi'an, the provincial capital of China's northwestern Shaanxi province.
     In a statement, ADB said the projects include construction of a 71-km ring road and the upgradation of 16 km of connector roads to integrate the ring road with the overall urban road network.
     ADB said the total investment for the project is expected to be 762 mln usd, with the rest of the funds to be provided by the local municipal government.
     ADB said the loan has a 24-year tenor, including a grace period of four years, with the interest rate determined in accordance with ADB's LIBOR-based lending facility.
     ADB has provided about 4.2 bln usd to finance the development of 3,407 km of key inter-city expressways in China and improvements in 5,516 km of associated local road networks since 1991.
     xin.zhou@xfn.com

 

Philippines' Vulcan Industrial signs marketing deal with Malaysian firm


     MANILA (AFX-ASIA) - Vulcan Industrial & Mining Corp said it has signed an agreement to market silica sand to be produced by Malaysian firm BINA Taiping Engineering Sdn Bhd.
     In a disclosure to the stock exchange, Vulcan said it will be the exclusive distributor of BINA's silica sand in the Philippines and will also sell the sand in the export market.
     Vulcan said it will sell at best effort a minimum of 20,000 metric tons per month of BINA's silica sand for the first year of the agreement, with the volume increasing progressively every year as Vulcan develops markets in the Philippines or elsewhere in Asia.
     It said BINA has applied for a permit to extract, process, sell and export silica sand from a 3,510-hectare plot of land in Kudat, Malaysia.
     Vulcan did not give financial details.
     edelacruz@afxasia.com

 

Philippine Treasury raises 1.555 bln pesos via 3-yr retail bonds auction


     MANILA (AFX-ASIA) - The Bureau of Treasury said it raised 1.555 bln pesos at today's auction of three-year Retail Treasury Bonds (RTBs), with the coupon rate set at 10.00 pct.
     Total tenders reached 5.765 bln pesos.
     The Treasury earlier said it planned to offer at least 5.0 bln pesos worth of the debt papers.
     The public offering begins today and lasts until Dec 3.
     In June, it was able to raise more than 60 bln pesos from the issue of three- and five-year RTBs, with the coupon rates placed at 9.5 pct and 10.375 pct, respectively.
     Deputy National Treasurer Mina Figueroa said investors demanded a higher coupon in today's RTB auction due to rising political uncertainties, particularly after popular movie action star Fernando Poe Jr announced his intention to run in the 2004 presidential race.
     Poe is widely believed to be a strong contender in next year's polls given his popularity, although investors are concerned over his lack of experience in government service and his closeness with former President Joseph Estrada, who was ousted from his post on corruption allegations.
     Figueroa said the recent three-year RTB issue was not expected to generate the same strong interest as the June bond issue.
     Banks would usually opt to hold on to their cash towards the end of the year than have it invested, she said.
     (1 usd = 55.792 pesos)
     cecille.yap@afxasia.com

 

DATAWATCH- Political risks may hamper Philippines' economic growth - ABCapital


     MANILA (AFX-ASIA) - Rising political concerns and an imminent ratings downgrade from Moody's Investor Service have threatened the sustainability of the Philippines' GDP growth, which reached 4.40 pct in the third quarter, AB Capital Securities research director and economist Jose Vistan Jr said.
     Already, the announcement of popular movie star Fernando Poe Jr that he would join the presidential race in May sent the peso to its lowest level in history at 55.850 against the US dollar.
     The peso beat its previous record low of 55.750 reached at the height of the political turmoil in Jan 2001, which led to the ouster of former President Joseph Estrada, also a famous movie personality.
     "The political noise will definitely have an impact on capital investments in the fourth quarter and the economic growth posted in the third quarter would be harder to sustain," Vistan said.
     He added that the elections threatened the continuity of current economic policies and such fears will worsen if President Gloria Arroyo fails to win in next year's presidential race.
     A recent non-government survey indicated a close fight between former senator Raul Roco, Poe and Arroyo.
     "Hopefully, what will turn out favorable is the global recovery, which will give hopes to exporting countries like ours."
     The National Statistical Coordination Board announced third quarter GDP grew 4.4 pct compared with a 3.8 pct rise a year earlier on the back of the agriculture's strong recovery and sustained growth of the services sector.
     The rate was higher than the revised 4.0 pct growth year-on-year in the second quarter.
     GDP grew 1.7 pct in the third quarter from the previous quarter, also higher than the second quarter's growth of 0.80 pct.
     Meanwhile, higher income contributions from overseas Filipino workers pushed GNP up 5.9 pct in the third quarter from 3.1 pct a year earlier.
     Government forecasts indicate GDP will grow at 3.8-4.0 pct in the fourth quarter, with agriculture growth at 3.7 pct in the fourth quarter after a 5.5 pct year-on-year growth in the third quarter.
     "This economic performance will rise above the political noise," National Economic Development Authority (NEDA) deputy director general Raphael Lotilla said.
     He noted the domestic economy, as shown by the better-than-expected third quarter performance, overcame hurdles such as persistent security threats and political uncertainties spawned by the failed July 27 military mutiny.
     cecille.yap@afxasia.com

 

Philippines economic and corporate news summary PSW69


     BEIJING (AFX-ASIA) - A summary of Philippine economic and corporate news at 0500 GMT
     -Philippines Q3 GDP up 4.40 pct yr-on-yr, up 1.70 pct from Q2
     -Q3 GDP growth better than expected on farm output, services
     -Q2 GDP rise revised to 4.0 pct yr-on-yr from 3.20 pct
     -Q2 GNP rise revised to 6.0 pct yr-on-yr from 4.50 pct
     -Q3 GNP up 5.90 pct yr-on-yr
     -Philippines seasonally adjusted GDP up 1.70 pct
     -Philippines to attain low-end of 4.2-5.2 GDP growth target in 2003 - NSCB
     -Philippines Nov CPI seen up 3.30 pct yr-on-yr vs 3.10 pct in Oct - NEDA
     -Arroyo confirms Q3 GDP up 4.40 pct yr-on-yr
     -Q3 agriculture output up 5.50 pct yr-on-yr
     -Q3 industry output up 2.30 pct yr-on-yr
     -Q3 manufacturing output up 4.40 pct yr-on-yr
     -Q3 services output up 5.60 pct yr
     -Philippine rating under review for possible downgrade - Moody's
     -Central bank watching currency market - Tetangco
     -Peso hits all-time low of 55.850 to US dollar
     -Peso hits record intra-day low on political concerns, Moody's report
     -Peso reacting to 'political noise' - Central Bank's Tetangco
     -Peso's weakness 'not consistent' with improving economy - Tetangco
     -Philippine oil firms hike prices by 0.30 pesos/liter
     -Meralco says 2004 capex budget under review
     -Security Bank names new president, CEO
     emily.xiong@xfn.com

 

Manila shares close sharply weaker on political, economic concerns


     MANILA (AFX-ASIA) - Share prices closed sharply lower on heightened political and economic concerns amid prospects of a Moody's Investors Service downgrade of the Philippines' sovereign rating, dealers said.
     The likelihood of another popular movie actor, with no experience in public office, becoming the country's next president is also worrying investors, they added.
     The composite index closed down 24.94 points, or 1.86 pct, at 1,319.42 on volume of 215.2 mln shares valued at 413.2 mln pesos. It moved between 1,313. 98 and 1,342.08.
     In the broader market, losers outnumbered gainers 33 to 15, while 38 stocks were unchanged.
     Moody's said it has placed on review for possible downgrades the country's long-term foreign and local currency ceilings and ratings on rising political uncertainties.
     The agency also placed on review for a possible downgrades the foreign currency long-term deposit ratings of seven Philippine banks.
     The banks are Banco de Oro Universal Bank, Bank of the Philippine Islands, Development Bank of the Philippines, Equitable-PCI Bank, Land Bank of the Philip pines, Metropolitan Bank Trust Co, and Philippine National Bank.
     The news of Moody's move and Fernando Poe Jr's presidential bid also pulled down the peso to an all-time low of 55.850 against the US dollar in early trade.
     The market largely ignored the better-than-expected 4.4 pct growth in the country's gross domestic product in the third quarter, dealers said.
     At the Philippine Dealing System, the peso averaged 55.792 to the dollar at noon on volume of 122.50 mln usd.
     Jose Vistan Jr, research director at AB Capital Securities, said the possible Moody's downgrades will negatively affect the country's borrowings and weaken its ability to sustain economic growth.
     "It also sends a signal to investors that the Philippines is a less attractive investment destination," he added.
     Poe's candidacy made investors cautious because the market does "not know what he is going to offer, given he is inexperienced" in running public office, said BPI Securities analyst Roberto Cano.
     "The market was already going lower (in previous sessions) after the 1, 380 support was broken. The last few days it was trying to recover, but I think FPJ (Fernando Poe Jr) added pressure," Eagle Equities president Joseph Roxas said.
     With the key index ending below the 1,320-point support, there could be further weakness in the coming session, dealers said.
     Top-traded Philippine Long Distance Telephone closed down 15 pesos at 760 on volume of 121,540 shares.
     Ayala Corp was down 0.05 at 4.90 on 11.88 mln shares and Ayala Land Inc down 0.20 at 5.50.
     Globe Telecom was down 20 at 735.
     BPI was down 0.50 at 43.
     SM Prime was down 0.30 at 6.40.
     Manila Electric B, available to foreign investors, was down 1.00 at 21 and Meralco A down 0.50 at 13.75. Meralco parent First Philippine Holdings was down 0.75 at 18.
     Petron Corp was down 0.02 at 2.12.
     Jollibee Foods was down 0.50 at 17.
     The all-shares index was down 4.00 points at 833.24.
     The commercial-industrial index fell 33.92 to 1,969.00, while property dropped 20.67 to 543.24.
     Mining bucked the trend, ending up 17.37 at 1,642.98.
     Oil was down 0.02 at 1.31.
     Banking and financial services shed 1.95 to 421.06.
     edelacruz@afxasia.com

 

Forex - Philippine peso hits record low on political concerns, Moody's review


     MANILA (AFX-ASIA) - The peso fell to an all-time low of 55.850 to the US dollar in morning trade due to political and economic concerns, dealers said.
     They saw the central bank supporting the peso at 55.850, which made them rule out a further slide in the coming sessions.
     The decline followed the announcement by actor Fernando Poe Jr that he will run for the presidency in May and Moody's Investors Service's decision to place the country's sovereign ratings under review for a possible downgrade amid heightened political concerns in the run-up to next year's polls.
     The peso averaged 55.792 to the dollar by noon on volume of 122.50 mln usd, after closing at 55.530 on Tuesday. Philippine financial markets were closed yesterday for Eid al-Fitr.
     It traded between 55.750 and 55.850 in the morning.
     "It's a knee-jerk reaction to both Moody's move and FPJ's (Fernando Poe Jr) announcement," a commercial bank dealer said.
     "It's a speculative trade, with the market focused largely on the bad news. And in a jittery market, the focus on the bad news is exaggerated."
     The dealer said this is why the currency market largely ignored the better-than-expected GDP growth of 4.40 pct year-on-year in the third quarter.
     Poe, hailed locally as "the king of Philippine movies" and a close friend of ousted former president Joseph Estrada, is largely seen as a big threat to incumbent Gloria Arroyo's chances of winning a full term in the May elections.
     Estrada is now detained on corruption charges.
     Moody's placed on review for a possible downgrade foreign currency long-term deposit ratings of seven Philippine banks, Banco de Oro Universal Bank, Bank of the Philippine Islands, Development Bank of the Philippines, Equitable-PCI Bank, Land Bank of the Philippines, Metropolitan Bank Trust Co and Philippine National Bank.
     The central bank said the peso's slide was triggered mainly be political worries and added it is monitoring the currency market.
     "The peso is still reacting to political noise. The movements are not consistent with improvements in the economy. We are watching the market," central bank deputy governor Amando Tetangco Jr said.
     The dealer said unless there is legitimate dollar demand, the peso will likely see a recovery in the afternoon session.
     edelacruz@afxasia.com

 

Philippines Q3 GDP up 4.40 pct yr-on-yr, up 1.70 pct from Q2


     MANILA (AFX-ASIA) - The gross domestic product (GDP) grew 4.40 pct year-on-year in the third quarter, exceeding the government's forecast of 3. 80-4.30 pct, President Gloria Arroyo said.
     The gross national product (GNP), which includes net factor income from abroad, expanded 5.90 pct year-on-year from the year-ago growth of 3.10 pct.
     Seasonally adjusted, the GDP in the third quarter grew 1.70 pct, after expanding at a revised rate of 0.80 pct in the second quarter.
     The agriculture sector's better-than-expected performance in the third quarter, growing at 5.5 pct year-on-year against a 4.2 pct projection, and a faster growth of the services sector buoyed the economy's performance during the three months to September.
     Economists polled by AFX-Asia forecast third-quarter GDP growth of 3.80-4. 50 pct year-on-year.
     Acting Economic Planning Secretary Raphael Lotilla said fourth quarter GDP is expected to grow at a slower pace of 3.8-4.0 pct as agriculture growth normalizes after a base effect arising from the sector's strong growth last year, attributed to a "bumper" agriculture harvest.
     He added industry and services sectors are expected to grow "respectably" on the back of better export performance and higher public spending to make up for the under-spending in the first half.
     "Given the economy's year-to-date performance, the economy is now assured of attaining the GDP low-end forecast of 4.2 pct and the high-end of the GNP forecast range of 5.4 pct," Lotilla said.
     For the first three quarters of the year, the GDP growth stood at 4.3 pct and GNP at 5.7 pct, against the full-year targets of 4.2-5.2 pct for GDP and 5.1-5.7 pct for GNP.
     Lotilla said higher net factor income from abroad, primarily buoyed by remittances from overseas Filipino workers, may even enable the country to reach the high-end of the GNP growth forecasts.
     Income from abroad grew 28.4 pct year-on-year in the third quarter from a 6.2 pct year-on-year decline a year earlier.
     "This economic performance will rise above the political noise," Lotilla said in a response to how political concerns ahead of the May 2004 presidential election, which have already sent the peso to a new historic low of 55.85 to the US dollar, would affect the country's economic stability.
     The government, meanwhile, revised the second quarter year-on-year growth for GDP to 4.0 pct from 3.20 pct, and for GNP to 6.0 pct from 4.50 pct.
     The National Statistical Coordination Board gave the following breakdown:
     

 

Philippine peso hits record intra-day low on political concerns,Moody's report


     MANILA (AFX-ASIA) - The peso fell to an all-time intra-day low of 55.850 to the US dollar in early trade, weighed down by rising political uncertainties ahead of the May elections, the central bank said.
     The peso hit a low of 55.850 to the dollar, erasing the previous all-time low of 55.750, which was recorded in Jan 2001 at the height of the political turmoil that led to the ouster of former President Joseph Estrada.
     At 10.05 am, the peso averaged 55.796 to the dollar on volume of 74.50 mln usd. It touched a high of 55.750 after opening at 55.800.
     The peso's slide followed the announcement by actor Fernando Poe Jr that he will run for the presidency in May and a move by Moody's Investors Service to place the country's sovereign ratings under review for a possible downgrade amid heightened political concerns in the run-up to next year's polls.
     "The peso is still reacting to political noise. The movements are not consistent with improvements in the economy. We are watching the market," central bank deputy governor Amando Tetangco Jr said.
     edelacruz@afxasia.com

 

Philippine Q3 GDP growth better than expected on farm output, services


     MANILA (AFX-ASIA) - The Philippine economy, as measured by gross domestic product, expanded in the third quarter at a faster-than-expected rate of 4.4 pct year-on-year, on an improved agricultural output and a better showing of the services sectors, the government said.
     Including net factor incomes from abroad, the economy, as measured by gross national product, grew 5.9 pct year-on-year, up from the expansion of 3. 1 pct a year ago.
     "These figures are higher than we expected. We outperformed Taiwan, Indonesia, Singapore, and South Korea," said President Gloria Arroyo, who formally announced the third-quarter GDP data via phone to a news briefing at the National Statistical Coordination Board office in Makati City.
     She said the fourth quarter will "definitely push the blue line upward, if we keep on track, shun destructive politics and unite in all fronts of national security and nation building."
     Arroyo, who will make a bid for a full term in the May polls, attributed the third-quarter growth to agriculture and investment spending.
     "Several factors kept our growth on an upward path. Macroeconomic fundamentals and sustained agricultural modernization are paying off. Fiscal prudence has kept the (budget) deficit within reasonable ceilings," she said.
     She also noted the continued increases in remittances from Filipino working overseas, which account for a big part of net factor incomes from abroad.
     "We are shaking off the lethargy occasioned by SARS, the Iraq war and El Nino. Confidence in our political stability has held steady in the face of the judicious resolution of the Oakwood incident," she added, referring to the failed mutiny of some junior military officers in July.
     She vowed her administration "will continue to push our gains in peace and development, working closely with our economic and security teams in the Cabinet."
     She also promised to work with Congress to ensure the passage of important economic bills, such as the indexing of taxes on cigarettes and liquor.
     edelacruz@afxasia.com

 

Philippines Nov CPI seen up 3.30 pct yr-on-yr vs 3.10 pct in Oct - NEDA


     MANILA (AFX-ASIA) - The country's consumer price index (CPI) is expected to show a rise of 3.30 pct year-on-year in November, compared with a 3.10 pct increase in October, due to higher oil prices and a weaker peso, the National Economic and Development Authority (NEDA) said.
     The CPI data will be announced late next week.
     The central bank expects the CPI to rise 3.5 pct year-on-year this month due to higher oil prices and increased consumer spending ahead of the Christmas holidays.
     The central bank maintains its forecast that the full-year inflation rate will settle near 3.0 pct, lower than the government's target of 4.5-5.5 pct.
     The inflation rate averaged 3.0 pct in the first three quarters of the year.
     afxmanila@afxasia.com

 

Philippines' Security Bank names new president, CEO


     MANILA (AFX-ASIA) - Security Bank Corp said its board of directors has elected Alberto Villarosa as president and chief executive officer, replacing Rafael Simpao Jr, who is retiring on the first banking day of Jan 2004.
     Villarosa's appointment is subject to the confirmation by the central bank's Monetary Board.
     Simpao, meanwhile, will serve the bank as chairman of the executive committee effective on the first banking day of Jan 2004, the bank told the stock exchange.
     edelacruz@afxasia.com

 

Philippines' Meralco says 2004 capex budget under review


     MANILA (AFX-ASIA) - Manila Electric Co said it is reviewing its 2004 capital expenditure budget after the Energy Regulatory Commission (ERC) ordered it to pay its customers in cash under the third phase of its refund program.
     "We are reviewing our 2004 cash flow and all assumptions on sales, system loss, loan repayments, capital expenditures, operating expense," a Meralco official said, although he did not say that a reduction is possible.
     Meralco has reportedly budgeted 5.0-6.5 bln pesos for next year capex.
     The ERC also wants Meralco to complete the third phase of the refund, estimated to cost 4.5-5.0 bln pesos, in six months from Jan 2004.
     The third phase covers some 830,000 residential customers with monthly consumption of more than 300 kilowatthours.
     The refund of overcharges dating back to 1994 is estimated to cost Meralco more than 30 bln pesos.
     Meanwhile, the power retailer will soon ask its creditors for more time to pay some 4.7 bln pesos in loans falling due in January, BusinessWorld newspaper reported, citing Meralco president Jesus Francisco.
     "We're talking to creditors to extend that, hopefully, with very little payments of principal," he said.
     He said Meralco will use some of its available cash for the refund.
     The final phase of the refund covers commercial and industrial electricity users.
     (1 usd = 55.53 pesos)
     afxmanila@afxasia.com

 

Philippine oil firms hike prices by 0.30 pesos/liter


     MANILA (AFX-ASIA) - Local oil companies led by listed Petron Corp said they have raised their pump prices by an average 0.30 pesos per liter to recover increased cost of crude in the world market.
     Petron, along with Pilippinas Shell Petroleum Corp and Caltex Philippines Inc, last raised their prices early this month, by an average 0.40 pesos per liter.
     (1 usd = 55.53 pesos)
     edelacruz@afxasia.com

 

Philippine San Miguel may finalize Indonesia investment by year-end - report


     MANILA (AFX-ASIA) - San Miguel Corp is hoping to finalize its planned investment in Indonesia before the year ends, Manila Times quoted company chairman and chief executive officer Eduardo Cojuangco Jr as saying.
     "Hopefully we can finalize something before the end (of the) year. After this, we would work on expanding in other countries as we have earlier planned," Cojuangco was reported to have said.
     The report did not give other details on the planned Indonesia investment of the country's largest food and beverage conglomerate.
     San Miguel has embarked on a regional expansion program and is looking, in particular, at markets such as Thailand, Vietnam, China, Indonesia, Australia, Malaysia and Taiwan.
     San Miguel intends to invest 100 mln usd in these markets to boost its annual revenue by 300 mln usd.
     (1 usd = 55. 53 pesos)
     edelacruz@afxasia.com

 

Philippine rating under review for possible downgrade - Moody's


     MANILA (AFX-ASIA) - Moody's Investors Service said it has placed on review for possible downgrade the Philippines' long-term foreign and local currency ceilings and ratings amid heightened political uncertainties.
     Moody's statement followed the announcement of Philippine movie icon Fernando Poe Junior that he would run for president. His popularity is largely seen as a big threat to incumbent Gloria Arroyo's chances of winning a second term in the May elections.
     Moody's said in a statement yesterday that heightened political uncertainties had begun to have adverse consequences for the government's financial position and the overall economy.
     Its rating review affects the Philippines' Ba1 foreign currency rating for government bonds and long-term foreign currency country ceiling for bonds, the Ba2 long-term foreign currency ceiling for bank deposits and the Baa3 local currency rating. Moody's has had a negative outlook on all of the country's long-term ceilings and ratings since September. The agency's review will include the resiliency of the external payments position and Arroyo's ability to maintain fiscal discipline, it said. "In view of the tensions that have accompanied political cycles in the past, the nation's fiscal policy could be handcuffed and capital outflows become more volatile as May's presidential election approaches," Moody's said. It said the status of Philippine foreign currency ratings would depend on the country's ability to maintain an adequate level of strength in its external performance and payments position. Moody's cautioned that a "continued deterioration in the political climate could further weaken the Philippines' external payments position." Investment is necessary not only for stabilizing the capital account in the near term but also for ensuring the dynamism of the export sector and boosting overall economic growth over the long run," it said.
     edelacruz@afxasia.com

 


FEATURES NEWS/ADVISORY CHARTS CONTACT