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Tuesday, October 07, 2003
Thailand's
PTT mulls expanding Philippine ops - Philippines' Energy Secretary
Philippine
banks' ratings outlook 'generally negative' - Moody's
Asian
countries consider second bond fund - Philippines' Camacho
Philippines
sets 10-yr T-bond coupon at 11.0 pct, raises 3.0 bln pesos
FATF
team to review Philippines' anti-money laundering program - Camacho
Philippine
fiscal targets stay despite Arroyo's political bid - Camacho
Manila
shares close firmer on selective buying - UPDATE
Bush designates
Philippines major non-NATO ally
Manila
shares slightly higher late morning on extended consolidation
Philippine
police headquarters hostage crisis leaves 4 dead
INTERVIEW
- Philippine PNB's 140 mln usd notes to raise capital adequacy ratio
Philippine
ISM Communications' 1.05 bln shares in cross sale
US
PowerSource Group's unit to invest 150 mln usd in Philippines - Perez
Manila
shares outlook - Mixed to lower on extended consolidation
American
Express to invest 5.0 mln usd next year to upgrade Philippine ops
Philippines'
new automobile excise tax law now in effect - finance dept
Philippine
end-Sept forex reserves 16.06 bln usd vs 16.16 bln in August
Forex
- Philippine peso closes weaker on strong US dollar across-the-board
Monday, October 06, 2003
Philippines'
Ionics unit sells Laguna plant equipment to re-pay debts
ROUNDUP
-Philippines' CPI slows in Sept; weak demand seen limiting price rises
Indonesians,
Filipinos kidnapped in Malaysia - police
Manila
shares close mixed on consolidation; PLDT lifts key index
Philippines
checking report of Malaysia kidnapping
Group
of Malaysians kidnapped from resort island - police official
Philippines'
Globe says may increase planned bond issue size to 3.5 bln pesos
DATAWATCH
- Philippines' consumer demand seen remaining weak - GK Goh
Philippines
inflation to remain stable at 3.0 pct yr-on-yr in Q4 - Neri
Philippine
Banco De Oro says UBS soliciting interest for 100-mln usd notes
Philippines
Sept CPI up 2.90 pct yr-on-yr, 0.10 pct mth-on-mth
Philippines'
LandBank 8 mths net profit 1.45 bln pesos, may exceed FY target
Philippine
central bank approves Banco de Oro notes issue hike to 130 mln usd
Philippines'
Meralco may hike 2003 capex to 6.0 bln pesos - report
Philippine
govt end-July total debt 3.14 trln pesos vs 2.96 trln in June
Arroyo
announces Philippines re-election bid
| Thailand's PTT mulls expanding Philippine ops - Philippines' Energy Secretary |
MANILA (AFX-ASIA) - Thailand's fully-integrated oil and gas company PTT PLC is considering expanding its operations in the Philippines, through wholly-owned subsidiary PTT Philippines Inc, Energy Secretary Vicente Perez said. Perez, in a statement, said PTT is looking at increasing its storage capacity in the country to service growing domestic gasoline demand. He said PTT Philippines' expansion move will boost the country's long-term goal of becoming a strategic oil storage terminal in the region. PTT Philippines is engaged in gas station retailing, marketing, and distribution and trading of petroleum products. The company has also formed a joint venture with Coastal Petroleum Corp of the US to create two companies: Subic Bay Fuels Co Inc for the international operations of the Subic Bay oil storage terminal; and Subic Bay Distribution Inc for its domestic operations. afxmanila@afxasia.com |
| Philippine banks' ratings outlook 'generally negative' - Moody's |
MANILA (AFX-ASIA) - Moody's Investors Service said the outlook for debt and deposit ratings of Philippine banks is "generally negative" and in line with the revised outlook for the country's foreign currency sovereign ceilings. At the same time, however, Moody's said the financial health of major indigenous banks remains "fairly sound," although the financial profiles for other banks vary. "A benign interest rate environment, given the system's high liquidity, has allowed banks to support lending margins via active asset and liability management and to realize trading gains to protect profitability," Moody's said in a statement. "However, given the difficult operating and competitive environment, the historical wide interest spread appears to be a thing of the past for the time being," it added. On Sept 30, Moody's said it was revising the outlook on the country's foreign currency debt to negative from stable due to heightened political uncertainties, which could affect investor sentiment. It also raised concerns over the country's fiscal deficit picture. On the same day, Moody's also announced a revision to negative from stable its ratings outlook on six Philippine banks, including listed Bank of the Philippine Islands, Metropolitan Bank and Trust Co, Philippine National Bank and Equitable PCI Bank. The two others were state-owned Development Bank of the Philippines and Land Bank of the Philippines. The agency said the stable outlook for the ratings of Allied Banking Corp, Rizal Commercial Banking Corp and United Coconut Planters Bank were unaffected. John Tham, a Moody's analyst and author of a new report, "Bank Fundamentals Modest, With Outlook Marred by Sovereign Weakness," said Philippine banks are seen getting support from a moderate level of domestic consumption, against a backdrop of stabilizing global conditions. "However, the country's political uncertainty, if it proves protracted, could weaken the economy and, under such circumstances, the abilities of the banks to counter further economic deterioration would diverge, as reflected in their individual bank financial strength ratings," Tham said in the statement. The Moody's report examines the slow pace of banking system restructuring in the Philippines, which is regarded as a credit concern. "A few of the country's weak and capital-deficient banks, which are now undergoing rehabilitation, could become the source of destabilization should the difficult operating environment persist," Moody's said. "The banks' ability to raise core capital in the future remains unclear." The agency added that the banking system's "many institutions will continue to overburden regulators, making the detection of irregularities difficult." Tham also expressed concern over the degree of private influence over government decisions, which could weaken the central bank's ability to enforce its regulations. edelacruz@afxasia.com |
| Asian countries consider second bond fund - Philippines' Camacho |
MANILA (AFX-ASIA) - Asian countries are considering a second Asian Bond Fund (ABF) that will be made available to non-investment grade economies that will contribute to the fund, Finance Secretary Jose Isidro Camacho said. Thailand and Singapore are taking the lead among Asia Pacific Economic Cooperation (APEC) members in pushing for the second ABF, Camacho told reporters. The first 1.00-bln usd ABF was created with the contributions of 11 central banks in Asia and was to be invested in high-grade debt securities in the region. "The first fund was for investment grade securities. Now there is not a very big portfolio of Asian investment grade securities. We have more non-investment grade issuers than we have investment grade issuers," Camacho said. The Philippines is among those still regarded as a non-investment grade economy. "The second ABF is being discussed to be structured in a slightly different way that will allow it to invest also in non-investment grade issues, by getting a portfolio of high investment grade and non-investment grade, putting it together so that the blended rating of the fund would be investment grade and therefore qualify under the requirements of most central banks," Camacho said. Camacho, however, said he could not go into detail about the proposals as he is not familiar with the discussions about it. Contributors to the first ABF are the central banks of Thailand, Indonesia, Malaysia, Singapore, the Philippines, China, Hong Kong, South Korea, Japan, Australia and New Zealand. afxmanila@afxasia.com |
| Philippines sets 10-yr T-bond coupon at 11.0 pct, raises 3.0 bln pesos |
MANILA (AFX-ASIA) - The Bureau of Treasury said it set the coupon rate for 10-year T-bonds at 11.00 pct and fully awarded its offer of 3.00 bln pesos at today's auction. Tenders totalled 7.793 bln pesos. Bids ranged from 10.625 pct to 11.00 pct, and averaged 10.910 pct. (1 usd = 55.05 pesos) edelacruz@afxasia.com |
| FATF team to review Philippines' anti-money laundering program - Camacho |
MANILA (AFX-ASIA) - A Financial Action Task Force (FATF) team will arrive here this month to review the implementation of the Philippines' anti-money laundering law, Finance Secretary Jose Isidro Camacho said. The review is part of, what is turning out to be, a long process of taking the Philippines off the Paris-based group's list of countries regarded to be non-cooperative in the fight against money-laundering, he said. Camacho, however, remains optimistic that the Philippines will eventually be de-listed on the FATF's "very promising assessment." The Philippines avoided economic sanctions from FATF member-countries after the passage of a global anti-money laundering law earlier this year. However, it remains on the FATF's list of non-cooperative countries. "The process of de-listing is recognized as a long process. I think (Central bank governor Rafael) Buenaventura, who is also chairman of the (Anti-Money Laundering) Council, has said it will take one to two years, which is the process for most other countries," Camacho told reporters on the sidelines of the Asian Bankers' Meeting here, where he was keynote speaker. He said, during that period, the Philippines must "be able to demonstrate our ability to implement effectively our anti-money laundering legislation." afxmanila@afxasia.com |
| Philippine fiscal targets stay despite Arroyo's political bid - Camacho |
MANILA (AFX-ASIA) - Finance Secretary Jose Isidro Camacho allayed fears that the government's fiscal targets will be compromised to boost President Gloria Arroyo's chances of winning a full term in next year's elections. Arroyo herself "is the one most concerned about making sure we meet our fiscal targets," he told reporters on the sidelines of the three-day Asian Bankers' Meeting in Manila, in which he was the keynote speaker. At the weekend, Arroyo announced her decision to run in the May polls, reversing her earlier decision not to seek a full term. Arroyo, who was elected vice president, took over when a popular revolt ousted the elected president, Joseph Estrada, in 2001. Estrada is now detained and facing corruption charges. There have been insinuations that the government will mobilize its financial resources in support of Arroyo's candidacy. "I think the insinuations that the President's announcement can possibly change the measures that we are undertaking for revenues and expenditures are misplaced, totally misplaced," Camacho said. "It does not appreciate the fact that the President herself is the architect of fiscal discipline and fiscal responsibility." Arroyo's economic team, he added, "is doing what we think is fiscally responsible, which I know the President supports." The government is keeping its full-year budget deficit ceiling of 202 bln pesos and remains confident of staying within that level by year-end. In the eight months to August, the gap stood at 113.50 bln pesos versus the target of 127.50 bln. However, the deficit in August alone was 18.17 bln pesos, exceeding the 8. 11 bln ceiling, as the government spent more to boost the slowing economy. It was the second month in a row that the monthly deficit was above target. Last week, Camacho said the government was again likely to exceed the 22. 078 bln peso deficit ceiling for September due to "conscious" overspending amid weak revenue collections. (1 usd = 55.05 pesos) afxmanila@afxasia.com |
| Manila shares close firmer in selective buying |
MANILA (AFX-ASIA) - Share prices closed higher on selective buying, particularly in stocks with good earnings potential and those at bargain levels, while the market remained in consolidation phase, dealers said. In the absence of fresh leads, investors slowly took positions ahead of the release of third-quarter corporate results and economic numbers, they said. The composite index closed up 7.26 points, or 0.56 pct, at 1,312.72 on volume of 1.64 bln shares valued at 498.12 mln pesos. It traded between 1,306.44 and 1,313.77 points. In the broader market, gainers led losers 30 to 22, while 37 stocks closed unchanged. (1 usd = 55.05 pesos) edelacruz@afxasia.com |
| Bush designates Philippines major non-NATO ally |
WASHINGTON (AFX-ASIA) - US President George W. Bush late Monday designated the Philippines a major US non-NATO ally, establishing the legal foundation for broadening US military and security aid to the country. In a memorandum sent to US Secretary of State Colin Powell, Bush said the designation was issued in line with the Foreign Assistance Act of 1961 and the Arms Export Control Act. |
| Manila shares slightly higher late morning on extended consolidation |
MANILA (AFX-ASIA) - Share prices were slightly firmer in early trade on technical buying in select stocks as the market continues to consolidate in the absence of fresh market-moving news, dealers said. At 11.01 am, the composite index was up 3.39 points or 0.26 pct at 1,308. 85 on volume of 1.25 bln shares valued at 182.36 mln pesos. It has traded narrowly between 1,306.44 and 1,312.45 so far. In the broader market, gainers led losers 24 to 11, with 35 stocks unchanged. Dealers said investors are waiting for the release of third-quarter corporate earnings reports and economic numbers. The market is also cautious about the political situation, with President Gloria Arroyo's announcement that she will seek a full term next year, failing to boost buying interest, they said. "The market is still consolidating but technical indicators show buying signal for some stocks," Accord Capital Equities research consultant Ron Rodrigo said. "There are no fresh news so this upside is largely due to technical factors. At certain price levels, some stocks are ready for accumulation." ISM Communications has so far been top traded and was up 0.0030 pesos at 0.050 on volume of 1.056 bln shares, mostly involving cross sales. ISM was recently reported to be intending to shift from mining to the mass media business amid market talk that it would used be as the backdoor listing vehicle for Associated Broadcasting Corp (ABC-5). Businessman Antonio "Tonyboy" Cojuangco, chairman of Philippine Long Distance Telephone Corp, has been reported to have acquired control of ABC-5. The company had also informed the stock exchange of its plan to issue Philippine Depositary Receipts to allow foreign investor participation, despite the current constitutional limits on foreign ownership in the mass media and public utilities. Bank of the Philippine Islands was up 0.50 at 43.50. Ayala Corp rose 0.05 to 4.85. Philippine Long Distance Telephone fell 5.00 to 690. Globe Telecom was unchanged at 700. ABS-CBN Holdings gained 1.50 to 27.50. Filinvest Land was up 0.02 at 1.10. Petron Corp rose 0.02 to 2.02. The all-shares index was up 5.27 points at 803.69. The commercial-industrial index rose 1.34 to 1,923.68. Property was up 1.65 at 572.42, but mining fell 9.20 to 1,388.34. Oil was unchanged at 1.36. Banking and financial services gained 3.62 to 434.31. (1 usd = 55.05 pesos) edelacruz@afxasia.com |
| Philippine police headquarters hostage crisis leaves 4 dead |
MANILA (AFX-ASIA) - A hostage crisis in the Philippine National Police headquarters this morning ended with three policemen and a Muslim Abu Sayyaf guerrilla dead, the police said. Three other officers were wounded in the three-hour hostage crisis, reports said. Earlier police reports said the detained Abu Sayyaf member, identified as Boyungan Bongcac, seized a rifle from a guard in an apparent escape attempt. Bongcac was arrested on suspicion of having taken part in a deadly bombing in the southern city of Zamboanga on Oct 18, 2002. In July, two Abu Sayyaf members, along with Jemaah Islamiyah bomb expert Fathur Rohman al-Ghozi, escaped from a jail in the headquarters. President Gloria Arroyo is currently in Bali, Indonesia, for a summit of the Association of Southeast Asian Nations to discuss, among other things, anti-terror measures. Abu Sayyaf gunmen have been blamed for bombings and kidnappings for ransom in the southern Philippines for a decade. The group has also been linked by both Washington and Manila to the al-Qaeda network of terror mastermind Osama bin Laden. afxmanila@afxasia.com |
| INTERVIEW - Philippine PNB's 140 mln usd notes to raise capital adequacy ratio |
---- by Cecille Yap ---- MANILA (AFX-ASIA) - A plan by the Philippine National Bank to issue up to 140 mln usd worth of unsecured subordinated notes will increase the bank's capital adequacy ratio (CAR) to 16 pct of total assets from the current 10 pct, its executive vice president Federico Cadiz Jr said. Cadiz, in an interview with AFX-Asia, said the move to increase its capital base will give it a sufficient buffer to enable it to deal with its massive disposal of billions of pesos worth of non-performing assets (NPA) next year. "We want to do the issue as soon as possible while there is liquidity and rates are low. This will shore up our CAR ratio, which is now at 10 pct, to 16 pct to be at par with the industry," said Cadiz, who is in charge of the bank's asset management group. PNB's capital stood at 23.96 bln pesos as of end-June. The bank's management has yet to approve the terms of the note issue, including the appointment of an underwriter, but the plan has been backed by the bank's board of directors. PNB is on target to reach full-year net profit of 100 mln pesos, officials said, on the back of higher interest income, fee-based and remittance gains, asset sales and a reduction in its NPAs. The bank's asset disposal target for the year is to sell as much as 3 bln pesos of its 30 bln pesos worth of foreclosed assets numbering about 17,000 properties. Cadiz said the bank is broadly on track to achieving that goal after having sold 1.70 bln pesos worth as of end-June. The bank's total NPAs - a combination of foreclosed assets and non-performing loans - stand at 75 bln pesos to date. PNB executive vice president and chief credit officer Omar Byron Mier said the bank's 45 bln pesos worth of non-performing loans, now representing about 60 pct of its total loan portfolio, is expected to be reduced to 53 pct by year-end. The target however hinges on the successful resolution of three to four big loan accounts that have either been foreclosed or are being restructured, and include a loan to debt-laden National Steel Corp. Bank officials said the bank's capital base needs to be enhanced prior to offloading its distressed assets. A discounted asset sale either through the Special Purpose Vehicle (SPV) Law, a joint venture or the bank's own marketing arm will adversely affect its capital base, they said. The SPV Law enables banks to dispose of NPAs at substantial discounts, with both buyers and sellers able to get tax concessions, and allows institutions to book potential losses over a longer period of time. Cadiz said the bank is still in the process of assessing its distressed assets to determine which can be sold by the bank's internal sales force and which can be sold to an asset management company. (1 usd = 55.02 pesos) cecille.yap@afxasia.com |
| Philippine ISM Communications' 1.05 bln shares in cross sale |
MANILA (AFX-ASIA) - Some 1.05 bln shares of ISM Communications Corp, formerly known as Itogon Suyoc Mines Inc, were sold in a cross transaction in early trade, according to data from the Philippine Stock Exchange. The shares were sold at 0.0460 pesos each, with the transaction undertaken by Unicapital Securities Inc. No other details were available. At 9.54 am, ISM was top traded and up 0.0020 pesos at 0.0490 on 1.055 bln shares. ISM was recently reported to be intending to shift from mining to the mass media business amid market talk that it would used be as the backdoor listing vehicle for Associated Broadcasting Corp (ABC-5). Businessman Antonio "Tonyboy" Cojuangco, chairman of Philippine Long Distance Telephone Corp, has been reported to have acquired control of ABC-5. The company had also informed the stock exchange of its plan to issue Philippine Depositary Receipts to allow the future entry of foreign investors to skirt the current constitutional limitation on foreign ownership in mass media and public utilities. (1 usd = 55.06 pesos) afxmanila@afxasia.com |
| US PowerSource Group's unit to invest 150 mln usd in Philippines - Perez |
MANILA (AFX-ASIA) - PowerSource Philippines Inc, the local unit of US-based PowerSource Group LLC, will invest as much as 150 mln usd over the next six years to boost the government's thrust of accelerating rural electrification, Energy Secretary Vincente Perez said. In a statement, he said PowerSource will "uplift the lives of the people by bringing the so-called development platform that provides additional basic services other than power." The investment will be used for PowerSource's Community Energizer Program, which is a "modularized, containerized platform with ready-to-install community electrification system," the Energy department said. The program will also provide basic facilities like water purification, communications, ice-making and entertainment systems, it said. afxmanila@afxasia.com |
| Manila shares outlook - Mixed to lower on extended consolidation |
MANILA (AFX-ASIA) - Share prices are expected to open mixed to lower as the market consolidates further amid a lack of fresh leads, dealers said. They said investors are likely to remain in the sidelines, awaiting the release of third quarter corporate earnings reports. They are also watching developments on the political front after President Gloria Arroyo's widely expected announcement that she would seek a full term in next year's elections. Yesterday, the composite index closed up 0.73 points, or 0.06 pct, at 1, 305.46. "We expect the market to remain in consolidation given the lack of leads. (This is) expected to persist as investors are still waiting for signals from third quarter economic or corporate performance," BPI Securities said in its daily note to investors. The key index is seen moving between 1,303 and 1,311, it said. edelacruz@afxasia.com |
| American Express to invest 5.0 mln usd next year to upgrade Philippine ops |
MANILA (AFX-ASIA) - American Express International Inc will invest around 5.00 mln usd next year to improve the systems operations of its Philippine unit, its country manager said. Ian Fish, who is also American Express Bank Philippines Inc chairman, said the additional investment will cover purchases of new computer equipment. "We're bringing it up to world-class standards," he told reporters. AmEx Bank, which has a thrift banking license and a capitalization of 650. 00 mln pesos, has opened a third branch in the Philippines, in the Binondo district's Chinatown area in Manila. The bank's two other branches are located in the Greenbelt area in Makati City and in Cubao in Quezon City. Fish said the bank plans to set up more branches in the next 12 to 18 months, though the number will be kept to a minimum. "We are going to grow this bank but we are not going to have many branches," he said. (1 usd = 55.02 pesos) afxmanila@afxasia.com |
| Philippines' new automobile excise tax law now in effect - finance dept |
MANILA (AFX-ASIA) - The Finance department said a new automobile excise tax law, aimed at reforming the country's 20-year old motor vehicle taxation system, is now in effect. The Republic Act 9224, effective on Oct 4, likewise scrapped revenue regulations of the Bureau of Internal Revenue that tightened the tax exemption enjoyed by buyers of automobiles with seating capacity for 10 or more people. The new law has instead removed the previous tax exemption, the finance department said, adding that it "addresses the weakness of the previous auto excise tax system by expanding the tax base and adopting a simple value based structure with more realistic tax rates." The finance agency had 30 days, after the signing of the law, to draft the necessary rules and regulations. The law then became effective 15 days after publication of the rules on Sept 18. President Gloria Arroyo earlier said the measures will serve as a disincentive to tax evasion and smuggling, adding that it will also improve the prospects for global automotive manufacturers investing in and setting up operations in the Philippines. Under the new law, vehicles with a net manufacturing price of 600,000 pesos, or less, will have an excise rate of 2.00 pct, like the previous system based on engine size. Buyers of vehicles worth 600,001 pesos to 1.10 mln will pay an effective tax rate of 2.00-10.20 pct, down from 15.00-50.00 pct. Automobiles worth 1.10-2.10 mln pesos will be have a tax rate of 10.20-24. 40 pct, against 15.00-50.00 pct previously. Vehicles over 2.10 mln pesos will have a lower tax rate of 24.40 pct, down from 50.00 pct. (1 usd = 55.02 pesos) cecille.yap@afxasia.com |
| Philippine end-Sept forex reserves 16.06 bln usd vs 16.16 bln in August |
MANILA (AFX-ASIA) - The country's gross international reserves (GIR) dropped to 16.06 bln usd, as of end-September, from 16.16 bln at end-August, due to the foreign debt payments of the central bank and the national government, the central bank said. The end-September GIR was enough to cover 4.4 months of imports of goods and payments of services and income, and was 2.50 times the country's short-term debt based on original maturity, and 1.30 times based on residual maturity, central bank officer-in-charge Alberto Reyes said in a statement. The central bank is targeting a GIR level of 14.00 to 15.00 bln usd by year-end. (1 usd = 54.97 pesos) edelacruz@afxasia.com |
| Forex - Philippine peso closes weaker on strong US dollar across-the-board |
MANILA (AFX-ASIA) - The peso closed weaker, tracking other regional currencies, after the US dollar regained its strength on the back of solid US employment data released on Friday, dealers said. The peso closed at 55.020, after trading between 54.950 and 55.040 on volume of 114 mln usd. It closed at 54.920 last Friday. "The peso moved in line with regionals in the absence of any major domestic news," a local bank dealer said. President Gloria Arroyo's announcement that she will run in the May 2004 presidential election, while a major about-turn from her earlier decision, had no impact on the forex spot market since the issue had long been discounted, dealers said. However, they expect political mud-raking to intensify further following Arroyo's change of heart. Another dealer said news that the country's gross international reserves (GIR) had weakened in September also weighed down sentiment regarding the local currency. "There was talk before the market closed about a weaker GIR, pulling the peso past the 55.000 level," the dealer said. The country's gross international reserves (GIR) dropped to 16.06 bln usd as of end-September, from 16.16 bln at end-August, due to the foreign debt payments of the central bank and the national government, the central bank said. The central bank is targeting a GIR level of 14.00 to 15.00 bln usd by year-end. The peso is seen trading between 54.800-55.100 tomorrow, dealers said. cecille.yap@afxasia.com |
| Philippines' Ionics unit sells Laguna plant equipment to re-pay debts |
MANILA (AFX-ASIA) - Ionics Inc said subsidiary Synertronix Inc has sold most of the equipment at its plant in Calamba, Laguna, south of Manila, to a foreign buyer to settle outstanding obligations to its creditors. "The sale of its equipment is part of the winding down of operations of Synetronix," Ionics assistant corporate secretary Anna Melissa Lichaytoo said in a letter to the Philippine Stock Exchange today. No further details were given. Ionics has shut down the printed circuit board manufacturing unit to prevent further losses, and concentrate on its core business under Ionics EMS. The company wrote off 800 mln pesos as a result of the closure. (1 usd = 54.97 pesos) edelacruz@afxasia.com |
| ROUNDUP -Philippines' CPI slows in Sept; weak demand seen limiting price rises |
MANILA (AFX-ASIA) -The country's annualized inflation rate slowed down in September, indicating that demand has not been picking up strongly. The consumer price index (CPI) rose 2.90 pct in the 12 months to September, slowing from 3.00 pct in August, the National Statistics Office (NSO) announced early today. The benign inflation environment and outlook allow for continued flexibility on the part of the central bank to maintain its "accommodative" monetary policy - despite the peso's volatility, economists said. They said they are not ruling out a restoration of the tier scheme for overnight borrowing, given the perceived weak demand. Month-on-month, the CPI inched up 0.10 pct versus a 0.20 rise the previous month. The inflation rate averaged 3.00 pct in the first three quarters of the year, still below the government's full-year target of 4.50-5.50 pct. Economists, polled by AFX-Asia, had expected the CPI to rise by 3.00-3.50 pct year-on-year in September, due to higher food and oil prices. It was also below the central bank's projection of 3.00 pct year-on-year and the National Economic Development Authority's 3.00-3.50 pct range. "The Philippines is not alone. Everywhere else in the region, we've seen relatively stable prices, given the uneven recovery and the lack of pricing power (among manufacturers)," said GK Goh Securities economist Song Seng Wun said. Julian Wee, an economist at DBS Bank in Singapore, said that with the latest CPI data, "the central bank is under no pressure to hike interest rates," though he noted that is just one of the factors that influence the central bank's policy stance. In late August, the tier scheme on overnight borrowing was scrapped in order to mop up excess liquidity in the banking system that might be used for speculating against the peso. The central bank effectively tightened monetary policy with the removal of the tier scheme, but it believes that the outlook for inflation and economic activity remain essentially unchanged. The Monetary Board, however, kept the central bank's key overnight interest rates steady at 11-year lows of 6.75 pct for borrowing and 9.00 pct for lending. Economists said weak consumer demand is reflected in the slower rates recorded in the indices of food, beverage and tobacco, and housing and repairs. For food alone, which makes up the bulk of the CPI basket, inflation fell to 1.40 pct in September from 1.50 pct the month before, as prices of rice and vegetables dropped due to sufficient supplies. Inflation for clothing, services and miscellaneous items remained steady from their August levels of 2.40, 5.90 and 1.90 pct respectively, NSO data show. The fuel, light and water component, however, rose to 9.60 pct from 9.50 pct year-on-year, due to higher oil prices and a weaker peso in September. "It's a function of weak demand... I suspect that given all the turmoil the Philippines have had recently, we would likely see growth to remain sluggish," Song, who is projecting GDP growth of only 3.00 pct in the second half, said. While manufacturing in terms of output and value have risen slightly in previous months, these do not translate into higher prices since "manufacturers cannot pass on their higher costs on concerns consumers may stop buying," he said. Economic Planning Secretary Romulo Neri said the inflation rate is expected to remain stable at around 3.00 pct year-on-year in the last quarter of the year. "Barring unexpected shocks in the coming months, we expect inflation to remain stable at around 3.00 pct on account of improved unhusked rice and corn output and stability in the currency market," he said in a statement. However, he expects inflationary pressure to arise from the higher cost of crude oil following a cut in the oil output of the Organization of Petroleum Exporting Countries (OPEC). The inflation data failed to boost share prices, with the key index up a mere 0.73 point or 0.06 pct at 1,305.46. At the Philippine Dealing System, the peso averaged 54.973 to the US dollar. It closed at 54.920 on Friday. afxmanila@afxasia.com |
| Indonesians, Filipinos kidnapped in Malaysia - police |
KUALA LUMPUR (AFX-ASIA) - A group of six Indonesian and Filipino workers has been kidnapped by an armed gang from a Malaysian resort on Borneo island, police said. The workers, three men from each country, were seized late Sunday night in a raid on the Borneo Paradise Resort on the River Sabahan in eastern Sabah state and taken away by longboat, police chief Norian Mai told a news conference. Some of the 10 kidnappers wore military fatigues and carried modern weapons, Norian said, but he ruled out speculation that the Philippine Muslim rebel group Abu Sayyaf was responsible. Abu Sayyaf kidnapped 21 people, mostly Western tourists, from the Sipadan resort in Sabah in April 2000, holding them for nearly a year before releasing them, reportedly in exchange for millions of dollars in ransom. Norian said the Abu Sayyaf had been ruled out because of the choice of target -- workers rather than foreign tourists -- and that locals seeking ransom were the main suspects. However, he added that Indonesian and Philippine armed forces were cooperating in the hunt for the kidnappers. "We are conducting joint operations with Indonesian and Philippine authorities. We cannot rule out the possibility of them hiding there. "The Malaysian navy, airforce and military are combing the area. There is a lot of jungle and highlands where they can hide." The resort, which opened six months ago, is some two kilometres from the coast and 38 kilometres from the nearest town, Kunak, Norian said. It has just 15 rooms, catering mainly for local tourists, and campsites for parties of schoolchildren. The kidnappers had not communicated with the authorities, he said. Earlier reports had identified the kidnap victims as Malaysians, but Norian said there were no tourists at the resort at the time. |
| Manila shares close mixed on consolidation; PLDT lifts key index |
MANILA (AFX-ASIA) - Share prices closed mixed in a directionless session as the market continued to consolidate, dealers said. Gains in Philippine Long Distance Telephone, though modest compared with previous ones, provided support to the key index, they added. The composite index closed up 0.73 points, or 0.06 pct, at 1,305.46 on volume of 959.62 mln shares valued at 366.06 mln pesos. It traded between 1, 303.48 and 1,310.90. In the broader market, losers led gainers 27 to 18, with 45 stocks unchanged. Dealers said they expect sentiment to be undermined by increased political tension after President Gloria Arroyo announced she will run for president in the May 2004 elections, reversing an earlier decision not to run. "The market is just consolidating around the 1,308 level. Investors are staying on the sidelines and will continue to be focused on specific (corporate) issues for the meantime while political concerns remain," Westlink Global Equities chairman Rommel Macapagal said. Investors may, however, take positions ahead of the the Oct 18 visit of US President George W Bush to Manila, he said. "President Arroyo's weekend announcement should have a good impact (on sentiment) as one uncertainty has been taken out of the picture," but the analyst added political bickering is expected to heat up ahead of the polls. Macapagal said the market was largely indifferent to Wall Street's gains last Friday. The slower-than-expected year-on-year inflation rate of 2.90 pct in September did not spur buying in the equities market, as economists noted that the rise in consumer prices have remained somewhat stable probably because demand has not picked up strongly. The National Statistics Office today said the inflation rate in the first nine months of the year averaged 3.0 pct year-on-year, below the government's full-year target of 4.5-5.5 pct. PLDT was top traded and up 5.00 pesos at 695.00 on volume of 229,590 shares. Its New York-listed American Depositary Receipts rose 0.10 usd to 12. 91 on Friday amid expectations of strong earnings on further gains in the wireless business. Macapagal said PLDT has his resistance level at 700 pesos. Ayala Land rose 0.10 to 6.30 on 6.20 mln shares, but parent Ayala Corp was unchanged at 4.80 on 4.28 mln shares. Equitable PCI Bank dropped 0.50 to 32.50 on 670,900 shares. Manila Electric B, open to foreigners, was up 0.25 at 23.75, while Meralco A was unchanged at 15.00. ABS-CBN Holdings Corp was up 0.50 at 26.00 on 451,700 shares. Metrobank was down 0.50 at 27.50. Jollibee Foods fell 0.25 to 17.00. The all-shares index was down 0.77 point at 798.42. The commercial-industrial index rose 1.82 to 1,922.34, while property gained 3.55 to 570.77. Mining was up 12.41 at 1,397.54. Oil was unchanged at 1.36. Banking and financial services shed 2.72 to 430.69. (1 usd = 54.97 pesos) edelacruz@afxasia.com |
| Philippines checking report of Malaysia kidnapping |
MANILA (AFX-ASIA) - Philippines authorities are checking reports that a group of Malaysians has been kidnapped on Borneo island, Filipino armed forces chief of staff General Narciso Abaya said. Abaya said he had no immediate information on whether Abu Sayyaf guerrillas based in the southern Philippines -- who launched a cross-border raid on the Malaysian resort island of Sipadan and kidnapped 21 people in April 2000 -- were behind the latest kidnap. "I will have this report checked," he told AFP by telephone from Hawaii, where he is making an official visit. "I will alert our forces in the area." The official Bernama news agency said in Kuala Lumpur that a group of Malaysians has been kidnapped in Sabah state on Borneo island, which adjoins Abu Sayyaf strongholds in the southern Philippines. It said Malaysian police chief Norian Mai would hold a news conference on the "kidnapping of a small group of Malaysians in Sabah" at noon. In the Sipadan kidnapping, the captives, half of them western tourists, were taken by boat across the sea border to Jolo island in the Philippines, where they were held for nearly a year before being released in several batches in exchange for millions of dollars in ransom. |
| Group of Malaysians kidnapped from resort island - police official |
KUALA LUMPUR (AFX_ASIA) - A group of Malaysians has been kidnapped from a holiday resort island in Sabah state off the island of Borneo, a police official said today. "Eight Malaysians were kidnapped from the Borneo Felda Resort, located on an island some 30 kilometers from Semporna island off Borneo," the official told the AFP news agency. Another resort island in Sabah state, Sipadan, was the site of the kidnapping of 21 people, mostly Western tourists, by the Philippine Muslim rebel group Abu Sayyaf in April 2000. The captives were taken by boat across the sea border to Jolo in the Philippines, where they were held for nearly a year before being released in several batches in exchange for millions of dollars in ransom. Malaysian police chief Norian Mai will hold a news conference on the "kidnapping of a small group of Malaysians in Sabah" at noon (0400 GMT), the official Bernama news agency said, without giving any further details. |
| Philippines' Globe says may increase planned bond issue size to 3.5 bln pesos |
MANILA (AFX-ASIA) - Globe Telecom Inc said it may increase the size of its planned bond offering to 3.50 bln pesos from 2.70 bln, depending on market conditions. The company earlier said it will use the proceeds of the bond issue for loan refinancing. "Should market conditions upon issuance prove beneficial, the company has included in its application to the (Securities and Exchange Commission) the option to raise the bond offer to 3.50 bln pesos," Globe told the stock exchange. Philippine Ratings Services Corp has assigned the highest rating of "Aaa" on the issue to signify that it carries the smallest degree of investment risk. Globe said it plans to launch the bonds next year to refinance a portion of a 220.00 mln usd senior notes issue, due in 2009. (1 usd =54.97 pesos) edelacruz@afxasia.com |
| DATAWATCH - Philippines' consumer demand seen remaining weak - GK Goh |
MANILA (AFX-ASIA) - A slowdown in the September inflation rate suggests consumer demand has remained weak, with manufacturers trying to keep prices steady in a relatively weak economy, GK Goh regional economist Song Seng Wun said. The Philippine consumer price index rose 2.90 pct year-on-year in September, a slowdown from the 3.00 pct rise posted in August. Month-on-month, inflation rate inched up 0.10 pct. "The Philippines is not alone. Everywhere else in the region, we've seen relatively stable prices given the uneven recovery and the lack of pricing power (among manufacturers)," Song said. On a more positive note, the stable CPI has given the central bank continued flexibility in its macroeconomic policies, he added. The inflation rate averaged 3.00 pct in the first three quarters of the year. Song noted there has been no pressure for prices to go up dramatically as consumer demand remains weaker than usual. For instance, slower rates were recorded in the indices of food, beverage and tobacco (FBT) and housing and repairs (HR). For food alone, which makes up the bulk of the CPI basket, inflation fell to 1.40 pct in September from 1. 50 pct the month before, as prices of rice and vegetables dropped due to sufficient supplies. Inflation for clothing, services and miscellaneous items has remained steady from their August levels of 2.40, 5.90 and 1.90 pct, respectively. Only the fuel, light and water (FLW) component rose to 9.60 pct from 9.50 pct year-on-year, due to higher oil prices and a weaker peso in September. "It's a function of weak demand... I suspect that given all the turmoils the Philippines have had recently, we would likely see growth to remain sluggish," Song, who is projecting GDP growth of only 3.00 pct in the second half, said. While manufacturing in terms of output and value have been on a slight uptick in previous months, these do not translate into higher prices since "manufacturers cannot pass on their higher costs on concerns consumers may stop buying," he said. The latest data showed manufacturing output in July rising 4.40 year-on-year in volume terms, while sales increased 0.60 pct, also in volume terms. In value terms, manufacturing output in July rose 12.90 pct year-on-year, while sales increased 9.40 pct year-on-year. (1 usd = 54.976 pesos) cecille.yap@afxasia.com |
| Philippines inflation to remain stable at 3.0 pct yr-on-yr in Q4 - Neri |
MANILA (AFX-ASIA) - Economic Planning Secretary Romulo Neri said the country's inflation rate is expected to remain stable at around 3.0 pct year-on-year in the last quarter of the year. "Barring unexpected shocks in the coming months, we expect inflation to remain stable at around 3.0 pct on account of improved unhusked rice and corn output and stability in the currency market," he said in a statement. However, he expects inflationary pressure to arise from higher cost of crude oil following a cut in the oil output of the Organization of Petroleum Exporting Countries. Inflation in September slowed to 2.9 pct year-on-year from 3.0 pct in August, and to 0.10 pct month-on-month from 0.20 pct in the previous month, the the National Statistics Office (NSO) today said. It averaged 3.0 pct in the first three quarters of the year. Economists polled by AFX-Asia expected the CPI to have risen by 3.00-3.50 pct year-on-year in September due to higher food and oil prices. It was also below the central bank's projection of 3.00 pct year-on-year and the National Economic Development Authority' 3.00-3.50 pct range. edelacruz@afxasia.com |
| Philippine Banco De Oro says UBS soliciting interest for 100-mln usd notes |
MANILA (AFX-ASIA) - Banco De Oro Universal Bank said UBS Investment Bank, its bond bookrunner, has begun to solicit investor interest for its proposed 100-mln usd bond issue. Banco De Oro said the 100-mln usd senior bond issue, which will be listed on the Singapore Exchange, will have a maturity of five years with 3.0-year put option to the bank at par value. Minimum placement is set at 50,000 usd. The issue date is targeted for Oct 13 to 17. The central bank's Monetary Board has recently approved the bank's application to increase the size of its five-year tier 2 capital notes issue to 130 mln usd from 100 mln, central bank deputy governor Alberto Reyes said. The issue has met warm investor reception, prompting the bank to increase the size, he said. (1 usd = 54.968 pesos) cecille.yap@afxasia.com |
| Philippines Sept CPI up 2.90 pct yr-on-yr, 0.10 pct mth-on-mth |
MANILA (AFX-ASIA) - The consumer price index rose 2.9 pct year-on-year, slowing from 3.0 pct in August, the National Statistics Office (NSO) said. Month-on-month, the CPI inched up 0.10 pct versus the 0.20 rise in the previous month. The inflation rate averaged 3.0 pct in the first three quarters of the year. Economists polled by AFX-Asia expected the CPI to have risen by 3.00-3.50 pct year-on-year in September due to higher food and oil prices. The NSO said slower rates were recorded in the indices of food, beverage and tobacco (FBT), and housing and repairs (H&R). Inflation a year ago was 2. 9 pct year-on-year. The benign inflation environment and outlook have given the central bank room to maintain its "accommodative" monetary policy, despite the peso's volatility. Economic Planning Secretary Romulo Neri sees the CPI remaining broadly stable for the rest of 2003, barring any unexpected shocks. He expects the full-year rate at the low-end of his 3.00-3.50 pct forecast, compared with the official target of 4.50-5.50 pct. The inflation rate for the FBT and H&R groups slowed to 1.4 pct and 3.0 respectively in September from 1.5 and 3.2 in August. For food alone, inflation declined to 1.4 pct in September from 1.5 pct the month before as prices of rice and vegetables dropped due to sufficient supply. On the one hand, the inflation rate for the fuel, light and water component went up to 9.6 pct from 9.5 pct year-on-year. Inflation for clothing, services and miscellaneous remained at August levels of 2.4, 5.9 and 1.9 pct, respectively. edelacruz@afxasia.com |
| Philippines' LandBank 8 mths net profit 1.45 bln pesos, may exceed FY target |
MANILA (AFX-ASIA) - State-owned Land Bank of the Philippines said it booked a net profit of 1.45 bln pesos in the eight months to August, boosting its chances of hitting or even surpassing its full-year target of 1.80 bln. "If we hit 150 mln pesos in September, then that's 1.6 bln pesos (for the first nine months of the year) versus our target. We'll probably hit or exceed our target of 1.8 bln pesos," LandBank president Margarito Teves told reporters in a briefing. He said earnings improved on the back of profitable investments and prudent spending. At end-August, however, LandBank's ratio of non-performing loans to total loans hit 17.2 pct, up from 16.45 pct as of June 19. Teves attributed the rise in the NPL ratio to the drop in outstanding loans. (1 usd = 54.92 pesos) afxmanila@afxasia.com |
| Philippine central bank approves Banco de Oro notes issue hike to 130 mln usd |
MANILA (AFX-ASIA) - The central bank's Monetary Board has approved the application of Banco de Oro Universal Bank to increase the size of its five-year tier 2 capital notes issue to 130 mln usd from 100 mln, central bank deputy governor Alberto Reyes said. The issue has met warm investor reception, prompting the bank to increase the size. The bank earlier said the notes will be issued at the appropriate time depending on market conditions. afxmanila@afxasia.com |
| Philippines' Meralco may hike 2003 capex to 6.0 bln pesos - report |
MANILA (AFX-ASIA) - Manila Electric Co is considering increasing its capital expenditures budget for 2003 to 6.0 bln pesos from 5.5 bln and looking at an annual 6.5-bln peso budget from next year, the Philippine Star quoted company president Jesus Francisco as saying. "Our budget for 2003 was originally at 6.5 bln pesos. But we recently reduced it to 5.5 bln. We are now looking at the possibility of stretching it to 6.0 bln by the end of the year," Francisco said. He said the increase will depend on the number of Meralco customers that will avail themselves of the Supreme Court-ordered refund of overcharges dating back to 1994. Meralco earlier estimated the refund to cost it 30.5 bln pesos. (1 usd = 54.92 pesos) afxmanila@afxasia.com |
| Philippine govt end-July total debt 3.14 trln pesos vs 2.96 trln in June |
MANILA (AFX-ASIA) - The national government's total outstanding debt rose to 3.14 trln pesos as of end-July from 2.96 trln in June, official figures show. Fresh foreign and local borrowings to finance the budget deficit bloated the government's debt stock. Domestic borrowings stood at 1.65 trln, up from 1.54 trln in June, while foreign debts totalled 1.49 trln against the previous month's level of 1.43 trln. (1 usd = 54.92 pesos) afxmanila@afxasia.com |
| Arroyo announces Philippines re-election bid |
MANILA (AFX-ASIA) - Philippine leader Gloria Arroyo announced Saturday that she will run for president in 2004 elections, reversing an earlier pledge not to run. "I will offer myself to the electorate in 2004," she told a crowd of 50, 000 in her home province of Pampanga. |
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