NEWS

Philippine monetary policy still cautious despite peso recovery - Buenaventura

     MANILA (AFX-ASIA) - The central bank is maintaining its "cautious" monetary policy stance despite the peso's sustained and significant recovery against the dollar, as inflationary threats still exist, central bank governor Rafael Buenaventura said.
     "We continue to be cautious because there are extraneous (inflationary) pressures largely beyond our control, such as oil price, wage and transport fare hikes," he told reporters.
     "These are all supply-driven and on which our monetary policy has very little influence. Obviously, we have to make up for it in the event that those pressures come in, (and) we may have to take measures that do not have a direct impact on them."
     The peso closed today at an 11-week high of 55.800, which is the dollar's immediate support level after the previous one of 56.000 was breached this morning.
     The volume at the Philippine Dealing System was heavy at 257.50 mln usd, with the peso appreciating a hefty 0.33 peso from yesterday's close of 56.13.
     Earlir today, Buenaventura said the peso's recovery back to 55 levels stemmed from easing concerns about political instability ahead of the May 10 presidential elections and on the back of positive economic indicators.
     "This was expected as worries over political instability have abated somewhat," he said, adding that the rise in the central bank's gross international reserves (GIR) back to over 16 bln usd also eased concerns over dollar supply in the coming months.
     The GIR rose to 16.306 bln usd as at end-March from 15.73 bln as of end-February on proceeds from recent foreign borrowings by the national government and state-run Metropolitan Waterworks and Sewerage System.
     Buenaventura said there are no longer concerns "that our international reserves would be depleted ... given improved performance of the country's exports, while prospects look good for the rest of the year."
     Revenue from merchandise exports in February rose 7.5 pct year-on-year, faster than the 4.1 pct increase in January.
     "Seasonal inflow of OFW (overseas Filipino workers) remittances and the successful refinancing by NG (national government) and other (government) agencies, and the precautionary borrowing by the central bank all helped strengthen the peso and remove the specter of the currency's free fall," the central bank chief said.
     Asked if he thinks the peso's gains are sustainable, Buenaventura said: "The expectation is for a stable peso with some upside." He did not elaborate.
     News that incumbent president Gloria Arroyo now leads opinion polls for the presidential race against main rival Fernando Poe Jr, was taken positively by market players, currency dealers said.
     They added that banks continued to cut their long dollar positions after a relatively peaceful five-day Easter break.
     Buenaventura, however, stressed that the monetary policy should remain cautious.
     The Philippines' inflation rate accelerated to a faster-than-expected 3.8 pct year-on-year in March from 3.4 pct in the previous month, on pressure stemming from the peso's weakness against the dollar and oil price increases.
     The peso had fallen to a record 56.45 in late March amid growing political uncertainties ahead of the May polls.
     Buenaventura earlier said the rising trend in inflation "validates our earlier move to increase liquidity reserves."
     Early this year, the regulator raised banks' liquidity reserves on deposits by 200 basis points to stem inflationary pressure arising from a weak peso.
     But it did not touch the key interest rates, which now stand at 6.75 pct for overnight borrowing and 9.00 pct for overnight lending.
     Meanwhile, Banco de Oro Universal currency strategist Jonas Ravelas said the dollar's next support will be in the 55.800-55.850 range.
     "Assuming that this support range holds, the near-term bias for a test of the 56.50 still exists. However, a sustained break below the 55.80-55.85 level could see further tests towards the 55.50-55.65 level," he said.
     afxmanila@afxasia.com

Philippines' Jollibee Foods to list 8,981 common shares April 14 - PSE

     MANILA (AFX-ASIA) - Jollibee Foods Corp will list tomorrow 8,981 additional common shares, arising from the company's tandem stock purchase and option plan, a Philippine Stock Exchange circular said.
     Jollibee closed today down 0.25 peso, or 1.35 pct, at 18.75.
     (1 usd = 55.95 pesos)
     afxmanila@afxasia.com

Philippines' BIR Q1 tax revenue 98.97 bln pesos vs target 101.08 bln

     MANILA (AFX-ASIA) - The Bureau of Internal Revenue's (BIR) tax collections in the first quarter to March totaled 98.97 bln pesos, below the targeted level of 101.08 bln, the bureau announced, citing the latest preliminary figures.
     In March alone, however, the BIR collected 33.604 bln pesos, against the target of 32.194 bln.
     In a statement, the BIR said the strong March performance helped reduce its cumulative deficit to just 2.11 bln pesos as of end-March, from 3.52 bln as of end-February.
     The bureau said it is now "in a relatively more manageable position" to meet its year-end revenue target.
     "The bureau remains bullish it can sustain its strong monthly collections vis-a-vis the goal this coming April and May," it said.
     The BIR has set an April 15 deadline for the filings of both corporate and individual income tax returns for tax year 2003, while May 30 is the deadline for the filing of the income tax returns for the first quarter of 2004.
     Citing preliminary figures, Budget Secretary Emilia Boncodin said last week the government's first quarter to March budget deficit stood at around 57-58 bln pesos, below the targeted 58.9 bln.
     Higher revenue collections and continued fiscal discipline allowed the government to contain the budget deficit within the ceiling, officials said.
     In the first quarter to March, the Bureau of Customs generated revenue of 28.99 bln pesos, exceeding the targeted 24.82 bln, based on preliminary reports.
     The Philippines' fiscal managers have vowed to maintain the government's cautious fiscal stance adopted in 2003 on aims to limit the 2004 budget deficit to 197.8 bln, or about 4.2 pct of the gross domestic product.
     Financial markets are keeping a close eye on the fiscal numbers, concerned that the government may spend more to win votes for administration candidates in the May 10 national elections.
     The government's fiscal performance is a major issue at which credit rating agencies are looking, as they assess the Philippines' creditworthiness amid the burgeoning public sector debt.
     The government aims to balance the budget by 2009.
     (1 usd = 55.95 pesos)
     afxmanila@afxasia.com

Philippines Q1 approved investments 108.04 bln pesos, up 1,334 pct yr-on-yr

     MANILA (AFX-ASIA) - Investments approved by the Board of Investments (BOI) in the first quarter to March surged 1,334 pct to 108.04 bln pesos from 7.53 bln in the year-earlier period, the Department of Trade and Industry said.
     In a statement, Trade and Industry Secretary Cesar Purisima said the approved investments mostly involve the electricity, gas and water supply sector, such as the GNPower Ltd Company's liquefied natural gas-fired combined cycle power plant in Bataan, north of Manila, worth 96.52 bln pesos, and the PNOC Energy Development Corp's two geothermal projects, worth a total of 7.9 bln pesos.
     "Majority of the capital investments approved by the BOI were from foreign sources amounting to 97.29 bln pesos. This manifests the renewed business confidence of foreign investors in our economy despite the election anxieties," Purisima said.
     Filipinos will go to polls on May 10 to elect a president, a vice president, members of Congress and local government officials.
     (1 usd = 55.95 pesos)
     afxmanila@afxasia.com

Philippines' Jardine Davies declares 647.37 pct stock dividend

     MANILA (AFX-ASIA) - Jardine Davies Inc said its board of directors has approved a stock dividend of 1.136 bln pesos or about 647.37 pct on its issued and outstanding 43.883 mln common shares.
     The record and payment dates are be announced later, it told the stock exchange.
     The board also approved the increase in the company's authorized capital stock to 1.336 bln pesos from 200.00 mln to cover the stock dividend.
     Jardine Davies is engaged in marketing and distribution of agricultural chemicals, building and industrial materials, middle-income housing, agribusiness and consumer finance.
     (1 usd = 55.95 pesos)
     afxmanila@afxasia.com

Philippines' Roco to seek US medical treatment; not quitting presidential race

     MANILA (AFX-ASIA) - Candidate Raul Roco, who trails incumbent Gloria Arroyo and movie star Fernando Poe Jr in surveys ahead of the presidential poll on May 10, said he will leave for the US tonight to seek treatment for "chronic pain" in his lower back.
     His departure will expected to boost presidential bid of Arroyo, who has overtaken main rival Poe in the race, according to Manila-based pollster Pulse Asia Inc's the latest survey.
     But Roco, who topped several surveys before Arroyo and Poe announced their candidacies late last year, said, as doctors have told him his condition is not immediately life-threatening, he is not quitting the race.
     "However, left unattended, I am told that it could debilitate me," he said.
     "I have decided to follow my doctors' advice, so that I can continue to serve the people. The pain I am enduring cannot compare to the sufferings of our people."
     Roco, who served the Arroyo administration as education secretary and was a senator previously, said his Alyansa ng Pag-asa (Alliance of Hope) coalition will continue to wage his presidential campaign "and by all those who want fundamental change in the character and integrity of the national leadership."
     Ana Maria Tabunda, executive director of Pulse Asia, said Roco's absence during the campaign period will likely hurt his chances at the polls.
     Based on the latest Asia Pulse survey, about 12 pct of the votes would vote for Roco if the elections were held now, against 34 pct for Arroyo and 31 pct for Poe.
     In a television interview, Tabunda said, if Roco is considered out of the race, Arroyo will benefit the most and receive 4 percentage points of the 12 pct, while Poe and ex-police chief Panfilo Lacson will each take 2 percentage points.
     Lacson has consistently been in fourth place in the surveys, attracting 10 pct of the poll in the latest Asia Pulse survey.
     Roco's supporters are mostly youths and affluent people.
     afxmanila@afxasia.com

Manila shares close lower on profit-taking in select blue chips

     MANILA (AFX-ASIA) - Share prices closed lower for the second day, with extended profit-taking in select blue chips, including Philippine Long Distance Telephone Co (PLDT), pulling the key index below the psychological support level of 1,500 points, dealers said.
     However, the declines were limited and volumes thin, suggesting that investors stayed on the sidelines on growing caution ahead of the May 10 presidential elections, they added.
     Investors shrugged off some positive developments, such as the peso's recovery back to the 55/US dollar territory after trading at 56 levels for nearly two months, news of incumbent Gloria Arroyo's lead in the latest presidential poll and Wall Street's advance overnight.
     The composite index closed down 25.11 points or 1.66 pct at 1,485.47 on volume of 213.5 mln shares worth 603.7 mln pesos. It moved between 1,483.35 and 1,516.45.
     In the broader market, losers led gainers 32 to nine, while 34 stocks were unchanged.
     At the Philippine Dealing System, the peso averaged 55.935 to the dollar at noon on volume of 158.0 mln usd, after closing at 56.13 yesterday, its strongest finish in nearly two months.
     afxmanila@afxasia.com

Manila shares lower as profit-taking sees key index fall below 1,500

     MANILA (AFX-ASIA) - Share prices were lower in late trade as profit-taking in select blue chips, such as Philippine Long Distance Telephone Co (PLDT), pushed the key index below the psychological support level of 1,500 points, dealers said.
     However, the declines are limited and volumes thin, suggesting investors are just staying on the sidelines on growing caution as the May 10 presidential election draw near.
     Investors ignored the peso's recovery to the 55 level against the US dollar after nearly two months of trade at the 56 mark.
     At 11.18 am, the composite index was down 17.02 points, or 1.13 pct, at 1, 493.56 on volume of 160.7 mln shares worth 304.1 mln pesos.
     In the broader market, losers led gainers 29 to eight, while 28 stocks were unchanged.
     Top-traded PLDT was down 10.00 pesos at 1,060 on volume of 124,310 shares, after successive gains on the back of bullish first-quarter earnings forecasts, which brought its price to the highest level in more than four years.
     PLDT's American Depositary Receipts advanced 0.42 usd to 19.11 in New York overnight.
     "The element of uncertainty is still there. People are cautious and probably expecting continued volatility in financial markets, including the currency market, ahead of the May polls," Citiseconline.com analyst Mark Alan Canizares said.
     "The peso's recovery is good news, but we may have to wait for a day or two more to see if this is sustainable or just a temporary technical bounce."
     Mall operator SM Prime was down 0.20 at 5.80.
     Manila Electric B, available to foreign investors, was down 0.50 at 26. 00, while Meralco A was unchanged at 18.00.
     At the Philippine Dealing System, the peso averaged 55.937 to the US dollar after closing at 56.13 yesterday, its strongest finish in nearly two months.
     afxmanila@afxasia.com

Philippine peso firms as political concerns ease, reserves rise - Buenaventura

     MANILA (AFX-ASIA) - The peso's sustained and significant recovery back to the 55-56 range against the dollar stemmed from easing political concerns and supported by positive economic indicators, central bank governor Rafael Buenaventura said.
     At 10.33 am, the peso averaged 55.938 to the dollar on volume of 125.5 mln usd. It closed at 56.13 yesterday, its strongest finish in nearly two months.
     It is the first time also in nearly two months that the peso traded in the 55/dollar territory, after falling to a record 56.45 in late March amid pre-election political concerns.
     "This was expected as worries over political instability (ahead of the May 10 presidential elections) have somewhat abated," Buenaventura told AFX-Asia, adding that the rise in the central bank's gross international reserves (GIR) back to the over 16 bln usd also helped ease concerns about dollar supply in the coming months.
     The central bank's gross international reserves (GIR) rose to 16.306 bln usd as of end-March from 15.73 bln at end-February, thanks to proceeds from recent foreign borrowings by the national government and state-run Metropolitan Waterworks and Sewerage System.
     The end-March GIR was adequate to cover 4.5 months of imports of goods and payments of services and income. It is equivalent to 2.7 times the country's short-term debt based on original maturity and 1.4 times based on residual maturity.
     "That our international reserves would be depleted is no longer a cause of concern given improved performance of the country's exports, while prospects look good for the rest of the year," Buenaventura said.
     Merchandise exports revenues in February rose 7.5 pct year-on-year, faster than the 4.1 pct rise in the previous month.
     "Seasonal inflow of OFW (overseas Filipino workers) remittances, and the successful refinancing by NG (national government) and other (government) agencies, and the precautionary borrowing by the central bank all helped strengthen the peso and removed the specter of the currency's free fall," the central bank chief added.
     Asked if he thinks the peso's gains are sustainable, Buenaventura said: "The expectation is for a stable peso with some upside." He did not elaborate.
     News that incumbent president Gloria Arroyo, the financial markets' favorite, is now leading in opinion polls for the May 10 presidential race against major rival Fernando Poe Jr, was taken positively by market players, currency dealers said.
     They added banks continued to cut their long dollar positions after a relatively peaceful five-day Easter break.
     afxmanila@afxasia.com

Forex - Philippine peso extends gains early as banks cut dollar positions

     MANILA (AFX-ASIA) - The peso extended its gains against the dollar in early trade, breaching the psychological resistance level of 56.000 to the US unit, as banks cut their long dollar positions further, dealers said.
     At 9.55 am, the peso averaged 55.969 to the dollar, after recovering to as high as 55.900 earlier, on volume of 39.0 mln usd. It closed at 56.13 yesterday, its strongest finish in nearly two months.
     It is the first time also in nearly two months that the peso traded in the 55/dollar territory, after falling to a record 56.45 in late March amid pre-election political concerns.
     Dealers said banks continued to unload some of the dollars they accumulated before the five-day Easter break, which turned out to be relatively peaceful.
     News that the incumbent president Gloria Arroyo, the financial markets' favorite, is now leading in opinion polls for the May 10 presidential race was also taken positively by market players, dealers added.
     "There's follow-through selling of dollars after a relatively peaceful Easter break. GMA's lead over FPJ is one major positive news," a commercial bank dealer said.
     GMA refers to Gloria Macapagal Arroyo, who has overtaken main rival FPJ, or Fernando Poe Jr, in the presidential race, according to Manila-based pollster Pulse Asia Inc's latest survey.
     If the polls were held now, 34 pct of the electorate would vote for Arroyo and 31 pct for Poe, a high-school dropout, who is also hugely popular, having played a hero of the masses in hundreds of action movies, survey results showed.
     The inexperienced Poe's popularity and possible victory had spooked financial markets amid doubts about his competence to manage the economy.
     The dealer, however, said he does not believe that remittances from Filipinos working overseas were a major factor behind the peso's recovery, as claimed by some traders and even the central bank.
     afxmanila@afxasia.com

Philippines' business group seeks immediate refunds from Meralco - report

     MANILA (AFX-ASIA) - The Federation of Philippine Industries (FPI) wants "an immediate, programmed reduction" in its members' electricity bills from Manila Electric Co (Meralco), BusinessWorld newspaper reported.
     The group issued a statement yesterday saying manufacturing firms need the refunds, estimated at between 16 bln and 18 bln pesos "as soon as possible," the report said.
     Earlier, Meralco said it would seek approval from the Energy Regulatory Commission to issue zero-coupon bonds to cover, in part, refunds it has to make to commercial and industrial customers.
     The Supreme Court has ordered Meralco to return overcharges, estimated at more than 30 bln pesos, to customers and the company plans to implement the fourth and final phase of the program, involving major users, next year.
     Under Meralco's proposal, "small" commercial users will receive refunds through credits on future billings. The refunds will be carried out over three years, starting early 2005.
     Major industrial users, on the other hand, will be issued zero-coupon bonds equivalent to the refunds due.
     The bonds can be exchanged for cash through rediscounting arrangements with accredited banks or finance companies. The process could take up to five years.
     (1 usd = 56.13 pesos)
     afxmanila@afxasia.com

Philippines' Meralco, Napocor to discuss new supply deal - report

     MANILA (AFX-ASIA) - Manila Electric Company (Meralco) is set to discuss a new "transition" supply contract (TSC) with state-owned National Power Corp (Napocor), the Philippine Star reported, citing Meralco president Jesus Francisco.
     "We will have a meeting with Napocor this week on the TSC. We need to negotiate and come up with new terms for a new supply contract," Francisco was quoted as saying.
     He said the new TSC will replace the existing 10-year supply contract with Napocor, which is reportedly to expire this year.
     Meralco is now sourcing a significant volume of its requirements from its affiliate power producer First Gas Holdings Corp, which operates two natural gas-fired facilities in Luzon.
     Meralco retails electricity in metropolitan Manila and nearby provinces.
     Francisco said the new contract "will only be used during the transition period." Napocor's generating assets are now being privatized.
     "We have to know when will be the transition period. When you say transition period, it must be short," he said.
     afxmanila@afxasia.com

Philippine peso at 2-mth high on inflows, unwinding of positions

     MANILA (AFX-ASIA) - The peso closed at its strongest level against the US dollar in nearly two months on fresh remittances of the greenback from overseas Filipinos and amid banks' moves to cut their long dollar positions, following a relatively quiet Easter holidays, dealers said.
     However, with the May 10 presidential elections only four weeks away, the sustainability of the peso's gains is uncertain amid persistent global security concerns.
     The peso closed at 56.130 to the dollar after trading between 56.110 and 56.300 on volume of 101.50 mln usd. It closed at 56.295 on April 6, before the five-day Easter break.
     Today's close is the peso's strongest since Feb 18, when it finished at the same level.
     "Some market players are saying this is remittance-related and squaring off of positions after the relatively uneventful long weekend," a local commercial bank dealer said.
     "We may see some follow-through selling" of the dollar tomorrow, after the peso earlier broke the 56.15 resistance level, he said, adding, however, that "we are not ruling out buying (of dollars) at current levels, especially by importers."
     afxmanila@afxasia.com

Philippines' Arroyo now ahead of Poe in presidential race - survey

     MANILA (AFX-ASIA) - Incumbent Gloria Arroyo has overtaken her main rival, Fernando Poe Jr, in the presidential election race less than a month before the May 10 polls, an independent survey said today.
     If the elections were to be held now, 34 pct would vote for Arroyo and 31 pct fore Poe, Manila-based pollster Pulse Asia Inc said.
     Pulse Asia said 4,800 statistically representative registered voters took part in the March 27-April 4 survey, which had an error margin of 1.4 pct, meaning Arroyo has a slim lead of more than one percentage point.
     Respondents were asked to write down on a ballot the names of their chosen candidates, simulating actual voting conditions, Agence France-Presse reported.
     Arroyo and Poe "continue to be locked in a close fight for the presidency, " Pulse Asia said, stressing that the survey also showed that a "considerable minority", or about 19 pct could still change their minds.
     The survey is the first in months to show Arroyo with a lead over opposition candidate Poe, a popular movie actor with little formal education and no record of public service.
     Its previous survey in February had both with 32 pct of support each.
     Opposition officials said today that Poe has overhauled his campaign team to regain ground from Arroyo, naming Jejomar Binay, the mayor of the financial district of Makati, as his "overall campaign manager."
     Poe spokesman Rodolfo Reyes said a committee of senior advisors had run his campaign previously, but someone was now needed to take charge.
     Reyes denied the decision is linked to Poe losing his wide lead over Arroyo.
     Poe led Arroyo by nine points in the January survey.
     Reyes said Arroyo's opponents are trying to persuade opposition candidates Poe or Senator Panfilo Lacson to withdraw from the election in order to avoid splitting the anti-Arroyo vote.
     The latest Pulse Asia survey has former education secretary Raul Roco in third spot with 12 pct of the votes and Lacson in fourth place with 10 pct.

Philippines' SPI Technologies says TH Lee's tender offer ends May 7

     MANILA (AFX-ASIA) - SPI Technologies Inc said the tender offer by THLPV Acquisition LP, which is 100 pct owned by US-based TH Lee Putnam Ventures LP, will commence on April 12 and end on May 7.
     The purchase price is 87.23 mln usd or 0.2794 usd per share, payable in US dollars.
     "SPI's shareholders who wish to convert their US dollar proceeds into Philippine pesos at the exchange rate to be quoted by HSBC (the paying agent) should so indicate in their application to tender," says a tender offer report filed with the Philippine Stock Exchange.
     The exchange rate will be equivalent to the weighted average rate at the Philippine Dealing System as of 11.30 am one business day prior to the payment date for the tendered SPI shares, minus 0.05 peso for every 1.00 usd.
     The bidder, which has tapped ATR-Kim Eng Capital Partners Inc as advisor for the transaction, intends to pay the tendered and accepted shares on May 20.
     The board of SPI Technologies, Asia's largest independent business process outsourcing provider, has unanimously voted to recommend the acceptance of TH Lee's offer to SPI shareholders.
     SPI's major shareholders, holding 71 pct of the company's total shares, have accepted TH Lee's acquisition price offer.
     THLPV Acquisition is a limited partnership in Delaware.
     TH Lee Putnam Ventures LP is a technology-focused private equity firm which manages 1.1 bln usd in capital commitments.
     (1 usd = 56.20 pesos)
     afxmanila@afxasia.com

Philippine court suspends Negros Navigation's debt payments

     MANILA (AFX-ASIA) - The Manila Regional Trial Court (RTC) has granted the petition of Negros Navigation Company Inc (Nenaco) for an immediate suspension of debt payments, seen as the first step towards the implementation of the shipping firm's rehabilitation program
     Nenaco, a unit of Metro Pacific Corp, provided the stock exchange a copy of the court order, which "stays the enforcement of all claims, whether for money or otherwise...against the petitioner, its guarantors and sureties..."
     Nenaco has debts totalling 2.5 bln pesos.
     The company has also been prohibited by the court from selling, encumbering, transferring, or disposing in any form any of its properties.
     The court has appointed Sulficio Tagud Jr as rehabilitation receiver. The bank shipping specialist was chairman of Camella Homes, and was formerly with Ayala Investment and Development Corp.
     "The purpose of the said stay order is to ensure the sanctity of our assets while the RTC of Manila considers our rehabilitation program and to prevent any creditor from attempting to gain advantage over others in an attempt to seize or attach any of our assets," Nenaco told the stock exchange in a letter.
     Trading in Nenaco shares has been suspended indefinitely since March 30 after it filed a petition with the Manila RTC to enter into a corporate rehabilitation program with a plea for an immediate suspension of debt payments.
     Nenaco earlier said the filing was triggered by a debt payment dispute with Cebu-based Tsuneishi Heavy Industries Inc, which is 20 pct owned by Aboitiz and Company Inc.
     afxmanila@afxasia.com

Philippines 91-day, 182-day T-bill rates rise; 364-day bids rejected

     (Updating with national treasurer's comments)
     MANILA (AFX-ASIA) - The government allowed rates on 91-day and 182-day Treasury bills to rise but rejected all bids for 364-day bills at today's regular auction.
     National Treasurer Mina Figueroa attributed the high bids for T-bills to political uncertainties in the run-up to the May 10 presidential elections and market worries about possible monetary policy tightening by the central bank amid the build-up in inflationary pressures.
     The 91-day rate, which banks use as benchmark in pricing loans, averaged 7.658 pct compared with 7.616 pct previously, with the government awarding in full its 3.5 bln pesos offering against total tenders of 4.882 bln.
     The 182-day rate averaged 8.661 pct against the previous average of 8.612 pct, on a partial award of 1.735 bln pesos against the government's offering of 3.0 bln and total tenders of 3.635 bln.
     The government rejected all bids for 364-day bills, with offered rates ranging from 9.495 pct to 10.750 pct against the previous average of 8.384 pct.
     The one-year bills were undersubscribed, with total tenders of 1.93 bln pesos against an offering of 2.5 bln.
     Figueroa said she still sees the upward pressure on T-bill rates to continue ahead of the May polls and amid market speculation about the central bank's policy tightening, possibly through an interest rate hike.
     "The preference currently is for short-term instruments given the uncertainty related to the elections and the central bank's monetary policy," she told reporters after the auction.
     "But we think these are the rates acceptable to us," she said, hinting at the possibility of rejections in the coming auctions should banks continue to push the rates higher.
     The Philippines' inflation rate rose a faster-than-expected 3.8 pct year-on-year in March, accelerating from 3.4 pct in the previous month. It reflected the inflationary pressure stemming from the peso's weakness against the US dollar and increases in oil prices.
     This prompted economists to comment that the central bank is now under increasing pressure to tighten its policy.
     The central bank, on the other hand, said its policy stance will remain "cautious" given expectations of a further build-up in inflationary pressures in the coming months.
     (1 usd = 56.20 pesos)
     afxmanila@afxasia.com

Philippines' overseas workers begin voting ahead of May 10 elections

     MANILA (AFX-ASIA) - Filipinos working overseas have started voting ahead of the Philippines' May 10 presidential election, the foreign ministry said today.
     Of the estimated 5.3 mln Filipinos working abroad, some 258,294 have registered to vote, it said.
     Around 200 voted yesterday in Hong Kong, where 8,416 Filipino workers have registered to vote.
     Filipinos with approved applications can cast ballots in 73 designated polling stations in embassies and consulates around the world.
     Filipino seamen started voting on March 12. Of the 2,304 seamen who have registered to vote, less than 10 pct had cast the ballots as of yesterday.

Manila shares close weaker on technical correction; PLDT limits fall

     MANILA (AFX-ASIA) - Share prices closed weaker on a technical correction after gains over the six trading days prior to the Easter break, with Philippine Long Distance Telephone Co's (PLDT) extended rally limiting the downside, dealers said.
     Investors were largely reluctant to trade after the long vacation and in the absence of strong cues from foreign markets, including the US, they said.
     The composite index closed down 6.23 points or 0.41 pct at 1,510.58 on volume of 242.7 mln shares valued at 716.5 mln pesos. It moved between 1,505. 95 and 1,518.38.
     In the broader market, losers beat gainers 33 to 12, with 32 stocks unchanged.
     Dealers said some investors continued to take positions, notably in PLDT, ahead of the release of what is largely expected to be another impressive earnings during the first quarter, on the back of sustained gains in wireless unit Smart Communications Inc.
     PLDT was top-traded on volume of 346,140 shares and up 15 pesos at 1,070, its strongest finish since Jan 2000.
     Fitch Ratings last week said it has upgraded its long-term foreign and local currency ratings for PLDT to "BB" from "BB-", with a stable outlook.
     The rating of the company's global bonds and senior notes has been upgraded to "BB" from "BB-" while the rating of the convertible preferred stock has been raised to "B+" from "B", Fitch added.
     The agency said the action follows a sustained period of improvement in PLDT's operating and financial profile, underpinned mostly by impressive growth in its 100 pct-owned unit Smart.
     "The market already looked overbought before the Easter break and it has now entered into a correction phase. We will probably see a day or two more days of correction, with the market testing support at 1,500 level, and possibly next at 1,480," DA Market Securities president Nestor Aguila said.
     "Investors were still in a holiday mode, but we will probably see a clearer trend by Wednesday - if the market is to further correct with the May 10 (presidential) polls drawing closer or to gain more ahead of the first quarter results."
     PLDT rival Globe Telecom was unchanged at 900.00 pesos.
     Ayala Land was down 0.10 at 5.50 and parent Ayala Corp down 0.10 at 6.30.
     Araneta Properties was among the most active stocks, with cross sales involving 124.9 mln shares, closing 0.09 lower at 0.15.
     San Miguel Corp's B shares, available to foreign investors, was up 0.50 at 72, while San Miguel A was unchanged at 57.50, on possible position-taking in anticipation of a double-digit growth in first quarter net profit.
     This followed the company's announcement that it has agreed to acquire the assets of Thai Amarit Brewery Ltd in Thailand for 102 mln usd as part of its regional expansion program that also covers China, Australia, Indonesia, Vietnam, Taiwan and Malaysia.
     The food and beverage conglomerate earlier said its net profit in the first two months of the year breached the 1-bln peso mark, a rise of 16 pct from 918 mln pesos in the same period last year, on increased sales mainly from the beverage business segment.
     Manila Electric B, available to foreign investors, was down 1.50 at 26. 50, while Meralco A fell 0.75 to 18.00.
     Meralco parent First Philippine Holdings Corp was down 0.75 at 22.25.
     PLDT affiliate Pilipino Telephone Corp was down 0.04 at 1.74.
     The all-shares index was down 9.77 points at 978.79.
     The commercial-industrial index fell 1.25 to 2,373.99.
     Property dropped 6.32 to 530.87, while mining declined 26.05 to 1,454.86.
     Oil was down 0.02 at 1.11.
     Banking and financial services shed 5.22 to 432.31.
     (1 usd = 56.20 pesos
     afxmanila@afxasia.com

Philippines to invite bids for 28-year water supply project in Manila

     MANILA (AFX-ASIA) - The government said its Investment Coordination Committee-Cabinet Committee (ICC-CC) has given initial approval to regulator Metropolitan Waterworks Sewerage System's (MWSS) 400 mln liters per day (MLD) treated bulk water supply project.
     In a statement, the National Economic and Development Authority (NEDA) said the project aims to address the shortage of water sources in Metropolitan Manila.
     "The project will involve the participation of the private sector, which will deliver a minimum 400 MLD treated bulk water to the MWSS, which, in turn, will sell it to Maynilad Water Services Inc and Manila Water Co Inc," NEDA said.
     The winning bidder will be responsible for financing the entire project, including acquisitions of right-of-ways, required permits and environmental compliance certificate, it said.
     The winning bidder, or proponent, will also identify the proposed raw water sources, prepare the feasibility study, the detailed engineering design and the environmental studies, NEDA said.
     In addition, the proponent will be responsible for constructing all the system components, such as transmission mains, treatment plant, water reservoir, and others, including operating and maintaining the proposed treated bulk water supply system, it added.
     The proposed funding for the project is on a Build-Operate-Transfer (BOT) scheme, NEDA said.
     The total "cooperation" period between the government and the winning bidder will be 28 years, with the development and construction period taking three years and the operating period lasting 25 years.
     "The proponent will operate the facility over a fixed term, during which it will be allowed to charge facility users appropriate fees to recover its investment, as well as cover operating and maintenance costs," the NEDA said.
     The project was conceptualized after several studies the MWSS commissioned yielded results showing the urgent need to address water shortage in Manila.
     The studies identified potential and/or alternative sources for both interim and long-term raw water supply developments to meet increasing demand in the capital.
     Based on the Study on Water Resources Development for Metro Manila, which the Japan International Cooperation Agency conducted in Feb 2003, the most critical period will be to 2013, where the demand-supply gap is estimated to be as large as 900 MLD.
     The study also noted that, based on MWSS projections, there is a need for an additional water supply of about 400 MLD by 2007, with a projected increase of about 200 MLD annually for the period 2005 to 2010.
     afxmanila@afxasia.com

Manila shares weaker mid-session on technical correction; PLDT limits fall

     MANILA (AFX-ASIA) - Share prices were weaker mid-session on a technical correction after six trading days of gains, but Philippine Long Distance Telephone Co's (PLDT) extended rally limited the downside, dealers said.
     At 10.54 am, the composite index was down 5.70 points or 0.38 pct at 1, 511.11 on volume of 192.7 mln shares valued at 168.1 mln pesos. It has so far moved between 1,510.45 and 1,518.38.
     In the broader market, losers beat gainers 26 to nine, with 23 stocks unchanged.
     "The market is really due for a technical correction following successive gains before the Easter break," Westlink Global Equities chairman Rommel Macapagal said.
     However, he said some investors continued to position themselves ahead of the release of first quarter earnings, especially in PLDT.
     PLDT was top-traded so far on volume of 60,690 shares and up 10 pesos at 1,065.00.
     Investors were still on the sidelines after the long vacation and in the absence of strong cues from foreign markets, including the US, Macapagal said, adding the local market is supported initially at 1,500-point level.
     (1 usd = 56.20 pesos)
     afxmanila@afxasia.com

STOCKWATCH - Philippines' PLDT extends rally ahead of Q1 earnings

     MANILA (AFX-ASIA) - Philippine Long Distance Telephone Co (PLDT) was firmer in early trade, extending gains on foreign interest ahead of what is largely expected to be another impressive first quarter earnings results, dealers said.
     At 10.42 am, PLDT was top-traded on volume of 51,580 shares and up 10.00 pesos at 1,065.00.
     The composite index was down 4.69 points or 0.31 pct at 1,512.12.
     "Despite the market's mild technical correction following recent gains, investors are holding on to their PLDT shares because of its bullish earnings prospects this year," an analyst with a local brokerage said.
     The stock closed at its highest price level in more than four years on April 6, before the Easter break, on gains after a company official's projection that PLDT may have booked net profit of more than 4.5 bln pesos in the first quarter to March, or double the year-earlier level.
     The source said the company's net profit in the first quarter soared on the back of earnings growth of wireless unit Smart Communications Inc.
     PLDT, however, has neither confirmed nor denied the initial profit projection, saying it won't be ready to announce its results until the first week of May.
     Even prior to the earnings projection, the stock has seen strong foreign support, with analysts projecting a net profit of 17-18 bln pesos for all of 2004 from 11.2 bln last year.
     PLDT chairman Manuel Pangilinan had said the company is comfortable with analysts' forecasts, adding that it may even earn more than that if Smart acquires control of wireless affiliate Piltel, which is expected to return to profitability this year.
     Fitch Ratings last week said it has upgraded its long-term foreign and local currency ratings for PLDT to "BB" from "BB-", with a stable outlook.
     The rating of the company's global bonds and senior notes has been upgraded to "BB" from "BB-" while the rating of the convertible preferred stock has been raised to "B+" from "B".
     The agency said the action follows a sustained period of improvement in PLDT's operating and financial profile, underpinned mostly by impressive growth in its 100 pct-owned unit Smart.
     While PLDT's own financial position is weaker than the consolidated profile, Smart has more flexibility to distribute all of its annual income to the parent company than in the past, it said.
     The ratings also consider the prospect that Smart will soon acquire a majority interest in PLDT's 45 pct-owned Pilipino Telephone Corp and that the entity will become reconsolidated into the PLDT group, Fitch said.
     "The stable outlook reflects Fitch's view that neither the existing competitive landscape nor the planned resumption of common share dividends by PLDT would disrupt the group's de-leveraging efforts," it said.
     However, Fitch said it would monitor closely any developments with respect to competition as this historically has had an impact on the company's credit profile.
     (1 usd = 56.20 pesos)
     afxmanila@afxasia.com

STOCKWATCH - Philippines' San Miguel B firmer on earnings prospects, expansion

     MANILA (AFX-ASIA) - San Miguel Corp's B shares, available to foreign investors, were firmer in thin trade early against a generally weak market, as some investors may be taking positions in anticipation of a double-digit first quarter net profit, dealers said.
     This followed the company's announcement that it has agreed to acquire the assets of Thai Amarit Brewery Ltd in Thailand for 102 mln usd as part of its regional expansion program that also covers China, Australia, Indonesia, Vietnam, Taiwan and Malaysia.
     At 10.23 am, San Miguel B was up 0.50 pesos at 72.00 on volume of 71,900 shares. San Miguel A was unchanged at 57.50.
     The composite index was down 4.27 points or 0.28 pct.
     "The volume is very thin, but this gain may be due to the company's earnings prospects and its continuing expansion that will likely sustain profitability going forward," an analyst with a local brokerage said.
     The food and beverage conglomerate earlier said its net profit in the first two months of the year breached the 1-bln peso mark, a rise of 16 pct from 918 mln pesos in the same period last year, on increased sales mainly from the beverage business segment.
     Consolidated net sales revenue for the January-February period surged 14 pct year-on-year to 24.4 bln pesos.
     The food and beverage conglomerate gave no exact figure for the net profit for the two-month period, but said it has already achieved close to 80 pct of its first quarter 2003 earnings forecast of 1.34 bln pesos.
     San Miguel Corp, meanwhile, signed a definitive sale and purchase agreement with Thai Amarit last week and the transaction is expected to be closed in 30 days.
     (1 usd = 56.20 pesos)
     afxmanila@afxasia.com

Philippines' Bankard gets central bank approval to boost reserves

     MANILA (AFX-ASIA) - Bankard Inc said it has secured a central bank approval to build up its reserve levels by 3.6 bln pesos over seven years to conform with the central bank requirement.
     "Bankard will add 3.6 bln pesos to its reserves over the seven-year period 2004-2010," the credit-card issuer said in a statement to the stock exchange, without saying how the amount will be raised.
     The move is to conform with the standard valuation reserve requirements for delinquent and potentially non-collectible credit card receivables, it added.
     Bankard's board, meanwhile, approved a proposed agreement with a local partner for the company to develop a fee-based business that capitalizes on the rapidly growing card transactions through the Internet.
     It expects this business to contribute at least 12 pct in revenue this year.
     (1 usd = 56.25 pesos)
     afxmanila@afxasia.com

Philippines' Cebu Holdings to develop 46-hectare coastal area in Cebu

     MANILA (AFX-ASIA) - Cebu Holdings Inc, an affiliate of Ayala Land Inc, said it will develop a 46-hectare coastal land in Cebu province in the central Philippines into a high-end residential community.
     It said it has signed a joint development agreement with project manager Coastal Highpoint Ventures Inc.
     It gave no financial details and timetable for the project.
     afxmanila@afxasia.com

Philippines' San Miguel acquires Thai Amarit Brewery for 102 mln usd

     MANILA (AFX-ASIA) - San Miguel Corp said it has agreed to acquire the assets of Thai Amarit Brewery Ltd in Thailand for 102 mln usd as part of its regional expansion program also covering China, Australia, Indonesia Vietnam, Taiwan and Malaysia.
     San Miguel said it has signed a definitive sale and purchase agreement with Thai Amarit last week and the transaction is expected to be closed in 30 days.
     The Thai Amarit assets to be acquired by the Philippines' food and beverage conglomerate include a modern and fully-equipped brewery on a 21. 75-hectare site at the Pathum Thani province in central Thailand.
     The brewery employs state-of-the-art technology from Europe and has a capacity of about 1 mln hectoliters, San Miguel said in a statement.
     Last month, San Miguel broke ground for its manufacturing complex in the Amata City (Rayong) Industrial Estate in Thailand.
     The Amata City venture called San Miguel (Thailand) Co Ltd involves the manufacture and distribution in Thailand of San Miguel's other product lines including beverage products, processed foods and snacks, and feed mill operations.
     San Miguel said the Pathum Thani site still has around 11 hectares of vacant land available for future expansion.
     It said the acquisition deal also covers Thai Amarit's 2.4-hectare property strategically located at the Bang Po area of Metro Bangkok, which has an existing port facility that gives access to the Chao Phraya River.
     "The Thai brewery shall allow the entry of San Miguel's own beer brands and provide access to the fast-growing and largest beer market in Southeast Asia," San Miguel said.
     San Miguel sells nine out of 10 beer bottles sold in the Philippines.
     It said the Thai Amarit acquisition also offers potential synergy with other San Miguel projects in Thailand and in the region.
     afxmanila@afxasia.com

Philippine Airlines plans to resume flights to India, Europe

     MANILA (AFX-ASIA) - Philippine Airlines (PAL) plans to resume flights to India and Europe, particularly Italy, before 2006, company president and chief operating officer Avelino Zapanta said.
     However, he said PAL will have to first forge air agreements with India and different European countries before it could fly to these destinations.
     PAL has not been flying to India since 1954 after the government had issued a policy to stop foreign flights in favor of its rural development program.
     It stopped flights to Europe in 1998 amid a dispute between management and flight and ground crew.
     afxmanila@afxasia.com

Philippines seeks tariff cuts on coconut oil exports to China - report

     MANILA (AFX-ASIA) - The Philippine government has asked China to lower the tariffs imposed on its coconut oil exports to levels at par with those imposed on Malaysia and Indonesia, the Philippine Daily Inquirer reported, citing Philippine Coconut Authority Administrator Danilo Coronacion.
     "From the current level of 20 pct, we are requesting that this be brought down initially to 10 pct and eventually to 5 pct," he was quoted as saying.
     He noted that China imposes a tariff of only 5 pct on coconut oil from Malaysia and Indonesia.
     Coronacion said the proposal will be raised during bilateral talks between Philippine and Chinese governments later this month.
     afxmanila@afxasia.com

Philippines' PLDT ratings upgraded to 'BB'from 'BB-'; outlook stable - Fitch

     BEIJING (AFX-ASIA) - Philippine Long Distance Telephone Co (PLDT)'s long term foreign and local currency ratings have been upgraded to "BB" from "BB-", Fitch Ratings said.
     Fitch said the outlook on the ratings is stable.
     The rating of the company's global bonds and senior notes has similarly been upgraded to "BB" from "BB-" while the rating of the convertible preferred stock has been raised to "B+" from "B".
     The ratings agency said the action follows a sustained period of improvement in PLDT's operating and financial profile, underpinned mostly by impressive growth in its 100 pct-owned unit Smart Communications Inc.
     While PLDT's own financial position is weaker than the consolidated profile, Smart has more flexibility to distribute all of its annual income to the parent company than in the past, it said.
     The ratings also consider the prospect that Smart will soon acquire a majority interest in PLDT's 45 pct-owned Pilipino Telephone Corp and that the entity will become reconsolidated into the PLDT group, Fitch said.
     "The stable outlook reflects Fitch's view that neither the existing competitive landscape nor the planned resumption of common share dividends by PLDT would disrupt the group's deleveraging efforts," it said.
     However, Fitch said it would monitor closely any developments with respect to competition as this historically has had an impact on the company's credit profile.

Malaysia's Cahya Mata, Philippines' Premier Capital sign MoU for cement jv

     KUALA LUMPUR (AFX-ASIA) - Cahya Mata Sarawak Bhd said it has signed a memorandum of understanding (MoU) with Premier Capital Venture Corp to consider the possibility of forming a cement joint venture.
     The MoU will look into merging the operations of CMS Cement Sdn Bhd, a wholly owned unit of Cahya Mata, and Sarawak Clinker Sdn Bhd to establish the former as a joint venture company between Cahya Mata and Premier Capital.
     Sarawak Clinker would become a wholly-owned unit of CMS Cement.
     Cahya Mata and Premier Capital will likely hold 50.1 pct and 49.9 pct, respectively, in CMS Cement after the scheme is completed.
     CMS Cement manufactures and sells cement, while Sarawak Clinker makes and trades cement clinker.
     Premier Capital is a Philippines-based firm whose affiliate companies have actively managed and expanded several fully integrated cement plants in their home country.
     The proposed exercise is expected to transform CMS Cement into an enlarged and fully integrated producer and dealer in cement and cement-related products, Cahya Mata said in a statement.
     lilian.loh@afxasia.com