NEWS

Tuesday January 20, 2004
Philippine 2003 GDP likely grew 4.2 pct - Neri
Philippines raises 4.5 bln pesos via 7-yr T-bond auction; coupon set at 11 pct
Philippine peace talks with Muslim rebels to resume next month - leaders
Manila shares close up on buying in select blue chips, second-liners
Philippine peso weak in morning on strong dollar/short-covering - Tetangco
Philippines' PNOC-EC, Malaysia's Petronas sign joint oil exploration deal
DATAWATCH - Philippine imports rise signals exports, domestic demand recovery
Philippines' PLDT says no plan to merge Smart, Piltel
FOREX - Philippine peso extends fall on weak regionals, political concerns
Philippines' Arroyo marks third year of revolt amid opposition protests
STOCKWATCH - Philippines' Piltel extends gains on reported merger with Smart
STOCK ALERT - Philippine PLDT firmer on bargain-hunting, Piltel gains
STOCK ALERT - Philippines' Petron extends gains on buying momentum
Philippines Nov merchandise imports up 4.3 pct yr-on-yr
Philippines' Export and Industry Bank 2003 net profit down 65 pct
Philippines Nov merchandise imports up 4.3 pct yr-on-yr
Philippines' Banco de Oro NPL ratio 6.34 pct as of Dec 16

Monday January 19, 2004
Forex - Philippine peso closes at 7-week low, central bank intervenes
Philippine peso dragged to 7-week low by stronger dlr -central bank's Tetangco
Philippines' Estrada in court denies he plans to flee country
Philippines' Napocor awards Pinamucan contract to DM Consunji group
Philippines' 91-day, 182-day T-bill rates down, 364-day rate up
Philippine executions will go ahead despite Papal intervention - Arroyo aide
Land Bank of the Philippines NPL ratio 17.83 pct as of Dec 16
Philippines' Citystate Savings Bank NPL ratio 3.60 pct as of Dec 16
Manila shares close flat as market consolidates
First Philippine Holdings to list 104,537 common shares Tuesday - PSE
Malaysian PM to focus on terrorism talks during Manila visit - Arroyo aide
STOCKWATCH - Philippines' Petron extends gain on positive earnings outlook
Philippines' Security Bank launches 2.5-bln peso Tier 2 notes issue
STOCK ALERT - Philippines' Piltel up on projected return to profits in 2004
Philippines' Jollibee to open stores in China, Indonesia - report
Philippines' PCGG plans to get extra seat on San Miguel board - report
Philippines' Meralco unlikely to get 80 mln usd loan deadline extended -report
Philippines' First Metro NPL ratio 8.13 pct as of Dec 16
Philippines' Prudential Bank NPL ratio 32.61 pct as of Dec 16
Philippine banks end-Nov total loans at 1.49 trln pesos, up 4.3 pct yr-on-yr
Philippines' Atlas plans capital infusion to address deficit
Philippines expresses concern over US inaction on telecom executives

January 16 -17
January 14 -15
January 12 - 13
January 8 - 9
January 6 - 7
January 04 - 05

Philippine 2003 GDP likely grew 4.2 pct - Neri

     MANILA (AFX-ASIA) - The Philippines' 2003 gross domestic product likely grew 4.2 pct, the lower end of the government forecast range of 4.2-5.2 pct, Economic Planning Secretary Romulo Neri said.
     In a statement last Tuesday, President Gloria Arroyo said the country's GDP expanded 4.4 pct last year and is expected to grow 5.2 pct in 2004.
     Increased crop harvest and growth in the construction sector complemented the sustained robust performance of the services sector in the fourth quarter of 2003, Neri told reporters.
     "Agriculture apparently did well enough in the last quarter. I think construction also may have recovered," he said.
     The National Statistical Coordination Board (NSCB) is expected to announce the data related to the economic performance in the fourth quarter and the full year in the next few weeks.
     Neri said a recovery in December exports, following a surprising decline in November, may have also aided economic growth in the fourth quarter.
     "All indicators point to a recovery," Neri said.
     Meanwhile, Budget and Management Secretary Emilia Boncodin said the government's economic managers will have to review its macroeconomic targets for 2004 after the release of the 2003 data to determine the attainability of the assumptions or this year.
     According to the government's 2004 economic targets, GDP is expected to grow 4.9-5.8 pct.
     Central bank governor Rafael Buenaventura, however, advised the government to lower the target to around 4.5 pct, saying business activity is likely to slow in the first quarter due to the May general elections.
     The government expects 2004 inflation to rose 4.0-5.0 pct this year, and the interest rate of the bellwether 91-day Treasury bills to inch up to 7.5-8. 5 pct. The peso is, meanwhile, seen averaging at 54.00-56.00 to the US dollar this year.
     (1 usd = 55.71 pesos)
     afxmanila@afxasia.com

Philippines raises 4.5 bln pesos via 7-yr T-bond auction; coupon set at 11 pct

     MANILA (AFX-ASIA) - The Bureau of Treasury said it fully awarded its 4. 50-bln peso offering for seven-year T-bonds at today's auction with the coupon rate set at 11.0 pct.
     Tenders totaled 9.746 bln pesos.
     (1 usd = 55.70 pesos)
     edelacruz@afxasia.com

Philippine peace talks with Muslim rebels to resume next month - leaders

     MANILA (AFX-ASIA) - The Philippine government will resume peace talks with Muslim separatist rebels in Malaysia next month, the leaders of the Philippines and Malaysia announced today.
     Philippine President Gloria Arroyo said after talks with Malaysian Prime Minister Abdullah Ahmad Badawi here that they agreed to hold "a new round of exploratory talks" between Manila and the Moro Islamic Liberation Front (MILF) in Kuala Lumpur "by the second week of February."
     "The talks will strive to resolve outstanding issues and advance the overall climate of peace," Arroyo told a joint press conference with Abdullah.
     She praised Malaysia for its role in mediating the peace talks with the MILF, which has been fighting for nearly three decades to set up a separate Islamic state in the southern third of the largely-Roman Catholic Philippines.
     President Arroyo is seeking a political settlement with the 11,900-member MILF before a May 10 presidential election, in which she is seeking six more years in office.
     The MILF has rejected allegations that it provides training and sanctuary to foreign militants from Jemaah Islamiyah, blamed for the deadly Bali bombing in 2002 and other deadly attacks across Southeast Asia.
     Abdullah said the MILF will soon be informed of their decision to hold the talks, adding "it is our intention that we want to move the peace process forward.
     "It is our intention to see that peace has been secured," in the southern Philippines, near the maritime border with Malaysia.

Manila shares close up on buying in select blue chips, second-liners

     MANILA (AFX-ASIA) - Share prices closed higher on bargain-hunting in select blue chips and interest in second-line stocks, dealers said.
     Despite spells of profit-taking in recent sessions, investors are generally still bullish about the Philippines' economic growth prospects in this election year, they added.
     The composite index closed up 26.86 points, or 1.77 pct, at the day's high of 1,546.89 on volume of 442.75 mln shares worth 912.8 mln pesos. It had hit earlier a day's low of 1,521.01.
     In the broader market, gainers outnumbered losers 38 to 24, while 35 stocks were unchanged.
     Some stocks moved on specific issues, particularly Pilipino Telephone Corp (Piltel), which extended gains on a newspaper report that parent Philippine Long Distance Telephone Co (PLDT) may consider a backdoor listing for unit Smart Communications Inc through a merger with affiliate Piltel.
     Strong foreign buying interest in conglomerate Ayala Corp also gave strong support to the market.
     "Investors consider the 1,500 level as a good point to take more positions. Sentiment is also generally positive because of expectations that 2004 will be better than last year in terms of economic prospects," Accord Capital Equities analyst Lawrence de Leon said.
     "The market is really bullish in an election year. People are taking positions in big companies like Ayala Corp," Eagle Equities president Joseph Roxas said.
     The market's rise followed the National Statistics Office's report that Philippine merchandise imports last November rose 4.30 pct year-on-year, which economists said is likely to fuel the recovery of domestic merchandise exports and consumer demand in the coming months.
     Analysts, however, said expectations of lower domestic interest rates after yesterday's drop in the benchmark 91-day and 182-day average Treasury bill rates may have also sparked interest in property stocks.
     Top-traded SM Prime was up 0.10 peso at 6.40 on volume of 26.10 mln shares.
     Ayala Corp was up a hefty 0.70 peso, or 11.67 pct, at 6.70 on 25.76 mln shares, with a boost to turnover from cross sales.
     Property unit Ayala Land was up 0.10 at 6.30 on 10.08 mln shares.
     Piltel rose 0.24 peso, or 17.14 pct, to 1.64 on 57.30 mln shares, despite a PLDT denial of a report of its plans to merge Smart with Piltel.
     Piltel said it is not aware of any plans for it to merge with Smart for the purpose of providing a backdoor listing for the latter.
     PLDT was up 20.00 at 935.00 on 74,810 shares.
     Petron, which extended gains in early trade, was unchanged at 2.80 on 19. 3 mln shares.
     Manila Electric B, available to foreign investors, extended its recovery from previous declines, closing up 2.50 at 33.50, while Meralco A gained 0.75 to 19.50.
     Meralco parent First Philippine Holdings was up 0.75 at 24.25.
     San Miguel A succumbed to profit-taking and fell 0.50 to 55.50, while San Miguel B, dropped 0.50 to 71.
     Metro Pacific Corp was up 0.06 at 0.38 on 90.78 mln shares.
     The all-shares index was up 11.86 points at 945.74.
     The commercial-industrial index rose 54.90 to 2,366.71.
     Property gained 9.24 to 581.19, while mining fell 34.32 to 1,536.41.
     Oil was down 0.04 at 1.29.
     Banking and financial services shed 1.95 to 472.71.
     (1 usd = 55.70 pesos)
     edelacruz@afxasia.com

Philippine peso weak in morning on strong dollar/short-covering - Tetangco

     MANILA (AFX-ASIA) - The dollar's strength, along with corporate demand for the greenback, and some short-covering weighed on the peso this morning, said central bank deputy governor Amando Tetangco Jr.
     However, the central bank did not intervene in foreign exchange trading this morning, he added.
     The peso averaged 55.707 to the dollar at noon after trading between 55. 670 and 55.750 in the morning session on volume of 80.5 mln usd. It closed at a seven-week low of 55.650 yesterday.
     "The peso was reacting to the strong dollar, corporate demand (for the US unit) and some short-covering," Tetangco said.
     However, the peso recovered some ground later in the morning session as demand for dollars waned and the receipt of some remittances from Filipino workers overseas, he added.
     afxmanila@afxasia.com

Philippines' PNOC-EC, Malaysia's Petronas sign joint oil exploration deal

     MANILA (AFX-ASIA) - The Philippine National Oil Co- Exploration Corp (PNOC-EC) and Malaysia's Petronas Carigali Overseas Sdn Bhd have agreed to jointly explore an offshore block in the province of Mindoro for oil and gas fields.
     The two companies today signed a new petroleum service contract with the Philippine government, coinciding with the visit of Malaysian Prime Minister Abdullah Ahmad Badawi to the country.
     The project involves the drilling of an exploratory well, estimated to cost between 15-18 mln usd, during the first phase of the seven-year exploration contract.
     "Efforts to revive the country's exploration industry have attracted different countries to take a second look at our petroleum resources. We are pleased to announce yet another service contract after we have just sealed an agreement with British firm Premier Oil last Friday," Energy Secretary Vincent Perez said.
     Last week, the energy department signed the country's first petroleum service contract since 1998 that will cover oil exploration over the Ragay Gulf in the provinces of Bicol and Quezon.
     Meanwhile, PNOC-EC president Rufino Bomasang said the offshore block in Mindoro province is so far the most attractive site in terms of petroleum potential.
     The area is said to have the richest "source rocks" in the country, and a well drilled in 1994 manifested the most significant oil discovery outside northwest Palawan, where commercial-producing oil and gas fields have been found.
     (1 usd = 55.71 pesos)
     cecille.yap@afxasia.com

DATAWATCH - Philippine imports rise signals exports, domestic demand recovery

     MANILA (AFX-ASIA) - Philippine merchandise exports and domestic consumer demand are likely to recover in the next few months after November's 4.3 pct year-on-year growth in imports, economists said.
     The National Statistics Office (NSO) reported that merchandise imports last November grew 4.3 pct year-on-year to 3.274 bln usd, down from the 7.0 pct rise in October.
     In the Jan-Nov 2003 period, imports grew 5.0 pct year-on-year to 34.38 bln usd from 32.754 bln.
     "At least, we were able to maintain some growth. Normally, imports are a leading indicator of exports and demand for consumer goods. We saw some healthy growth, although it slackened compared to the past," said AB Capital Securities research director Jose Vistan Jr in a television interview.
     November exports dropped 4.9 pct year-on-year, raising some questions on the reliability of the government data.
     GK Goh Securities economist Song Seng Wun said the latest report on imports supports his view that there is something not quite right about the exports figures, although there could be a lag between the recovery in both exports and imports.
     "If the improving trend in imports continues, it will point to stronger exports and improved domestic demand moving forward," Song said.
     Electronic imports, which accounted for 48.9 pct of the total November bill, were up 8.3 pct year-on-year at 1.60 bln usd.
     Imports of capital goods, which usually signal manufacturing expansion, grew 2.6 pct year-on-year to account for about 40.4 pct of total November bills.
     Raw materials and intermediate goods, a bulk of which represent Philippine-made products sold overseas, grew 5.1 pct year-on-year.
     However, Vistan, who has projected a 10 pct growth in 2004 exports, said Philippine-made products continue to face stiffer competition from goods made elsewhere in Asia, particularly countries with cheaper labor costs, such as China.
     Song said exports may have recovered in December after the 4.9 pct fall in November.
     He expects 2003 exports to come have grown a marginal 0.7 pct year-on-year, while imports likely improved 6.1 pct.
     For 2004r, a global economic recovery, strong domestic demand and a rebound in the electronics sector should see exports grow a sharp 8.5 pct year-on-year and imports 10.6 pct, Song said.
     (1 usd = 55.712 pesos)
     cecille.yap@afxasia.com

Philippines' PLDT says no plan to merge Smart, Piltel

     MANILA (AFX-ASIA) - Philippine Long Distance Telephone Co (PLDT) said there are no plans to merge wireless unit Smart Communications Inc and affiliate Pilipino Telephone Corp (Piltel) to facilitate a backdoor listing for Smart.
     In a statement to the stock exchange, PLDT said it "continues to study various options for the optimal capital structure of the group."
     It did not elaborate.
     In its statement to the exchange, Piltel said it is not aware of any plans for it to merge with Smart for the purpose of providing a backdoor listing for the latter.
     It did not make any further comments.
     The statements from the two companies follow a newspaper report that PLDT is looking at the possibility of a backdoor listing for Smart through a merger with Piltel.
     Smart, the country's leading wireless service provider, is required, under its congressional franchise, to sell at least 30 pct of its common shares to the public before August this year.
     The report said some key officials of the PLDT group, which includes PLDT, Smart and Piltel, support a plan that calls for Smart to take over Piltel and a decision on the matter may be made in the next few weeks.
     edelacruz@afxasia.com

FOREX - Philippine peso extends fall on weak regionals, political concerns

     MANILA (AFX-ASIA) - The peso extended its fall in morning trade, tracking weak regional currencies amid a globally strong US dollar, and on pre-election political jitters, dealers said.
     They said the market is worried in particular about repercussions of a possible disqualification of the opposition presidential standard bearer, actor Fernando Poe Jr (FPJ), after news reports alleging he is not a natural-born Filipino.
     At 10.59 am, the peso averaged 55.713 to the dollar after falling to as low as 55.750 in early trade, on volume of 59.0 mln usd.
     It closed at a seven-week low of 55.650 yesterday.
     "This is because of the weak regionals coupled with uncertainties due to a very fluid political scenario in the event that the (Commission on Elections) disqualifies FPJ from running in the May polls," a commercial bank dealer said.
     "His disqualification may spark unrest and chaos given his popularity."
     FPJ, a close friend of ousted Philippine president Joseph Estrada, has been topping surveys on presidential candidates.
     Newspaper reports said the director of the National Archives, Ricardo Manapat, testified before the Comelec yesterday that according to documents in the government's Records Management and Archives, FPJ's mother was an American and his father a Spanish citizen.
     FPJ's camp has branded as fake the documents from the National Archives.
     The dealer said the central bank was not seen in the market so far, unlike yesterday when it was rumored to have sold 20 mln to 30 mln usd worth of dollars on the spot market to support the local unit.
     The peso hit a record low of 55.850 in late 2003, pulled down by domestic political and security concerns.
     edelacruz@afxasia.com

Philippines' Arroyo marks third year of revolt amid opposition protests

     MANILA (AFX-ASIA) - Philippine President Gloria Arroyo today marked the third anniversary of a popular uprising that installed her in power with prayers, while leftist opponents threatened to march against her.
     Arroyo, joined by former president Fidel Ramos, key cabinet members, nuns and priests, attended a Catholic mass and a flag-raising ceremony shortly after dawn at a historic shrine where thousands converged on Jan 20, 2001, and forced corruption-tainted president Joseph Estrada out of office.
     Only a small group of supporters were at the so-called Edsa shrine along a key Manila highway on Monday to show their support for Arroyo, who is running for another term in May against a close friend of Estrada.
     Estrada, a foemer movie star who became president on a wave of popular support, is now in detention facing graft charges.
     Arroyo's office had said the revolt was commemorated early in the morning to allow her to devote the rest of the day to a visit from Malaysian Prime Minister Abdullah Ahmad Badawi.
     Leftist groups, meanwhile, announced they will march on the same historic shrine later today to denounce Arroyo for allegedly betraying the ideals of the uprising.
     The anniversary has been overshadowed by the elections in May where Arroyo will be going up against opposition presidential candidate, movie star Fernando Poe, a close friend of Estrada.
     The elections are widely seen as a proxy battle between Arroyo and Estrada.
     "The elections on May 10 will be a referendum on three years of Gloria Macapagal-Arroyo," the Philippine Star newspaper said in its editorial.
     The Philippine Daily Inquirer newspaper, meanwhile, said in an editorial that the uprising had been a "wasted opportunity," with the level of corruption actually rising under Arroyo.

STOCKWATCH - Philippines' Piltel extends gains on reported merger with Smart

     MANILA (AFX-ASIA) - Pilipino Telephone Corp (Piltel) was sharply firmer, but off highs, in mid-session, extending its gains after a newspaper report that Philippine Long Distance Telephone Co (PLDT) may consider a backdoor listing for unit Smart Communications Inc via a merger with Piltel, dealers said.
     Buying interest in Piltel was also boosted by expectations that it will return to profitability this year.
     At 10.27 am Piltel was up 0.16 peso, or 11.43 pct, at 1.56 on volume of 32.3 mln shares.
     The composite index was up 12.73 points, or 0.84 pct, at 1,532.76.
     The Philippine Daily Inquirer reported, without identifying its sources, that key officials of the PLDT group (PLDT, Smart and Piltel) support a plan that involves the takeover by Smart of Piltel, which may be decided upon in the next few weeks.
     Smart, the country's leading wireless service provider, is required under its congressional franchise to sell at least 30 pct of its common shares to the public by August this year.
     The report is not new since there have been persistent rumors in the market about a merger between Smart and Piltel, although officials of PLDT, Smart and Piltel have also repeatedly denied them.
     "The speculative interest in Piltel is back because of the newspaper report. But the possibility of a merger has been the subject of rumors and speculations in the market for months now," Westlink Global Equities chairman Rommel Macapagal said.
     "The report, however, mentioned that PLDT officials are now considering the merger of Piltel and Smart and have even come up with a timetable for the talks. So that somehow supports the persistent rumor."
     PLDT, however, denied it was planning to merge Smart with Piltel to facilitate a backdoor listing for Smart.
     PLDT, in a statement to the stock exchange, said it "continues to study various options for the optimal capital structure of the group."
     It did not elaborate.
     PLDT president Manuel Pangilinan earlier said Smart's initial public offering (IPO) will likely raise around 600 mln usd if it involves 30 pct of the wireless unit.
     He said PLDT could use the proceeds of Smart's IPO to pare down PLDT debts.
     PLDT plans to cut its debt level by 400-450 mln usd in 2004, including about 320 mln usd worth of debts in its fixed-line business and about 100 mln in the wireless segment, he said.
     The PLDT group has total debts of 2.7 bln usd, with Smart accounting for some 300 mln usd.
     (1 usd = 55.70 pesos)
     edelacruz@afxasia.com

STOCK ALERT - Philippine PLDT firmer on bargain-hunting, Piltel gains

     MANILA (AFX-ASIA) - Philippine Long Distance Telephone Co (PLDT) was firmer in early trade as it attracted bargain-hunting interest, dealers said.
     They said PLDT also benefited from extended gains in affiliate Pilipino Telephone Corp (Piltel), which rose on speculation of a merger with the highly profitable PLDT wireless unit, Smart Communications Inc.
     PLDT was top traded so far and up 20 pesos at 935 on volume of 42,990 shares.
     (1 usd = 55.70 pesos)
     edelacruz@afxasia.com

STOCK ALERT - Philippines' Petron extends gains on buying momentum

     MANILA (AFX-ASIA) - Oil refiner Petron Corp was firmer in early trade, with the break of its key resistance level sustaining the buying momentum, dealers said.
     Petron was up 0.10 peso, or 3.57 pct, at 2.90 on 8.7 mln shares.
     "There's buying momentum for Petron after the breaching the 2.80-peso level," Westlink Global Equities chairman Rommel Macapagal said.
     Petron has attracted buying interest on expectations that its earnings will be boosted by faster economic growth in the Philippines and its improved pricing power under a deregulated environment.
     (1 usd = 55.70 pesos)
     edelacruz@afxasia.com

Philippines Nov merchandise imports up 4.3 pct yr-on-yr

     MANILA (AFX-ASIA) - Merchandise imports rose 4.3 pct year-on-year to 3. 274 bln usd in November last year, the National Statistics Office (NSO) said.
     Merchandise imports had climbed 7.0 pct year-on-year in October.
     In the first 11 months of 2003, merchandise imports rose 5.0 pct to 34. 380 bln usd from 32.754 bln a year ago.
     The NSO said the country recorded a trade deficit of 322.0 mln usd in November compared with 35.0 mln a year earlier, and a deficit of 1.939 bln usd in the 11-month period against 459 mln usd in the year-earlier period.
     Electronic imports accounted for 48.9 pct of the total November bill and were up 8.3 pct year-on-year to 1.60 bln usd.
     Imports of mineral fuels, lubricants and related materials ranked second with a 9.3 pct share, while shipments valued at 303.47 mln usd were down 10.2 pct year-on-year.
     Purchases of industrial machinery and equipment were ranked third, worth 131.62 mln usd and up 2.9 pct year-on-year.
     Other top import items in November were transport equipment, telecommunications equipment and electrical machinery, and iron and steel.
     Capital goods comprised 40.4 pct of total November bill, with purchases worth 1.323 bln usd higher by 2.6 pct from year-ago imports.
     Raw materials and intermediate goods accounted for 37.5 pct of the bill, with total purchases of 1.229 bln usd, up 5.1 pct year-on-year.
     Imports from Japan worth 710.42 mln usd, up 13.7 pct year-on-year, accounted for 21.7 pct of the November bill. Exports to Japan amounted to 592. 09 mln usd, yielding a trade deficit for the Philippines of 118.33 mln usd.
     Purchases from the United States accounted for 17.4 pct of total shipments, valued at 569.19 mln usd against exports to the US of 474.89 mln usd. This resulted in a trade deficit for the Philippines of 94.30 mln usd.
     Singapore was the country's third biggest source of imports, with payments worth 241.66 mln usd, up 8.3 pct year-on-year. With exports to Singapore amounting to 212.52 mln usd, a trade deficit for the Philippines was registered at 29.15 mln usd.
     afxmanila@afxasia.com

Philippines' Export and Industry Bank 2003 net profit down 65 pct

     MANILA (AFX-ASIA) - Export and Industry Bank said its 2003 net profit declined 65 pct to 133 mln pesos from the previous year's level of 380 mln.
     Profit fell after the bank booked a huge non-recurring income in 2002 and due to increased provisions for possible losses on loans last year.
     Total assets stood at 27.4 bln pesos as of end-2003, roughly the same as the year-ago level.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

Philippines Nov merchandise imports up 4.3 pct yr-on-yr

Philippines' Banco de Oro NPL ratio 6.34 pct as of Dec 16

     MANILA (AFX-ASIA) - Banco de Oro Universal Bank said its non-performing loans (NPL) ratio stood at 6.34 pct as of Dec 16, down from 6.72 pct as of Sept 19.
     In its published statement of condition, the bank said its NPLs totaled 4. 69 bln pesos as of Dec 16, with specific provisions of 1.71 bln and general provisions of 795.61 mln.
     Return on equity stood at 9.91 pct.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

Philippines' RCBC NPL ratio 14.31 pct as of Dec 16

     MANILA (AFX-ASIA) - Rizal Commercial Banking Corp's (RCBC) non-performing loans (NPL) ratio stood at 14.31 pct as of Dec 16, according to its published statement of condition, down from 14.75 pct as of Sept 19.
     As of Dec 16, the bank's NPLs totaled 15.828 bln pesos, against general provisions of 697.46 mln and specific provisions of 8.31 bln.
     Return on equity stood at 10.89 pct.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

Forex - Philippine peso closes at 7-week low, central bank intervenes

     MANILA (AFX-ASIA) - The peso closed at its lowest in seven weeks, but off the day's low, as the central bank was seen supporting it with dollar sales of as much as 20-30 mln usd on the spot market, dealers said.
     The peso ended at 55.650 to the dollar after hitting an intraday low of 55.670 on volume of 174.70 mln usd. It had closed at 55.540 on Friday.
     Today's level was the peso's weakest since Nov 28 last year when it closed at 55.730.
     Central bank deputy governor Amando Tetangco Jr said strong global dollar demand, corporate buying of the US unit and pre-election political uncertainties combined to pull down the peso.
     A dealer with a foreign bank said the central bank tried to prop up the peso by selling between 20 mln and 30 mln usd worth of dollars at 55.650.
     "We are dragged by the sentiment for a stronger dollar," the dealer said.
     "The dollar is staging a rally against all the currencies globally. This was maybe brought about by figures that appeared last Friday indicating that dollar assets are getting attractive again."
     Dollar buying particularly by local oil companies and election jitters amid questions about the nationality of opposition presidential standard bearer Fernando Poe Jr (FPJ) also weighed on the local unit, the dealer said.
     News reports have said a disqualification case has been filed with the Commission on Elections against FPJ on the grounds that he is not a natural-born Filipino. The Constitution requires that the country's president must be a natural born-Filipino.
     Dealers said the peso could have fallen to as low as 55.700 had there been no intervention by the central bank.
     With the central bank's perceived support for the local unit, the peso is seen correcting in the coming session, they added.
     The peso hit a record low of 55.850 in late 2003, pulled down by domestic political and security concerns.
     edelacruz@afxasia.com

Philippine peso dragged to 7-week low by stronger dlr -central bank's Tetangco

     MANILA (AFX-ASIA) - Strong global dollar demand, corporate buying of the US unit and pre-election political uncertainties combined to pull down the peso to its weakest closing level in seven weeks, central bank deputy governor Amando Tetangco Jr said.
     The peso closed at 55.650 to the dollar after trading between 55.595 and 55.670 on volume of 174.70 mln usd. It closed at 55.540 on Friday.
     It is the peso's weakest finish since Nov 28 last year when it closed at 55.730.
     "The peso depreciated due to the strong dollar, corporate demand and election jitters," Tetangco told reporters.
     The peso hit its record low of 55.850 in late 2003, pulled down by domestic political and security concerns.
     afxmanila@afxasia.com

Philippines' Estrada in court denies he plans to flee country

     MANILA (AFX-ASIA) - Detained ex-president Joseph Estrada appeared in court to reject government charges he will flee the Philippines and his corruption trial after being granted leave to fly to the US for medical treatment.
     Troubled by his arthritic knees, the 66-year-old former president limped into the special anti-graft court for a two-hour hearing after police escorted him out of his detention quarters at a military camp east of Manila.
     "I was born here. I have been mayor, senator, vice president and president, and I will die here," Estrada told the three-judge Sandiganbayan court.
     Toppled by a military-backed popular revolt three years ago amid a corruption scandal, movie icon Estrada last month secured a medical furlough to allow him to have knee surgery in the United States on condition he returns here March 31.
     He faces life imprisonment if convicted of plundering a personal fortune of some 80 mln usd during his 30 months in office.
     Estrada was summoned to the court after state prosecutors alleged that he plans to escape Philippines justice and his own aides suggested he will forego a US medical trip until after the May 10 election so he can help his movie icon friend Fernando Poe win the Philippines presidency.
     "My health is my priority," Estrada told the court.
     "Whether I am here or not, FPJ will surely win," he said, referring to Poe's initials.
     National polls have tipped Poe as the frontrunner in a six-cornered presidential race that includes Estrada foe Gloria Arroyo, the incumbent president.
     Estrada affirmed at the hearing that he wants to pursue medical treatment in the US, but that the US embassy here has yet to issue him a visa.
     He said his family is also looking for another hospital, insisting that he cannot afford the 1.25 mln usd fee quoted by one prominent California clinic.
     His lawyer Jose Flaminiano also asked the court to extend Estrada's medical leave beyond March 31.
     Presiding judge Minita Nazario ordered Estrada to submit to the court within 10 days his US itinerary, which she said must include the names of specific hospitals, doctors, and a timetable.

Philippines' Napocor awards Pinamucan contract to DM Consunji group

     MANILA (AFX-ASIA) - State-owned National Power Corp (Napocor) said it has awarded to a consortium that includes DM Consunji Inc a contract to transfer the 110-megawatt Pinamucan diesel power plant to Dingle, Iloilo province in the central Philippines from Batangas province south of Manila.
     DM Consunji is a subsidiary of listed DMCI Holdings Inc.
     Napocor president Rogelio Murga said the consortium, called Dingle II, also includes Bendimil Construction & Development Corp, Alsons Power Holdings Corp, and Home Construction, Inc.
     The consortium put in the lowest bid of 629.5 mln pesos for the transfer of the facility, according to the results of Napocor's third public bidding.
     Napocor has set a budget of 660.1 mln pesos for the facility's transfer, which will take 10 months to complete and is intended to prevent power shortage in the Visayas.
     (1 usd = 55.65 pesos)
     afxmanila@afxasia.com

Philippines' 91-day, 182-day T-bill rates down, 364-day rate up

     MANILA (AFX-ASIA) - The Philippines' Bureau of Treasury said the average rates for the 91-day and 182-day Treasury bills fell, while the rate for the 364-day T-bill rose -- all on full awards.
     The bellwether 91-day T-bill rate, which banks use to price loans, averaged 6.160 pct, compared with 6.246 pct previously, on a full award of 3 bln pesos. Tenders totaled 5.683 bln pesos.
     The rate for the 182-day bill averaged 7.331 pct versus the previous 7. 441 pct, with the government awarding in full its 3.5 bln peso offering against tenders worth a total of 7.578 bln.
     The rate for the 364-day bill averaged 8.180 pct, compared with 8.076 pct previously. The government also awarded in full its 4.5 bln peso offering against tenders worth a total of 8.513 bln.
     "The market is still very liquid," deputy national treasurer Mina Figueroa told reporters after the auction, explaining the drop particularly in the shorter-term T-bills.
     She added that banks' reluctance to lend to the private sector boosted the industry's liquidity that needs to be invested.
     The government will auction seven-year Treasury bonds tomorrow, with an offering of 4.500 bln pesos.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

Philippine executions will go ahead despite Papal intervention - Arroyo aide

     MANILA (AFX-ASIA) - Pope John Paul II appeal will not stop the Philippine government from carrying out the scheduled execution of two convicts this month, a spokesman for President Gloria Arroyo said today.
     Spokesman Ignacio Bunye said lifting a moratorium on capital punishment to allow the execution of convicted rapists Roberto Lara and Roderick Licayan on Jan 30 will ensure "just retribution" for their victims.
     "We must hold fast to our determination as a people and as a society and support the will of the presidency," he added.
     Bunye said, as a devout Catholic, Arroyo is against capital punishment, but "for the sake of the higher national interest, she is willing to make an exception."
     Arroyo had earlier rebuffed an appeal from the European Union and a pro-life congressman, who urged Philippine church leaders yesterday to seek the intervention of the pontiff.
     Licayan and Lara will become the first convicts to be subjected to lethal injection since Arroyo lifted a moratorium on the death penalty last month.
     Arroyo said she lifted the four-year-old moratorium to curb a rash of violent crimes, particularly kidnapping for ransom, which had enraged the business community and notably the economically-influential ethnic Chinese.
     Seven convicts were put to death between 1999 and 2000, but then-president Joseph Estrada declared a moratorium on judicial executions amid pressure from the influential Catholic church and rights groups.

Land Bank of the Philippines NPL ratio 17.83 pct as of Dec 16

     MANILA (AFX-ASIA) - State-owned Land Bank of the Philippines said its non-performing loans (NPL) accounted for 17.83 pct of total loans as of Dec 16.
     Its NPL ratio, as of Dec 17, 2002, was reported at 21.91 pct.
     In a published statement of condition, Land Bank said its NPL totaled 24. 46 bln pesos, with specific provisions of 15.66 bln and general provisions of 1.24 bln.
     Return on equity stood at 9.97 pct.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

Philippines' Citystate Savings Bank NPL ratio 3.60 pct as of Dec 16

     MANILA (AFX-ASIA) - Citystate Savings Bank said its non-performing loans (NPL) ratio stood at 3.60 pct as of Dec 16, down from 3.68 pct a year ago.
     In its published statement of condition, the bank said its NPLs totaled 26.37 mln pesos as of Dec 16, with specific provisions of 5.02 mln and general provisions of 8.37 mln.
     Return on equity stood at 6.39 pct.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

Manila shares close flat as market consolidates

     MANILA (AFX-ASIA) - Share prices closed flat in a mixed session on a lack of fresh strong leads to guide investors, dealers said.
     The market consolidated further, but gains in select stocks with positive earnings prospects provided some support to the composite index, they added.
     The composite index closed up a marginal 2.02 points, or 0.13 pct, at 1, 520.03 on volume of 214.0 mln shares worth 734.9 mln pesos. It traded between 1,515.01 and 1,523.01.
     In the broader market, losers led gainers 29 to 25, while 44 stocks were unchanged.
     Dealers said investors could be waiting for Moody's Investors Service to announce the results of its review of the Philippines' sovereign ratings.
     While a downgrade seems to be a foregone conclusion, analysts said the market wants to know if it is a single notch cut, or as much as two notches.
     The agency decided late last year to place under review its ratings on the Philippines ratings because of concerns over political squabbling ahead of the May national elections, as well as the country's debt level and its impact on the government fiscal position.
     Moody's, which is expected to announce its decision before the month's end, currently rates the Philippines one notch below investment grade.
     "The market was flat and quiet today as it consolidated above the 1,500 points level," DA Market Securities president Nestor Aguila said.
     He said the market is waiting for leads, such as the results of Moody's review of the country's sovereign ratings.
     "A Moody's downgrade can still weaken investor sentiment, but the downside may be limited on positive earnings prospects, particularly in the telecoms sector," Aguila said.
     Mall operator SM Prime Holdings was top-traded today on volume of 22.97 mln shares, but closed down 0.10 peso at 6.30.
     San Miguel A gained 0.50 to 56.00 on 2.10 mln shares, while San Miguel B, available to foreign investors, rose 2.50 at 71.50 on 425,200 shares.
     Dealers said buying interest in San Miguel emerged on expectations that increased consumer spending this election year will boost earnings of the country's largest food and beverage conglomerate.
     Investors largely ignored a local newspaper report of the government's plan to win at least one more seat on San Miguel's 15-man board. San Miguel has been the subject of a long-running ownership dispute between the government and the firm's company chairman, Eduardo Cojuangco Jr.
     Philippine Long Distance Telephone (PLDT) closed down 5.00 at 915.00 after Friday's 0.12 usd fall to 16.48 in its New York-listed American Depositary Receipts.
     Petron Corp rose 0.20 to 2.80 on volume of 18.90 mln shares on positive earnings projections.
     In a research note, ING Financial Markets said it is maintaining its "buy" call on the oil refiner, but raising its 12-month target price to 3.40 pesos per share from 2.85 on its improved earnings and pricing power.
     Petron raised its pump prices as much as 0.80 pesos per liter earlier last week, its highest one-time increase since the deregulation of the oil industry in 1998.
     Regina Capital Development Corp analyst Gomer Tan said expectations of a 10 pct year-on-year increase in Petron's full 2004 net profit are reasonable, given the strong economic growth seen this year.
     PLDT affiliate Piltel gained 0.14 to 1.40 on 32.65 mln shares, extending gains after saying it expects to return to profitability in 2004.
     Piltel expects to book a net profit of 402.40 mln pesos this year, after a projected net loss of 3.33 bln in 2003. It reported a net loss of 21.80 bln pesos in 2002.
     Ayala Land was down 0.10 at 6.20 on 5.60 mln shares.
     Manila Electric (Meralco) B, available to foreign investors, rose 1.50 to 31.00, while Meralco A gained 0.25 to 18.75.
     Investors shrugged off a newspaper report that the power distributor will likely have some difficulties asking creditors to extend repayment of some 80. 00 mln usd short-term loan falling due this week after the Supreme Court suspended its recent 0.12 peso per kilowatthour rate increase.
     The all-shares index was up 4.88 points at 933.88.
     The commercial-industrial index rose 10.44 to 2,311.81.
     Property was down 7.84 at 571.95, while mining was down 25.75 at 1,570.73.
     Oil was unchanged at 1.33.
     Banking and financial services gained 1.07 to 474.66.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

First Philippine Holdings to list 104,537 common shares Tuesday - PSE

     MANILA (AFX-ASIA) - First Philippine Holdings Corp will list an additional 104,537 common shares tomorrow to cover shares availed of under the company's employee stock purchase plan, the Philippine Stock Exchange (PSE) said.
     At 12.01 pm, First Philippine Holdings was down 0.25 peso at 23.50.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

Malaysian PM to focus on terrorism talks during Manila visit - Arroyo aide

     MANILA (AFX-ASIA) - Malaysian Prime Minister Abdullah Ahmad Badawi is expected to discuss anti-terror cooperation with Philippine President Gloria Arroyo in his first trip here since assuming power last year, an official said today.
     Upcoming peace talks between Manila and the separatist Moro Islamic Liberation Front (MILF), which Malaysia is brokering, are also expected to top the agenda of the talks, presidential spokesman Ignacio Bunye said.
     Abdullah and Arroyo will discuss "security concerns of our two countries because we are both involved in the fight against terrorism," Bunye said.
     Abdullah is to scheduled to arrive in Manila late today and hold talks with Arroyo tomorrow before departing.
     Malaysia has been hosting and mediating peace talks between Manila and the MILF, a Muslim rebel group that has been fighting for more than two decades to set up an Islamic state in the southern third of the largely-Christian country.
     Both countries are also struggling to deal with the threat of the Jemaah Islamiyah (JI), an Islamic group believed to be the local chapter of the al-Qaeda terror network.

STOCKWATCH - Philippines' Petron extends gain on positive earnings outlook

     MANILA (AFX-ASIA) - Oil refiner Petron Corp was firmer in mid-session thanks to its positive earnings projections, dealers said.
     At 10.32 am, Petron was up 0.15 peso or 5.77 pct at 2.75 on volume of 8. 57 mln shares.
     The composite index was up 1.91 points or 0.13 pct at 1,519.92.
     "This continuing gain is still driven by the company's sound fundamentals, with earnings growth likely to be sustained this year," Regina Capital Development Corp analyst Gomer Tan said.
     He added that a 10 pct year-on-year increase in Petron's full 2004 net profit is reasonable given strong economic growth expected this year.
     Petron booked a net profit of 2.02 bln pesos in the first nine months of 2003, up 10 pct from 1.84 bln pesos in the year-earlier period, on the back of stronger export sales and lower operating expenses.
     ING Financial Markets, in a recent research note, said it is maintaining its "buy" call on the oil refiner with a 12-month target price raised to 3.40 pesos per share from 2.85 on its improved earnings and pricing power.
     ING said Petron's ability to raise prices "exemplifies pricing power, and should result in improved earnings" even though the brokerage sees a more gradual decline in world crude oil prices both this year and in 2005.
     Petron raised its pump prices by as much as 0.80 pesos per liter earlier last week, its highest one-time increase since the deregulation of the oil industry in 1998.
     The brokerage said improved domestic retail sales volume growth, which accelerated in the last quarter of 2003, complements Petron's pricing power.
     "This would make our original volume growth assumption of 1.0 pct annually for overall domestic sales in 2004-2005 too conservative," it said.
     ING forecasts Petron's 2003 net profit to come in at 3.078 bln pesos, compared with 2.914 bln a year earlier, at 3.812 bln this year and 5.276 bln in 2005.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

Philippines' Security Bank launches 2.5-bln peso Tier 2 notes issue

     MANILA (AFX-ASIA) - Security Bank Corp said it launched last Friday its peso-denominated lower Tier 2 notes with an indicative issue size of 2.5 bln pesos.
     The notes will be issued in two series -- A and B -- the bank told the stock exchange.
     "Series A may only be issued or transferred to individuals and tax exempt institutions while Series B will be limited to non-series A eligible noteholders," Security Bank said.
     The bank has set offer periods of Jan 16 to 23 for Series A, and Jan 19 to 23 for Series B.
     ING Bank NV's Manila branch is lead manager, which is also acting as a selling agent and market maker, along with BDO Capital & Investment Corp and Multinational Investment Bancorporation.
     The trust services department of the Development Bank of the Philippines has been appointed public trustee and registry and paying agent.
     Security Bank, to a limited extent, is also a selling agent of the notes.
     Fitch Ratings has assigned a BB- rating to Security Bank's notes issue, and a BB rating to its long-term foreign and local currency senior notes -- reflecting a stable outlook on the bank's creditworthiness.
     At 10.15 am, Security Bank was untraded after closing at 17.50 pesos previously.
     (1 usd = 55.65 pesos)
     edelacruz@afxasia.com

STOCK ALERT - Philippines' Piltel up on projected return to profits in 2004

     MANILA (AFX-ASIA) - Pilipino Telephone Corp (Piltel) was firmer in early trade, extending gains after it said it expects to return to profitability in 2004, dealers said.
     Piltel expects to book a net profit of 402.4 mln pesos this year, after a projected net loss of 3.33 bln in 2003. It reported a net loss of 21.8 bln pesos for 2002.
     Piltel was up 0.10 peso or 7.94 pct at 1.36 on volume of 6.9 mln shares.
     "Some market players are positioning themselves in Piltel as the company itself sees a major recovery this year," Unicapital Securities senior analyst Elena Ponceca said.
     Piltel, partly owned by Philippine Long Distance Telephone Co (PLDT), expects its GSM subscriber base to grow to 3.68 mln at the end of this year from 2.78 mln as of end-2003.
     The company's strategic direction and financial projection, which it filed to the Philippine Stock Exchange last week, forecast a return to a position of positive equity by 2013.
     Piltel provides mobile phone services under the Talk N' Text brand.
     (1 usd = 55.54 pesos)
     edelacruz@afxasia.com

Philippines' Jollibee to open stores in China, Indonesia - report

     MANILA (AFX-ASIA) - Jollibee Foods Corp plans to open four stores around Asia in the second half of this year, including two in China and two in Indonesia, the BusinessWorld newspaper said, citing company chief finance officer Ysmael Baysa.
     He said the the country's largest fastfood chain, which already operates stores in Hong Kong and the US, plans to open outlets in Shanghai, Beijing or Guangzhou.
     He said two more stores will be opened in Indonesia, where Jollibee already operates two.
     The company may spend 20-25 mln for each store, Baysa was quoted as saying.
     Baysa earlier said Jollibee has programmed a 1.0 bln peso capital expenditure budget for this year, mainly for the opening of 70-80 new stores.
     It now has 989 stores globally, including 468 Jollibee stores, 248 Chowking outlets, 213 Greenwich outlets and 27 Delifrance branches in the Philippines and 33 stores abroad.
     (1 usd = 55.54 pesos)
     edelacruz@afxasia.com

Philippines' PCGG plans to get extra seat on San Miguel board - report

     MANILA (AFX-ASIA) - The government, through the Presidential Commission on Good Government (PCGG), plans to get at least one more seat on San Miguel Corp's board in a bid to consolidate its hold on the food and beverage conglomerate, the BusinessWorld newspaper reported.
     The report quoted PCGG chairwoman Haydee Yorac as saying that the PCGG, the government agency tasked to recover assets allegedly owned by the state, is reviewing the government's total stake in San Miguel.
     She said the number of government-held seats in the company's 15-man board could increase from the current five.
     The PCGG is preparing to nominate directors for San Miguel ahead of its annual shareholders' meeting in April.
     "In every election we can nominate as many directors as possible given the number of shares we can accumulate. We will see (how many people we can nominate) since the government has scattered shareholdings in the company, which are not yet committed," Yorac was quoted as saying.
     The government could get additional board seats if other government agencies holding San Miguel shares would allow PCGG to represent them, according to PCGG commissioner Ruben Carranza.
     State-run pension funds Social Security System (SSS) and Government Service Insurance System (GSIS) also hold San Miguel shares.
     The government has been contesting ownership of a 47-pct block of shares in San Miguel, as it alleges that San Miguel chairman and chief executive officer Eduardo Cojuangco Jr, who has been allowed by the court to vote for the 20-pct block, used levies collected from coconut farmers during the Marcos administration to buy the shares.
     Cojuangco disputed the allegations, saying he acquired the shares using his own money.
     (1 usd = 55.54 pesos)
     edelacruz@afxasia.com

Philippines' Meralco unlikely to get 80 mln usd loan deadline extended -report

     MANILA (AFX-ASIA) - Manila Electric Co (Meralco) has some 80 mln usd short-term loan falling due this week and its creditors may not agree to extend the deadline of repayment after the Supreme Court suspended its recent 0.12 peso per kilowatthour rate increase, the BusinessWorld newspaper reported.
     "It looks like refinancing now may not be possible. We will see by the end of the week," the paper quoted Meralco president Jesus Francisco as saying.
     The creditors include Bank of the Philippine Islands, Citibank NA, Equitable PCI Bank, and Banco de Oro Universal Bank, according to the report.
     The Supreme Court last week ordered Meralco to suspend the tariff hike provisionally allowed by the Energy Regulatory Commission to be implemented from Jan 1 this year.
     Meralco has been asked to comment on a petition filed by advocacy groups led by the Freedom from Debt Coalition against the rate hike.
     Local newspapers, meanwhile, reported that the European Chamber of Commerce of the Philippines has expressed deep concern over the Supreme Court order, saying this undermines investor confidence and security of energy supply.
     (1 usd = 55.54 pesos)
     edelacruz@afxasia.com

Philippines' First Metro NPL ratio 8.13 pct as of Dec 16

     MANILA (AFX-ASIA) - First Metro Investments Corp said its non-performing loans (NPL) ratio at the parent level stood at 8.13 pct as of Dec 16.
     It's NPL ratio stood at 6.24 pct as of Sept 19.
     In its published statement of condition, First Metro said its NPLs totalled 248.63 mln pesos as of Dec 16, with specific provisions of 269.17 mln pesos and general provisions of 22.73 mln.
     Return on equity stood at 9.44 pct.
     (1 usd = 55.54 pesos)
     edelacruz@afxasia.com

Philippines' Prudential Bank NPL ratio 32.61 pct as of Dec 16

     MANILA (AFX-ASIA) - Prudential Bank's non-performing loans (NPL) accounted for 32.61 pct of total loans as of Dec 16, according to its published statement of condition.
     As of Sept 19, the bank's NPL ratio stood at 38.26 pct.
     The bank said its NPLs totaled 6.06 bln pesos as of Dec 16, with specific provisions of 1.39 bln pesos and general provisions of 17.47 mln.
     Return on equity stood at 4.95 pct.
     (1 usd = 55.54 pesos)
     edelacruz@afxasia.com

Philippine banks end-Nov total loans at 1.49 trln pesos, up 4.3 pct yr-on-yr

     MANILA (AFX-ASIA) - Outstanding loans of Philippine commercial banks grew 4.3 pct year-on-year to 1.49 trln pesos as of end-November from 1.43 trln at end-October on the back of increased business borrowings and other commercial activities ahead of the holiday season, the central bank said.
     The recovery in bank lending was also accompanied by acceleration in the growth of domestic liquidity which grew 4.6 pct as of end-November from a 2.5 pct year-on-year rise in October.
     "The growth in bank lending to the manufacturing, community, social and personal services, and financial services sector, which account for a combined share of 68 pct of the outstanding loans, accelerated in November," the central bank said in a statement.
     The increased demand for loans was supported by improved activity in the real sector, the central bank said.
     The National Statistics Office earlier reported that the average capacity utilization of manufacturing firms in October rose to 78.9 pct, better than the 77.7 pct in September.
     Registered electricity sales in November also improved 3.6 pct year-on-year after two months of almost flat growth.
     (1 usd = 55.54 pesos)
     cecille.yap@afxasia.com

Philippines' Atlas plans capital infusion to address deficit

     MANILA (AFX-ASIA) - Atlas Consolidated Mining and Development Corp said it is considering fresh capital infusion and equity investments to reduce substantially, if not wipe out entirely, its capital deficiency.
     The company said its debt reduction program is also at an "advanced stage" and is expected to help address the deficit issue.
     It has decided to re-open the Toledo copper mine in Cebu in central Philippines with the help of new investors. This will require funding of around 75 mln usd.
     "To attract prospective investors, we have to present a balance sheet showing the company can operate as a going concern," Atlas corporate secretary and treasurer Noel del Castillo.
     In a letter to the Philippine Stock Exchange, he said that 25 pct of the Toledo mine funding will be by way of equity.
     Atlas also maintains an interest in nickel deposit in Palawan, which it plans to develop this year.
     The company is also engaged in a water dam and reservoir project in Cebu, which will also involve equity infusion, most likely through the sale of new shares, he added.
     Atlas is now in talks with financial institutions, which del Castillo did not identify, for these projects.
     Talks are "actively progressing", he said.
     He said the issuance of new shares to cover the equity requirements is supported by a recent move of the company to raise its authorized capital.
     Part of the plan to reduce or wipe out its capital deficiency is its agreement with Alakor Corp in Oct 2000 authorizing the latter to settle Atlas obligations, with Alakor to be re-paid in the form of shares of stock at par value.
     Alakor settled Atlas liabilities worth 1.69 bln pesos.
     Atlas said negotiations with other creditors are at an advanced stage, and that this, along with the issuance of shares to Alakor, is expected to reduce its deficit to only 160.0 mln pesos by the middle of this year from the current 7.06 bln.
     "The board plans to rehabilitate the company and its assets at the earliest possible time, particularly now that copper and nickel prices have recovered. In this context, the directors have high hopes that the company's balance sheet will swiftly be restored to a positive level," del Castillo said.
     (1 usd = 55.50 pesos)
     edelacruz@afxasia.com

Philippines expresses concern over US inaction on telecom executives

     MANILA (AFX-ASIA) - Philippine officials expressed concern today over the US government's failure to help settle a dispute stemming from a Honolulu grand jury summons of Filipino telecommunications executives.
     President Gloria Arroyo has called on government agencies to "exhaust all diplomatic and legal means" to assure that the Filipino executives are being treated fairly and would be allowed to return home as soon as possible.
     Local newspaper reports said the Filipino executives have been barred from leaving the country until after they submit to grand jury questioning.
     The foreign justice and communications ministers met the chief executives of affected telecom companies on the issue.
     "Up to now, the US government has not addressed the serious concerns we raised with them regarding this case," Foreign Secretary Delia Albert said.
     "The government finds common cause with the concerns of the Philippine telecommunications industry in this matter," Albert assured the chief executives at the meeting.
     Justice Secretary Merceditas Gutierrez said she will "get in touch immediately with my counterpart in the US Department of Justice and we will coordinate with them to find out why this investigation is being conducted."
     The 30 Filipino executives were attending a telecoms conference in Hawaii at the weekend when Federal Bureau of Investigation agents handed them summonses to appear as witnesses before a Honolulu grand jury this week.
     The inquiry apparently focuses on an accusation US firms made last year that several Filipino companies had unfairly raised rates on calls coming from the US.
     Albert said: "Our own inquiries on the decision of the US Department of Justice to initiate this grand jury investigation causes us even further concern."
     She said she was particularly dismayed over the action as the Philippine and American telecommunications firms were already in the process of "settling the matter amicably with the the assistance of both governments" when the executives were summoned.
     US embassy spokesmen could not be reached for comment.
     The surprise summons embarrassed the Filipino executives and the Philippine government, prompting President Arroyo to demand an apology over the alleged mistreatment of the executives.