|
| Philippine
central bank asks Poe to clarify debt restructuring pronouncement |
MANILA (AFX-ASIA) - Central bank
governor Rafael Buenaventura has asked movie star Fernando Poe Jr
to clarify his position on the country's debt problem, saying the
presidential candidate's debt restructuring pronouncements might
be misinterpreted as a call for debt repudiation.
"What is important is,
creditors are kept comforted that the Philippines will meet its
obligations. I think it is important for Mr. Poe that he clarify
exactly what he means. There is a fine line between debt
restructuring and debt repudiation," Buenaventura said.
Poe today released a lengthy
document, dubbed a "social covenant", a list of what he
intends to do for the country if he wins in the May 10 polls.
He is running neck-and-neck with the
financial markets' favorite, incumbent Gloria Arroyo. But his
inexperience in politics and governance has raised doubts about
his competence to run the country, particularly the economy,
analysts said.
Apart from "re-orient(ing) the
government's policy on globalization to focus on pushing for
expanded markets for our products and protecting vulnerable
sectors from unfair competition," Poe said, he will
"look into the possibility of restructuring our sovereign
debt in the domestic and international financial markets."
Buenaventura said restructuring the
country's debts could be pursued in several ways.
If Poe intends to adopt a voluntary
type of restructuring, he said this was what the current
administration did, for example, with a bond exchange exercise in
February, worth 1.3 bln usd.
A new bond issue was swapped with
existing ones last month, helping the government lengthen the
maturity of some of its debts.
He said if Poe intends to a more
drastic step, which is to seek a debt moratorium, then he said the
Philippines would have to close its borders to the international
community.
Buenaventura said the principal
challenge for the next administration, regardless of who will win
in the presidential race, is to keep the existing fiscal
consolidation plan, under which a balanced budget is to be
achieved by 2009.
"If they zero out the budget by
2009, then we can start paying out the debts on schedule," he
said.
The national government has been
running deficits for several years now, resulting in huge
borrowings year after year both domestically and abroad.
"What is more important is to
address the budget deficit in the coming years to make our debt
sustainable," Buenaventura said.
"The debt profile of our
external debt is fairly stretched out although you could improve
on it, but we've never had an opportunity really to do all of that
because we have short-term intermittent problems."
Poe's "social covenant"
seeks to avert a possible fiscal crisis by implementing drastic
cuts on non-essential government expenditures such as travel,
contingent, miscellaneous, and intelligence funds.
He also vowed to institute bold tax
reform measures to improve tax collection efficiency, such as the
abolition of the Bureau of Internal Revenue and replacing it with
a performance-based internal revenue authority.
He said he will also "look into
the possible imposition of a balanced budget rule or a budget
deficit ceiling to ensure that government does not
overspend."
He will also "dramatically
realign our budget expenditures to prioritize the delivery of
basic social services, especially education, health care, food and
housing."
afxmanila@afxasia.com
|
| Philippines'
Napocor, Japan's Mitsubishi Corp sign 1.49 bln yen power deal |
MANILA (AFX-ASIA) - State-owned
National Power Corp (Napocor) said it has signed with Japan's
Mitsubishi Corp a 1.49 bln yen agreement covering additional
supply and rehabilitation works on Napocor's Mak-Ban (Makiling-Banahaw)
geothermal power plant in Laguna, south of Manila.
Under the supplemental contract,
Mitsubishi will provide equipment and technical services for the
project.
Funding will be provided by the
Japan Bank for International Cooperation (JBIC), Napocor said.
JBIC had extended a 3.38 bln yen
loan for the rehabilitation of Mak-Ban's four units.
The project aims to extend the life
of the geothermal complex by another 15-20 years, and increase the
capacity of the Mak-Ban units to 63 megawatts (MW) each from 55
MW.
Mak-Ban is jointly operated by
Napocor and Unocal's local subsidiary, the Philippine Geothermal
Inc.
(1 yen = 0.5028 peso, 1 usd = 56.15
pesos)
afxmanila@afxasia.com
|
| Philippines
taps HSBC, CSFB, UBS for global bond issue |
(Updating with more comments from
central bank governor)
MANILA (AFX-ASIA) - The Philippines
has mandated HSBC, Credit Suisse First Boston (CSFB) and UBS to
sell as much as 1.0 bln usd in sovereign bonds, market sources
said.
Central bank governor Rafael
Buenaventura confirmed the monetary regulator has given its
"approval in principle" for government to borrow up to
1.0 bln usd.
He said the tenor, timing and the
amount of the borrowings will be the call of the government.
The government's remaining external
financing requirement for this year stood at about 680 mln usd
after most of it was pre-funded last year.
Buenaventura said a bond issue
"beyond 10 years is good for us," but did not elaborate.
"I think it's a good strategy
to do foreign borrowing because spreads have narrowed and this
will relieve the pressure on domestic interest rates,"
Buenaventura said.
(1 usd = 56.145 pesos)
cecille.yap@afxasia.com
|
| First
Philippine Holdings, PLDT to list more shares March 10 |
MANILA (AFX-ASIA) - First Philippine
Holdings Corp and Philippine Long Distance Telephone Co (PLDT)
will list tomorrow 31,375 and 700 common shares respectively.
The shares were availed of under the
companies' stock option plans, the stock exchange said.
First Philippine Holdings closed
unchanged at 23.75 per share.
PLDT ended down 15.00 pesos at 940
apiece.
(1 usd = 56.145 pesos)
cecille.yap@afxasia.com
|
| Philippines'
Citystate Savings Bank gets quasi-banking license |
MANILA (AFX-ASIA) - Citystate
Savings Bank said it has been given by the central bank a
certificate of authority to engage in quasi-banking.
It gave no other details in its
statement to the stock exchange.
Citystate Savings closed untraded
after its previous close of 16.25 pesos per share.
(1 usd =56.145 pesos)
edelacruz@afxasia.com
|
| Philippine
stockbrokers' group may go to court against private placement
deals |
MANILA (AFX-ASIA) - A group of
Philippine Stock Exchange (PSE) brokers said it is prepared to
take legal action against the recent private placements by some
institutional investors, who acquired a combined 40 pct stake in
the local bourse.
Stockbrokers Ismael Cruz of IGC
Securities Inc, Filomeno Francisco of AB Capital Securities Inc,
and Edgardo Guevara of Intra-Invest Securities Inc said the group
of brokers has signed a manifesto declaring their objections to
the share sale.
The brokers have asked the PSE board
to reconsider or suspend the share sale until the issues they have
raised have been threshed out.
They alleged that the transaction
violated some rules under the Corporation Code, the Securities
Regulation Code (SRC) and even the PSE's own listing rules.
They sought the withholding of
registration of the shares sold to the institutional investors,
and the withholding or suspension of payment of a
recently-declared 16 pesos per share cash dividend to the buyers
of PSE shares.
"The issued we have raised are
of such importance and substance, affecting the rights of all the
stockholders and the future of the Exchange, that we are
constrained to put you on notice that unless the board take the
appropriate actions suggested we shall immediately take legal
action to protect and preserve the interest of the stockholders
and the Philippine Stock Exchange," says a March 8 letter to
the PSE board, signed by Cruz, Francisco and Guevara.
The PSE tried to explain the
transactions to brokers in meetings scheduled on March 2 and 3.
The exchange in February raised 629
mln pesos by issuing 5.265 mln of its shares via private
placements by five institutional investors, state-run pension fund
Government Service Insurance System (GSIS), PLDT Beneficial Trust
Fund, San Miguel Retirement Fund, Kim Eng Investment Ltd and KE
Strategic Pte Ltd.
The transaction was underwritten by
ATR-Kim Eng Capital Partners Inc.
But even prior to the transaction, a
group of PSE broker-shareholders had asked the exchange's board to
suspend the plan to sell more of its shares through private
placements, saying the move required prior approval from them.
They also sought transparency in the
transaction.
PSE president Cayetano Paderanga
however had argued that the plan to undertake a private place for
PSE's unissued shares was never withheld from anybody.
While the Securities and Exchange
Commission found the transaction price of 119.50 pesos per share
to be "reasonable," PSE brokers opposed to the
transaction said they consider the price to be detrimental to
their interests.
They noted that such a price
represented a huge discount to the market price, which was 185
pesos per share when the transaction was announced.
Paderanga, on the other hand, said
it was a market-driven price that was obtained by the underwriter
in the placement process with the institutional investors.
"This means the offer price is
the maximum amount that institutional investors are willing to pay
given the current market standing of the Exchange," he said
earlier.
The SEC had been urging the PSE to
sell more shares after the latter listed by way of introduction
some of its shares on the bourse in December. This is to enable
the bourse to substantially comply with the SRC, which sets a 20
pct cap on brokers' ownership of the bourse.
The PSE closed today down 2.00 pesos
at 157.00.
(1 usd = 56.15 pesos)
edelacruz@afxasia.com
|
| Manila
shares lower early on Wall St falls, profit-taking |
MANILA (AFX-ASIA) - Share prices
closed lower, mainly on Philippine Long Distance Telephone Co's
decline, while Wall Street's overnight losses weighed on investor
sentiment, dealers said.
The peso's volatility and the lack
of strong fresh leads on the corporate front also kept investors
at bay.
The 30-company composite index
closed down 13.01 points, or 0.89 pct, at 1,455.75 on volume of
373.75 mln shares worth 821.15 mln pesos, off a low of 1,449.74
and a high of 1,463.42.
Cross sales worth 349.7 mln pesos
boosted turnover.
In the broader market, losers beat
gainers 32 to 13, while 32 stocks ended unchanged.
Top-traded PLDT closed down 15.00
pesos at 940.00 on 313,990 shares traded, in line with a 0.63 usd
fall to 16.61 in its American Depositary Receipts in New York last
night.
The peso has recovered from
yesterday's fall to a record low of 56.35 to the US dollar with
help from the central bank, according to dealers. At the lunch
break, the peso averaged 56.145 to the dollar on volume of 152 mln
usd.
Dealers said the market will likely
trade sideways in the coming sessions in the absence of strong
leads and as investors await for more 2003 earnings results.
"It's a bearish market we're
looking at, badly hurt by a weaker peso and the absence of
exciting news on the corporate front. Adding to these is the
direction of the US market and the steep decline in our benchmark
stock in the US," Unicapital Securities senior analyst Elena
Ponceca said.
Investors are also awaiting the
release of more 2003 earnings results in the next few days, she
added.
"Wall Street's declines have
dampened sentiment across Asia. Locally, there's no catalyst to
re-ignite investor interest," said Citiseconline.com analyst
Mark Alan Canizares.
Second most active Equitable PCI
Bank gained 0.50 at 38.50 on volume 5.15 mln shares.
SM Prime was down 0.20 at 5.70 on
16.2 mln shares.
Piltel shed 0.06 to 1.60 on 7.03 mln
shares.
Bank of the Philippine Islands was
down 0.50 at 45 on 238,200 shares.
Petron Corp dropped 0.10 to 3.00 on
3.3 mln shares.
The all-shares index was down 1.80
points at 936.57.
The commercial-industrial index shed
20.18 to 2,269.37.
Property retreated 7.39 to 517.81.
Mining was up 11.34 at 1,481.89,
while oil was unchanged at 1.23.
Banking and financial services was
down 1.73 at 430.81.
cecille.yap@afxasia.com
|
| STOCK
ALERT - Philippines' Cyber Bay sharply lower after court ruling |
MANILA (AFX-ASIA) - Cyber Bay Corp
was lower in early trade after the Supreme Court denied the
company's third motion to reconsider a May 2003 ruling nullifying
its purchase from government of 367.5 hectares of reclaimed and
submerged land in the Manila Bay area, dealers said.
Cyber Bay was down 0.02 pesos, or
13.33 pct, at 0.13 on volume of 800,000 shares.
Cyber Bay, formerly known as Amari,
said management will study all options to protect its rights and
these include claims of reimbursement from the Public Estates
Authority, which was the government agency that sold the property.
The high court ruled the contract
violated the Philippine Constitution's prohibition on the sale of
public land to private corporations.
Under the law, private corporations
cannot hold, except by lease, alienable lands of the public
domain, it said.
However, the court allowed Cyber Bay
to recover its costs in developing the property, estimated at
around 9.8 bln pesos.
(1 usd = 56.166 pesos)
cecille.yap@afxasia.com
|
| Forex
- Philippine peso gains as banks cut dollar positions |
MANILA (AFX-ASIA) - The peso
extended its gains in early trade after recovering yesterday from
a record low of 56.35 to the dollar on rumored dollar sales by the
central bank on the spot market, dealers said.
They said the US dollar's weakness
globally is also helping to keep the peso below 56.20, along with
banks' move to unwind their long dollar positions.
At 9.48 am, the peso averaged 56.169
to the dollar on volume of 57.5 mln usd. It closed at 56.220
yesterday.
"There's follow-through selling
of dollars, but we're still waiting for corporate (buying)
interest," a commercial bank dealer said.
"The dollar's global weakness
is another reason."
The peso touched for the third time
in two weeks its record low of 56.35 yesterday, but the central
bank was seen in the market early in the session, triggering
dollar sales by banks already caught long on dollars.
"Banks have begun cutting their
long positions after seeing weak demand for dollars in afternoon
trade and strong support for the peso by the central bank at
56.35," another dealer said.
The first dealer expects the peso to
remain trading in a tight range of 56.15-56.35 today.
Pre-election political concerns will
however continue to weigh on the local unit, dealers said.
The central bank had in many
instances denied market rumors about its move to provide dollar
liquidity to the market during times of extreme volatility.
Last week, it reported that its
gross international reserves (GIR) had dropped to 15.765 bln usd
as of end-February from 16.084 bln in January, due to the debt
service requirements of both the national government and the
central bank.
The end-February GIR was adequate to
cover 4.4 months of imports of goods and payments of services and
income. It was also equivalent to 2.7 times the country's
short-term debt based on original maturity and 1.4 times based on
residual maturity, the central bank said.
The central bank intends to maintain
the GIR at a comfortable level of 14-15 bln usd this year.
edelacruz@afxasia.com
|
| STOCK
ALERT - Philippines' PLDT lower early on ADRs fall, profit-taking |
MANILA (AFX-ASIA) - Philippine Long
Distance Telephone Co (PLDT) was lower in early trade in line with
the sharp fall overnight of its American Depositary Receipts (ADRs),
dealers said.
Top-traded PLDT was down 25.00 pesos
at 930 on 91,930 shares.
Its ADRs dropped 0.63 usd to 16.61
in New York last night.
Dealers said investors also
immediately took profit from yesterday's gains, on reports that
PLDT crown jewel Smart Communications Inc may not have make an
initial public offering, after all.
(1 usd = 56.18 pesos)
cecille.yap@afxasia.com
|
| Philippines'
Sanitary Wares plans to purchase property in Las Pinas |
MANILA (AFX-ASIA) - Sanitary Wares
Manufacturing Corp said it plans to purchase a property in Las
Pinas where its manufacturing plant is located.
The company's board of directors has
directed management to serve notice of its option to end its lease
over the property effective March 2005.
Sanitary Wares manufactures vitreous
china, bathroom fittings and accessories and plastic fittings.
cecille.yap@afxasia.com
|
| China's
ZTE wins contract for switching system from Philippines' Digitel |
BEIJING (AFX-ASIA) - ZTE Corp (SZA
000063), one of China's largest telecommunications equipment
makers, said it has won a contract to build a soft-switch system
for Philippine's second largest fixed line operator, Digital
Telecommunication Philippines Inc (Digitel).
ZTE did not disclose the value of
the contract.
A company spokesman, when contacted
by AFX-Asia, also would not comment on the value of the deal.
Last year, ZTE won a total of 25.2
bln yuan worth of contracts, including 600 mln usd worth of
overseas contracts.
ZTE said earlier this month that it
expects its overseas sales contracts to rise nearly 70 pct this
year to more than 1.0 bln usd.
Meanwhile, ZTE has forecast that its
profit and sales for 2003 will rise by over 50 pct on back of
strong growth in the first three quarters of last year.
The company posted 295.49 mln yuan
in net profit for the first nine months of 2003, up 72.42 pct from
a year earlier. In 2002, it posted a profit of 567.0 mln yuan, up
7.82 pct from the 2001 level.
(1 usd = 8.3 yuan)
nicole.li@xinhuafinance.com
|
| Manila shares outlook - Mixed to
down on Wall St decline, peso falls, politics |
MANILA (AFX-ASIA) - Share prices are
expected to open mixed to lower with Wall Street's overnight fall
and the peso's prevailing weakness likely to discourage investors
from aggressively positioning in the market.
Caution ahead of the May 10
elections will continue to prevail, dealers said.
Yesterday, the 30-company composite
index closed down 2.89 points, or 0. 20 pct, at the day's low of
1,468.76 on volume of 179.28 mln shares worth 617. 48 mln pesos.
Cross sales worth 250.27 mln pesos
boosted turnover.
The market's breadth was negative,
as losers beat gainers 24 to 21, while 38 stocks ended unchanged.
"Political uncertainties
continue to weigh on the market with investors focusing on the
upcoming presidential May elections," BPI Securities said.
AB Capital research director Jose
Vistan Jr said stocks are expected to remain flat to sluggish in
the coming session as investors remain reluctant to trade.
The market will likely trade within
the 1,450-1,500 range.
(1 usd = 56.22 pesos)
cecille.yap@afxasia.com
|
| Philippines'
Meralco scraps plan to raise capital outlay - report |
MANILA (AFX-ASIA) - Manila Electric
Co (Meralco) has scrapped a plan to raise its capital expenditure
to 6.5 bln pesos this year due to lack of funds, the BusinessWorld
newspaper reported, quoting Meralco president Jesus Francisco.
The power distributor's board
decided to keep the capital outlay at 5.75 bln pesos for 2004.
"We went back to 5.75 bln pesos
because we don't have enough funds to support the 6.5 bln
pesos," Francisco was quoted as saying.
He added the company decided to
increase the original outlay since it was optimistic it would be
able to implement a provisional rate increase of 0.12 pesos per
kilowatthour.
However, the Supreme Court has
issued a stay order on the rate hike pending court deliberations.
(1 usd = 56.22 pesos)
cecille.yap@afxasia.com
|
| Philippines
plans 500 mln usd bond issue - report |
MANILA (AFX-ASIA) - The government
plans to issue 500 mln usd worth of bonds to help bankroll part of
its funding requirements this year, the Philippine Star newspaper
reported, citing government sources.
The government is already
negotiating with prospective creditors and deciding on the terms
of the bond float, the report said.
Central bank governor Rafael
Buenaventura neither confirmed nor denied the plan, but said the
timing is good for another bond issue.
"All I can say is that if
spreads are tightening, it might be a good idea to look at the
market now," Buenaventura said.
(1 usd = 56.22 pesos)
cecille.yap@afxasia.com
|
| Philippines'
end-Jan M3 at 1.7 trln pesos, up 4.1 pct yr-on-yr |
MANILA (AFX-ASIA) - Domestic
liquidity, or M3, rose 4.1 pct year-on-year to 1.7 trln pesos as
of end-January on stable growth in the levels of domestic credits
to both the public and private sectors, the central bank said.
Seasonally adjusted M3 was up 0.6
pct month-on-month in January, compared with a 0.8 pct decline in
Dec 2003.
The central bank earlier reported M3
growth in December at 4.3 pct year-on-year to 1.74 trln pesos,
slower than the previous month's 4.9 pct.
Central bank governor Rafael
Buenaventura, in a statement, said the net foreign assets and net
domestic assets of the monetary system grew at an annual rate of
12.2 pct and 2.3 pct, respectively, in January.
"The increase in foreign assets
of the banking system was due partly to foreign exchange inflows
from overseas Filipino workers remittances during the extended
holiday period in early January. The 12.1 pct growth in public
sector credits sustained the increase in net domestic credits
(while) private sector credits rose by 2.2 pct, up slightly from
the 1.4 pct increase in the previous month," he said.
He noted that the continued growth
in credit demand is consistent with the overall trend of improving
domestic demand.
Various economic indicators confirm
the improving demand, he said, such as the GDP annual growth of
4.5 pct in 2003, and the 78.2 pct average capacity utilization of
the manufacturing sector in 2003 from the previous year's 74.5
pct.
Looking ahead, Buenaventura said the
central bank will "continue to emphasize caution in
formulating the stance of monetary policy while ensuring an
appropriate level of liquidity in the financial system, consistent
with the economy's objective of price stability and sustainable
growth."
"The central bank will also
continue to monitor closely the evolving macroeconomic conditions
for prices and output in order to mitigate any pressures to the
inflation outlook," he said.
(1 usd = 56.22 pesos)
edelacruz@afxasia.com
|
| Philippines'
Smart, Piltel oppose entry of 3G mobile phone company |
MANILA (AFX-ASIA) - Philippine Long
Distance Telephone Co (PLDT) unit Smart Communications Inc and
affiliate Pilipino Telephone Corp (Piltel) have opposed the
application of a new company to offer third generation (3G) mobile
communications technology.
Connectivity Unlimited Resources
Enterprises Inc (Cure) has asked for a provisional authority from
National Telecommunications Commission (NTC) to operate the new
cellular service after obtaining a franchise from Congress.
Cure, in its four-page application
to the NTC, said it plans to initially capture at least 200,000
subscribers when it starts commercial operation and has committed
to offer its services at affordable rates.
It said it will position itself as a
"pure" 3G operator and proposed to operate with a paired
frequency spectrum of 2000MHz within the 1900-2170MHz frequency
band.
But Piltel and Smart, in a joint
opposition, said "the applicant failed to prove the necessity
for its application."
"At present, the services it
seeks to provide are amply addressed by present telecommunication
providers. It fails to identify what new services it will
offer," the two firms said.
NTC director Edgardo Cabarios said
it was natural for existing carriers to resist the entry of
another new player, saying Cure's application may be detrimental
to existing carriers.
cecille.yap@afxasia.com
|
| Philippines,
China agree to increase flights, cargo capacity - source |
MANILA (AFX-ASIA) - The Philippines
and China have agreed to double their aviation firms' seating
capacity entitlements over a four-year period and at the same time
aggressively expand cargo exchange between the two countries, a
source said.
Representatives of the two countries
met in Beijing last week to expand the 1979 Philippine-Sino Air
Service Agreement.
The two nations agreed to gradually
increase seating capacity entitlements from 5,000 weekly to 6,000
this year, then to 8,000 by 2006 and to 10,000 by 2008, the source
said.
They also committed to increase by
15 times the allowable cargo capacity to 800 tons weekly from the
current 50 tons, a move that would allow Philippine freight
companies to tap the huge Chinese market.
Local carriers were also granted
limited stopover rights, the source added.
At the same time, the two countries
agreed to begin limited fifth freedom flights that would allow
their carriers to fly to a third country except to Japan, Korea,
Australia and European countries.
"We agreed to have fifth
freedom provided this is limited to beyond points and no
intermediate points," the source said.
Under the agreement, Philippine
Airlines for instance, can fly from Manila to Shanghai in China,
where it can pick up passengers and fly them to any destination
except the countries that were excluded.
afxmanila@afxasia.com
|
| Philippines
lowers tariff on imported cement by 5.00 pesos per 40 kg bag |
MANILA (AFX-ASIA) - The government
will lower safeguard duty on imported cement by 5.00 pesos from
20.50 per 40 kilogram bag to stem the rising prices of cement.
"The Department of Trade and
Industry reviewed extensively the safeguard measures last quarter
and we have evaluated existing conditions of the industry. The
decision is to formalize and implement the five-peso reduction and
to consider other measures that can bring about healthy
competition from imports," Trade and Industry Secretary Cesar
Purisima said.
The trade agency has also directed
the Bureau of Product Services (BPS) to review the existing policy
concerning the inspection period for exports for the purpose of
shortening this from the current 28 days to seven or 14 days. The
move is aimed at further easing the entry of imported cement.
As of mid-January, local cement
prices in the National Capital Region stood at 125 pesos per bag,
up from 120 in December, while prices of cement sold in other
provinces posted higher increases.
(1 usd = 56.22 pesos)
cecille.yap@afxasia.com
|
| Philippine
42-day T-bill avg rate 7.312 pct; partially awarded |
MANILA (AFX-ASIA) - The government
awarded 2.06 bln pesos worth of 42-day Treasury bills at today's
auction, against an offering of 4.0 bln, with the rate averaging
7.312 pct.
Bids ranged from 6.749 pct to 7.500
pct.
It was the first time in many years
that the Bureau of Treasury (BTr) had started offering T-bills
with maturity shorter than the regular 91-day instrument, in a
move to satisfy market appetite for short-term instruments.
After rejecting all bids at last
Monday's regular T-bill auction, the BTr decided to reduce the
volume of its regular T-bill offerings to 8.0 bln pesos from 11.0
bln, and issue 42-day T-bills worth 4.0 bln pesos at each of two
auctions set for this month.
Participants in the government
securities auctions apparently want to play it safe, as they
prefer shorter-term instruments amid prevailing political
uncertainty ahead of the May 10 national and local elections and
the peso's weakness against the US dollar.
National Treasurer Mina Figueroa
said the auction committee, which she heads, opted for a partial
award following a meeting last week with government securities
dealers, who were told the government will not allow the 42-day
rate to rise beyond 7.5 pct.
"We told them that we could
accept rates higher than the (central bank's) overnight rate (of
6.75 pct), but only up to a certain level that we see fit, "
she told reporters after the auction.
However, she noted that today's
rejection of some of the bids "does not mean we will be
forced to accept rates higher than 7.5 pct in the next
auction."
The government is also open to
rejecting unreasonably high bids at tomorrow's auction for 3.0 bln
pesos worth of three-year Treasury bonds, she said.
"We have a very healthy cash
position," Figueroa said.
While the total offering for regular
T-bills has been reduced, the BTr has decided to raise the volume
of 91-day T-bills to be offered by 500 mln pesos to 3.5 bln.
Banks use the 91-day T-bill rate as
a benchmark in pricing loans.
The volume for 182-day bills has
been lowered to 2.5 bln pesos from 3.5 bln and that for 364-day
bills lowered to 2.0 bln from 4.5 bln.
The government conducts T-bill
auctions on a fortnightly basis and T-bonds every week.
T-bond offerings have also been
reduced to 3.0 bln pesos from 4.0 bln per auction.
(1 usd = 56.35 pesos)
edelacruz@afxasia.com
|
| Manila
shares close slightly lower on consolidation |
MANILA (AFX-ASIA) - Share prices
closed marginally lower after a sluggish session as the market
consolidated on the lack of strong fresh leads, dealers said.
Some investors continued to trade
cautiously ahead of the general elections on May 10, while others
opted to either stay on the sidelines or immediately take profit
on slight gains.
The 30-company composite index
closed down 2.89 points, or 0.20 pct, at the day's low of 1,468.76
and off a high of 1,476.13 on volume of 179.28 mln shares worth
617.48 mln pesos.
Cross sales worth 250.27 mln pesos
boosted turnover.
The market's breadth was negative,
as losers beat gainers 24 to 21, while 38 stocks ended unchanged.
Top-traded PLDT shed some of its
earlier gain to close up 5.00 pesos at 955.00 on 386,880 shares.
Investors welcomed reports that PLDT
crown jewel Smart Communications Inc may not have to make an
initial public offering (IPO) after all, dealers said.
Smart president and chief executive
officer Napoleon Nazareno told a newspaper that "the mother
being listed could be reason enough for a wholly owned subsidiary
not to."
Dealers said investors welcomed a
possible shelving of Smart's listing, as it will allow parent PLDT
to keep benefiting from the wireless unit's robust performance.
PLDT booked a record 2003 net profit
of 11.2 bln pesos after provisions, com pared with the previous
year's 3.0 bln, as Smart's earnings soared to 16. 1 bln, almost 10
bln more than in 2002.
Second most active Globe Telecom
closed up 5.00 at 870.00 on 68,840 shares amid bargain-hunting
after recent declines.
The market is seen trading sideways
in the next few sessions, with a weaker peso also being another
disincentive against entering the market, dealers said.
"The market has been in a
consolidation mode. There's nothing that can move it either
way," Asiasec Equities analyst Oliver Plana said.
Accord Capital Equities analyst Ron
Rodrigo said political uncertainties in the run-up to the May
polls and a weaker peso have discouraged investors to take
aggressive positions in the market.
"There is no fresh news to
tickle the market's interest. We are likely to see the index trade
within the 1,463-1,486 range in the short term," Rodrigo
said.
Mall developer SM Prime was down
0.10 pesos at 5.90 on 11.46 mln shares ahead of its 2003 earnings
results out in the next few days.
The Philippine Daily Inquirer
newspaper reported that the mall developer expects a 10 pct growth
in its 2003 bottom line and the same growth level for this year on
the back of earnings contributions from additional malls.
Pilipino Telephone Corp, an
affiliate of PLDT, shed 0.04 peso at 1.66 on 16.06 mln shares.
Dealers said Piltel was lower on a
technical correction and a newspaper report that affiliate Smart
may not have to make an initial public offering (IPO).
Piltel had risen earlier on
persistent speculation that it would be merged with Smart to
facilitate the latter's backdoor listing.
San Miguel A dropped 0.50 to 56.50,
while San Miguel B shed 1.00 at 69.00.
Oil refiner Petron Corp fell 0.05 to
3.10 on 1.4 mln shares on announcing that it is implementing a
1.00 peso per liter price discount on its diesel products to
public utility vehicles nationwide.
Chinabank gained 5.00 to 655.00
after saying it expects its 2004 net profit to grow a marginal 2.3
year-on-year from 2.63 bln pesos, despite an anticipated slowdown
in revenue from government securities trading.
The all-shares index was down 0.57
points at 938.37.
The commercial-industrial index shed
2.91 to 2,289.55.
Property retreated 4.43 to 525.20.
Mining was up 13.05 at 1,470.55,
while oil was unchanged at 1.23
Banking and financial services was
down 0.02 at 432.54.
(1 usd = 56.343 pesos)
cecille.yap@afxasia.com
|
| Philippines'
Makati Finance 18.4 mln shares in escrow to be released March 9 |
MANILA (AFX-ASIA) - Makati Finance
Corp's 18.4 mln common shares will be released from escrow and
shall be tradable on the The Philippine Stock Exchange from
tomorrow, the PSE said.
The shares were locked up under an
escrow agreement executed on Dec 3, 2002.
Makati Finance has, so far, been
untraded after its previous close of 2. 80 pesos per share.
(1 usd = 56.344 pesos)
cecille.yap@afxasia.com
|
| STOCK
ALERT - Philippine PLDT firms on bargain-hunting, no IPO for Smart |
MANILA (AFX-ASIA) - Philippine Long
Distance Telephone Co (PLDT) was firmer in early trade on
bargain-hunting as investors welcomed reports that PLDT's crown
jewel Smart Communications Inc may not have to go through an
initial public offering (IPO) after all, dealers said.
At 10.22 am, most active PLDT was up
10.00 pesos at 960 on volume of 24, 330 shares.
Smart president and chief executive
officer Napoleon Nazareno said in a newspaper report that
"the mother being listed could be reason enough for a wholly
owned subsidiary not to."
Dealers said investors welcome a
possible shelving of Smart listing since this would allow parent
firm PLDT to continue benefiting from the wireless unit's robust
performance.
PLDT booked a record 2003 net profit
of 11.2 bln pesos after provisions, compared with the previous
year's 3.0 bln, as Smart's earnings soared to 16.1 bln, almost 10
bln more than in 2002.
Apart from keeping Smart's 100 pct
dividend, PLDT's share price would likely be kept steady if not
higher, dealers said.
Under Smart's congressional
franchise, the wireless unit is required to go public by August of
this year.
But Nazareno said Smart would need
at least two to three years before it could undertake an IPO as
"this will give PLDT enough time to deleverage to a more
sustainable position."
Earlier, PLDT chairman and then
president Manuel Pangilinan said there might be a slight delay in
Smart's IPO given unfavorable market conditions.
Pangilinan said it would be
"ideal" to defer Smart's IPO to 2006, when the debt of
PLDT's fixed-line business will have gone down substantially with
the help of earnings contribution from Smart.
As of end 2003, PLDT's consolidated
debt stood at 2.9 bln usd from 3.2 bln at end-2002, the bulk of
which is debt from its fixed-line business.
(1 usd = 56.347 pesos)
cecille.yap@afxasia.com
|
| Philippine
Supreme Court denies Cyber Bay appeal on Amari ruling |
MANILA (AFX-ASIA) - The Supreme
Court has denied Cyber Bay Corp's third appeal for the court to
reconsider a May 2003 ruling nullifying the company's purchase
from the government of 367.5 hectares of reclaimed and submerged
land in the Manila Bay area.
In a disclosure to the stock
exchange, Cyber Bay, formerly known as Amari, said its legal
counsel has officially received a copy of the Supreme Court
resolution denying its third motion for reconsideration.
"Management will study all
options to protect the company's rights, including claims for
reimbursement from the Public Estates Authority," Cyber Bay
said.
The high court earlier ruled that
the contract violated the Philippine Constitution's prohibition on
the sale of public land to private corporations.
Under the law, private corporations
cannot hold, except by lease, alienable lands of the public
domain, it said.
The Supreme Court allowed Cyber Bay
to recover the costs, estimated at around 9.8 bln pesos, incurred
to develop the property.
(1 usd = 56.35 pesos)
cecille.yap@afxasia.com
|
| STOCK
ALERT - Singapore-listed Del Monte up on news of Cirio's stake
sell off |
SINGAPORE (AFX-ASIA) -
Philippine-based Del Monte Pacific Ltd was higher after news that
its shareholder Cirio Finanziara S.p.A, through commissioners
appointed by Italy's Ministry of Industry, intends to dispose of
its 39.99 pct stake in DMPL via an auction process, dealers said.
Del Monte was up 0.03 sgd or 4.84
pct at 0.65.
The auction process is expected to
be completed during the second half of 2004, it added.
The Cirio group of companies was
placed under Amministrazione Straordinaria (AS), similar to
Chapter 11 in the US, after Cirio Finanziaria defaulted on about
1.2 bln euros of bonds last year.
(1 usd = 1.71 sgd, 0.8 euro)
singapore@afxasia.com
|
| Italy's
Cirio to auction 39.99 pct stake in Singapore-listed Del Monte |
SINGAPORE (AFX-ASIA) -
Philippine-based processed food firm Del Monte Pacific Ltd (DMPL)
said shareholder Cirio Finanziara S.p.A, through commissioners
appointed by Italy's Ministry of Industry, intends to dispose of
its 39.99 pct stake in DMPL via an auction process.
It added that the auction process is
expected to be completed during the second half of 2004.
The Cirio group of companies was
placed under Amministrazione Straordinaria (AS), similar to
Chapter 11 in the US, after Cirio Finanziaria defaulted on about
1.2 bln euros of bonds last year.
(1 usd = 1.71 sgd, 0.8 euro)
singapore@afxasia.com
|
| Philippines'
Petron and Shell cut prices of diesel products 1 peso/liter |
MANILA (AFX-ASIA) - Oil refiners
Petron Corp and Pilipinas Shell Petroleum Corp have lowered prices
of diesel products nationwide by 1.00 peso per liter for public
utility vehicles amid mounting pressure to hike transportation
fares.
The discount will apply at 50 gas
stations of Petron and Shell around the Philippines.
"Discounts will be uniform at
1.00 peso per liter. It is an option to show the transport sector
that we have decided to share an equitable discount to all
transport groups around the country," Pilipinas Shell
external affairs manager Roberto Kanapi said.
Petron and Shell already offer
varying discounts, ranging from 0.30-2.00 pesos per liter,
depending on the locations of gas stations.
(1 usd = 56.345 pesos)
cecille.yap@afxasia.com
|
| Philippines'
Centro Escolar board approves campus extension at Makati City |
MANILA (AFX-ASIA) - Centro Escolar
University said its board of directors has approved the
establishment and operation of a campus extension at Makati City.
It also authorized management to
negotiate a lease contract for the NIDC Building, which Philtrust
Company owns, for an initial period of 25 years and renewable for
another 25.
No other details were provided in
Centro Escolar's disclosure to the stock exchange.
cecille.yap@afxasia.com
|
| Philippines'
Meralco allowed by ERC to pass on franchise tax to clients-report |
MANILA (AFX-ASIA) - The Energy
Regulatory Commission (ERC) has allowed power distributor Manila
Electric Co (Meralco) to pass on to local residents the franchise
tax it pays in Calamba in the province of Laguna and to adjust
franchise taxes it collects from customers in Quezon City and
Caloocan City, the BusinessWorld newspaper reported, quoting an
unidentified ERC official.
"We issued the provisional
authority because local government units collect franchise tax
from the firm. It's just right to allow Meralco to pass on the tax
to the consumers," the ERC official was quoted as having
said.
Under the provisional authority,
Meralco will charge Calamba residents the local franchise tax
equivalent to 0.5 pct of their electric bills.
In Quezon City, Meralco was allowed
to pass on to clients a franchise tax rate of 0.057 pct of the
bill, lower than the 0.075 pct tax imposed by a city ordinance.
In Caloocan City, the franchise tax
was raised to 0.0825 pct from the previous 0.075 pct, also as
directed by a city ordinance.
The report did not say whether
previous city ordinance-imposed tax rates where charged to clients
in whole or in part.
The report added Meralco also wanted
to charge franchise tax rate of 0.05 pct to customers in Navotas,
Taguig, San Juan, Makati, Pasig and Malabon.
However, ERC noted Meralco was not
paying franchise fees in these areas "on legal grounds,"
and as such should not be allowed to collect from customers.
"Meralco has not been paying
any local franchise tax to certain (local government units) nor
has it been charging any local franchise tax rate in its
customers' bills. Hence, in these areas, the commission finds no
reason to allow Meralco to collect from its customers said local
franchise taxes," the ERC said in the provisional authority
granted to Meralco.
(1 usd = 56.345 pesos)
cecille.yap@afxasia.com
|
| Philippine
PLDT's Smart may not undertake public offering after all - report |
MANILA (AFX-ASIA) - Smart
Communications Inc may not have to go into an initial public
offering (IPO) after all since its parent Philippine Long Distance
Telephone Co (PLDT) is already a publicly listed company, the
Philippine Star newspaper quoted Smart president and chief
executive officer Napoleon Nazareno as saying.
"The mother being listed could
be reason enough for a wholly owned subsidiary not to,"
Napoleon, who is PLDT president and CEO, was quoted to have said.
He said this is one of the arguments
which lawyers of Smart are lining up for the company to be allowed
to defer if not altogether be granted an exemption to list
publicly.
Under Smart's congressional
franchise, the wireless unit is required to go public by August of
this year.
Nazareno said Smart would need at
least two to three years before it could undertake an IPO as
"this will give PLDT enough time to deleverage to a more
sustainable position."
Earlier, PLDT chairman and then
president Manuel Pangilinan said there might be a slight delay in
Smart's IPO given unfavorable market conditions.
Pangilinan said it would be
"ideal" to defer Smart's IPO to 2006, when the debt of
PLDT's fixed-line business will have gone down substantially with
the help of earnings contribution from its crown jewel Smart.
PLDT will continue reducing group
debt, he said, adding that it will pare away a further 370 mln usd
this year as part of its debt-liability management program.
Smart's maturing debts account for
some 120 mln usd of the 370 mln.
As of end 2003, PLDT's consolidated
debt stood at 2.9 bln usd from 3.2 bln at end-2002, the bulk of
which is debt from its fixed-line business.
PLDT posted net profit of 11.2 bln
pesos in 2003, almost four times the previous year's level -- on
the back of sustained robust gains of Smart.
(1 usd = 56.345 pesos)
cecille.yap@afxasia.com
|
| Manila
shares outlook - Mixed on consolidation ahead of elections |
MANILA (AFX-ASIA) - Share prices are
expected to open mixed due to the market's further consolidation
ahead of the May general elections and economic concerns such as a
weaker peso and a lower-than-expected recovery in exports, dealers
said.
They added that investors may
continue to trade cautiously especially after the peso again
weakened to near its all-time low of 56.35 versus the US dollar.
However, bargain-hunters may emerge
after the index shed 11.53 points or 0.78 pct last week as
investors awaited the Supreme Court decision on the
disqualification case against opposition presidential candidate
Fernando Poe Jr.
Last Friday, the 30-company
composite index closed down 2.42 points, or 0. 16 pct, at 1,471.65
on 184.58 mln shares worth 400.26 mln pesos.
In the broader market, losers closed
ahead of gainers 30 to 13, while 43 stocks were unchanged.
"The recent decision by Supreme
Court to rule in favor of Poe lifted some uncertainty on the
political front (there were fears that an FPJ disqualification may
cause violent protests among the actor's supporters) but investors
will remain cautious as they shift their focus to the May
presidential elections," BPI Securities said.
It expects the market to consolidate
within the 1,430-1,500 range.
"Market weakness is still an
opportunity to accumulate select issues given that the earnings
outlook for 2004 remains positive," BPI Securities advised.
2TradeAsia.com said brave pickers
might seize this scenario to purchase selected stocks that have
gone off from their recent peak levels, on the belief that
volatility at the forex front is bound to be temporary.
"Rises however, might not be as
aggressive, as some investors could seize on intra-day rallies to
cash-out from the bourse and position in government's expected
issuance of cash management bills (CMBs)," 2TradeAsia said in
its daily note to investors.
(1 usd = 56.345 pesos)
cecille.yap@afxasia.com
|
| Philippines'
SM Prime expects 2003 net profit to grow 10 pct yr/yr - report |
MANILA (AFX-ASIA) - Mall developer
SM Prime Holdings Inc expects its net profit to grow more than 10
pct year-on-year in 2003 and another 10 pct this year on the back
of earnings contributions from newly-built malls in Baguio City
and Bulacan, the Philippine Daily Inquirer newspaper reported,
quoting SM Prime senior vice president Hans Sy.
SM Prime's 2002 net earnings stood
at 3.86 bln pesos, 11 pct higher than a year earlier.
Sy said the company is also set to
open four more malls in key cities and provinces next year. It
currently has 17 malls nationwide.
It will open its biggest mall
project dubbed "The Mall of Asia" by 2005 and three more
malls in Manila, Valenzuela and Cavite.
"The Mall of Asia" sits in
a 500,000 square meter reclaimed property in the Manila Bay area.
The company said its land bank of
1.70 mln sq m in 12 prime locations will enable it to continue
with its expansion program in the next five years.
(1 usd = 56.345 pesos)
cecille.yap@afxasia.com
|
| Philippine
PLDT's 450 mln usd debt issue approval extended |
MANILA (AFX-ASIA) - Philippine Long
Distance Telephone Co (PLDT) has received a fresh approval from
the central bank for its plan to issue 450 mln usd worth of debt
papers, an official of the monetary regulator said.
The central bank originally approved
the planned borrowing last year, but the approval expired before
the company decided to push through with the issue.
"The extension is good for 90
days so if they do not proceed with the borrowing, it may lapse
again unless another extension is approved," the central bank
official said.
The central bank also granted PLDT's
request to waive the extension's processing fee.
The company is looking at
aggressively reducing group debt, and will pare away some 370 mln
usd of its maturing obligations this year as part of its
debt-liability management program.
As of end 2003, PLDT's consolidated
debt stood at 2.9 bln usd from 3.2 bln at end-2002, the bulk of
which is debt from its fixed-line business.
For this year, PLDT will set aside a
capital budget of around 18 bln pesos, including 6-7 bln for the
expansion of its fixed-line business' DSL Internet service.
Smart's 2004 budget will be slightly higher than last year's 11
bln pesos.
(1 usd = 56.345 pesos)
cecille.yap@afxasia.com
|
| Philippine
Airlines expects to break even in full-year 2003 to March - report |
MANILA (AFX-ASIA) - Philippine
Airlines expects to break even in its 2003 fiscal year ending
March thanks to improving appetite for air travel, which started
in December, the Philippine Daily Inquirer newspaper reported,
quoting PAL president and chief operating officer Avelino Zapanta.
The flag carrier was earlier looking
at a net loss of 700 mln pesos by end-March due to the full impact
of the SARS outbreak on its operations. The company incurred
losses of 1.6 bln pesos from April to November last year because
of low travel demand.
In 2002, PAL's net profit stood
close to 300 mln.
For fiscal year 2004, PAL expects to
net at least 1 bln pesos on the back of a sustained traffic
recovery.
"People are hungry to travel
after being denied the pleasure when the SARS scare was prevalent.
We think the coming fiscal year would be favorable, " Zapanta
was quoted as saying.
(1 usd = 56.345 pesos)
cecille.yap@afxasia.com
|
| Explosives
smuggled from Philippines used in Indonesian bombings - reports |
JAKARTA (AFX-ASIA) - Terrorists used
explosives smuggled from the Philippines in the deadly bombing of
a Jakarta hotel last year and other attacks, Indonesia's top
detective said in newspaper reports Saturday.
Police learned the source of the
explosives during interrogation of Amran bin Mansyur alias Andi
Saputra, a Malaysian arrested in Central Java province on February
26, General Superintendent Erwin Mappaseng said, quoted by Media
Indonesia.
Mansyur said some of the the
explosives smuggled from the Southern Philippines were used to
bomb churches in Sumatra on Christmas Eve, 2000, the report said.
The attacks were part of a series across the country that killed
19 people.
Explosives left over from those
attacks were used in the JW Marriott bombing last August which
killed 11 Indonesians and a Dutch banker, Mappaseng said.
"From the residue of the
Marriott bomb, the fact is the explosives are the same as those
used on Christmas Eve," he said.
Mappaseng could not be reached for
confirmation.
Investigators blame the Christmas
Eve and Marriott attacks on the Jemaah Islamiyah regional
extremist network which authorities say has some links to al-Qaeda.
A court in Sumatra early this month
imposed a 10-year jail sentence on a man who stored raw materials
later used to build the Marriott bomb.
Four men are already on trial in
Jakarta for their alleged roles in the hotel attack or similar
plots.
Two Malaysians, Noordin Mohammad Top
and Azahari Husin, are the key suspects still being hunted for
their role in the Marriott attack and in the October, 2002, Bali
bombings which killed 202 people.
Intelligence reports have said
Jemaah Islamiyah members have undergone training within camps of
the Moro Islamic Liberation Front in Mindanao, the southern
Philippines. The Muslim rebels, who sealed a ceasefire with the
government last year, have denied this.
|
| Philippines'
Vitarich suspends debt principal repayments until 2005 |
MANILA (AFX-ASIA) - Poultry producer
Vitarich Corp said it and a majority of its creditors have agreed
on a three-year suspension of principal repayment on debts
beginning Jan 1, 2003.
Vitarich creditors holding about 72
pct of its total debt of 3.2 bln pesos have approved the proposed
restructuring changes to their existing agreement, it said.
"For the duration for the
three-year period ... Vitarich will not make (any) principal
repayment, as this is part of the concessions granted by its
creditor banks. Under the old agreement, Vitarich was supposed to
pay the principal obligations in 2003," the company said in a
letter to the stock exchange.
Under the terms of the approved
amendments, Vitarich's total debt is divided into
"serviceable debt" of 1.04 bln pesos and
"non-serviceable debt" of 2.155 bln.
"This simply means that the
creditor banks will consider the serviceable portion of the
restructured debts a performing loan to comply with the rules and
regulations of the central bank," Vitarich said.
The company also agreed with
creditors on an interest rate of 9.0 pct per annum for the
"serviceable debt", instead of computing the rate based
on the 91-day Treasury bill rate, which was the original
agreement.
The 9.0 pct interest rate started
from Jan 1, 2003 and will be effective until Dec 31, 2005.
The "non-serviceable debt"
carries no interest rate.
(1 usd = 56.32 pesos)
edelacruz@afxasia.com
|
| ROUNDUP
- Stable Philippine Feb CPI eases policy pressure on central bank |
MANILA (AFX-ASIA) - The annualized
1994-based headline inflation rate was steady at 3.4 pct in
February, easing pressure on the Philippines' central bank to
tighten monetary policy further amid the peso's weakness against
the US dollar.
But it may not be too long before
the central bank is forced to tighten policy, given the emerging
inflationary risks ahead of the May 10 presidential and local
polls, a regional economist said.
Economic Planning Secretary Romulo
Neri has warned that a possible increase in transport fares due to
rising fuel prices and a weaker peso are expected to add
inflationary pressures this month.
He said companies may also start
passing on to consumers the increases in tariffs of some products
listed in a recently issued executive order.
In the mean time, however, the
central bank is seen as not inclined just year to tighten
liquidity, despite the peso's trading near its record low to the
US dollar this morning.
But it is worried about possible
price increases in the coming months.
"The stable inflation gives us
flexibility, but we must remain cautious because of future
inflationary pressures," Buenaventura told AFX-Asia.
The regulator's monetary board will
hold its monthly policy review on March 11.
Using 2000 as base year, which the
National Statistics Office (NSO) put in place in January,
inflation in February stood at 4.0 pct year-on-year, slower than
January's 4.1 pct.
Core inflation in February,
meanwhile, inched up 3.7 pct year-on-year, based on 1994 prices,
and 4.1 pct, using the 2000 base.
Economists AFX-Asia polled had seen
the CPI rising 3.6-4.2 pct year-on-year in February due to higher
oil and food prices and a weaker peso.
The central bank, on the other hand,
had seen a rise of 3.4-3.6 pct year-on-year, while Neri had
projected an annualized rate of 3.4 pct.
The NSO data released today,
however, showed that the food, beverage and tobacco commodity
group, as well as clothing and miscellaneous items, retained their
January inflation rates.
Month-on-month, February prices
increased an average 0.2 pct, using both the 1994 and 2000 bases,
slower than January's 0.8 pct and 0.9 pct monthly rises,
respectively.
Inflationary threats from a weaker
peso prompted the central bank to hike the reserve requirements of
banks 2 percentage points in early February, which was meant to
mop up excess liquidity from the financial system and limit banks'
capacity to accumulate more dollars.
However, for months now, the central
bank has chosen to keep its policy interest rates steady at 6.750
pct for overnight borrowing and 9.000 pct for overnight lending,
saying the stance is supportive of the government's economic
growth target for this year.
The central bank and the government
have also retained the full-year inflation outlook at 4.0-5.0 pct
for 2004, despite speculation that the peso may weaken further as
foreign investors shy away from the Philippines ahead of the
polls.
Economists, however, have mixed
views on whether or not the central bank can hold down key
interest rates.
DBS Bank regional economist Wong
Chee Seng said the central bank may raise policy rates soon as
inflationary pressures persist, despite the stable CPI in
February.
Wong said the prevailing weakness of
the peso, higher oil prices and an anticipated increase in
transport fares will certainly push inflation higher in the coming
months.
"I am worried that, because of
these pressures, the Philippines would raise benchmark rates ahead
of the US. That should cloud it economic prospects," Wong
said.
The CPI may start its upward trek as
early as April, when the impact of a weaker peso and higher oil
prices will be reflected in the prices of goods and services, he
said.
The May election is also seen
increasing domestic liquidity and putting pressure on prices.
"The only factor that could
temporarily save the Philippines from higher inflation is the
country's rising agricultural output," Wong said.
At the Philippine Dealing System,
the peso averaged 56.318 to the dollar at noon after falling to
56.34 in early trade, just a centavo away from its weakest-ever
level of 56.35 on Feb 20 and Feb 27, due to pre-election political
concerns.
Dealers attribute today's weakness
of the peso to the dollar's strength against regional currencies
and to the usual bank short-covering ahead of the weekend.
Still, a senior currency trader at a
local commercial bank said he does not see the central bank
resorting to interest rate hikes this early, or in the near term,
considering its negative impact on business productivity.
Any further liquidity tightening
measures the central bank takes, if there is need, may come in the
form of a further reserve increase and not an interest rate hike,
the trader said.
afxmanila@afxasia.com
|
| Philippine's
Buenaventura says too early to judge anti-dirty money efforts |
MANILA (AFX-ASIA) - Central bank
governor Rafael Buenaventura deemed as "premature" and
"unfair" a purported US State Department report
expressing dissatisfaction with the Philippines' efforts against
money laundering.
"I am a little bit surprised
because, in effect, they are pre-judging us... I will ask them why
a judgment call has been made when there hasn't been a review as
yet," Buenaventura said in a television interview.
The government in January submitted
to the Financial Action Task Force's (FATF) Asia Pacific group an
implementation plan, which serves as a blueprint of the country's
anti-dirty money regime.
It details how government agencies
are working with each other to combat the flow of
illegally-acquired funds in and out of the country.
FATF's Asia Pacific group, which
Japan heads and of which the US is a member, has yet to review the
implementation plan, says Buenaventura.
However, major local dailies cited a
US State Department report that said, "despite major
improvements to the legal framework, there is an area of concern
regarding bank compliance and bank secrecy yet been
resolved."
The central bank chief said congress
has given in to the requirements of the Paris-based watchdog,
despite the reluctance of some lawmakers.
Among others, Buenaventura was
referring to the relaxation of the bank secrecy law, which, he
said, was a major step forward.
"I know they're not happy that
the lifting of bank secrecy is not absolute, but they expected
it."
The Philippines avoided economic
sanctions from FATF member-countries after the passage of a new
anti-money laundering laws early last year. However, it remains on
the FATF's list of non-cooperative countries until such time that
a review of the plan and its implementation has been completed.
Buenaventura raised the possibility
of going back to congress for the second time to revise the law
should the watchdog find it unsatisfactory.
"If the law says we can't amend
it (on our own) the way they want it, then, obviously, I'd have to
go back to congress and say 'although (FATF) told us it was
acceptable before, they now tell us it's not acceptable,"
Buenaventura said.
cecille.yap@afxasia.com
|
|