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Tuesday, March 23, 2004
Philippines' Universal Robina Q1 to Dec net profit 552 mln pesos vs 533.4 mln
Movie star cleared for Philippine polls as citizenship claim thrown out
Philippines Petron assures normal fuel supplies despite refinery shutdown
Forex - Philippine peso recovers on easing dollar demand, budget deficit
Philippines budget deficit widens to 34.6 bln pesos as of end-Feb
Philippines' Belle Corp sees 2003 net profit at 130-140 mln pesos
Philippines sets 10-yr T-bond coupon at 12.375 pct, raises 3.0 bln pesos
Philippines' PLDT rank-and-file union ratifies 3-yr agreement
Manila shares close lower on political concerns, weak peso
Philippines' Rockwell Land LTCPs rating raised to PRS Baa - PhilRatings
Philippines' Primex to list additional 6.33 mln shares March 25 - PSE
STOCKWATCH - Philippines' Piltel sharply firmer as Smart entry looms
STOCK ALERT - Philippines' Meralco flat despite return to profit in 2003
Philippines' PBCom board approves 3.0 bln peso capital hike
Philippines' Vaalco-Alcorn group to pull out from Palawan drilling projects
Philippines' Napocor zero-coupon bonds rated Ba2, outlook negative - Moody's
Philippines to re-privatize Maynilad by 2009 - report

Monday, March 22, 2004
Philippines' Meralco profitable in 2003, restates 2002 net loss
Forex - Philippine central bank intervention seen to have limited peso fall
Philippines' Smart seeks to acquire PLDT's 45.3 pct stake in Piltel
Philippines' Petron raises fuel prices by 0.40-0.60 peso/liter
SARS helped Asian effort to control tuberculosis - WHO
Dollar inflows limit Philippine peso fall to 56.45 in morning - Tetangco
Philippines' Benpres denies Maynilad deal with MWSS form of govt bailout
Philippines' Globe Telecom opposes additional tax on text messaging
Philippines' Globe Telecom considering 5-yr 150 mln usd loan to finance capex
Manila shares close weaker on Wall Street, peso plunge to record low
Manila shares weaker in mixed mid-trade on Wall Street losses, weak peso
STOCK ALERT - Philippines' Benpres extends gains after Maynilad exit deal
Forex - Philippine peso at record low as central bank stays out of market
Philippine exchange suspends Philweb bonus warrants trading from today
Philippines' MWSS to reduce bond issue after Maynilad takeover deal - report
Philippine oil firms raise gasoline prices by 0.60 pesos/liter - report
Manila shares outlook - Mixed to lower on consolidation, weak peso
Philippine banks agree to waive deposit secrecy rule - report
Philippines' JG Summit sees flat 2003 net profit on higher expenses
Philippines' GMA Network 2003 net profit 1.05 bln pesos, up 162 pct
Philippines' ABS-CBN Global to delay Singapore listing to 2006

March 17 - 19 
March 13 - 16
March 10 - 12
March 8 - 9
March 3 - 5
March 1 - 2

 


 
Philippines' Universal Robina Q1 to Dec net profit 552 mln pesos vs 533.4 mln


     MANILA (AFX-ASIA) - Universal Robina Corp's unaudited consolidated first quarter to Dec 2003 results:
      Net sales and services - 6.39 bln pesos vs 6.06 bln
      Cost of sales and services - 4.66 bln pesos vs 4.25 bln
      Gross profit - 1.72 bln pesos vs 1.81 bln
      Opg expenses - 1.08 bln pesos vs 944.8 mln
      Opg profit - 642.15 mln pesos vs 860.27 mln
      Net profit - 552.0 mln pesos vs 533.4 mln
      Earnings per share - 0.33 peso vs 0.33
     Universal Robina is a Gokongwei family-controlled branded foods company with a growing presence in other Asian markets.
     (1 usd = 56.37 pesos)
     afxmanila@afxasia.com
 

 
Movie star cleared for Philippine polls as citizenship claim thrown out


     MANILA (AFX-ASIA) - Philippine movie star Fernando Poe was cleared to run in May presidential polls as the Supreme Court finally threw out a motion questioning his citizenship.
     The court denied a group of lawyers' motions for reconsideration of their charge that Poe, whose mother was American, was not a natural-born Filipino, which if upheld would have ruled him out of the presidency.
     The court denied the motion with finality today, ruling that "no substantial arguments were presented to warrant the reversal" of its earlier refusal.
     Poe, the country's top action movie star, is running in the May 10 elections despite being a high school drop-out with no experience in government. Opinion polls put him neck and neck with President Gloria Arroyo.
 

 
Philippines Petron assures normal fuel supplies despite refinery shutdown


     MANILA (AFX-ASIA) - Petron Corp has given an assurance that the supply of petroleum products to its customers will remain normal despite the total shutdown of its refinery in Bataan yesterday.
     It blamed a power failure in the area for the shutdown.
     Petron said the power failure was caused by a fault in the National Power Corp's 69-kilovolt supply line to the city of Balanga, Bataan, in central Luzon.
     "Power has been restored and operation of the primary refinery units have been initiated," the company told the stock exchange, adding that the refinery's operation is expected to normalize in one to two days.
     The Bataan refinery has a capacity of 180,000 barrels per day.
     afxmanila@afxasia.com
 

 
Forex - Philippine peso recovers on easing dollar demand, budget deficit


     MANILA (AFX-ASIA) - The peso regained some lost ground against the US dollar as demand for the greenback eased and the government seems to be on track with its fiscal program, dealers said.
     They said dollar inflows helped the peso recover even as the central bank stayed out of the market today.
     The peso closed at the day's high of 56.37 to the dollar, after trading at a low of 56.435 on volume of 86.6 mln usd, about half of yesterday's volume of 160 mln when it finished at its lowest close of 56.42.
     "We saw more inflows and little demand for dollars. At 56.40 (level), demand is weak," a commercial bank dealer said.
     "The budget deficit is also within expectations."
     The government's budget deficit widened to 34.6 bln pesos as at end-February from 16.1 bln at end-January, the Department of Finance said.
     In February alone, government revenues were 18.4 bln pesos lower than expenditure.
     The government has not set monthly deficit ceilings. For the first quarter, however, the ceiling had been programmed at 58.9 bln pesos.
     The Philippines' fiscal managers have vowed to maintain the cautious fiscal stance the government adopted in 2003 and aim to limit the full-year 2004 budget deficit to 197.8 bln, or about 4.2 pct of gross domestic product.
     Yesterday, the central bank was seen in the market unloading some of its dollar reserves, and dealers said this limited the peso's fall to 56.45, an all-time intraday low.
     Banks may sell more of their dollar holdings tomorrow, dealers said.
     "We may see follow-through selling and a test of the 56.35 level. If that is breached, the market will test 56.20 next," a dealer said.
     Perceived central bank support for the peso at 56.45 has prevented the local currency from falling further, but dealers said growing political risks as the May 10 presidential election draws closer will continue to weigh on the peso.
     And any further fall in the peso may prompt the central bank to further tighten its monetary policy, possibly through an increase in key interest rates, they said.
     Wong Chee Seng, an economist with DBS Bank in Singapore, said the likelihood of an increase in interest rate is getting stronger.
     "We do not discount the possibility of further control measures being taken with an aim to squeeze liquidity (from the financial system), if the peso is subjected to another speculative attack in the coming months," he said.
     Central bank governor Rafael Buenaventura declined to comment, when asked if the monetary authorities are inclined to take any policy action to halt the peso's slide and deal with inflationary pressures arising from it.
     Besides an increase in interest rates, the central bank may also raise the banks' reserve requirement on deposits to reduce their peso holdings which they could use to speculate against the dollar.
     This is exactly what the central bank did a few weeks back -- it raised the reserve requirement by 200 basis points and so helped to stabilize the peso for a brief period.
     afxmanila@afxasia.com
 

 
Philippines budget deficit widens to 34.6 bln pesos as of end-Feb


     MANILA (AFX-ASIA) - The government's budget deficit widened to 34.6 bln pesos as at end-February from 16.1 bln as at end-January, the Department of Finance said.
     The latest figure compares with the deficit of 31.6 bln pesos for the same month last year.
     In February alone, government revenues were 18.4 bln pesos lower than expenditures. In the same month last year, the deficit stood at 17.7 bln pesos.
     Total revenues in the January-February period amounted to 97.7 bln pesos against total expenditures of 132.3 bln.
     The government has not set monthly deficit ceilings. For the first quarter, however, the ceiling has been programmed at 58.9 bln pesos.
     The Philippines' fiscal managers have vowed to maintain the cautious fiscal stance the government adopted in 2003 and aim to limit the full-year 2004 budget deficit to 197.8 bln, or about 4.2 pct of the gross domestic product.
     The budget deficit in 2003 came in at 199.9 bln pesos, or 4.6 pct of GDP.
     The government's goal is to achieve a balanced budget by 2009.
     Financial markets are monitoring the government's fiscal performance closely, worried that the administration of Gloria Arroyo, who is seeking a full six-year term in the May 10 presidential elections, will spend more than the programmed level, especially in the period before the polls.
     Finance Secretary Juanita Amatong, however, said the government will maintain its fiscal discipline.
     "The ongoing electoral exercise has not deterred the national government from meeting its fiscal objectives for this year. We will remain focused on our fiscal consolidation program with support from measures to enhance revenue collections," she said in a statement.
     "Most importantly, at this time, fiscal discipline remains on top of my agenda and we are sustaining a prudent expenditure management to ensure that government spends only within its means."
     The government's sustained deficit-spending for the past few years, which will likely continue until 2008, has seen its debts soar to more than 3 trln pesos.
     The Bureau of Internal Revenue (BIR), whose tax collections account for the bulk of government revenues, took in 28.8 bln pesos in February, compared with 27.09 bln in the same month last year.
     The Bureau of Customs collected a total of 8.6 bln pesos in February, up from the year-earlier's 8.09 bln.
     Bureau of Treasury (BTr) collections totalled 4.42 bln pesos in February, nearly double the year-earlier amount of 2.58 bln.
     The government collected an additional 2.73 bln pesos from other offices last month, somewhat flat, compared to 2.69 bln a year earlier.
     The BTr, meanwhile, has adjusted the government's borrowing mix for this year to 81 pct domestic and 19 pct foreign, taking into account last November's pre-funding exercise, when 1.15 bln usd was raised for this year's requirement.
     On an accrual basis, the government said its programmed borrowing mix remains at 70 pct domestic and 30 pct foreign.
     To date, the national government's external borrowing requirement is down to around 200 mln usd, following March's 11-year global bond issue worth 500 mln usd.
     (1 usd = 56.42 pesos)
     afxmanila@afxasia.com
 

 
Philippines' Belle Corp sees 2003 net profit at 130-140 mln pesos


     MANILA (AFX-ASIA) - Property developer Belle Corp said a net profit of 130-140 mln pesos is a "fairly reasonable" estimate of how it fared in 2003.
     The company issued the statement after a local newspaper reported, citing a company vice chairman Willy Nacer, that Belle's net profit last year came in at 130-140 mln pesos, compared with 119 mln in 2002.
     Belle said its external auditors were still completing its audited financial statements for 2003, and hence, it could not confirm the accuracy of the newspaper report.
     "We confirm, however, that the successful launch and the brisk sales last year of our new development project in the Tagaytay Highlands/Midlands Complex called the 'Plantation Hills' has significantly contributed to our profitable operations," the company told the stock exchange.
     Belle was originally incorporated as Belle Mining and Oil Exploration Inc.
     In 1989, the company together with AIA Capital Corporation, a regional investment and advisory subsidiary of the American International Group, formed a joint venture company called the Tagaytay Highlands Corporation (THC).
     THC started the development of a golf course community in Tagaytay City.
     Belle is also engaged in gaming business.
     (1 usd = 56.42 pesos)
     afxmanila@afxasia.com
 

 
Philippines sets 10-yr T-bond coupon at 12.375 pct, raises 3.0 bln pesos


     MANILA (AFX-ASIA) - The Bureau of Treasury (BTr) said it has set the coupon rate for 10-year T-bonds at 12.375 pct as it fully awarded its 3.0-bln peso offering at today's bond auction.
     Tenders totalled 6.49 bln pesos. Bids ranged from 11.875 pct to 12.375 pct to average 12.119 pct.
     At yesterday's 42-day T-bill auction, the BTr made a partial award of 1. 16 bln pesos, with the average rate settling at 7.123 pct or 18.9 basis points lower than the previous average rate of 7.312 pct.
     Tenders totalled 4.209 bln pesos against an offering of 4.0 bln.
     National Treasurer Mina Figueroa said the BTr may stop offering 42-day bills after the two auctions conducted this month met waning interest in such an instrument, as indicated by the small volume of bids yesterday.
     The government had decided to offer debt instruments with maturity shorter than the regular 91 days to satisfy market appetite for short-term instruments amid political uncertainty ahead of the May 10 presidential and local elections and the peso's weakness against the US dollar.
     (1 usd = 56.42 pesos)
     afxmanila@afxasia.com
 

 
Philippines' PLDT rank-and-file union ratifies 3-yr agreement


     MANILA (AFX-ASIA) - The rank-and-file union of Philippine Long Distance Telephone Co (PLDT) has ratified the three-year collective bargaining agreement (CBA) signed by management and union officers last month, PLDT said.
     About 64 pct or 3,311 of about 5,200 union members ratified the CBA.
     Under the agreement, rank and file employees will each receive wage increases of 1,800 pesos for the first year of the CBA effective Nov 9, 2003; 1,850 pesos for the following year (effective Nov 9, 2004); and 2,450 pesos for the third year (effective Nov 9, 2005).
     They will also receive a signing bonus equivalent to one month's salary, computed at the salary rate prevailing prior to Nov 9, 2003, plus 10,000 pesos.
     "The ratification of the CBA provides PLDT a stronger foundation from which we can push forth our collective goals and objectives for the coming years," PLDT president Napoleon Nazareno said in a statement.
     PLDT noted that the CBA was reached after a series of negotiations that began in Sept 2003, without the union resorting to work stoppage to push for their demands.
     "Now that we have successfully hurdled the issues amongst us, it is time to move together towards our goal of making PLDT the best telecommunications company in the region," Nazareno said.
     PLDT's net profit nearly quadrupled in 2003 to 11.2 bln pesos, after provisions, boosted by wireless unit Smart Communications Inc's earnings, which soared to 16.1 bln, almost 10 bln more than in 2002.
     (1 usd = 56.42 pesos)
     afxmanila@afxasia.com
 

 
Manila shares close lower on political concerns, weak peso


     MANILA (AFX-ASIA) - Share prices closed weaker, extending declines amid the peso's weakness against the US dollar and political concerns ahead of the May 10 presidential election, dealers said.
     Wall Street's losses overnight also weighed on sentiment, they added.
     The composite index closed down 12.94 points or 0.90 pct at the day's low of 1,418.73, below the 1,420-support level, on volume of 364.7 mln shares worth 490.6 mln pesos. The index traded at a high of 1,431.67.
     In the broader market, losers led gainers 40 to 14, while 30 stocks were unchanged.
     A weak peso will increase the indebtedness of companies and expenses of importers, and even the government, which relies heavily on foreign loans to finance its budget deficit.
     It also increases the possibility of a monetary policy tightening by the central bank, possibly through higher interest rates, to halt the build-up in inflationary pressures.
     The peso averaged 56.417 to the dollar at noon on the spot market, with thin volume of 48 mln usd.
     The currency finished at its weakest-ever closing level of 56.420 yesterday, with dollar sales by the central bank seen to have limited the peso's falls to an intraday record low of 56.450.
     Dealers attributed the peso's weakness largely to continued dollar-hedging by companies ahead of the May polls.
     "The market remains weak as we move closer to the May 10 (presidential) elections," Accord Capital Equities research consultant Ron Rodrigo said, adding that a weak peso is another source of concern.
     "The uncertain political environment is keeping investors more cautious."
     Bucking the trend, top-traded Pilipino Telephone Corp's (Piltel) closed up 0.04 pesos at 1.78, off the day's highs, on 70.26 mln shares.
     Piltel's further advance was triggered by Smart's disclosure it is seeking the consent of creditors and guarantors to acquire the 45.3 pct interest of parent Philippine Long Distance Telephone Co (PLDT) in Piltel.
     "If the plan pushes through, Smart will become Piltel's biggest shareholder and there will be a bigger possibility that the two companies will merge their operations," Accord Capital's Rodrigo said.
     "Smart's plan to acquire Piltel shares seems to confirm what the market has been thinking about for months now."
     Smart, PLDT's main source of revenue, is proposing to absorb Piltel's debts by offering cash to Piltel creditors, or swapping Piltel debts with Smart-issued bonds, or with sovereign bonds.
     Under its franchise, Smart has until August this year to offer some of its shares to the public.
     PLDT, which closed 5.00 pesos lower at 915 on thin volume of 28,300 shares, said the successful completion of Smart's transaction with Piltel creditors will lead to the rationalization of its wireless business segment.
     PLDT's American Depositary Receipts (ADRs) retreated 0.26 usd to 16.15 in New York last night.
     PLDT rival Globe Telecom was down 25 at 820.
     Mall operator SM Prime Holdings fell 0.10 to 5.60.
     Property developer Megaworld Corp was unchanged at 1.00 peso following cross sales worth 103.5 mln pesos.
     Manila Electric Company's B shares were down 0.50 at 27.50, while Meralco A fell 0.25 to 18.25 as news that it had returned to profitability in 2003 was negated by the company's restatement of its 2002 net loss to 28.18 bln pesos from 2.0 bln.
     Increased sales and a rate hike enabled Meralco to book a net profit of 907 mln pesos in 2003, which was within the 800 mln to 1.2 bln pesos range of forecasts by analysts polled by AFX-Asia.
     Petron Corp, which raised fuel prices by 0.40-0.60 pesos per liter effective yesterday, was down 0.15 at 2.75.
     Bank of the Philippine Islands dropped 0.50 to 44.
     The all-shares index was down 4.78 points at 906.07.
     The commercial-industrial index fell 22.19 to 2,221.57.
     Property dropped 4.38 to 498.07, while mining eased 14.58 to 1,424.00.
     Oil retreated 0.01 to 1.17.
     Banking and financial services shed 2.07 to 422.89.
     afxmanila@afxasia.com
 

 
Philippines' Rockwell Land LTCPs rating raised to PRS Baa - PhilRatings


     MANILA (AFX-ASIA) - Standard & Poor's affiliate Philippine Rating Services Corp (PhilRatings) said it has raised its rating on Rockwell Land Corp's outstanding 500.25 mln pesos worth of long-term commercial papers (LTCPs) to PRS Baa from PRS Ba.
     The rating improvement marks Rockwell's return to an investment-grade rating category, it said.
     Rockwell Land is 51 pct owned by Manila Electric Company (Meralco).
     A rating of PRS Baa implies that the debt is "neither highly protected nor poorly secured," PhilRatings said.
     "Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time," it said.
     PhilRatings said the rating upgrade takes into consideration Rockwell's return to profit in 2003 after two years of operating losses.
     Rockwell posted net profit of 130 mln pesos last year, on revenues of about 2.2 bln pesos, it said.
     "Positive bottom line results are expected to be sustained going forward with management's prudent control over operating costs and reduced interest charges," PhilRatings noted.
     (1 usd = 56.43 pesos)
     afxmanila@afxasia.com

 
Philippines' Primex to list additional 6.33 mln shares March 25 - PSE


     MANILA (AFX-ASIA) - Real-estate developer Primex Corp will list an additional 6.33 mln common shares on Thursday (March 25) to cover payment of a stock dividend.
     At 10.41 am, Primex was untraded after closing at 2.60 pesos previously.
     (1 usd = 56.44 pesos)
     afxmanila@afxasia.com

 
STOCKWATCH - Philippines' Piltel sharply firmer as Smart entry looms


     MANILA (AFX-ASIA) - Pilipino Telephone Corp's (Piltel) shares were sharply firmer in mid-session following Smart's disclosure it is seeking creditors' and guarantors' consent to acquire the 45.3 pct interest of parent Philippine Long Distance Telephone Co (PLDT) in Piltel, dealers said.
     At 10.25 am, Piltel was up 0.08 peso or 4.6 pct at 1.82 pesos on volume of 37.9 mln shares.
     The composite index was down 4.69 points or 0.33 pct at 1,426.98.
     While PLDT said it is not Smart's intention to merge with Piltel, nor does it intend to use Piltel as a backdoor-listing vehicle, dealers said Smart's entry into Piltel will likely lead to a merger between the two wireless firms.
     "If the plan pushes through, Smart will become Piltel's biggest shareholder and there will be a bigger possibility that the two companies will merge their operations," Accord Capital Equities research consultant Ron Rodrigo said.
     "Smart's plan to acquire Piltel shares seems to confirm what the market has been thinking about for months now."
     Smart is PLDT's main source of revenue, with the market leader's net profit soaring to 16.1 bln pesos in 2003, almost 10 bln more than in 2002, and boosting PLDT's net profit nearly 400 times to 11.2 bln pesos from the year-ago level.
     Under its franchise, Smart has until August this year to offer some of its shares to the public.
     "By owning a controlling stake in Piltel, Smart may also not have to list its own shares on the local market," Rodrigo said.
     PLDT's stake in Piltel consists of 767 mln common shares and 59 mln Series K preferred shares convertible into Piltel common shares at a ratio of 170 to one.
     Smart will allow Piltel creditors to exchange their loan exposure to Piltel either for cash - in US dollars or pesos - or for Smart's US dollar-denominated loan obligations or US dollar-denominated sovereign bonds.
     Piltel creditors have four weeks from the date of the letters of invitation from Smart to submit their offers.
     PLDT, which was down 5.00 pesos at 915 in early trade on a very thin volume of 2,870 shares, said the successful completion of Smart's transaction with Piltel creditors will lead to the rationalization of its wireless business segment.
     It will lead to Smart gaining full access to Piltel's Talk 'N Text's expanding subscriber base and improving revenue streams, PLDT said.
     "PLDT's wireless group is expected to realize benefits from the closer operational alignment of Smart and Piltel, an increase in the share in Piltel's revenue streams and certain cash and tax savings," PLDT said.
     These positive effects will, however, be partially offset by increased interest expenses and foreign exchange exposure arising from the issuance by Smart of new debt, it said.
     (1 usd = 56.44 pesos)
     afxmanila@afxasia.com

 
STOCK ALERT - Philippines' Meralco flat despite return to profit in 2003


     MANILA (AFX-ASIA) - Shares of Manila Electric Company (Meralco) were flat in early trade as news that it had returned to profitability in 2003 was negated by the company's restatement of its 2002 net loss to 28.18 bln pesos from 2.0 bln, dealers said.
     Meralco B, available to foreign investors, was steady at 28 pesos on 553, 900 shares following a slight 0.50 pesos fall at the open, while Meralco A was unchanged at 18.50 on 5,500 shares.
     Meralco posted net profit of 907 mln pesos in 2003, which was within the 800 mln to 1.2 bln pesos range of forecasts by analysts polled by AFX-Asia.
     Increased sales boosted its operating revenues to 132.02 bln pesos, up 12. 1 pct from the previous year on 4.4 pct higher sales volume.
     Meralco said the increase in revenues was also driven by an increase in purchased power costs and a 0.0865 pesos per kilowatthour rate increase approved by the Energy Regulatory Commission (ERC) in mid-2003.
     Meralco, which retails electricity in metropolitan Manila and nearby provinces, said refunds covering the period Feb 1994 to Dec 2001, amounting to 23.82 bln pesos net of tax effect for 1999 of 1.13 bln, were accounted for as an extraordinary loss in the 2002 statement of income.
     (1 usd = 56.44 pesos)
     afxmanila@afxasia.com

 
Philippines' PBCom board approves 3.0 bln peso capital hike


     MANILA (AFX-ASIA) - Philippine Bank of Communications (PBCom) said its board of directors has approved an increase in authorized capital stock by 3. 0 bln pesos by creating new preferred shares with a par value of 25 pesos each.
     It gave no other details in a disclosure to the stock exchange.
     The bank expects to post annual net profit of between 200 mln and 1.0 bln pesos starting this year after clinching a 7.6 bln pesos financial assistance deal with state-run Philippine Deposit Insurance Corp (PDIC).
     The bank plans to invest the money from PDIC in high-yielding government securities to cushion the transfer of its non-performing loans, at discounted prices, into a special purpose asset vehicle (SPAV).
     The bank reported a nine months to Sept 2003 net loss of 85.35 mln pesos, against a net profit of 281.8 mln pesos a year earlier.
     The agreement with PDIC involves the establishment of a SPAV through which PBCom's non-performing assets will be sold. PDIC will be given board seats in the bank in exchange.
     Major PBCom shareholders, the Luy, Nubla and Chung families, have increased the bank's capital by 3.0 bln pesos.
     (1 usd = 56.42 pesos)
     afxmanila@afxasia.com

 
Philippines' Vaalco-Alcorn group to pull out from Palawan drilling projects


     MANILA (AFX-ASIA) - Basic Consolidated Inc said wholly-owned unit Petroleum and Minerals Inc has signed an agreement to acquire the working interest of VAALCO-Alcorn group in Palawan drilling projects covered by Service Contracts 6 and 14.
     Once the final deed of assignment has been signed, Basic Petroleum will increase its interests in such oil field discoveries as Nido, Matinloc, Galoc, West Linapacan and Bonita, all in Palawan.
     Oriental Petroleum and Minerals Corp, meanwhile, said it will conduct a due diligence study on SC 6 and 14, after it and other partners in the projects have been given the option to acquire the interests currently held by the Vaalco-Alcorn group.
     Alcorn Gold Resources Corp, another stakeholder in the SC 6 and 15 blocks, said it has also signed an option agreement with Vaalco Energy Inc, Alcorn Philippines Inc, Alcorn (Production) Philippines Inc and Altisima Energy Inc, with the closing date set for April 30.
     Oriental Petroleum said the Vaalco-Alcorn group has decided to consolidate its operations in another unidentified country, where production volume is bigger.
     The companies did not disclose financial details in their separate letters to the stock exchange.
     afxmanila@afxasia.com

 
Philippines' Napocor zero-coupon bonds rated Ba2, outlook negative - Moody's


     MANILA (AFX-ASIA) - Moody's Investors Service said it has assigned a Ba2 rating to state-owned National Power Corporation's (Napocor) proposed peso-denominated zero-coupon bonds, which will be guaranteed by the Philippine government.
     The rating outlook is negative, which is in line with the negative outlook for the government's Ba2 local currency rating, Moody's said in a statement.
     "The current rating assignment is based on the draft preliminary offering circular - including draft terms and conditions - dated March 18, 2004. The proposed bond is subject to the grant of Full Powers/Special Authority of the President of the ROP (Republic of the Philippines) authorizing the issuance of this bond and the guarantee," Moody's said.
     The agency said that despite the weak operating and financial profiles of Napocor, "the Ba2 rating reflects the guarantee by the ROP of this bond offering."
     "Moody's expectation is that the Philippine government will honor its commitment to the outstanding guaranteed obligations of Napocor regardless of the progress of power sector restructuring and privatization," it said.
     Moody's noted that Napocor's operating performance has deteriorated in the first six months of 2003, mainly due to lower revenue resulting from rate reductions due to the unbundling of rates, higher operating and interest expenses, and the 0.40 peso per kilowatthour cap on the Power Purchase Cost Adjustment (PPCA).
     The PPCA is an automatic cost recovery mechanism that allowed Napocor to pass on increased costs associated with its US dollar-denominated obligations under the Independent Power Producer (IPP) contracts.
     Under the power sector reform plan, Napocor will transfer its asset and liabilities to the Power Sector Assets and Liabilities Management Corporation (PSALM), which is wholly owned by the Philippine government.
     However, Napocor will continue to operate the generation assets until such assets are privatized, and is currently negotiating the operations and maintenance agreement with PSALM.
     Napocor has obtained consent from certain bondholders to transfer its debt obligations to PSALM as part of the reform process.
     Moody's said that under the terms of the proposed zero-coupon bonds, PSALM shall, without the consent of the bondholders, assume the obligations of Napocor, subject to the same terms and conditions, including the irrevocable and unconditional guarantee of the ROP.
     (1 usd = 56.42 pesos)
     afxmanila@afxasia.com

 
Philippines to re-privatize Maynilad by 2009 - report


     MANILA (AFX-ASIA) - After taking back ownership of Maynilad Water Services Inc from the Lopez family's Benpres Holdings Corp, the government plans to privatize the water utility again by 2009, TODAY newspaper said, citing an unidentified government official.
     "The intent is to re-privatize Maynilad within five years. It is in the best interest to proceed with privatization at the appropriate time," the official was quoted as saying.
     During the five-year period, the report said the government will take steps to reduce the utility's losses caused by water pilferage and leakage.
     About seven years after winning a concession to supply drinking water to half of metropolitan Manila, Benpres decided to withdraw its equity participation in Maynilad, which is to be taken over by regulator Metropolitan Waterworks and Sewerage System (MWSS) under a Maynilad reorganization agreement between them.
     Benpres currently owns 60 pct of Maynilad, while France's Suez Group holds about 40 pct.
     After the reorganization, which is still subject to approval by other regulatory agencies and the courts, Maynilad will be 39 pct owned by MWSS, 19. 0 pct by Suez Group, 2.0 pct by creditor Metropolitan Bank and Trust Co and 4. 0 pct by Maynilad employees.
     Benpres chief operating officer Angel Ong said the company had made full provision for Maynilad equity last year, and that its decision to write off this investment will no longer have an impact on the conglomerate's bottom line.
     The agreement puts an end to a concession dispute between Benpres and the government, which has been forwarded to the court for resolution.
     However, the deal has become an election issue in the Philippines, with the opposition suspecting a political deal between the Lopez family and the administration of President Gloria Arroyo behind the alleged Maynilad bailout.
     Incumbent Arroyo is seeking a full term in the May 10 elections.
     The Lopez family controls media giant ABS-CBN Broadcasting Corp.
     (1 usd = 56.42 pesos)
     afxmanila@afxasia.com

 
Philippines' Meralco profitable in 2003, restates 2002 net loss


     MANILA (AFX-ASIA) - Manila Electric Company (Meralco) said it posted a net profit of 907 mln pesos in 2003, returning to profitability from a restated net loss of 28.18 bln pesos the previous year.
     Increased sales boosted its operating revenues to 132.02 bln pesos, up 12. 1 pct over the previous year as sales volume rose 4.4 pct.
     Meralco said the increase in revenues was also driven by an increase in purchased power costs and a 0.0865 peso per kilowatthour rate increase approved by the Energy Regulatory Commission (ERC) in June 2003.
     The company, which had earlier reported a net loss of 2.0 bln pesos in 2002, said it booked an extraordinary loss of 23.82 bln pesos in that year, resulting in the restatement of 2002 results.
     Meralco, which retails electricity in metropolitan Manila and nearby provinces, said refunds covering the periods Feb 1994 to Dec 2001, amounting to 23.82 bln pesos net of tax effect for 1999 of 1.13 bln, have been accounted for as an extraordinary loss in the 2002 statement of income.
     Analysts polled by AFX-Asia had expected Meralco to post 2003 net profit before provisions of 800 mln to 1.2 bln pesos on the back of increased rates and higher electricity sales.
     Sales volume in 2003 rose 4.4 pct to 23.8 bln kilowatthours from 22.8 bln in 2002.
     At end-2003, Meralco's customers totaled 4.05 mln, up 3.24 pct from 3.9 mln at end-2002.
     Meralco said its commercial customers registered the highest growth rate at 5.2 pct, followed by residential customers at 4.6 pct and industrial customers at 3.5 pct.
     The growth in sales to commercial customers was led by the transportation, storage and communications sector.
     Explaining further the restatement of its 2002 net loss, the company said its external auditors for its 2002 financial statements issued on April 25, 2003, had issued a report due to the non-accrual of contingent losses of 28. 73 bln pesos.
     This excluded income tax effects pending the resolution of Meralco's motion for consideration filed with the Supreme Court on the refund issue.
     On April 30, 2003, the Supreme Court denied Meralco's motion, rendering its refund decision final.
     Meralco was found to have overcharged customers dating back to 1994.
     Meralco said the loss from the Supreme Court ruling amounted to 28.73 bln pesos.
     "As a result of the refund order, the company has effectively overpaid income taxes estimated at 8.9 bln pesos. Meralco has amended its tax returns for 1999 and 2002 and applied the overpayment for those years against its 2003 income statements," it said.
     The company added that the refunds covering the period Jan 1, 2002, to Dec 31, 2002, amounting to 3.78 bln pesos, were reflected as a reversal of revenue, while the related income tax effect of 1.04 bln pesos was reflected as a reduction in the provision for income tax.
     The Supreme Court has suspended a 0.12 peso per kWh rate hike approved by the ERC for implementation from Jan 1 this year.
     (1 usd = 56.42 pesos)
     afxmanila@afxasia.com

 
Forex - Philippine central bank intervention seen to have limited peso fall


     MANILA (AFX-ASIA) - Dollar sales by the central bank limited the peso's fall today to 56.45 to the US dollar, but the local unit still finished at its weakest-ever closing level at 56.42, dealers said.
     They saw the central bank unloading as much as 50 mln usd on the spot market today.
     The peso traded between 56.380 and 56.450 to the dollar on volume of 160 mln usd. It closed at 56.38 on Friday.
     "The central bank, as expected, sold dollars to support the peso at 56.45, " a commercial bank dealer said.
     Dealers and the central bank agreed that continued dollar-buying by corporates, including importers, pulled down the peso to record lows.
     The central bank was initially not seen in the market after purportedly withdrawing its support for the local unit at the previous record low of 56. 35 on Friday.
     Dealers said some companies continued to hedge their future dollar requirements as the May 10 Philippine presidential election draws closer.
     Central bank deputy governor Amando Tetangco, however, said during the mid-afternoon session that fresh dollar inflows helped limit the peso's fall in morning trade.
     He attributed the peso's weakness to dollar demand particularly by oil, manufacturing, power and electronics companies.
     "OFW (overseas Filipino workers) remittances and dollar sales by exporters provided support to the peso (this morning)," he said.
     With the central bank seen again in the market, dealers said the peso is expected to trade in the range of 56.35-56.45 tomorrow.
     afxmanila@afxasia.com
 

 
Philippines' Smart seeks to acquire PLDT's 45.3 pct stake in Piltel


     MANILA (AFX-ASIA) - Smart Communications Inc is seeking consent from its creditors and guarantors to allow it to acquire the 45.3 pct interest of parent Philippine Long Distance Telephone Co (PLDT) in affiliate Pilipino Telephone Corp (Piltel), PLDT said.
     PLDT's stake in Piltel consists of 767 mln common shares and 59 mln Series K PLDT preferred shares convertible into Piltel common shares at a ratio of 170 to one.
     In a statement, PLDT said it is not, however, the intention of Smart, its profitable wholly-owned wireless unit, to merge with Piltel, nor does it intend to use Piltel as a backdoor-listing vehicle.
     Smart will allow Piltel creditors to exchange their loan exposure to Piltel either for cash - in US dollars or pesos - or for Smart's US dollar-denominated loan obligations or US dollar-denominated sovereign bonds.
     "Piltel creditors have four weeks from the date the letters of invitation (from Smart) are issued to submit their offers," PLDT said.
     However, it said Smart will only proceed with the debt transaction if at least 75 pct of Piltel's debt, by value, is exchanged either for cash, Smart debt, or sovereign bonds.
     In a separate disclosure to the stock exchange, Piltel said its board of directors has been formally informed of Smart's offer.
     Piltel said it has decided to appoint an independent advisor to advise its board of directors on the offer.
     Piltel creditors have the option of exchanging their loan exposure for cash, for up to 40 US cents for every one dollar of Piltel debt exchanged, or for Smart debt maturing in Dec 2007, Dec 2008, June 2014, or for 12-year sovereign bonds.
     Smart has allocated 20 mln usd for the cash offer.
     Piltel, the third-largest mobile phone service provider in the country, had approximately 2.9 mln subscribers as of end-2003, accounting for about 13 pct of the local market. It offers its service under the Talk 'N Text brand.
     PLDT said the successful completion of the Smart transaction with Piltel creditors will lead to the rationalization of its wireless business segment, with Smart gaining full access to Piltel's Talk 'N Text's expanding subscriber base and improving revenue streams.
     "PLDT's wireless group is expected to realize benefits from the closer operational alignment of Smart and Piltel, an increase in the share in Piltel's revenue streams and certain cash and tax savings," PLDT said.
     These positive effects will, however, be partially offset by increased interest expenses and foreign exchange exposure arising from the issuance by Smart of new debt, it said.
     Market leader Smart had more than 13 mln wireless subscribers as of January. Its net profit soared to 16.1 bln pesos in 2003, almost 10 bln more than in 2002, and boosted PLDT's net profit to 11.2 bln pesos, after provisions, nearly 400 times its year-earlier level.
     PLDT noted that the terms of the new debt to be issued by Smart have been designed to mature after Smart pays off its existing GSM loans.
     The loan terms will also not adversely affect Smart's key financial ratios, which remain comfortably within prescribed limits, PLDT added.
     Piltel's shares have risen dramatically since last year on persistent market rumors that Smart will merge with Piltel to facilitate its backdoor-listing.
     Smart has until August under its franchise to offer some of its shares to the public.
     Piltel in June 2001 completed the restructuring of approximately 41.1 bln pesos worth of debts and other claims owed to banks, trade creditors, bond-holders and preferred shareholders.
     As a result of the restructuring, which now covers 99 pct of Piltel's indebtedness, some 20.5 bln pesos of Piltel's debt has been exchanged for Piltel Series K convertible preferred shares, which were then mandatorily and immediately exchanged for PLDT convertible preferred shares.
     Another 20.5 bln pesos of debt was restructured as loans with terms of 10 to 15 years.
     The terms of the restructuring also involved PLDT giving a commitment to provide up to 150 mln usd to make up for any shortfalls in Piltel's operating cash flows in discharging its obligations to the creditors.
     (1 usd = 56.45 pesos)
     afxmanila@afxasia.com
 

 
Philippines' Petron raises fuel prices by 0.40-0.60 peso/liter


     MANILA (AFX-ASIA) - Listed Petron Corp raised the pump prices of its gasoline products by 0.60 peso per liter and kerosene by 0.40 per liter, matching the price hikes announced by its rivals on Saturday.
     Caltex Philippines Inc and a number of small fuel retailers have raised their gasoline prices for the fourth time in three months, citing higher crude costs in the international market.
     Pilipinas Shell Petroleum Corp is likely to announce similar price hikes soon.
     Caltex, a subsidiary of Chevron Texaco of the US, said diesel prices will be maintained at the current level.
     It said the price hikes were in response to continued pressure from high regional crude and product costs, coupled with the impact of a weak peso against the US dollar.
     It noted that the regional month-to-date average price of gasoline this month is almost 4.50 mln usd per barrel higher than the February average.
     "We can no longer maintain our current prices in view of the continued increase in international product and crude prices," Caltex said.
     (1 usd = 56.45 pesos)
     afxmanila@afxasia.com
 

 
SARS helped Asian effort to control tuberculosis - WHO


     MANILA (AFX-ASIA) - The outbreak of SARS in Asia boosted efforts to fight infectious diseases, particularly tuberculosis (TB), which kills 1,000 people in the Western Pacific daily, the World Health Organization (WHO) said today.
     In many countries in the region, SARS resulted in renewed attention to public health issues and, in particular, to the control of infectious diseases, WHO regional director Shigeru Omi said in a statement.
     This led to a substantial increase in resources available to address SARS and other public health threats, such as TB, he said.
     "SARS could indirectly help us fight TB, since greater resources for the surveillance and control of infectious diseases mean we can find and cure more of the 2 mln TB sufferers in our region," he said.
     The statement, which the WHO regional headquarters here released today, said TB killed 1,000 people in the Western Pacific region every day, with 5, 500 people developing the illness daily.
     The pneumonia-like SARS killed almost 800 people in 32 countries in a 2002-2003 outbreak, infecting about 8,000. There is still no cure or vaccine for the disease.
     The WHO seeks to detect at least 70 pct of the people in the region with TB and expand access to the WHO-approved "directly observed, short-course" treatment, known as DOTS.
     Many Asian countries have high rates of TB with low access to DOTS, the statement said, singling out China as facing "a major test".
     China, Cambodia, Laos, Mongolia, Papua New Guinea, the Philippines and Vietnam are among the countries with high rates of TB, it said.
     Cambodia, Mongolia, the Philippines and Vietnam have expanded the reach of the DOTS system to nearly all of their TB sufferers, it said.
     Omi warned that many cases of TB are going undetected because many of those with the disease are afraid of the stigma and the cost of treatment.
     "Thousands continue to suffer from TB without realizing that their illness is curable and that treatment will cost them nothing under the DOTS program," Omi said.
 

 
Dollar inflows limit Philippine peso fall to 56.45 in morning - Tetangco


     MANILA (AFX-ASIA) - Fresh dollar inflows helped limit the peso's fall at 56.450 to the US dollar in morning trade, a new record intraday low, central bank deputy governor Amando Tetangco said.
     He attributed the peso's weakness to dollar demand particularly by oil, manufacturing, power and electronics companies.
     "OFW (overseas Filipino workers) remittances and dollar sales by exporters provided support to the peso (this morning)," he said.
     The peso averaged 56.434 to the dollar at the lunch break.
     It opened at 56.400, already weaker than its all-time closing low of 56. 380 on Friday, after the central bank was seen to have withdrawn its support for the local unit at the previous all-time low of 56.350.
     A commercial bank dealer this morning said the central bank might decide to re-enter the market and sell dollars at 56.450.
     afxmanila@afxasia.com
 

 
Philippines' Benpres denies Maynilad deal with MWSS form of govt bailout


     MANILA (AFX-ASIA) - Benpres Holdings Corp chairman Oscar Lopez firmly denied his family, major stockholder of Benpres, had entered into a bailout deal with the government, through the Metropolitan Waterworks and Sewerage System (MWSS), for debt-saddled unit Maynilad Water Services Inc.
     "How can it be a bailout when the Lopez Group is completely writing off its equity investment of 80 mln usd? If there was a political deal with the government, how come in addition to our loss in Maynilad, Meralco's rates have remained unadjusted?" Lopez asked in a statement.
     "It is pathetic that other vested interests have taken advantage of the election campaign season by injecting politics into purely business decisions, and in the process demonizing the Lopez family."
     The government also denied any bailout deal with the Lopez family.
     About seven years after winning the concession to supply drinking water to half of metropolitan Manila, Benpres has decided to withdraw its equity participation in Maynilad, which is to be taken over by MWSS under a Maynilad reorganization agreement between them.
     Benpres currently owns 60 pct of Maynilad, while France's Suez Group holds about 40 pct.
     After the reorganization, Maynilad will be 39 pct owned by MWSS, 19.0 pct by Suez Group, 2.0 pct by creditor Metropolitan Bank and Trust Co and 4.0 pct by Maynilad employees.
     Benpres chief operating officer Angel Ong said the company had made full provision for Maynilad equity last year, and that its decision to write off this investment will no longer have an impact on the conglomerate's bottom line.
     Benpres will have residual equity of about 2 pct once all remaining advances of the company are converted into common shares, Ong said.
     Ong added Benpres and MWSS will have to withdraw all legal cases against each other once the compromise plan is approved by the court and Maynilad's creditor banks.
     Maynilad decided in late 2002 to terminate early its 25-year concession agreement with the government, after failing to win approval for rate increases, the proceeds of which were to be used to repay loans.
     Maynilad had claimed the government failed to comply with the terms of the concession agreement.
     The concession dispute went to an international arbitration panel, which asked the two parties to find an extra-judicial solution to their dispute.
     The political opposition has criticized the deal as a form of bailout by the government, which could worsen its fiscal position.
     Critics also suspected that the scrapping of the weekly show on television station ABS-CBN of a popular Filipino actor, Dolphy, who is one of opposition presidential candidate Fernando Poe Jr's biggest showbiz supporters, may have something to do with the alleged Maynilad bailout.
     They said ABS-CBN's move could be a "sweetener or bonus" that the government had sought in exchange for the Maynilad deal.
     Incumbent Gloria Arroyo is running neck-and-neck with Poe, a high school dropout who worries investors because of his lack of experience in government service.
     "Even the matter of an ABS-CBN talent like Dolphy, which is a purely show business concern, is being given political color. What a cheap political stunt," said Lopez, whose family also controls media giant ABS-CBN Broadcasting Corp and power retailer Manila Electric Company (Meralco).
     Lopez said it took them months to hammer out the agreement with MWSS and over 20 creditor-banks.
     He lamented that his family has too often been made convenient whipping boys for their participation in utilities.
     "We have too seldom been recognized for the good that we have done. We are proud to have accomplished much in Maynilad in the last six and a half years, he said.
     "We are not leaving a desolate and financially unsound company as the misinformed wish to believe, and definitely there was no mismanagement of the water utility."
     Lopez said Maynilad could have taken the course of pursuing the rehabilitation case in court that could have dragged for years. But he said this would have risked the quality of its water service delivery.
     "Instead, Maynilad agreed to reorganize to address both government and creditor issues, at the sacrifice of shareholder interest," he said.
     He said foreign exchange losses and the utility's difficulty in getting realistic tariff rates badly affected Maynilad's business.
     The write-off of shareholder equity will however eliminate Maynilad's accumulated losses and give consumers a level of protection from what would otherwise have been drastic increases in tariff rates going forward, Lopez said.
     (1 usd = 56.45 pesos)
     afxmanila@afxasia.com
 

 
Philippines' Globe Telecom opposes additional tax on text messaging


     MANILA (AFX-ASIA) - Globe Telecom Inc has joined rival Philippine Long Distance Telephone Co (PLDT) in opposing a proposal to tax short messaging services (SMS), a major source of revenues for the local wireless companies.
     Globe president and chief executive officer Gerardo Ablaza Jr said that while the company supports the government's efforts in trying to trim its budget deficit through raising more revenue, the telecom industry should be spared from any new tax measures.
     "The telecom industry has contributed to the well-being of the economy in many more ways. As it is we are already heavily taxed. In 2003 alone we paid 2-5 bln pesos in taxes," he told reporters after today's annual stockholders' meeting.
     "We should not entertain new taxes for now because voice and text services are already subject to taxes, and imposing additional taxes would be double taxation."
     He said it is the consumers that will eventually have to carry the burden of any new taxes.
     "The telecom industry is already heavily taxed. We can contribute best by continuing to grow the business (and not by paying more taxes)," Ablaza said.
     PLDT chairman Manuel Pangilinan earlier said he does not support a proposal to tax text messaging even if he was one of the top three business leaders who endorsed the recommendation to candidates in the May 10 presidential election.
     Pangilinan said he only deferred to the consensus of the majority who drafted the 2004 Presidential Business Agenda, a comprehensive list of what business leaders believe a new president should undertake once in office.
     "You can't kill the goose that lays the golden egg," Pangilinan had said.
     There are more than 22 mln cellular phone subscribers in the country sending as many as 170 mln text messages daily. Phone firms charge at least 1. 00 peso per message sent.
     Simulations by the finance department showed a 5 pct tax on text messaging should boost government revenues by 8.5 mln pesos a day or more than 3 bln pesos a year.
     "I would rather keep quiet but I am not going to support it. That was the consensus of the group," Pangilinan said.
     The proposal to tax text messaging has gained the support of the International Monetary Fund as an innovative measure to raise revenue and address the widening budget deficit.
     (1 usd = 56.45 pesos)
     afxmanila@afxasia.com
 

 
Philippines' Globe Telecom considering 5-yr 150 mln usd loan to finance capex


     MANILA (AFX-ASIA) - Globe Telecom Inc said it is preparing to take 150 mln usd in five-year loans to finance its capital expenditures this year.
     Globe chief financial officer Delfin Gonzalez said 100 mln usd will be in the form of a syndicated loan to be underwritten by Standard Chartered Bank, BNP Paribas, Sumitomo Mitsui Banking Corp.
     The loan will be drawn in the third quarter of this year, he told reporters after today's annual meeting.
     The balance of 50 mln usd will be in the form of a five-year loan from a local bank, but Gonzalez could not disclose details of this transaction.
      The company has drawn up a 2004 capital expenditure budget of 350 mln usd, of which 260 mln will be spent on new projects and the balance on programs started in 2003 and scheduled for completion this year.
     Gonzalez said Globe plans to settle up to 175 mln usd of its outstanding bonds due in 2009.
     The company has not scheduled any bond offering for this year.
     "We will get 100 mln usd from bank financing and 75 mln usd from internally-generated funds (to pay the loan)," he said, adding that Globe had raised some 3 bln pesos and 50 mln usd came from a club loan signed with Credit Lyonnaise and DBS Bank.
     (1 usd = 56.45 pesos)
     afxmanila@afxasia.com
 

 
Manila shares close weaker on Wall Street, peso plunge to record low
 

MANILA (AFX-ASIA) - Share prices closed weaker as Friday's losses on Wall Street and the peso's plunge to a record low this morning weighed on sentiment, dealers said.
     Investors also stayed on the sidelines amid a lack of positive leads and lingering concerns as the May 10 Philippine presidential elections draw near, they said.
     The composite index closed down 19.16 points, or 1.32 pct, at the day's low of 1,431.67 on volume of 509.1 mln shares worth 371.7 mln pesos. It hit a high of 1,450.90 earlier.
     Cross sales accounted for about 60 pct of the market's total turnover.
     In the broader market, losers beat gainers 31 to 25, with 43 stocks unchanged.
     The peso fell to 56.450 against the US dollar in morning trade, a record intra-day low, amid dollar-buying by corporates, including importers, which continued to hedge their future dollar requirements ahead of the May polls.
     "Sentiment is negative, following losses in the US market on Friday and the peso's continuing fall," Westlink Global Equities chairman Rommel Macapagal said.
     On Friday, the peso hit its weakest-ever closing low of 56.38 to the dollar, after the central bank was seen to have withdrawn its support for the local unit at 56.35.
     A weak peso will increase the indebtedness of companies and even the government, which is heavily reliant on foreign loans to finance its budget deficit.
     It also puts the central bank under pressure to tighten monetary policy, possibly through higher interest rates, given a build-up in inflationary pressures.
     Gomer Tan, an analyst with Regina Capital Development Corp, said the market will likely continue consolidating in the absence of positive leads, with support seen 1,420.
     China Banking Corp was top traded and up 10 pesos at 680 on cross sales involving 128,220 shares.
     Philippine Long Distance Telephone (PLDT) was down 10 at 920 on 70,940 shares. Its American Depositary Receipts retreated 0.17 usd to 16.41 in New York on Friday.
     ABS-CBN Holdings was down 0.50 at 23.
     Meralco B, available to foreign investors, was down 2.50 at 28 and Meralco A down 0.75 to 18.50, ahead of the company's announcement of its 2003 results on Wednesday.
     Analysts AFX-Asia polled expect Meralco to post a 2003 net profit before provisions of 800 mln to 1.2 bln pesos on the back of increased rates and higher electricity sales.
     The company expects to have returned to profitability in 2003, after a net loss of 2.0 bln in the previous year.
     Globe Telecom was down 5.00 at 845. The company is to hold its annual shareholders' meeting today.
     PLDT affiliate Piltel was down 0.02 at 1.74.
     Benpres Holdings was up 0.01 at 0.57 on 28.9 mln shares, extending gains after it agreed to write off its equity completely in loss-making unit Maynilad Water Services Inc.
     The stock continued to attract support amid the market's overall weakness and despite its deal with the government having been criticized by various sectors, analysts said.
     Benpres chief operating officer Angel Ong said on Friday that the company had already made full provision for its 80-mln usd equity in Maynilad last year and that its decision to write off the investment will no longer have an impact on the conglomerate's bottom line moving forward.
     Jollibee Foods was down 0.50 at 16.50.
     The all-shares index was down 8.46 points at 910.85.
     The commercial-industrial index fell 25.29 to 2,243.76.
     Property retreated 11.28 to 502.45.
     Mining rose 13.71 to 1,438.58.
     Oil was down 0.01 at 1.18.
     Banking and financial services shed 4.57 to 424.96.
     afxmanila@afxasia.com
 

 
Manila shares weaker in mixed mid-trade on Wall Street losses, weak peso


     MANILA (AFX-ASIA) - Share prices were mixed with a negative bias in mid-session, as sentiment was undermined by losses on Wall Street on Friday and the peso's plunge to record lows this morning, dealers said.
     They said investors were staying on the sidelines, while buying interest was concentrated on a few second- and third-line stocks.
     At 10.34 am, the composite index was down 8.49 points or 0.59 pct at 1, 442.34.
     In the broader market, gainers led losers 20 to 15, with 27 stocks unchanged.
     The peso fell to 56.45 so far this morning, a new record intraday low against the US dollar, amid continued dollar-buying by corporates, including importers.
     The central bank was seen staying out of the market, dealers said, adding that some companies are continuing to hedge their future dollar requirements as the May 10 presidential elections draw closer.
     The peso closed at a record low of 56.38 to the dollar on Friday, after the central bank was seen to have withdrawn its support for the local unit at 56.35.
     The shooting of the Taiwan president and vice president on the eve of presidential elections there also affected the local currency market, the central bank and currency dealers said Friday.
     Dealers said the peso may test 56.500 this week without the central bank's support, although the bank may come in to defend the local unit at 56. 45.
     "Sentiment is negative following losses in the US market last Friday and the peso's continuing fall," Westlink Global Equities chairman Rommel Macapagal said.
     He said the market may test support at 1,420, while any upside is likely capped at 1,450.
     A weak peso is bad news for companies with heavy dollar-denominated debts and for the government that has been relying heavily on foreign loans to finance its budget deficit.
     afxmanila@afxasia.com

 
STOCK ALERT - Philippines' Benpres extends gains after Maynilad exit deal


     MANILA (AFX-ASIA) - Benpres Holdings Corp was firmer in early trade, extending gains after the company agreed to write off its equity completely in loss-making unit Maynilad Water Services Inc, dealers said.
     The stock continued to attract support amid the market's overall weakness and despite its deal with the government having been criticized by various sectors, they said.
     Benpres was up 0.02 pesos at 0.58 on 12.2 mln shares.
     Dealers said Benpres' withdrawal from Maynilad will enable the Lopez family-led conglomerate to concentrate on profitible businesses such as energy and broadcasting.
     Currently Benpres owns 60 pct of Maynilad while its foreign partner, France's Suez Group, has about 40 pct.
     Benpres' chief operating officer Angel Ong said on Friday the company had already made full provision for its 80-mln usd equity in Maynilad last year, and that its decision to write off this investment will no longer have an impact on the conglomerate's bottom line moving forward.
     Benpres also owns substantial interests in ABS-CBN Broadcasting Corp, Manila Electric Co and First Philippine Holdings Corp.
     Under the deal with Benpres, regulator Metropolitan Waterworks and Sewerage System (MWSS) will take over Maynilad operations, while the Suez Group will cut its Maynilad equity participation to 19 pct.
     Maynilad creditors, including Metropolitan Bank and Trust Co, will also convert their exposure to equity in the concessionaire.
     The political opposition branded the deal as a form of a government bailout, which could worsen its fiscal position.
     (1 usd = 56.43 pesos)
     afxmanila@afxasia.com

 
Forex - Philippine peso at record low as central bank stays out of market


     MANILA (AFX-ASIA) - The peso plunged to a new all-time low against the US dollar in early trade amid continued dollar-buying by corporates, including importers, with the central bank seen staying out of the market, dealers said.
     They said some companies are continuing to hedge their future dollar requirements as the May 10 presidential elections draw closer.
     The peso fell to 56.430 to the dollar after opening at 56.400, weaker than Friday's close of 56.380, its previous record low. At 9.20 am, the local unit averaged 56.425 on volume of 3.0 mln usd.
     Dealers saw the central bank withdrawing its support for the peso at the previous level of 56.350 to the dollar on Friday.
     "There's legitimate corporate demand (for dollars) as of now. Importers are in the market apparently to beef up their dollar reserves ahead of the May elections," a commercial bank dealer said.
     The dealer said the peso may test 56.500 this week without the central bank's support for the peso.
     But the central bank may decide to come in to defend the local unit at 56. 45, he said.
     afxmanila@afxasia.com

 
Philippine exchange suspends Philweb bonus warrants trading from today


     MANILA (AFX-ASIA) - Philweb Corp's bonus warrants are suspended from trading from today, as the Philippine Stock Exchange said it is awaiting the company's clarification on the expiration date of the warrants.
     afxmanila@afxasia.com

 
Philippines' MWSS to reduce bond issue after Maynilad takeover deal - report


     MANILA (AFX-ASIA) - Regulator Metropolitan Waterworks and Sewerage System (MWSS) will cut its planned bond offering of 200 mln usd after reaching a deal with Benpres Holdings Corp to take over Maynilad Water Services Inc, BusinessWorld newspaper reported.
     The report quoted MWSS administrator Orlando Honrade as saying that the bond issue will be reduced as the regulator can now draw down from Maynilad's performance bond.
     The MWSS planned to issue bonds to finance on-going projects.
     The report did not say how much the reduction in bond issue will be.
     Benpres, the holding firm of the Lopez family, has reached an agreement with MWSS and its creditors to write off its equity in financially-troubled Maynilad.
     Under the deal, the government-run MWSS will take over Maynilad, while loans to creditors will be converted into Maynilad equity.
     It also allows a substantial immediate draw of 50 mln usd by MWSS against the performance bond that Maynilad put up when it won the concession in 1997.
     The agreement followed months of a concession dispute between MWSS and Maynilad, which in 1992 decided to terminate early its 25-year concession agreement with the government, after failing to win approval for rate increases.
     The proceeds from the rate hike proposal were to be used to repay loans.
     Maynilad, which supplies drinking water to half of metropolitan Manila, had claimed the government failed to comply with the terms of the concession agreement when it decided to seek the early termination.
     The Maynilad-MWSS deal has been heavily criticized, with the political opposition branding it as a form of a bailout for Maynilad, which could worsen the government's fiscal position.
     afxmanila@afxasia.com

 
Philippine oil firms raise gasoline prices by 0.60 pesos/liter - report


     MANILA (AFX-ASIA) - Caltex Philippines Inc and a number of small fuel retailers have raised their gasoline prices - for the fourth time in three months - by 0.60 pesos per liter, BusinessWorld newspaper reported.
     The paper said the Caltex price hike took effect 6 am Saturday. The company also raised kerosene prices by 0.40 pesos per liter.
     Total (Philippines) Corp, Eastern Petroleum Corp, Unioil Philippines Corp, and Seaoil Philippines Corp have also jacked up their pump prices, the report said.
     The report said listed Petron Corp and major rival Pilipinas Shell Petroleum Corp have yet to announce if they will match the Caltex price hikes.
     (1 usd = 56.38 pesos)
     afxmanila@afxasia.com

 
Manila shares outlook - Mixed to lower on consolidation, weak peso


     MANILA (AFX-ASIA) - Share prices are expected to open mixed to lower with the market continuing to consolidate amid a lack of fresh positive leads locally, dealers said.
     Wall Street's losses and the peso's plunge to a new record low on Friday are likely to weigh on sentiment, they added.
     The composite index rose 2.77 points, or 0.19 pct, to 1,450.83 on Friday.
     The peso closed at a new record low of 56.38 against the US dollar on Friday, with the central bank blaming the weakening on dollar short-covering by banks and their clients ahead of the weekend and in reaction to news of the shooting of Taiwan's President Chen Shui-bian.
     The central bank was seen to have withdrawn its support for the local unit at the previous all-time low of 56.35, while banks covered their short dollar positions amid concerns over global terrorism and political uncertainties at home in the run-up to the May 10 presidential elections.
     A weak peso is bad news for companies with heavy dollar-denominated debts and for the government that has been relying heavily on foreign loans to finance its budget deficit.
     "The market's recovery (last week) after breaching its important support level of 1,430 is a welcome reprieve for investors. However, we remain worried about the near term prospects and believe that the period of consolidation is probably not over and may continue until at least the first-quarter earnings reporting period," said Jose Vistan Jr, research director at AB Capital Securities.
     He said concerns about the local political and economic outlook, rising interest rates and inflationary pressure remain.
     "There's been a big reduction in risk appetite over the past few months as the market has already discounted a lot of good news last year and this provides limited upside ahead," he added.
     Vistan added there is nothing fundamentally new to drive gains and that "there are several fresh factors making the downside the path of least resistance."
     "Market activity is expected to remain anemic. In the light of the current market conditions, investors are advised to act conservatively and take defensive positions," he said.
     Jonathan Ravelas, market strategist at Banco de Oro Universal Bank said Friday's composite index close "continues to highlight the near-term bearish scenario."
     Immediate support is at 1,410 and resistance at 1,470, he said.
     afxmanila@afxasia.com

 
Philippine banks agree to waive deposit secrecy rule - report


     MANILA (AFX-ASIA) - The central bank and the Bankers Association of the Philippines (BAP) have agreed to seek a waiver on secrecy of bank deposits to enable data-sharing among them for the operation of a centralized credit information bureau, the Philippine Daily Inquirer reported.
     The report quoted central bank governor Rafael Buenaventura as saying that the BAP, which is an organization of top officials of the country's commercial banks, had accepted the central bank's proposal to participate in the data gathering and processing.
     Under the plan, the banks will provide data to the central bank with both "positive" and "negative" list of borrowers.
     The central bank will then relay the processed information to the credit bureau.
     afxmanila@afxasia.com

 
Philippines' JG Summit sees flat 2003 net profit on higher expenses


     MANILA (AFX-ASIA) - JG Summit Holdings Corp, the Gokongwei family's holding firm, likely kept its net profit in 2003 flat at 2.3-2.4 bln pesos as higher expenses in telecom and airlines businesses weighed on earnings, a company official said.
     The company booked a net profit of 2.36 bln pesos in 2002.
     The official, who did not want to be identified, said that earnings before interest, taxes, depreciation and amortization reached about 14 bln pesos.
     The company, which also has interests in food manufacturing, textile, petrochemicals, property development and shopping malls, aims to book a net profit of 3.0 bln pesos this year, the official said.
     The official said that most of the major businesses managed to contribute to the profits last year, although increased spending to expand Digital Telecommunications Philippines Inc (Digitel) and airline firm Cebu Pacific pared down the gains from the other businesses.
     "I think income last year reached about 2.3 or 2.4 bln pesos. Most of the businesses contributed to the profit," the official said.
     Besides increased expenditures, the company was also hit by rising interest rates and a depreciating peso, the official noted.
     Digitel posted a net loss of 722.8 mln pesos from January to September as revenues from the fixed-line, data and Internet services dropped.
     James Go, chairman of JG Summit said that Digitel would spend 250 mln usd to double the network capacity of Sun Cellular, its wireless brand, using funds to be raised from borrowings.
     Sun Cellular is targeting to grow its subscriber base to 2 mln this year from about 700,000 in 2003, its first year of operations. The phone subsidiary is likely to stay in the red this year but officials hope that it would at least break even in 2005.
     Cebu Pacific also suffered a net loss of 29.6 mln in the first three quarters of last year, reversing a 234 mln profit in the previous year, as travel slowed down due to the SARS scare.
     The airline plans to fly to China on a regular basis and establish a Manila-Japan route as part of its regional expansion. It currently flies to Hong Kong daily and to Seoul twice weekly from Manila and Cebu.
     It also offers chartered flights to Xiamen and Guangzhou in China.
     JG Summit will issue 800 mln pesos worth of preferred shares to help finance an estimated 20 bln pesos in capital expenditures for the year, which are mostly intended for Sun Cellular's network upgrading to be able to compete more aggressively with market leaders Smart Communications Inc and Globe Telecom.
     The company also plans to expand the facility of its food manufacturing arm and to construct new malls.
     Universal Robina Corp will start the construction of its 10 mln usd food manufacturing plant in Vietnam later this year and will start selling its snack foods in that country next year.
     The company also plans to expand its 24-hour convenience store Ministop to at least 150 stores this year from a total of 10 stores as of February.
     (1 usd = 56.38 pesos)
     afxmanila@afxasia.com

 
Philippines' GMA Network 2003 net profit 1.05 bln pesos, up 162 pct


     MANILA (AFX-ASIA) - GMA Network Inc, the main rival of listed ABS-CBN Broadcasting Corp, said its net profit rose 162 pct to 1.05 bln pesos in 2003 from the previous year's 402 mln, as improved ratings performance and the launching of new programs boosted advertising revenues.
     GMA matched the 1.01 bln net profit that ABS-CBN posted in 2003.
     GMA, which has long been planning to list its shares on the local bourse, said gross revenues rose 48 pct to 6.24 bln pesos in 2003.
     Its senior vice president for corporate services Felipe Yalong said the company expects net profit this year to rise 50 pct from 2003 on growth in revenues from both television and radio businesses as well as from its international operations.
     (1 usd = 56.38 pesos)
     afxmanila@afxasia.com

 
Philippines' ABS-CBN Global to delay Singapore listing to 2006


     MANILA (AFX-ASIA) - ABS-CBN Broadcasting Corp said it will delay the planned listing of its offshore subsidiary ABS-CBN Global Ltd on the Singapore stock exchange by one year to 2006 pending completion of required documents.
     ABS-CBN Global manages the media giant's international cable services, which cover North America, the Middle East, Asia and Europe.
     At the end of 2003, ABS-CBN Global had a total of 1.3 mln subscribers, up 24 pct from the year-ago level, mostly in North America.
     ABS-CBN chief financial officer Randolph Estrellado said ABS-CBN Global is one of the company's profitable subsidiaries, with net sales of 2.37 bln pesos in 2003, up 24 pct from the previous year.
     (1 usd = 56.38 pesos)
     afxmanila@afxasia.com


 

 


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