Philippine stockindexbackat 4,800level

MANILA, PhilippinesThe local stock index climbed back to the 4,800 level on Wednesday after the previous days profit-taking as risk appetite was boosted by signs of progress in the debt relief deal being worked out for Greece. The main-share Philippine Stock Exchange index surged by 49.82 points, or 1 percent, to close at 4,805.80, promptly bouncing from Tuesdays profit-taking. We participated with the region but we also received (a) kick from SM, said Jose Mari Lacson, head of research at Campos Lanuza & Co. Sentiment was buoyant across the region on news that private creditors were making progress on debt discussions with Greece even as Athens itself was besieged with public protests against cuts in jobs and spending. All counters were up but holding firms outperformed other sub-indices with a 1.9-percent gain. Trading on the property counter (up by 1.16 percent) was likewise upbeat led by tycoon Henry Sys SM Prime Holdings which surged by 4.7 percent to P15.60. Shares of Sys holding firm, SM Investments, also spiked by 2.4 percent to P692 per share. Banco de Oro, Manila Water, PLDT, JG Summit, EDC, AGI, Cebu Air, AEV, ALI, BPI, Semirara and Ayala Corp. also contributed to the PSEis rise. The non-index stocks that surged in heavy volume were Security Bank, Lepanto A (open only to local investors) and NiHao. On the other hand, shares of Metrobank and Megaworld declined. We Recommend  Biz Buzz: CDC shake-up  Filipino businessmen are not having fun, research says  PS Bank asks SC to stop subpoena of Corona bank records  Quake kills 52 in Negros Oriental  Lame ducks From Around The Web  Prophetic Economist Warns, Its Curtains for the US. Prepare. (Moneynews)  China Buys Up Saudi, Russian Oil to Squeeze Iran (CNBC)  How to Avoid Taking Profits Too Quickly and Staying with Losing Trades Too Long(DailyFX)  New 2012 Honda Civic pictures (Auto Express)  9 Ways to Start Earning Extra Money on the Side (MoneyNing)

Peso deposits up 7.3% to P3.9T

By Lawrence Agcaoili (The Philippine Star) Updated February 08, 2012 12:00 AM Comments (0)

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) reported yesterday that total pesodenominated deposits in Philippine banks increased by 7.3 percent as of end-November last year as more Filipinos continued to save in the formal banking sector. In a report, the BSP said bank deposits amounted to P3.9 trillion as of end-November last year or about P300 billion higher than the end-November 2010 level of P3.6 trillion. The continued growth in deposits reflected depositors sustained confidence in the banking system, BSP stated in the report.

The central bank said savings deposit registered an 8.6-percent growth and continued to account for nearly half of the funding base while demand deposits jumped 12.3 percent and time deposits inched up by one percent. Savings and time deposits remained the primary sources of funds for banks, it added. Monetary authorities last week decided to slash the reserve requirement ratio for banks by three percentage points effective April 6 to free up at least P100 billion worth of funds to the financial system and help boost the countrys economy. The central bank decided to reduce the reserve requirement ratio by three percentage points to 18 percent from the current level of 21 percent to help offset the impact on the intermediation costs of banks. The reforms involved three operational adjustments in the central banks reserve requirement policy last Thursday to increase the effectiveness of reserve requirement as a monetary policy tool, simplify its implementation, and improve the monitoring of banks compliance. These include the unification of the existing statutory reserve requirement and liquidity reserve requirement into a single set of reserve requirement; the non-remuneration of the unified reserve requirement; and the exclusion of vault cash and demand deposits as eligible forms of reserve requirement compliance.

Monetary Policy To Support Growth

February 7, 2012, 11:34pm

HONG KONG (Dow Jones) Supportive monetary policy can boost domestic demand and confidence in the economy, Bangko Sentral ng Pilipinas Governor Amando Tetangco said, noting the global economy seems to be tipping towards a further slowdown. In written responses to questions from Dow Jones Newswires, Tetangco said average annual inflation rates in the Philippines were likely to fall within the lower half of the Bangko Sentral ng Pilipinas' 3%-5% target range through the end of 2013. However, he noted there were also upside risks to inflation, in particular linked to sustained capital inflows and volatility in global oil prices. The National Statistics Office disclosed yesterday that inflation decelerated to 13 month low of 3.9 percent in January compared to 4.2 percent the month before "Amidst continued uncertainty in the global economic environment, the Philippine economy is likely to face external headwinds in 2012," Tetangco said. "While the strength of domestic spending can help offset the weaknesses in external demand, a supportive monetary policy stance can help sustain domestic demand and bolster confidence in the economy." The comments from Tetangco may indicate he is inclining towards additional monetary easing. In January, the Philippine central bank cut its overnight rate by 25 basis points to 4.25%, having twice raised it in the first half of 2011 as part of a "normalization" process. From 2008, the BSP slashed rates by a total of 200 basis points to support the economy amid the global financial crisis.

The central bank announced Friday it would cut the banks' reserve requirement ratio by three percentage points to 18%, effective April 6, to offset various operational adjustments. Tetangco said the changes were aimed at simplifying the central bank's reserve requirement regime and ensuring there was adequate liquidity to support economic growth, "especially given the prevailing weak global economic conditions." The governor also said he expected the Philippines to score a rating upgrade from a major credit rating agency this year. Fitch Ratings rates the Southeast Asian nation BB+, while Moody's Investors Service rates it Ba2, both with stable outlooks. Standard & Poor's Ratings Services ranks it BB and raised the outlook on the rating to positive in December. "The fiscal space plus the monetary policy space that the current manageable inflation outlook affords us should hopefully translate to sustained and higher growth," Tetangco said.

Hopes of deal for Greece buoy Asian currencies

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SINGAPORE -- Most emerging Asian currencies rose on Wednesday, driven by capital inflows and demand from offshore funds on hopes that Greece was near a deal that would cut its debt, while local investors remained cautious about intervention.
Taiwans central bank was buying dollars to cap its currencys gains, while Malaysias central bank may also be in the market, dealers said. This comes at a time when many emerging Asian currencies are approaching major resistance levels. The outlook for regional units remains firm, given improved risk appetite, and are expected to break the resistance levels if Greece succeeds in securing a 130-billion ($170 billion) rescue fund, analysts and dealers said. Even though Greece is seen close to an agreement, its politicians have yet to accept to painful austerity measures to receive the second bailout package. They have delayed, once more, the deal deadline to Wednesday. Meanwhile, Asian central banks are also likely to continue to intervene and slow the rise in their currencies, they added. The strength in Asia ex-Japan (currencies) is impressive considering the state of the global economy, though momentum seems to be improving, said Sacha Tihanyi, senior currency strategist for Scotia Capital in Hong Kong. Thus, intervention is to be expected, Mr. Tihanyi said.

I just cant get the Eurozone out of my head. I think one should trade with the trend, but remain vigilant as it could turn should Greece give us negative headlines, he added. Most emerging Asian currencies have risen this year, thanks to resumed inflows amid high liquidity and growing hopes that the euro zones debt crisis is easing. The Taiwan dollar rose on Wednesday on stock inflows, while the central bank and importers limited its rises, dealers said. The won also gained on demand from some offshore funds, but local speculators did not chase it further on caution over possible intervention. The South Korean currency also has a firm resistance at 1,110 per dollar, near a 200-day moving average. Everybody is reluctant to sell dollars here. So, even though dollar/won is seen sliding more, but it would be very slow, said a foreign bank dealer in Seoul. Still some dealers saw low possibility of intervention as the country remains wary of inflation. The ringgit hit a five-month high against the dollar on bids by offshore names, while domestic investors sold on rallies. The Malaysian currency strengthened to as firm as 2.9990 versus the greenback, the first time to breach the 3.0000 level since Sept 9. Some dealers suspected the central bank of buying dollars to defend the 3.00 line. -- Reuters

PesogoesupasinvestorsbuyPH stocks
By: Michelle V. Remo Philippine Daily Inquirer
8:43 pm | Thursday, February 9th, 2012 0shareNew 0

MANILA, PhilippinesThe peso slightly inched up on Thursday even as other key Asian currencies dropped following the failure of concerned Greek officials to agree on a debt-easing measure required for the country to secure a bailout fund. The local currency closed at 42.18 against the US dollar, up by 3.5 centavos from Wednesdays finish of 42.215:$1. Intraday high hit 42.08:$1, while intraday low settled at 42.33:$1. Volume of trade amounted to $1.518 billion from $1.33 billion previously. Foreign exchange markets in Asia saw some currencies declining after investors were disappointed by reports that concerned officials failed to agree on proposed pension cuts in Greece. An agreement is needed for the country to secure financial assistance to help address Greeces debt woes. The peso, nonetheless, appreciated slightly as some yield-seeking investors bought Philippine stocks amid a still relatively favorable outlook on emerging Asian economies, traders said. The Philippines grew by 3.6 percent in 2011, slower than the 7.6 percent registered the previous year but was faster than the growth rates of many advanced economies, including the United States and those from the Euro zone that grew by less than 2 percent. The Philippine government said the domestic economy would grow by a faster rate of between 5 and 6 percent this year.

Foreign buying drives PSE index up 49.8 pts

By AP (The Philippine Star) Updated February 09, 2012 12:00 AM Comments (0)

MANILA, Philippines - Local share prices got a boost from foreign funds, lifting the main Philippine StockExchange index (PSEi) more than one percent from Tuesdays level, analysts said. The PSEi gained 49.82 points or 1.04 percent to close at 4,805.80. More than nine billion shares valued at P14.02 billion changed hands in yesterdays session. Gainers led losers 121 to 48 with 41 issues closing unchanged. Fund managers are not simply going into emerging markets because interest rates are low in the US and in Europe, they are also looking at growth premiums, said Mark Angeles, head of research at First Metro Securities Brokerage Corp. Once the US monetary authorities go into QE (quantitative easing) to stimulate the US economy more funds are expected to flow toward emerging markets, Angeles noted.

The big caps are todays market leaders, and the approach is to buy on dips with the PSEi gunning for 5,000, he added. Across Asia, stocks were also up yesterday as Japans powerhouse exporters got a boost from hopes of

new moves to weaken the yen while a deal appeared within reach between Greece and its creditors to cut the countrys massive debt load. The Nikkei 225 index in Tokyo was 0.8 percent higher to 8,990.58 after briefly hitting 9,015.59, a threemonth intraday high. South Koreas Kospi rose 0.9 percent to 1,999.80 and Hong Kongs Hang Seng gained 0.6 percent to 21,023.30. Australias S&P/ASX 200 added 0.4 percent to 4,290.70. Benchmarks in Singapore, Taiwan, Indonesia, New Zealand, India and mainland China also rose. Greece has been kept solvent for the last two years by euro110 billion ($145 billion) in international rescue loans. But the money was not enough and a second loan is urgently needed to avert bankruptcy. International lenders, however, have refused to approve more aid unless Greece learns to live within its means and implements a strict austerity program.

Thailand And The Philippines: A Study In Contrasts In Dev't

Bottomline
By MICHAEL ALAN HAMLIN February 8, 2012, 3:22am

MANILA, Philippines In 1985, per capita gross domestic product (GDP) for Thailand and the Philippines was just under US$1,000. Growth in Thailand was set to take off, and it did, primarily fueled by foreign direct investment (FDI) in manufacturing. Growth in the Philippines, in contrast, was set to stagnate, with the economy limping along thanks to heavy reliance on the export of people, who send home billions of dollars annually. In 2010 Thailands per capita GDP was approaching US$3,000 while the Philippines was threatening to pull per capita GDP back up to about US$1,100, matching record per capita GDP in the early 1980s when the population was less than half as big. Since 1985, both countries have experienced successive political crises, repeated natural calamities, and the impact of two global financial crises. Aside from population growth the only difference is this: Thailand has attracted billions of dollars more in job- and revenue-generating FDI nevertheless. During the 2000s, Thailand took in more than US$71 billion in FDI according to the Asian Development Bank (ADB) while the Philippines absorbed US$18 billion, or just a quarter of the investment dollars that went to Thailand. As a result, manufacturing which requires high levels of development FDI in the Philippines contributes about half as much to the economy as it does in Thailand. From 1980 when FDI into Thailand first jumped dramaticallyto 2009, labor productivity in manufacturing grew better than 90%. In that same period, in the Philippines manufacturing productivity contracted 3.8%. Although services accounts for almost 70% of Philippine GDP compared to less than 45% for Thailand, labor productivity in services grew just 25% from 1980 to 2009 while labor productivity grew almost 80% in Thailand during that same period. Thailand was pulling away competitively from the Philippines. Growth in exports for both countries contracted at the onset of the 2009 global financial crisis but recovered in months. However, in January last year growth in Philippine exports began to fall precipitously, while growth in exports from Thailand remained steady. In mid-2011 exports from Thailand were up year-on-year over 20%, while exports from the Philippines were flat. By September, growth in Philippine exports was negative.

Part of the reason is the Philippines dependence on semiconductors and electronics, which account for close to 70% of exports, and its failure to diversify export markets. Thailand exports a much broader array of manufactured products to more markets. The Philippines has continued to enjoy robust growth in IT-BPO, which grew approximately 20% last year, but ADB economist Norio Usui suggests the Philippines needs two economic legs to stand on to grow significantly. The contrasts presented by Dr. Usui at the recent Philippine Automotive Manufacturing Summit show that Thailand has succeeded since the mid-1980s in becoming both globally competitive and resilient. Its resiliency is largely the result of Thailands success in diversifying its economy. Over 90% of the Thai economy is accounted for in roughly equal amounts by manufacturing and services, with agriculture making up the difference. While this diversity ensures that Thailand is not overly reliant on one sector, the more significant impact is its capability to generate economic value from two economic legs, unlike the Philippines. The reasons for the Philippines inability to match industry-bound FDI are myriad, ranging from the cost of energy to inadequate investment incentives and a highly regulated business environment that exploited investors instead of nurturing them. The economic and employment cost of that failure is about to hit hard. According to officials of the Philippine Automotive Competitiveness Council, Inc. (PACCI), the Philippines is at a crossroads. At stake are some 410,000 direct and indirect jobs, according to University of Asia & the Pacific senior fellow Thomas Aquino. Many of those jobs are vocational, and dont require the educational credentials that work in the IT-BPO sector does. Direct employees contribute about P325 million in income taxes annually. The industry pays about P2 billion in duties and business taxes every year. In 2010, vehicle and parts manufacturers exported US$3.2 billion in vehicles and parts, despite a decline in locally manufactured vehicles as a percentage of new vehicles registered that year. Dr. Aquino told reporters last week that locally manufactured vehicles fell to 44% of new vehicles in 2010, down from 55% in 2006 and 96% in 2000. PACCI members which represent 90% of the vehicle and parts manufacturers in the Philippines believe that the Philippine auto industry can compete globally under the right conditions, and that recent supply chain interruptions demonstrate the importance to the global industry of an alternative manufacturing hub within Southeast Asia. Department of Trade and Industry Secretary Gregory L. Domingo agrees. Last month, Mr. Domingo said his department will recraft the Motor Vehicle Development Program, signaling that two decades of neglect of the industry is coming to an end. Thailands example shows thats a good thing. And that the alternative is a senseless one.

Peso continues strengthening, tracks euro

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THE PESO sustained its upward momentum against the dollar yesterday, buoyed by market players bias towards risky assets amid expectations Greeces would clinch its second bailout deal.

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The local currency gained 19.5 centavos to finish at P42.215 to the dollar yesterday against its P42.41 close last Tuesday. The peso was last seen this strong on Sept. 7 last year when it closed at P42.25 to the dollar.

Peso strengthens to P42.33:$1

Peso at five-month high It sank to its weakest level at P42.38 and hit its strongest at P42.21 during trading yesterday. The peso further strengthened against the dollar yesterday as it tracked the euros movement against the dollar, which also gained yesterday as investors continued to price in the possibility of that a second bailout package for Greece would be achieved, a trader said in a phone interview yesterday. The euro appreciated to $1.32 yesterday against its $1.3134 close last Tuesday. Other Asian currencies also firmed up against the dollar yesterday, the trader noted. In a separate phone interview, another trader said: Moodys recent statement that the local banking industry is resilient and least exposed to euro zone risks lifted market players sentiment that the country is likely to receive a credit rating upgrade anytime soon. Peso to take cues from Euro developments

Peso opens at P42.50:$1

Peso sustains momentum on hopes of debt deal in Europe

Credit rater Moodys Investors Service in a report dated Feb. 6 said the Philippine banking industry, along with that of Indonesia, are the least exposed to a sudden euro zone slump. As a result, he said, both the peso and the local bourse gained yesterday. The Philippine Stock Exchange index yesterday climbed by 1.05% or 49.82 points to close at 4,805.80. Both traders said the peso is seen to trade within the P42-42.40 per dollar band today. -- ARRG