The main index continues its rally for the 2nd day, after consecutive days of falling early this week and last, closing 33 points higher at 4,070, off from more than a percent intraday high earlier this morning. Yesterday PSE inched up by merely 0.12% to close at 4,037. This follows the rally that was seen in the US after the Fed Beige Book gave a positive tone to the recovery that’s underway in the US. Most Asian markets are also up today.
On the currencies front, the peso lost ground against the dollar after deficit in the US reported to have declined from last year and December figures met expectations. A dollar currently buys 44.1350 pesos, up 0.22 or half a percent from yesterday’s close of 43.9150.
Exports for the month of November slowed for the Philippes, rising by 11.2% to $4.14bn compared to the 27.4% increase seen in October. Despite the slowdown, full year target of $43.1bn was surpassed as aggregate exports for 11 months reached $47.22bn, higher by 34.5% from previous year.
The decline was attributed to seasonal changes, given that the months of November and December are the sale season for many Western countries. By then, most have already been exported.
In a telephone interview, National Economic and Development Authority (NEDA) Deputy Director-General Augusto B. Santos said, “Our performance is good despite the perceptively weak global economic recovery [last year].”
“Given the good showing, it (exports growth) may exceed 15% for 2011; in that case we may have to review the macroeconomic targets of the government,” he added.
Meanwhile, despite the economic openness of the country to trade and business, its ranking in the annual Index of Economic Freedom conducted by The Heritage Foundation in Washington, DC dropped from 109 out of 179 to 115th this year. Based on 10 areas, business, trade, monetary and fiscal conditions, investment, financial, property rights, freedom from corruption, and labor, the country scored 56.2, below the global average of 59.7
Scored of 0 to 49.9 implies repressed, 50-59.9 as mostly unfree, the next 10 as moderately free, 70-79.9 as mostly free and the last range as free. Hong Kong and Singapore placed highest while North Korea stood at the bottom with a measly 1.0.
Some excerpt from the report:
“The absence of entrepreneurial dynamism, however, still makes long-term economic development a difficult task.”
“Deeper institutional reforms are required in four interrelated areas: business freedom, investment freedom, property rights and freedom from corruption.”
“The government imposes formal and non-formal barriers to foreign investment, and foreign remittances do little to promote sustainable growth. The judicial system remains weak and vulnerable to political influence and corruption.”
In most areas, the country scored above average but the big gap between averages and the scores for investement freedom and property rights brought us lower than the global overall average.
More on this here.
Other headlines: FDI turned negative in October for the country, seeing a net outlflow of $23m vs. the $66m inflow in September. Net FDI inflow for January to October decline 36.5% to $1.07bn.
Government seeks more reliable data for revenue tracking – The Dept of Finance (DoF) plans to form next year “a fiscal unit” that will focus on acquiring “third party” information to be checked against the records of its two main revenue-collecting bureaus, Secretary Cesar V. Purisima told a think tank in an interview.
More stocks, peso gains seen – Stocks and the local currency are expected to continue posting gains this year as investors seeking high yields favor assets in emerging market economies like the Philippines, research firm GlobalSource Partners, Inc. said in its latest report.
PSBank launches ‘Prepaid MasterCard’ debit card – Cardholders of PSBank MasterCard, a debit card that requires no maintaining balance, can use it to withdraw cash from automated teller machines (ATMs), make purchases in all MasterCard-affiliated establishments, shop online, or transfer money.