PHILIPPINE STOCK MARKET RECOVERS, UP BY 1.20% DUE TO BARGAIN HUNTING
MANILA, March 3, 2005 (STAR) The Philippine Stock Market recovered from its dip yesterday, the index closing higher Thursday by 24.85 points to 2,093.27.
However, the All-Shares market didn't reciprocate, down by 2.43 points to 1,188.90.
Most of the subsectors registered in the green except for oil, which closed lower by 1.28 percent.
Volume traded was at 2.85 billion worth 2.05 billion pesos. Gainers barely beat losers, 56 against 45, with 55 issues unchanged.
Meanwhile, at the foreign exchange market, the local currency averaged 54.84 to the US dollar, down from Wednesday's close of 54.78.
BSP sees Feb inflation hitting 8.3% to 8.8% By Des Ferriols The Philippine Star 03/03/2005
The Bangko Sentral ng Pilipinas (BSP) said the February inflation rate is expected to hit 8.3 percent to 8.8 percent as the unabated increase in global oil prices continued to create an upward pressure on domestic prices.
BSP officials said there are no indications that the inflation rate would hit double-digit levels this year but they expect prices to continue to accelerate before slowing down later in the year.
BSP Deputy Governor Amando M. Tetangco Jr. told reporters yesterday that the inflation rate for February is likely to be slightly higher than the 8.4-percent level recorded in January.
"Our simulations are still showing a hump-shaped curve for the inflation rate this year," Tetangco said. "We expect the rate to go up first before going down although we donít see double-digit rates in any of our projections."
However, Tetangco said the BSP was still concerned over the movements in oil prices in the world market and the potential impact on domestic wages, transport fares and ultimately, inflation.
"Oil prices are the only real threat we see right now," he said. "If that moves up on a sustained basis, it will have cascading effects domestically."
In the midst of debates over the proposed increase in the value added tax rate, transport groups have started demanding the increase in transport fares and labor groups are expected to follow with the lobby to increase wages.
"If transport fares are increased, that has a direct impact on the inflation rate, we will have to revisit our position especially if we see second-round effects," Tetangco explained.
Thus far, Tetangco said the BSP has managed to hold off any moves to tighten its monetary policies since inflationary pressures have remained on the supply side.
"The cause of inflation is not a monetary phenomenon so the BSP has not taken any steps to tighten up," he said. Banks are claiming there is excess liquidity in the market but Tetangco said much of the excess funds are parked with the BSP anyway.
"The excess liquidity they are talking about is not in the system causing inflationary pressure," he said. "These funds are parked with the BSP so there is no need to mop it up. Itís already mopped up."
Meanwhile, Tetangco said the BSP is scheduled to meet with the Japan Credit Rating Agency (JRCA) to discuss the progress in the Arroyo administrationís policy reforms in time for the review of the countryís credit rating.
JRCA is one of only two credit rating agencies that still classified the Philippines as investment-grade. The other agency is also Japanese, the Ratings & Investments Inc.
Both credit rating agencies, however, has put the Philippines on review for a possible downgrade, giving the country a "negative" outlook.
Reported by: Sol Jose Vanzi
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