MANILA, November 10, 2005
 (STAR) By Rica D. Delfinado - Local stocks soared yesterday to their highest level in nearly eight months as foreign investors gobbled up blue chips on the back of the country’s improving economic outlook.

The 30-company Philippine Stock Exchange (PSE) composite index surged by 50.37 points, or 2.5 percent, to settle at 2,097.30, its highest close since March 17, when it ended at 2,100.11 points.

The index has risen 15 percent so far this year, making it the best performer in Southeast Asia.

"There’s improved sentiment now in the market, with the political noise set aside as investors focus on corporate earnings and the improving economic outlook," BPI Securities senior manager Roberto Cano said.

President Arroyo survived an impeachment attempt in Congress in September, but investors were concerned she may not have the political will to see through the fiscal reforms needed to balance the budget.

But last week’s implementation of the long-delayed expanded value added tax law (EVAT) – the government’s most important revenue measure– put such concerns to rest, analysts said.

Analysts also attributed the implementation of the EVAT to the continued strengthening of the peso against the dollar. The peso gained three percent against the dollar in the past month, hitting a high of 54.53 to a dollar in midday trading on Tuesday.

At yesterday’s trading at the Philippine Dealing System (PDS), the peso weakened by nine centavos to close at 54.740 to $1 on technical correction.

Analysts expect the peso to settle at 54 to $1 by yearend on the back of strong remittances from overseas Filipino contract workers and bright economic outlook.

"Investors are getting encouraged by the corporate numbers and are optimistic about companies such as "Phillipine Long Distance Telephone Co. (PLDT) and Petron," said Manila-based Rico Gomez, who helps manage a fund of $1 billion at Rizal Commercial Banking Corp.’s trust department.

PLDT, the nation’s biggest company by market value, rose P50, or 2.8 percent, to a record P1,830.

The company reported yesterday that third-quarter profit increased by a greater-than-expected 24 percent as cost controls helped make up for sluggish sales.

PLDT chairman Manuel V. Pangilinan said after the market closed yesterday the company may beat its P29- billion profit forecast ($530 million) for this year by P1 billion.

Last year’s profit was P25 billion. PLDT accounted for almost a quarter of the main stock index’s advance yesterday.

Equitable PCI Bank, the nation’s third-largest lender by assets, and Petron Corp., the biggest oil refiner, gained as investors awaited their third-quarter earnings reports. Value-added taxes The composite index has risen seven percent so far this month, the third-best performer in the world according to Bloomberg data, on expectations the government will cut debt levels after introducing new value-added taxes on gasoline and electricity.

The government is scheduled to raise the value-added tax rate to 12 percent from 10 percent in January.

"There is a strong anticipation that the Philippine macro- economic front will improve because of the implementation of the tax reform,’’ said Grace Cerdenia, head of research at in Manila.

The government is counting on the tax to meet a 2008 target of ending eight years of deficits that have inflated its debt to P3.89 trillion. A third of the government’s budget is spent paying interest on debt.

Expectations of strong corporate results also boosted First Philippine Holdings, which rose 11 percent to P49.50 and Petron Corp, which ended up 6.7 percent to P4.

Also active was Globe Telecom, up 2.1 percent at P730, despite reporting earlier yesterday that net profit in the first nine months had slipped from the same period last year.

Traders said investors opted to focus on the 87 percent improvement in Globe’s third-quarter net profit on higher revenue and lower costs.

"From a quarter-on-quarter perspective, Globe has shown some improvements and that’s giving some people comfort,’’’s Cerdenia said.

Equitable PCI Bank added P2 or four percent, to P52.50.

Banco de Oro, which owns 25 percent of Equitable, gained P1.50, or 4.5 percent, to P35.

Shares worth P1.76 billion were traded, 55 percent more than the six-month average and the highest since Aug. 12.

Gainers edged losers, 88 to 10, with 40 stocks unchanged.

Hail to the Chef! SPY BIZ By S.A. Maguire The Philippine Star 11/10/2005

Our Washington-based Eye-Spy reported that during the visit of Prince Charles and Camilla – their first after tying the knot in April – President and Mrs. George Bush gave a rare black tie dinner for the visiting royal couple. George Jr. hates black tie dinners because he finds them too stiff and formal. He prefers the informal affairs in his ranch where he can wear his cowboy boots and hat. Our Eye-Spy informed us that the dinner was well attended by Washington’s Top 400. But one of the main highlights of the affair was the fantastic menu. From the soup to the salad, to the aperitif to the main course, everything was impressively done that it prompted Prince Charles and his Lady to call on Filipina Cristeta Comerford, on her first official culinary performance as Executive Chef. Prince Charles, in his stiff British accent told her: "My compliments to the chef!"

Bonuses for PLDT officers

During the board meeting of PLDT the other day, Manny Pangilinan was in a happy mood because of the good news that expected revenues will hit P32 billion by the end of this year. Looks like MVP is feeling generous and will most likely give away big, fat bonuses to key executive officers. PLDT and Smart have been really aggressive in their marketing and advertising campaigns. And even if business is predicted to slow down next year, they still expect to increase their budgets for advertising and will launch a more aggressive campaign to get an even bigger market share. Smart already has the lion’s share in the wireless communication sector with more than 20 million subscribers.

Overcharging airport taxi drivers

Airport authorities had better look into numerous complaints about overcharging airport taxi drivers. Foreigners who frequently visit the country for business purposes have been noticing the unprecedented increase in taxi charges from P350 to P520 from the airport to the Malate area. While there are DOT-accredited taxis available for hire at the arrival area, there have been reports of abusive drivers still demanding additional amounts as "tips" because according to them, they do not get anything from the amount paid by the passenger at the company booth in the arrival area. NAIA and DOT better do something about these complaints to avoid turning off visitors to the country, especially now that the Holiday Season is coming.

Spy tidbiz: Not really Pinoy?

While interest for the reality show Pinoy Big Brother continues to be high, email messages won’t stop circulating that the show’s theme song Pinoy Ako performed by the band Orange and Lemons is not exactly a Pinoy original. Apparently, the song curiously sounds the same as Chandeliers, a song written by an obscure British band called Care. Chandeliers was one of the tracks in an album called Diamonds and Emeralds released in 1997, which was more like a collection of the ill-fated group’s singles. To hear for yourselves and compare the two songs, log on to and

Chief News Editor: Sol Jose Vanzi

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