JPMORGAN'S  'OVERWEIGHT'  RATING  OF  RP  A  POSITIVE  DEVPT - SOLON

MANILA,
May 29, 2006 (STAR) JPMorgan’s "overweight" rating of the Philippines demonstrates the "enduring positive foreign investor sentiment toward the country" despite the political noise, House Deputy Speaker Eduardo Gullas said yesterday.

According to the American investment firm, which operates in more than 50 countries, an overweight rating means "the total investment return in the Philippines is expected to exceed the average total return in other countries covered, on a risk-adjusted basis, over the next 12 to 18 months."

"Among leader global financial institutions, JPMorgan is probably the best qualified to accurately pass judgment on the country’s worth. The company has been here for 45 years and has become totally acclimatized to our political and economic conditions," Gullas said.

Citing the country’s robust economic fundamentals, the New York-based financial services giant, which is the world’s sixth largest in assets, also expressed bullishness on the local stock market.

It predicted that the profits of publicly traded companies like banks and property developers would grow by 15 percent next year, almost double this year’s earnings.

Apart from being one of the country’s biggest creditors, JPMorgan has commercial banking and stock brokerage businesses here through JPMorgan Chase Bank and JPMorgan Securities Philippines, Inc., one of the 33 members of the Philippine Stock Exchange.

JPMorgan Securities is one of the top 10 brokers that handles the most trades on the PSE and provides foreign investors direct access to listed companies here. Recently, it crossed the sale of $440-million worth of Philippine Long Distance Telephone Co. (PLDT) shares from NTT Communications Corp. to its parent, Japan’s NTT DoCoMo Inc., which now owns seven percent of PLDT.

JPMorgan is also one of the largest institutional investors in PLDT, holding 629,038 common shares worth P1.26 billion at Friday’s closing price of P2,010 per share. Its holdings constitute one-third of one percent of PLDT’s issued shares.

In addition to its financial services-related businesses, JPMorgan has opened an in-house, 700-seat call center in Makati that services its credit card holders in the US. — Jess Diaz

2006 budget okay expected tomorrow The Philippine Star 05/29/2006

The Senate is expected to finally approve the proposed 2006 national budget tomorrow with most — if not all — of the major cuts restored, Budget Secretary Rolando Andaya Jr. said yesterday.

Andaya said he was hoping that the approved expenditure program would still be at the trillion-peso level as Malacańang proposed, in order not to jeopardize new initiatives — funded by new tax and administrative revenues — aimed at jumpstarting growth and uplifting the lives of the poor.

"The senators are very reasonable public officials, they will clearly see the urgency of the programs, whose funding they earlier slashed because of some wrong premises," Andaya said in a telephone interview, referring to the P31 billion cut by senators from the proposed P1.053 trillion national budget.

He is set to meet today with senators, particularly with finance committee chairman Sen. Manuel Villar, and urge them to restore the lopped-off funding.

Andaya said among the cuts likely to be restored is the P10 billion to fund the government’s bureaucracy rationalization plan, wherein incentives and retirement money would have to be given to workers and officials who opt to retire early.

He said the Senate earlier thought that the streamlining of the bureaucracy was not moving fast enough with rationalization plans of only two agencies approved by the Department of Budget and Management (DBM).

Andaya said plans of three agencies are already set for implementation and 38 more are to be approved by the DBM in the coming weeks.

"Our deadline is December to fully implement it (rationalization plan) so the incentives for the workers should be assured," he said.

Another budget cut that senators are expected to restore is the P13 billion for the additional P1,000 monthly allowance for 1.3 million government workers, Andaya said.

He said the Senate is likely to approve the appropriation, earlier branded by senators as a form of "pork barrel" to benefit President Arroyo, as its own proposal for a P2,000 additional allowance is not moving.

Andaya said the House of Representatives and the Senate "have not yet sat down to discuss the proposal."

The President earlier this year announced that state employees will be granted P1,000 additional monthly allowance due to rising costs of living. Not to be outdone in political brownie points, the Senate announced shortly after that it is pushing for a bill for a P2,000 allowance.

"Since when did an appropriation for allowances become pork barrel?" Andaya said. "I think the funding would be approved because that is the fastest way that the allowances would be granted."

He also expressed hope that senators would also restore the funding for the construction and upgrading of new airports in the country, amounting to over P2 billion.

Andaya, however, admitted that the P5-billion Kalayaan Barangay and Kilos Asenso program for local governments would face rough sailing in the Senate.

Senators branded the appropriation as a pork barrel allocations to Mrs. Arroyo, whom they perceive to be enjoying the strong support from local officials for her move to amend the Constitution. — Paolo Romero


Chief News Editor: Sol Jose Vanzi

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