Philippine Weekly Economic Recap: Sept. 24-28

Market-moving news for the week ended September 21, 2007:

T-bill yields fall

Yields of the 91-day and 182-day Treasury bills offered by the government slid during the auction held on September 24, 2007. The 91-day Treasury bill fetched a lower rate of 3.759% compared to the previous auction’s 3.769%. The rate of the 182-day T-bill likewise fell to 4.832% from 4.842%. Meanwhile, the rate of the 364-day T-bill inched up to 5.643% from 5.607%. Total tenders amounted to P9.6 billion against the government’s offer of P3.4 billion.

Domestic liquidity growth slows down

Domestic liquidity growth slowed for the fourth straight month in August to 14.9% from 18.7% in July. Liquidity peaked at 26.3% in April of this year and decelerated to 20.5% and 19.4% in May and June, respectively. The growth in liquidity was tempered by the decrease in domestic assets of depository corporations.

RP external debt decreases

The total external debt of the country went down by 1.9% to $53.0 billion as of the second quarter of the year from $54.0 in the previous quarter. The contraction in external debt was mainly due to the increase in investments of local banks in Philippine debt papers issued abroad as well as the negative foreign exchange adjustments. The external debt ratio or its percentage of the GNP likewise decreased to 37.8% from 41.7% in 2006 and 46.5% in June last year.

Philippine imports up

Imports went up by 14.3% to $5.0 billion in July from $4.4 billion a year ago. The growth in imports outpaced the 4.3% growth of exports in the same month. This caused the trade deficit to widen to $854.0 million from $396.0 in the previous year. Imports of electronics, which accounted for 42.7% of total imports, registered a 12.8% increase to reach $2.2 billion from last year’s $1.9 billion.

Philippine Stock Exchange Index (PSEi) ends the week higher

The PSEi closed the week higher by 4.36% or 149.17 points. On September 27, the PSEi went up by 2.93% or 101.76 points due mainly to the gains on Wall Street’s rally and strong investor confidence arising from the expectations of a cut in key rates ahead of the policy meeting on October 4. Among the PSEi index companies, Security Bank Corporation (SECB), DMCI Holdings, Inc, (DMC), and International Container Terminal Services, Inc. (ICT) posted the largest gains with their share prices increasing by 11.76%, 10.98%, and 10.61%, respectively, during the week.

Source: Philippine Stock Exchange

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