Philippines forex reserves rise to $76.3 Billion USD - market rebounds on easing inflation level

Philippine forex reserves rise to $76.3Billion USD

The Philippine gross international reserves (GIR) rose to 3.3 Trillion Peso or  $76.3 Billion U.S. dollars as of end- November, the local central bank reported Wednesday.

The November GIR is 500 million U.S. dollars higher than the GIR posted in October.

Foreign currency deposits, higher valuation on its gold reserves on back of rising gold prices and income from the central bank's investments abroad and net foreign exchange operations boosted the country's GIR.

These inflows were offset by outflows as the National Government and the central bank paid its maturing obligations.

November's GIR level could cover 11.2  months of imports of goods and payments of services and income; and is equivalent to 10. 7 times the country's short-term external debt based on original maturity and 6.5 times based on residual maturity.

The level of net international reserves (NIR), which includes revaluation of reserve assets and reserve-related liabilities, rose to 76.3 billion U.S. dollars in end-November.

Philippines market rebounds on easing inflation level

The Philippine stock market rebounded Wednesday (December 7, 2011) after the government reported a slower rise in consumer prices.

The rally in the stock price of heavyweight Philippine Long Distance Telephone Co. (PLDT) also pulled up the bellwether Philippine Stock Exchange index to close at 4,315.17, 0.75 percent higher or 32.40 points.

The broader all-share index meanwhile gained 0.16 percent or 5. 03 points to 2,991.24. Of the six counters, only the holding firm sector bucked the trend and fell 0.01 percent.

 Trading volume reached 2.16 billion shares worth 4.97 billion pesos ($114.57 million U.S. dollars) with 87 stocks advancing, 72 declining, and 50 unchanged.

Brokerage DBP-Daiwa Securities, Inc. said that it expected the composite index to rally on Wednesday following slower inflation growth of 4.8 percent in November, which signaled a cut in policy rates.

The 4.8 percent reported in November is slower than the 5.2 percent rise in inflation in October and was well within the central bank projection.

 The central bank hinted it may cut policy rates in the first quarter of 2012 in the wake of expectations that a prolonged crisis in the euro zone would dampen growth prospects for emerging economies including the Philippines.

 "We expect positive implication into the market given that a policy rate easing, in theory should have a direct positive impact on banks as it generates more lending activities which can trickle down to other sectors such as consumer and property," DBP-Daiwa Securities, Inc. said.

 The brokerage said investors are now slowly accumulating stocks as they gear for next year. DBP-Daiwa Securities said investors expect a "favorable" stock market as the country remains to be insulated from the Euro debt crisis because of its strong domestic- oriented businesses.

 Stocks in the 30-company index closed mixed. Stock price of PLDT jumped by 2.73 percent after its chairman Manuel Pangilinan said the company will meet its profit target this year.

 DBP-Daiwa Securities, Inc. said this also help lift the composite index on Wednesday.

 Other issues that gained include companies of Philippines' richest man Henry Sy, sr., namely SM Prime Holdings, Inc. and SM Development Corp.

 Globe Telecom, Inc., DMCI Holdings, Inc., and San Miguel Corp. were sold down.

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