Index gains 15 pts as oil, fiscal woes ease

Shares advanced yesterday after two sessions of losses on relief over softening world oil prices and government assurances that its fiscal reforms remain on track.

The benchmark 30-company Philippine Stock Exchange Index rose 14.59 points, or 0.7 percent, to end at 2,247.14, after shedding 1.3 percent in the two previous sessions, including Tuesday’s 0.8-percent loss.

"Oil prices weakened slightly, so that kind of relieved pressure on markets worldwide," said Citiseconline investment analyst Mark Alan Canizares.

On the New York Mercantile Exchange Tuesday, the crude oil settlement price for June delivery fell 0.6 percent to $72.88 (euro58.80) a barrel.

Jitters over rising oil prices in the domestic front recently prompted senior government officials to consider such options as suspending the 12-percent value-added tax on oil products, or cutting the three percent oil import tariff.

But Finance Secretary Margarito Teves assured Tuesday that the government will stay on track with its fiscal consolidation efforts.

The VAT measure is central to the government’s plan to balance the budget by as early as 2008.

"If the VAT suspension takes place, it would seriously impair the earlier goal set by the government when it implemented its revenue enhancing measures in November," said Canizares.

Blue chip Philippine Long Distance Telephone Co. was the most actively traded stock, closing up 0.5 percent at P1,995, in step with the 0.5-percent rise in the company’s American depositary receipts in New York Tuesday.

Recovering from recent losses were Philex Mining A and B, both up 1.3 percent at P4.05 on bargain hunting.

SM Prime climbed 3.9 percent to P8 on expectations the Philippines’ largest mall operator may disclose positive early indicators on its first-quarter financial performance during a briefing later Wednesday after its annual stockholders’ meeting.

Nestor Aguila of DA Market Securities said "the clarification from the presidential palace and the finance department provided investors some relief."

Ayala Corp. was down P2.50 at P347.50, while unit Bank of the Philippine Islands retreated 50 centavos to P61. Ayala Land gained 50 centavos to P12.25.

Manila Electric Co’s (Meralco) A-shares which are limited to Filipino investors, fell 25 centavos to P12.75 and the B-shares, which foreigners can buy, was down 50 centavos at P18.75.

Meralco reported first-quarter net loss of P748 million, much smaller than the year-earlier’s P2.2 billion.

San Miguel A shares closed flat at P60.50, while San Miguel B was up 50 centavos at P81. – AP, AFP