MACROECONOMICS WEEKLY UPDATE

The Philippines’ two top property developers, SMPH (P36.40, +3.70%) and ALI (P31.50, +5.18%) led the index higher. This showed that OFWs are keen again on using their money to lease or purchase a permanent home in the Philippines.

 S&P Global Manufacturing PMI for November came in at 52.7 vs 52.6 in October, sustaining the brisk business activity seen since troughing out in July 2022. The Employment Index fell below the 50.0 mark.

ASEAN countries continued to show expansion in business activity. Singapore’s 56 was the top performing nation, followed by the Philippines at 52.7, Thailand’s 51.1 and Indonesia’s 50.3. Malaysia and Vietnam had PMI readings of 47.9 and 47.4 respectively.

The BSP chief expects the Fed to hike by 50 basis points, followed by a series of 25-basis-point hikes moving forward – and would likely respond with a 25 or 50-bit rate increase on its December policy meeting.

Members of the Development Budget Coordination Committee (DBCC) forecasted growth to ease up next year to settle within 6-7%, coming from 2022’s 6.5-7.5% forecast range. Growth is seen picking up between 6.5-8% annually between 2024 to 2028.

 Inflation last month surged faster due to a 10% increase in food prices from a year ago, followed by higher costs of restaurant menu items. The BSP expects inflation to decelerate in the coming months after hitting another high of 8% in November 2022.

Philippines’ foreign exchange reserves are good for 7.5 months of the country’s import bill, or more than double the three-month forex reserves standard. Some of the funds could be diverted to the Maharlika Investment Fund, a project of President Bongbong Marcos.

 The Bureau of Immigration (BI) sees an increase in the number of tourist arrivals in the country during the holiday season. In October alone, the Philippines recorded more than 600,000 tourist arrivals, due to the relaxation of travel restrictions.

 Former President and now Senior Deputy Speaker Gloria Macapagal Arroyo insisted there’s a powerful safeguard against the misuse of the proposed Maharlika Wealth Fund amid concerns it will become a slush fund of select individuals. 

 Rizal Commercial Banking Corp. expects the peso to trade between 55.30 to 56.00 next week. The local currency closed at P55.71 a dollar from P56.1 on Thursday. Volume reached USD1.28 billion, up from Thursday’s USD898.7 million. 

INDUSTRY UPDATE

REAL ESTATE AND PROPERTIES

  Manuel Villar announced last Friday that he plans on investing around $1-Bn into the integrated gaming resort business, at Vista Mall Global South. The mall will be converted into a Las-Vegas style casino roughly around the size of Solaire’s gaming space.

The Consunji-led DMCI Homes saw sales skyrocket in the third quarter, pushing earnings higher by a quarter to P1.15 billion. Sales and reservations grew 159 percent to 2,610 units, comprising 1,473 residential units and 1,137 parking slots.

 The Court of Appeals has approved a compromise deal between businessman Jose Go’s bankrupt Ever Gotesco and government-owned Land Bank of the Philippines. The compromise amount is set at P73 million, representing a principal amount of P50 million plus interest of P23 million.

INDUSTRIALS 

   D&L Industries of the Lao family has deferred the start of commercial operations of its manufacturing plant in Batangas. Delays in processing permits and certifications, as well as late arrival of shipments from overseas suppliers are cited as the cause for the delay.

Iloilo City Mayor Jerry Treñas said the provincial government is excited over the plans of International Container Terminal Services, Inc. (ICTSI) to take over the Iloilo Commercial Port Complex.

Apex Mining said its board approved the acquisition of 1.9 million shares of Asia Alliance Mining Resources Corp. for $42.89 each. 

 Prime Media said its parent company RYM Business Management Corp. and the majority shareholders of Golden Peregrine Holdings Inc. have executed an amended memorandum of agreement, approved by the company’s board of directors.

 The merger of the National Teachers College (NTC) and Affordable Private Education Center Schools (APEC) is in the works. iPeople Inc. of the Ayala and Yuchengco families owns the two schools. The merger, however, is still subject to regulatory approval.

POWER AND UTILITIES

 The Luzon grid has already been placed in yellow and red alerts in the past week due to thin supply. Semirara Mining & Power Corp. chairman Isidro Consunji said liquefied natural gas is not yet fully available in 2023 thus electricity prices will likely go up.

The Ayala Group’s listed energy platform, ACEN Corp. is set to complete its acquisition of a project company developing a 60-megawatt solar power plant in Pangasinan. 

PHILIPPINE STOCK MARKET

The PSEi jumped 232.25pts (+3.61%) to close at 6,674.38 despite local inflation for November coming in higher than expected at 8.0% (vs. consensus estimates of 7.8%), driven by the higher cost of food items. 

 The broader All Shares (+2.17%) and sectoral indices also inched higher. 

 Value turnover increased 39% to P5.8Bn while foreign funds saw net inflows (+P270Mn). Top index gainer was JGS (+7.43%) while top index decliner was MONDE (-3.50%).