GOOD NEWS: PH stock market, one of the best performing global markets in 2014

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Investors and would-be-investors in the PH stock market must be excited to hear this great news! Confidence in the vibrant PH economy has not faded, to date!

The Philippine stock market landed number 7 on the list of the best performing global markets in 2014. It had an increase of 22.01%, with benchmark year-end-performance set at December 23, 2014; this means the PH stock exchange index's performance may be higher than what was recorded by CNN on the last trading day, December 29; that's around (22.01% + 0.62%) = a whooping 22.63%!The PH stock market even outpaced that of neighboring Indonesia's (20.24%) at number 9.

Image Courtesy: CNN

For the common tao, or in layman's term (well, also as how a non-Economics student like me understands haha), this only means that more investors are interested to pour their cash into public companies because they know these companies may be regional economic giants. Not only are they interested, but they are optimistic that the promising economic success story of the Philippines will steal the international spotlight soon. However, here's a caveat, the article only mentioned 74 big markets; the others have not been included in the list (there are more than 190 nations in the world!).

Leading the list of top performing international markets are Argentina (54.51%) and economic giant China (43.32%). It may be recalled that this year's most valuable tech startup is Xiaomi, a Chinese smartphone maker which overtook Samsung in terms of sales units (in some countries that Samsun formerly dominated) for the first time in years, valued at 45 billion USD.

The worst global markets with biggest losses in 2014 include those of Greece (-26.62%) and Russia (-44.9%) which made headlines this year for annexing Ukraine's region Crimea. It's believed that Russia's on a recession today as an effect of the collapse of the oil prices worldwide (due to increased US supplies) and the economic sanctions imposed by countries against the political and military struggles ongoing at the proximity of Russia's borders.

PH improves in ease of doing business! Check out the largest companies in the Philippines.

Recently, the Philippines was heralded by the World Bank as the most improved country in terms of Ease of Doing Business ranking. The Philippines jumped 30 spots from 138th to 108th this year. (Wow!)

This 30-spot jump was the biggest improvement for any country in the world this year. This could be accredited to gains in the following indicators: Resolving Insolvency indicator (where PH jumped from 165th to 100th), Getting Credit, Electricity, Paying Taxes, Cross-Border Trading, Dealing with Construction Permits, and Registering Property.

Seems like the PH is the up and coming roaring tiger cub economy of the century, to follow the lead of the Four Asian Tigers - Singapore, Hong Kong, Taiwan and South Korea. It's perhaps the best time to know which PH companies are creating this wave of sustained economic growth.

 

Would you know which companies are the largest in the Philippines? Well, according to a list made by Forbes in April 2013, eight (8) companies made it to the list of 2000 largest companies in the world.

 San Miguel Corporation leads the group of 8 major companies that would somehow drive the economic future of the Philippines. It's then followed by tycoon Henry Sy's SM Investments.

The list of largest companies in the Philippines are as follows:

1. San Miguel

Rank: 694

Sales: $16.6 B

Assets: $0.7 B

Profits: $25.1 B

Market Value: $7 B

2. SM Investments

Rank: 915

Sales: $5.3 B

Assets: $0.6 B

Profits: $13.6 B

Market Value: $16.6 B

3. PLDT

Rank: 1060

Sales: $4 B

Assets: $0.9 B

Profits: $9.9 B

Market Value: $15.1 B

4. BPI

Rank: 1142

Sales: $1.4 B

Assets: $0.4 B

Profits: $23.9 B

Market Value: $9.1 B

5. Manila Electric

Rank: 1308

Sales: $6.8 B

Assets: $0.4 B

Profits: $5.3 B

Market Value: $9.2 B

6. Aboitiz Equity Ventures

Rank: 1642

Sales: $1.6 B

Assets: $0.5 B

Profits: $4.6 B

Market Value: $7.8 B

7. Metropolitan Bank and Trust

Rank: 1666

Sales: $1.5 B

Assets: $0.3 B

Profits: $21.7 B

Market Value: $6 B

8. Ayala

Rank: 1784

Sales: $2.5 B

Assets: $0.3 B

Profits: $11.9 B

Market Value: $8.2 B

Good News: PH gets first-ever investment grade

Photo Courtesy: HopeAndFail

A report from ABS-CBNNews has confirmed that the Philippines got its first-ever investment grade debt rating today (Wednesday), as Fitch Ratings gave the country a 'BBB-' with a stable outlook.

"The Philippine economy has been resilient, expanding 6.6% in 2012 amid a weak global economic backdrop. Strong domestic demand drove this outturn," Fitch said.

Fitch, however, expects the PH economy to slow down to 5.5% this year, lower than government target growth of 6-7% growth.

The Philippines still awaits two other internationaly recognized credit ratings agencies' provision of investment grade ratings - one from Standard & Poor's and the other from Moody's Investors Service, which both rate the country a notch below investment grade.

S&P awarded the Philippines a BB+ with a positive outlook, while Moody's gave it a Ba1 with a positive outlook

What does investment grade mean?

There are many dimensions of the term investment grade. Investopedia defines investment-grade for a company as the following:

Investment grade refers to the quality of a company's credit. In order to be considered an investment grade issue, the company must be rated at 'BBB' or higher by Standard and Poor's or Moody's. Anything below this 'BBB' rating is considered non-investment grade. If the company or bond is rated 'BB' or lower it is known as junk grade, in which case the probability that the company will repay its issued debt is deemed to be speculative.

Investment grade, in the context of the country's ability to pay off its debts, means that the country is likely able to meet its obligations to creditor banks and other financial institutions. This means that the Philippines will be able to secure a spot in terms of financial investments (FDIs) and loan with relatively lower interests since there's no speculation it couldn't pay off its debts, as seen in the Aquino administration's continuous allotment of a big chunk of the government budget to paying off (bad) debts, in order for the country to settle its accounts and eventually be guaranteed access to more international funding due to its high reputation (investment grade).

Furthermore, financial dictionary defines investment grade as an indicator of a corporate bond's "creditworthiness and likelihood of default".

11 Filipino billionaires in Forbes 2013 list, mall tycoon Henry Sy leads

As the economy and stock market of the Philippines progressed and outperformed others, 11 Filipinos made it to the Forbes Magazine 2013 global billionaires' list, with five more Filipino billionaires added from a total of six last year.

Number 1 Filipino tycoon and business magnate Henry Sy, and his family, ranked 68th on the list with a net worth of $13.2 billion as of March 2013.

"The Philippines' richest man Henry Sy saw his fortune swell by more than $5 billion as shares of his holding firm SM Investments, the country's most valuable company, surged by over 50 percent, fueled by reports that it may merge its property units," Forbes said.

Lucio Tan, owner of tobacco, alcohol, airline and real estate firms, and his family ranked second in the Filipino billionaires list with a net worth of $5 billion. 

The new members of the billionaires' list are this year are Consunji and family, Ty and family, the Co couple, Coyiuto, Tan Caktiong and family, and Gotianun and family. 

Meanwhile, the biggest gainer title goes to Enrique Razon who debuted in the billionaires list just last year. Razon, owner of International Container Terminal Services (ICTS) which purchased various ports worldwide, saw his wealth hike by over $3 billion after Bloomberry Resorts,  his hotel and casino venture, joined the Philippine Stock Exchange.

The names and ranks of the Filipino billionaires worldwie in 2013 are as follows:

1. No. 68 - Henry Sy ($13.2 billion)

2. No. 248 - Lucio Tan ($5 billion)

3. No. 258 - Enrique Razon Jr. ($4.9 billion)

4. No. 345 - Andrew Tan ($3.95 billion)

5. No. 503 - David Consunji and family ($2.8 billion)

6. No. 554 - George Ty and family ($2.6 billion)

7. No. 736 - Lucio and Susan Co ($2 billion)

8. No. 931 - Robert Coyiuto, Jr. ($1.6 billion)

9. No. 1031 - Tony Tan Caktiong and family ($1.4 billion)

10. No. 1175 - Andrew Gotianun and family ($1.2 billion)

11. No. 1175 - Roberto Ongpin ($1.2 billion)

Forbes noted that all the 1,426 billionaires of the world saw an increase in its aggregate net worth from $4.6 trillion to $5.4 trillion, which is roughly near (hundreds of billions in dollars) the gross domestic product (GDP) of Japan or the GDPs of France and Brazil combined in 2011.

Together, the net worth of the Philippine billionaires this year totaled to $39.85 billion, around 16.75 percent of the Philippine economy in 2012.

Some facts about the economy of the Philippines

According to World Bank country director Motoo Konishi, the Philippines "is no longer the sick man of East Asia, but the rising tiger." True as it may seem, PH has registered one of the highest growth rates in Asia since the Aquino administration started.

However, could the issue of 'inclusive' growth several years ago still be the same issue of today? There must be some truth in it. Here are some facts which that economic gains do not trickle down the bottom classes.

1. In 2009, about 25 million Filipinos or 1/4 of the population lived on $1 dollar a day or less.

2. In 2011, the 40 richest families in the Forbes wealthy list accounted for 76 percent of the total gross domestic product (GDP) of the Philippines. That's very high compared to Thailand's 33.7 petcent, Malaysia's 5.6 percent, and Japan's 2.8 percent.

3. In 2012, the two wealthiest people in the Philippines were worth a combined $13.6 billion, which is approximately six percent of the Philippine economy.

4. Minimum wages have not been increased to a point that could significantly impact the lives on the lowest social strata, despite corporate gains obtained by owners of profitable Philippine companies and corporations. Hence, the owners get increases, yet the workers don't.

5. Politics is a game-changer, with regards to effectiveness of public policy that negatively impacts PH capitalists and business owners.

6. Some sectors of the Philippine economy are under monopoly or duopoly; thus, prices of commodities (may it be goods or services) can easily be controlled and eventually directly affect the customer base - a big portion of which is powered up by the middle class.

Jollibee buys new food businesses, establishes presence in Asia

Fast-food king Jollibee Foods Corp. (JFC) has completed a buy-in deal with a regional food group that manages a chain of Highlands Coffee, Hard Rock Cafe stores and Pho24 restaurants, thus raising its expansion rate in Asia..

Through subsidiary Jollibee Worldwide Pte. Ltd., JFC declared the consummation of its acquisition of 50 percent of the businesses of SuperFoods Group, which comprise of a 49-percent stake in Vietnam-based SF Vung Tau Joint Stock Co. and a 60-percent share in Hong Kong-based Blue Sky Holding Ltd.

The deal will cost JFC $25 million for the 50 percent stake in SuperFoods alone. But, inclusive in the deal is an extension of a $35-million loan to its partner Viet Thai International Joint Stock Co. (VTI) through their joint venture in SuperFoods. Furthermore, JFC has also released in advance $5 million to the SuperFoods group.

Earning $30 million in annual sales, the SuperFoods Group operates 56 Highlands Coffee stores in Vietnam, and Pho24 stores in Vietnam (48), Indonesia (11), Hong Kong (4), Japan (3), the Philippines (2), and Cambodia (1). It also handles a number of Hard Rock Cafe-franchised stores in Macau, Hong Kong and Vietnam.

The key leading player in the Philippine quick-service restaurant industry, JFC which is increasingly heightening its operations abroad, now has a total of 2,003 restaurants in the Philippines and 2,471 restaurants worldwide.

With supporting reports from Inquirer.net

Facts and Figures: Economy of the Philippines

Economy of the Philippines:

GDP (purchasing power parity):
$351.4 billion (2010 est.) country rank: 34
$327.4 billion (2009 est.)
$323.9 billion (2008 est.)

GDP (official exchange rate):

$188.7 billion (2010 est.)

GDP - real growth rate:
7.3% (2010 est.) country rank: 31
1.1% (2009 est.)
3.7% (2008 est.)

GDP - per capita (PPP):

$3,500 (2010 est.) country rank: 162
$3,300 (2009 est.)
$3,400 (2008 est.)

GDP - composition by sector:

agriculture: 13.9%
industry: 31.3%
services: 54.8% (2010 est.)

Labor force:

38.9 million (2010 est.) country rank: 15

Labor force - by occupation:

agriculture: 33%
industry: 15%
services: 52% (2010 est.)

Unemployment rate:

7.3% (2010 est.) country rank: 76
7.5% (2009 est.)

Population below poverty line:

32.9% (2006 est.)

Household income or consumption by percentage share:

lowest 10%: 2.4%
highest 10%: 31.2% (2006)

Distribution of family income - Gini index:

45.8 (2006) country rank: 36
46.6 (2003)

Investment (gross fixed):

15.7% of GDP (2010 est.) country rank: 131

Budget:

revenues: $26.84 billion
expenditures: $33.75 billion (2010 est.)

Taxes and other revenues:

14.2% of GDP (2010 est.) country rank: 190

Budget surplus (+) or deficit (-):

-3.7% of GDP (2010 est.) country rank: 112

Public debt:

55.4% of GDP (2010 est.) country rank: 44
57.3% of GDP (2009 est.)

Inflation rate (consumer prices):

3.8% (2010 est.) country rank: 125
3.2% (2009 est.)

Central bank discount rate:

4% (31 December 2010) country rank: 105
3.5% (31 December 2009)

Commercial bank prime lending rate:

7.7% (31 December 2010 est.) country rank: 120
8.566% (31 December 2009 est.)

Stock of narrow money:

$29.08 billion (31 December 2010 est.) country rank: 58
$24.86 billion (31 December 2009 est.)

Stock of broad money:

$97.35 billion (31 December 2010 est.) country rank: 52
$83.3 billion (31 December 2009 est.)

Stock of domestic credit:

$98.22 billion (31 December 2010 est.) country rank: 52
$85.54 billion (31 December 2009 est.)

Market value of publicly traded shares:

$202.3 billion (31 December 2010) country rank: 33
$130.5 billion (31 December 2009)
$85.63 billion (31 December 2008)

Agriculture - products:

sugarcane, coconuts, rice, corn, bananas, cassavas, pineapples, mangoes; pork, eggs, beef; fish

Industries:

electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing

Industrial production growth rate:

12.1% (2010 est.) country rank: 17

Electricity - production:

61.93 billion kWh (2009 est.) country rank: 42

Electricity - consumption:

54.4 billion kWh (2009 est.) country rank: 43

Electricity - exports:
0 kWh (2009 est.)

Electricity - imports:

0 kWh (2009 est.)

Oil - production:

9,671 bbl/day (July 2010 est.) country rank: 86

Oil - consumption:

307,200 bbl/day (September 2010 est.) country rank: 42

Oil - exports:

28,900 bbl/day (September 2010 est.) country rank: 86

Oil - imports:

338,400 bbl/day (September 2010 est.) country rank: 30

Oil - proved reserves:

168 million bbl (1 January 2010 est.) country rank: 64

Natural gas - production:

2.94 billion cu m (2008 est.) country rank: 55

Natural gas - consumption:

2.94 billion cu m (2008 est.) country rank: 75

Natural gas - exports:

0 cu m (2008 est.) country rank: 163

Natural gas - imports:

0 cu m (2008 est.) country rank: 110

Natural gas - proved reserves:

108.7 billion cu m (1 January 2011 est.) country rank: 52

Current account balance:

$9.51 billion (2010 est.) country rank: 26
$8.788 billion (2009 est.)

Exports:

$50.72 billion (2010 est.) country rank: 54
$37.6 billion (2009 est.)

Exports - commodities:

semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits

Exports - partners:
US 17.7%, Japan 16.3%, Netherlands 9.5%, Hong Kong 8.4%, China 7.6%, Singapore 6.7%, Germany 6.6%, South Korea 4.7% (2009)

Imports:
$61.07 billion (2010 est.) country rank: 42
$46.39 billion (2009 est.)

Imports - commodities:

electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic

Imports - partners:

Japan 12.6%, US 12%, China 8.9%, Singapore 8.6%, South Korea 6.9%, Thailand 5.7%, Indonesia 4.2% (2009)

Reserves of foreign exchange and gold:

$62.37 billion (31 December 2010 est.) country rank: 28
$44.24 billion (31 December 2009 est.)

Debt - external:

$63.75 billion (31 December 2010 est.) country rank: 49
$63.1 billion (31 December 2009 est.)

Stock of direct foreign investment - at home:

$24.44 billion (31 December 2010 est.) country rank: 64
$22.44 billion (31 December 2009 est.)

Stock of direct foreign investment - abroad:

$6.591 billion (31 December 2010 est.) country rank: 56
$6.191 billion (31 December 2009 est.)

Exchange rates:

Philippine pesos (PHP) per US dollar -
45.11 (2010)
47.68 (2009)
44.439 (2008)
46.148 (2007)
51.246 (2006)

Source: Central Intelligence Agency

Peso appreciates alongside Greece debt fix

MANILA, Philippines—The peso rises together with other Asian currencies on Wednesday as continued efforts to resolve the fiscal problem of Greece further appeased market concerns over the debt situation in the Euro zone.

The local currency closed at 43.135 against the US dollar, up by 11.5 centavos from Tuesday’s finish of 43.25:$1.

Intraday high reached 43.115:$1, while intraday low settled at 43.26:$1. Volume of trade rose to $995.94 million from $800.43 million previously.

Traders said progress of discussions to resolve the debt situation of Greece prompted investors to buy some emerging market assets, including those from the Philippines, thereby lifting Asian currencies.

The European Union has expressed intention to help Greece meet its obligations, thus appeasing creditors and the international financial community.

Traders also said some investors bet on continued rise in interest rates in Asia, and so they buy assets denominated in Asian currencies to take advantage of the projected rise in yields.

-with reports from Michelle V. Remo of Inquirer.net

PH stocks rebound, end higher

MANILA, Philippines—Local stocks swung back to positive territory on Wednesday as investors took heart from news about Germany leading a second bail-out package for debt-strapped Greece.

The main-share Philippine Stock Exchange index added 41.82 points, or 0.98 percent, to finish at 4,286.46.

Investors across the globe cheered recent developments in Greece. On Wall Street, the Dow Jones Industrial Index was up by 128.21 points, or 1 percent, to 12,569.79.

Lepanto “A,” AGI, Megaworld, PLDT, Metrobank, DMCI, Philex, ICTSI, BPI, Meralco, Ayala Corp. and FLI led the index higher. Likewise a big gainer was San Miguel Corp., the day’s most actively traded stock. Atlas Mining and Vista Land were also among the gainers.

The day’s index rise was tempered by the losses incurred by URC, Aboitiz Power, EDC and BDO.

Index heavyweight PLDT promptly bounced after a steep fall on Tuesday that was in turn caused by concerns over opposition to its takeover of Gokongwei-led Digitel. The services index thus led the day’s upswing by sector, rising by 2.66 percent.

There were 78 advancers as against 62 decliners while 33 stocks were unchanged.

-with reports from Michelle V. Remo of Inquirer.net

Japan to invest $5B in PH

According to the Inquirer website, an enthusiastic President Benigno Aquino III announced a large flow of investment offers amounting to $5.45 billion in projects, which includes the expansion of power plants and construction of a bioethanol facility.

Mr. Aquino reported a minimum $2.85 billion in new investments and $2.6 billion in yet-to-be-firmed-up business deals from Japanese investors whom he met in Yokohama before attending the Asia-Pacific Economic Cooperation (APEC) leaders’ summit.

Itochu is investing $122 million in the construction of a bioethanol plant in the province of Isabela.

Marubeni is allocating $1 billion for the expansion of the power plant in Sual, Pangasinan. Another $1 billion is allotted for the power plant in Pagbilao, Quezon, and $600 million for the power plant in Calaca, Batangas.

Toshiba is also setting aside $133 million for the expansion of its electronics products in the country.

Mr. Aquino especially enthused Itochu’s plan to develop 11,000 hectares of sugar plantation in Isabela for bioethanol production which may generate 18,000 jobs in two years and help 15,000 farmers.

Aside from the $2.85-billion investment offers, new “possible projects” worth some $2.6 billion are on the table.These projects include the expansion of the Metro Rail Transit Line 7, Light Rail Transit 2, and digital TV system and equipment.

To read the detailed report, click here.

RP Economy at Record High 7.3%

Arroyo's presidency has bear fruits, bringing in an economic pouring of 7.3% in its national growth from outrageous election spending, an okay-rise in remittances from abroad, and improved business and consumer confidence.

Both the GDP and GNP of the country outpaced expectations.

Augusto Santos, director general of NEDA, stated that “the improvement in the global economy, brighter economic outlook, increased business and consumer confidence, and election-related spending all contributed to the resurgence in economic activities."

The industrial sector, which embraces the fields of manufacturing, utilities, mining and quarrying, grew 15.7% during the first quarter, way better than last year's contraction of 2.6%. The services sector, which includes the growing business process outsourcing sub-sector, also increased to 6.1% in the first quarter. However, the agriculture, forestry and fisheries sector was hit largely due to the dry spell, contracting at 2.5%.

Santos suggested that to prevent stagnant growth or probable decline, the government has to increase spending on infrastructure, social services and education.

For more information, click on this link.