Latest Views

July 2015


The Philippine economy appears headed to a more sanguine second quarter performance as inflation fell to a 67-month low of 1.6% in May, while the National Government's (NG) infrastructure zoomed up by 40% in April. Below-target headline inflation, pulled down by stable to lower food prices, should encourage more consumer spending in Q2 onwards. NG infrastructure spending signaled a rebound from overall underspending in Q1 as NG boosted its April expenditures by 9%, and still brought year-to-date budget surplus to P19.1 B from P3.3 B a year ago. The more optimistic outlook is bolstered by a seasonally adjusted annualized net job creation of 1.3 M in April compared to January 2015. Read More

June 2015


Instead of roaring and galloping, the Philippine economy grimaced and limped to a 5.2% Gross Domestic Product (GDP) growth in Q1 hugely disappointing investors (especially foreigners) and market players who were expecting a robust 6.6% expansion. Erstwhile growth leader, the Industrial sector weakened to a 5.5% (year-on-year) gain from 9% a quarter ago; while the Services sector similarly slowed to a 5.6% from 6% a quarter ago. In both instances, most analysts point to weak government spending - public construction for industry and public administration & defense spending for Services - as the main culprit for the surprisingly tepid performance. Read More

May 2015


Some people surmise that the onset of summer may have brought not only a dry spell (weather) but also a shortage of good news (for the economy). However, the most recent economic data do provide a burst of good tidings, albeit not a downpour. Meralco's electricity sales (a proxy for economic activity) showed a modest acceleration from previous months, while headline inflation remained soft at 2.4% or closer to the lower end of the government's 2-4% target. Besides, money growth kept its single-digit pace, and these all together combine to inhibit the Bangko Sentral ng Pilipinas from tightening monetary policy this year. Read More



View all The Market Call issues


Vol. 3 No. 7

July 31, 2015


SSI Group, Inc. (SSI) posted net income of PHP267.03mn in 1Q15, ahead of this year's profit guidance of 23%-25% net income growth to PHP1.23bn-1.25bn. It is ahead of target as the second semester usually accounts for the bulk of full year net income as seen in the two previous years: 61% and 60% of full year net profits of 2013 and 2014, respectively, were realized in the 2nd half. If the latter percentages were to indicate the annual business seasonality, net profit growth could turn out 34% higher this year to Php1.34bn versus yearago, also exceeding the consensus estimate of PHP1.29bn (29% growth). Read More

Vol. 3 No. 6

June 30, 2015


The power crisis didn't happen last summer in Luzon despite the 1-month Malampaya shutdown last March-April. (Malampaya is a key fuel source, natural gas, for the Lopez-owned 1,500MW and 1,200MW Kepco Ilijan of San Miguel, comprising a third of Luzon's dependable capacity of about 8,000MW). Still, a power shortage may happen next year as power demand on a national basis outstrips supply, both growing at an average yearly rate 5.7% vs. 5.3% until 2020, respectively. Read More

Vol. 3 No. 5

May 31, 2015


The real estate industry grew 15.2% last 1Q2015 (GDP accounting) despite BSP's tightening regulations: 1) Real Estate Stress Test and 2) lower loan-to-value (LTV) ratio. This was matched by the 13.6% year-to-March returns in the Philippine Property Index. This was faster than 1Q2014's 11.7% and FY 2014 9.6% growth. Read More

Vol. 3 No. 4

April 30, 2015


Based on total aggregate earnings in 2014 versus year ago, the companies in the PSEi yielded growth of 13%. Summing up the core EPS of PSEi members and comparing 2014 vs 2013 numbers, the growth is 14%. These numbers were better than the Bloomberg estimate of 11% last year. Read More



View all The Bellwether issues


Crown Asia Chemicals Corp. gets into high-tech pipes

August 10, 2015


After throwing in the towel on what in the early nineties was a sunset industry -- timber and wood processing -- Crown Asia Chemicals' luck turned the corner when it switched to chemical compounding and plastic tube pipe (polyvinyl chloride - PVC) manufacturing. Geared to the construction business, Crown's major products - PVC and plastics-based chemicals, produced net profits that may be small until last year, growth of 30% to Php65m, but enough inspiration for the company's getting into high-tech pipe manufacturing and bagging some PVC supply contracts for PPP projects like the NAIA Expressway and with a still undisclosed housing developer. Its most recent breakthrough was unlikely of a small family-owned company: doing an IPO. Read More

PSEi fell on fifth week of net foreign selling

August 7, 2015


PSEi fell 0.23% to 7,532.52 last week despite slowing inflation as foreign selling continued to weigh in. The market continued to register net foreign outflows for the past five weeks for an aggregate amount of Php8.71bn (July 6-Aug 7). Also, the market recorded fourteen weeks of net foreign selling out of fifteen since April 27. Last week the market recorded a net foreign selling of Php319mn. Inflation in July was at 0.8%, the lowest in twenty years. This brought year-to-date inflation to 1.9%. Read More

Short-term yields fell on inflation outlook

August 7, 2015


ST yields fell due to lower bid rate at auction and favorable July inflation figure (@ 0.8% vs June @ 1.2%). Trading volume (Php19.2bn, +11% w-o-w) continue to improve as domestic catalysts started to drive yields and volume. Yields of liquid ISINs fell ahead of the bond swap program. Read More



View all Equity Research issues