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PHILIPPINE stocks declined for a third day Wednesday,
led by Bank of the Philippine Islands, on speculation a
quarter-point rate cut in the US will not be enough to
extend a six-year expansion in the world’s biggest
economy.
Megaworld Co. led a drop among Philippine builders on
concern a recession in the US will dent domestic real-
estate purchases of Filipinos working and living
overseas.
“People
aren’t that happy with the rate cut,’’ said Tynee Tan,
who helps manage about $1 billion at Rizal Commercial
Banking Corp. “Investors expected a more aggressive cut.
The concern is the US may have a sharp slowdown.’’
San
Miguel Corp. surged the most in almost 10 years before a
government auction for the nation’s network of
high-voltage wires. Metropolitan Bank & Trust Co., known
as Metrobank, fell the most in more than seven weeks on
news reports that the bank has been ordered by a court
to pay P3.79 billion in back taxes.
The
Philippine Stock Exchange index lost 66.79, or 1.8
percent, to 3,605.59, after slipping 1.9 percent in the
previous two days. Wednesday’s loss is the biggest in
three weeks for the 32-member benchmark, which closed at
the lowest in eight days.
Bank of
the Philippine Islands, the nation’s largest lender by
market value, dropped P2.50, or 3.9 percent, to P61.50,
its biggest loss in three weeks. BDO Unibank Inc., the
second biggest, declined P2, or 3.3 percent, to P59.
US
stocks dropped the most in a month Wednesday as
investors speculated the Federal Reserve’s rate
reduction will fail to prevent a recession.
The US
is home for over a third of the estimated more than 8
million Filipinos working and living overseas. Funds
sent home by Filipinos abroad, which make up 10 percent
of the Philippine economy, are spent on homes, phones,
food, clothes and cars, helping fuel the Southeast
nation’s fastest annual expansion in three decades.
Megaworld, which makes 20 percent of home sales to
overseas Filipinos, declined 20 centavos, or 4.8
percent, to P3.95. Ayala Land Inc., the largest
Philippine builder that makes a third of residential
sales to Filipinos abroad, dropped 25 centavos, or 1.6
percent, to P15.75.
“A
slowdown will affect the spending of consumers who rely
on the US for some of their income,’’ said Astro del
Castillo, managing director of First Grade Holding Inc.,
a financial management and advisory company.
Filinvest Land Inc., which also sells homes to Filipinos
abroad, slumped 6 centavos, or 4 percent, to P1.44.
Robinsons Land Corp., a shopping mall and homebuilder,
plunged P1, or 5.7 percent, to P16.50, its biggest drop
since October 22. SM Prime Holdings Inc., the largest
Philippine shopping mall operator, dropped 75 centavos,
or 6.8 percent, to P10.25, its biggest loss in four
months.
Separately, Metrobank, the third-biggest lender by
market value, tumbled P3.50, or 5.8 percent, to P57, its
sharpest decline since October 22.
The bank
has been ordered by Court of Tax Appeals to pay taxes
that have accrued since the 1990s from unpaid
documentary stamp tax and taxes on special deposits,
according the newspaper report. The lender, which is
facing a tax liability that’s more than two thirds of
its P5.31 billion nine-month profit this year, said
Wednesday in a report to the stock exchange that it
filed an appeal with the court.
San
Miguel’s Class A shares, equity reserved for Filipinos,
rose P4.50 pesos, or 8.9 percent, to P55, the biggest
gain since January 1998—the stock climbed as much as 11
percent earlier Wednesday. Its Class B shares, which
have no ownership restrictions, added P4, or 7.8
percent, to P55.50, the highest in a month.
Shares
worth P4.26 billion were traded, 22 percent less than
the six-month daily average. Losers beat gainers 95 to
22, with 39 stocks unchanged in the broader market.
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