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MANILA, Dec 20, 2011 - (ACN Newswire) - First Metro Investment Corp (FMIC) and University of Asia and the Pacific (UA&P) have published the November issue of "The Market Call, Capital Markets Research". An excerpt from the report, which covers the Macroeconomy, Fixed Income Securities, Equity Markets and Economic Indicators, follows:
Slowdown: Due to Euro-zone Crisis or Domestic Woes?
Q3 Gross Domestic Product (GDP) growth of 3.2%, or flat from a revised 3.1% (from 3.4%), in Q2 caught analysts flatfooted with consensus estimate at 4.2%. It is easy to blame the Euro-zone crisis and the weak US recovery since exports fell by 27% during the quarter. But if we look at the production side, we would see that agriculture did not do well and industry slumped by 0.2%, led by a 12.2% decline in construction and hardly any growth in mining. But the main concern should be on the bigger income measure, Gross National Income (GNI) which inched up by only 1.6% despite an 8.6% gain in Overseas Filipino Workers' (OFW) USD remittances. The culprit here was the 5.7% peso appreciation for the period.
Other economic data were mixed. Inflation hit over 5% year-on-year (y-o-y) for the first (and likely last) time in 2011, as food prices went up due to weather-related supply shortages in some items and a low base in 2010. Government expenditures (excluding interest payments) were up by 18.4% in October, the third consecutive month of robust spending; while the budget deficit reached P74.3 B for the 10-month period, still only a fourth of the full-year target of P 291 B. This will result in a below-P180 B deficit for 2011, which will lower the debt ratio to below 50%, the first time in more than 30 years. Money growth fell back to single digits as the earlier tightening moves of the Bangko Sentral ng Pilipinas (BSP) gained traction.
And with Meralco electricity sales slowing to a 0.8% uptick in October, unless the government changes tack on the peso's continued appreciation and gets to an urgency mode in much-touted public-private partnership (PPP) projects to get off the ground soon, Q4 may yet see another mediocre performance, albeit slightly better than Q3.
Download the complete report at: www.firstmetro.com.ph/assets/publications/THE%20MARKET%20CALL%20(NOVEMBER).pdf.
Contact:
Anna Marie Tuprio
Corporate Planning & Affairs Department
Tel: +63-2-858-7951
E-mail: marie.tuprio@firstmetro.com.ph
Topic: Research / Industry Report
Source: First Metro Investment Corporation
Sectors: Daily Finance
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