THE VOICE OF BUSINESS IN NORTHERN MINDANAO

Thursday, March 31, 2011

Morning Brief: 31 March 2011




VAT windfall expected from higher oil prices

A WINDFALL of around P4 billion could be realized this quarter by the government as higher oil prices lead to increased value-added tax (VAT) collections, a Finance official yesterday said.

The amount, which could rise to some P28 billion if crude prices remain high, is expected to allow the government to fund planned subsidies that will allow the public transportation sector to cope with rising fuel costs.

"As long as the volume of oil we purchase doesn’t go down, the government can usually get a windfall of roughly P1 billion for every $1 in excess of the programmed cost of oil," Finance Undersecretary Gil S. Beltran told BusinessWorld.

While the numbers are not yet final, Mr. Beltran said, "The VAT windfall could reach P4.4 billion by end-March."

With the benchmark Dubai crude now averaging $108 per barrel, up from the government’s oil price assumption of $80 per barrel for the year, the additional earnings from import duties would total some P28 billion.

"Yes, that’s my estimate," Mr. Beltran said.

"The excess VAT can be used for any project that’s the priority of the government," he added, including P600-million fuel subsidy targeted at the public transportation sector.

"Based on the pronouncements of the DoE (Department of Energy), financial assistance to the public transportation sector is counted as one of the priorities," Mr. Beltran said.

An Energy department-drafted executive order that will implement the subsidy -- involving the issuance of fuel cards that will be valid for a month -- has been submitted to MalacaƱang for approval.

The assistance, currently limited to legitimate franchise owners, could be extended to other transportation used by the food and fishery sectors, Energy officials have said.

A VAT windfall was also realized by the government when oil prices spiked to a record $147/per barrel in 2008. The added earnings of P8.16 billion from July to December 2008 was spent by the Arroyo administration on "Katas ng VAT" programs such as electricity subsidies, student loans, scholarship grants and engine conversion loans for owners of public utility vehicles.

University of the Philippines economist and former Budget secretary Benjamin E. Diokno welcomed the news of a new VAT windfall trickling down to consumers, but cautioned against "inefficiencies".

"By subsidizing public transport, half-empty buses and jeepneys would continue to traverse their routes as if the price of oil products have not increased; such practice is inefficient. Passengers should feel the higher cost of transportation so they will change their behavior accordingly," Mr. Diokno said in an e-mail.

"What about the car owners who have to pay the higher costs of oil products at the pump? Don’t they deserve a subsidy too?" he said.

Mr. Diokno, Budget secretary during the Estrada administration, instead proposed a VAT cap when the price of crude exceeds a certain level.

"The idea is for the government not to benefit in terms of a windfall gain even as consumers suffer from higher than planned price of crude oil," he said.

He also suggested an automatic surcharge when the price of crude plummets.

"Consumers should not get used to artificially cheap oil products when the price of oil plummets to, say, $60 per barrel. The surcharge will be in the form of a corrective tax," Mr. Diokno explained.


U.S. Stocks Advance as S&P 500 Extends Best 1Q Gain Since 1998

U.S. stocks rose, extending the biggest first-quarter rally in 13 years for the Standard & Poor’s 500 Index, as a report showing companies added more workers in March bolstered optimism about the economy.

Cephalon Inc. (CEPH) surged 28 percent for the biggest jump in the S&P 500 after Valeant Pharmaceuticals International Inc. (VRX)offered to buy the maker of sleep and pain drugs. Visa Inc. (V) climbed 2.8 percent on speculation that curbs on debit-card fees will be delayed or modified. AT&T Inc. (T) rallied as its chief executive officer pitched the company’s acquisition of T-Mobile USA as a way to boost network capacity and improve service.

The S&P 500 gained 0.7 percent to 1,328.26 at 4 p.m. in New York and is up 5.6 percent for the first quarter, which ends tomorrow. TheDow Jones Industrial Average increased 71.60 points, or 0.6 percent, to 12,350.61 and has rallied 6.7 percent so far this year. The Russell 2000 Index of smaller stocks rose 1.3 percent to 840.28, the highest level since October 2007.

“Given the beginning of a strong cyclical recovery in the U.S. and a tougher environment in many of these other international markets, it seems to us like a good place for investors to be,” said Connor Browne, who oversees about $5 billion as co-manager of the Thornburg Value Fund at Thornburg Investment Management Inc. in Santa Fe, New Mexico. “We’re positively inclined toward valuations and fundamentals for the U.S. market.”


Treasuries Rise as Yields Attract Buyers at Government Seven-Year Auction

Treasuries rose, with seven-year notes snapping a nine-day losing streak, as the highest yields in almost a year on a $29 billion auction of the securities eased concern the Federal Reserve may curtail U.S. debt purchases as the economy strengthens.

Bonds rose earlier as a private report before the Labor Department’s payrolls figures on April 1 showed companies added fewer jobs than forecast. U.S. debt dropped yesterday as Federal Reserve Bank of St. Louis President James Bullard said policy makers should consider ending purchases of Treasuries earlier than planned under its quantitative easing policy.

“The general message one takes away is that there is still strong demand for Treasuries from foreign investors at these levels, especially in the intermediate sector,” said Anshul Pradhan, an interest-rate strategist in New York at Barclays Plc, one of the 20 primary dealers obligated to bid in U.S. government debt sales.

The yield on the existing seven-year note dropped six basis points, or 0.06 percentage point, to 2.84 percent at 5:28 p.m. in New York, according to Bloomberg Bond Trader prices. The 2.75 percent security maturing in February 2018 increased 11/32, or $3.44 per $1,000 amount, to 99 13/32.

The seven-year note yield earlier touched 2.92 percent, the highest level since March 9. The nine consecutive days of gains ended yesterday made up the longest losing streak for the maturity since the government resumed selling it in 2009 after a break of almost 16 years. The benchmark 10-year note yield fell five basis points to 3.44 percent today.



Crude Oil Falls in New York After U.S. Inventories Rise More Than Forecast

Crude oil dropped after a U.S. government report showed a larger-than-forecast gain in supplies as fuel demand declined to the lowest level in four months.

Oil fell 0.5 percent as inventories climbed 2.95 million barrels to 355.7 million last week, the Energy Department said. Stockpiles were forecast to rise by 1.5 million barrels, a Bloomberg News survey showed. Fuel demand dropped to the lowest level since November as gasoline consumption decreased to 2.1 percent less than a year ago.

“The U.S. market is very well supplied,” said Jason Schenker, president of Prestige Economics, an energy advisory firm in Austin,Texas. “Gasoline demand is now lower than it was a year ago, which may be a signal that higher prices are starting to hurt consumers.”

Crude oil for May delivery declined 52 cents to settle at $104.27 a barrel on the New York Mercantile Exchange. Futures are up 27 percent from a year ago.

Oil volume on the Nymex was 496,986 contracts as of 2:36 p.m. in New York. Volume totaled 448,466 contracts yesterday, 45 percent below the average of the past three months. Open interest was 1.52 million contracts.

“The lack of volume shows a real lack of commitment to bid the market in either direction,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.



Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com

BDO UNIBANK INC.

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher

(632) 858-3001

Wednesday, March 30, 2011

The Essence of Financial Accounting in Your Business



28 March 2011


Dear Members:

The BPR & Company and its partners-- Pilgrim Christian College, Institute of Business Development and Entrepreneurship, CPAs and Philippine Association of Management Accountants CDO-MisOr Chapter thru your Chamber—the Cagayan de Oro Chamber of Commerce and Industry Foundation, Inc. (OROCHAMBER) is pleased to invite you to a timely seminar on “The Essence of Financial Accounting in Your Business” on April 27 at 8:30am-5:30pm at the Pilgrim Christian College Executive Hall, this city.

The whole-day training will cover the following topics:

  • Why Accounting is Crucial to the Business?
  • Basic Accounting Concepts
  • Setting up an Accounting System
  • Preparing Financial Reports
  • Financial Analysis
  • Cash Flow Management and Managing Receivables


The registration fee is pegged at Php 1,000/participant only inclusive of snacks, lunch, handouts, learning kit and a Certificate. Please make your cheque payable to OROCHAMBER.

We hope that you will be able to send your accounting and other key personnel to attend the said seminar.

Thank you so much for your continued support.

Very truly yours,


ANTONIO D. UY

President


Morning Brief: 30 March 2011




Deal shakes up telco sector

PHILIPPINE LONG DISTANCE Telephone Co. (PLDT) yesterday moved to increase its dominance of the local telecommunications industry, announcing that it would be taking control of a Gokongwei-led competitor.

PLDT will acquire a 51.55% stake in Digital Communications Philippines, Inc. (Digitel) -- the firm behind the low-price Sun Cellular brand -- from JG Summit Holdings, Inc. in a transaction valued at P69.2 billion. A mandatory offer to minority investors for the rest of the firm, if taken up fully, is expected to bring the deal’s total value to P74.1 billion.

JG Summit, in return, will get a 12.8% stake in PLDT.

The purchase involves 3.28 billion shares in Digitel along with zero-coupon convertible bonds and inter-company advances owed JG Summit, PLDT President Napoleon L. Nazareno said in a press conference.

PLDT will swap one new share for every P2,500 worth of Digitel assets to be acquired.

Minority shareholders were given the option to sell at a discounted P1.60 apiece or swap their stakes for PLDT’s shares at a premium of P2,500 per.

The deal, which officials said would result in a combined cellular market share of some 67% -- no estimates were provided regarding other services -- is expected to be completed by end-June, the two companies said.

The Sun Cellular and Smart cellular brands will be kept separate, while "Digitel fixed line operations can complement those of PLDT’s."

Lance Y. Gokongwei, president and chief operating officer of JG Summit Holdings, said the share swap was a "very difficult decision" that would help maintain their participation in the industry.

JG Summit Holdings will be given one board seat in PLDT as a result of the transaction, he said, with the post going to JG Summit Chairman James L. Go.

Rival firm Globe Telecom, Inc., in a statement, said it was prepared to keep competing in the mature industry.

"The Digitel and PLDT merger will not fundamentally change our strategy. We stand ready to compete, and to defend and grow our market share," Globe President and CEO Ernest L. Cu said.

"This industry has always been intensely competitive, and we have been a strong challenger to a dominant incumbent all this time. We will continue to focus on delivering relevant products to our retail and corporate customers, providing differentiated customer service and enhancing our network to deliver the best experience possible to our subscribers," Mr. Cu added.

Jose Mari Lacson, analyst at Campos, Lanuza & Co., Inc., said: "PLDT is not out to kill the competition, but growth of Globe will be limited."

A price war that was accelerated by the entry of Digitel has eroded telco margins in the country’s saturated market, with penetration at around 90% against a population estimated to be nearing 100 million.

PLDT Chairman Manuel V. Pangilinan said the deal would dilute stakes held by Hong Kong’s First Pacific Co. Ltd. and Japan’s NTT Communications. First Pacific’s stake will drop to 22% from 26% while NTT Communications’s stake will decrease to 18% from 21%.

PLDT -- valued at $8.9 billion -- saw it shares close unchanged at P2,036 per yesterday ahead of the deal’s announcement. The firm will come under one-hour trading halt starting at 10:00 a.m today, the Philippine Stock Exchange said.

JG Summit and Digitel -- valued at $269 million -- were last traded on Monday at P24.50 and P1.83 per share, respectively. Trading was suspended yesterday on the firms’ request.

Shares of Globe Telecom -- valued at $2.1 billion -- closed at P746 apiece yesterday, 7% or P49 higher.

Mediaquest Holdings, Inc., a unit of the Beneficial Trust Fund of PLDT, has a minority stake in BusinessWorld. -- reports from K. A. Martin and Reuters


Inflation to exceed 5% -- Tetangco

INFLATION is expected to top 5% in the coming months -- likely prompting further changes to monetary policy -- but the average rate for the year will still be within the 3-5% target, the Bangko Sentral ng Pilipinas (BSP) chief yesterday said.

"Inflation will peak in the second and third quarter and in some months will exceed the target," central bank Governor Amando M. Tetangco, Jr. said at the sidelines of a Management Association of the Philippines (MAP) meeting yesterday.

"In some months it will be more than 5% and in some it will be less," he added.

Still, the outlook is that the rise in consumer prices will eventually taper off, resulting in an "average that is well within target".

The BSP, said Mr. Tetangco, needs to "make sure that inflation expectations remain anchored and that any possible second effects would be dealt with at an early stage".

"If we will take any action, it is going to be gradual".

Analysts expect the central bank to keep raising policy rates.

"I see inflation breaking the 5% target, rising up to 5.5%," University of Asia and the Pacific economist Cid L. Terosa said in a telephone interview.

"I think it is inevitable for the central bank to raise rates. The market can absorb further rate hikes as they have other options, but end consumers have little left to do when inflation continues to rise," he added.

The BSP, which has warned that its 4.4% inflation forecast for 2011 was at risk, last week set a 25 basis point rate hike, its first adjustment since July 2009.

"Our view is that the central bank will continue to raise rates, as it is only in the beginning of a tightening cycle," Standard Chartered economist Simon Kwok-Cheung Wong said in an e-mail.

The central bank’s policymaking Monetary Board is scheduled to hold its next review on May 9.

Mr. Tetangco, in his speech at the MAP meeting, said the country was still set for modest economic growth despite disruptions such as civil unrest in the Arab world and the disaster in Japan.

"Stronger private consumption, overall improvement in [the] business outlook, healthy banking system and infrastructure growth because of PPPs (public-private partnerships) will offset the risks posed by escalating commodity prices and [a] possible decrease in remittances due to crises in the MENA (Middle East and North Africa) and Japan," he said.

"Effects of the recent events will likely to be just in the first half. In the long-term the effect will be positive."

Economic managers have ordered a review of existing macroeconomic targets, with some Cabinet officials and Mr. Tetangco saying that the 2011 gross domestic product goal of 7-8% will likely be missed. -- with a report from Reuters





U.S. Stocks Advance Amid Gains From Home Depot, Energy Shares

U.S. stocks advanced, sending the Standard & Poor’s 500 Index to a three-week high, as Home Depot Inc. (HD) drove consumer companies higher and energy shares rose amid speculation production will increase in the Middle East.

Home Depot rose 2.9 percent, the most in the Dow Jones Industrial Average, as the largest U.S. home-improvement retailer sold $2 billion in bonds to help finance buybacks. Rowan Cos. and Schlumberger Ltd. (SLB) rallied more than 4.4 percent as oil gained 0.8 percent. AK Steel Holding Corp. (AKS) gained 5.2 percent as SAC Capital Advisors LP reported a stake. Apollo Group Inc. (APOL), owner of the biggest U.S. for-profit college, fell 4.3 percent following lower enrollment.

The S&P 500 rose 0.7 percent to 1,319.44 at 4 p.m. in New York. It rebounded after falling to 1,305.26, compared with yesterday’s 50-day average of 1,306.11, a bullish sign to some traders. The Dow gained 81.13 points, or 0.7 percent, to 12,279.01, three days before a U.S. government report forecast to show non-farm payrolls increased by 190,000 in March.

“It’s hard not to want to be a part of this market when there’s clear economic momentum being driven by the jobs market,” said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $340 billion. “Any other week, these downgrades of Greece and Portugal would knock the market down.”


Treasuries Drop on Federal Reserve View After $35 Billion Five-Year Sale

Treasuries tumbled and the U.S. paid the highest yields in almost a year at a government debt auction for a second day as the St. Louis Federal Reserve’s president reiterated that the central bank may need to trim back bond purchases with the economy strengthening.

Yields on five-year notes climbed for a ninth day in the longest losing streak since before Lehman Brothers Holdings Inc. collapsed in 2008 as the Treasury paid the highest yield at a five-year debt auction since April 2010. James Bullard of the St. Louis Fed said in Prague today that the central bank may need to cut about $100 billion from its $600 billion plan to buy Treasuries through June under what’s become known as its policy of quantitative easing.

“The auction was not very good,” said Michael Franzese, managing director and head of Treasury trading at Wunderlich Securities Inc. in New York. “There are not many takers coming into the market. People don’t know what the Fed is going to do. The market’s in a state of confusion.”

Yields on existing five-year notes climbed five basis points, or 0.05 percentage point, to 2.23 percent at 4:59 p.m. in New York, according to Bloomberg Bond Trader prices. The 2.125 percent security maturing in February 2016 dropped 7/32, or $2.19 per $1,000 face amount, to 99 17/32.

Two-year note yields gained as much seven basis points to 0.82 percent, the highest level since Feb. 17. Five-year note yields touched 2.24 percent, the highest since March 4.



Crude Oil Advances as Equities Increase Amid Signals Economy to Recover

Oil rose for the first time in four days in New York as an advance in U.S. equities signaled the economic recovery may accelerate.

Crude gained 0.8 percent, erasing an earlier drop, as the Standard & Poor’s 500 Index increased amid advances in consumer stocks and St. Louis Federal Reserve President James Bullard said the Fed may be able to cut about $100 billion from its plan to buy Treasury securities as the economy rebounds.

“We’re seeing equities move higher, and that’s giving a little bit of positive sentiment toward crude,” said Matt Smith, a commodities analyst for Summit Energy Services Inc. in Louisville, Kentucky. “The remarks by Mr. Bullard indicate the potential for the economy is looking a little better.”

Crude for May delivery gained 81 cents to settle at $104.79 a barrel on the New York Mercantile Exchange. Oil has risen 28 percent in the past year.

Prices pared gains after the settlement when the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles increased 5.69 million barrels last week to 356.4 million. May oil rose 54 cents, or 0.5 percent, to $104.52 a barrel in electronic trading at 4:31 p.m.

Brent crude for May settlement on the London-based ICE Futures Europe exchange rose 36 cents, or 0.3 percent, to $115.16 a barrel.

The S&P 500 gained 0.7 percent to 1,319.44 and the Dow Jones Industrial Average rose 0.7 percent to 12,279.01.

If uncertainties in the global economy are resolved, the Fed could “pull up a little bit shy of our total of $600 billion,” in planned purchases of Treasury securities, a measure known as quantitative easing, Bullard told reporters today in Prague, where he was attending a financial conference.



Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com

BDO UNIBANK INC.

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher

(632) 858-3001

Monday, March 28, 2011

Philippine Markets: 28 March 2011


28 March 2011

USD/PhP: 43.45 + 0.145 PSEi: 3913.98 + 38.17
USD/JPY: 81.72 PFINC: 877.18 +9.55
EUR/USD: 1.4078 BDO: 49.90 - 0.50
GBP/USD: 1.5986 BPI: 55.05 + 1.25
PDSTF3M: 1.2942 MBT: 63.20 + 0.95
Prices as of 4:00pm Source: Bloomberg, Reuters


PH stocks up nearly 1%
By Doris Dumlao
Philippine Daily Inquirer


MANILA, Philippines—Buoyant global markets and selective stock plays set the stage for an upbeat local stock-market opening on Monday.

The main-share Philippine Stock Exchange index gained by 38.17 points, or 0.98 percent, to finish at 3,913.98.

The gains were led by the financial and property counters, which both surged by over 1 percent. All other counters were also up.

Value turnover amounted to P4.26 billion. There were 78 advancers as against 40 decliners and 46 unchanged stocks.

Telco stocks Digitel and PLDT led the day's gains followed by Digitel's parent firm JG Summit. Traders said Digitel is becoming more interesting to investors based on both corporate fundamentals and a potential merger and acquisition play.

Gaming stocks Belle and Leisure & Resorts were likewise up on favorable prospects for the privately run casino businesses.

Other stocks that traded favorably were Meralco, Ayala Land, Metro Pacific Investments, Semirara Mining, Metrobank, Ayala Corp., DMCI, AGI and SM Prime Holdings.

On the other hand, EDC, Cebu Air, Aboitiz Power, FPH and Globe Telecom traded in the red.


Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher

(632) 858-3001

Morning Brief: 28 March 2011



Ratings drop for Aquino
www.bworldonline.com

PUBLIC SATISFACTION with President Benigno S. C. Aquino III’s performance has fallen and controversies such as his purchase of a luxury car apparently have not helped, a new Social Weather Stations (SWS) survey found.

Most Filipinos still approve of Mr. Aquino but his latest net satisfaction rating is down 13 points to +51 (69% satisfied minus the 18% dissatisfied) from November’s +64 (74% satisfied, 10% dissatisfied), results of a March 4-7 poll made exclusive to BusinessWorldshowed.

Interviewed on the issue of the president’s purchase of a Porsche late last year, nearly half or 48% said it was not a good example for the chief executive of a country like the Philippines, notwithstanding details such as the car was not brand new and that Mr. Aquino had used his own money.

A political analyst warned that results pointed to "uneasiness," while MalacaƱang said a dip in Mr. Aquino’s numbers had been expected following his overwhelming election win last year.

Scores in all areas but one, socioeconomic classes and gender were down from November last year. In Luzon, urban areas, among the ABC class and among males, Mr. Aquino particularly saw his net ratings dip into "good" territory from "very good."

His sole gain was in the Visayas to a "very good" +60 from +56 in November. A "very good" net rating of +53 also came from Mindanao but this was down from +65 previously. It dropped 21 points to a "good" +48 in the Balance of Luzon from a "very good" +69, and by a slightly smaller 18 points to a "good" +41 in Metro Manila from a "very good" +59.

Rural satisfaction dipped to a net +55 from +67, both "very good," while urban satisfaction fell further to a "good" +47 from a "very good" +61 in November.

By socioeconomic class, Mr. Aquino’s net rating dived by 26 points to a "good" +49 from an "excellent" +75. Less substantial drops among the class D or masa and the class E allowed the president to maintain "very good" ratings of +51 (from +63) and +50 (from +64), respectively.

Satisfaction among men dropped to a "good" +47 from a "very good" +65, while women were apparently more forgiving as their rating of +55 -- down from +63 -- kept Mr. Aquino’s net score in "very good" territory.

The SWS classifies net satisfaction scores of +70 and above as "excellent"; +50 to +69, "very good"; +30 to +49, "good"’ +10 to +29, "moderate"; +9 to -9, "neutral"; -10 to -29, "poor"; -30 to -49, "bad"; -50 to -69, "very bad"; and -70 and below "execrable."

Many respondents, meanwhile, objected to purchase of a Porsche 911, with the SWS finding pluralities of 52% in the Visayas, 51% in Mindanao and 46% in the Balance of Luzon. Pluralities of 50% and 45%, respectively were also recorded among the masa and the class E. Mixed results were recorded in Metro Manila (44% agree, 44% disagree and 13% undecided) and among the class ABC (48% agree, 46% disagree, 6% undecided).

Asked to comment, Palace officials noted that Mr. Aquino’s scores remained in the "good" to "very good" range.

"Overall, across almost all sectors of society, the President continues to enjoy majority support," Presidential Spokesperson Edwin Lacierda said in a text message.

Sec. Ricky Carandang of the Presidential Communications Development and Strategic Planning Office took a more pragmatic view.

"In general, you tend to see a dip in the numbers after the euphoria of the election wears off. Still, this should remind us that the public is eager to see the results of our reforms sooner rather than later," he said in a separate text message.

As for the unpopular sports car purchase, the Palace insisted that the SWS results involved "public opinion on a private decision" and were "not relevant" to judgments on the President’s performance.

"The public recognizes it as a private issue. Hence, it does not connect the car with the President’s performance," Mr. Lacierda said.

Mr. Carandang said the public reaction was "understandable," but emphasized that "there was never any doubt that the Porsche was purchased by the President with his own money and not with public funds."

Ramon C. Casiple, political analyst at the Institute for Political and Electoral Reforms, said Mr. Aquino had made a bad judgment call.

"He should have known what the political ramifications would be when he bought that car," Mr. Casiple said in Filipino. The people, he pointed out, "go by impression."

More worrisome, said Mr. Casiple, is that "This survey already reflects disappointment ... it’s not distrust but uneasiness, particularly because this administration has policies that tend to alienate people..."

He claimed that dissatisfaction would increase given more recent issues, among these the move to postpone the elections in the Autonomous Region of Muslim Mindanao and the official response to displacements hitting overseas Filipino workers.

"One day you applaud a decision and on a subsequent day you don’t understand what they are doing ... Unfortunately, the picture coming out is that there is no direction ... we’re talking of reaction only," Mr. Casiple said.

The SWS polled 1,200 adults nationwide for the March 4-7 survey, which had sampling error margins of ±3% for national and ±6% for area percentages.

Last week pollster Pulse Asia, Inc. reported that a Feb. 24 to March 6 poll had found Mr. Aquino’s performance and trust ratings basically unchanged from October. It said 74% approved of his performance, down from 79%, while his trust rating also slipped to 75% from 80%.


Rotating brownouts loom
By MYRNA M. VELASCO
www.mb.com.ph

MANILA, Philippines -- Fears of rotating brownouts this summer were raised following the tripping of the San Jose-San Manuel transmission line of the National Grid Corporation of the Philippines (NGCP), causing power outages in Metro Manila and nearby areas despite the relatively low demand for electricity last Saturday.

The brownouts lasted from 2 p.m. to 5 p.m.

A day after the incident, system operator NGCP was still clueless on what caused the line to trip which triggered massive power loss, primarily in Metro Manila and neighboring areas.

“It is too early to say whether the tripping is a function of overloading or not. We will just have to wait for the report,” NGCP spokesperson Cynthia Alabanza said, stressing that their technical people are still investigating the incident.

Power industry players are apprehensive over the reliability of the transmission system with the power line tripping with relatively low demand. They are also fidgety as to the implications of such incident especially during the summer months when demand for electricity picks up.

Alabanza argued that “overloading” could not have been the only cause of the tripping, as she indicated that even falling trees or storm-tossed tree branch crashing on a transmission line may trigger a line tripping and consequent power outages.

She pointed out that in the case of the brownout incidents triggered by the San Jose-San Manuel line, the initial efforts “were focused on putting the three downed transformers back online.”

As of yesterday, NGCP reported that the lines have already been fully energized.

Meanwhile, Manila Electric Company external communications manager Joe Zaldarriaga explained that “if there is a transmission constraint, there is no other recourse but for us to undertake load shedding which results in rotating power interruptions to balance the system.”

Meralco said it implemented manual load dropping (MLD) for three hours following information transmitted by NGCP on the tripping of its line.

The Department of Energy (DoE) noted that it will look into the matter, as it stressed that “this incident is isolated and need not be interpreted as summer brownouts.”

The tripping of the NGCP line, which is a crucial transmission backbone for power supply to Metro Manila, caused the shutdown of some power plants – mainly the Sual 2, Masinloc, San Roque 3, and Pantabangan generation facilities.

Earlier, the DoE said it was confident there would be no rotating brownouts this summer if generating capacity and demand for power are the only considerations.

But it conceded that transmission constraints and technical glitches could trigger power outages.


Investors focus on jobs

NEW YORK (CNNMoney) -- As Wall Street continues to digest events overseas, investors will focus on the U.S. job market this week.

The Labor Department's March jobs report typically sets the stage for the rest of the month because of how important jobs are to driving future economic activity. While the U.S. economy grew by 3.1% in the last three months of 2010, job creation has not kept pace.

"There remains a lot of concern that the U.S. remains in this jobless recovery," said Daniel Morgan, portfolio manager with Synovus Trust Company.

Economists surveyed by Briefing.com expect the U.S. economy created 185,000 jobs last month and the unemployment rate remained steady at 8.9%.

Wall Street will also get the closely-watched Institute for Supply Management manufacturing index and two reports on the housing market.

Investors will also have to balance this week's economic data with ongoing concerns about Japan's nuclear reactors, Europe's debt problems and Libya's civil war.

It's been a roller coaster ride for U.S. markets as the first quarter of 2011 heads into its final trading week. Stocks struck multi-year highs in mid-February, fueled partly by a strong earnings season, but a spate of international crises have put a damper on market momentum.

"Investors were pretty enthusiastic at the start of the quarter, but the Mid East and Japanese problems have been like punches to the face," Morgan said.

That said, U.S. stocks have bounced back from every crisis so far. The Dow is on pace to end the quarter up 5.5% while the S&P is up 4.5% and the Nasdaq Composite has gained 3.4%.

"The market has weathered a lot of this bad news pretty well because underlying it all is a greater willingness to take risk," said Brian Gendreau, market strategist at Financial Network, a financial advisory firm.

On the Docket:

Monday: The Commerce Department will release February personal income and spending figures at 8:30 a.m. ET and the National Association of Realtors will issue its January pending home sales report at 10 a.m. ET.

Pending home sales are expected to increase 0.3% while personal incomes are expected to rise 0.3% and personal spending is to rise 0.5%.

Tuesday: Investors will get March consumer confidence figures from the Conference Board. With the turbulence in the oil markets and Japanese nuclear crisis, economists expect consumer confidence to fall sharply to a reading of 65.0 from last month's reading of 70.4.

Also out on Tuesday is the S&P Case-Shiller home price index for January.


Wednesday: The ADP private-sector jobs report is the first of three labor-related reports that investors will get this week. Wall Street is looking for an addition of 210,000 private-sector jobs.The ADP report has a mixed record of accuracy but it's typically used to forecast Friday's more-important government jobs report.

In earnings, discount retailer Family Dollar (
FDO, Fortune 500) will report its results before the opening bell.

Thursday: Investors get weekly jobless claims at 8:30 a.m. ET, followed by the Chicago Fed's purchasing managers' index for March at 9:45 a.m. ET and the Commerce Department's February factor orders report at 10 a.m. ET.

Weekly jobless claims are expected to edge higher to 383,000 claims from last week's 382,000 claims. The Chicago PMI index is expected to fall to a reading of 69.5 and factory orders are expected to rise 0.4%.

Friday: In addition to the jobs report from the Labor Department, investors will get the Institute for Supply Management's March manufacturing index and the Commerce Department's February construction spending report, both released at 10 a.m. ET.

Economists expect the ISM manufacturing index remained steady at a reading of 61.4 while construction spending fell by 0.7%.

The major automakers such as General Motors (GM) and Ford (F, Fortune 500) will release their monthly sales reports starting at around 12 p.m. ET.



Oil Trades Below $106 as Europe Debt Concerns Outweigh Middle East Unrest

Oil traded below $106 a barrel in New York as concerns that European nations’ debt may cut demand overshadowed the threat of the Libyan conflict spreading in the Middle East and restricting crude supplies.

Futures slipped 0.2 percent on March 25 after the European Union cut the amount committed to an emergency support system for the euro region. Libyan rebels recaptured the oil port of Ras Lanuf, while 12 people died in clashes in Syria.

Crude for May delivery traded at $105.46 a barrel, up 6 cents, in electronic trading on the New York Mercantile Exchange at 10:08 a.m. Sydney time. The contract fell 20 cents to $105.40 on March 25. Prices climbed 4.3 percent last week and are 28 percent higher the past year.

Oil in New York has rallied 24 percent since protests began Feb. 15 in Libya, a member of the Organization of Petroleum Exporting Countries. The conflict is the bloodiest in uprisings that have toppled the presidents of Tunisia and Egypt and spread to Algeria, Bahrain, Iran, Oman and Yemen.

Brent crude for May settlement traded at $115.66 a barrel, up 7 cents, on the ICE Futures Europe exchange in London. The contract dropped 13 cents to $115.59 on March 25.



Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com

BDO UNIBANK INC.

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher

(632) 858-3001

Friday, March 25, 2011

Important Notice to CEPALCO Customers Subject: Scheduled Power Interruption on Sunday, March 27, 2011

CAGAYAN ELECTRIC POWER & LIGHT CO., INC

Important Notice to CEPALCO Customers

Subject: Scheduled Power Interruption on Sunday, March 27, 2011

The Cagayan Electric Power & Light Co., Inc. (CEPALCO) would like to inform all customers that power supply will be interrupted on MARCH 27, 2011 as shown below:


Reasons:

FACILITATE THE RECONFIGURATION OF THE 69KV CIRCUIT SUPPLYING PUEBLO AND MACASANDIG SUBSTATIONS.

Date:

Sunday, March 27, 2011

Interruption Time:

6:00 AM – 7:30 AM (1 hour and 30 minutes); switching works

Affected Areas:

PUEBLO FEEDER 2 AREAS:

Portion of Upper Carmen, Upper Balulang and all of Brgy. Lumbia including; PNR Sawmill, Shop and transmitter; Pueblo de Oro, Camella Homes, Xavier Estates, Xavier Heights, Xavier High School, La Buena Vida, Frontiera and Montana subdivisions; CAA-BAT Lumbia Airport, Rio Verde & Bubunawan Power Corporation.


Power will however be restored immediately without further notice

when switching works are completed earlier than scheduled.

We hope the affected customers and the public in general

will be guided by this announcement. Thank you.


Released by:

LGU Castillo

Customer & Community Relations Dept.

Philippine Markets: 25 March 2011


25 March 2011

USD/PhP: 43.305 -0.115 PSEi: 3875.81 + 34.27
USD/JPY: 81.000 PFINC: 867.63 + 4.53
EUR/USD: 1.4167 BDO: 50.40 + 0.55
GBP/USD: 1.6110 BPI: 53.80 + 0.10
PDSTF3M: 1.4019 MBT: 62.25 + 0.15
Prices as of 4:00pm Source: Bloomberg, Reuters



Philippine Interest Rate Outlook

Secondary market rates moved lower as market participants had already priced in the 25-bps hike in the Bangko Sentral Ng Pilipinas (BSP) benchmark rates. Rising inflation expectations put pressure on interest rates to rise to combat further rise. The monetary authorites decided late Thursday afternoon to raise its benchmark rates to 4.25 percent from 4.00 percent, marking its first adjustment since July 2009. BSP cited its move as preemptive as they raised their inflation forecast range to 3.00-5.00 percent from the previous 3.00 - 4.40 percent range.

Continue to expect rates to move sideways to up in the near-term while gradual rise is seen over the medium term.

Philippine Equities Outlook

Local shares consolidated this week buoyed by improved sentiments in Wall Street. However, the continued spread of the "unrest" virus in the Middle East and North Africa continued to provide instablity to the region causing oil prices to remain above the US$100/bbl. This uncertainly continues to put a toll on inflation expectations. Thus building a rising global inflation expectations, which could support further tighting in interest rates. This could provide some adjustments in the stock market.

Chartwise, the week's close at 3875.81 continues support further tests toward the 3,700 levels in the near-term. Immediate support and resistance is seen at 3,700 and 3,950 levels, respectively

Philippine Peso Outlook

The local currency rose anew by 0.90 percent week-on-week to 43.305 after the monetary authorities raised its benchmark rates by 25 bps to 4.25 percent. The weaker sentiment on the dollar also contributed to the peso's strength this week.

Chartiwse, the week's close at 43.305 continues to suggest further consolidation between the 43.25 - 44.00 levels in the near-term.

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher

(632) 858-3001

Morning Brief: 25 March 2011


Gov’t urged to issue rules for PPP projects

THE PRIVATE SECTOR wants the government to finalize rules for public-private partnership (PPP) deals, with banks and financial institutions eager to capitalize on the potential of infrastructure financing waiting in the wings.

"It’s great that the government is finalizing the feasibility studies and the roadshows but they also have to focus on the financing for the PPP projects. Without financing, you won’t be able to complete the projects," John Walker, chairman of the Korea arm of financial services giant Macquarie Group of Companies, told BusinessWorld in an interview at the sidelines of a Macquarie PPP conference yesterday.

The financing framework will also encourage the private sector, aided by their expertise in the field, to "take the lead" in funding the planned infrastructure projects, Mr. Walker said.

Banks, in particular, expressed their willingness to invest in the PPP deals, citing the steady cash flows involved through the long-term interest income.
"There is a high liquidity in banks and we are always looking for places to put our money in. PPP projects have heavy capital requirements and will need a lot of loans. As long as they are feasible and good projects, we are interested," Banco de Oro (BDO) Capital president Eduardo V. Francisco said in a telephone interview.
Mr. Francisco, also the chairman of the Capital Market Development Council of the Philippines, emphasized that he was "sure" that domestic banks had the appetite to provide the large sums of funding necessary for the PPP deals.

Macquarie’s Mr. Walker welcomed this, saying it would create competition among banks to give the lowest interest rates for PPP project loans.
He gave the example of South Korea where the Korea Development Bank could impose higher interest rates since they were the main debt provider for PPP deals. The entry of domestic banks, however, broke Korea Development Bank’s stranglehold and brought down costs for the government.

The Aquino administration earlier this month announced five PPP projects that will be auctioned off this year: five-year maintenance contracts for Metro Rail Transit Line 3 (P6.3 billion) and Light Rail Transit Line 1 (P7.7 billion) in Metro Manila, the Daang Hari-South Luzon Expressway link (P1.6 billion), Ninoy Aquino International Airport expressway (P10.59 billion) and the North Luzon-South Luzon expressway link (P21 billion).

Banks are awaiting further details regarding the allocation of project costs between the government and the private investors, BDO Capital’s Mr. Francisco said. "Once the bidding starts, the investors will need to have finalized their credit lines and lined up the banks [that will finance the project]," he explained.

Government financial institutions (GFIs) have also pledged P200 billion for a PPP fund, split equally among the Government Service Insurance System, Social Security System, Land Bank of the Philippines and the Development Bank of the Philippines.

The government has not yet released the rules on how the financing can take place.
Finance Undersecretary Rosalia V. de Leon told BusinessWorld that the Department of Finance was planning to release infrastructure bonds for the GFIs but was still waiting for an enabling executive order from the Palace. The Finance department is also considering infrastructure bonds for the private sector but this is still far from implementation.

"We are still studying the structure of the bonds, the business plan and the prospective buyers, such as hedge funds or insurance companies," Ms. de Leon said.
The diversification of the means of infrastructure financing is crucial to the success of PPP deals and the development of the Philippine capital market, Macquarie’s Mr. Walker said.



Rate hikes finally start

KEY INTEREST RATES were raised yesterday as expected, with monetary authorities warning of stronger inflationary pressures and the possibility of further tightening.
The move -- a 25-basis-point increase that pushed the Bangko Sentral ng Pilipinas’ (BSP) overnight borrowing and lending rates to 4.25% and 6.25%, respectively -- marked the first adjustment since July 2009.

Key rates had been trimmed by a total of 200 basis points starting December 2008 as the BSP’s policymaking Monetary Board sought to cushion the impact of the global financial crisis.

Other central banks have since reversed similar accommodative stances and the BSP, in delaying, has been criticized as being behind the curve.
"International food and oil prices have continued to escalate due to the combination of sustained strong global demand and supply disruptions and constraints," BSP Governor Amando M. Tetangco, Jr. yesterday said in a statement.

"The latest baseline inflation forecasts now indicate that the 3-5% inflation target range in 2011 could be at risk."
The rise in consumer prices accelerated to 4.3% last month from 3.6% in January. The latter result, up from 3% in December, had prompted the Monetary Board to raise its inflation forecasts for 2011 and 2012 during a Feb. 10 meeting. The forecast for this year was adjusted to 4.4% from 3.6% previously while that for 2012 was also increased to 3.5% from 3%.

Fresh outlooks were not issued yesterday but the 2011 outlook will be breached, BSP deputy governor Diwa C. Guinigundo said as he called the rate hike a "preemptive measure."

"The action is in response with public expectations on inflation given [global] developments especially in MENA (Middle East and North Africa) and Japan," he told reporters.
"Broadly speaking, now that we have raised rates the inflation will be within our target of 3-5% but will be higher than the [forecast of] 4.4%," Mr. Guinigundo added.
Analysts said further adjustments should be expected.

"There will be rate hikes in the future because inflationary pressures due to external events are picking up," University of Asia and the Pacific (UA&P) economist Cid L. Terosa said.

Rizal Commercial Banking Corp. (RCBC) senior vice-president Marcelo E. Ayes said the BSP would "continue to raise rates very gradually."
Some analysts expect rate hikes totalling as much as one percentage point this year.
"We have pencilled in another 50 basis point increase in the second quarter and 25 basis points in the third quarter," said Sherman Chan, economist at HSBC in Hong Kong.

"Inflation has clearly intensified in recent months, and the BSP has taken the prudent step of raising rates so as to curtail demand-driven pressures."
Simon Wong, economist at Standard Chartered Bank in Hong Kong, said: "The central bank has put out some hawkish comments that inflation pressure is stronger, and so we think this is only the beginning of the tightening cycle."

The BSP, said Mr. Guinigundo, "will continue to be guided by the inflation forecast, and increases in food and commodity prices," adding that it was also "waiting for more concrete signs of second round effects."

He had defended the delay in adjustments last week, saying the Philippines had more room given the relatively narrow 200-basis point easing implemented during the financial crisis.
Tightening, said Mr. Ayes, would have a "slight negative impact" on growth. Mr. Terosa concurred, saying that "As long as the inflation rate doesn’t skyrocket, GDP (gross domestic product) won’t decrease by more than 0.5%."

Mr. Tetangco, however, said: "Buoyant domestic demand conditions provide room for a policy interest rate hike without affecting the country’s economic growth prospects."
Macroeconomic targets for 2011 and 2012 are being reviewed. On Wednesday, Mr. Tetangco said achieving the current 7-8% growth goal was now "unlikely". A 5-6% expansion, he added, "is a reasonable figure."

.U.S. Stocks Rally Amid Higher-Than-Estimated Corporate Profits

U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a second day, after corporate profit topped analysts’ estimates and a government report showed a decline in jobless claims.

Micron Technology Inc. (MU), the biggest U.S. producer of computer-memory chips, rose 8.4 percent and Linux-software maker Red Hat Inc. (RHT) surged 18 percent after earnings beat analysts’ estimates. GameStop Corp. (GME) jumped 2.9 percent as the largest video-game retailer forecast profit above analyst’s projections.Amazon.com Inc. (AMZN) gained 3.5 percent after William Blair & Co. raised its rating for the world’s biggest online retailer.

The S&P 500 advanced 0.9 percent to 1,309.66 at 4 p.m. in New York, the highest level in two weeks. The Dow Jones Industrial Average advanced 84.54 points, or 0.7 percent, to 12,170.56. The benchmark measure of U.S. stock options completed its biggest six-day drop since November 2008.

“There’s no shortage of cheap stocks,” Leon Cooperman, chairman of hedge fund Omega Advisors Inc. said in an interview today with Bloomberg Television at the Strategas Global Macro Conference in New York. “You have good profits and good economic growth. You have good valuations and conservative posture.”
The S&P 500 has advanced 4.1 percent in 2011, extending last year’s 13 percent rally, amid government stimulus measures and as companies reported earnings that topped analysts’ estimates for the eighth straight quarter. The benchmark index is trading at 15.4 times reported earnings, compared with the average ratio of 19.7 at bull-market peaks.

Jobless Claims Drop
Fewer Americans filed applications for unemployment benefits last week, signaling the labor market is mending. Jobless claims declined by 5,000 to 382,000, Labor Department figures showed, in line with the median forecast of economists surveyed by Bloomberg News. The total number of people receiving benefits dropped to the lowest level in almost three years.

“The economy is improving and this is a good environment for corporate profits,” said David Kelly, who helps oversee $450 billion as chief market strategist at JPMorgan Funds in New York. “The latest numbers suggest an advance in the U.S. economy. Investors are buying the idea that even though there are many headwinds, if you believe the economy will grow, then stocks are cheap.”

Global stocks rose for a sixth day, the longest rally for the MSCI World Index since September, amid speculation the need for European Union bailouts may end with Portugal. European leaders meet in Brussels today after Portugal’s parliament rejected budget-cutting measures, pushing the country closer to needing an EU rescue.
Volatility Slumps

The VIX, as the Chicago Board Options Exchange Volatility Index is known, fell 6.1 percent to 18, extending its drop since March 16 to 39 percent. That’s the biggest drop over the same number of days in 28 months. The VIX needed to fall below 17.53 to beat the six-day record set two months after Lehman Brothers Holdings Inc.’s September 2008 bankruptcy sent stocks plunging.

Micron Technology jumped 8.4 percent to $11.50. Second- quarter sales and profit beat analysts’ estimates on increasing demand for chips used to store data on mobile phones and tablets. Revenue climbed 15 percent to $2.26 billion in the period that ended March 3. That compared with $2.1 billion, the average of predictions compiled by Bloomberg.

Red Hat gained 18 percent, the most in the S&P 500, to $47.26. The largest seller of the Linux operating systemposted a profit of 26 cents a share excluding some items, beating the 22 cent average of 22 estimates in a Bloomberg survey, as customers updating data centers to take advantage of cloud computing boosted billings.

GameStop Rallies
GameStop rose 2.9 percent to $21.73. The world’s largest video-game retailer forecast first-quarter profit excluding some items of at least 53 cents a share, beating the average analyst estimate of 52 cents in a Bloomberg survey.
Amazon.com added 3.5 percent to $171.10 after being raised to “outperform” from “market perform” at William Blair by equity analyst Mark Miller.
Bank of America Corp. (BAC) sank 1.3 percent to $13.48. The biggest U.S. lender was cut to “market perform” from “outperform” at FBR Capital Markets. The bank may not have the earnings power to be in compliance with the new capital requirements, analyst Paul Miller said in a note.

Trading in U.S. stocks, which fell to the slowest pace this year, is poised to contract because Citigroup Inc. (C)’s reverse stock split may take out about one-tenth of the volume, according to Birinyi Associates Inc. New York Stock Exchange volume declined to 3.75 billion shares on March 22 and 3.97 billion shares yesterday, the second and the sixth-slowest trading days this year, respectively, Bloomberg data show.

“We won’t be surprised when we read in a few weeks that volume is declining and how this is a negative signal for equities,” Jeffrey Yale Rubin, Birinyi’s director of research, wrote in a note yesterday. “Just be aware that it’s because of a structural change and not a ‘real’ decline in volume.”


Oil Trades Near Two-Day Low on Signs European, U.S. Fuel Demand May Weaken

Oil traded near a two-day low in New York as signs of weakening demand in the U.S. and Europe overshadowed concerns that the conflict in Libya and unrest in the Middle East threaten crude supplies.

Futures dropped from the highest price in more than two years yesterday after Fitch Ratings cut Portugal’s credit ranking and U.S. durable goods orders unexpectedly fell. Allied warplanes carried out further strikes against ground forces loyal to Libyan leader Muammar Qaddafi. Regional unrest has toppled the leaders of Tunisia and Egypt and extended to Yemen, Bahrain and Syria.

“We can’t support $100 oil, and that’s becoming more and more evident as we see these economic figures come out from Europe and the U.S,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “We saw the highs, and we couldn’t press through.”

Crude for May delivery traded at $105.55 a barrel, down 5 cents, in electronic trading on the New York Mercantile Exchange at 9:42 a.m. Sydney time. Yesterday, it slid 15 cents to settle at $105.60. The contract reached $105.75 on March 23, the highest since Sept. 26, 2008. Prices are up 4.4 percent for the week and 31 percent higher than a year ago.

Brent oil for May settlement gained 17 cents, or 0.2 percent, to $115.72 a barrel on the London-based ICE Futures Europe exchange yesterday. It was the highest closing price since March 9.

Fitch Downgrade
Fitch downgraded Portugal’s long-term foreign and local currency issuer default ratings by two levels to ‘A-’ and its short-term issuer default ratings to “good” from “highest” credit quality.

Portugal may require a bailout of as much as 70 billion euros ($99 billion), said two European officials with direct knowledge of the matter. The EU lent 177.5 billion euros last year to Greece and Ireland to avert defaults, triggering a backlash in Europe’s better-off countries, such as Germany.
Fitch announced its ratings cut as a summit of European Union leaders got under way in Brussels to discuss the situation. Portuguese Prime Minister Jose Socrates resigned before the meeting after plans to cut the budget were rejected by parliament.

Orders for long-lasting goods in the U.S. unexpectedly dropped 0.9 percent in February after a 3.6 percent gain the prior month that was higher than initially reported, the Commerce Department said yesterday in Washington.

Oil Boycott
German Chancellor Angela Merkel called for a boycott of Libyan crude as a way to stop finance flows to the regime of Qaddafi. There should be “no more oil exports from Libya to European countries,” Merkel told lawmakers in Berlin in a speech on the European Union summit that began yesterday.
Oil supplies from Libya, Africa’s third-largest producer, collapsed to a “trickle” last week from 1.6 million barrels a day in January and may be halted for months because of sanctions, the International Energy Agency estimates.

Shipments from the Organization of Petroleum Exporting Countries will drop to the lowest level since October as the fighting in Libya halts exports, according to tanker-tracker Oil Movements. Exports will fall to 23.03 million barrels a day in the four weeks to April 9, down 1.8 percent from 23.46 million in the period ended March 12, the consultant said in a report yesterday. The data exclude Ecuador and Angola.

OPEC members are more likely than at any time in the past two years to agree to a formal supply increase when they meet in June because of a forecast for a “sustained” supply disruption, according to David Kirsch, a Kansas City, Kansas- based analyst with PFC Energy.



Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com

BDO UNIBANK INC.

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher

(632) 858-3001
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