Philippine Markets: 23 November 2010

23 November 2010

USD/PhP: 44.20 + 0.25 PSEi: 4147.35 - 39.54
USD/JPY: 83.65 PFINC: 960.19 - 11.01
EUR/USD: 1.3581 BDO: 55.10 - 1.80
GBP/USD: 1.5940 BPI: 59.45 - 0.05
PDSTF3M: 1.7827 MBT: 71.80 - 1.35
Prices as of 4:00pm Source: Bloomberg, Reuters


Philippine Deficit Narrows as Aquino Trims Spending
By Karl Lester M. Yap and Max Estayo

Nov. 23 (Bloomberg) -- The Philippines’ budget deficit
narrowed in October as spending fell and tax revenue rose.
The shortfall was 10.5 billion pesos ($238 million) last
month, the government said in a statement in Manila today.
Spending decreased 4.5 percent in October from a year earlier
after a 3.6 percent decline previously reported for September,
and revenue rose 15.1 percent. The 10-month deficit was 270.3
billion pesos.
President Benigno Aquino, who took office in June, is
winning investors’ confidence as he goes after tax evaders and
corrupt officials to narrow a budget deficit that surged to a
record 298.5 billion pesos last year. Standard & Poor’s this
month raised the nation’s debt rating to the highest level in
more than seven years.
“The fiscal deficit is not a key market concern at the
moment,” Vincent Tsui, a Hong Kong-based economist at Standard
Chartered Plc, said before the report. “The focus of the
government should be on increasing collection efficiency” and
allocating more resources from the budget for infrastructure
developments, he said.
The shortfall this year may be less than the government
target of 325 billion pesos because of savings on debt payments,
Deputy Treasurer Eduardo Mendiola said Nov. 17. Aquino plans to
narrow the budget gap to 290 billion pesos next year.
S&P raised the Philippines’ credit rating on Nov. 12 to BB,
the second-highest non-investment grade and the same level as
Indonesia and Vietnam.

Smuggling Complaint

The Philippines last month filed a 24.5 billion-peso
smuggling complaint against the local unit of Royal Dutch Shell
Plc, saying it was shifting its drive against tax evasion “to a
much higher gear.” The unit’s chairman said the company has
never engaged in smuggling.
The Southeast Asian nation has run deficits in 21 of the
past 25 years, limiting state spending on infrastructure to less
than the 5 percent of gross domestic product recommended by the
World Bank. The $160 billion economy grew 7.9 percent in the
second quarter from a year earlier, the fastest pace in three
years.


Report: N. Korea fires on S. Korea, injuring at least 6
By the CNN Wire Staff

Seoul, South Korea (CNN) -- North Korea on Tuesday fired artillery into the sea near its tense western sea border with South Korea, injuring at least four South Korean soldiers and two civilians, the Yonhap news agency reported.

At least 200 rounds of artillery hit an inhabited South Korean island after the North started firing about 2:30 p.m. local time, Yonhap said.

South Korea's military responded with 80 rounds of artillery and deployed fighter jets to counter the fire, the report said.

The South Korean army also raised its alert condition, the report said.

Images of plumes of smoke were quickly broadcast on Yonhap television from the island of Yeonpyeong, but it was not immediately clear what the artillery had hit.

The island that was hit has a total of about 1,300 residents, a fisherman who lives on the island told Yonhap.

The South Korean government immediately called an emergency meeting of its security ministers.