MANILA, Philippines—Local stocks rallied back to the 6,100 level on Thursday on reports that the Philippines had posted its fifth straight quarter of more than 7-percent gross domestic product growth in the third quarter.
Firming up for the third straight session, the main-share Philippine Stock Exchange surged by 116.09 points or 1.92 percent to close at 6,169.96, likewise aided by a strong regional market.
Local equities were perked up by news that Philippine GDP growth was at 7 percent in the third quarter, bringing the nine-month expansion to 7.4 percent.
“Although the result came below consensus expectations of 7.1 percent year-on-year, it was suppressed by a high base effect and the adverse impact of 10 typhoons in third quarter,” British bank Standard Chartered said in a research note.
Stanchart said it was maintaining its forecast of 7.2 percent GDP growth for the country this 2013 and 6.7 percent in 2014. For the fourth quarter, it was expecting GDP growth to remain resilient at 6.4 percent year-on-year.
“The Philippine economy looks to cap the year on a stronger footing amid a solid, albeit slightly slower, third quarter GDP growth of 7 percent,” Metrobank said in a separate note, adding that the robust GDP growth could be mainly attributed to the strong performance of the manufacturing sector, still solid investment spending, and rebound in external trade.
Metrobank has thus kept its full-year GDP forecast of 7 percent for the Philippines this year.
At the local stock market, value turnover for the day amounted to P6.78 billion. There were 98 advancers, which trumped 53 decliners while 44 stocks were unchanged.
The day’s biggest PSEi gainer was still Philex (+6.51 percent), following reports that the country’s largest mining firm had restored a damaged tailings storage facility to a level of stability. Other top gainers were EDC (+6.04 percent) and Megaworld (+5.42 percent).
RLC and BDO rose by over 4 percent while Jollibee was up by over 3 percent. ALI, Globe, SMIC and AP were all up by more than 2 percent.
The 7 percent GDP growth posted by the Philippines for the third quarter was the highest recorded in the Southeast Asian region and second to China’s 7.8 percent growth for the period.
“The sustained expansions in investment spending and the manufacturing sub-sector continue to provide the needed boost to GDP growth,” Metrobank said.
Metrobank said the impact of the calamities that struck Visayas in the latter part of the year would likely dent fourth quarter growth, with the agricultural sector largely taking the beating. “However, the reconstruction and rehabilitation efforts will lift GDP growth next year,” it said.
“External risks remain amid the tapering of the US QE (quantitative easing) program, slackening in some emerging economies, and continuing troubles in Europe’s credit markets,” Metrobank said.
QE refers to the US Federal Reserve’s aggressive bond-buying operations meant to inject additional liquidity and stimulate the world’s largest economy.
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