Apology
pulls peso, stocks
As rating firm warms of lingering political uncertainty
As the peso and
local stocks slid, an international credit rating firm said President Arroyo’s
admission Monday night of having spoken to an election official during last
year’s presidential polls is unlikely to affect the Philippines’
sovereign ratings.
In a statement sent from Singapore, Standard
& Poor’s Rating Services, however, warned that “[o]ver
the longer term…the possibility of a President weakened by diminished
public support and an obstructive legislature could heighten political
instability.”
“That might further impede the administration’s
efforts to put public finances on an even keel. Such an environment would
prolong the Philippines’ vulnerability to adverse developments,
given its high public and external debt,” said Agost Bernard, Standard
& Poor’s credit analyst.
The Philippines’ foreign-currency rating remains below
investment grade at ‘BB minus.’ At this level, foreign borrowings
are slapped steeper interest rates, resulting
in a heavier debt burden.
The rating firm said the outlook for Mrs. Arroyo’s remaining
five years in office has become “less certain” following the
political scandal, with the political opposition’s continued criticism
and an impeachment complaint “raising the specter of ongoing political
uncertainly.”
“This implies further distraction for the legislature
and President from their reform tasks, and the increased likelihood of an
ineffectual presidency for the remaining five years,” Bernard said,
adding this would weaken ongoing fiscal reforms and prolong the political
uncertainly that has kept foreign investment away for the better part of
the past decade.
The rating firm warned that
the continued political noise would lead to a “muddle-through”
situation wherein reforms would yield “mild” success.
Though it may prevent the country’s debt from further
rising, the Philippines’ vulnerability to external shocks would remain
given its huge debt overhang, the rating firm said.
Financial markets slide
Financial markets slid slightly on Tuesday, with the peso ending
the day at 55.69 to the dollar, or weaker than Monday’s close of 55.51.
At the Philippine Dealing System, the local unit opened at 55.65
and managed to rise to 55.49 before shedding 20 centavos by the end of the
day.
Trading volume declined to $204.20 million from Monday’s $308.5 million.
The Bangkok Sentral ng Pilipinas (BSP) as well as bank traders
blamed the weak peso on a strong US currency and an
increase in corporate demand for the greenback.
“The market is muted,” a trader said. “The regional currencies
also weakened because of strong dollars. The weakening of the peso is nothing
compared [with] the weakness of the regional currencies.”
Traders said an expected increase in the US interest rates on
Friday bolstered the dollar.
“The investors still believe in GMA. The tape cannot be used as evidence
because wiretapping is illegal,” a trader said.
At the Philippine Stock Exchange, share prices closed 0.42 percent
lower as investors waited to see how the latest twist in allegations of
vote rigging and corruption against President Arroyo play out, dealers said.
They said trade was cautious after Mrs. Arroyo’s apology.
The PSE composite index shed 8.30 points to 1,955.20 after moving between
1,952.29 and 1,963.50.
Volume amounted to 185 million
shares worth P966 million.
The broader all-shares index fell 4.29 points to 1,187.02.
Losers led gainers 46 to 24, with 42 stocks unchanged.
“The market is actually resilient despite the lingering
political uncertainties. We did not see any panic [despite Mrs. Arroyo’s
statement],” said Nestor Aguila of DA Market Securities.
“It was more of a continuing technical correction after
the market’s rise recently,” he remarked.
ING Financial Markets, in a note, said it views President Arroyo’s
admission as a step forward in diffusing current political tensions.
“We expect politics to fade from view gradually and allow
economic fundamentals to reassert their strength on financial asset prices,”
it said, citing in particular the progress on the government’s fiscal
reforms.
With Maricel E. Burgonio and AFP
The
legacy of the house of Sin
The nation buried Cardinal
Jaime Sin Tuesday, in a three-hour ceremony that was solemn, sonorous, timorous
and humorless. The high and the mighty of the government, led by President
Arroyo and Vice President Noli de Castro, and of the Catholic Church, led
by Archbishop Cardinal Ricardo Vidal of Cebu and Archbishop Gaudencio Rosales
of Manila, and leading prelates from Asia were in attendance.
Cardinal Sin leaves a legacy in
three areas-in the finances of the Catholic
Church, his political activism and his impact on the national ECONOMY.
Before Sin took over as prince of the Roman Catholic Church
in 1976 and as president of the Catholic Bishops Conference of the Philippines
in 1977, the local Catholic Church was one of the richest in the world.
It has substantial investments in bluechip companies like San Miguel, Bank
of Philippine Islands, Ayala and the Cardinal
VIRTUAL
BUSINESS
TONY LOPEZ
Santos Medical Center. It owned Philippine Trust and Monte de Piedad, in
the name of about 100 bishops. Those investments are gone. Philtrust was
bought by publisher Emilio Yap. Monte de Pieded was
bankrupted by graft and is now known as
Keppel Bank.
The medical Center was taken over by the Chinese and is now
one of the best equipped, for the money, hospitals in Metro Manila, second
perhaps in quality of equipment and medical personnel to St. Luke’s
which is also Chinese-managed.
The norm now in churches in the national capital is two collections per
Mass-one for the local church and another for the mother church. Sin was
not
as good a financial manager as the late
Cardinal Rufino Santos. Santos rebuilt the Catholic Church from the ravages
of war, renovated the Manila Catholic Cathedral and at the time of his death,
the Church owned at least three major banks. Those banks are gone.
Cardinal Sin brought political activism to the extreme. He employed
a press secretary and a full time close-in photographer and gave calibrated
interviews, mostly to foreign correspond-
-ents like me.
He brought down two once hugely popular presidents, Ferdinand
E. Marcos in February 1986, and Joseph “Erap” Ejercito Estrada
in January 2001. Their successors are two of most controversial and unstable
presidencies ever. The record of Corazon Cojuanco-Arroyo as
chief executives is mixed at best. In a sense, you can say Sin was the father
of People Power.
See SIN B2
Teachers,
Heroes of Wisdom
While
there are courageous people who die in battle in the name of their native
land, there are those who choose to attest their patriotism by fulfilling
the most difficult, yet rewarding profession there is -- teaching. Teachers
sow the seeds of nationalism into young minds and mold them into becoming
the Filipinos they ought to be.
To
those incomparable individuals who devote their lives to help shape a better
country, there is a bank as committed to shaping their dreams. Philippine
Veterans Bank.
The
future belongs to those who believes in the beauty of their dreams. Build
your dream with us.
• The
Phisix was down 8.30 points Tuesday, closing at 1955.20. The total volume traded
reached 185 million valued at P965 million.
