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Inquiry eyed to address smuggling

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A SENATOR has filed a resolution that seeks to look into the decrease in government revenues caused by the smuggling of goods subject to excise tax such as cigarettes and vape products.

“Despite the efforts of various government agencies, illicit trade and smuggling of excisable products remain rampant across the country,” Senator and Ways and Means Chairperson Sherwin T. Gatchalian said in Senate Resolution No. 1243, which he filed on Nov. 28.

“And because of its far-reaching effect, it is imperative for the government to re-evaluate its approach in combating smuggling and illicit trade in the country.”

Citing Bureau of Customs data from October 2023 to August this year, the government has confiscated about P6.5 billion worth of smuggled vape products.

The Philippine National Police Criminal Investigation and Detention Group last month confiscated about P2.4 billion worth of fake cigarettes and smuggled equipment.

Secretary Ralph G. Recto in November said that the government is losing about P52 billion yearly due to tobacco and vape smuggling.

Broken down, P35 billion of the amount is from smuggled tobacco products, while P17 billion is from smuggled vape products.

“Aside from it (smuggling) reduced government revenues, smuggling and illicit trade also undermines the rule of law, fuels corruption, impairs competitiveness of legitimate business while become a major source of income for organized groups and taints the reputation of our country in the global scene,” Mr. Gatchalian said in the measure, which is in aid of legislation. — John Victor D. Ordoñez

Trump nominees signal favorable view of PHL

REUTERS

By Justine Irish D. Tabile, Reporter

THE PHILIPPINES could be among the beneficiaries of US President-elect Donald J. Trump’s trade policies, with the incoming 47th president and his appointees expected to favor the signing of a free trade agreement (FTA), Trade Undersecretary and Board of Investments Managing Head Ceferino S. Rodolfo said.

At the National Exporters’ Week on Monday, Mr. Rodolfo said that he is hopeful that Trump 2.0 will be net positive for the Philippines.

“Of all recent US Presidents, it is (Mr.) Trump who has officially welcomed a bilateral free trade agreement (FTA) with the Philippines,” he said, citing a joint statement during Mr. Trump’s first term in 2017.

“Both sides agreed to discuss the matter further. So at least on record, President Trump has welcomed an FTA with the Philippines,” he added.

In particular, he said then-US Trade Representative (USTR) Robert Lighthizer, who served in Mr. Trump’s first term, testified at a Senate Committee Hearing that the US is close to starting FTA negotiations with several countries.

“He said that one that we particularly like is the Philippines. I think it would be a good first agreement,” Mr. Rodolfo said, quoting Mr. Lighthizer.

“Now the incoming USTR is Jamieson Greer. He was the Chief of Staff of Ambassador Lighthizer. And Ambassador Lighthizer continues to be an advisor to President Trump,” he added.

He also said Senator Marco Rubio, who was Mr. Trump’s nominee to the State Department, had introduced a bill proposing to strengthen the US-Philippines security partnership.

“That bill called for the US to directly negotiate a critical minerals agreement with the Philippines. And to amend the Better Utilization of Investment Leading to Development Act to explicitly support investments in critical min-erals and energy products in Southeast Asia, most particularly in the Philippines,” he said.

“It also required an interagency plan for US support for infrastructure development in the Philippines,” he added.

He said that going by Mr. Trump’s actions during his first term, as well as the track record of his nominees, it is reasonable to expect an overall receptiveness to a stronger, closer relationship with the Philip-pines.

He added that Mr. Trump views trade deficits as an important indicator and tends to blame such imbalances on unfair trade practices against the US.

“If you look at the trade deficit of the US, its number one deficit globally is actually China, which has a $300-billion trade surplus with the US. The number two deficit is with Vietnam, which is $109 billion,” he said.

He added that the US has determined during the first Trump administration that Vietnam has been employing unfair trade practices.

“Whenever he makes announcements about additional tariffs, for sure, China, Vietnam, and other countries will be targeted,” he said.

“Fortunately for the Philippines, our trade surplus with the US is just $4 billion. So in effect, we have a healthy, almost balanced trade with the US,” he added.

Bamboo is poised to be Mindanao’s next major industry

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Bamboo is being considered the next major industry for Northern Mindanao after the Philippines set a Guinness World Record for planting the most bamboo simultaneously across areas of Mindanao, a lawmaker said.

The world record attempt was joined by a total of 2,305 planters, led by the Department of Science and Technology (DoST), and its Kawayanihan Circular Economy partners on Oct. 18, at 19 locations across Mindanao

“All eyes are now on Northern Mindanao because a lot of investors are actually interested to come in and invest, whether in propagation, processing, or marketing. There are many opportunities here available in this initiative,” Bukidnon Rep. Jose Manual F. Alba said in mixed English and Filipino during the press conference of the DoST held in Cagayan de Oro City last Thursday.

Mr. Alba highlighted bamboo’s potential beyond furniture, emphasizing its use as a durable, sustainable material for modern infrastructures. He added that promoting bamboo would create job opportunities for locals in rural areas, dismantling the belief that such opportunities exist only in urban centers.

“Right now, we are trying to reverse the situation… The opportunity is right there in your backyard,” Mr. Alba furthered.

In Bukidnon alone, Mr. Alba said the DoST has identified 18,000 hectares of land planted with bamboo, highlighting its great potential for economic use.

“There will come a time when we no longer need to cut down forests because people will seek bamboo, not wood,” Mr. Alba said.

Mr. Alba also said that a bill to integrate bamboo into the national building code is in progress, which, if enacted, would be a significant milestone for the country’s construction industry. Given bamboo’s fast-growing properties and its abundance in many areas of the country, the move is seen as a step toward more sustainable building practices. — Edg Adrian A. Eva

House committee approves tax perks section of decarbonization measure

ANNE NYGARD-UNSPLASH

A HOUSE OF REPRESENTATIVES committee approved on Monday the tax incentive package contained in a bill seeking to regulate the low-carbon economy.

The House ways and means committee approved the tax incentives section of the bill, to be granted to companies developing “innovative technologies” that reduce greenhouse gas emissions.

“Investments in emerging low-carbon technologies by Covered Enterprises shall be eligible for income tax holidays and enhanced deductions on research and development expense… in accordance with CREATE More Act,” according to the amended version of the unnumbered substitute bill’s Section 35.

Covered enterprises are “large enterprises and medium-sized enterprises whose emissions exceed a specific threshold set by the Climate Change Commission,” according to a copy of the bill obtained by BusinessWorld. Power generation, transport, industrial processing, agriculture, and waste management industries fall under this category.

The House climate change committee approved the unnumbered substitute bill in August.

The Philippines aims to reduce greenhouse gas emissions by 75% in 2030, in line with commitments made under the 2021 Paris Agreement.

The country loses 3% of its economic output annually due to climate change, reinsurance company Swiss Re Group has said.

Companies covered under the proposed law are required to prepare their decarbonization plan, complete with “specific, measurable, and time-bound carbon reduction pathway… towards 2050,” according to the bill.

The decarbonization plan should include projected greenhouse gas emissions and a “comprehensive strategy” for reducing emissions, according to the bill.

Companies should also include emission reduction strategies within and beyond their value chain, including improvements to their production processes and transitioning towards renewable energy sources for their power needs.

They could also invest in technologies that support decarbonization efforts or by purchasing carbon credits from projects that offset greenhouse gas emissions, according to the bill. — Kenneth Christiane L. Basilio

HIV cases in PHL to exceed 200,000 by year-end

The number of Human Immunodeficiency Virus (HIV) cases is expected to hit 215,400 by the end of 2024, the Department of Health (DoH) said.

According to the DoH’s report on Sunday, males comprised 94% of the total 132,776 reported cases of People Living with HIV (PLHIV), while females accounted for the remaining 6%, or 7,876 cases.

By age distribution, the DoH reported 471 cases among individuals under 15 years old, comprising less than 1% of the total cases. A total of 41,219 cases (30%) were reported among those aged 15 to 24 years.

The highest number of cases, 69,808 (50%), occurred in individuals aged 25 to 34, with 24,478 cases (18%) in the 35 to 49 age group, and 3,610 cases (3%) in those aged 50 and older.

DoH Secretary Teodoro J. Herbosa called for collective action to combat the rising HIV cases during the official launch of the DOH’s “Undetectable = Untransmittable Campaign” on the 2024 Philippine World AIDS Day held on Sunday.

The campaign aims to reduce the stigma surrounding HIV/AIDS (Acquired Immunodeficiency Syndrome) while raising awareness about prevention, testing, and treatment options.

“We have 50 new cases of HIV everyday (as of Q3 of 2024). We want the whole of society to help us with this rising tide of HIV cases in our youth. This is a disease that we can detect, and we can help people living with HIV have a normal life. No one should die of AIDS,” Mr. Herbosa said.

If no interventions were made, the AIDS Epidemic Model warns that the country’s PLHIV cases will spike to around 448,000 by 2030.

“Early detection is key to managing the virus and improving health outcomes. Practice safe sex, regularly undergo HIV testing, and encourage all your peers to do the same,” Mr. Herbosa said.

As of September 2024, DoH reported 61% of estimated PLHIV cases, or 131,335 individuals, have been diagnosed and are alive. Of these, 88,544 (67%) are on Antiretroviral Therapy, with 39,003 (44%) tested for viral load in the past 12 months.

Among those tested, 34,252 (88%) achieved viral suppression, meaning the virus is effectively undetectable in their bodies. — Edg Adrian A. Eva

PEZA investment approvals top P200 billion in first 11 months

THE Philippine Economic Zone Authority (PEZA) said it approved P201.551 billion worth of investment applications in the first 11 months, surpassing the agency’s target for the full year.

PEZA issued the statement on Monday following a board meeting on Nov. 29 at the Cavite Economic Zone.

“As expected, investment approvals would pick up in the last quarter of the year,” PEZA Director General Tereso O. Panga said.

“So far, we have achieved P201 billion, with one more board meeting left in December,” he added.

He said that numbers reflect investor confidence in the Philippines and in PEZA due to the government’s investor-friendly policy direction partnered with the ease of doing business inside economic zones.

The first eleven months of approvals were up 43.06% compared to the same period last year.

It is also 14.7% higher than the full-year investment approvals target of P175.71 billion.

The approvals consist of 239 new and expansion projects, which are expected to generate $2.9 billion in potential export revenue and more than 70,000 jobs.

At the board meeting, PEZA approved 17 new and expansion projects worth P15.453 billion. These are expected to generate $467.516 million in exports and 9,957 jobs.

“With this, the total for November approved new and expansion projects reaches 41, with a combined investment of P77.794 billion,” PEZA said.

“These projects are expected to drive $831.019 million in exports and create 30,623 direct jobs,” it added.

Of the recently approved projects, 10 are export manufacturers, four are in the information technology and business process management industry, two involve facility development, and one is an ecozone development project.

“They are distributed across the regions of Calabarzon, Region 3, and Central Visayas: four in Batangas, four in Laguna, four in Cebu, two in Cavite, and one each in Rizal, Pampanga, and Negros Oriental,” PEZA said.

“This distribution highlights the regional spur of the projects, contributing to economic growth across various provinces,” it added. — Justine Irish D. Tabile

Rehab, upgrade bids sought for ports in Catanduanes, Negros Occidental

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AT LEAST TWO more port upgrade and rehabilitation contracts will go up for auction by year’s end, according to the Philippine Ports Authority (PPA).

In separate bid notices posted on the PPA’s website, the regulator is seeking interested parties for the rehabilitation and improvement of Virac port in Catanduanes for P120.07 million and for the improvement of San Carlos port in Negros Occidental for P351.93 million.

Interested parties can submit their bids for the two projects on or before Dec. 19, the PPA said.

The contractor will have 450 calendar days to finish the Virac port rehabilitation project, while the winning bidder for the San Carlos port will be given 630 days to complete the port improvements.

The San Carlos port project includes upgrades to the operations area and roll-on roll-off ramps, as well as the reconstruction of the wharf, according to the PPA.

San Carlos port in Negros Occidental is part of the PPA’s port masterplan.

The PPA awarded in August the contract for a port master plan which will help improve cargo movement and enhance agro-industrial development.

The master plan aims to determine and assess the feasibility of constructing ports at designated locations while also improving cargo movement and meeting the increasing demand for port services.

The PPA identified the ports in the master plan were Davila, Pasuquin, Ilocos Norte; Puerto Galera, Oriental Mindoro; Taytay, Palawan; Buenavista, Guimaras; San Carlos, Negros Occidental; Dumaguete, Negros Oriental; Lazi, Siquijor; Catbalogan, Samar; Zamboanga; and Cagdianao, Dinagat Islands.

The rehabilitation and improvement of Virac port includes clearing, demolition and reconstruction works on the roll-on roll-off ramps and the port operations area.

In the next four years, the PPA is setting aside about P16 billion to fund its infrastructure projects, including 14 flagship projects due to be completed during the period. — Ashley Erika O. Jose

Over 100 informal workers in Siargao register for social protection

Over a hundred informal workers in Siargao registered for social protection, livelihood support and employment opportunities through a one-stop service initiative held on Nov. 29-30.

According to the International Labor Organization (ILO), the beach destination has been identified as an area needing improvement in social protection compliance as laborers lack the necessary registration and understanding of its importance

“Siargao, a famous surfing destination, relies heavily on tourism and agriculture. However, farmers, fishers and tourism operators become increasingly vulnerable to climate change. Stronger typhoons and environmental shocks have pushed many into poverty, worsened by limited access to social protection,” the ILO said in a statement on Monday.

The initiative was in collaboration with the Department of Labor and Employment (DoLE) and local partner Lokal Lab, targeting workers in the agro-fishery, tourism, digital freelancing, and micro and small enterprise sectors.

The initiative was part of the ILO’s Rise from Multiple Crises Through the Integrated Formalization of Informal Economy and Rebuilding Better Coconut Economy programs, which aim to support vulnerable communities facing economic and environmental shocks.

“As a one-stop seamless process, they are not just prepared but also protected against economic shocks and climate change,” said Linartes M. Viloria, ILO National Project Coordinator in a statement. — Chloe Mari

PRDP Scale-Up to raise farm infra funding

PHILSTAR FILE PHOTO

THE Department of Agriculture said on Monday that its flagship Philippine Rural Development Project (PRDP) Scale-Up is looking to fund the construction of more agricultural infrastructure like cold storage facilities and slaughter-houses.

“The PRDP Scale-Up will focus on the (projects) that will create a bigger impact on agriculture. This would include slaughterhouses, cold storage facilities, among others,” Agriculture Assistant Secretary and Spokes-person Arnel V. de Mesa told reporters.

The PRDP was a World Bank-funded program, originally implemented in 2014, aimed at increasing rural incomes and enhancing farm and fishery productivity in targeted areas.

PRDP Scale-Up continues the original program by improving the access of farmers and fisherfolk. It has a funding of $600 million from the World Bank awarded to the DA in November 2023.

“Scale-Up was designed to respond to the needs for investment mostly in agri-infrastructure and enterprises, beyond what was in the original PRDP,” Mr. De Mesa added.

The Scale-Up project is active in 82 provinces and is expected to benefit 450,000 farmers and fisherfolk, generating about 42,000 new jobs.

“The recently launched PRDP Scale-Up already has a portfolio of 75 approved infrastructure subprojects worth P11.44 billion… and 60 proposed enterprise subprojects amounting to P6.31 billion,” Agriculture Assistant Secretary for Operations and PRDP National Project Director U-Nichols A. Manalo said.

He added that 30 projects are under construction.

The original PRDP funded and completed 503 rural infrastructures worth P31 billion and 667 rural enterprises worth P2.93 billion, benefitting 3 million people, according to Mr. Manalo. — Adrian H. Halili

Police intelligence agent shot dead in Cotabato City

STOCK PHOTO | Image by kjpargeter from Freepik

COTABATO CITY — Gunmen shot dead a police intelligence agent in an attack at the supposedly guarded parking area of a shopping mall here on Sunday night.

Officials of the Cotabato City Police Office and Brig. Gen. Romeo J. Macapaz, director of the Police Regional Office-Bangsamoro Autonomous Region, separately told reporters on Monday that Master Sgt. John Manuel V. Bongcawil died on the spot from multiple bullet wounds sustained in the attack.

Mr. Bongcawil of the intelligence unit in the Maguindanao del Norte Provincial Police Office participated in covert operations in recent months that resulted in the arrest of more than ten elusive suspects in high-profile crimes and acts of terror.

Mr. Bongcawil, his wife, and their grade school children had just emerged from the mall in an upland area in Cotabato City and were walking towards their car parked in the establishment’s underground parking area when two men approached him and repeatedly shot him with pistols, killing him instantly.

His assailants managed to immediately escape using a getaway vehicle.

Mr. Macapaz said investigators in the Cotabato City police force and barangay officials who have jurisdiction over the area where the mall is located are cooperating in identifying the killers of Mr. Bongcawil for immediate prosecution.

Mr. Macapaz said they are convinced that the gun attack that left him dead was work-related. — John Felix M. Unson

In Focus: Navigating tax exemptions and incentives in the real estate industry

As the holiday season draws near, it’s a good time to examine the tax exemptions and privileges available to businesses in real estate under the Tax Code. These statutory benefits, specifically designed to support the real es-tate industry, are primarily in the form of value-added tax (VAT) exemptions, income tax holidays, and other related fiscal incentives. For real estate transactions, understanding the distinction between ordinary and capital assets is critical, as it determines whether VAT applies. The Tax Code, under Section 109, outlines several key exemptions for real property transactions, which we will explore in detail.

VAT EXEMPTION ON THE SALE OF CAPITAL ASSETS
Under Section 109(P) of the Tax Code, the sale of real properties not primarily held for sale or lease in the ordinary course of trade or business is exempt from VAT. This applies to real properties classified as capital assets — those that are not intended for sale or use in a business.

For a real property to qualify as a capital asset, it must not be part of the seller’s regular business activities, such as trading or leasing real estate. The classification of the real property as a capital or ordinary asset depends on the nature of the taxpayer’s business and whether such property is used in trade or business of the taxpayer. For example, if the seller is a real estate dealer, developer, or lessor, the property is classified as an ordinary asset, and the sale of such is typically subject to VAT at 12%. However, if the seller is not engaged in the real estate business, such as a non-dealer company that holds a property for investment, the sale of such property may qualify for VAT exemption.

The Bureau of Internal Revenue (BIR) has provided further clarity on this point through Revenue Regulations (RR) No. 7-2003, which allows the reclassification of properties from ordinary to capital assets if the property has been idle for more than two years. A recent BIR ruling in 2023 demonstrates this principle, where a non-real estate business was able to reclassify its property as a capital asset and exempt it from VAT after showing that the property had not been used for trade or business for over two years. Specifically, the taxpayer presented the following proof.

i. The taxpayer is not engaged in real estate business as shown in its Articles of Incorporation.

ii. Its Audited Financial Statement (AFS) shows that the subject properties were neither included in its inventory held nor owned primarily for sale in the ordinary course of its trade or business from the time of their acquisition. Also, the same has not been subjected to the allowance for depreciation provided for under Sec. 34(F) of the Tax Code of 1997, as amended. In support thereof, the subject properties were certified as idle by the Office of the Punong Barangay where it is located and have been found to have no improvements, as confirmed in the certification issued by the Office of the Assessor.

iii. The AFS showed no revenue from any of the subject properties held from the time that they were acquired. The subject properties were never used for lease/rent or being offered for lease/or rent.

With the foregoing facts, the BIR opined that the sale of the properties is subject to capital gains tax and documentary stamp tax but not subject to VAT and creditable withholding tax.

VAT EXEMPTION ON LOW-COST AND SOCIALIZED HOUSING
The sale of real properties used for low-cost and socialized housing enjoys VAT exemption under the provisions of the Urban Development and Housing Act (RA 7279). As defined by the law and supported by Revenue Regulations (RR) No. 13-2018, low-cost housing refers to projects designed for low-income families, while socialized housing covers housing for the underprivileged and homeless citizens.

Under the Joint Memorandum Circular No. 2024-001, both the Department of Human Settlements and Urban Development (DHSUD) and the National Economic and Development Authority (NEDA) have set specific price ceilings for socialized and low-cost housing projects. These ceilings range from P300,000 for socialized housing to up to P3 million for low-cost housing units. Developers of these housing projects are entitled to VAT exemption, and the sale of property to qualified beneficiaries is also exempt from income tax and creditable withholding tax.

INCOME TAX HOLIDAY FOR SOCIALIZED HOUSING DEVELOPERS
Developers of socialized and low-cost housing can avail of the Income Tax Holiday (ITH) by registering with the Board of Investments (BoI). In 2023, the BoI amended the 2022 Strategic Investment Priority Plan (SIPP) to include low-cost housing projects with a selling price of up to P3 million. This amendment opens the door for more developers to benefit from ITH, which are granted for a period starting from the project’s Start of Commercial Operations (SCO).

Under the CREATE MORE Act (RA No. 12066), domestic market enterprises duly registered with the BoI can avail of the ITH for a period of four to seven years, followed by the Enhanced Deduction Regime (EDR) for 10 years, or EDR for a maximum period of 14 to 17 years, depending on location and industry priorities.

The SIPP also requires that at least 20% of the project’s area and floor space be dedicated to socialized housing. Once a project is registered with the BoI, it may be exempt from corporate income tax during the ITH period, and the developer is also exempt from creditable withholding tax.

Upon BoI registration, the terms of entitlement shall be specified in the registration agreement and/or standard terms and conditions. For income tax purposes, the ITH commences following the SCO. As the real estate developer is not subject to income tax, it follows that the creditable withholding tax (CWT) is inapplicable to their income. In this case, a BIR ruling shall be applied to confirm the exemption from creditable withholding tax during the ITH period pursuant to the provisions under RMO No. 9-2014 and RR No. 2-98, as amended. Thereafter, the duly issued affirmative ruling or certificate of tax exemption (CTE) shall then be issued to the buyers or clients of the real estate devel-oper as proof of its exemption from CWT.

VAT EXEMPTION ON RESIDENTIAL PROPERTIES SOLD FOR P3.6 MILLION OR LESS
As of Jan. 1, 2024, a new VAT exemption applies to the sale of residential units — such as house and lot packages, condominium units, and other residential dwellings — valued at P3.6 million or below, as outlined in RR No. 1-2024. To qualify for this exemption, the property must be used for residential purposes. Importantly, if multiple adjacent properties are sold to the same buyer with the intent to be used as a single residential area, they will still be con-sidered VAT-exempt as long as the aggregate value does not exceed P3.6 million.

However, this exemption does not extend to parking lots, even if sold together with a condominium unit, as the sale of parking spaces is considered a separate transaction and remains subject to VAT.

VAT EXEMPTION ON RESIDENTIAL LEASE AGREEMENTS
For real estate lessors, the lease of residential units with a monthly rental of P15,000 or less is VAT-exempt. This includes apartments, houses, dormitories, and other similar residential properties. Notably, the exemption applies even if the total annual rental payments exceed the VAT threshold of P3 million, as long as the individual monthly rent does not exceed P15,000.

“Residential Units” shall also include apartments, houses, buildings, parts, or units thereof used for home industries, retail stores, or other business purposes if the owner and his family actually live there and use them principally for dwelling purposes.

Essentially, this exemption applies if the following conditions apply: a lease transaction involving residential units and the monthly lease not exceeding P15,000.

The lessor must issue a non-VAT invoice for such leases, ensuring that they do not charge VAT to their tenants. This exemption provides relief for lessors of low-cost housing and other affordable residential units.

KEY TAKEAWAYS
Tax exemptions and incentives are critical tools for fostering growth in the real estate sector, particularly for developers focused on low-cost and socialized housing. However, real estate businesses must be diligent in ensuring that they meet the specific requirements set forth by the tax authorities and Investment Promotion Agency.

It is important to note that tax exemptions are strictly construed against the taxpayer. Businesses must demonstrate their eligibility for these exemptions with clear, substantiated evidence. Exemptions are not automatically granted, and taxpayers bear the burden of proof.

The BIR’s recent push for clearer guidelines and regular issuance of clarificatory circulars is a positive step, helping businesses navigate the complexities of tax laws. As the year draws to a close, it is an opportune time for real estate businesses to review their tax compliance and take advantage of the exemptions available under the law, while ensuring they are fully compliant with the relevant regulations.

In this season of giving, many businesses in the real estate sector continue to benefit from these incentives while contributing to the economy and society. Likewise, it is hoped that the BIR continues its efforts to simplify pro-cesses and support businesses in achieving sustainable growth.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Kim M. Aranas is a director from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

PSE index back above 6,700 on bargain hunting

PHILIPPINE STAR/KJ ROSALES

PHILIPPINE SHARES recovered on Monday to return above the 6,700 mark as investors bought bargains following the market’s four-day slide last week.

The main Philippine Stock Exchange index (PSEi) rose by 1.95% or 129.04 points to end at 6,742.89 on Monday, while the broader all shares index climbed by 1.35% or 50.52 points to 3,789.60.

“The local market bounced back this Monday as investors hunted for bargains following four straight days of decline,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Expectations that November inflation has remained biased towards the lower end of the government’s target also helped in today’s rise,” he added.

The Philippine Statistics Authority will release November inflation data on Dec. 5 (Thursday).

A BusinessWorld poll of 15 analysts conducted last week yielded a median estimate of 2.5% for the November consumer price index, within the central bank’s 2.2% to 3% forecast for the month.

If realized, the November print would be slightly faster than the 2.3% clip in October but slower than 4.1% in the same month a year ago.

This would also mark the 12th straight month that headline inflation was within the Bangko Sentral ng Pilipinas’ 2-4% annual target.

“The positive cues from Wall Street’s performance last Friday gave the local market a boost,” Mr. Tantiangco said.

Wall Street closed higher on Nov. 29. The Dow Jones Industrial Average Index rose by 0.42% or 188.59 points to 44,910.65; the S&P 500 Index gained by 0.56% or 33.64 points to 6,032.38; and the Nasdaq Composite Index climbed by 0.83% or 157.69 points to 19,218.17.

“Philippine shares started the last month on a strong note as investors begin to look ahead at 2025,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“On the local front, the highlight of the week is the latest consumer price index report, scheduled for Dec. 5, followed by the release of the latest unemployment rate on Dec. 6,” he added.

All sectoral indices closed higher on Monday. Services climbed by 3.53% or 71.48 points to 2,094.69; holding firms rose by 3.33% or 186.61 points to 5,787.06; property went up by 0.76% or 19.11 points to 2,517.58; industrials increased by 0.61% or 55.99 points to 9,223.96; mining and oil added 0.51% or 38.66 points to end at 7,486.60; and financials inched up by 0.16% or 3.60 points to 2,258.26.

Value turnover dropped to P4.65 billion on Monday with 386.31 million shares traded from P5.8 billion with 405.66 million issues exchanged on Friday.

Advancers bested decliners, 109 versus 80, while 55 names were unchanged.

Net foreign selling went down to P77.68 million on Monday from P1.25 billion on Friday. — Revin Mikhael D. Ochave

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