TERM OF THE DAY


Source: Bureau of Micro, Small and Medium Enterprise Development- Department of Trade and Industry


Negative cash flow Occurs when spending in a business is greater than earnings.


business The Manila Times WEDNESDAY BY DARWIN G. AMOJELAR SENIOR REPORTER


ONSUMER prices appear to have bottomed out, as inflation picked up last month amid higher fuel and


»INFLATION 2.8


(in percent) 3


electricity costs.


2 0


The National Statistics Office (NSO) said inflation went up to three percent in November from the 11-month low of 2.8 percent in Oc- tober, exceeding the central bank’s forecast range of 2 percent to 2.9 percent for last month. The November figure led infla-


tion to average 3.8 percent in the first 11 months of this year, well within the Bangko Sentral ng Pilipinas’ (BSP) target range of 3.5 percent to 5.5 percent.


The NSO blamed the spike in consumer prices on the higher charges for electricity in Metro Ma-


11-month forex reserves breach latest forecast


BY LAILANY P. GOMEZ REPORTER


THE Philippines’ dollar reserves hit an all-time high last month, again exceeding the already revised forecast set by monetary authorities. In a statement, the Bangko Sentral ng Pilipinas (BSP) said the country’s gross international reserves (GIR) level in the first 11 months this year grew by 7.26 percent to $61.3 billion from the end- October level of $57.2 billion. The 11-month GIR level expanded by 39 percent


»GIR


60 0


(in billion dollars) 65


61.3 NoEnd- vember 60


Full-year goal


from the $44.16 billion last year. BSP Gov. Amando Tetangco Jr. said the GIR could


cover 10.7 months worth of imports of goods and payment of services and income. Last month’s GIR level was also sufficient to cover 11.2 times the country’s short-term external debt based on original maturity and six times based on residual maturity. An ample GIR level helps prop up the peso and


keeps domestic inflation at bay. The policy making Monetary Board revised its GIR


growth projection for the third time last month as the country’s dollar hoard rose to new highs. The first adjustment came about when the end-


September GIR rose to $53.5 billion, breaching the then full-year target of $49 billion. The BSP then revised the forecast to $50 billion, only to be breached by the end- October level when reserves grew to $56.8 billion. Its latest revision was for reserves to hit $60 billion.


Stocks fall, peso climbs amid inflation uptick


BY KRISTA ANGELA M. MONTEALEGRE REPORTER


LOCAL share prices broke a four-day rally on Tues- day as investors booked their profits even as the peso continued to strengthen against the dollar. At the Philippine Stock Exchange, the compos- ite index fell 25.2 points, or 0.6 percent to 4,197.92, while the broader all-shares index dipped 1.51 points, or 0.05 percent to 2,892.17. Losers beat gainers, 78 to


51, while 46 stocks were un- changed. A total of 894.03 million stocks worth P5.78 billion were traded. “Stocks were also nega-


tively affected by the higher- than-expected inflation rate for November,” said SB Eq- uities Inc.


The National Statistics Of- fice reported that the coun- try posted a 3-percent infla- tion rate in November, up from 2.8 percent in October and a year earlier. Jun Calaycay of Accord Capital Equities Corp. said that the day’s losses erased a


quarter of the accumulated positive gap over the four prior sessions. “Finding very little reason to push equities


higher, investors lightened their positions while others kept to the sidelines waiting for further signals,” he said


The local equities market’s movement on Tues-


day affirmed that sustaining the index past the 4,200 to 4,250 range would require more than a “Santa Claus rally,” Calaycay said.


➤StocksB2 October 3 November


manila times@gmail.com D ecember 8, 2010


B 1


Inflation bottoms out as Nov. prices pick up C


Manila Electric Co. raised its generation charges by 22.7 per- cent from P4.31 per kilowatt hour (kwh) in October to P5.29 per kwh for November.


Prices for selected food items such as fish, vegetables and chicken also went up during the month, the NSO said. “The adverse effects of Typhoon ‘Juan’ in the production of vegeta- bles lowered its supply in the mar- kets,” the agency said.


nila and selected regions, as well as on the price uptick in liquefied pe- troleum gas (LPG), kerosene, gaso- line and diesel.


Socioeconomic Planning Secre-


tary Cayetano Paderanga said infla- tion rates in four Southeast Asian countries – Indonesia, Singapore,


Thailand and the Philippines – re- main on target, with most of these countries maintaining their respec- tive policy rates.


Despite the uptick, the BSP said


the November figure gives mon- etary authorities additional con- fidence that inflation would re- main manageable. BSP Governor Amando


Tetangco Jr. said the central bank will continue to monitor develop- ments, specifically the impact of new policy measures in major economies on domestic liquidity, global growth prospects and in- vestors’ risk appetite, to see if


there is any need to make adjust- ments in its policy rates. “Our current assessments still


show that inflation would remain manageable during the policy ho- rizon and that inflation expecta- tions continue to be well-an- chored,” he said.


The BSP has kept its overnight


borrowing and lending rates at record lows of four percent and six percent since July 2009. Financial market players said the BSP is likely to keep its policy rates at current lows until next year. WITH REPORT FROM LAILANY P. GOMEZ


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