RP stocks slide for second day

By Ian C. Sayson

Bloomberg

THE Philippine stock index fell for a second day. Philippine Long Distance Telephone Co. (PLDT) dropped on concern the government will ask the company for more than $720 million in dividends paid on disputed shares it claims to have owned. "The speculation is that the government might compel the company to pay the dividends," said James Lago, head of research at Westlink Global Equities in Manila. Philippine Savings Bank rose on news that the commercial bank industry's bad loan ratio will fall to less than 5 percent. Philex Mining Corp. rose after exporting 5,025 dry metric tons of copper concentrates. The Philippine Stock Exchange index lost 30.67, or 1 percent, to 3043.61 at the close as the value of shares that changed hands fell to a two-month low. The measure has advanced 2.1 percent this year. The main stock measure tumbled 3.4 percent Wednesday on concern consumer spending in the US will weaken after an increase in home loan defaults and a smaller-than-expected gain in retail sales. The index advanced 42 percent last year, its fourth straight year of gains, and last month climbed to its highest in more than 10 years.  "Investors are still generally wary," Lago said. "Considering how far share prices have gone up last year and the uncertainties in the US, equities should be in for a period of volatility." PLDT, the nation's largest company by market value, lost P75, or 3.2 percent, to P2,260, extending a 2.7 percent drop Wednesday.   Bad-loan ratio THE government plans to seek as much as P35 billion of dividends due to disputed PLDT shares that were awarded to it, according to news report quoting executive secretary Eduardo Ermita. The Supreme Court declared in August that the government is the owner of an indirect 6.4-percent stake in the company, saying the shares, seized in 1986, were part of the so-called ill-gotten wealth of former Philippine president Ferdinand Marcos. The government sold the shares for P25.2 billion in February. Philippine Savings Bank, a unit of the nation's largest lender by assets, gained 50 centavos, or 0.8 percent, to P62.50. Metropolitan Bank & Trust Co., its owner, closed unchanged at 58 pesos after rising as much as 1.7 percent. China Banking Corp., one of the lender's owned by the nation's richest tycoon, Henry Sy, gained P10, or 1.2 percent, to P880, extending this week's rise to 3.5 percent. Bad loans of Philippine banks will fall this year to less than 5 percent after sliding to 6 percent in December, the lowest in almost nine years, as lenders sell overdue debt before tax breaks expire in 2008, according to news citing central bank deputy governor Nestor Espenilla. "A steady decline bodes well for the banking sector," said Tanya Cua, Manila-based analyst at Macquarie Securities Ltd. "We expect the non-performing loan ratio to continue this downtrend by end of the year." The government in 2005 extended tax breaks on the sale of bad loans to encourage banks to dispose of overdue debt to raise cash for more lending. The breaks expire in April next year. Philex Mining, the nation's most profitable metal producer, rose 5 centavos, or 1.2 percent, to P4.15. The miner said Wednesday that it shipped P723 million worth of copper and gold. The company in February shipped P668 million worth of the metals. Shares worth P2.36 billion were traded, 38-percent percent less than the six-month daily average and the lowest since January 15. Gainers outnumbered losers 42 to 37, with 52 stocks unchanged in the broader market.

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