x Abu Dhabi, UAEMonday 24 July 2017

Philippine stocks dip on weaker export and higher unemployment data

Philippine stocks slumped, heading for the biggest loss since September 2011, after the nation's unemployment rate climbed to a three-year high and exports contracted more than expected.

Philippine stocks slumped, heading for the biggest loss since September 2011, after the nation's unemployment rate climbed to a three-year high and exports contracted more than expected.

The Philippine Stock Exchange Index slumped 4.6 per cent to 6,556.65 at the close in Manila, ending a three-day rally. The measure's 30-day volatility climbed to 27.9, the highest since November 2011, and valuations dropped to a four-month low. Unemployment increased to 7.5 per cent in the three months through April, the highest since the quarter ended June 2010, the National Statistics Office said on Tuesday. Exports shrank 12.8 per cent in April, the office said, exceeding the 5.3 per cent median of 12 estimates in a Bloomberg survey.

"The high unemployment rate casts a shadow of doubt on the strength of economic growth and its sustainability," Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank. "Whether the perception is right or wrong, it raises questions. The exports data highlights the world economy remains fragile."

The jobless rate increased even after the government reported on May 30 gross domestic product expanded 7.8 per cent in the three months ended March, the fastest pace in almost three years. The economy will grow 6 per cent to 7 per cent this year, according to official forecasts.

The Philippine Stock Exchange Index has retreated 11 per cent since closing at a record 7,392.20 on May 15. The benchmark gauge has tumbled since US Federal Reserve Chairman Ben S Bernanke's comment on May 22 that policy makers could consider reducing the pace of monetary stimulus triggered a selloff by overseas investors.

Still, the measure has gained 13 per cent this year, heading for a fifth annual advance, boosted by better-than-expected economic growth, low interest rates and as the nation won two upgrades in sovereign debt rating to investment grade.

 

* Bloomberg News