Stock market climbs ahead of GDP report

By Jenniffer B. Austria

LOCAL stocks rose Wednesday after the government announced a lower unemployment rate in June and as investors await the release of second-quarter gross domestic product.

The Philippine Stock Exchange index advanced by 57.48 points, or 0.89 percent, to close at 6,530.45, while the broader all-shares index rose 19.05 points to 3,480.16.

Regina Capital Development Corp. managing director Luis Limlingan said investors bought Philippine stocks ahead of the GDP release and as companies reported better-than-expected second-quarter earnings.

Philstocks Financial Inc. research analyst Claire Alviar said investors also welcomed the decline in June unemployment rate.

The Philippine Statistics Authority said Wednesday unemployment rate declined to 4.5 percent in June 2023 from

6 percent a year ago, but slightly increased from 4.3 percent in May. Market value turnover remained thin at P3.26 billion.

Meanwhile, Asian markets fluctuated after data showing China slipped into deflation compounded worries about the world number two economy›s faltering post-Covid recovery.

The mood on trading floors was already glum after another sell-off on Wall Street fueled by fresh concerns over the banking sector and talk of another possible Federal Reserve rate hike.

The 0.3 percent drop in China’s July consumer prices was the first since the start of 2021 and comes as slowing do- mestic spending weighs on the country›s economic recovery.

Investors were already in a dour mood a day after China announced its biggest drop in exports since the beginning of the pandemic more than three years ago, while imports also tanked owing to slimming demand at home.

An extended period of disappointing indicators out of Beijing this year has ramped up pressure on authorities to provide much-needed support to the economy.

However, while leaders have made a number of pledges in recent weeks to introduce stimulus—particularly for the property sector—there have been very few concrete moves save for some small interest rate cuts by the People›s Bank of China.

“China is in deflation, for sure, the question is for how long.” Robin Xing of Morgan Stanley said on Bloomberg Television. “It’s up to the policymakers how they react.” With AFP

FRUIT STORE.

A fruit and vegetable vendor updates the price of an item at a market in Beijing on August 9, 2023. AFP

Diversionary NLEX route leads to flooded MacArthur Highway

FROM a harrowing journey to the same hellish trip. Motorists driving through the North Luzon Expressway (NLEX) on the northbound and southbound lanes had an appalling experience in the past two weeks.

A small flooded portion of the NLEX along the San Simon stretch approaching the Tulaoc Bridge had stalled hundreds of vehicles, resulting in a traffic buildup that stretched to as long as 22 kilometers on both sides. Vehicles were running at five to 10 kilometers per hour after an overflow from the Pampanga River flooded the tiny stretch and rendered it impassable for some small cars and vehicles. The floodwater had risen to as high as 40 cm or almost 16 inches, forcing traffic at some point to stop. It’s one nightmare for motorists. It took travelers two to six hours to navigate the San Fernando-San Simon stretch on the southbound road and the Pulilan-San Simon stretch on the other side. This road strip normally takes just 10 to 15 minutes of travel time.

I had the same unfortunate experience as the other NLEX motorists. It took me two hours to finish the tiny flooded portion of the southbound road on July 31. Driving north over the next weekend, I took the advice of a motorist group to exit in Pulilan and head to Mac Arthur Highway until the alternative route nears the San Fernando exit of NLEX. The recommended route was a smooth ride at the start. The road traversing a portion of the Calumpit town in Bulacan on the way to Mac Arthur Highway was surprisingly not (or no longer) flooded. Turning right to Mac Arthur Highway, however, was another story.

One can sense that a great portion of Calumpit town was still flooded. Vehicles of different sizes were parked along the two sides of the highway that presumably served as a safe and a more elevated parking space. The traffic was more forgiving but some parts of the old highway leading to Calumpit and Apalit, San Simon and San Fernando were flooded and under repair. In all, it took me two hours to complete my diversionary trip to the San Fernando exit and back to NLEX.

So what caused the NLEX flood? NLEX Corp., the operator of the toll road, and the national government blamed Super Typhoon Egay, Typhoon Falcon and the enhanced southwest monsoon rain that flooded parts of the major highway.

The Department of Public Works and Highways, meanwhile, said it would raise the Tulaoc Bridge to accommodate a more elevated road under it—as planned by NLEX.

San Miguel solution Rivers overflow due to heavy rain, siltation, deforestation, illegal structures and pollution. The swelling of Pampanga River partly caused the heavy NLEX flooding. The excess water found its way to the Candaba Swamp and increased the water intake of Calumpit River, a tributary of Pampanga River.

Bulacan’s perennial problem with flooding has a solution, says San Miguel Corp. president and chief executive officer Ramon S. Ang, or RSA.

San Miguel offered an extensive cleanup of polluted river systems and waterways in and around the province, using its own resources at no cost to the government and the people of Bulacan.

RSA made the pledge to Department of Environment and Natural Resources (DENR)

Secretary Maria Antonia Yulo-Loyzaga in a recent meeting, where he presented the status of SMC’s massive river cleanup initiatives including the Pasig River, Tullahan River, and the San Juan River.

The company has already spent some P3 billion to de-silt and remove solid wastes from the polluted waterways. Ang also outlined plans to fully shift its river rehabilitation efforts to Bulacan in the coming months.

San Miguel, which has multiple investments in Bulacan —including the MRT-7 project, the Bulacan Bulk Water Supply facility, and the biggest development in the country to date, the P740-billion New Manila International Airport —has, in recent years, been a prime mover and advocate for cleaning up major river systems in Metro Manila.

“Our Pasig River cleanup is almost complete. After about two years, we are nearing our target of 1.4 million tons of silt and waste removed. We have also started desilting and waste extraction activities at the Meycauayan River and Maycapiz/Taliptip River. This is part of our plan to clean up rivers in the Bulakan-Obando-Meycauayan-MarilaoBocaue-Guiguinto River System, which is critical to addressing flooding throughout the southern part of Bulacan,” says Ang.

E-mail: rayenano@yahoo.com or extrastory2000@gmail.com

Taiwan chip giant TSMC ploughs $3.8b in new semicon factory in Germany

TAIPEI—Taiwanese chip giant TSMC agreed Tuesday to plough $3.8 billion (3.5 billion euros) into a new semiconductor factory in Germany, lending a major boost to Europe’s efforts to bring production onto the continent.

Total investments in the factory, TSMC’s first in Europe, are expected to exceed 10 billion euros, with “strong support from the European Union and German government”, along with TSMC’s partners in the project.

Taiwan Semiconductor Manufacturing Company will set up a joint venture with

German groups Bosch and Infineon and Dutch firm NXP to build the plant, the companies said, with construction to begin in the second half of 2024. TSMC is a key player in the sector, controlling more than half the world’s output of microchips.

The facility in Germany is expected to begin production by the end of 2027, with monthly capacity to reach 40,000 300mm (12-inch) wafers. It will also create about 2,000 direct jobs, the companies said. Hailing the news, Chancellor Olaf Scholz said that Germany “is now likely to become the major location for semiconductor production in Europe.” This was important “for the future viability of our European continent and it is, of course, particularly important for the future viability of Germany,” he said. Stung by the energy crisis unleashed by Russia’s war in Ukraine, Germany and its allies have been racing to slash dependencies on countries such as China and ramp up domestic production of sensitive components such as semiconductor chips. AFP

SM Investments posted 32% profit growth to P36.5b in first six months

By Jenniffer B. Austria

SM INVESTMENTS Corp., a holding company led by the Sy family, reported a 32-percent growth in firsthalf consolidated net income to P36.5 billion from P27.7 billion in the same period last year as core businesses delivered positive results.

SMIC said in a disclosure to the stock exchange Wednesday first-half consolidated revenues rose 18 percent year-on-year to P286.3 billion.

SMIC president and chief executive Frederic DyBuncio said solid consumer sentiment and positive economic environment led to the group’s strong first-half performance.

“Our performance was driven by fundamental demand, without the added benefit of post-pandemic ‘revenge spending’ that contributed to last year’s results,” he said.

“We experienced robust consumer confidence, consistent with the Philippines’ overall economic growth, record low unemployment and improving inflation environment. This provides us with a solid basis for the balance of the year, in which we typically see our strongest quarters,” he said.

The banking group accounted for 47 percent total net earnings in the six-month period, followed by property with 26 percent. Retail group contributed 17 percent, while portfolio investments added 10 percent.

SM Retail’s net income grew 21 percent in the first semester to P8.4 billion from P7 billion as revenues went up 15 percent to P188.9 billion from P164.3 billion amid vibrant shopping activity supported by improving employment.

Sales from the department store grew 27 percent, while specialty retail revenues increased 18 percent. Food retail revenues also grew 10 percent.