Philippine Stocks Fall Most in Asia on Valuations, Export Data

Philippine stocks fell from a record as a rally in the nation’s benchmark stock index drove valuations to a nine-year high and after data showed exports missed estimates.

The Philippine Stock Exchange Index sank 1 percent as of 12:41 p.m. local time, the most among equity markets in Asia. The slide halted a seven-day, 5.1 percent gain. The gauge is trading at 17.2 times estimated earnings, the most expensive in Asia Pacific after Japan.

“After the market’s sharp rally in a short period, valuation concerns are starting to set in,” James Lago, head of research at PCCI Securities Brokers Corp. in Manila, said by phone.

The Philippine benchmark index trades at 19.5 times trailing earnings, the highest level since January 2004, according to weekly data compiled by Bloomberg. Philippine exports rose at a slower pace than economists estimated in November, data from the National Statistics Office showed today.

Philippine stocks may post a “stronger rally” this year, boosted by earnings growth and the prospects of a credit-rating upgrade, bourse President Hans Sicat said in a Bloomberg Television interview today.

“The Philippines is in the midst of an upward re-rating exercise,” he said. “We are probably just at the start of this re-rating exercise instead at the end of it. If corporate earnings perform as they have been performing over the last year, then you will probably have a stronger rally this year.”

Standard & Poor’s raised the Philippines’s credit-rating outlook to positive from stable on Dec. 20.

The Philippine government may raise its key interest rate three times this year to cool inflationary pressures, Michael Spencer, chief economist for Asia at Deutsche Bank AG, told reporters in Manila today.

To contact the reporter on this story: Ian Sayson in Manila at isayson@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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