Philippine builders advanced on expectations remittances will grow as European policy makers take steps to ease the region’s debt crisis, spurring spending and home purchases in the Southeast Asian nation.
Megaworld Corp., a builder of residential towers, rose 1.8 percent to 2.23 pesos at the close in Manila. Ayala Land Inc., the nation’s biggest developer of homes and offices, gained 3.6 percent and SM Prime Holdings Inc., the largest shopping mall builder, climbed 2.5 percent, the sharpest gain since July 30. The Philippine Stock Exchange Index climbed 1 percent.
The European Central Bank announced yesterday an unlimited bond-buying plan to subdue borrowing costs of the region’s most indebted nations and quell speculation about a breakup of the euro. Europe accounts for 16 percent of remittances from overseas Filipinos and funds from the region fell 5.5 percent in the first half from a year ago, according to Philippine central bank data.
“Developments in Europe are improving sentiments and outlook on remittances and spending,” Richard Laneda, analyst at COL Financial Group Inc., said today. “Developers source a sizable chunk of sales from overseas Filipinos.”
Remittances make up 10 percent of the $225 billion economy and help fund consumer spending. The nation’s gross domestic product expanded 5.9 percent in the second quarter, slower than a revised 6.3 percent in the previous quarter, as government spending eased and global demand weakened.