Jan. 3 (Bloomberg) -- Philippine property stocks rose to a record, leading gains in the nation’s equities, as central bank Governor Amando Tetangco said interest rates will remain low this year.
Megaworld Corp., a builder of residential and office towers, climbed 3.2 percent to 2.88 pesos as of 3:30 p.m. in Manila, the highest close since Feb. 4, 2008. The Philippine Stock Exchange Property Index rose 1.3 percent to a record, compared with a 1.25 percent gain in the broader Philippine Stock Exchange Index.
There is no clear evidence of an asset price bubble and the inflation outlook continues to be manageable, Tetangco told reporters today in Manila. The central bank approved on Nov. 28 measures to broaden monitoring of banks’ real-estate financing to protect against excesses that may lead to a financial crisis.
“The absence of a property bubble gives further support to the outlook that the central bank can keep the low interest-rate environment,” Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc., said by phone today. “Signs of a bubble could prompt the central bank to siphon liquidity and one way of doing that is by increasing interest rates.”
The central bank cut its benchmark rate four times in 2012 to a record low 3.5 percent, to boost growth and has said it has room for more reductions.
Ayala Corp., owner of the nation’s biggest developer, gained 1.9 percent to 534 pesos, a record close based on prices going back to January 1987. Ayala Land Inc., its property unit, rose 0.2 percent to 26.70 pesos.
Ayala Corp., which trades at 22.4 times estimated profit, is a cheaper alternative than Ayala Land as a Philippine property play, Ravelas said. Ayala Land is valued at 34.4 times, data compiled by Bloomberg show.
SM Prime Holdings Inc. and Sta. Lucia Land Inc. rose at least 3 percent, among the biggest advances in the Philippine property index. Century Properties Group Inc., a developer of high-end residential towers, gained 2.1 percent.
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