Philippine builders advanced on expectations European steps to ease the region’s debt crisis will boost remittances, spurring spending and home purchases in the Southeast Asian nation.
Megaworld Corp. (MEG), a builder of residential towers, rose as much as 2.7 percent to 2.25 pesos and settled at 2.24 pesos at the noon break in Manila. Ayala Land Inc. (ALI), the nation’s biggest developer of homes, gained 1.8 percent and SM Prime Holdings Inc. (SMPH), the largest shopping mall builder, climbed 2.5 percent, bound for sharpest gain since July 31. The Philippine Stock Exchange Index (PCOMP) climbed 1.2 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 euro breakup. 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, Philippine central bank data show.
“Developments in Europe are improving sentiments and outlook on remittances and spending,” said Richard Laneda, analyst at COL Financial Group Inc. “Developers source a sizeable 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.
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