MANILA, 3 June — Fortunately for the Philippine Stock Exchange (PSE), the huge losses it suffered last Monday, because of the abduction of 20 tourists from a beach resort in Palawan, were recovered when the power sector reform bill was all but passed cheering up investors and businessmen.
This was evident among investors although the bill itself had yet to be signed into law. For them, the legislature had “ratified a long-awaited power sector reform bill,” a bill which most businessmen had been waiting for. But because of earlier losses, the market barometer only managed a 5.86 point of 0.42 percent rise to 1,416.09 points. Traders said market players were concerned of the government’s handling of the new hostage crisis. But the Senate is expected to ratify the power bill early next week, according to reports, after which President Gloria Arroyo can sign it into law.
The passage of the bill is widely perceived by investors as testament to the sincerity and will of the Arroyo administration in implementing much needed reforms. “It’s (the market rise) basically the power bill news ... people are punting on the perceived benefits to business after its passage,” Regina Capital Development Vice President Allan Araullo said.
The bill’s advocates say it will lead to a more efficient electricity industry, cheaper power costs and pave the way for new infrastructure investment to avoid future brownouts. Further fueling appetite for Manila shares are concrete efforts made by the government to resolve the hostage crisis caused by Abu Sayyaf bandits. “The government seems to be making headway in resolving the hostage crisis,” said Astro del Castillo, research head at A&A Securities.