More than reporting the stock market’s high

CHEERS TO 24 Oras and the BusinessMirror for providing an additional perspective on the implications of the Philippine Stock Exchange index’s (PSEi) breaching the 6000^th mark last January.

The PSEi closed at 6,044.91 points on Jan. 7, the first time in history for the PSEi to hit the 6000^th mark .

The Jan. 7 report of 24 Oras cited strong investor confidence for continued economic growth as the country exceeded its targeted gross domestic product, or the overall value of products and services created in the first nine months of 2012, and the low inflation rate or the rate of price increase, among others.

Luz Lorenzo, a stock market analyst, told 24 Oras that the higher stock price reflected higher investor confidence which will hopefully encourage publicly listed companies to invest in the country and eventually generate jobs.

It also led to a stronger peso which can help industries paying debts outside the country and those using dollars in their transactions.

However, in a Jan. 9 article, the BusinessMirror reported that the “PSEi bull run” could have adverse effects on exporters,  the business process outsource industry, and the remittances of overseas Filipino workers. (PSEi bull run could cause pain as it contributes to peso rise, Jan. 9)

Sergio Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc., said local exporters have experienced problems and cut in revenues since the peso-dollar exchange reached P42.50. He also said expansion plans this year of some exporters were put on hold.

Economist Benjamin Diokno warned about “hot money” which he said “is a short-term gain with adverse short-term and long-term consequences once the market corrects.”

“Government authorities should be more pro-active and effective in discouraging the entry of ‘hit-and-run money.’ This is to avoid the appreciation of the peso [that] leads to lower exports and higher unemployment and deeper misery for families of the [OFWs],” Diokno said in the report.

Malacanang through deputy spokesperson Abigail Valte took exception to the story, and said the PSEi record  was due to “sustained investor confidence” and not  short-term gains.