Philippines mining stocks surged on Thursday after a court order reopened the sector to foreign players, but a drop in telecom stocks weighed on the overall market. Shares in number-one telecoms firms Philippine Long Distance Telephone Co (PLDT) and second-ranked Globe Telecom Inc fell on concerns about the effect of a franchise tax on the industry being debated by lawmakers.
The main index ended up 0.03 percent at 1,816.99 points. The mining index jumped 19.65 percent. Value turnover reached 1.08 billion pesos ($19.34 million) as gainer beat losers 52 to 29. The most heavily traded mining stock was Manila Mining Corp whose B shares, open to both foreigners and locals, jumped 12 percent to 2.8 centavos.
Manila Mining-A, which is restricted to Filipinos, rose 10.53 percent to 2.1 centavos.
The firm, an affiliate of Lepanto Consolidated Mining Co, used to mine gold bullion and copper but ceased operations in 2001.
Lepanto rose 28.57 percent or 8 centavos to 36 centavos. The Philippine Supreme Court late on Wednesday reversed a ruling that quashed parts of a law allowing foreign companies to own a 100 percent stake in mining projects.
In its new decision, the court said the constitution allows the government to enter into service contracts with firms in large exploration, development and utilisation of minerals, petroleum and mineral oils.
Horacio Ramos, head of the Mines and Geosciences Bureau, has said revenues from mining could be a way out of the government's fiscal problem - a $3.5 billion annual budget deficit and rising debt burden.
The Philippines is rich in gold and copper but remains one of the least-explored countries in region.
"The mining stocks surged due to the court order but the telecoms dragged the market," said Eagle Equities President Joey Roxas.
PLDT, the country's largest firm in terms of market capitalisation with $4.13 billion, fell 15 pesos or 1.10 percent to 1,345 pesos. Globe fell 5 pesos or 0.51 percent to 980 pesos.