PSE president Francis Lim said the impressive growth rate was noted in a new PSE study of the performance of the listed companies.

Justice Jose C. Vitug, PSE chairman, said the strong profit performance is a reaffirmation that the Philippine equities market stands on solid ground.

Local stock prices, as tracked by the PSEi, gained 3.2 percent last Friday after it lost 12.6 percent of its value during the previous 10 days of trading.

Justice Vitug said the retreat in the previous trading days was a reaction to developments outside the country, particularly in the US.

"The country’s economic fundamentals remain robust and politicians have modulated their bickering, so it’s obvious that adverse developments from abroad, and not from the local front, are behind the losses in our stock market this week," he noted.

Vitug added that they believe government revenues will pick up and its deficit will further narrow down as benefits from government’s ongoing tax reform program kick into the system.

"Improved government finances and corporate earnings in turn will fuel more economic activity," he said.

"Thus, I am confident government’s enhanced fiscal position and the strong earnings performance of companies will provide some of the most compelling reassurances to investors about the stock market’s bright prospects," Justice Vitug said.

Lim said the combined gross revenues of the listed companies last year went up by 15.7 percent to P1.7 trillion from P1.47 trillion a year earlier.

By industry, listed companies in the services sector accounted for the bulk of the earnings as their combined net income last year hit P60.9 billion, or 18 percent higher than the P51.6-billion level a year earlier, Lim added.

But companies in the mining and oil sector enjoyed the highest growth rate as their combined income in 2005 went up by 176.1 percent to P4.05 billion from P1.47 billion the previous year.

"All other sectors recorded a double-digit growth in net income," Lim disclosed. Net earnings of firms in the industrial sector went up by 14.9 percent to P43.53 billion, those in the financial sector rose by 11 percent to P31.14 billion, holding firms by 46.6 percent to P35.35 billion, and property sector by 48.5 percent to P16.3 billion.

Lim explained the PSE study covered 207 companies that submitted financial reports to the Exchange as of May 25, 2006. The list excludes foreign firms and small- and medium-sized enterprises.

The combined earnings of companies that make up the 30-company PSEi went up by 22.1 percent to P127.72 billion in 2005 from P104.57 billion the previous year. The combined income of the PSEi firms accounted for 66.8 percent of all the earnings of companies included in the survey.