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Asia Business News - 2002-12-23

The Philippine government says bank lending is rising, while Taiwan's government suffers a setback following a credit rating downgrade. The Philippine central bank reports that bank lending is picking up as the economy recovers. Outstanding loans increased more than one percent to about $26.5 billion from January to October this year, compared with the same period last year.

Loans to the agriculture sector recorded the biggest gain, rising 22.2 percent.

Financial rating agency Standard and Poor's downgraded Taiwan's long term credit rating to AA- from AA. The international rating agency raised concerns over rising bad loans in the banking system and slowing financial reforms.

Neal Stovicek, a stock strategist at Taipei's Sino-Pac Securities, says big investors are still keeping some bank shares in their holdings despite the bad news. "It is not at a crisis level. There are efforts being made such as self write-downs of non-performing loans, foreign capital coming and consolidation to improve the situation."

The New Zealand government approved a deal for Australia's leading airline, Qantas, to buy 22.5 percent of Air New Zealand for about $275 million. The New Zealand government owns the biggest stake in the national carrier. Once the deal is completed, Qantas will have the second biggest stake.

Airline officials say the deal would enable the two carriers to operate more efficiently and compete with other regional airlines.

Singapore continues to see weak demand for real estate. International property consulting firm CB Richard Ellis says as much as 16 percent of Singapore's office space remains vacant and the outlook will remain weak in 2003.

Several multinational companies have closed offices in Singapore over the past year as the economy fell into a recession. Although the economy has recovered, property experts say rents will continue to fall.