COMBINED profits of publicly listed firms declined 22.6 percent during the first quarter, reflecting a slowdown in the broader Philippine economy which was boosted by election-related spending in 2010, the Philippine Stock Exchange (PSE) said on Tuesday.

In a statement, the PSE said combined corporate profits of 228 out of 247 listed firms showed that net income amounted to P106.98 billion compared with the  P138.21 billion reported in the three months to March last year.

Revenues during the period, however, increased by 10 percent to P857.78 billion, indicating that these firms also grappled with other factors such as rising commodity and energy prices, which resulted in lower bottomline growth.

The PSE added that firms listed under its 30-company PSE Index (PSEI) saw a steeper decline of 26.3 percent.

Bourse data indicated that the decline in profitability was led by firms under the industrial, holding and services subsectors, which offset strong profit growth reported by real estate as well as mining and oil firms. Financial companies posted relatively flat profit growth during the period.

“Despite the early results, investors remain upbeat on the prospects of our listed companies as evidenced by the PSEI hitting a new record high. Hopefully, our firms’ second-quarter corporate earnings, which should be released between this month and the next, will be able to validate this renewed confidence,” PSE president Hans Sicat said in the statement.

The bourse said the industrial sector suffered the biggest decline at  47.6 percent. Heavyweights like First Philippine Holdings Corp. and San Miguel Brewery Inc. saw a drop in profits due to one-time gains booked last year.  Other energy firms also saw power sales drop during this period.

The net income of holdings firms also slowed 21.3 percent, as the units of these diversified businesses took the brunt of the economic slowdown.

The services sector, meanwhile, was also down 7 percent, as Philippine Long Distance Telephone Co. and Globe Telecom Inc. continued to deal with eroding margins and broadcast networks posted lower recurring earnings without political advertising spending.

The mining and oil sub-sector led gainers as firms here saw their combined incomes surge 378.9 percent, mainly as mineral prices improved. Companies like Philex Mining Corp. and Atlas Consolidated Mining and Development Corp. benefited from the rise in prices.

The property sector booked a 19.4 increase in collective net income, mainly as sales improved for firms like Ayala Land Inc. and SM Development Corp. Mall developer and operator SM Prime Holdings Inc. also booked higher earnings after opening new shopping centers and expanding existing ones.

Financial service firms said combined profits were up 1.1 percent, after interest income for large banks increased.