• Indonesian magnate controls Meralco

    Rigoberto Tiglao

    Rigoberto Tiglao

    First of a Series on the Salim Empire in the Philippines


    Through several corporate layers, the 65-year-old Indonesian Anthoni Salim who owns Indonesia’s biggest conglomerate controls Manila Electric Co. (Meralco), the Philippines’ biggest private corporation and the monopoly in electricity distribution in Metropolitan Manila, according to publicly-available corporate information.

    I asked two people close to Salim’s conglomerate in the country two months ago for its top official in the country  to comment on this column’s topic. They replied that he didn’t want to.

    It is probably the country’s most successful case of corporate imaging that the Indonesian tycoon’s control of Meralco—as well as Philippine Long Distance and several other huge firms—has been hidden from public consciousness.

    Meralco Chairman Manuel V. Pangilinan, Mr. Salim’s point-man and top executive in the Philippines, has been been portrayed as the face of the Indonesian’s empire in the Philippines, that it is casually referred to as the “MVP Group of Companies.”

    However, Mr. Pangilinan owns only token shares (25,000 out of the firm’s 1.2 million shares) in Meralco and less than two percent in Meralco’s ultimate mother companies, the Hong Kong based First Pacific Co., Ltd. and the Philippine-incorporated Metro Pacific Investments.

    Salim’s control of Meralco starts with his 45 percent control of the firm which is, as it were, the “mother ship” of his empire in Asia, the Hong Kong-based First Pacific Co. Ltd., listed in that China special region’s stock market.


    col 208 chart

    (Click infographic to enlarge.)

    Salim’s 45 percent holdings in First Pacific are through three offshore-firms, created in secretive, tax haven countries. He is the sole owner of Salerni International Ltd., organized in the British Virgin Islands.

    Salerni in turn is the sole stockholder of First Pacific Investments (BVI) Ltd. also incorporated in that tax haven, and 57-percent owner of a similarly named corporation, but incorporated in another tax haven, Liberia.

    The shares of the two First Pacific Investments and those directly held by Salim compose 45 percent of First Pacific’s (HK) total shares. (Anthoni in 2002 for some reason bought off shares in the two First Pacific investments from his brothers, therefore becoming the undisputed sole biggest owner of the First Pacific conglomerate.)

    That Salim’s 45 percent shares in First Pacific means total control is obvious in that the next biggest stockholder are fund managers, who represent thousands of portfolio investors around the world: Lazard Asset Management with 7 percent and Marathon Asset Management with 4.4 percent. Some two dozen-fund managers own less than 1 percent. Pangilinan holds 1.4 percent shares.

    The Metro Pacific layer

    The next corporate layer for the control of Meralco is the Philippine-incorporated Metro Pacific Investments, which is, as it were, Salim’s command ship in the country.

    A Salim holding firm called “Metro Pacific Holdings” has 56 percent ownership of Metro Pacific. (Salim’s control of the holding firm for some reason is through three other firms with interlocking ownership: the Amsterdam-based Intalink, B.V, Enterprise Holdings Corp., and First Pacific International.)

    As in the First Pacific layer, that Salim’s firms’ 56 percent holdings in Metro Pacific represent complete control of the firm is beyond any doubt, for the remaining shares are distributed among nearly 40 fund managers, most of which hold less than 1 percent stocks.

    The two biggest of these are T. Rowe Price International (UK) Ltd. and Morgan Stanley Investment Management, which hold, respectively, 1.6 percent and 1 percent of the firm’s stocks. Pangilinan has 0.09 percent of the shares, the minimum for him to have to be in its board.

    Salim’s third corporate layer—or his third step—for his control of Meralco is a firm incorporated in 2010, Beacon Electric Asset Holdings. The firm is effectively 100 percent controlled by Salim, through Metro Pacific Investments, which has 50 percent shares, and a 100 percent PLDT subsidiary, PLDT Communications and Energy Ventures, which has the other 50 percent.

    Salim controls 27 percent of PLDT. That holding may seem small, but that makes up the indisputable controlling bloc in PLDT, which has thousands of shareholders. Its next biggest shareholder with 15 percent shares is the Japanese NTT group. How Salim got to control the country’s biggest telephone firm is yet another story.

    And at the end of the corporate layers: Beacon Electric Holdings has 50 percent control of Meralco. The next biggest shareholder is the San Miguel Corp. and its subsidiaries, which together have 27-percent holdings.

    Lopez clan gone

    Whatever happened to the old-elite Lopez clan, whose name had been synonymous with Meralco? After the Lopezes bought Meralco from its US owners in 1962, after they lost Meralco to Marcos’ brother-in-law Kokoy Romualdez, and then, after the EDSA revolution, President Cory handed back Meralco to them. The Lopez clan then, in 2009, sold most of the Meralco shares to the Indonesian Salim’s firms. The Lopezes now hold only 4 percent of Meralco.

    One of course could believe that Mr. Pangilinan has full autonomy in running the First Pacific empire, and that he is of course the most patriotic of Filipinos. That would be supremely naive, unless one is in a socialist system.

    But most of the Meralco and PLDT profits flow not to Pangilinan through his 1 percent or token shares in those firms, but to their owners. The lion’s share would be claimed by Salim, and the rest by the thousand or so US and European portfolio investors in First Pacific.

    Pangilinan may be the most patriotic of Filipinos, but what happens if one morning, Salim wakes up deciding to replace him with the best executive the world can offer? He can even just pick from the list of the best CEOs in the world the Harvard Business Review annual determines.

    And of course, what if, God forbid, Salim passes away, and we learn that the Indonesians had found a way for Salim’s holdings to be turned over to the state of Indonesia, which may have a policy of cut-throat competition with its neighbors?

    There are important reasons why nearly all countries in the world have restrictions—not necessarily through their constitutions but through laws and regulations—on foreign ownership of strategic industries, especially utility companies. (That topic for a coming installment of this series.)

    And who is Anthoni Salim? Forbes magazine ranked him as the third richest Indonesian last year. He is the youngest of the four sons of ethnic Chinese Liem Sioe Liong, who took the Indonesian name of Sudono Salim, and who had been for decades that country’s richest magnate.

    Liem had been Indonesia’s most controversial magnate. He had been viewed as the former strongman Suharto’s most successful crony so much so that he and even Anthoni had to flee Indonesia during the anti-government, anti-Chinese May 1998 riots that eventually led to Suharto’s fall. Sources say that because of that harrowing experience, Anthoni lives mostly in Los Angeles.

    The Salim conglomerate includes Indofood, the world’s biggest noodle factory and about 500 firms in diverse industries all over Asia. In Indonesia alone the Salim firms have a workforce of 200,000.

    Quite significant though is that according to First Pacific’s 2012 annual report, its profits from its Philippine operations have outstripped those from its Indonesian operations starting in 2011, by about $200 billion in 2012.

    Take it the way you want it.

    Two interpretations

    Salim’s control of Meralco and PLDT—both utility firms—is a mockery of our constitutional and legal restrictions on foreign control of strategic industries. And these are not only strategic industries: Salim controls a monopoly in electricity distribution in Metro Manila and surrounding provinces and one member of the duopoly in mobile telecommunications (Smart Communications).

    Or the other interpretation: the restrictions imposed by the constitution and our laws are so full of legal loopholes that all that a foreign investor wishing to invest in the Philippines has to do is to contract a good lawyer, or, as some say, a lawyer or law firm with strong political connections.

    Sadly, the issue of Salim’s empire in the Philippines would muddle the debate over amending the constitution.

    I have heard a conspiracy theory that with the weak legal basis for Salim’s control of utility and mining firms in the country, the solution would be to lobby for amending the constitution so that its existing restrictions on foreign ownership in these industries would be lifted, and the issue becomes moot.

    What kind of country have we become?

    A magnate in a foreign country which is in our level of development—Indonesia with a GDP per capita of $1.731 just a bit bigger than our $1,501—takes control of what are not only the prized gems of our corporate world, but also the most strategic of our industries.

    We are the only country in the world in which a foreigner controls the biggest power company and the biggest telecommunications firm.

    What an irony: Our restrictions on foreign investments have turned off global investors so much, that it explains partly why we are the smallest recipient of foreign capital in Asia, barring, of course Cambodia and Laos. Yet an Indonesian magnate of Chinese ethnicity—reputed to have ties with certain leaders of China has businesses in the mainland—controls our strategic industries.

    The need to keep out of the public mind such obvious anomaly is probably what has prodded Salim to go into an industry that controls public opinion: Media. That topic in coming parts of this series.

    Other parts of these series:

    • Foreign ownership by Salim still a legal issue.

    • So what if foreign owned? How the Salim conglomerate mobilizes Philippine savings to fund the empire. How its Philippine firms’ profits flow to Hong Kong, Indonesia, and ultimately to Salim’s tax-haven firms.

    • The Salim Empire in the Philippines: From telecommunications to toll roads, electricity to the press, mining to medical center.

    www.trigger.ph and www.rigobertotiglao.com


    Please follow our commenting guidelines.


    1. walang duda na si salim ay isa sa mga crony ni suharto at ng mapatalsik si suharto, portion ng nakurakot nya ay dito sa Pilipinas dinala at itinago sa likod ng mga kumpanyang itinatag nila sa ibat ibang panig ng mundo at may mga frontman sila. At ang style ni suharto ay katulad ng style ni marcos, at lahat ng mga diktador ay iisa ang style at layunin. kung si suharto ay nasa labas ng Indonesia ang nakurakot nya si marcos naman ay nasa labas ng Pilipinas ang nakurakot nya at yung nabawi ng PCGG ay tinga lang yun kumpara sa isang malaking platong pagkain.

    2. The publicly-available corporate information has publicized the correct news about Anthoni Salim. He did hard work to be the best and he is a great guy as well.

    3. Let’s admit it..Filipinos don’t have the business savvy of most Chinese or foreign tycoons. Our local tycoons would rather invest in more profitable businesses with less government control (fastfoods, real estate, malls) than invest in utilities. The only local company who would dare invest in huge infrastructure is San Miguel Corporation proposing to build a dam to supply NCR with fresh water. Another stumbling block to local financiers is the red tape and grease money necessary to get involved with local utilities and communications. The foreign capitalists have deeper pockets.

    4. primo amparo on

      Yes Mr. Tiglao, its worth reading! The Constitution with its implementing laws and policies specifically the promotion of PRIVATIZATION, liberalization & deregulation – that serves as the engine to run the nation and the TRAPO that serves as the drivers / state administrators are the REAL CULPRIT. It may not be easy to understand for common people, but if we will dig the bottom of these issues these are the reasons of our nation and Filipino peoples MISERY.


    6. Ask ko lanh sir,bakit.ma sequester yun meralco etc,eh naka pangalan naman ito sa gobyerno,sequester na nakapangalan sa gobyerno tapos bigay lang sa lopez at iba pa maski walang kapalit,di si marcos ang nalugi kundi taong bayan,kasi nakapangalan na nga sa gobyerno no eh

    7. Thanks for this revelation, Mr. Tiglao. A big eye-opener for us all. If Indo-Chinese Salim controls MER & PLDT, in the event of full-scale war, talo na tayo kaagad. Economic Sabotage will ensue. In the end, China will win…

    8. kaya nga wala nang pinakamagaling na namuno ng pilipinas kundi ang dating pangulong marcos. ngayon nahahayag kung ano talaga ang layunin ng Edsa…

    9. Hold on a minute. lets stop here for a moment. The bigges companies in the Philippines have always been in the hands of “foreigners”. Example is Ayala. Our local Chinese Filipino Taipans use predatory business practices. Our “homegrown” business magnates are content with “rental” fees. No one invest in modernizing and uplifting our infrastructure and industries. Filipinos fronting for foreigners is no different. In a globalized world this is bound to happen. The only difference is what legal controls do we have? No way can Filipinos sell and own companies in other countries if we dont allow foreigners to do the same in our country. Salim might be a foreigner but do you think he can bring the Tollways/Roads, mobile system, real estate and hospitals with him to the Bahamas? If our own Filipino elite would not invest in our country who do you think would do it?

    10. Hey Folks. we can start making a petition regarding this expose. How many signatures are needed to make our congress listen and address this issue? We need to start now before our country will be taken away from us!

    11. Philippine Government should take over the utilities sector of the country since it is monopolized. There a number of patriotic countrymen who are willing to work “honestly” for the government if given a chance… maybe not in this regime, hopefully in the next regime… change would come, even if not for us, but for the sake of our future generations…

    12. Nicolas Kramer on

      It was Atty. Wilson Gamboa of Bacolod, Neg. Occ who questioned real ownership of PLDT, in fact he filed a case in Supreme Court, i just don’t know now status of case now that he’s deceased.

    13. What a chilling revelation this is. I’ve always thought of MVP as a dummy or frontman and this confirms it. And I have always thought the Gov’t must retain control of vital service corporations like Power Generation/distribution, National Grid, Steel Prod, etc. But the way I see it, the Philippines was literally sold after EDSA ’86. National Grid, bought by China State-owned company, National steel Corp (NSC) was bought and shutdown by a Malaysian company, Meralco, PLDT, Smart, tollways, and soon the hospitals by Salim, I would suppose Malaysia would buy Mindanao next, that’s what we get from allowing the Yellows to head our Government.!

    14. Mr. Tiglao, can you please do some research on PHILEX MINING which is also chaired by this Manuel V. Pangilinan? Are they in some ways connected with The Salim Group also?

      His attempts to negotiate with CHINA NATIONAL OFFSHORE OIL CORP (CNOOC) for possible joint exploration of natural resources in the disputed islands in the West Philippine Sea clearly undermines our efforts to effectively assert sovereignty over these islands.

      I consider MVP a traitor to this nation.


      • Nope, FAR from it. MVP is a patriotic people who has done so much for the Philippines NOT only bringing foreign investments here, but also supporting charitable causes.

      • MVP is the traitor of this nation and all officials in the SEC for allowing a foreigner to own big companies (PLDT,MERALCO,SMART etc.) as majority share holder, in the first place before a foreigner can owned stock and shares in different companies in our country first it should be known or determined how much is his/her share not to exceed the 60/40 ratio as what the constitution or the phil. govt. laws says, but the sad part they used dummies by hiring good lawyers(CPA’s) as their front man and MVP is one of them because of his/their greedy motives and lust for wordly positions like money,fame and corporate power, he didnt consider the welfare and position of our nation in the first place he knows from the very start that the interest of the filipino nation is at the losing end. and also to be blame is the SEC and other govt. officials who have knowledge to corporate and investment laws by not checking the bottomline of the ownership of this foreign capitalist and determining its proportionality that serves the interest of this nation.

    15. troyzaratedeleon on

      In January 2013, Manuel Pangilinan in a speech at the Foreign Correspondents Association of the Philippines (FOCAP) conference noted that if the Philippines is serious in its goal of attaining inclusive economic growth, it must change the economic provisions of the 1987 Constitution.

      Clearly any change in the economic provisions of the charter will not only benefit MVP but also the real person controlling him, Anthoni Salim. Do we want that level of foreign control specially at a time china is expanding its investments and mayt use it to control our economy too?

    16. This matter is simple if you want to take the asset of Meralco & PLDT from MVP (Salim Group) buy it.

    17. Ibig bang sabihin nito, ay maituturing na Traydor sa bayan si Manny Pangilinan, for intentionally fronting for this foreign interest, in connection with his Malacanang relations…?

      Mga mukhang pera talaga, dati akala ko philantropist ito at very generous, yun pala super greedy, kaya nakukuha niya lahat ng govt contracts

      our lawmakers who conspire to allow this are all TRAITORS, too! Thanks for this reporting and expose…

      • Sir ramon, i somehow relate to how you feel but think of it in a different way. He may be a front of someone but he still pays his taxes, is a good leader for the companies he is handling, and let’s just say that he was able to bring additional funds that our country badly needs. Sure, you can be disappointed, mad, or perhaps feel that you’ve been wronged in a way that meralco is not owned by a filipino. But you need to keep your emotions checked at times, for it does not look nice to call someone a traitor and please be reminded that you should do things with good intentions :)

    18. If meralco was not been given back all along after the edsa revolution of cory aquino…this thing would not be happening now…vital asset and infrastructures that has been controlled by the government..has been given or sold to the private sectors after the downfall of marcos…and some businessmen.. in cahoots with government officials..make a constitution..and laws favoring their businesses…and interest….kaya ayun example…lahat o halos lahat ng mga strategic businesses sa bansa natin mga dayuhan na ang namamahala using their puppets and fronts na pilipino…pag nagkagulo o mag away away ang mga bansa…tapos ang maliligayang araw nating lahat…….

      • tama nga MVP salim’s dummy brought investment to the philippines pero hindi sinunod ang 60/40 equity limit therefore useless hindi kapakanan ng bansa ang puno’t dulo nito at ang katotohanan e siphon nila palabas lahat na kinita palabas ng pilipinas sakaling magka problema na dito. si salim is an ethnic chinese daw iisang kulay lng sila ng kadugo nya china na nagbu bully sa atin ngayon in fact they control everything in us kasi napasok at nabili na nila halos lahat from power utilities/energy,telecommunications,media etc. vital businesses sa bansa natin pag lumala yung sigalot natin sa china pag pinull out nila investment sa atin malamang malaki ang epekto sa ekonomiya natin kasi napasok na nila systems natin.

    19. Every Filipino must be aware of this. If these will go on, then what will be the Philippines future?

    20. Binenta na pala tayo sa Indonisia at China, ngayon naman sa Malaysia at Bangsa Moro kaya gusto ni Belmonte na mag Cha-Cha para tuluyan na tayo mabili ng China. Di ba yuon nasiarang asawa ni Belmonte-Go ay intsik din? Di kaya gusto ni Belmonte na Cha-Cha imbest na Con-Ass ay para mapadali ito pagsakop ng China, Indonesia at Malaysia sa atin habang Speaker sya ng mababang Tongresso? Tanong lang po at sana meron sumagot ng kinauukulan para tayo maliwanagan, di ba Sirs?

    21. Kudos to you Mr. Tiglao you are nationalistic, please continue exposing this issue. Kaya pala itong si Speaker Belmonte eh gustong ng economic amendment daw ng saligang batas ngaun magsalita mr. Belmonte?

    22. We should blame MVP. He’s too greedy, ambitious and want to monopolize everything here in our country, eh tota lang naman yan nga mga Salim c MVP. Parang ni laundry na dito sa atin amg pera na galing di maganda..i don’t believe MVP’s vision and to his interests..He must preserve and protect Filipinos interest not his own interest..

    23. Tanya Ileto Diaz on

      Thank you for unearthing and sharing this information, Mr. Tiglao. Our country needs more journalists like you.

    24. Wow!!!!!!!!

      An Indonesian-Chinese whose conglomerate has a port operation and other businesses in China controls Meralco, which operates and controls as a monopoly the supply of electric power to Metro Manila. The same person and his conglomerate controls our largest cellphone company Smart and its mother company the largest landline telephone service provider in our country.

      Chinese from Mainland China control the National Grid Corporation of the Philippines, whose mandate is to manage and supervise the distribution and transmission of electric power throughout our country.

      China has taken over our islets and sea territories in the West Philippine Sea.

      Is there still any doubt that the Philippines will become a province of China or some kind of colony of that country ruled by the Chinese Communist Party?

      C. M. Malifier

    25. Ayan na ang resulta ng hinihirit ni BELMONTE, ano kaya ang connection ni BELMONTE kay SALIM? dahil ngayon lumalabas na ang motibo na may kinalaman sya sa mga negosyo ni SALIM kaya gusto nya na maisabatas na pwedeng bumili ng lupain sa PILIPINAS ang mga dayuhan, Sana matuklasan kung ano ang katutuhanan nito, Parang sa C E Z A yan, katulad yan ng– PHILIPPINE VILLAGE HOTEL dati.– kung lilimiin mo ay iisa ang pattern.

    26. Poor Pilipino people….suffering from the corrupt & self-serving of their politicians in the government. But whose fault is that when they sell their votes to the unscrupulous candidates for mealy $2.00 to $10 each? They are the root cause of their own problem. Remember, no country can be great by just depending on other countries. It needs strong will and ethical governance from their own people and their leaders.

      • Santiago a. Caisido on

        Amen I agree 200%. God bless the Philippines. TAYO RING MGA BOTANTE ANG MAY KASALANAN.

      • hindi mo masisisi ang mga nagbebenta ng boto tuwing election kasi yun lang ang pagkakataon nilang kumain ng 3 beses sa isang araw…kaya nga ang ating mga politiko ay gustong mas maraming mahirap para may mauuto sila..may kasabihan nga “kung nais mong makuha ang gusto mo panatilihin mong mang mang ang iyong kapwa”…yan ang minemaintain ng ating mga pulitiko, catholic chruch, CPP-NPA, mga maka kaliwang grupo, mga muslim rebels and bandit…

    27. AnonymousReply on

      Isn’t there a law in the Philippines regarding foreign ownership of corporations and major companies especially in particular Government regulated companies like PLDT and Meralco????? The law specifically states that ownership and full control will be 60% Filipino and only 40% foreign ownership. That type of deal is totally absurd and is a total violation of the law. Meralco and PLDT can be fined and the foreigners will stripped of their shares limited to only totaling 40% of total foreign ownership.

      • Just Mr. Tiglao said. there are many loopholes in or laws. dagdagan ko na rin, masyadong magagaling kasi ang mga abogado natin din sa PINAS and ang mga FILIPINO ay masyadong magaling sa diskarte lalo na pag pera at kung papaano iexploit ang kapwa nila…

    28. This is the fleecing of the Philippines. In the US and most other develop countries, utilities are considered national assets and is protected because of its importance to the nations national security, any compromise would lead to grave damage to the way of life. Utilities are always under constant attacks from hackers coming from China and Russia. Here we are they did not even have to do that, with the help of the greedy politician like Pangilinan, we have given up control of our biggest electric company. What Pangilinan did is treason, and should be seriously look at. What’s next?

      • If bringing investment in this country is a treason act then MVP is a traitor. I remember before in the 90’s when no investor want to invest in the Phil. MVP came, He gave a life to our anemic economy then. He first buy PLDT, then invest heavily in Ft. Bonifacio and acquire other troubled companies like Maynilad Northlex & from the Lopezes, MRT from Sobrepenas . I think MVP’s success in Phil. business can be attributed for his not being ” kuripot”, when he buy companies unlike other filipino businessman who want to pay cheap. Ask his employees if they are paid properly & then ask employees of other taipans.

      • si MVP ay dummy lng ni Salim na crony ni suharto malamang a portion ng capital ni salim ay ill gotten wealth din, dahil si MVP ay frontman at sya ang nagpapatakbo ng lahat na investment ni salim sa pilipinas natural in part may share din sya kasi sya ang utak sa pagpapalago ng business operations nila sa pilipinas kaya kung titingnan natin parang si MVP ang nagmamay ari ng negosyo ni salim kaya nalaman natin ngayon kasi ibinunyag ni rigoberto tiglao ang totoo sa likod nito

    29. Agree with you Mr. Tiglao. This is another greed by some people. It was Pres. Marcos who insisted that utilities should not be controlled by foreigners, hence he took over Meralco. Whether the Lopezes or Salim (MVP) like it or not, the interest of the Filipinos should be above their interest otherwise there will be protests all over the country.