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If you are still in doubt whether things are
improving in the country, listen to what Jaime Augusto Zobel de
Ayala says.
“Ayala Corp. [AC] achieved
record profitability and strong operating results across all of our
subsidiaries and affiliates,” JAZA told Friday the stockholders of
Ayala Corp., the holding company for Ayala Land, the largest premium
land developer; Globe Telecom, the second-biggest cellular company;
Bank of PI, the most profitable bank; Manila Water, the profitable
water concessionaire of Metro Manila; and IMI, the group’s
semiconductor producer on contract basis. AC profits jumped 49
percent to a record P12.2 billion.
The Zobel de Ayala family, which
owns about 51 percent of Ayala Corp., has tripled the stock market
value of their holdings in Ayala Land and nearly doubled it in Globe
Telecom and Bank of PI. The increase in the value of their holdings
in Manila Water and IMI was as much as tenfold. The Zobel-Ayala
family is richer by about P100 billion than it was in 2001.
Enthuses JAZA: “Ayala Land’s
market value at year-end of P165 billion was more than three times
what it was in 2001, while BPI’s market value of P172 billion was
nearly double what it was five years ago. More compelling are the
values that we have been able to generate in three of our relatively
newer businesses—Globe Telecom, Manila Water and Integrated
Microelectronics. Few may realize that in the past five years, we
have created over P33 billion in value in IMI and Manila Water
alone, while Globe Telecom’s market value reached P163 billion,
which is twice the value that it was in 2001.”
In 2006 alone, Ayala Corp. gave
its owners 89-percent return—the yield of their capital plus the
appreciation of the company’s share value. It is the best
performance in the company’s 173 years. AC share price almost
doubled, from P315 in end-2005 to P590 in end-2006. It beat the
stock market which rose 46 percent. PSE was one of the best
performing stock markets in Asia last year.
How did the Ayalas do it? Well, a
combination of the legendary Ayala management brilliance plus, of
course, what President Arroyo has done for the economy.
Explains JAZA: “A major factor
in this outstanding performance was the significant improvement in
the country’s macroeconomic landscape last year. With minimal
volatility in the political arena, the government was able to hit
its GDP growth targets and implement effective fiscal reforms and
budget adjustments resulting in sustained and dramatic improvements
in the country’s fiscal position.”
Also, he adds, “Increasing
remittance flows from overseas Filipino expatriates, sustained
export growth by the electronics sector and a gradual revival in
foreign direct investments improved our balance of payments and
strengthened our current account, with foreign currency reserves
reaching historic highs. With a stable and even appreciating peso
and interest rates at or near all-time lows, the Philippine
investment climate has clearly been attractive for both portfolio
and direct investments.”
“The stable monetary policy and
the success of the government’s fiscal reform programs have
restored a significant amount of credibility for the Philippines
within the international investor community as well as with the
ratings agencies,” concedes JAZA.
Ayala’s “strategy is on
track,” asserts the CEO and chairman.
The group’s businesses all made
money, thanks to the robust economy. Also, Ayala reduced debts, to
P52.9 billion, saving about P1.5 billion in interest expense. And as
usual, it sold some assets to boost revenues and profits. Ayala is
investing heavily in a business where everybody wants to go to these
days—call centers and business-process outsourcing. This booming
industry is estimated to have generated $3 billion and employed
500,000 in 2006.
The Philippines is very
competitive as an outsourcing hub for the world. And this
competitiveness, implies a recent study by A.T. Kearney Consulting,
will last for the next 20 years.
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