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During December, I met Philippine Long Distance Telephone Co. (PLDT)
Chairman Manuel V. Pangilinan (MVP) twice, each time for a 40-minute
chat at the PLDT headquarters in Makati. Three days before
Christmas, I had a two-and-half hour lunch with San Miguel Corp.
Chairman and CEO Eduardo Cojuangco Jr. and President and COO Ramon
Ang at the SMC headquarters in Ortigas Center. On Saturday, December
27, I spent half a day with SM Group Founder and Chairman Emeritus
Henry Sy Sr. for one and a half hours of late lunch, four hours of
tour and an hour of coffee break at the Mall of Asia. Tatang Henry
was with his son, Hans Sy, president of SM Prime, which builds the
malls, and his grandson, Hans Sy Jr (Chico) during the lunch. Chico,
an engineering graduate from Australia, accompanied his Lolo during
the mall tour.
These people are among the brightest and most
visionary of Filipino tycoons. Their companies are unrivalled No. 1
in their businesses and among the largest and most diversified in
the Philippines and the rest of Asia. They also are among our
biggest employers. The PLDT Smart Group employs about 28,000, half
of them in call centers. SM Group has 25,000 members in its Savings
and Loan Association. San Miguel has 15,000 workers.
As of end-2007, SMC had assets of P288 billion,
PLDT P240 billion, and SM Investments Corp. P234 billion.
In my interaction with the top honchos of these
companies, I make but one conclusion—the short and the long-term
future of this country in general and business in particular is
bright and bullish. So what global recession is the World Bank
talking about?
PLDT will make over P37 billion in profits in
2008, it best year ever. The PLDT/Smart/Metro Pacific Investments
Corp. will be the first private group to chalk up $1 billion in
profits in 2009, gushes Pangilinan. The income will come from
wireless phones, water, tollways, infrastructure, and mining.
San Miguel will become a P625-billion (that’s
$13.3 billion at P47 to $1) conglomerate in revenues in 2009 when
its acquisition of control of Petron, Meralco, Liberty Telecoms and
Bank of Commerce begins to turn in revenues for the mother company.
Petron made P210.5 billion in revenues in 2007 and possibly P290
billion in 2008. Meralco posted P198.75 billion in revenues in 2007
and another P195 billion in 2008. Under accounting rules, a parent
company can credit 100 percent of its subsidiary’s revenue if it
owns 51 percent. Thus, San Miguel can book P485 billion of
additional revenues from Petron and Meco and bundle those with its
P140 billion sales this year to create a P625 billion company. This
year, 2008, SMC had its best and most profitable year ever, with
P21.5 billion net in the first nine months of 2008 alone.
Ramon Ang says all of SMC’s operating
divisions—beer, beverage, food and packaging and overseas—did
very well during 2008. They will do even better in 2009, he says.
The week the World Bank announced in December
the beginning of a global recession. Henry Sy opened two
malls—Baliwag, in Bulacan province north of Manila, and the SM
North EDSA Extension. Both openings resulted in traffic gridlock.
So you cannot say people have lost their
appetite to spend, enjoy or entertain themselves.
The North EDSA Annex adds 90,000 square meters
of gross floor area (GFA) to create a 425,000-sqm mall, which makes
SM North EDSA the second largest mall in the world. The SM Mall of
Asia (MOA) is the world’s third largest, with 407,000 sqm GFA. SM
Megamall in Mandaluyong is the sixth largest while SM City Cebu is
the tenth. Thus, of the world’s 10 biggest malls, Henry Sy has
four. Sy plans to build three more malls in 2009, bringing the total
number of malls to 36. He will also build 12 SaveMore supermarkets
in 2009. His Banco de Oro bank became the largest Philippine bank in
2008.
More than three million people visit Sy’s 33
malls daily. On Christmas Day, more than 700,000 went to MOA, Hans
revealed to me.
Filipinos have plenty of money. Ten million of
the 16 million households in the Philippines are supported by an
OFW. This year, 2008, Filipino expats will remit almost $18 billion.
You say the peso devalued by 13 percent from P42 to P47.50 to $1.
But that only means P99 billion of additional purchasing power in
the hands overseas Filipino workers families because $18 billion at
P42 is P756 billion while $18 billion at P47.50 is P855 billion and
P99 billion is more than the P80 billion economic stimulus program
of the government.
“I put the Philippines on the world map as a
shopping destination,” Tatang tells me. Next, he wants to put the
Philippines on the world map as a tourist destination. He is
building at least two hotels next to the MOA and is developing the
5,700-hectare Hamilo Coast resort, five times larger than Boracay,
in Batangas.
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