Philippines’ Richest 2018: Billionaire Builders Push Ahead With Infrastructure Projects

07-Sep-2018 Intellasia | Forbes | 6:00 AM Print This Post

In the midst of fast growth and an improving investment climate, the Philippines is long overdue for a nationwide infrastructure overhaul–one which President Rodrigo Duterte hopes will become part of his legacy.

Duterte’s “Build, Build, Build” campaign consists of 75 major public infrastructure projects, from roads to floodways, transportation, drinking water, energy and airports. Filipino tycoons are keen to get a piece of the promised $180 billion public investment and are launching privately funded projects in what many are hoping is the dawn of a golden age of Philippine infrastructure.

Duterte Turns To Loans

Little ground has been broken so far in Duterte’s push as his economic team works to find financial footing. The government is moving away from the public-private partnership model favoured by previous administrations, after chronic underspending in infrastructure resulted from bottlenecks in negotiations or approval processes, and shy bids for the projects from corporations. Duterte has turned to loans and development assistance, most notably from China and a recently passed tax hike.

However, the much-vaunted Chinese cash has been slow to materialise, and critics are concerned about what strings may be attached. The excise taxes and value-added taxes, which the Philippine finance department estimated would add $1.8 billion in revenues in its first year, are already controversial for driving up prices.

Big Names Push Ahead

But private operators are moving ahead regardless. Some of the Philippines’ biggest names highlight the action.

San Miguel’s Ramon Ang, who diversified the food and beverage company into a large infrastructure developer, says, “The Philippines today is among the world’s fastest growing economies. But unless we are able to build the needed infrastructure, we will not be able to sustain long-term growth.”

Along with major road projects–holdovers from the previous administration–San Miguel has proposed a new airport north of Manila. Meant to relieve congestion from the capital’s beleaguered Ninoy Aquino International Airport, hobbling along at overcapacity, Ang’s proposal may be his most ambitious yet. A $13.8 billion Manila Bay Airport, 27 kilometers north of the capital, would have four runways and an initial capacity of 100 million passengers per year. The project, which San Miguel plans to fully fund, received approval from the Philippine economic board, chaired by Duterte, this April. It is now being prepared for the Swiss challenge process, which allows rival groups to submit counterproposals, but favours San Miguel by allowing it to match new offers.

“We have a great momentum now; the sense of urgency from government and from our people is palpable,” Ang says by email.

Family-group patriarch Erramon Aboitiz founded Aboitiz InfraCapital in 2017. As the government moved away from the PPP model, the Aboitiz infrastructure arm pivoted toward water, acquiring Lima Water and a minority stake in Balibago Waterworks System. These add to an earlier Aboitiz venture, Apo Agua Infrastructura in Davao City, one of the Philippines’ largest private bulk water suppliers.

Seeking Improvement

Here’s a look at some of the other key infrastructure improvement projects being embarked upon by the Philippines’ richest.

1. Expressway, Manila

Jaime Zobel de Ayala’s AC Infrastructure is investing in traffic mitigation, one of Manila’s most intractable problems.

2. Ninoy Aquino International AirportJaime is also part of a group of tycoons who have teamed up to propose a $6.7 billion plan to modernise Manila’s International Airport. The consortium is also made up of companies run by Erramon Aboitiz, Lucio Tan, John Gokongwei, Andrew Tan and Mercedes Gotianun.

3. Thermal Power Plant, Sarangani

DMCI is building a thermal power plant in Sarangani for a subsidiary of Japan’s JGC Corp. It will serve the city of general Santos and its energy-short surrounding province. 69-year-old Isidro Consunji, who is number 12 on our list, is acting chair of DMCI Holdings following the death last year of his father, David, the founder of the conglomerate. The oldest of 8 siblings, Isidro also helms Semirara, a mining and power company.

4. Light Rail Station, Antipolo

DMCI is also building a light rail station in Antipolo, which will be the first station of the capital’s light rail system to be located outside Manilla.

5. Cement Plant, Norzagaray

In anticipation of the building boom, Erramon Aboitiz is putting $300 million more across its cement plants over the next five years through his family’s Aboitiz Group, including a recently expanded plant in Norzagaray.

6. Apo Agua Infrastructura

The Aboitiz Group is also building one of the Philippine’s biggest water supply facilities in Davao, a city that has experienced a water shortage since 2016.

https://www.forbes.com/sites/forbesasia/2018/09/05/philippines-richest-2018 billionaire-builders-push-ahead-with-infrastructure-projects/#1b39aeb970f4

 


Category: Philippines

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