Philippines Gets $3.8 Billion Airport Upgrade Offer From Aboitiz
Philippines Gets $3.8 Billion Airport Upgrade Offer From Aboitiz
(Bloomberg) -- Aboitiz Equity Ventures Inc., a Philippine conglomerate mainly invested in power, is ready to spend about 200 billion pesos ($3.8 billion) in upgrading the Southeast Asian country’s rickety and overcrowded airports.
“Airports is a play on consumer growth, on their increasing financial capability and on tourism,” President and CEO Erramon Aboitiz said in an interview on March 13. “The nation’s infrastructure requirements are tremendous all over. We’re behind in everything except power.”
Aboitiz Equity is part of a consortium of seven members that submitted a 350 billion-peso bid to modernize the Philippines’ main gateway. It also handed in a 148-billion-peso proposal to upgrade and operate four provincial airports.
The nation’s tycoons and some business groups are competing for a share of projects as President Rodrigo Duterte plans to spend $180 billion on infrastructure. The 70-year-old Manila airport has been ranked among the world’s worst as it handles well beyond the 30 million passengers it was designed for. Airports in the provinces of Iloilo, Bacolod and Laguindingan, which are gateways to tourism destinations in Visayas and Mindanao, have also become overcrowded as an economic boom boosts travel.
The conglomerate also owns Union Bank of the Philippines and Pilmico Foods Corp. It has budgeted about 77 billion pesos for capital spending this year, of which a portion would go to boosting cement capacity. Accounting for 70 percent of the parent’s revenue, Aboitiz Power Corp. will continue to get the bulk of the annual spending.
Union Bank is looking for opportunities to acquire smaller lenders to widen its reach to the small and micro depositors and borrowers, said Aboitiz, who is set to retire in 2019. He thinks that financial services in the digital age is a potential area for expansion.
To contact the reporters on this story: Cecilia Yap in Manila at cyap19@bloomberg.net, Clarissa Batino in Manila at cbatino@bloomberg.net.
To contact the editors responsible for this story: Linus Chua at lchua@bloomberg.net, Sam Nagarajan
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