Bank of Tokyo-Mitsubishi eyes PPPs

JAPAN’S largest banking group The Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) is keen on supporting big-ticket infrastructure projects under the public-private partnership (PPP) framework in the Philippines, including the proposed North-South Luzon railway and the development of Clark Green City.

After buying a 20 percent stake in Security Bank for P36.9 billion, BTMU is keeping its wholly owned branch in the country and scouting for ways to help fund PPP projects, whether by itself or through a newly-formed alliance with Security Bank, top officials said in a press briefing on Tuesday. Apart from funding projects, the bank also wants to offer advisory services to proponents of PPP projects.

Go Watanabe, chief executive officer for Asia & Oceania, said that before buying into Security Bank, the Philippines was among the “missing” pieces in the group’s expansion plan in Asia. Elsewhere in Southeast Asia, BTMU has established alliances in Myanmar (Co-operative Bank) and Cambodia (Canadia Bank) as well as investments in Vietnam (Vietin Bank), Malaysia (CIMB), Indonesia (Bank Nusantara Parahyangan) and Thailand (Bank of Ayudhya).

In the future, Watanabe said BTMU would also scout for opportunities to enter the banking markets of Indonesia and India. These are two of the most populous countries in Asia.

Watanabe said infrastructure-building was an imperative for the Philippines, adding that PPP projects were attracting a lot of interest. The BTMU branch in Manila, together with peso liquidity from Security Bank, could create the “best team to support PPP,” he said.

“Basically we can come in as financier, so we’ll see what we can do. We can also be the financial adviser,” said Tadahiro Miyamoto, BTMU general manager for the Philippines.

Miyamoto said the Clark Green City project, for instance, was supported by the Japanese government. “It’s a very good project and creates a lot of possibility,” he said.

Clark Green City is a 35,000-hectare project of the state-owned Bases Conversion Development Authority (BCDA) which is envisioned to be the country’s first smart, green and disaster-resilient metropolis.

Miyamoto also added that BTMU would also be interested to look at projects that help boost connectivity, such as the North-South Luzon railway, referring to the P170.7 billion project led by the Department of Transportation and Communications (DOTC) and the Philippine National Railway (PNR).

Asked whether the recent buy-in deal with Security Bank carried the right of first refusal if the controlling shareholders – the family of Frederick Dy – would want to sell shares in the future, Watanabe said he could not disclose details of the agreement.

Right now, he said BTMU was comfortable with a 20 percent investment. He said he was hoping that the collaboration would be successful. If the owner would want to reduce stake in the future, he said “i think BTMU will be the best party to talk fast (to).”

BTMU’s entry into Security Bank was touted as a “game-changing” partnership seen to catapult the local bank to be the country’s fourth largest in the next few years.

said there were a lot of opportunities in the Philippines and that many Japanese companies were interested in this market.

Asked what sectors they are most interested in, he pointed out to the country’s automotive car program or the “CARS program” approved last year, which offers fiscal and non-fiscal incentives to jumpstart the revitalization of the country’s automotive industry, improve its competitiveness and transform the country into an auto manufacturing hub. Two large Japanese car makers— Toyota and Mitsubishi – have expressed interest to participate in this program.