Bigger budget to allow Lopez-led FPH to entertain new projects

Lopez-led First Philippine Holdings Corp. (FPH) has earmarked P29 billion for capital outlays this year across its power generation, property, construction operations and some new businesses like health care and education.

This amount is bigger than FPH’s actual expenditure of P25 billion last year.

“Despite the pandemic, we remain open to new opportunities and continue to review and evaluate potential new projects,” FPH president Francis Giles Puno said during the company’s stockholders meeting yesterday.

Of the total capital outlays this year, P14 billion will be for the energy group, while P11.4 billion will be for the property group, which includes upscale property developer Rockwell Land Corp. and industrial estate developer First Philippine Industrial Park (FPIP). Rockwell’s budget is around P9.4 billion while FPIP will get P2.4 billion.

“The balance is for construction … and a number of new business in health care and education,” Puno said.

Also during the meeting, FPH chair Federico Lopez said the power generation group would pursue the development of an onshore liquefied natural gas (LNG) terminal within the First Gen Clean Energy complex in Batangas province. This would allow LNG to be brought in using a floating storage and regasification unit, thereby “ensuring energy security of the country as indigenous gas supply from Malampaya is expected to become less reliable,” Lopez said.

He added FPH’s property group was focused on completing Rockwell’s ongoing residential projects and expanding FPIP’s footprint and service offerings to park locators. This industrial estate currently employs about 66,000 Filipinos.

“[The] manufacturing group’s expansion beyond transformers has started to gain traction, particularly the distribution line components,” Lopez said.FPH also vowed to support the Asian Eye Institute, the primary vehicle for its investments in health care. It is seen reevaluating the business model in light of the COVID-19 pandemic.

Asked about the impact of the pandemic on its businesses, Puno said the consequent lockdown protocols have dampened the power generation business given the slowdown in demand for electricity alongside the drop in spot electricity prices.

“With the exception of commercial office and industrial leasing, which have remained relatively stable, our property sector revenues from residential, retail and hospitality segments have also contracted,” Puno said.

The construction group also experienced deferrals and delays in a number of projects slated for this year.

As such, FPH, like most other businesses, is expecting a contraction in earnings this year.

On funding its capital outlays, FPH has so far raised P10 billion in debt financing, which the company deems to be sufficient for its current requirements.

As to whether it plans to rationalize its workforce, FPH said there was no plan at this time to let go of any employees.

Lopez also affirmed the energy group’s commitment to lead the transition to a “decarbonized and regenerative future.”