BIZ BUZZ: Unpaid hotel bills
The hotel industry has been one of the worst hit sectors of the Philippine economy during the COVID-19 pandemic.
Many have closed down. Many are barely hanging on. And a number of them are surviving thanks to being designated as quarantine hotels for travelers, especially the country’s overseas Filipino workers (OFWs). Or so they thought.
Biz Buzz learned that scores of hotels are now struggling financially because of their inability to collect on payments from the government, which designated over a hundred of them as quarantine facilities for OFWs.
As such, the Philippine Hotel Owners Association—the umbrella organization that represents over 300 hotels nationwide—has written an urgent plea to Overseas Workers Welfare Administration (OWWA) and the Department of Labor and Employment, practically begging to be paid for the accommodation services they’ve rendered over the last two years.
The total accounts receivables of these hotels from the government? Hold on to your seats. It has ballooned to about P1.5 billion as of last week.
We’re talking about 86 hotels in and around Metro Manila, eight all over Luzon, 15 in the Visayas and one in Mindanao. That’s a total of 110 cash-strapped hotels nationwide who need to keep pay the bills for their operations, pay their employees and pay their suppliers during the worst economic crisis in recent memory.
If they thought back then that the guarantee of being paid by the government was sure money, not a few are regretting their decision to have themselves as accredited quarantine hotels now, that’s for sure.
Of course, it’s not as if they haven’t been paid. OWWA has been paying, but “in trickles,” according to one hotelier we spoke to. Think of it as the hotel industry’s version of the Philhealth crisis.
Government officials have reassured the hotel operators that the Department of Budget and Management has allocated P2.7 billion to settle these bills. But, to date, the hotels have yet to see a single centavo of that money. And they worry that, with elections approaching soon, they may never see any of that money at all. So will these hotels be paid for their services? Abangan!
—Daxim L. Lucas
IPO queue
Infrastructure holding firm Metro Pacific Investments Corp. (MPIC) is keen on unlocking values from three, not just two, of its operating units that may be ready for a stock market debut as early as next year.
Aside from Metro Pacific Tollroads Corp. (MPTC) and Metro Pacific Hospital Holdings Inc. (MPHHI), even water utility Maynilad Water Services Inc.—which has gone through hell and back (an understatement of the arbitration proceedings on the previous tariff dispute with regulators)—is now a potential IPO (initial public offering) candidate, too.
But while a revised concession agreement (RCA) has been sealed, Maynilad wants to tie all loose ends before taking the plunge.
“One very important activity that we want to finish first before we go for any IPO is the rate rebasing, which will happen this year. And after a successful rate rebasing, implementation is the next step. So we want to make sure that the implementation is stable, RCA is stable and also the franchise before we make any move to go for an IPO,” Maynilad president Ramoncito Fernandez said.
MPIC chief financial officer Chaye Revilla said of the three units in the IPO queue, “I think the most immediate that we can put out to market is really the hospital group.”
Now with 19 hospitals in its growing nationwide portfolio, MPHHI’s focus is evolving into an integrated health-care provider in the postpandemic world.
“Now that Omicron is behind us literally, now we can really focus on the growing demands of noncommunicable diseases,” said Harish Pillai, CEO of the hospital group, referring to the planned increase in capacity and provisions for cancer treatment, cardiac surgery and transplants, alongside the further expansion in footprint.
“Over the next five years, we do have a growth charted out in provinces where the hospitals are not present right now. And in preparation for the universal health-care act rollout, which is already a law, we are also focusing on expanding the primary care network, so all the 19 hospitals are really looking at going into the community,” Pillai said.
It has been signaled that MPTC could go public as early as next year, although it may also depend on how the Ukraine crisis and global oil prices would play out. Lofty gas prices, after all, discourage road travel, more so when you have to pay toll to use the roads.
Revilla said MPTC’s stock market debut may be launched by next year, at the earliest, as the company would have to await new cash flow from new projects such as the Cebu-Cordova Link Expressway (opening in April) as well as the NLEX-SLEX connector road.
“We’re waiting for our performance, for our results to stabilize a bit,” said MPTC president Rodrigo Franco, noting that after being battered by Omicron, high petroleum prices may affect the company’s financial results.
“We’ll see within the first half or until the second half how the business will perform and the progress of the projects for us to make a determination, whether we would pursue a public offering soon, perhaps next year,” he said. “But we do have other funding options in case we need money for our projects.”
—Doris Dumlao-Abadilla
Panlilio’s big plans
The coming years under PLDT Inc. chief Alfredo Panlilio are taking shape, as the company president and CEO outlined the broad strokes of the “PLDT 2025 vision.”
Do not be fooled by the simple description. Panlilio, barely a year in his role, revealed in a recent briefing plans for a major overhaul of the company’s business, culture and market position.
A plan of this scale, he said, would require a change in mindset and also the humility to acknowledge the rapid shifts in the environment as PLDT turns 100 years old in 2028.
“Fast is better than perfect. So we want to be more agile,” Panlilio said.
Facing increasing pressure from competition, Panlilio said PLDT was aiming to reclaim its stature as the No. 1 company in the eyes of customers, investors and even its employees.
An advocate of better customer service, Panlilio said PLDT and Smart wanted to be more customer centric while creating an “all digital experience” to be measured using the closely followed net promoter score.
The group would also revamp its culture to make PLDT and Smart “the best place to work.”
This shift will be done as PLDT streamlines operations, which will involve reducing “high” costs and stretching the value of the company’s investments, leading to better profitability.
No vision is complete without a pledge to pursue sustainable business principles. Panlilio said PLDT would thus follow environmental, social and governance standards.
“What got us here will not be the same thing that moves us forward,” he said.
“It’s really a change of mindset and thinking differently. Our ambitions are bold. We want to be the best in every market: the capital market, ICT market and even connectivity markets,” Panlilio added.
—Miguel Camus
