First Pacific to cut back Philippine investments

Hong Kong’s First Pacific Co. Ltd., led by local business tycoon Manuel V. Pangilinan, may scale back its investments in the Philippines following a recent Supreme Court decision that may change rules on the participation of foreigners in certain industries.

Pangilinan said the high court’s decision, which declared First Pacific’s ownership of Philippine Long Distance Telephone Co. (PLDT) to be a violation of the Constitution, would “spook” other investors planning to put their money in the country.

“Of course, we do not want to violate any laws. The ruling strikes at the heart of our investments: our ownership,” Pangilinan told reporters earlier this week. “If the legality of your ownership is questioned, you’ll get spooked.”

Pangilinan was speaking at the sidelines of a signing ceremony for the new business and operating contract for the Subic Clark Tarlac Expressway (SCTEx) between Manila North Tollways Corp. and state-run Bases Conversion and Development Authority (BCDA).

First Pacific, which is financially backed by Indonesia’s Salim family, controls several local companies that are leaders in their respective industries.

Its main local subsidiary is PLDT, the country’s largest telecommunications company. The group also controls the country’s largest power distributor Manila Electric Co. (Meralco) and one of two major water utilities, the Maynilad Water Services Inc.

But Pangilinan said his group would hold off any major acquisition in the country until rules on foreign ownership are resolved.

“We will stand still for now. We want to see where the wind blows,” Pangilinan added.

The high court earlier this month ruled that although First Pacific, together with Japan’s NTT DoCoMo, owned just a fraction of PLDT’s total capital stock, the two foreign firms still held majority of the company’s voting shares.