MPIC to acquire hospital in Manila

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC), the Philippine flagship of Hong Kong-based First Pacific Co., wants to acquire another hospital, this time in the city of Manila, as part of its bid to expand its nationwide chain of premiere hospitals in the country.

MPIC chairman Manuel V. Pangilinan told The STAR that while they are still searching for potential candidates, the group definitely needs one hospital in Manila to complement its presence in the metropolis.

Other Metro Manila-based medical centers in MPIC’s portfolio are Makati Medical Center (MMC) in the city of Makati with a 707-bed capacity and the 235-bed Cardinal Santos Medical Center (CSMC) in San Juan also in Metro Manila.

MPIC subsidiary Medical Doctors Inc. (MDI) is the owner and operator of MMC while wholly-owned MDI unit Colinas Verdes Hospital Managers Corp. (CVHMC) holds the right to operate CSMC for the next 20 years.

Just recently, MPIC acquired a 51-percent shareholding in Riverside Medical Center Inc. (RMCI), the largest hospital in Bacolod City, Negros Occidental with 336 beds. The deal also includes the purchase of RMCI’s wholly-owned unit Riverside College Inc., a nursing school with 2,800 students.

MPIC’s healthcare group also owns one-third of Davao Doctors Hospital (Clinica Hilario) Inc., owner and operator of Davao Doctors Hospital with a 250-bed capacity and Davao Doctors College.

MPIC is targeting to build up to 5,000 beds from the current 1,300-bed capacity of its four hospitals over the next three to five years and is on the lookout for properties or existing hospitals in Northern, Central and Southern Luzon and in the cities of Cebu, Iloilo, Cagayan de Oro, Bacolod, Zamboanga and General Santos.

For this year, MPIC said it aims to complete the renovation at Makati Med, plans for the redevelopment of Cardinal Santos, and a five-story building for doctors’ clinics at Davao Doctors.

Company officials also said MPIC’s healthcare division continues to invest in improving infrastructure, leveraging on its technical and professional expertise to expand services and enhance operational efficiency. “The division will continue to evaluate opportunities to expand the healthcare portfolio through the acquisition of additional hospitals in strategic areas in the Philippines,” they added.

Earlier, MPIC executive director Augusto Palisoc Jr., who heads the company’s hospital division, said they are in talks with as many as five other provincial hospitals.

 “There is more negotiating leverage [when operating] eight to 10 hospitals instead of one. There are synergies [in owning] a chain of hospitals – from purchasing of medicines to hospital supplies. Eventually we would like to do some shared service and reduce costs,” Palisoc was quoted as saying earlier.

The firm also plans to spend on upgrades for its existing hospitals. Palisoc said near-term spending includes P600 million for equipment in Makati Med and another P200 million for Davao Doctors. The firm has also committed to spend P750 million for Cardinal Santos over the next 10 years as part of its operating contract.

In the case of Makati Med, Palisoc said the strategy will be to improve its outpatient facilities, or services that do not involve a patient being admitted to a hospital like blood-tests or radiology procedures. The hospital’s new outpatient facility is nearly complete, he added.

The company earlier disclosed it was in talks to acquire government-owned Cebu City Medical Center but no definitive agreement has been signed nor completed.

MPIC believes that Cebu offers a perfect site to take advantage of the increasing market of medical tourists worldwide seeking a health-friendly environment.

During the first quarter of 2010, the group (MDI, CVHMC, DDH), reported an aggregate core income of P111 million, a 12–percent decline from the P126 million generated during the same period last year.

Company officials said the decline was primarily caused by MDI’s higher operating expenses arising from an increase in personnel, additional depreciation on MDI’s new building and newly purchased equipment, as well as higher cost of utilities, supplies and contracted services.