Why is Manny Villar leaving the low-cost housing segment?

In the Philippines, which has a perennial housing problem, one can never build too many homes.

But not in the case of housing king Manuel B. Villar who now says he’s had enough, at least of low-cost homes, a segment that helped catapult him to where he is now – the country’s richest man, with a net worth of $8.3 billion, according to Forbes.

Villar, who started building homes in the ‘70s, said he would no longer sell houses that are priced at P550,000 or even up to P2.5 million. Instead, the Villar Group would focus on selling homes that are more expensive to make more profits. These include the highly profitable vertical developments or the residential condominiums.

He believes he’s already done so much for Filipino homebuyers by offering low-cost homes, saying it’s now time for other developers to do their part in building lower priced horizontal developments.

If he didn’t sell low-cost homes, Villar believes, he would have made more money. If he joined the more profitable vertical segment early on, he believes stock market investors would not have penalized him. The share prices of his companies, he believes, are significantly undervalued.

It’s not surprising that Villar, being a businessman, wants to make more profits despite his already fabled wealth but we’ll now have to wait and see what happens to the low-cost mass housing segment in the country if a player as big as Villar stops making cheaper homes. The government, for sure, needs to find other options to address the housing backlog of roughly seven million homes.

Carmen Tan joins Eton board

Carmen Tan, wife of taipan Lucio Tan, continues to implement changes in the family’s sprawling business empire.

Take Eton Properties Philippines, the Tan-owned property company, for instance.

According to documents filed by Eton with the Securities and Exchange Commission (SEC), the family matriarch will join the Tan-owned Eton Properties, the property arm, taking the place of Tan’s son Michael.

Eton had to request the SEC to approve such changes in its Definitive Information Statement (DIS), as well as Notice of Meeting to stockholders for Eton’s April 29 annual stockholders meeting. The original filing, which was submitted earlier to the SEC, showed that Michael was among those nominated to the 2022 to 2023 board of directors.

A portion of the document submitted to the SEC on April 8 reads: “That the company be allowed to amend its DIS to reflect the nomination of Mrs. Carmen K. Tan as member of the Board of Directors for the year 2022 to 2023 in lieu of Mr. Michael Tan.”

In its meeting held on March 14, the Nomination and Remuneration Committee of Eton’s board of directors, approved the following nominees for election to the board in the forthcoming stockholders meeting: Lucio Tan, Cirilo Noel, Ramon Pascual, Karlu Tan-Say, Michael Tan, Vivienne Tan, Juanita Tan Lee, and Kyle Tan, according to company documents.

It will be interesting to see if there will be more changes to be announced by Mrs. Tan during Eton’s stockholders meeting on April 29. She earlier put her grandson Kyle Tan as executive director of the company. He is working closely with Hong Kong-based Ramon Pascual, Eton’s president and CEO.

The changes in the Tan empire have been happening more frequently over the past three years, but these days, the movements have become more aggressive, abrupt, and for many quite shocking.

US Grains Council bats for higher ethanol brand

The US Grains Council, a US Department of Agriculture Cooperator and non-profit organization enabling the use of bioethanol globally, has asked Finance Secretary Carlos Dominguez and Socioeconomic Planning Secretary Karl Chua to consider higher blend rates of bioethanol to help lower domestic fuel prices.

“I write you today to call to your attention how higher blend rates of bioethanol are used as a tool to reduce prices at the pump, particularly during periods of upward pressure on fuel prices and market volatility like we are experiencing now,” said Caleb Wurth, regional director of the US Grains Council in an April 4, 2022 letter to the two Cabinet secretaries.

The council noted that crude oil prices have risen nearly 40 percent over the past three months and appear set to remain elevated and volatile moving forward due to an amalgamation of low inventories, upward pressure on prices, and geopolitical uncertainties.

“Like many countries around the world, the current pricing environment is putting a strain on public finances and Philippine industry and consumers,” the organization also said.

The group said that higher discretionary blend rates of bioethanol under current market conditions can help significantly lower this financial burden.

“Additionally, a higher discretionary blend rate of bioethanol provides further economic benefits through greater greenhouse gas mitigation, also aiding the Philippines in meeting its admirable emissions reduction commitments...These environmental savings through carbon intensity reduction generate wide-reaching benefits to key sectors such as tourism and alleviate pressure on public expenditures such as healthcare,” it said.

This is certainly good news for the 10-member Ethanol Producers Association of the Philippines (EPAP), which has also been pushing to raise the biofuels blend to 15 percent by 2023 and 20 percent by 2025 from 10 percent at present to pull down gasoline prices, generate more savings from avoided GHG emissions, and of course, to help preserve the environment.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com.