Businesses on wait-and-see stance this year, says RSA

MANILA, Philippines — Businessmen are currently on a wait-and-see stance due to uncertainties that could impact the country's economic growth this year, tycoon Ramon Ang said.

Ang, president and CEO of diversified conglomerate San Miguel Corp. (SMC), said the country's economy was "good" and supply of electricity was "enough" in 2023.

"For 2024, we don't know what's going to happen to the economy because there's two fronts of the war. One is the Russia-Ukraine war and the second one is the Israel-Hamas war. So nobody really knows what's going to happen," Ang said.

"And with the impending El Niño and with world prices of rice having gone up so many times, so we are worried about inflation," he said.

SMC has a diversified business that includes fuel and oil, power, food, beverages, packaging, infrastructure and cement.

"Overall for business, because of the very high interest rate to fight inflation, and Ukraine war and Hamas war, I think businessmen are all adopting a stance of wait-and-see," Ang said.

In terms of power, Ang said the Philippines currently has an overcapacity.

"I think there is no demand of additional electricity in the next three years. So I think that the next time that there will be a need of additional electricity will be 2027, 2028 already," he said.

Ang, however, noted that such is assuming that the economy will be growing at five percent per year.

"But what if the economy will not grow? Because a lot of things are happening today," he said.

Ang explained that if the economy is weak, then the demand for power is usually low.

SMC, through Excellent Energy Resources Inc., is constructing a 1,300-megawatt (MW) LNG combined cycle plant in Batangas City.

Its energy arm San Miguel Global Power Holdings Corp. (SMGP) is likewise developing nationwide a total of 32 battery storage stations which will have a combined capacity of 1,000 MW.

SMGP’s battery storage stations are the first and largest of such network in the country, and among the largest integrated battery storage networks in the world.

SMGP has a combined installed capacity of approximately 19 percent of the national grid, 25 percent of the Luzon grid, and seven percent of the Mindanao grid as of end-June 2023.

The company previously reiterated its commitment to the diversification of its power generation portfolio through the development of solar-based power projects.

As such, Ang said SMC's New Manila International Airport project in Bulacan province will also be running on all renewables.

"The airport will be run by solar, wind and pumped hydro," he said.