Tycoons vow to spur development of Mindanao

MANILA, Philippines - They came in full force to meet with President Duterte, committing to pour resources into some of the nation’s most impoverished regions and promote inclusive growth.

 Sitting down to dinner with the President at Malacañang, the country’s business heavyweights vowed to help the government promote peace, spur development and reduce poverty in Mindanao.

The meeting took place Tuesday at the President’s Hall, with Ramon Ang of San Miguel Corp., Manuel V. Pangilinan of Metro Pacific and PLDT, Hans Sy of the SM Group, Tony Tan Caktiong of Jollibee and Ayala Corp.’s Jaime Augusto Zobel de Ayala, among others, in attendance.

“Mainly, they were there to show their support, especially for improvement in areas of poverty and crisis and conflict,” presidential spokesman Ernesto Abella said in a briefing yesterday.

He said the consensus after the meeting was for the business sector and the Duterte administration to work more closely in boosting Mindanao development while efforts to forge lasting peace with rebel groups are underway.

“And, in fact, they had taken the initiative regarding Sulu. And, I think, they – as far as I know, I think Sec. Sonny was also talking to them about how the Landbank had extra funds, something like $40 million for improvements in other areas of Mindanao,” he said, referring to Finance Secretary Carlos Dominguez III.

“So, basically, they were being brought on board to help address the issue of how to create a more inclusive economy, especially addressing work and investments, investments in areas of conflict,” Abella added.

Pangilinan told reporters yesterday his group has conveyed its interest to Duterte in investing more in hospitals, telecommunications and in a coconut oil mill facility in Mindanao.

“We offered and suggested areas where we could help. The business groups that were present, I would say, were in full force, in support of the government,” he said, referring to the Tuesday dinner with the President.

He added his group would also be interested in working with community development movement Gawad Kalinga for housing projects in Mindanao.

Following the dialogue with the President, he said the next step would be to concretize plans and discuss them with relevant government agencies.

“It is good to have this dialogue with the President. In my recollection, this is the first time that a president has done this and sat down with business groups,” Pangilinan said. “It’s unprecedented. We have much to be thankful for.”

Earlier, Pangilinan said his group is looking at submitting unsolicited proposals for projects in the infrastructure, power and agriculture sectors.

At present, MPIC is involved in infrastructure projects in the rail and tollways sectors under the public-private partnership program.

The MPIC is also engaged in other ventures like water, power, healthcare and logistics.

It was presidential adviser on entrepreneurship Joey Concepcion III who invited the business taipans to Malacañang. Former president and now Pampanga Rep. Gloria Macapagal-Arroyo also helped arrange the dinner meeting.

Listening president

In the same meeting, President Duterte had shown his willingness to listen to the business community’s call for the preservation of the current practice of contracting as long as workers’ security of tenure is guaranteed and protected, Philippine Chamber of Commerce and Industry president George Barcelon said.

“On contractualization, Mr. Joey Concepcion explained that endo (end of contract) is prohibited and the business community will police its own ranks. Joey pointed out that this is the best solution wherein the workers – even they are given jobs by the service providers, they are protected, they are regularized, they will enjoy all the benefits mandated by law, and in case they will temporarily be out of work, they would be able to get some financial assistance,” Barcelon told The STAR yesterday.

“So this provides the security of tenure for the workers. I think he is okay with the proposal,” Barcelon said.

The Department of Labor and Employment has yet to come out with a clear policy on the issue of labor contracting.

Duterte earlier promised to put an end to contractualization. Workers are calling for the complete abolition of contracting in the country.

The business community, however, said that while it is clearly against the illegal practice of contracting such as endo and “5-5-5,” it wants to maintain the accepted and legal practice of the scheme.

“Under the law, the management has the right to hire contractual workers. Actually I mentioned it in our discussion that the small and medium enterprises (SMEs) are not like the big companies that can project the number of people they will need,” he said.

“The biggest employers in our country are the SMEs, so for them it is important to have that flexibility,” Barcelon pointed out.

“We are hoping that this issue can clear the air so that those who want to invest here in our country will see that labor contracting is not an issue to deter them,” he added.

“The common denominator is that the taipans and the business community want to help in job creation,” Barcelon said, stressing the complete abolition of contracting would only limit job opportunities.

Abella said the business leaders were discussing a “win-win” position with Labor Secretary Silvestre Bello III.

“Apparently, they are engaged in a conversation with Sec. Bello and they are working out a win-win situation. In the words of Sec. Dominguez, they are trying to work out a win-win situation. They are engaged in working out a situation which will be beneficial for both employees and employers,” Abella pointed out.

He added the dinner meeting provided a conducive environment for the President and the business groups to share insights regarding development goals.

“It was over dinner, they had conversation. Apparently as PA (presidential adviser) Joey (Concepcion) was saying, their preconceptions about PRRD were settled because of the one-on-one conversation,” he said, referring to Duterte by his presidential initials.

“Many of them have not met the President, they had this face-to-face, according to PA Joey, a number of their uncertainties were settled,” Abella disclosed.

Brewery investment

Meanwhile, SMC is investing $300 million or roughly P14.9 billion for beer breweries in Cagayan de Oro and Laguna, its president Ramon Ang said.

He said the brewery in Cagayan de Oro would have a capacity of three million hectoliters. It would have an initial capacity of 1.5 million hectolitres.

“It’s a $300-million investment,” Ang said, adding that the company would soon break ground for the brewery in Cagayan de Oro inside the Phividec Industrial Estate.

SMC would also expand its existing brewery and bottling plant in Santa Rosa, Laguna by two million hectolitres in capacity.

Ang said the company hopes to complete the expansion of its brewery business within the next two years.

Last week, SMC senior vice president, chief financial officer and treasurer Ferdinand Constantino said the conglomerate is pouring in P281 billion to finance the expansion  of its various businesses in the next three years.

The allocation is part of a P543.3-billion capital expenditure program for various projects such as the expansion of its food business, a refinery upgrade for Petron, construction of power plants and toll roads.

Of the P543.3 billion, P262.1 billion had already been spent, according to SMC documents.

SMC expects revenue to grow by 1.5 times by 2020 as against 2015 figures on the back of the contribution of its new businesses, Constantino said.

He said revenues would grow because of the contribution of new businesses such as power and infrastructure.

New businesses are seen to retain their contributions to revenues at 66 percent, while their EBITDA contribution is expected to grow to 67 percent from 60 percent. EBITDA stands for earnings before interest, tax, depreciation and amortization.

In 2015, SMC registered consolidated sales revenue of P674 billion while EBITDA hit P108.6 billion.

The beer business is SMC’s first business. The company started as La Fabrica de Cerveza de San Miguel, which was Southeast Asia’s first brewery, producing and bottling what would eventually become one of the best selling beers in the region and among the world’s top beers.

San Miguel has since diversified into other beverages, food, packaging, fuel and oil and, in recent years, power and infrastructure.

It is one of the country’s largest conglomerates, generating about 5.1 percent of the gross domestic product in 2015. – Richmond Mercurio, Iris Gonzales, Louella Desiderio