RSA, airport king

Over the next three to 25 years, San Miguel Corporation chair and CEO Ramon S. Ang (aka RSA) has committed to spend, without cost to the government, a whopping P1.743 trillion to modernize and manage three of the country’s largest airports – P1 trillion in fees for the Ninoy Aquino International Airport in Pasay City; P735 billion in capex for the New Manila International Airport in Bulakan, Bulacan and P8 billion in capex for the Boracay Airport.

Easily, with its P1.743-trillion spending, San Miguel is the country’s biggest investor. SMC will also be the biggest employer.

The airports will create two million jobs, double the present job generation. The unprecedented investments by a single company will transform the Philippine economy dramatically, accelerating growth from the present 6 percent per year, to easily eight or even nine percent per year.

The P1 trillion (P911 billion without inflation) are payments and fees to the government for the right to modernize, manage and operate NAIA, for 15 years in the first phase, and an additional ten years after that, if SMC does good in its 2024-2039 initial concession period. The new NAIA will service 62 million passengers a year, more than double NAIA’s current design for 29.5 million passengers.

Additionally, RSA has committed to spend, without cost to the government, P735 billion to build and manage the Bulacan Airport or the New Manila International Airport, ten minutes north of Manila in Bulakan town, to service 100 million passengers a year.

The San Miguel Aeroport and economic zone will be partially operational in the first half of 2028, just as Ferdinand R. Marcos Jr. is winding down his six-year presidency. NMIA is designed for six runways, with two operational by late 2028. In effect, RSA will deliver to the BBM administration three modern gateways – NAIA, the NMIA (Bulacan airport) and Boracay.

Domestic or Filipino passengers number 40 million today. That can easily double in three years, with new and comfortable airports, cheap fares, better services and more destinations. Build the airports and the tourists will come.

RSA believes that with larger and modern airports, more airline frequencies and more choices for passengers, the cost of a round trip ticket to Boracay from Manila, for example, could be cut dramatically, from the present average of P15,000. In Europe, with huge airports and low-cost carriers, a two-hour plane trip could be bought for $100.

Using San Miguel’s expressways, RSA will connect the south and north of Manila regions within ten minutes of each other, from km zero, or the Manila Hotel, triggering a travel and logistics boom.

At Caticlan’s Boracay Airport (Godofredo Ramos Airport), SMC is building, in three years, a terminal with a seven-million a year passenger capacity (from 2.3 million in 2022), complete with eight passenger boarding bridges and a runway to accommodate big jets.

So there, three major airports – new NAIA, New MIA and Boracay. NAIA is the gateway to 90 percent of total departures and arrivals in the Philippines. At present, aviation, as a component of the Philippine Gross Domestic Product (GDP), contributes 3.4 percent ($10.4 billion, plus 1.2 million in jobs) in economic value added, according to IATA (International Air Transport Association).

In Singapore, air transport contributes 11.8 percent ($36.6 billion) and 375,000 jobs. Singapore’s Changi currently handles 58.9 million passengers. In the US, the share of aviation to GDP is 5 percent, $1.25 trillion, 666 million passengers in 2022.

With 62 million passengers from NAIA, 100 million from NMIA and 7 million from Boracay, RSA will service up to 169 million passengers a year. Consequently, aviation’s share of GDP is expected to triple, to 10.3 percent of GDP. In three years, Philippine GDP will hit P31.55 trillion. A tenth of that is P3.1 trillion.

Currently, with its products and services – beer and beverages, foods, packaging, petroleum, tollways, cement, infrastructure and power – SMC already contributes 5 percent of Philippine GDP. Add the 10.3 percent GDP share of aviation, SMC will account for more than 15.3 percent of a P31.5-trillion GDP, or P4.83 trillion.

At NAIA, passenger fees, terminal fees, airline parking fees, car parking fees and rental rates are going up exponentially. Most of the fees were stagnant for nearly a quarter century.

In Makati, a shop locator pays P700 per square meter on average for commercial space. In NAIA, before SMC, prime space could be had for as low as P60/sqm. Certain government agencies even get free parking, forever.

SMC will gain a pittance from the increases. About P82 of every P100 of the fees and rates of all kinds collected by SMC are guaranteed by SMC to be remitted to the government. SMC spends for everything – capex, maintenance and operating costs, but 82 percent of revenues goes to the government. SMC gets only less than 18 percent, and yet gets all the flak.

In 30 months, if not less, SMC CEO Ang guarantees to deliver a totally modern, almost new NAIA – with a new terminal building, a new runway, a new taxiway, eight floors of parking space and yes, new toilets. The new taxiway will be built in 24 months; the new terminal will be completed in 30 months. The present Philippine Village Hotel will give rise to a new terminal building.

The new NAIA will have three runways. Runway 13/31 will be moved backward by 300 meters to provide elbow room for Runway 06/24 so the two runways will no longer intersect or form a letter T and can thus operate independently of each other.

Separating the two runways, plus an additional taxiway (for 06/24) have the potential of doubling NAIA’s aircraft movements in three years. Currently, NAIA’s capacity is hitting 42 takeoffs and landings per hour.

Congrats RSA, the Airport King.

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