Making money

VIRTUAL REALITY - Tony Lopez - The Philippine Star

The best business in the Philippines today is banking. Banks are hauling profits like there was no tomorrow. By the billions per month.

In the whole year of 2023, the Sy family’s BDO Unibank reported whopping profits of P73.4 billion, up 28.5 percent from its previous record of P57.1 billion in 2022, which itself was a jump of 33 percent from P42.8 billion net in 2021. The P73.4 billion is the largest profit ever by any bank in the Philippines. In fact, it is the largest profit ever by any private corporation in the Philippines. With Tessie Sy as chair and Wharton-educated Nestor Tan, 66, as president-CEO, BDO has been the country’s largest bank since 2015.

BDO is singlehandedly financing, up to P180 billion, the P1-trillion modernization of the Ninoy Aquino International Airport beginning this year by San Miguel Corp. SMC needs P30 billion to pay the government upfront, plus P122 billion in capex.

Ayala-owned Bank of PI, the oldest bank in Southeast Asia, increased its profits 30.5 percent to P51.7 billion, also a record high for the bank. BPI has been unusually profitable under Stanford-educated (Math, honors, 1984) president and CEO Jose Teodoro “TG” Limcaoco, a grandson of a banker.

Close behind is the Ty-owned Metrobank, third largest bank. Its net income rose 29 percent to P42.2 billion, a record. Arthur V. Ty, 65, is Metrobank chair, since 2012. He is MBA Columbia, 1991. Fabian Dee, 61, is president and CEO. He is BS Management  Engineering, Ateneo. Metrobank has been cited many times as the Best Corporate Bank and the Strongest Bank.

The country’s second largest bank, state-owned LandBank, reported record net profits of P40.3 billion, exceeding its P35-billion profit target for 2023.

Monthly, BDO makes P6.1 billion in net profits; BPI P4.3 billion; Metrobank P3.5 billion and LandBank P3.3 billion.

Not to be outdone are the other government financial institutions. The Government Service Insurance System (GSIS) under CEO Wick Veloso reported astonishing profits of P113.3 billion in 2023, up 70 percent over 2022, 36.4 percent of its revenues of P311 billion. La Salle-educated Wick was HSBC’s first Filipino CEO in 2012, before moving in to PNB as CEO in 2018. In July 2022, he succeeded Rolly Macasaet as GSIS CEO.

The pension fund of private workers, meanwhile, the Social Security System, reported net profits of P83.13 billion, up 62.8 percent.

For every P100 of revenues, GSIS makes P36.4. Every month, the state pension fund carts away P9.44 billion in profits. GSIS is the Philippines’ most profitable enterprise. In that sense, GSIS is the country’s best managed company.

SSS delivers P6.92 billion in profits every month. On profit performance alone, SSS, under Rolly Macasaet (UP MBA, cum laude) is the Philippines’ second best managed company.

Speaking of San Miguel, it will now be the largest operator of airports in the Philippines, with NAIA, the Bulacan SMC Aerocity and Boracay (Caticlan) airport under its wings.

On Tuesday, Senator Grace Poe delivered a speech to sponsor Senate Bill 2572, the Bulacan Airport City Special Economic Zone and Freeport Act. She cited benefits from having the Bulacan ecozone, slated to be the largest and most modern Philippine airport complex and which impacts directly on 55,000 hectares of prime land in Luzon, will create P130 billion in economic value added and employ from 800,000 to 1.2 million workers.

“No airport is an island,” Senator Grace said. “The success of an airport relies on a whole ecosystem of properly-run highways and roads, vibrant markets and industries, and seamless collaboration with its neighboring towns and communities.”

She cited examples of airport ecozones that immensely boosted the economies where they are located.

The world’s first modern economic zone, the 64-year-old Shannon Free Zone in Ireland, now hosts 300 companies and employs about 8,000 individuals.

The Shannon Airport Group consists of the Airport, the Free Zone and other related ventures. It has contributed about 3.96-billion euros in 2022 alone to Ireland’s GDP in terms of Gross Value Added.

South Korea’s Incheon Free Economic Zone houses the world-renowned Incheon International Airport. Built on former mudflats, the area has since grown into an economic driving force within South Korea’s economy.

The ecozone itself has generated $14.756 billion in foreign direct investments, and is poised to attract key investments in bio-industry, tourism, robotics and tech industry.

“The proposed Bulacan Airport City Special Economic Zone and Freeport, or Bulacan Ecozone, aims to follow these success stories by ensuring that the local community grows side by side with the new airport project,” Poe pointed out.

“In terms of investments, its goal is to attract a whole array of businesses and institutions ranging from hi-tech conglomerates such as Samsung, to semi-conductor manufacturers, battery manufacturers, electric vehicle makers and other emerging and sustainable technologies,” Poe related.

Paging ARTA and DILG Secretary BenHur Abalos. There is this tiny barangay in Concepcion, Tarlac which has refused to renew the business permit of huge chicken broiler farm owned by who I call Madam M. The farm has been shut down for eight months now. Before its closure, because of the barangay’s refusal to renew its permit (which was renewed without fail in the previous seven years), the farm produced 16 million broiler chicks yearly and generated revenues of P10 million monthly.

Madam M has been asked to make all kinds of concessions, like straight cash in the millions (on top of amounts previously paid), benefits to the barangay kagawads and so-called “ayuda” to barangay folks.

The barangay chairman is a bata of the town mayor.

How about looking into this case, ARTA chief Ernesto Perez and DILG Secretary BenHur?

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Email: [email protected]

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