Philippines’ Ayala Corp. Boosting Spending To $5.4 Billion In 2022 As Earnings Rebound

Ayala Corp.—the Philippines’ oldest conglomerate, controlled by billionaire Jaime Zobel de Ayala—is increasing spending by 25% to 285 billion pesos ($5.4 billion) this year to bankroll investments in real estate, renewable energy and telecom projects, reflecting the company’s confidence in a post-pandemic economic recovery.

“We continue to see an improvement in the business environment with better mobility and ability of both enterprises and consumers to adjust to disruptions,” Ayala Corp. president and CEO, Fernando Zobel de Ayala, said in a statement on Friday. “With the recent de-escalation of quarantine measures to the lowest status, we are hopeful that 2022 will be the start of our country’s recovery.”

The company’s earnings rebounded strongly in 2021 as the government relaxed Covid-19 restrictions in the latter part of the year. Ayala Corp.’s net profit climbed 62% to 27.8 billion from a year ago amid increased contributions from its real estate, banking, telecommunications and renewable energy businesses. It also booked exceptional gains from asset divestments including the partial sale of its stake in Manila Water to billionaire Enrique Razon Jr.’s Trident Water.

While the company is mindful of the impact of the Russian invasion of Ukraine on the country’s economic recovery, Ayala said the group is increasing capital expenditures this year “to execute growth initiatives across our businesses.”

The group’s real estate arm, Ayala Land, is preparing to launch 100 billion pesos worth of residential projects this year, after recording more than 92 billion pesos worth of sales reservations in 2021, up 13% from the previous year.

AC Energy is also stepping up spending in renewable energy projects in the Philippines and across the Asia Pacific, with investments of 55 billion pesos in 2022, after the company’s net profit increased 22% to 5.3 billion pesos last year.

Globe Telecom, a partnership between Ayala Corp. and Singtel, is pouring an additional 89 billion pesos this year to expand its network and boost internet quality across the country. The company’s net profit rose 27% to 23.7 billion pesos last year as the growing digital adoption of consumers across the Philippines bolstered demand for mobile and fixed broadband data services.

Ayala Corp. traces its roots to the Spanish colonial era. It was started by Jaime Zobel de Ayala’s grandfather in 1834 as a distillery in Manila, and then expanded into banking, hotels, real estate and telecommunications.

Ayala, 87, was ranked the country’s fifth-richest person with a net worth of $3.3 billion when the list of the Philippines’ 50 Richest was published in September. He retired in 2006, and his eldest son Jaime Augusto Zobel de Ayala, who had been the CEO of Ayala Corp. since 1994, succeeded him as chairman. Last year, Fernando took over as CEO, while his elder brother Jaime Augusto continues to serve as chairman.