By Arra B. Francia, Reporter

AYALA LAND, Inc. (ALI) sees capital expenditure (capex)  accelerating up to P100 billion in 2018, as the property giant aims to keep up with the growing demand for residential projects in the country.

ALI Chief Finance Officer Augusto Cesar D. Bengzon said given the current pace of project developments, spending in 2018 should be larger than its P88-billion capex this year.“Historically we’ve not reached P100 billion. It’s possible. We’re finalizing our budgets. So we’ll see if we see that the opportunities are there,” Mr. Bengzon told reporters after the listing ceremony of its P3.1-billion short-dated notes at Philippine Dealing and Exchange Corp. on Thursday.

Of this projected capex, the bulk will still be allotted for its residential segment, which continues to be the top contributor to revenues.

As of end-September, 49% of this year’s capex was allocated for residential projects, followed by commercial leasing projects at 28%, land acquisitions, new businesses, and other investments taking up 17%, and the development of ALI’s estates accounting for 6%.

Mr. Bengzon noted capital spending increased, alongside the growth of the Philippine economy, which expanded by 6.9% year-on-year in the third quarter of 2017.

“We also have to be thankful for the general economy, 6.9% is quite strong. As you know, our business is closely tied with the economic growth of the country,” he said.

To fund this capex, Mr. Bengzon said the company may issue bonds to raise between P15 billion to P20 billion.

The ALI executive said the company is on track to launch P90 billion worth of residential projects this year. Including its office, commercial, and hospitality segments, ALI will be ending this year with P120 billion in project launches.

“Next year, we’ll see if the economy continues to be as strong as it is. And if demand is there, we will keep up,” Mr. Bengzon said. On Thursday, ALI listed P3.1 billion in short-dated notes at the fixed-income bourse, the proceeds of which will be used to finance its short term debt.

“So essentially we have 30-, 60-, 90-day promissory notes. So with this instrument we’re now extending the tenor to 15 months. The first short-dated note we issued in July was 21 months. This one is a 15-month instrument,” Mr. Bengzon explained.

Last July, ALI also issued P4.3-billion short-dated notes for debt refinancing. This year, the company had a total of P7.4 billion in capital market issues.

Asked whether the company is on track to hit an 18% year on year growth in earnings, Mr. Bengzon said they are “within striking distance.”

The ALI executive added there is usually an uptick in residential sales in the fourth quarter, due to the demand from overseas Filipino workers coming home for the holidays.

For the first nine months of 2017, ALI profits rose 18% to P17.8 billion, on the back of a 16% growth in revenues to P98.9 billion. The company attributed the increase to higher property sales for the period, which climbed to P94.2 billion, 12% higher year on year.

With this performance, Mr. Bengzon said the company remains on track to meet its 2020 vision, which aims to grow net income to as high as P40 billion by 2020.

Shares in ALI were up by 20 centavos or 0.47% to close at P42.90 each at the Philippine Stock Exchange on Thursday.

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