SAN MIGUEL Corp. (SMC) said it does not need a financial partner for its planned P735 billion Bulacan International Airport.
The project has received initial approval from the National Economic and Development (NEDA) Board, though it still requires final approval for the concession terms amid concerns over the proponent’s financial and technical capacity to pursue the project.
SMC President and Chief Operating Officer Ramon S. Ang said that he is confident that the company will be able to undertake the project on its own.
“On the financing for the construction of the airport, if and when we have it, San Miguel has the balance sheet to do that,” he told reporters yesterday on the sidelines of a seminar hosted by the Philippines government during the 51st Asian Development Bank Annual Meetings.
“If you look at our balance sheet and cash flow, we can easily do that airport alone,” he added.
SMC as about P1.38 trillion in total assets as of end-2017, and reported a net profit of P54.81 billion that year.
The project involves the construction, operation, and maintenance of a 2,500-hectare airport in Bulakan, Bulacan, that features an 8.4-kilometer airport toll road. The airport will have capacity of 100 million passengers a year.
Since the project is an unsolicited proposal, a Swiss challenge is mandatory. The challenge involves inviting counter-offers, which the original proponent holding the right to match them.
Socioeconomic Planning Secretary Ernesto M. Pernia has said that the airport “barely” passed the hurdle rate — the rate of return required to exceed the cost of capital. Mr. Ang said that achieving a viable return is not SMC’s priority.
“We are very confident that this airport will be good for our country and the return on investment is secondary to us,” he said.
“We are confident that that airport will… bring in at least 20 million foreign tourists to our country (a year). If we bring in 20 million foreign tourists to our country because of this airport, it will create at least two or three jobs per foreign tourist arrival. and that will be very good for our country,” added Mr. Ang.
The new airport is being positioned as an alternative international gateway to the Ninoy Aquino International Airport, as well Clark International Airport.
“Foreign tourist arrivals to the Philippines are limited because of the congested airport. Now if we have a good airport, the Philippines will have a good image and will be able to bring in foreign tourists comparable to other countries in the region,” Mr. Ang said.
SMC closed at P136.7, down 0.94% on Friday. — Elijah Joseph C. Tubayan

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