My Cup of Liberty
By Bienvenido S. Oplas, Jr.
Continuing this column’s “Top 10” series, in this 5th installment I will discuss the recently published BusinessWorld Top 1000 Corporations in the Philippines 2022. For the purpose of brevity, I will limit the data and discussions here to the Top 25 companies: 19 conglomerates and six non-conglomerates but huge firms. I extend the data back to 2015, so 2015-2021 or seven years. Here are some interesting points:
1. In the Top 10 conglomerates, three are from the SMC group. These are the parent company San Miguel Corp. (SMC), Petron, and San Miguel Food and Beverage and their respective subsidiaries. Four, if you include Top Frontier Investment Holdings, Inc. because Ramon S. Ang of SMC is a major investor, along with Iñigo Zobel and others. The gross revenues of Top Frontier and SMC are almost similar through all the years covered.
SMC had gross revenues of P1.06 trillion/year in 2018 and 2019, and after the pandemic drop of 2020, slowly recovered to P0.98 trillion in 2021. SMC Food and Beverage is back at P300+ billion in revenues, and SMC Global Power is back at P140 billion, but Petron is below P500 billion.
2. The Sy family has two conglomerates in the Top 10. These are SM Investments Corp. and BDO Unibank and their subsidiaries. They are the second richest business power in the Philippines after SMC.
3. MPIC also has two conglomerates in the Top 10. The Metro Pacific Investment Corp. (MPIC) has Meralco and PLDT and their subsidiaries. Meralco remains the biggest company in the Philippines in gross revenues, but as a conglomerate it is only No. 4. Meralco alone had P309 billion in revenues in 2019 and P292 billion in 2021.
4. Ten other conglomerates are in the Top 20. Ayala, Aboitiz, and Gokongwei/JG Summit had gross revenues of P245 billion to P276 billion in 2021. They are followed by Lucio Co/Cosco, Ty/GT Capital, Lucio Tan/PAL, Tan Caktiong/Jollibee, Andrew Tan/Alliance Global, Dennis Uy/Phoenix, and Lopez/First Phil. Holdings.
5. Six non-conglomerates have revenues equivalent to those conglomerates ranked Nos. 11-20. These are Pilipinas Shell, Philip Morris Fortune Tobacco Corp. (PMFTC), Mercury Drug, Toshiba Philippines, Nestlé Philippines, and Philippine Associated Smelting and Refining Corp. (PASAR).
6. The Top 1,000 corporations’ revenues comprise perhaps half of the Philippines’ GDP. There are some double-counting in revenues, like Meralco’s gross revenues include the generation charges that it collects from consumers and gives to the generation companies (gencos) and which are reported again as revenue by these gencos. So the Top 1,000 revenues/GDP reached 71% in 2018 (See Table 1). If this double counting is corrected, perhaps 50% of GDP is the appropriate ratio.
7. There was revenue contraction among the Top 1,000 corporations in 2019-2020, but revenue growth in 2021 was much faster than the GDP’s nominal growth in 2021. There was a huge uptick of 24% revenue growth vs only 8% GDP nominal growth.
8. In net income, high profit conglomerates in 2021 were PAL, SMIC, SMC, BDO. They have net incomes of P43 billion to P61 billion. These are followed by Ayala, Aboitiz, PLDT, Alliance, and Globe with net incomes of P24 billion to P36 billion.
9. Non-conglomerates with high profits in 2021 were PMFTC and Nestlé Philippines. PASAR was a huge loser in 2020-2021.
10. SMC Global Power’s SMEC and SPPC had net incomes in 2021 of P5.34 billion and P4.5 billion respectively. But SMC said they suffered losses of about P15 billion from its units South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC), the administrators of the gas plant in Ilijan, Batangas, and the coal plant in Sual, Pangasinan, respectively.
The good news here is the fast recovery of revenues by the Top 1,000 corporations in 2021. The results of the Top 1,000 revenues in 2022 will be released in November or December this year.
This column projects that full year 2022 real GDP growth is about 7.8%, and nominal GDP growth is about 10%. From this, the projected Top 1,000 revenue growth is about 15% over 2021, or about P15.5 trillion in revenues in 2022.
It is important that the government should continue economic liberalization and mobility liberalization — no more lockdown whatsoever, no more mandatory vaccination and boosters, and save public funds for infrastructure and not on health alarmism.
To get the latest edition of the Top 1000 Corporations in the Philippines, go to https://bworld-x.com/ or contact BusinessWorld’s Circulation department at 8527-7777 locals 2649 or 2650 or e-mail at email@example.com.
Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Rese arch Consultancy Services, and Minimal Government Thinkers.