Ayala to ramp up 2018 spending

Ayala Corp. is looking at various capital raising activities, including tapping the local debt market, as it eyes to ramp up its capital expenditures this year, a ranking official said.

In an interview over the weekend, Ayala CFO Jose Teodoro Limcaoco said the conglomerate expects a bigger spending this year. “I think as a group, it will be bigger than 2017,” he said.

The conglomerate has allotted P185 billion for capital expenditures last year, higher than the 13 percent allocated in 2016 to support its real estate, telecommunications and water segments as well as to power up its emerging businesses.

For the past four years, Ayala’s capex has hovered above the P170 billion mark: P187 billion in 2014, P185 billion in 2015, P174 billion in 2016 and P185 billion in 2017.

To finance the higher capital spending, Limcaoco said the company is looking at all possible opportunities, particularly in the local bond market.

“We have very strong support from our banks and we have enough backlines, but we would look at possibly a bond issue if markets are conducive. I think markets right now are a little bit in a flux,” he said.

“I believe we should be in the Philippine bond market once a year because it’s good to have investors know you every time. It’s good practice to be a regular issuer. I’d like to do a Philippine peso bond issue,” he said.

In 2016, Ayala Corp. announced its target to double its net income to P50 billion by 2020 anchored on strong growth projections in its core businesses as well as its emerging businesses. This target has been retained late last year.

Its core businesses are real estate, banking, telecommunications and water while its emerging business are in the power, industrial technologies, infrastructure, healthcare and education.

For its education business, the potential merger with the Yuchengo group’s iPeople Inc. will complement their respective offerings.

iPeople’s Malayan Education System Inc. operates Mapua University, and Malayan Colleges Manila, Laguna and Malayan Colleges Mindanao.