Lopez firm made P24.6-B profit, paid P10-M income tax
ABS-CBN may be a lightning rod, but for the Lopez clan, the real big money, with low-tax bonus to boot, is in the power business.
Their First Philippine Holdings yesterday reported that it ended 2019 with a P24.6 billion net income as against ABS-CBN’s 2018 P1.9 billion net income.
Despite such elevated profitability, First Philippine will be handing the revenue-pressed Finance Secretary Carlos Dominguez III the grand total of P10 million in income tax payment.
Ironically, the Lopezes gave the Dominguez department slightly more money in 2018 despite reporting lower income.
The country’s power clan paid the tax brigade P14 million in income tax in 2018, even as First Philippine reported a lower net profit of P20.2 billion for the same year.
According to an SGV audit, the First Philippine’s statutory tax bite for 2019 was supposed to be P3.8 billion, but after deducting the “share in earnings/losses from investments in and deposits to subsidiaries and associates” and other deductions, the power firm managed to bring its corporate income tax down to only P10 million. And that is just for one company. Another Lopez power firm, First Gen, is equally blessed with incentives and shelters that it had managed to bring its statutory corporate income tax rate, according to another SGV audit, from “$85,699” (apparently $85.699 billion) down to “$78” ($78 million, or P4 billion).
First Gen reported over $414 million (about P21 billion) net income for 2019, nearly 30 percent more than the $319 million that it made in 2018.
Combining First Philippine and First Gen, the two Lopez power companies generated an eye-watering P45.6 billion profit in 2019.
(For comparison, the Aboitiz Power, with its power generation and retail electricity businesses, reported P17.32 billion net income last year, after provisioning P3.2 billion for taxes, with income tax payable reported at P506 million.)
Despite the record incomes, the two listed Lopez power companies, in a break from past practice, would rather keep quiet about their sterling financial accomplishments, choosing not to issue the standard news releases about their year-end results.
As well, no news report about the 2019 financial results from the two related companies could be found in the ABSCBN website as of this writing, with the broadcast sister instead devoting wall-to-wall coverage about its unresolved franchise issue.
Despite making 18.5 times more profit for the Lopezes, First Philippine only has 119 employees, a much smaller footprint, and with definitely fewer king-sized egos to feed, than ABSCBN’s estimated 11,000 employees and talents.
First Philippine had considerable spare cash in its coffers that it had so far spent P6.7 billion buying back its shares from the open market, after covering the operations its money-losing subsidiary, Asian Eye Institute, and also writing off advances made by its aviation subsidiary, INAEC Aviation, with its fleet of nine helicopters and three Beechcrafts.
First Philippine and First Gen both list patriarch Oscar Lopez as chairman emeritus, and the actual chief executive and president his son Federico Lopez, but First Philippine still accords the 90-year-old patriarch the honor as the conglomerate’s chief strategic officer.
E-mail: moneygoround.manila@yahoo.com