PHL conglomerates’ P1.65-T renewable push to test capital discipline — S&P

PHILIPPINE CONGLOMERATES are expected to invest about $28 billion (P1.65 trillion) in renewable energy projects over the next decade as part of a broader $185-billion (P10.9-trillion) investment wave by leading business groups in the Philippines and Vietnam, according to S&P Global Ratings.

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In a report released on Nov. 5, S&P said Philippine conglomerates are accelerating their shift toward renewable energy and other emerging sectors as their core businesses mature, positioning themselves for long-term growth.

S&P said the $185 billion combined investment is roughly 2.5 times the conglomerates’ total capital spending in the past decade, underscoring the scale of the upcoming investment cycle.

“We estimate that over the next decade [the Philippine conglomerates] will invest up to $28 billion on renewable energy, or about 20% of their total capital expenditure (capex) plans. The development of renewable energy sources in the Philippines is gaining momentum due to generally supportive policies, with private players leading the way,” S&P said.

By 2030, the country’s top business groups could account for 40-50% of the Philippines’ total renewable energy capacity, the report noted.

The study covered Aboitiz Equity Ventures, Inc., Ayala Corp., JG Summit Holdings, Inc., San Miguel Corp., and SM Investments Corp., which are among the country’s largest publicly listed conglomerates by market capitalization. S&P Global Ratings said it does not rate these companies.