Growing 'too big' in Manila, First Pacific sets sights outside Philippines

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MANILA - Hong Kong-based First Pacific Co. Ltd. on Thursday said it is now looking to other emerging markets amid concern that the company “is becoming too big” in the Philippines.

During the Earth's Resources Conference in Hong Kong, Manuel V. Pangilinan, managing director of First Pacific, said the company will continue to invest heavily in Manila’s infrastructure, but admitted being "more comfortable" in investing in other emerging markets such as Vietnam, Thailand and Myanmar.

He said the company is revisiting Thailand, where First Pacific earlier had businesses, while looking at opportunities in Vietnam and Myanmar. 

"We're actually ready to go investing into power, water, telco. That’s where we’d like to get into, even in mining," he said, referring to interests in Vietnam.

“There are still opportunities in the Philippines. But the drawback is that we are the largest there already, and of course, the comment is that these guys are becoming so big, they might be in control of the country,” Pangilinan said.

He said the company has to be “more cautious” in investing in the Philippines, which is considered a high growth economy, adding that opportunities should be a bit more focused.

“We need to clearly demonstrate that the investments are beneficial to the country,” Pangilinan said.

Controlled by the Salim Group, First Pacific's Philippine business has overshadowed its Indonesian roots, with investments ranging from telecommunications to roads, hospitals, mining, power and media.

Among its Philippines assets are PLDT, Metro Pacific Investments Corp., Philex Mining Corp., Meralco, and TV5. InterAksyon.com is the online news portal of TV5.

“We do have to formulate a national competition in the Philippines. We cannot copy,” Pangilinan said, citing the bills on anti-trust pending in Congress.

Despite the drawback, Pangilinan said the company is confident of doing business in the Philippines, adding that it sees agriculture and mining as the bright spots in the country.

“We’ve always been interested in agriculture. It’s the largest contributor to the economy. That’s an area which the country should focus on,” he said.

He said the company’s principal interest in mine development remains in dual-metals, like copper and gold, adding that two to three new areas are being developed to increase gold production to about one million ounces per year by 2016.

First Pacific is also looking at another operating mine in Indonesia, to increase its mining portfolio beyond Philex Mining and oil-exploration subsidiary Philex Petroleum Corp. 

Template for disputed territories 

Pangilinan said the company is now looking for two more foreign partners, which are non-Filipino and non-Chinese, to develop its concession area in Recto Bank to ease the political tension between Manila and Beijing.

Both governments are claiming jurisdiction over the Panatag Shoal in the West Philippine Sea.

“We have a work program commitment, which we should fulfill or else we lose our concession rights. We have to find a solution,” Pangilinan said, referring to the Philippine government's policy of cancelling an exploration contract that fails to make headway.

“We can’t do it ourselves because of the size. It's too big. I think it can accommodate two to three more investors who are non-Filipino and non-Chinese to depoliticize the contract,” he said. 

First Pacific is in talks with China National Offshore Oil Corp. for the development of Recto Bank, which is said to contain natural gas reserves greater than the 2.7 trillion cubic feet found in the Malampaya field.

Pangilinan said the ongoing negotiations with CNOOC over Recto  Bank could become a template for disputed territories.

"Discussions are quite discreet and delicate and tough. But the ball’s in our court. There’s a desire to move forward. Anything higher than zero is better than zero," he said.

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