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The Hospitals Man

For a long time, the man generally referred to by the initials MVP was known as the PLDT Man. Then he became known as the Meralco Man. Still later, he became known as the NLEX Man. MVP stands, of course, for Manuel V. Pangilinan, the top honcho of Indonesian-owned MPC (Metro Pacific Corporation).

Today MVP goes by yet another name: The Hospitals Man. Astute financial analysts will have observed that until recently, MVP’s choices for MPC investments have been industries and companies of the stable-cash flow pay-or-be-disconnected kind. MPC’s entry into the hospital industry is a departure from the investment pattern set by MVP. After all, one does not say to an incoming patient “Pay or be disconnected” or “No toll, no entry.”

To be sure, MVP’s decision to look in the direction of the hospital industry has been welcomed by the government and Philippine society at large. With their weak financial bases and inadequate facilities, most of the members of the Philippine Hospitals Association can only wish for the kind of financial and technical resources that MPC has been infusing, and will continue to infuse into the hospitals that MVP has chosen to include in the MPC hospitals portfolio.

The first two hospitals that MPC acquired—Makati Medical Center, founded in the late 1960s by a group of high-caliber medical practitioners, and San Juan City’s Cardinal Santos Memorial Medical Center, owned by the Archdiocese of Manila—probably did not badly need an infusion of additional capital. But the five other additions to MPC’s hospitals portfolio, mostly located in the provinces, almost certainly did. The provincial hospitals are located in places like Cebu City, Bacolod City and Davao City, which are among the fastest-growing and most progressive population centers in this country.

Apart from price, a key factor in an MVP decision to buy a particular hospital is the trend of the local market, which in turn is determined by the economic trend of the area or region where it is located. Without a doubt, the economies of the cities of Cebu, Davao and Bacolod are among the most robust in this country.

Another key factor in MVP’s investment calculations is bound to be the state of the target hospital’s facilities. A hospital that has more or less kept up with the technological times will require less capital infusion than a hospital whose owners have allowed it to deteriorate.

Still another acquire-or-not-to-acquire factor is the demographics of the location of a target hospital. Considerations related to income structure, age and gender come into the analytical process. The benefit for the community—and the health care industry in general—from MVP’s decision to bring hospitals into MPC’s investment hamper are already there to be seen. Observers have expressed approbation of the improved facilities and services of Makati Medical Center, Cardinal Santos Memorial Medical Center and Our Lady of Lourdes Hospital. I’m certain that similar sentiments have been expressed by the residents of Cebu City, Bacolod City, Davao City and their environs.

Given the steady expansion of MPC’s hospitals portfolio, MVP probably has been at the receiving end of investment proposals for other members of the PHA. Thus far, MVP has been choosing his targets very judiciously. The hospitals that he will choose to acquire in the future will have to be attractive investment propositions in every respect.

From the bottom line’s standpoint, how have hospitals been stacking up against MPC’s investments in telecommunications, power, water, real estate and expressways? Given the steady and strong demand for first-class—not merely good—hospital services, I would imagine that MVP’s swerve toward the hospital industry has been comparatively profitable for his Hong Kong-based conglomerate.

Keep adding to the number of establishments in your hospitals portfolio, Mr. Hospitals Man. That will be good for the collective health of the Filipino people. It will also be good for MPC’s bottom line.


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