The really rich Filipinos

Forbes magazine has published the 2015 list of the Philippines’ richest individuals.  The Top 35 richest Filipinos with their estimated wealth in US dollar millions, according to Forbes, are:

1 Henry Sy Sr. (14,400);  2 John Gokongwei Jr. (5,500); 3 Andrew Tan (4,500); 4 Lucio Tan (4,300); 5  Enrique Razon Jr.  (4,100);  6 George Ty (4,000); 7 Aboitiz Family (3,600).

8 Jaime Zobel de Ayala (3,500);  9 David Consunji (3,200); 10 Tony Tan Caktiong (2,200);  11 Lucio and Susan Co (1,700); 12 Roberto Coyiuto Jr. (1,600);  13 Manuel Villar Jr. (1,500); 14 Yap family (1,400).

15 Alfredo Yao  (1,300);16 Dean Lao (1,100); 17 Oscar Lopez          (1,000); 18 Andrew Gotianun (910);  19 Betty Ang (905);  20 Roberto Ongpin (900);  21 Inigo and Mercedes Zobel (870).

22 Vivian Que Azcona (780); 23 Eduardo Cojuangco Jr.  (770);  24 Beatrice Campos (740);  25 Ricardo Po family (640); 26 Jorge Araneta (560); 27 Carlos Chan (550);  28 Mariano Tan Jr. (520).

29 Ramon Ang (510);  30 Alfonso Yuchengco (500);  31 Bienvenido Tantoco Sr. (480);  32 Manuel Zamora (450);  33 Concepcion family (400);  34 Edgar Sia (390) and 35 Frederick Dy (310). 

The Forbes list is an indicator of who in the Philippines have money, influence and power in the Philippines.  But it is not a very reliable indicator of who the really rich Filipinos are.

For instance,  Forbes greatly overstates the wealth of the family of No. 8 richest, Jaime Zobel de Ayala, the father of the brothers Jaime Augusto and Fernando ($3.5 billion), and No. 5 richest, Enrique Razon of owner of ICTSI and the money-losing Bloomberry casinos ($4.1 billion). 

The magazine grossly understates the wealth of Ramon S. Ang, the vice chairman, president and COO of San Miguel Corp., Iñigo Zobel, SMC’s single largest owner; and John Gokongwei Jr., the founder and chair emeritus of JG Summit Holdings, Inc.

Ang or RSA is ranked only 29th richest with estimated wealth of $510 million, while taipan John is No. 2 with $5.5 billion.  Iñigo is estimated by Forbes to be worth just $870 million, No. 21 richest.  His poorer cousins, Jaime Augusto and Fernando, are ranked higher, at No. 8.

In my book, John could indeed be the Philippines’ second richest, but with a wealth of $7.355 billion, not $5.5 billion per Forbes.  Iñigo should be ranked No. 3, while Ramon should be No. 4, or No. 5 at the very least.  Let me tell you why.

SMC, the Philippines’ largest industrial corporation in revenues and assets, had a market capitalization, as of yesterday, of just P119.5 billion or $2.597 billion (at P46 to $1).  SMC’s businesses have a value of more than $40 billion. 

Iñigo owns 31 percent of San Miguel, RSA 24 another percent.  About  31 percent of $40 billion is $12.4 billion.  That’s the value of Iñigo’s holdings in San Miguel if the conglomerate’s businesses were properly valued.  

In addition, Iñigo and his sister, Mercedes, own 24.5 percent of Ayala Corp. which has a market cap of P230.786 billion.  The other 24.5 percent is owned by former Ambassador Jaime Zobel de Ayala, father of  Jaime Augusto and Fernando. Get a fourth of P230.786 billion and you are richer by $1.229 billion.  The $1.229 billion (not $3.5 billion as Forbes estimates) is the wealth of Don Jaime and his children.

The same $1.229 billion is the value of ownership of the siblings Iñigo and Mercedes – in Ayala alone. 

However, Iñigo also owns 31 percent of San Miguel whose enterprise value is easily $40 billion.  Get 31 percent of $40 billion, that is $12.4 billion.  Add Iñigo’s holdings in Ayala, $1.229 billion, and the guy is easily worth $13.629 billion.  That makes him the country’s second or third richest individual.  Assuming I am half wrong. Iñigo will still be worth only  $6.814 billion, behind Gokongwei’s $7.35 billion (my estimate and not $5.5 billion per Forbes).

On the other hand, RSA’s 24 percent of SMC’s $40-billion enterprise value is worth $9.6 billion, a fortune that is nearly 19 times the estimate of Forbes as the wily tycoon’s wealth.

Why do I say San Miguel’s businesses are worth $40 billion or more?  The value of its beer business (90 percent of the market) is easily $6 billion, its food business (the biggest in the Philippines) $3 billion, packaging business $1 billion, and Ginebra San Miguel $800 million.   These are the traditional businesses.

Add the new or non-traditional businesses which now contribute 71 percent of SMC’s total revenues.  These are: Petron Corp. (including the Malaysian refinery and gas stations) $6 billion; power (SMC is the Philippines’ biggest power producer) $6 billion; and infrastructure (SMC is the biggest tollways operator, with no less than seven major infra properties) plus the the Caticlan airport and its adjacent 1,000 hectares which could be developed into a new Hawaii and make Boracay such a puny operation: $10 billion.

In addition, San Miguel owns among the Philippines’ richest nickel, coal and iron ore deposits and is the country’s single largest cement producer—16 million tons.  The value of the mining and cement businesses: $18 billion.

Even if you remove the mining and cement businesses, SMC still has over $25 billion worth of businesses—$6 billion beer, $3 billion food, $1 billion packaging, $800 million Ginebra, $6 billion power, and $10 billion infra.

Yet, the stock market values SMC at only $2.6 billion. What a joke.

If you don’t believe my listing of the really rich, here is the 2013 list of biggest taxpayers: 1. Manny Pacquiao, P163 million; 2. Juanito Alcantara, P99.6 million; 3. Estelito Mendoza, P73 million; 4. Reynaldo Chico Jr., P67 million; 5. Andrew Tan, P67 million;  6. Lorenzo Tan, P60.89 million;  7. Jose Alvarez, P55.6 million; 8. Vivian Azcona, P51.6 million; 9. Oscar Reyes, P51 million; 10. Vicente Ayllon, P50,088,841; 11. Ronaldo Soliman, P46,636,876; 12. Ramon S. Ang, P46,471,324; 13. Lauro Baja, Jr., P45,194,110; 14. Piolo Pascual, P42,533,158; 15. John Lloyd Cruz, P41,976,592; 16. Kris Aquino, P40,481,146; 17. Federico Lopez, P39,899,018; 18. Victor Angeles, P39,762,021; 19. Sharon Cuneta-Pangilinan, P39,049,235; 20. Willie Revillame, P38,305,824; 21. Justo Aboitiz Ortiz, P37,225,922; 22. Erramon Aboitiz, P35,819,446; 23. Nestor Tan, P33,563,178; 24. Jose Ma. Lim, P33,024,233; 25. Vicente Tan Lao, P32,924,363; 26. Jaime Augusto Zobel de Ayala II, P32,224,696; 27. Manuel Pangilinan, P31,636,324; 28. Raul Mendoza Ang, P31,247,155; 29. Victor Valdepenas, P31,151,270.35, and 30. Francis Puno, P30,909,992.


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