×

In the Philippines, infrastructure program could grant businesses 'manna from heaven'

  • Philippine President Rodrigo Duterte appears committed to expanding the country's infrastructure industry, said Jaime Augusto Zobel de Ayala of Ayala Corporation
  • That's "manna from heaven" for businesses, Zobel de Ayala said
  • Ayala Corporation is also looking to invest further in disruptive areas like e-commerce, financial technology and electric vehicles, he added

Philippine President Rodrigo Duterte appears committed to improving the country's infrastructure as part of economic reform plans, and that could bring about huge opportunities for businesses, Jaime Augusto Zobel de Ayala, chairman and CEO of Ayala Corporation, told CNBC.

"They really feel very keenly about making a major contribution in that sector and they're allocating budgets accordingly to be able to push that," Zobel de Ayala said of the Duterte administration.

"That's manna from heaven," he added.

Infrastructure in the Philippines is lagging consumer demand, the CEO said, adding that the building campaign was a timely move considering the low interest rates and apparently stable macroeconomic environment.

Philippine President Rodrigo Duterte gives a speech at the Malacanang Palace in Manila on June 1, 2017.
Noel Celis | AFP | Getty Images
Philippine President Rodrigo Duterte gives a speech at the Malacanang Palace in Manila on June 1, 2017.

Duterte has said that he is planning a $180 billion "Build, Build, Build" infrastructure campaign. Already, the controversial leader has agreed to 21 projects worth $16 billion, which include a revamp of Manila's airport and other improvement operations on railways, ports and roads, Reuters reported.

And despite the concerns some have expressed over the threat of disruptive technologies to industries, Zobel de Ayala expressed confidence. In fact, attaching to those areas comprises a key strategy of the business, he said.

"In the real estate market, we have a big retail portfolio and a lot of front-end retail shops. There's no doubt e-commerce and industries supporting that will begin to change the way that sector works," the CEO said.

However, he said his company is looking to participate in the e-commerce sector, so it has begun to buy assets in that field.

Ayala is now buying into the financial technology and payments spaces, according to the CEO. Given the shift toward electric vehicles, the business is also investing in automobile-related assets, he added.

With a market cap of about 575 billion Philippine pesos (approximately $11.2 billion), Ayala is the country's largest and oldest conglomerate. The firm has outperformed benchmarks this year, with shares up more than 9 percent in the last 12 months.