Ayala Corporation is thriving as an economic resurgence in the Philippines is giving the middle class more spending power in the East Asian nation.
The company, Philippines’ oldest family-controlled firm, has more than tripled its capital spending in the past five years to expand its property, banking and infrastructure units and benefit from one of the fastest economic expansions in Asia, Bloomberg News reported.
“There are shifts in consumption patterns as the middle class expands, which provide a lot of opportunities for the group,” Ayala’s Chief Financial Officer Delfin Gonzalez was quoted as saying in an interview, pointing to growing demand for homes, cars and loans. “We’re going full steam ahead.”
Since taking office in 2010, Philippines’ President Benigno Aquino has tackled corruption, won investment-grade ratings and boosted business confidence, while also increasing spending on roads and schools and handouts to the poor, the report noted.
Private consumption in the Philippines grew more than 5 percent in each of the 12 quarters through June, according to Bloomberg data. Meanwhile, remittances from overseas, which rose to a record US$23 billion in 2013, are expected to rise 5.5 percent this year and 5 percent in 2015.
All this bodes well for the 180-year-old Ayala, whose group entities include the nation’s top property developer, the No. 2 bank by market value and the second-biggest telecoms firm, Bloomberg said.
The group expects its revenue to almost double this year from 2011 to a record 156.5 billion pesos (US$3.5 billion). Ayala shares have risen about 33 percent this year, compared with a 25 percent gain for the Philippine benchmark stock index, the report noted.
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