MANILA -- LT Group Inc., conglomerate of taipan Lucio Tan, has earmarked a PHP10-billion capital spending this year, as it continues to grow its various businesses on the back of a growing economy.
LTG President Michael Tan told reporters Tuesday that bulk of the amount would be earmarked for the construction projects of its real estate arm Eton Properties Inc. at PHP3 billion, in addition to its joint venture project with Ayala Land Inc. “Eton will continue to enjoy high occupancy rates for its BPO (business process outsourcing) office buildings, as well as the retail space that complement these projects. Demand should continue for the buildings being constructed,” he said.
Tan said the Philippine National Bank (PNB) targets to spend PHP2.5 billion this year; Asia Brewery Incorporated (ABI), PHP2 billion; and Tanduay Distillers Inc. (TDI), PHP500 million. LT Group spent PHP7.4 billion for 2017.
He expects a better year for its businesses, especially for tobacco, but will be challenging for some consumer businesses.
“The government’s actions versus the illicit trade, which includes smuggled and locally produced products, have been a welcome development as this has leveled the playing field. However, we have to remain vigilant to keep the illicit trade from prospering again,” he told the group’s stockholders’ meeting.
Tan pointed out that the implementation of the first package of Tax Reform for Acceleration and Inclusion (TRAIN) increased the prices of some consumer goods with the imposition of a tax on sugary drinks and excise taxes on petroleum products, among others. “While TRAIN’s Package One translated to additional disposable income for consumers, it remains to be seen how this additional discretionary income will be spent,” he said.
Tan said the group is ramping up its non-alcoholic beverage portfolio.
“ABI is currently in investment stage. It needs to invest in other beverages for the future growth of the company,” he added.
For TDI, Tan said demand for distilled spirits is projected to remain stable to slightly higher as more jobs are expected to be generated by the government’s “Build, Build, Build” infrastructure program.
This despite the expected increase in excise taxes for distilled spirits under the second package of TRAIN, he added. (PNA)
