This Sankey diagram depicts data from Ayala Corporation’s 2015 Annual Report: cash flows, both into and out of the company, from and to investing, operating, and financial activities, and total assets. Urban land and infrastructure activities emphasized.
As part of Philippine Center for Investigative Journalism’s special report on Duterte’s China romance, I conducted research into the firms that signed deals during his state visit. What I found was that, among the Philippine parties to these deals include:
• firms with no track record in major infrastructure projects, no recent operating profit, and alarmingly small asset bases;
• firms and personalities that have been implicated in anomalous deals, including Arroyo-era “bridges to nowhere” and the Smokey Mountain Rehabilitation Project; and
• two firms involved in the nickel ore trade with China, one of which had been implicated in smuggling cases at Subic.
“How did virtually unknown firms with no track record in bidding for—much less completing—major infrastructure projects, rise to billion-dollar prominence with the change of the administration?
“For the firms that have no records with the SEC: if they aren’t registered to do business in the Philippines, how could they be party to billion-dollar deals on our behalf? For freshly-registered firms how were their directors able to both anticipate Duterte’s turn to China, and secure influence with the new government so quickly?
“Given the ambitious scope of these projects, can the smaller firms, some of which appear to be seriously undercapitalized, be trusted to deliver on time and within budget? Would any sensible lender take the risk of extending credit to these firms—or will their access to capital depend on intercession from on high?”
Read the full story: Duterte’s China deals, dissected.
Other stories in this series, “Romancing China under DU30”:
Karol Ilagan and Malou Mangahas: Beijing and Manila dating again (part II)
Data Annex: The Philippine parties to Duterte’s China deals