First Pacific Company Limited is a name that might not be familiar to many, but it plays a significant role in the Philippines. Let’s explore why this company is so important.
First Pacific is an investment holding company based in Hong Kong. In simpler terms, it focuses on buying and investing in companies across Asia-Pacific, including the Philippines and Indonesia. The company earns from these investments by selling them for a profit or receiving dividends. While First Pacific operates in various countries, its largest investments are concentrated in the Philippines and Indonesia.
The company is partly owned by an Indonesian billionaire, Anthoni Salim, and managed by a Filipino business tycoon, Manuel Pangilinan. Anthoni Salim represents the Salim Group, an Indonesian conglomerate with significant influence in Indonesia’s economy. On the Filipino side, Manuel Pangilinan is a well-known figure who has held leadership roles in many major Philippine companies, including PLDT, Metro Pacific Investments, Meralco, and Smart Communications.
Both Anthoni Salim and Manuel Pangilinan play key roles in First Pacific. Manuel serves as the Managing Director and CEO, while Anthoni is the Chairman. However, ownership is not evenly distributed. The Salim Group holds a majority stake of 45.4%, while Manuel owns around 70 million shares. In comparison, Anthoni Salim owns over 1.9 billion shares, giving him substantial control over the company.
This is significant because First Pacific owns considerable stakes in many major companies in the Philippines. For example, it holds 25.6% of the economic interest in PLDT and 13.5% in direct ownership, making it the second-largest shareholder. This stake is worth PHP 41.2 billion. Additionally, First Pacific has a 46.3% stake in Metro Pacific Investments, which controls Meralco, Maynilad, and various infrastructure projects, amounting to PHP 71.7 billion in value.
Beyond that, First Pacific has a 16.6% economic interest in Light Rail Manila Corporation, a 42.4% share in PXP Energy, and a 46.2% stake in Philex Mining, one of the oldest mining companies in the Philippines. These investments highlight the extent of Anthoni Salim’s influence over critical sectors in the Philippines.
But is this a cause for concern? Some may argue that a foreign investor, such as Anthoni Salim, benefits greatly from the growth of Philippine companies. In 2023, First Pacific reported a net profit of $501 million, with $143 million coming from PLDT and $159 million from Metro Pacific, showing how lucrative these investments are.
Public opinion on foreign investment has been shifting. The previous administration opened up several industries to full foreign ownership, indicating a potential acceptance of foreign investors like First Pacific. However, this raises the question: how much control should foreign entities have over key Philippine industries?
First Pacific has a long history. It was founded in 1981 with an initial investment of $900 million. In its early years, the company made significant acquisitions, including Hibernia Bank in San Francisco and a controlling interest in Hagemeyer in the Netherlands. They also established Metro Pacific Corporation in the Philippines.
One of the company’s most notable ventures was its attempted acquisition of San Miguel Corporation, a major food and brewery company in the Philippines, in 1997. This move was controversial and was viewed as a hostile takeover, raising concerns among local stakeholders. San Miguel was considered a national treasure, and the idea of it being controlled by a foreign conglomerate sparked fears of losing a key domestic asset.
The bid was not welcomed, and San Miguel’s management sought to protect the company from the takeover. First Pacific had already acquired 6% of San Miguel’s shares, but there was strong opposition. The situation was further complicated by political factors, including a legal dispute over the ownership of a 48% stake in San Miguel, which had been sequestered by the government from former chairman Eduardo Cojuangco, a close ally of former President Ferdinand Marcos.
By early 1998, First Pacific expressed its intent to acquire a controlling 51% stake in San Miguel, including shares from government-controlled United Coconut Planters Bank and Eduardo Cojuangco. However, the deal fell apart due to concerns about foreign control, First Pacific’s debt issues, and political factors. By August 1998, First Pacific sold its stake in San Miguel, ending its bid to take over the company.
Had First Pacific succeeded in acquiring San Miguel, it could have become one of the most dominant forces in the Philippine corporate landscape. Nonetheless, its significant influence through other investments remains undeniable.