LISTED HOLDING firm Metro Pacific Investments Corp. (MPIC) is betting on the hospital industry as it acquires four more hospitals this year worth up to P1.2 billion in its bid to create the country’s first network of hospitals.
In an interview, MPIC Chairman Manuel V. Pangilinan said the company is in talks to buy hospitals in Luzon and the Visayas.
"There are four more hospitals we are looking at so I think we’ll probably have around 2,000 [hospital] beds by yearend at least," he told BusinessWorld during a corporate governance event in Makati last week.
Analyst Jun Calaycay of Accord Capital Equities said there is a guaranteed market for hospitals, but MPIC might be taking a big risk by venturing into this business.
"It can be a profitable business venture, but there are a number of factors that are outside their control," he said in an interview.
He added that the company might be trying to take advantage of a government thrust to become a medical tourism hub in Asia, "but that would be dependent on the brain drain issue."
Aside from doctors and nurses leaving the country for opportunities abroad, the hospital industry also has to contend with new government regulations, the increasing number of health maintenance organizations, self-medication and the rise of new hospitals.
The Philippine Medical Association has blamed absconding patients, taxes, expensive facilities and high maintenance and labor costs for the bankruptcy of about half of the country’s 2,000 hospitals — three-fourths of which were private — since 1988.
Citing a survey, the group had claimed that by 2005, there were only 919 hospitals left in the country — 72 government and 849 private — with a combined bed capacity of 69,733, or one hospital bed for 1,144 patients.
MPIC now has 540 hospital beds through its 33% stake in Medical Doctors, Inc., the owner and operator of Makati Medical Center.
The company also bought early this year 34% of Davao Doctors Hospital, Inc. for half-a-billion pesos.
Mr. Pangilinan said MPIC might increase its stake in Medical Doctors to 50%, but only if shareholders decide to sell.
"We don’t want to make a general effort of buying the shares, and I think it would be premature for them to sell because they’re seeing improvements [in management]," he said.
Meanwhile, Mr. Pangilinan said MPIC is also looking at infrastructure projects and more investments in the water sector.
"We are looking at other areas to build water [infrastructure] not only here but also abroad [because] eventually, water can be a very scarce resource," he pointed out.
MPIC and partner DMCI Holdings, Inc. bought Maynilad Water Services, Inc. last year.
The two formed a joint venture company called DMCI-MPIC Water Co., which won the concession to supply water in the West zone. Maynilad had been losing money and the joint venture sought to revive the business through its $447.23-million concession bid.
Aside from its hospital and water businesses, MPIC is also into real estate development through subsidiary Landco Pacific Corp. For the first quarter, MPIC’s consolidated net income tumbled by 91% to P138.5 million from P1.52 billion a year earlier, when profits surged following a one-time gain from its Maynilad acquisition.
Mr. Pangilinan is also chairman of dominant carrier Philippine Long Distance Telephone Co. (PLDT). Mediaquest Holdings, a subsidiary of PLDT’s beneficial trust fund, has a minority stake in BusinessWorld.
