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Pangilinan eyeing one more hospital

Posted on 09:13 PM, May 30, 2010 [BusinessWorld Online ]
BY NEIL JEROME C. MORALES, Reporter

PANGILINAN-LED Metro Pacific Investments Corp. is in talks to acquire one more hospital this year out of four medical facilities being eyed for acquisition, an executive said.
The move will further strengthen the hold of Metro Pacific -- which now claims to be the country’s largest hospital operator -- in the local health care industry. The group will “synergize” operations and services of its hospitals in the next year or so to further increase efficiency.
The listed holding firm has identified four hospitals -- one each in Northern Luzon, Central Luzon, Metro Manila, and Northern Mindanao -- for acquisition, Augusto P. Palisoc, Jr., Metro Pacific executive director and chief of firm’s health care group, said in a recent interview.
“We hope to acquire one more hospital before the year ends,” Mr. Palisoc said in Filipino.
Early this month, Metro Pacific bought majority of Riverside Medical Center, Inc., the largest hospital in Negros Occidental, for an undisclosed amount.
Riverside Medical Center, the group’s fourth hospital and the first in the Visayas region, is a 336-bed level four hospital with obstetrics and gynecology, medicine, orthopedics, and surgery departments.
Mr. Palisoc said the group still has about P1 billion for a new hospital acquisition this year.
“We want at least [a 200-bed hospital],” the executive added.
Metro Pacific had allotted P1 billion to P2 billion for capital spending and acquisitions under its health care group, which accounts for less than 1% of the holding firm’s profits.
Core net income of the health care group dropped by 12% to P111 million in the first quarter due to higher expenses -- outpatient services for Makati Medical Center, accessibility for patients at the Cardinal Santos Medical Center, and new parking buildings and 42 new clinics at the Davao Doctors Hospital.
Excluding Riverside Medical Center, the hospital group of Metro Pacific has a capacity of more than 1,300 beds.
Mr. Palisoc said Metro Pacific would “synergize” the operations of three hospitals by next year. Under the plan, the group will have joint procurement, services, equipment trading, and medical and management systems.
“Our strategy is we allow an individual hospital to reach its optimized level of performance before the group-wide synergy,” he said.
Shares in Metro Pacific, whose profits in the first quarter rose by 118% to P775 million, went up to P2.90 apiece on Friday from P2.80 on Thursday.
The tollway unit of Metro Pacific, meanwhile, is looking to start the construction of a road linking Luzon’s two main expressways before the year ends.
“The government already has the budget for the right-of-way [acquisition]. After that, we could start construction,” Metro Pacific Chairman Manuel V. Pangilinan said in Filipino.
The government is expected to shell out P2.41 billion for the right of way.
Last month, Metro Pacific Tollways Corp. submitted an unsolicited proposal to the government to build a “connector road” between the North Luzon Expressway (NLEx) and the South Luzon Expressway (SLEx).
The P17-billion project will start from the C-3 interchange in Tondo, Manila to Senator Gil Puyat Avenue in Makati.
The NLEx-SLEx connector road will span 13.24 kilometers and would have ramps on España Boulevard, Quirino Avenue, and San Andres, all in Manila.
“We will do it in three segments -- nine, 10 and 11,” Mr. Pangilinan said. “[Segment] 11 is the harbor connection to Buendia, the Skyway.”
Metro Pacific wants to connect the North Harbor, which is being operated by a joint venture where it owns a 35% stake, to the Skyway and South Luzon Expressway.
There will be elevated roads and a bridge over the Pasig River.
Early this month, the Department of Public Works and Highways said the unsolicited proposal was complete and was in compliance with build-operate-transfer rules.
Metro Pacific is the Philippine unit of Hong Kong’s First Pacific Co. Ltd., part owner of the Philippine Long Distance Telephone Co. (PLDT).
Mediaquest Holdings, Inc., a unit of PLDT’s Beneficial Trust Fund, has a minority stake in BusinessWorld.
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