Duterte’s apology boosts Ayala, MPIC stocks

By Denise A. Valdez, Reporter

STOCKS in firms led by the Zobel brothers and Manuel V. Pangilinan surged on Tuesday after President Rodrigo R. Duterte’s apology for the “hurting words” he gave the companies in recent months.

Shares in Ayala Corp. (AC), Metro Pacific Investments Corp. (MPIC) and Manila Water Co., Inc. emerged as top gainers in the stock market yesterday, growing 14.73%, 13.55% and 12.05%, respectively.

This was after Mr. Duterte softened his stance towards the Zobel brothers and Mr. Pangilinan in a speech on Monday, which he said was triggered by the businessmen’s assistance to the government and communities during the coronavirus disease 2019 (COVID-19) crisis.

The Ayala group’s total contributions have reached P5.5 billion as of mid-April, which went to employee support, business operations waivers and monetary and in-kind donations to communities and frontliners.

Members of the so-called “MVP Group” have partnered with the government in building a quarantine site, and have supported frontline workers by providing personal protective equipment, alcohol, hygiene kits, vitamins, and relief packs, cooked food, water bottles, transportation, computers and monetary donations.

Mr. Duterte said the support from the companies made him realize he might need these businessmen someday. “Naubos na ‘yung pagkasuplado ko [My rudeness has run dry]… The COVID humbled me,” he said.

AC’s Manila Water and MPIC’s Maynilad Water Services, Inc. have been recipients of the president’s ire since late 2019 because of alleged onerous contracts for water concession in Metro Manila. The government has since started drafting a new water contract for the companies.

“Maybe there will be a lot of legal issues but we can talk. I am ready to talk and I’d be reasonable,” Mr. Duterte said in his speech Monday night.

Mr. Pangilinan and the Zobel brothers — AC Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala and President and Chief Operating Officer Fernando Zobel de Ayala — welcomed the president’s changing of tone.

“I wish to assure him that our group is fully committed to being a partner of (the government) in addressing the heartbreaking moments of COVID-19 on our people…,” Mr. Pangilinan said in a tweet after the speech.

The Zobels, in a statement on Tuesday, said they are “committed to help the President” throughout the COVID-19 crisis.

“We have always believed in building a strong partnership between the private and public sectors in addressing our country’s problems… We appreciate the recognition of the Ayala Group’s efforts…,” they said.

Presidential Spokesperson Harry L. Roque also said in a separate briefing on Tuesday that an out-of-court agreement is possible for the water contracts.

“The legal studies and legal examination will proceed, but we’re expecting that mas malakas ngayon ang partnership ng gobyerno at ng pribadong sector sa mga bagay na importante ngayong panahon ng COVID-19 (the partnership between the government and the private sector will be stronger especially in this period of COVID-19),” he said.

Investors similarly took the government’s renewed approach to the companies with glee, evidenced by the gains of stocks in AC, MPIC and Manila Water.

“The President’s apologies to the Ayalas and to Mr. Pangilinan have sparked optimism as it trimmed the regulatory risks that have been hounding the market…,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a text message.

“We cannot ascertain, but the humility that the government has shown and the welcoming response of the Ayalas and Mr. Pangilinan are pointing towards a favorable contract,” he added.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan shared the same observation, saying in a mobile message: “Investors probably must view the statement of the administration a step in the right direction for the businesses to work more closely together moving forward.”