MANILA -- Metro Pacific Investments acquired a controlling stake in a Mindanao-based hospital, the Philippine infrastructure conglomerate said Thursday, extending the company's network to 14 medical centers and deepening its presence on President Rodrigo Duterte's home island.
The investment is also viewed as a vote of confidence in the southern island, which was placed under martial law in May after Islamic State-linked militants tried to take over a city. Ongoing military operations to wipe out militants have resulted in over 800 casualties.
Metro Pacific is a local unit of Hong Kong-listed First Pacific, a company controlled by Indonesian conglomerate Salim Group.
In a stock exchange report, Metro Pacific said it purchased 108,350 shares -- 54% of the total -- in St. Elizabeth Hospital for nearly 178 million pesos ($3.5 million). The 248-bed tertiary hospital is in General Santos City, a commercial hub in Mindanao.
The conglomerate, active in water and electricity distribution as well as toll roads, expanded into hospitals 10 years ago by acquiring established medical centers. With its latest purchase, the company now has a little over 3,000 beds in 14 hospitals, of which three are in Mindanao, including Davao Doctors Hospital in Davao city, Duterte's hometown.
Metro Pacific, whose hospital group's net income jumped 21% on the year to 927 million pesos for the January-June period, is developing its tertiary hospital portfolio in preparation for a possible initial public offering by 2019. The company also has teamed with Spain's Sanitas Internacional for primary health clinics in the Philippines.
Health care has been on the radar of big business groups in recent years, as they see potential in the country's growing population and expanding household income. Consumer spending on health goods and medical services grew by 52.19% from 2011 to 2016, reaching 2,779 pesos per capita. The figure is expected to rise 36.57%, to 3,795.4 pesos, by 2021, according to Euromonitor International.
Ayala Corp., another major Philippine conglomerate, also has embarked on an acquisition spree to offer comprehensive health care services covering clinics, pharmacies and hospitals. The company hopes to unlock value in the country's fragmented health care industry. Meanwhile, the corporate group of Manuel Villar, a former Senate president and presidential candidate, is building a hospital chain near its vast residential estate developments in the country.