IFLR1000 Reviews


Financial and corporate

The Philippines is one of Asia’s steadiest economies with a GDP growth of 7.2% in 2013 and even in the much more turbulent waters of 2014, the country’s GDP grew 5.7% in the first quarter. 

The energy, infrastructure, mining and utilities sectors continue to generate a lot of interest from foreign as well as domestic investors, with the construction and energy industry sectors in particular receiving renewed interest from American and European companies. 

The Philippines as such has seen a continuous string of very high-value deals. In one example Sagittarius Mines Inc (SMI) of Glencore signed a joint development and power purchase agreements for the Tampakan Power Project worth approximately $1 billion, as part of a $6 billion mine development project. 

Note has also been made of increased M&A activity in the banking sector following the government’s July 2014 announcement lifting the restrictions placed on foreign banks control over domestic lending institutions. Previously foreign banks had been restricted to controlling 60% of the voting equity.

The manufacturing sector, one of the Philippines’ key industries, also remains robust and continues to draw attention from Chinese and other Asian investors.

Energy and infrastructure

Despite being one of Asia’s fastest growing economies, the Philippines struggles to address issues plaguing its infrastructure and energy sectors.

In infrastructure, public transport is a major concern. In power, as well as being one of the most expensive consumer markets in Southeast Asia, the country experiences constant power failures even in the capital. The few electricity producers have aging power plants that are no longer able to keep up with the growing demand.

On top of that, Manila also has issues with water shortages, deteriorating roads and airports. The few electricity producers there are have aging power plants that are no longer able to keep up with the growing demand.

Efforts to improve public transport and reduce corruption have been a priority for current president Benigno Aquino III. It was reported that by introducing more streamlined processes for government spending and reducing the public debt in addition to an anti-corruption campaign, the president has paved the way for improvements in the Philippine economy. 

Improving the country’s infrastructure will alleviate a range of socio-economic burdens. Nevertheless, uncertainty has crept in as the current presidential term is set to end in 2016. Aquino has only one more year to push projects ahead. 

A redeeming characteristic in this area is that the Philippines possesses a good PPP (public-private partnership) regime. The government has identified a long list of projects ranging from airport and highway upgrades and development, to rail improvements and the construction of a natural gas pipeline. The emphasis though is on power projects and a growing trend is the interest of local companies taking on these projects. This is helped by domestic banks slowly coming into majority. The PPP framework has also attracted a wealth of funds coming in from Europe and the United States as well as foreign investors. 

For example, the country is currently building a P20 billion ($450 million) elevated highway running above the Philippine National Railway’s railroad tracks, called the NLEX-SLEX (South Luzon Expressway) Connector Road. This highway is said to help many of the commuters to bypass traffic from the city centre. 

Port development work is also prominent. Projects such as the NLEX-Harbour Link Road due to be completed in 2017 will reduce the number of cargo containers in Manila, also helping to avoid or create worse traffic.  

The country’s PPP system is a crucial tool for the country to improve its infrastructure but with the end of Aquino’s term, investors are already slowing down the pace. The next administration will be pivotal for the countries development in these areas.

Hill Choi Lee - Journalist - Asia-Pacific

Gatmaytan Yap Patacsil Gutierrez & Protacio

Key contacts at the firm include head of department Jaime Renato Gatmaytan and partners Norma Margarita Patcsil and Aris L Gulapa. 

Though known as a litigation firm with a strong corporate and financial background, Gatmaytan has worked on several energy projects in the Philippines. 

One example was the financing for the Therma South 300MW coal-fired power plant on the Island of Mindanao, Philippines, towards the end of 2013. 

In the mining sector, the firm has advised MBMI Resources in selling its shares in three mining companies in the Philippines to DMCI Corporation. 

In transport, the firm acted as local counsel to the IFC and Development Bank of the Philippines in relation to the bidding for financing, design, construction and operation of the south extension of the Light Rail Transit Line 1 PPP (public-private partnership) project valued at $1.44 billion. The firm is subsequently engaged in the development of Line 2 of the same project advising the same clients. 

The firm is also Philippines counsel to a consortium of bidders in relation to the ongoing $2.71 billion Laguna Lake Expressway Dike project. 

When it comes to port infrastructure, the firm is involved in the bidding process of the Sasa Port project worth $422 million where the GYP team is advising the grantors on various legal issues. 

Puyat Jacinto & Santos

Monalisa Dimalanta is the energy group head at Puyat Jacinto & Santos (PJS). The firm has in 2014 added to its energy and infrastructure practice lawyers on the associate level to strengthen its team of five partners and co-heads in said practice group. 

In energy, PJS was counsel on a $453 million acquisition that saw client Electric Generating bidding for minority interests in the 630MW Masinloc coal-fired power plant from AES Corporation. 

For resources company Cavite Biofuel Producers, the firm was involved in a P2 billion loan facility towards a biofuel production and power generation plant in Magallanes, Cavite. 

SyCip Salazar Hernandez & Gatmaitan

Partner Rocky L Reyes is SyCip Salazar Hernandez & Gatmaitan’s (SyCip) head of special projects. The firm continues to be active in the energy and infrastructure space and has worked on a number of PPP (public-private partnership) projects in recent years. Its position in the legal market is undisputed and its bench of lawyers is some of the industry’s finest. 

Work in transportation has been of particular focus for SyCip since 2013. Until recently in late 2014, the firm worked as legal advisor in the $1.44 billion Manila Light Rail Transit Line 1 project for the Light Rail Manila Consortium, where amongst others SyCip advised on the equity structure of the concessionaire and its contractual agreements with technical partners. 

The firm continues to advise banks and financial institutions in lending funds to power projects particularly in the renewable energy sector.

Angara Abello Concepcion Regala & Cruz (ACCRALAW)

Angara Abello Concepcion Regala & Cruz (ACCRALAW) strongest suits are capital markets and restructuring and insolvency but it picks up across the financial and corporate spectrum.

In banking and finance, work highlights last year include work for Japanese bank Sumitomo Mitsui Banking on the banking license application of its branch in the Philippines with the Bangko Sentral ng Pilipinas and registration with the Securities and Exchange Commission (SEC).

In project finance, the firm acted for ADC & HAS Management Services in a $390 million tender process for the Mactan Cebu International Airport advising on regulatory, labour, tax issues as well as shareholders’ agreements and consortium term sheets. Elsewhere the team acted for various public and private entities including the Philippines’ Government and the Department of Education on a public-private partnership (PPP) project for the construction of 9000 classrooms in three regions, and advised the Department of Public Works and Highways on the Cavite Laguna Expressway project. 

The firm’s close connection with the Philippine Stock Exchange (PSE) and the SEC is a selling point for the capital markets team. Francisco Ed Lim who was the former President of the PSE has recently returned to the firm as a partner, while the current chairman of the SEC, Teresita Herbosa was a former partner at the firm. The firm has acted on IPO, securitisation and fund projects for the likes of Bank of the Philippine Islands (BPI) and BDO Unibank.

In M&A, as part of the global merger of parts of GlaxoSmithKline and Novartis, ACCRALAW acted as local counsel to GlaxoSmithKline on local issues. 

Gatmaytan Yap Patacsil Gutierrez & Protacio

Gatmaytan Yap Patacsil GuTierrez & Protacio, formerly known as Caguioa & Gatmaytan (C&G Law), is a full-service law firm that specialises in advising clients in the energy, mining and manufacturing sector. Key partners on the team are Jaime Renato Gatmaytan, Norma Margarita Patacsil and Aris Gulapa. 

The firm has, in the past year, been active on PPP (public-private partnership) projects. Examples include work for Apo Agua Infrastructure, a consortium between Aboitiz Equity Ventures and JV Angeles Construction Corporation, on the $266 million financing of the construction and operation of a bulk water treatment facility in Davao City.

Elsewhere Gulapa acted as counsel in the joint venture between APO Production Unit and United Graphic Expression Corporation – the first joint venture between a recognised Government printer and a private printer. The team also acted for Pearson on its additional capital injection into Affordable Private Education Center, the joint venture of LiveIt Global Services Management Institute and Pearson Affordable Learning Fund.

Javier Santiago Torres & Gorriceta Law Offices

Javier Santiago Torres & Gorriceta is a full-service law firm established in 2006. Partner Mark Gorriceta oversees the firm’s capital markets and M&A practice. Last year, the firm advised on tech start-up Xurpas’s $35 million IPO as well as Xurpuas’ $740 million acquisition of Singaporean mobile games studio Altitude Games.

Puyat Jacinto & Santos

Finance and restructuring are the two strongest areas of practice for Puyat Jacinto & Santos Law (PJS Law).

In banking the firm has picked up licensing work from foreign banks following the change in legislation allowing foreign entities in the sector and has acted for a number of client on the acquisitions of non-performing loans (NPLs).

In project finance, the firm is experiencing steady growth in business and regularly acts for both the government and other parties in public-private partnerships (PPPs). In one example the firm assisted Steag State Power in the $40.2 million financing for its 232MW coal fired power plant project. The firm is also acting for a Philippine-based bioenergy company on a loan facility for the development of a biofuel distillery and carbon dioxide facility.

In the capital markets, the firm was engaged in a number of note and bond issuances last year. In one example it advised China Banking Corporation, the lead arranger for STI Education Services Group’s first $65 million issuance of flexible corporate notes and the $6.5 million fixed rate bond issued by West Negros University, a subsidiary of STI.

On the M&A front, the firm was involved in a lot of non-energy projects referred by its energy clients as they divest their businesses in other sectors. It has recently acted for Universal Robina Corporation (URC), one of the largest branded food product companies in the Philippines, on its joint venture with Japanese snack food giant Calbee as well as famous Japanese noodle company Nissin Foods Holding. 

Quiason Makalintal Barot Torres Ibarra & Sison

Quiason Makalintal Barot Torres Ibarra & Sison (QMBTI) has a strong capital market practice. Led by securities partner Enrique Quiason, the team regularly advises on global depositary receipt issues, debt and equity-linked issues as well as public offerings. “QMBTI was able to help us negotiate better terms in our agreements,” says a client.

Though partner Ruelito Soriano has a background in tax planning, he is very active in M&A and securities offerings. Last year, he was involved in several shares issuance through private placements including the issuance of preferred redeemable shares by First Philippine Holdings Corporation (FPH) and the issuance of common shares by First Gen Corporation to its parent company FPH.

One client says: “[Soriano] identifies the issues we should focus on and suggests the best option taking into account the company's interests”

On the M&A front, Soriano assisted Cosco Capital on the $76 million acquisition of Liquigaz Philippines, the second largest LPG supplier in the country.

Quisumbing Torres

Being affiliated with international law firm Baker & McKenzie, Quisumbing Torres can pick up a large number of referral matters from its network. The firm has a fairly well balanced practice across the different areas of financial and corporate.

The banking and finance team is headed by Felix Sy and the firm reports more work emerging in the finance and insurance sector, particularly following the relaxation of the laws around foreign involvement in these sectors.

The firm’s energy, mining and infrastructure group has seen an increase in activity not only in the energy sector but also in public-private partnership (PPP) work following the government’s initiative to improve local infrastructure.

Elizabeth Opena is head of the firm’s capital markets team which acts on equity and debt issues. 

The M&A practice is led by Pearl Liu. In a confidential mandate that involved a European solar energy company, the firm advised the client on its joint venture with a Philippine company in developing a 30MW power plant in the Philippines.

SyCip Salazar Hernandez & Gatmaitan

SyCip Salazar Hernandez Gatmaitan is a solid fixture in the Philippine legal landscape, and is ranked in the Top Tier across all the financial and corporate tables. 

In the finance area, highlights include work for a group of banks on a $870 million loan facility for the re-acquisition of 49% shares in Philippines Airlines by Lucio Tan Group.

In project finance, the team advised Standard Chartered Bank on the financing provided to a special purpose Philippine subsidiary of Dutch holding company, Atlantic Aurum Investments for a major tollway project which connects the North Luzon Expressway and the South Luzon Expressway. Elsewhere the firm represented PNB Capital Corporation and other financial institutions in a secured term loan facility of $167 million made available to Vertex Tollways Development for the NAIA Expressway PPP (public-private partnership) project. 

Mainly acting for foreign banks, funds, institutional investors and underwriters, SyCip has had a fruitful year in the capital markets. Simeon Ferrer and Mia Gentugaya advised ANZ Banking Group (Hong Kong) and Deutsche Bank in MCE Leisure (Philippines) Corporation’s issuance of $330 million in senior notes. The firm also acted for lead underwriters of Petron Corporation’s $224 million share issue.

In M&A, a high profile deal sees Ferrer involved in a high profile merger between Philippine’s two existing stock exchanges – the Philippines Stock Exchange and the Fixed Income Philippines Stock Exchange. Elsewhere deal highlights include the second investment of the PINAI fund in the Philippines through an acquisition of the operator of a primary fuel storage facility in one of the Philippines’ special economic zones, the Subic Bay Freeport Zone. The firm also acted for the investment arm of the Singapore Government – Government Investment Corporation, in relation to its $885 million investment in a 14.4% stake in Neptune Stroika Holdings. 

In the restructuring space Benedicto Panigbatan, Rocky Reyes, Amer Mambuay and Ricardo Ongkiko acted on the $22 million restructuring of Nissin-Universal Robina Corporation, and separately the $3 million restructuring of Trust International Paper Corporation (TIPCO). 

Zambrano & Gruba

Zambrano & Gruba is a mid-sized, full-service law firm representing and advising clients in general corporate & commercial matters, tax, banking, finance & capital markets, and foreign investments in the Philippines. In banking, the firm advised Asia United Bank Corporation where managing partner Lily Gruba led the team in reviewing various loan and collateral documents

The firm had an impressive year in M&A advising both domestic and international clients. Domestically, the firm advised VFC Land Resources on the acquisition of a majority stake in Philippine Bank of Communications, a listed Philippine commercial bank, Elsewhere, Antero Jose Caganda led the team advising loyal client Asia United Bank Corporation on the acquisition of a Singapore-based and licensed remittance company.