The San Miguel group’s South Luzon Tollway Corporation has retained the highest PRS Aaa issue credit rating with a stable outlook from the Philippine Rating Services Corporation (PhilRatings) for its outstanding Fixed-rate bonds of P4.9 billion.

SLTC was incorporated primarily to engage in the rehabilitation, construction and expansion of the South Luzon Expressway (SLEX).

Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.

AStable Outlook, on the other hand, indicates that ratings are likely to be maintained or to remain unchanged in the next 12 months.

PhilRatings said issue rating for SLTC’s fixed-rate bonds is primarily supported by expectations that the continuous push of the government to strengthen infrastructure, improve connectivity between provinces, and decentralize growth amidst the pandemic, will support recovery of demand, going forward.

It also took into consideration the expansion and consistent enhancement of the Company’s expressway and collection systems and SLTC’s healthy liquidity, which is backed by ample cash flows from toll collections despite lower traffic volume.

SLTC continues to expand its franchise with the ongoing construction of Toll Road 4 (TR 4), which will extend the SLEX by 66.74 kms. TR 4 extends from Sto. Tomas, Batangas to Lucena City, Quezon Province, and will have nine interchanges added to the throughput.

The extension will shorten travel time from Sto. Tomas to Lucena City to about an hour, from the current four hours.

Due to the restrictions caused by the pandemic, the pace of work on TR 4 was significantly reduced. The new target date of completion is under review, and will depend on the improvement of the pandemic situation and right-of-way acquisition.

The continued improvement of interconnectivity between provinces will benefit SLTC going forward. The Department of Transportation (DOTr), through the Toll Regulatory Board (TRB), launched the Electronic Tollway Collection (ETC) System Interoperability Project in 2017, which aims to integrate the various toll collection systems of the different toll operators.

SLTC believes that the implementation of the cashless toll payments will result in a reduction in overall toll collection costs. This, in turn, will support company efforts to conserve cash.

Cash flow from operations remained healthy at P767.5 million in the first half of 2020, although lower by 51.2 percent due to lower income on account of the steep drop in traffic volume.

Since the gradual reopening of the economy, a recovery in the annual average daily traffic was observed and is expected to improve as community protocols continue to relax.(James A. Loyola)