JG Summit increases capex to P73 B

JG Summit Holdings Inc., the flagship of the Gokongwei Group, is allotting P73 billion for capital expenditures this year, slightly higher than the P71 billion it invested in 2022, as it expects a better 2023.

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JG Summit Holdings President and CEO Lance Gokongwei

“While the market is pricing in slower GDP (gross domestic product) expansion in 2023, relative to the growth in 2022, everyone agrees that consumption remains quite strong,” said JG Summit President and CEO Lance Gokongwei during the firm’s annual stockholders’ meeting.

He explained that this is on the back of unrestricted mobility, the 100 percent return to school, and an easing of inflation.

“This bodes well for the group as we are able to touch on about 80 percent of the average Filipino spending. We continue to see strong underlying demand in our food business. We also anticipate full year impact of recovery on our malls or hotels and the sustained growth in our other businesses,” Gokongwei said.

He added that its banking business should also benefit higher rates and higher net interest margin and China's reopening should be positive for both our tourism and air transport.

“Higher demand for tourism will accelerate the return of Cebu Pacific to full year profitability. We've already restored capacity to pre pandemic levels. And we see encouraging foreign bookings, stabilizing commodity prices, and foreign exchange should also help. All in all, I think 2023 will be a much better year,” noted Gokongwei.

He said this year’s capex will include “planes we are planning to acquire through sale and leaseback financing. This is higher than the comparable capex figure of P71 billion in 2022.”