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Metro Pacific Investments Corporation gave investors some good news in March by announcing a jump of more than 20 percent in annual profits for 2015. Such results were in line with the robust performance of the Philippine economy, which has been one of the fastest-growing markets in Asia in recent years. Economists say the country still has ample more room to grow, and a big part of that optimism is based on the potential of investments in the infrastructure sector.

That is good news for Metro Pacific Investments Corporation (MPIC), a Manila-based infrastructure development company. The company announced at the start of March that its core net income rose to Ps10.3 billion ($219.3 million) in 2015, around 22 percent higher than the previous year. This reflects the company’s years of investment in the infrastructure sector.

“Our strong earnings growth reflects our intense focus on operational efficiencies but at the cost of years of elevated capital expenditures,” says Jose Ma. K. Lim, MPIC’s President and CEO.

The Philippine electorate goes to the polls on May 9, picking a new president to replace Aquino, who is constitutionally limited to a single-term. But few observers expect the new president to back away from a commitment to infrastructure development in the country. Instead, there is some hope that the approval of new projects may even pick up speed.

This is going to be of clear benefit to the Philippine economy and should reward the long view Metro Pacific has taken on the sector.

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The road to riches
MPIC offers investors both diversification and concentration. The company profits from its investments in companies from toll roads to water and from rail to electricity. These ventures are all infrastructure-focused, and are expected to improve their performance as the Philippine economy continues to perform well.

MPIC’s profits last year benefitted from growing returns at some of its flagship investments: Maynilad Water Services, the biggest water utility in the country; Manila Electric Company, the country’s number one electricity company; and the Hospital Group, a portfolio of private hospitals that generated a 30 percent growth in income last year. Despite these impressive successes, it is in the company’s toll road division where executives anticipate the greatest growth in the near term.

“We expect massive growth to come from roads, given the number of projects we have there,” says Lim. “Every area is growing, but that is where we see the really impressive growth over the next three years.”

The main toll road assets are Metro Pacific Tollways Corporation and Manila North Tollways Corporation. These businesses are already offering major returns. Metro Pacific Tollways, for instance, posted core income 19 percent higher than the previous year. There are many more such projects in the pipeline.

MPIC is going to start construction soon of a Ps2.6 billion expansion of the North Luzon Expressway. It also has been picked to build the C5 Link Expressway, has been given operational control of the Subic-Clark-Tarlac Expressway, and has been picked to build major expressways in Cavite and Cebu, among other contracts.

MPIC’s unique position in the Philippine economy has made it a natural play for foreign investors, leading to a scramble among some foreign funds to get a piece of the company’s float. Stimulating such investments is a prediction from the International Monetary Fund that annual economic growth in the Philippines will exceed 6 percent. This is expected to continue boosting demand for infrastructure investments that should continue to support Metro Pacific’s strong performance.