• Reading time:9 mins read

Closet billionaires . . . or corporate dummies?

Part 1: The Indonesian billionaires behind the ‘MVP Group’

Part 2: Indonesian tycoon skirts Charter limits through corporate layers

Part 4: The smartest investors … or the most valuable puppets?

The Salim conglomerate in the Philippines, aka the “MVP” group, has five executives who are the Indonesian billionaire Anthoni Salim’s Filipino partners, their identities heretofore kept hidden from the public eye.

With the enormous income and share prices of the conglomerate’s subsidiaries, mainly Philippine Long Distance Telephone Co. (PLDT), the mammoth holding firm, Metro Pacific Investments Corp. and Meralco, these five executives could be the country’s closet billionaires.

Or they could be merely corporate dummies who help portray the fiction that the conglomerate is a Filipino entity, which, therefore, can go into public utility firms.

You decide what they are.

Except for the high-profile Manuel V. Pangilinan, 68 — who has been portrayed as controlling, or even owning the conglomerate that is known by his name’s initials – you mostly probably haven’t heard of them. Until now.

Surprisingly, these four executives are just third-tier executives in the hierarchy of the Salim empire in the country:

Alfredo Panlilio, 52, senior vice president for Customer Retail Services and Corporate Communications of Manila Electric Co.
Victorico Vargas, 62, president of Maynilad Water Services;
Rene Bañez, 59, senior vice president, Supply Chain, Asset Protection and Management Group of PLDT;
Lourdes Rausa-Chan, 61, PLDT senior vice president for Corporate Affairs and Legal Services, chief governance officer, and corporate secretary.

Indonesian tycoon Salim’s Filipino partners, and the market value of their indirectly held shares in PLDT and Metro Pacific Investments Corp. – if they are really the owners of the key firms, that is.
Indonesian tycoon Salim’s Filipino partners, and the market value of their indirectly held shares in PLDT and Metro Pacific Investments Corp. – if they are really the owners of the key firms, that is.

Together with Pangilinan, they are the stockholders of a firm named Pacific Enterprise Management Corp. (PEMH). Their respective percentage shares in the firm are shown in Table 1.

This firm is the sole Filipino partner of Salim, through subsidiaries of First Pacific Co. Ltd., which he controls, in a shell company named Pilipinas Pacific Enterprise Holdings. This company is at the apex of corporate layers that represent the investors in the Indonesian billionaire’s Philippine empire.

The Pangilinan-Panlilio-Vargas Group?

The company chairman is Pangilinan, who also chairs and is the sole representative of all five intermediate firms that are the corporate layers for Salim’s control of PLDT and MPIC. He is the biggest stockholder of the firm with a 29 percent stake.

Surprisingly, though – considering that Pangilinan has been the conglomerate’s public face, and that many thought he was its controlling stockholder so that it was called the “MVP Group” – the amount of shares of the next biggest stockholders, Panlilio and Vargas, aren’t too far from his: 24 percent each. (Bañez and Rausa-Chan have 11 percent each.)

Also unexpected is that the PEMH president is a relatively young Panlilio, the youngest of the group, but who is, in effect, Pangilinan’s right-hand man. Vargas is vice president, while Bañez is treasurer. So if the group just had to have a Filipino name, instead of “Salim Group,” perhaps more appropriate would have been “PPV Group,” after the initials of the three biggest individual stockholders of the conglomerate, next to Salim.

However, Rausa-Chan isn’t the shell firm’s corporate secretary, the post she has occupied in Salim’s flagship PLDT since the Indonesian tycoon acquired it in 1998. That post is held by lawyer Alex Erlito Fider, a partner of the Picazo Buyco Tan Fider & Santos law firm. Fider is also corporate secretary of five other firms belonging to the Salim conglomerate.


It is PEMH that allows Salim to skirt the constitutional ban on foreign controlled public-utility enterprises.

That is undertaken by having this shell company own 60-percent of Pilipinas Pacific Enterprise Holdings (PPEH), with the remaining 40 percent held by a subsidiary of First Pacific Enterprise Holdings B.V., a Netherlands-based subsidiary of Salim’s Hong Kong-based First Pacific Co., Ltd.

Since it is 60 percent owned by PEMH, whose stockholders are the five Filipinos, PPEH is classified as a “Philippine corporation.”

The chain of corporate layers below PPEH – Enterprise Investment Holdings (EIH), Metro Pacific Holdings, Inc., Metro Pacific Resources, Inc., and Metro Pacific Asset Holdings – are all classified as Philippine firms, which, therefore, can own public utility firms. (See accompanying chart.)

The reason why Salim had to have several corporate layers to invest in PLDT and MPIC, even if PPEH is already masked as a Philippine corporation and, therefore, technically allowed to control public utilities, is that each layer further dilutes the Filipino stockholders’ shares, and inversely increases his holding for near-absolute control.

Thus, while PPEH is 60 percent controlled by the five executives, its share is reduced to 36 percent in EIH, 21.6 percent in Metro Pacific Holdings (the corporate investor in Metro Pacific), 13 percent in Metro Pacific Resources (one of the two investors in PLDT), and 8 percent in Metro Pacific Asset Holdings (the second investor in PLDT through Philippine Telecommunications Investment Corp.)

On the other hand, Salim’s holdings inversely grow from 78 percent, 87 percent, to 92 percent, respectively, in the three firms for his uncontested control of these firms, even as they are classified as “Philippine corporations,” thanks to PEMH’s role in the layers.

The all-Filipino firm PEMH’s economic interest in PLDT is reduced to 2.2 percent, and that in MPIC to 12.1 percent. That of the Indonesian tycoon is 23.4 percent in PLDT and 43.7 percent in MPIC – if the Filipinos in PEMH actually own the shares registered to them, that is.

Salim, with these shares, has an uncontested control of the two firms, since the remaining shares are dispersed among thousands of investors in the stock market, though none of them owns more than 1 percent.

And our stupid lawmakers, and even such purportedly professional organization of economists such as the Foundation for Economic Freedom, are pushing for the lifting of the country’s purported restrictions on foreign investments! What naiveté.

Biggest individual stockholders

The stockholders of PEMH make them the biggest individual stockholders of both PLDT and Metro Pacific, because of their indirect holdings, as shown in Table 1.


Source: The firms’ reports to US and Philippine SECs. (Percentages rounded off)
Source: The firms’ reports to US and Philippine SECs. (Percentages rounded off)

Their shares are much larger, for instance, than the second biggest individual stockholder (after Pangilinan) in PLDT’s reports, Albert and Gretchen del Rosario, who together have only 0.1 percent, according to the PLDT’s figures submitted to the US and Philippine SECs.

These percentage ownership figures certainly aren’t just of academic interest.

The billions of pesos of profits from PLDT and MPIC (especially from its very profitable monopoly Meralco) are distributed to the ultimate owners, based on their direct and indirectly owned shares, while the shares themselves are worth billions in the stock market.

Based on data reported by First Pacific in its annual reports from 2000-2014, that its share of profits from PLDT totaled $2.2 billion, and from MMPIC, $378 million, the current stock market prices of PLDT and MPIC, and indirect shares of the five Filipino executives, I computed their income and market of value of shares they hold as shown in Table 2.


(Percentages rounded off)
(Percentages rounded off)

The figures are gargantuan, making them the country’s closet billionaires – if they are really the stockholders, that is.

I doubt very much, though, if they really received these shares of profits, or else they would have appeared since 2000 in the Bureau of Internal Revenue’s top taxpayers’ list. I’m also astonished why they would still be working eight to 10 hours at Salim’s conglomerate, when they could just rely on their share of even just PLDT and Meralco’s profits.

On Wednesday I will discuss who on earth are Panlilio, Vargas, Bañez, and Chan to Salim that they became his partners. I will also discuss the obvious question: Are they really billionaires with their indirect holdings in one of the country’s largest conglomerates, or are they just dummies, their purported shares in reality held by Salim?


I had sent emails, as far back as several weeks ago, to all the Salim group officials mentioned in this article, requesting their comment on the points raised in this piece. I wasn’t even given the courtesy of any form of reply. I had also informed certain people close to Pangilinan and Panlilio that I had sent them such emails.

I am grateful to my colleague, columnist Emeterio Perez, for sharing with me crucial information for this article.

Part 1: The Indonesian billionaires behind the ‘MVP Group’

Part 2:Indonesian tycoon skirts Charter limits through corporate layers

Part 4: The smartest investors … or the most valuable puppets?