CONGLOMERATE Ayala Corp. said Friday it maintains a “constructive outlook” on the economy even as it keeps a critical eye on interest rates and inflation.
Ayala president and chief executive Cezar Consing said in an interview following the company’s annual stockholders meeting the company’s property, power, telecom and automotive businesses tend to perform better with lower interest rates.
“We have a constructive outlook for 2024. Lower inflation and lower interest rates will really help the country’s consumers. And the fact that ours is a consumption-driven economy will be key to our achieving the 6.2-percent GDP [gross domestic product] growth. If the country grows at this rate, our businesses should continue to show positive momentum,” Consing said.
He said the group would also rationalize its businesses that are not scalable while investing in new ventures like health, automotive and logistics to support the growth for core businesses.
“We are going to double down on winners in terms of capital and other resources to the extent that they need it,” Consing said.
“We are going to exit businesses where we see little competitive advantage or have limited ability to scale. Freed capital will be recycled,” he said.
Consing is bullish on AC Health which is steadily building a healthcare ecosystem consisting of hospitals, clinics and pharmacies.
The group is also excited about AC Mobility, the automotive arm of the conglomerate which aims to be the leading distributor of electric vehicles in the country by 2030.
The conglomerate, as part of its rationalization program last year, sold two subsidiaries of Integrated Manufacturing Inc. which resulted in write downs.
It also closed down Entrego, one the group’s logistics companies, and moved its profitable business lines to Air21. “Overtime, our whole portfolio will probably look a bit simpler with more concentrated bets,” Consing said.
Ayala earlier said it would complete its $1-billion divestment plan by the end of the year with the planned sale of its stake in Light Rail Manila Corp., operator of LRT1, and its remaining stake in utility firm Manila Water Co. Inc.
The group also allotted P284 billion for 2024 capital expenditures, up 14 percent from a year ago primarily to support the expansion of its property and power generation businesses.