Uy says Duterte didn’t play a direct role in his businesses, but his advice proved effective. He was cleared of smuggling charges and within the five years to the top of 2018, he quadrupled in profits from his Phoenix Petroleum Philippines. Along the best way, he says, he gained the resolve that Duterte tried to instill in him.
“If you survive oil and transportation, it teaches you combat readiness,” said Uy, 46. “In the case of crude oil, to get a 1-peso margin, you’re looking at everything from storage to trucking, and lending and dealing with currency and oil price fluctuations are common.”
Before Duterte got here to power, the southern province of Davao was higher known for tropical fruits and the endangered monkey-eating eagle than for business powerhouses like Uy’s.
But over the past few years, Uy, who donated to Duterte’s presidential campaign, has spread far beyond the region, amassing assets which are devouring industries run by a few of the country’s richest and oldest business dynasties.
Smart is owned by PLDT, whose CEO Manuel Pangilinan has been repeatedly criticized by Duterte as an elite out of touch with reality. The carrier’s largest shareholders include JG Summit Holdings, a banking, aviation and retail conglomerate now run by Lance Gokongwei, son of founder John Gokongwei Jnr.
The other telecom operator, Globe, has Ayala as certainly one of its largest shareholders. Ayala is led by Chairman Jaime Augusto Zobel de Ayala II, who’s a frequent goal of Duterte.
The Philippines has been seriously defrauded by wealthy people
Duterte has also been a pointy critic of the present telecommunications duopoly.
“The Philippines has been seriously defrauded by wealthy Filipino people,” he said on January 23. “Like Ayala and Pangilinan, owners of Globe and Smart. They are all thieves, these sons of bitches,” he said, according to the official transcript of his speech.
An Ayala spokesman said the company did not want to comment on Duterte’s speech. A spokesman for PLDT, which also represents Pangilinan, said he would not comment on the situation. Duterte’s spokesman did not respond to requests for comment.
Uy also had no experience in the gambling resort industry, but he won the first such license offered after Duterte became president, obtaining permission to build a $300 million casino complex on a resort island in Cebu.
In owning the casino, Uy will compete with Enrique Razon, the third-generation heir to a ports and cargo empire who founded Bloomberry Resorts, developer of the Solaire Resort and Casino in the suburbs of Entertainment City in Manila. Razon, whose fortune is estimated at about $4.6 billion, is the country’s richest man after Villar, according to the Bloomberg Billionaires Index.
Uy’s gambling resort will also put him in competition with the family behind Belle Corporation, which owns a stake in the City of Dreams casino in Manila. Belle is part of a family-controlled empire built by the late Henry Sy. The Sy Group includes BDO Unibank, Uy’s largest creditor, and together with it runs a forwarding and logistics venture, the 2GO Group.
“You always have to pay attention to opportunities, small or big, whether they are related to what you do or not,” Uy said. “We look at industries where we can be in the top five, or where we have the resources to compete, or where there is room to better serve the customer.”
Uy built his group on the muse of Phoenix Petroleum, which he founded in 2002, 4 years after the country deregulated the oil industry. It is now the third gasoline retailer within the Philippines after taking market share from the local unit of Royal Dutch Shell and Petron, offering 24-hour service to business customers corresponding to Cebu Air, a part of the Gokongwei group.
Uy’s rise through the ranks of Philippine conglomerates was largely financed by loans. Total debt rose sharply from about 14 billion pesos ($275 million) to 111.5 billion pesos within the 4 years ended December 2018, based on the newest regulatory filing by its holding company Udenna Corporation.
“His friendship with Duterte opened up opportunities to start a new business, which he aggressively pursued,” said Rachelle Cruz, an analyst at AP Securities in Manila. “Uy’s main challenge now is to keep these businesses operational and turn Udenna into a holding company that will outlast Duterte.”
Uy says his connections to the president will not be the rationale for his success.
“I am not close to the president,” he said in an interview. – He will not be involved in any of our contracts. He only learns about it from what he reads within the newspapers.
Uy said his aggressive expansion under Duterte is partly on account of his confidence that the president has created a level playing field that enables an outsider like him to do business.
“I have always been confident in the Philippines, but it’s different when you know the leaders and you both come from the same place,” Uy said
This article appeared within the print edition of the South China Morning Post as: How Duterte taught a ‘soft’ tycoon to turn out to be stronger
