Ayala Corporation to trim capital spending amid Middle East crisis

Diversified conglomerate Ayala Corporation is taking a conservative approach in its capital spending plan for this year amid economic uncertainty resulting from inflationary pressures brought by the Middle East-war-triggered global oil price shocks.

“We are presently emphasizing resiliency over growth,” Ayala Corp. president and CEO Cezar Consing said, in his report during the company’s annual stockholders meeting on Friday, citing “current market uncertainties” such as a combination of inflation and negative growth since “the war in Iran has altered, at least for the near and medium term, the outlook for our economy.”

“Our capital allocation discipline, traditionally quite strong, will become even sharper,” Consing said.

The Ayala Corp. chief added that the group is putting greater emphasis on cash flow, earnings, and balance sheet growth.

For 2026, Ayala Corporation budgeted a capital expenditure of P220 billion to P230 billion, higher than last year’s capex of P180 billion.

Speaking to reporters at a press briefing following the stockholders meeting, the Ayala Corp. CEO said the capex figure “was before the oil crisis.”

“Now, we’re reviewing that number again because we might have to calibrate that down. I suspect the number would be more like last year’s number more or less,” Consing said.

Nonetheless, the Ayala Corp. chief said the company will return its focus on growth when the global energy situation reverts to normal.

The company is also targeting a core net income of P65 billion for 2026.

Asked if the group will also trim its core net income target, Consing said, “I think the next two or three months will give us more information as what’s gonna happen in the market.”

“It quite makes sense if we revise our targets but we will do that later. In the meantime we will stick to the original target. It’s not to say we won’t make adjustments, if the situation looks like adjustments are called for, we make them,” Consing said.

In his address during the stockholders meeting, Ayala Corp. chairman Jaime Augusto Zobel de Ayala expressed confidence in the Philippine economy’s long-term prospects.

“Ayala has prospered for almost 200 years because it has always sought to be relevant to our community and stakeholders and be a partner in nation-building,” Zobel de Ayala said.— AOL, GMA News