Phoenix Petroleum, owned by businessman Dennis Uy, owes 11 banks more than P30 billion in loans which he needs to pay in the first six months of 2020, a local website has reported.
Because of this, Bayan Muna chairman Neri Colmenares reiterated Thursday his warning that the reported ballooning debt and the deteriorating debt ratio of Uy and his companies “is a serious cause for concern, especially since government banks and financial institutions have stakes in his fortune.”
Uy, who hails from Davao City, has close ties with President Rodrigo Duterte, who was mayor of the southern metropolis for over two decades before ascending to Malacañang in 2016.
In a report by Bilyonaryo.com.ph, it said the total P30.167 billion in loans by Phoenix is 40 percent higher than the P21.479 billion in short-term loans the company had in 2019.
Before the year ends, Phoenix still has a P20-billion loan to pay, the report added. Owing to this, P50 billion out of the P64 billion in loans by the company must be paid this year.
“A third of Phoenix’s short-term loans are accounted for by Multinational Investment Bancorporation, the country’s oldest investment house, with P11.47 billion, or nearly triple its level of P4.304 billion in 2019. MIB’s loans have an interest of 4.25 percent to 6.75 percent,” the Bilyonaryo report added.
Two government banks—the Development Bank of the Philippines and the Land Bank of the Philippines—each lent P2 billion in short-term to Phoenix, Colmenares said.
It was learned that LandBank, which lent P5.8 billion to Phoenix, charged up to 6.5 percent interest for the short-term loan, while DBP imposed a 5.3 percent interest.
The other eight short-term lenders to Phoenix include BDO Unibank – P2 billion (total P9.488 billion); Maybank Philippines – P1.2 billion; Asia United Bank – P1 billion; Rizal Commercial Banking Corp. – P1 billion; Union Bank of the Philippines – P1 billion; Robinsons Bank Corp. – P1 billion; United Coconut Planters Bank – P712 million; at CTBC Bank – P443 million.
Phoenix, which owns more than 700 retail stations in the country, registered a P1.49 billion loss in 2019, a big turnaround to the P2.77 billion profit the company earned in 2018.
Colmenares said this dovetailed with a report that BDO has given Uy up to June 30 this year to improve the debt equity ratio of Phoenix Petroleum, “which shows that issues about his highly leveraged expansion are not entirely baseless.”
The Social Security System was previously reported to have bought at least 9.68% in shares in Phoenix when it bought 7.5 million primary shares of the oil company, he added.
The impact of Phoenix’s debt ratio could also impact on the government-run Philguarantee Corporation, which reportedly has guaranteed at least P700 million of Uy's loans, the former lawmaker added.
“In sum, the future of Mr. Uy could impact on government institutions and public funds, especially since President Rodrigo Duterte continues to harp on the lack of funds to sustain his COVID-19 response,” he said.
