I.

Point of View

The researcher took ING Barings (managerial consultant) point of view.

II.

Objectives

To be able to indentify factors (SWOT-driven) in which the company can

utilize to promote sustainable development;
To be able to know the effective utilization of these factors (SWOTdriven) through the help of strategic marketing;
And, to be able to help solve the companys problem through the
utilization of the concepts of Strategic Marketing.
III.

Problem of the Case

The main problem of the case evolved from the simple consideration of
the external factors such us the instability of the financial performance of the
economy especially during the late 1990s to the extent of considering the
company internal deliberations. The internal factors mainly happened to be
the payment of debts in the short-term. The cost initially outweighs the
benefits and to write off these costs only give problem to the developer.
IV.

Areas of Consideration

a. Company Background
Fort Bonifacio is the home of the Philippine Army in an underdeveloped
stretch of land in the area of Taguig in Metro Manila. In March 1992, the
Aquino administration signed a Republic Act mandating the conversion of
this military reservations into alternative productive uses. The proximity of
Fort Bonifacio to the business hub of Manila makes it an ideal development
site for a state-of-the-art business center. Since the countrys governing boy
has to do some other things in other priorities, the concept of privitization
takes place.
Bidding was held on January 6, 1995 where top corporations were
present. The final bidder who won in the bidding was the Metro Pacific
Corporation (MPC). They acquire the property for Php 39.2 billion pesos or at
about Php33,000 per square meter over their tough competitor, the Ayala
land who bid for the property for Php9,000. The latter has been known in the
industry as the developer of the Makati business configurations.

As the winning bidder, MPC was granted a 55 percent share of the Fort
Bonifacio Development Corporation (FBDC), the body tasked to develop the
former military base. The other 45 percent share remained as government
property under the Bases Conversion and Development Authority (BCDA).
After winning the bidding, intensive plans for the immediate
development has to be finalized. The aim of developing the property into
something productive made them to strategize and will view the property in
the future as the dream city or the city of the future through the injection of
the state-of-the-art facilities for the global business enterprise. Although MPC
has a lot of business in many other industries, they consider this property as
their crown jewel.
When making big businesses, of course, it entails a lot of money. Aside
from the mere acquisition of the property, the development itself dictates
that a large amount of investment is needed. Since MPC is a multinational
corporation, it created their subsidiary project facilitator, the Bonifacio Land
Corporation. This is a 13-company consortium headed by the mother
company, the MPC. However, not until the 1997 Asian financial crisis, the
company experienced major setbacks.
The full swing started the following year after the acquisition. The
creation of Big Delta or the Global Citys main hub for business enterprise
entails lots of money. The Global City has created the Big Delta and other
facilities like the NBC Tent, the Bonifactio Global Citys open field, the Fort,
and other residential and businesses. The facilties were massive to the
extent that it rose up the short-term debts of the developer. The only hope
for capital gain is the revenue the Global City can generate.
b. Persons and Companies Involved in the Case
The companies involved were Metro Pacific Corporation, Bonifacio Land
Corporation, First Pacific, Ayala Land Inc. and Philippine Stock Exchange. ING
Barings was hired for consultancy. Persons also mentioned were the
president and CEO Ricardo Pascua, PSE building committee chair Ismael Cruz
and Manuel V. Pangilinan, MPC chairman.

V.

SWOT Analysis

Strengths:
Strategic Location. Main hub for business enterprises and other related
business since it is known as the city within a city through its strategic
location.
Convenience. Considering the ambience and the readiness of the
property towards convenient workplace enables us to identify that the
itself is set to be convenient provided that it is near other major cities
and the seat of government.
Accessibility. Since the property is bounded by different major
urbanized cities, transportation by air, land and sea is not anymore a
quandary. This dictates future investments thereby increasing
revenues.
Attractiveness. Wrapping up all these, since businesses operate in busy
lifestyle, the property is very attractive because it paves way to
businesses in their market penetrating activities considering that the
property is highly volatile to market exposure.
Weaknesses:
Difficulty on obtaining financing to cover its current obligation
Debts structure was mainly short-term
Earnings from investors are not enough to cover all its financial
obligation
Lack of sufficient fund for the project
Opportunities:
Large-Scale Investments. The very big opportunity the property can
offer is the large market it will serve. This sums up all the abovementioned internal strengths.
Working towards Globalization. When the businesses found
competitive advantage in the marketplace, when they embrace
globalization, the property will be embracing it as well. This links to
global exposure.
Referrals. When the services of the property are exemplary and/or
excellent, invitation to bid for certain partition of the property will be
positively be identified.
Geometric Exponential Progression and Geographic Acquisition. This is
the concept of of internal growth and expansion. When a certain

property performs well, expansion is at reach to efficiently deliver the

services.
Threats:
Volatility on Security. When the property is volatile, threats such as
terrorism and other security related incidents are of suspicious
probability.
Geographic Disturbances. This pertains to uncontrollable phenomena
in the environmental aspects or nature of the property.
Geographic Competition. As stated above, internal competition brought
up the propertys weakness. In this case, geographic competition
trigger the propertys development.
Environmental Issues. Since diversified businesses are in the propertys
internal consideration, external weakness or the threat in simpliest
form is also attributable to the business environmental issues which is
covered by the propertys administration.

VI.

Alternative Courses of Action

Alternative 1.
On Sale This alternative dictates the company will sell some of their
shares in order to write off their debts in the short-term since the income in
developing the BGC will offer long term profit that cannot be used to pay
their current short term debts. The concept will be beneficial especially if the
company is protecting core businesses while disposing the inactive.

Alternative 2.
Bridge Loan bridge loan can cover the short term debts and cost of
operation that MPC is facing. Short term financing though carry a risk on
higher interest rates that the MPC cannot afford anymore.

Alternative 3.
Merger. Merging can be beneficial to MPC but not to Ayala Lands at
the moment since MPC incurred more short term loans and the Ayala Lands
wanted to own the area for concreting its hold in real estate business and
maybe, the latter will not offer merger but purchase on share.
VII.

Conclusion

After scrutinizing the above alternatives, the researcher will offer the first
alternative. The money that will be getting in selling some of the shares can
be utilize to pay the existing debts and can be used to develop what MPC has
already started.
VIII. Recommendation
MPC should handle better portfolio management to improve business
on remaining shares. The priority will be payment of the current short
term debts and development of what are already started since for sure,
it will incur profit even if its long term.