MANILA, Philippines - Metro Pacific Investments Corp. (MPIC), the infrastructure and tollways conglomerate chaired by tycoon Manuel Pangilinan, has raised its capital budget for its logistics business to P8 billion over the next two years from P5 billion.

The money would be used for both acquisitions and greenfield projects, said MPIC chief financial officer David Nicol.

Nicol said the company is looking at three “last mile” companies for possible acquisition as it expands its highly lucrative and less regulated logistics business.

A last mile company refers to a service provider that is able to bring goods to its final destination. This last leg of the supply chain is often the most tedious and less efficient and comprises 30 percent of the total cost to move goods.

Officials declined to name the target companies but earlier reports said MPIC was eyeing to acquire a majority stake in Air21 of the Lina Group of Companies.

Aside from acquisitions, the company would also embark on greenfield projects in the sector such as distribution centers or warehouse management, Nicol said.

Meanwhile, MPIC reported a 14 percent rise in consolidated core net income to P3.1 billion in the first quarter on the back of an expanded presence in the power industry.

The conglomerate’s businesses are in tollways, power, water, hospital, light rail and logistics.

In a briefing yesterday, officials attributed the rosy first quarter results to robust traffic growth in each of the roads held by Metro Pacific Tollways Corp., expanded power portfolio through increased investment in Beacon Electric Asset Holdings, and Global Business Power Corp.; and continuing growth in the hospital group.

In terms of contribution to MPIC’s net operating income, power distribution and generation accounted for P2.1 billion or 52 percent, while the tollroads business accounted for P900 million or 24 percent of the total.

The water distribution, production and sewerage treatment contributed P700 million or 18 percent while the hospital group contributed P182 million or four percent of the total. The rail, logistics and systems group contributed P54 million or two percent.

Jose Ma. Lim, MPIC president and CEO, said the company is reaping the fruits of its additional investments.

“Our earnings growth reflects our increased investment in the power sector last year together with strong volume growth for our tollroads and hospitals businesses,” he said.

MPIC chairman Manuel Pangilinan said the company would continue with its mission to build and operate well-run infrastructure at good value to the public.

“This includes providing first class medical care, offering safe and efficient road and rail transportation, delivering electricity to power homes and businesses, and piping clean, safe drinking water to the public,” Pangilinan said.

At the same time, Pangilinan noted that the company’s tariff adjustments for its tollways, have already reached P6 billion.

“While our businesses continue to drive efficiencies, it is apparent that the combination of sizeable capital expenditures and cost reduction programs in recent years must be matched with contracted tariffs for our shareholders to receive the returns they are due. We remain committed to our infrastructure expansion program but the continuing tariff uncertainty makes it impractical to provide reliable full year earnings guidance at this time,” he said.