Ayala expects to do ‘fine’ this year

MANILA, Philippines — Ayala Corp., the country’s oldest conglomerate, expects to do just fine this year amid a challenging business environment due to the ongoing Middle East crisis, with the group planning to cut capital spending to manage costs and maintain flexibility.

Ayala president and CEO Cezar Consing said the group is very constructive about 2026, notwithstanding geopolitics and the economy. 

“Our greatest challenge obviously remains macro. Poor macro makes it hard for all companies. But the reason we’re constructive is that we’ve got very good companies and they’re very well placed. There’s a lot of optionality in our business,” he said during the company’s annual stockholders’ meeting yesterday. 

By constructive, Consing said he means “challenging environment, but we’ll do fine.” 

“If we are agile and disciplined, and notwithstanding the current challenges, 2026 may yet surprise us on the upside,” he said.

Ayala is coming off a strong 2025, with earnings soaring to a record high on the back of robust contributions from its banking and property businesses alongside the collective turnaround of non-core business units.

Consing said Ayala’s first quarter performance has “actually felt quite good.” 

“We haven’t been able to price in the effects of the global oil prices yet. We haven’t seen that in our margins and we’ll see that over the next couple of months. But I suspect when things finally resolve themselves, we’ll do okay. So we remain very constructive in 2026,” he said.

Ayala chairman Jaime Augusto Zobel de Ayala, for his part, acknowledged a more challenging operating environment driven by global and domestic headwinds, noting that the impact from the oil supply shock has affected some of its businesses more than others. 

“Higher unit costs are an issue. We’re also seeing cost pressure on the foreign exchange side. Softening of demand varies per sector and no business has been immune,” he said. 

Zobel, however, said that while there are headwinds, the group is also seeing some bright spots. 

“For example, the oil crisis has highlighted the importance of energy diversification and renewable sources of energy in the mobility space. Higher pump prices have underscored the cost benefits of EVs (electric vehicles), which have seen increased demand,” he said. 

For Zobel, the rapidly evolving nature of the current situation calls for more agile decision-making. 

As such, he said the Ayala Group management committee, whose members include the CEOs of its different companies, convenes weekly to discuss recent developments and how they impact their respective businesses, as well as the support needed to carry out response initiatives. 

“At this stage, the group is prioritizing resiliency over growth, with greater focus on cash flow, earnings, quality and balance sheet strength. Our capital allocation discipline will be sharper, and we will be even more demanding of our operating units,” Zobel said.

In line with this, Consing said the group may likely reduce its originally planned capital expenditures budget allocation of up to P230 billion for 2026.

“Last year, we spent P180 billion in capex across the group. When we were entering this year, we said P220 billion to P230 billion. At that point, this was before the oil crisis, we’re really thinking of ramping up. Now we’re reviewing that number again, because we might have to calibrate that down,” Consing said. 

“I suspect the number will probably look more like last year’s number more or less. But that shows you last year’s number, P180 billion is still P180 billion. That’s still a big number,” he said.