Philippine National Construction Corporation (PNCC) has explored the possibility of voluntarily delisting from the Philippine Stock Exchange, according to a confidential source with direct knowledge of the discussions. The discussions have not gained traction due to concerns over whether the company's intrinsic value has been adequately established before minority shareholders are asked to exit, the source indicated. PNCC's 2024 audited financial statements reveal a company holding a 129,548-square-meter Pasay City property valued at P51.804 billion, continuing to receive tollway-related revenues, and entangled in legal and accounting disputes with the Commission on Audit that could determine the company's true worth.
PNCC Holds P51.8 Billion Pasay Property Generating P290 Million Annual Rental Income
Independent appraisers valued PNCC's property in the Financial Center Area of Pasay City at P51.804 billion in 2023. Together with other investment properties, PNCC carried approximately P54.5 billion of investment property at fair value in its 2024 financial statements. The company adopts the fair value model using independent appraisals every two years.
The property appreciation has been substantial. The same property was valued at roughly P6.6 billion in 2009, P9.7 billion in 2013, P32.4 billion in 2019, P35.7 billion in 2021, and P51.8 billion in 2023.
The property portfolio appraised at more than P54 billion generated only about P290 million in rental income during 2024. The Commission on Audit highlighted this concern, estimating foregone income of more than P714 million because large portions of the Financial Center Area remain underutilized. Only about three hectares are covered by long-term lease arrangements, leaving nearly ten hectares either idle or producing returns below their potential.
PNCC recognizes rights over the Financial Center Area and records it as investment property, yet title remains registered in the name of the Republic of the Philippines. Government legal opinions cited in the company's disclosures identify restrictions affecting how portions of the property may be sold, transferred, or developed.
Company Continues Receiving Tollway Revenue Shares Despite No Longer Operating Expressways
Contrary to widespread belief that PNCC completely exited the tollway business, the financial statements show that the company continues to receive revenue shares and dividends arising from legacy tollway arrangements. The recurring cash flows are modest compared with the value of the underlying infrastructure, but they demonstrate that PNCC's economic relationship with the country's toll-road network did not disappear when operating responsibilities shifted to private concessionaires.
A confidential source referred to the situation as PNCC's "mega franchise," likely referencing the company's continuing contractual and economic rights arising from its historical franchise.
COA Issues Adverse Opinion on 2024 Financial Statements Over Liability Disputes
PNCC's 2024 financial statements received an adverse opinion from the Commission on Audit. Among the principal issues is the accounting treatment of long-standing obligations involving the Privatization and Management Office. PNCC disputes the government's position, while COA maintains that liabilities are materially understated because accumulated interests and other charges have not been fully recognized.
Depending on how those disputes are ultimately resolved, the amounts involved could reach tens of billions of pesos. The disagreement goes directly to the question of how much of PNCC's underlying asset value belongs to shareholders and how much may be absorbed by government claims.
FAQ
What property does PNCC own in Pasay City?
PNCC owns a 129,548-square-meter property in the Financial Center Area of Pasay City, valued at P51.804 billion by independent appraisers in 2023. The property is recorded as investment property in the company's financial statements, though title remains registered in the name of the Republic of the Philippines.
Why did the Commission on Audit issue an adverse opinion on PNCC's 2024 financial statements?
The Commission on Audit issued an adverse opinion due to disputes over the accounting treatment of long-standing obligations involving the Privatization and Management Office. COA maintains that liabilities are materially understated because accumulated interests and other charges have not been fully recognized, while PNCC disputes the government's position.
