Political support for Pagbilao projects

The political support for the two projects in the Philippines should, in my opinion, be considered to be overwhelmingly strong.

The market is misreading the risk profile of these projects being completed.

Consider :

1. The EO 30 for Projects of National Signifigance. This has been widely covered by local and international media and is easily found using google.

2. The recent resolution from the House of Representatives. See link.

http://www.congress.gov.ph/legisdocs/basic_17/HR01034.pdf

While the timing of fixing the access issues is frustrating, it is not unusual in emerging markets to have to fix problems like this when building a business.

I believe the business model is very close to being to complete. When it is complete, the market will revalue the business from a price below NTA to multiples of NTA. i.e - the market will change its valuation approach from thinking about value from an asset point of view, to thinking about it from a series of cashflows point of view.

After that, the story will change again, from being a new business story to a growth business story, with the focus being expansion and leveraging of the existing asset base by building a larger gas and generation network. This is a unique story.