The two groups have the biggest loan exposure to ABS-CBN through their banking units – Aboitiz’s Union Bank of the Philippines (UBP) and Ayala’s Bank of the Philippine Islands (BPI) – and have the most to lose if the Lopezes falls into cash problems if ABSCBN’s shutdown dram drags on for months or until the President Rodrigo Duterte steps down from office.
UBP has extended P11.4 in loans to ABS-CBN as of November 2019 (its latest available financial record) which is equivalent to 2.9 percent of its total loans and 11.6% of total equity.
BPI is not far behind in terms of exposure with P10.1 billion in loans to ABS-CBN or 0.7 percent of its total loans and 3.9 percent of its capital base.
But since Duterte has been vocal in his blocking the renewal of ABS-CBN’s franchise since he took office 2016, market watchers believe ABS-CBN’s creditors have already braced themselves for this scenario where its free TV and radio (which account for 50 percent of revenues) have been suddenly yanked off the air through a cease and desist order issued by the National Telecommunications Commission on May 5, a a day after its franchise expired.
The TV giant has enough cash and liquid assets to pay off its loans maturing up to 2025.
Other financial institutions with loans to ABS-CBN are BDO, Rizal Commercial Banking Corp., Philam Life,and Security Bank.