Dealmaker Who Bet Big on Duterte Is Building a Casino-to-Oil Empire

Updated on
  • Dennis Uy gains Philippines spotlight after spate of deals
  • Davao native sees opportunity in president’s economic agenda

Rodrigo Duterte’s ascent to power in the Philippines has motivated a little-known businessman from the president’s province to become one of the country’s most energetic dealmakers.

Dennis Uy. Source: GreenBulb PR

Dennis Uy. Source: GreenBulb PR

Dennis Uy, an oil trader from Davao City who counts Duterte as a family friend, has rapidly expanded into industries from shipping to casinos since last year’s election. Once on the fringes of the Philippine business elite, Uy is now co-investing with the nation’s richest family and is often seen socializing with billionaires. He says the spurt of activity reflects his confidence that Duterte will boost economic growth across the country.

“We’re aggressive in expanding our businesses because we believe in the president’s economic agenda,” Uy said in an interview in Cebu on the sidelines of the Association of Southeast Asian Nations finance ministers meeting in April. “When else is a better time to do that but now? We just have to open our eyes to the opportunities.”

Duterte is embarking on an up to 9-trillion-peso ($180 billion) infrastructure plan during his six-year term to bring opportunities closer to poorer provinces like his own. If the president realizes his goal, Uy, 43, is well-placed to reap the dividends. 

Deal Spree

Since the election a year ago, Uy has bought a stake in logistics company 2GO Group Inc., where he is now president, and consolidated his shipping business into Chelsea Logistics Corp., which will go public as early as next month. His Udenna Corp. announced on May 4 that it will build a $300 million casino in Mactan, Cebu, after being awarded the first license for such a resort under Duterte’s administration. He’s also in talks for opportunities in downstream oil and potential acquisitions in the maritime, logistics and other businesses.

Uy, who was a major donor to the president’s campaign, said he isn’t getting any special favors from his long-time family friend. He noted that he applied for the casino license before Duterte’s term, and won approval due to his own track record. The Philippine casino regulator also said no favoritism was involved, explaining that Udenna was more aggressive in complying with its requirements.

“He’s at the right place at the right time,” said Gonzalo Bongolan, vice president at investment firm Philippine Commercial Capital Inc. “It’s not fair to say these opportunities are there because he and the president are from the same province. He’s been able to successfully grow his oil business, even before Duterte became president.”

Udenna this week raised 4 billion pesos with the sale of a 25 percent stake in another Uy company, Phoenix Petroleum Philippines Inc., to help fund its casino project. Shares in Phoenix Petroleum and 2GO, which have market caps of less than $1 billion, have taken off this year. 2GO is up 158 percent while Phoenix has jumped 81 percent, outpacing a 15 percent advance for the Philippines benchmark index.

Shares of Phoenix Petroleum climbed 2.2 percent at the close in Manila Friday, while 2GO rose as much as 3.8 percent before ending unchanged.

After completing a business course at De La Salle University in Manila in 1993, Uy spent a decade helping his family in ventures including trading copra -- dried coconut meat used to extract oil -- and prawn farming in Davao. Uy said he would jump into any business that looked promising. A barbecue restaurant in Davao was one of his early projects, eventually growing to six outlets.

Gas Stations

Oil retailing is where he made his name. Uy started Phoenix in 2005 after operating a 6-million-barrel oil depot in Davao. His initial five gasoline stations grew to 30 by the time he listed in 2007. Phoenix now has more than 500 stations, accounting for 5.7 percent of the market last year, compared with Chevron Corp.’s 6.8 percent. Uy is hoping to leap from fifth place into third this year, dislodging Chevron, and an oil refinery may be in the cards eventually.

“We’re considering, we’re studying” if it makes sense for Phoenix to build a refinery that will allow it to offer “more competitive products and pricing,” he said. Uy retained control of Phoenix after selling the 25 percent stake to ES Consultancy Group Inc.

A year after opening Phoenix, Uy found himself needing a vessel to distribute oil. That was the genesis of Chelsea Logistics and his entry into the shipping business. Uy said he started buying into 2GO two years ago, building his stake in its parent company to 31 percent last year, betting that logistics would become a big business opportunity in the Philippines.

When Uy found himself short of funds for 2GO, he partnered with the family of billionaire Henry Sy, whose BDO Unibank Inc. took a chance on him when no one else would as he was starting Phoenix, he said.

Bolstered Confidence

“We saw that he was promising even then, and doing business with him was easy and straightforward,” said Teresita Sy-Coson, vice chairman at SM Investments Corp., the Sy family’s holding company.

“He’s been very active this time,” said Sy-Coson, who Uy fondly calls his “ate,” or big sister. “We don’t talk about politics but since he’s from Mindanao like the president, maybe that bolstered his confidence and he probably feels that now the timing is right.”

Sy-owned BDO Bank has seen the plans for the casino resort and is keen to finance up to 12 billion pesos of the project, said Eduardo Francisco, president at unit BDO Capital & Investment Corp.

Uy is often seen attending government-sponsored conferences for investors, hobnobbing with Manila-based billionaires and meeting with businessmen in hotel lobbies and restaurants. While Uy declined to say how often he sees or speaks with the president, he was part of Duterte’s large private-sector delegation to Russia this week.

“It’s actually more difficult when you know the president because there’s pressure to lead by example, to do good.” Uy said. Asked about his improved fortunes under Duterte, the tycoon said life, using his favorite expression, is determined by destiny.

— With assistance by Ian C Sayson

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