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Dennis Uy and Udenna


Duterte’s Lesson Taught Philippine Tycoon to Toughen Up
By Ian C Sayson
February 2, 2020, 1:00 PM PST Updated on February 3, 2020, 2:00 AM PST


Philippine tycoon Dennis Uy has built an empire spanning oil, shipping, casinos and telecommunications, but eight years ago his oil-trading business was in trouble over government allegations of fuel smuggling.

Uy went to see the local mayor, a family friend from childhood, for advice. The mayor was Rodrigo Duterte, the country’s current president.

“He said my image is soft, so I should practice before a mirror saying, “You son of a b****,’ 100 times,” Uy said in an interview in Manila. “He doesn’t like when a person is bullied.”

Uy says Duterte hasn’t played a direct role in his businesses, but the advice worked. He was cleared of the smuggling charges and went on to quadruple profit at his Phoenix Petroleum Philippines Inc. in the five years through the end of 2018. Along the way, he says, he gained the toughness Duterte had been trying to instill in him.

“If you survived petroleum and shipping, it trains you to be battle ready,” said Uy, 46. “In petroleum, to get your 1 peso margin, you watch everything from storage to trucking, and it’s common to give credit and deal with currency and oil price fluctuations.”

Before Duterte’s rise, the southern province of Davao was better known for its tropical fruit and an endangered species of monkey-eating eagle than for business powerhouses like Uy’s.

But in the past few years, Uy, who donated to Duterte’s presidential campaign, has spread far beyond the region, assembling assets that are eating into industries ruled by some of the country’s richest and oldest business dynasties.

In 2018, Uy’s teamed up with China Telecommunications Corp., to win a telecommunications license to challenge the duopoly of Smart Communications Inc.and Globe Telecom Inc. Uy had no previous experience as a carrier, but his company, now called Dito Telecommunity Corp., emerged as the sole bidder. Duterte has repeatedly called for greater competition in the industry, which has some of the highest mobile rates and slowest service in Southeast Asia.

After Duterte encouraged the Chinese wireless giant to join the competition, Norway’s Telenor ASA and Austria’s Mobiltel AG, which had bought documents to participate, didn’t bid. Streamtech Systems Technologies Inc., led by the Philippine’s richest person Manuel Villar, withdrew from the race.

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Cebu Gamble

Uy also lacked experience in the gambling resort business, but won the first such license offered after Duterte became president, gaining permission to build a $300 million casino complex on a resort island in Cebu.

With a casino, Uy will be in competition with Enrique Razon, a third-generation heir of a ports and cargo empire who founded Bloomberry Resorts Corp., developer of the Solaire Resort and Casino in Manila’s Entertainment City suburb. Razon, with a net worth of about $4.6 billion, is the country’s richest person after Villar, according to the Bloomberg Billionaire’s Index.

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Oil, Debt

Uy built his group on the foundation of Phoenix Petroleum, which he started in 2002, four years after the nation deregulated its oil industry. It is now the no. 3 Philippine gasoline retailer after taking market share from Royal Dutch Shell Plc’s local unit and Petron by offering round-the-clock service to business clients such as Cebu Air Inc., part of the Gokongwei group.

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Uy’s surge into the ranks of Philippine conglomerates was largely financed by borrowing. Total debt has mushroomed from about 14 billion pesos ($275 million) to 111.5 billion pesos in the four years ended December 2018, based on the most recent regulatory filing from his Udenna Corp. holding company.

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