RLC stays on course amid oil shock risks

Robinsons Land Corporation (RLC), the real estate arm of the Gokongwei family, is staying the course on its growth plans while closely monitoring geopolitical developments that could further affect the local real estate and construction sectors.

Speaking at a press conference following RLC’s annual stockholders’ meeting at Crowne Plaza Manila Galleria, RLC President and CEO Mybelle Aragon-GoBio said the company is closely watching developments related to the Middle East conflict, particularly their impact on construction materials and labor inputs.

“[W]e always try to keep our ears to the ground and to see how the market evolves,” she said.

“[A]lso, we took it as an opportunity as well to take a look at our projects— which to accelerate, which to possibly halt — but then came to the conclusion that we are pushing ahead with all of our projects as committed.”

The remarks came after the property developer reported last Monday a 9-percent increase in first-quarter net income to P4.40 billion, driven by steady income from malls, offices, hotels, and residential projects that helped cushion the impact of broader economic uncertainty stemming from the global energy shock.

Construction input costs have risen since the conflict’s escalation, with Philippine Statistics Authority data showing National Capital Region wholesale construction prices increasing by 1.9 percent in April, up 0.8 percent from March. Common inputs such as cement, steel, and asphalt remain heavily dependent on diesel, which climbed into the triple-digit-per-liter range in April as geopolitical tensions pushed global oil prices higher.

Colliers Philippines Head of Research Joey Bondoc previously noted the strong correlation between construction material costs and oil prices, with periods of elevated crude prices—such as the current energy crisis—typically driving up construction expenses and forcing smaller contractors to rely more heavily on rentals.

Aragon-GoBio said RLC is closely monitoring both current and potential risks posed by the conflict, noting that the company maintains “hefty” cash reserves and disciplined budgeting practices.

“We've been very disciplined in budgeting for contingencies. And this has been serving us very well. And as we monitored the project costs and anticipated increases in those, we are still in a position where our contingencies are able to cover sufficiently and still give us some buffers,” she said.

Parent company JG Summit Holdings disclosed on Wednesday that RLC would roll out austerity measures, which Aragon-GoBio said would include cutting non-essential expenditures, tightening inventory management, and optimizing workforce productivity.

She added that the company’s key growth drivers moving forward would continue to be its malls, offices, hotels, and logistics businesses, while remaining committed to Vision 5-25-50, RLC’s five-year roadmap targeting P25 billion in net income by its 50th year.

“[W]e know we have to widen our recurring income base because that provides us the stability and reliability through situations like this. So, a lot of our funds were directed toward our investment projects,” she said.

“But for this particular geopolitical and global crisis, we continuously monitor the movement of construction inputs and the costs of those and evaluate those against our pipeline projects. I think it's really just being very disciplined about cost management.”