EXCLUSIVE: Debt, discipline, and daring: Inside the Lopez Group’s high-risk bets

First of two parts

On paper, the Lopezes should have played it safe after Martial Law: they had already learned that a hostile president can erase an empire with a stroke of a pen. Yet now, nearly 4 decades after they recovered ABS-CBN Corporation and power giant Manila Electric Company (Meralco) during the Cory Aquino administration, the clan is again at war with itself, this time, over a proposed P2-billion cash infusion into ABS-CBN, pushed by Eugenio “Gabby” Lopez III and opposed by his cousin, Federico “Piki” Lopez.

The fight is playing out in court and at Lopez Inc., the private holding company of the group. On one side are Gabby (Eugenio Lopez III) and cousins who argue that family capital must be used to shore up the network their fathers rebuilt after the late dictator Marcos, even if that means subsidizing a politically battered and financially weakened broadcaster. On the other is Piki (Federico Lopez), who now sits atop the family’s power and renewables empire and insists that any fresh money must come with strict terms and clear safeguards, not what he derides as a “bailout” for a chosen few. 

This is the first of a two-part series that zooms out from that cousins’ war to look at the Lopez story in wide shot. It draws on my many years as a business journalist who has watched, covered, and written about this very colorful family for decades — from the corporate rehabilitation of Bayan Telecommunications (Bayantel), Maynilad Water Services and SkyCable, to the Meralco wars and, now, to the bitter fight over what remains of ABS-CBN. 

(Editor’s note: The ABS-Board of Directors, namely Martin Lopez, Carlo Katigbak, Rafael Lopez, plus independent directors Honorio Poblador IV, Emmanuel De Dios, and Randolf David, issued a statement on March 28, Saturday, on news reports about the Lopez family dispute. They said ABS-CBN is not a party to the reported legal dispute among the cousins, and denied allegations of “unresolved audit findings.”)

Before diving into Bayantel and balance sheets, it helps to remember who sat where across generations.

In the Lopez empire’s post-EDSA rehabilitation, Eugenio “Geny” Lopez Jr. was the builder and public face of ABS-CBN and the telecom push. Inside the Lopez group, he was simply “Kapitan,” the boss whose presence in the newsroom and the corridors defined what the network stood for. His younger brother Oscar M. Lopez chaired Benpres Holdings Corporation (the old holding company now known as Lopez Holdings Corporation) and First Philippine Holdings Corporation (FPH), and would later become the family’s de facto crisis manager. Manuel “Manolo” Lopez, the youngest, became the steward of Meralco and the old “crown jewels” of distribution.

Their children are the protagonists today.

Gabby is a son of Geny whose line is intricately linked with ABS-CBN and the family’s media influence. Piki is a son of Oscar, whose line is now anchored in FPH and First Gen Corporation, with their portfolio of gas plants, geothermal fields, and industrial parks.

Geny’s era set up the bold expansions. Oscar’s era was about cleaning up the entrepreneurial adventures that went wrong. Manolo presided over the painful sacrifice of Meralco when cash and political pressure left the family cornered.

Today, the third generation is fighting over who should pay to rescue the latest bet-gone-wrong — i.e. ABS-CBN in the Duterte aftermath — and under whose rules. 

This first piece focuses on the business side of that story: how the group handled bets that went wrong in Bayantel, in First Gen, and now in ABS-CBN, and what “discipline” really looked like when the bills came due. The second will follow the presidents and show how politics keeps deciding which asset — and which branch — pays the price. 

The Benpres decade 

In the late 1980s and early 1990s, Benpres Holdings Corporation was the Lopez family’s big tent. It sat above ABS-CBN and Meralco. It also became the launchpad for a wave of “nation-building” ventures opened up after the regime of Marcos Sr., especially during President Fidel V. Ramos era of economic liberalization, deregulation, and privatization push.

In hindsight, the way Benpres did it looks like a case study in overreach. On the telecom side, they established Bayan Telecommunications (Bayantel), one of the many new telco players poised to compete with PLDT, which monopolized phone services then. That meant building their own network — putting up lines and switches — and financing it with a mix of bank loans and dollar bonds.

On the water side, Benpres took 60% of Maynilad Water Services Inc., the private operator of the west zone of Metro Manila’s water system, alongside French partner Ondeo (then Suez). In pay TV, they built SkyCable/Sky Vision into the country’s largest cable operator at the time. In banking, they held a significant stake in Philippine Commercial International Bank (PCI Bank) with John Gokongwei’s JG Summit, a position Geny would sell in 1999 as the first round of retrenchment. In infrastructure, they had a stake in the toll road operator of the North Luzon Expressway (NLEX). 

The logic was simple enough. If you already know how to navigate regulators and public opinion through Meralco, which powers millions of homes, and ABS-CBN, which entertains and informs, then why not extend that to every “basic service” Filipinos rely on — water from Maynilad, phone lines from Bayantel, cable from SkyCable, and tollways through NLEX. 

The problem was how all this was financed, and on what scale. 

When the numbers stopped working 

In the mid-1990s, Bayantel — under Bayan Telecommunications Holdings and ultimately Benpres — raised about US$200 million of 13.5% senior notes, on top of syndicated bank loans, to fund its network rollout.

Think of senior notes as big IOUs sold to global investors: you get cash now, promise to pay interest every year, and repay the principal at the end. Bayantel also signed omnibus and mortgage trust agreements that pledged most of its receivables and project cash flows as collateral. In plain terms, if Bayantel stumbled, almost everything it earned or owned was already spoken for by creditors. 

At the same time, Benpres Holdings itself was issuing long-term commercial paper — IOUs sold to local investors — and taking on bank loans, while guaranteeing parts of its operating companies’ debts.

So take note: Bayantel’s rollout, Maynilad’s concession, SkyCable’s expansion and other projects were all leaning on the same central “wallet” as ABS-CBN and Meralco. 

As long as the original assumptions held, this structure looked clever. When Bayantel borrowed at 13.5%, internal models assumed an exchange rate near P25 to the dollar and strong take-up of its half-million rolled-out lines.

But after the 1997 Asian financial crisis, the peso slid to around P53 to a dollar. So by 2000, each dollar of debt cost more than twice as many pesos to service. By July 2000, after only two interest payments, Bayantel stopped paying coupons on its notes — effectively defaulting — even though it was earning at the operating level. EBITDA was positive, but the interest bill was simply too big. 

In 2001, Bayantel began formal talks to restructure roughly P25 billion in obligations under an “informal standstill,” paying only reduced interest while it tried to agree new terms. Benpres itself was negotiating standstill agreements, which is a polite way of saying it was asking its creditors: “please don’t collect yet while we figure this out.” By 2003, Bayantel’s total indebtedness had climbed to roughly US$674 million (around P35.9 billion); that July, the bondholders pushed it into court-supervised rehabilitation. (READ: Globe hikes Bayantel stake, buys out Lopez group)

Maynilad and SkyCable followed into their own forms of distress.

Maynilad couldn’t reconcile the capital it needed to fix leaky pipes with tariffs that were politically acceptable. It filed for rehabilitation in 2003 with a P5-billion-plus capital deficit on its books. SkyCable and Home Cable, meanwhile, had to sign a P2.5-billion restructuring deal with banks in 2004, giving them seven years to repay about P1.1-plus billion of SkyCable’s share of the loans — another sign that a 1990s bet was not generating enough cash to meet its original schedule. 

On top of that, the Development Bank of the Philippines (DBP) later disclosed it had sold non-performing loans to Bayantel, Maynilad, SkyCable and Benpres into a “bad asset” vehicle. Translation: these accounts were beyond what a state bank wanted to carry on its own books. 

By then, it was obvious that the 1990s push into telecoms, water, cable and other “nation-building” businesses had left Benpres over-leveraged, with these regulated utilities and platforms under strain at the same time. The loans and guarantees that once looked like smart financial engineering now forced the holding company into years of debt workouts and reputational damage, setting up the painful wave of asset sales — PCI Bank, NLEX, Maynilad, SkyCable restructurings, and eventually Meralco — that would follow. 

How Benpres tried to dig itself out 

Once the dust settled, the holding company’s choices were unglamorous and painful: sell what you can, restructure what you can’t, and shrink until the balance sheet can breathe again. That meant unwinding pieces of the very expansion that had defined the post-EDSA Lopez comeback story. 

The banking story went first. PCI Bank, once a core Lopez–Gokongwei joint venture, became chip on the table as the Philippines’ banking landscape consolidated. PCI was sold down in 1999, effectively ending the family’s direct role in big commercial banking. 

Toll roads followed. The NLEX business was sold into the orbit of Metro Pacific Investments Corporation (MPIC). In the language of the time, this was framed as “monetizing a mature infrastructure asset” to pay down long-term commercial papers and bank loans. In simpler terms, the family gave up a reliable future stream of toll income so they could stop worrying about large chunks of debt coming due. 

Maynilad was messier. The west-zone concession went into rehabilitation; its contract with MWSS had to be renegotiated, new investors (MPIC and others) eventually came in, and the Lopezes ceded control. Economically, they wrote off much of their investment. Politically, they bore the blame for rate hikes and service issues even as they lost the asset. (READ: Public interest, private hands: How Manila Water, Maynilad got the deal)

Throughout this period, Benpres — later renamed Lopez Holdings Corporation — sat across the table from its lenders. It bought back bonds at a discount where it could, asked for longer repayment terms where it couldn’t, and chipped away at the mountain of obligations that Bayantel, Maynilad and SkyCable had helped create.

This was not the glamorous side of business. It was financial triage: deciding which limbs to amputate to keep the patient alive.

It also had an unintended side effect. As assets like PCI Bank, NLEX, and Maynilad were sold or surrendered, the internal weight of the group shifted. The more Benpres shrank around its remaining holdings, the more central one cluster became: the power and energy businesses housed under First Philippine Holdings Corporation and its subsidiary First Gen Corporation. 

From Benpres overreach to First Gen discipline 

By the mid-2000s, the Lopez story had quietly split into two tracks. 

Image from Lopez Holdings

On one track was the Benpres world of telecoms, water, cable and toll roads, being cut back to size. On the other track was a power-focused platform anchored in First Philippine Holdings Corporation (FPH) and First Gen Corporation (First Gen), where the family was making a different kind of high-risk bet under Oscar and son Piki Lopez. 

This second arm built natural gas-fired plants like the 1,000-megawatt Santa Rita and 500-megawatt San Lorenzo facilities in Batangas through First Gas Power Corporation and allied companies. These sold electricity to Meralco under long-term power purchase agreements (PPAs) — the 20-plus-year contracts where Meralco essentially agreed to buy a set amount of capacity or energy over many years. 

Those PPAs were creatures of the early-1990s power crisis, when brownouts were daily reality and the government didn’t have the money to build all the needed plants. To entice private investors, government offered long contracts with “take-or-pay” clauses so banks would lend. As long as the plant was available, Meralco (or the National Power Corporation) had to pay for a minimum level of capacity whether or not actual demand matched it. For banks, that made the projects financeable.

For First Gas and First Gen, it meant that once Santa Rita and San Lorenzo were running, their revenue streams were much more predictable than Bayantel’s or Maynilad’s. Unlike Bayantel’s gamble on getting enough paying phone subscribers, or Maynilad’s dependence on politically sensitive tariff increases, these gas plants had clearer cash-flow visibility: “take-or-pay” provisions meant Meralco would pay for the capacity even in lean years, and fuel costs for Malampaya gas could largely be passed through to consumers under regulatory rules.

The trade-off was reputational: critics like Winston Garcia would later accuse Meralco of locking itself into buying from “relatives” — Lopez-owned generators — on guaranteed terms, even if the actual numbers showed those contracts were cheaper than many alternatives. The financing was still heavy on debt — these were big, capital-intensive projects — but it was classic project finance: loans tied to the cash flows of a specific plant, with banks comforted by the long-term PPAs, rather than a single holding company rolling the dice on many sectors at once.

By 2007, this power arm looked, on the surface, like the more disciplined side of the family. First Gen had Santa Rita and San Lorenzo humming along on long-term contracts with Meralco, and a respectable 112-megawatt hydro asset in the Pantabangan-Masiway complex.

The next move, however, would show that this arm could be just as bold — and just as fallible — as Benpres had been with Bayantel.

Betting the house on geothermal

That next move was Energy Development Corporation (EDC). 

In 2007, a Lopez-led consortium called Red Vulcan Holdings won the government auction for 60% of PNOC-EDC, the country’s dominant geothermal developer and the core of what would become one of the world’s largest geothermal portfolios.

Geothermal taps underground heat through steam fields and wells, so it is an indigenous source of power that the Philippines already has, and plants can run almost nonstop, unlike solar and wind. The group, controlled by First Gen and partnered with foreign investors, paid around P58-plus billion for the stake — roughly $1.2–1.3 billion at the time, at a rich premium to EDC’s IPO price. It was a classic Lopez play: pay up to secure control of a strategic, regulated asset that fit the “nation-building” story. 

On paper, the strategy made sense.

Geothermal was baseload, “green,” globally attractive, and in EDC’s case it relied on steam fields inside the Philippines rather than imported coal or oil. EDC already had operating fields with more megawatts in the pipeline, and putting it under First Gen’s umbrella would give the Oscar–Piki side a portfolio that spanned gas, hydro and geothermal — exactly the mix that now underpins their “clean energy” narrative. In 2008, Federico “Piki” Lopez, already president and CEO of First Gen, would call EDC a “very strong asset” that they intended to “take to the next level.”

The financing carried the risk. To fund the acquisition, First Gen used a mix of equity and short-term “bridge” loans, including almost P29 billion in financing arranged by a syndicate led by Banco de Oro, Development Bank of the Philippines (DBP), and Land Bank. A bridge loan is supposed to be temporary: a big, short-term credit line to close a deal quickly, with the plan to refinance it later with longer-term loans or bonds. First Gen was betting that once the EDC dust settled, it could roll those bridge loans into cheaper, longer-dated financing. 

Then the 2008 global financial crisis hit. 

By June 2008, the numbers had turned from ambitious to alarming. First Gen data reported it had about $820 million in current liabilities (debts due within a year) and $1.6 billion in long-term debt, against roughly $1.2 billion in equity. The key problem: over $410 million of short-term loans taken for the EDC acquisition were coming due in November 2008. 

At the same time, both EDC’s and First Gen’s share prices had fallen sharply. EDC, bought at around P9–9.25 per share, was trading below P5. First Gen stock was down about 75% year-to-date by October 2008, making it one of the worst performers in the Philippine Stock Exchange index. Investors were asking a simple question: had the Lopezes overpaid for EDC and borrowed too much, too short, to boot? 

Underneath the headlines, this was a classic refinancing crisis.

First Gen was fundamentally sound in operating terms — its plants were running — but the timing and structure of its EDC debt meant it suddenly had a huge lump of loans to refinance just as global credit markets were freezing. International banks were pulling back from emerging-market exposure, not adding to it. For a company that had become the flagship of Oscar–Piki’s “new Lopez” identity, the stakes were existential. 

The Oscar–Piki arm now looked like Benpres had a decade earlier: highly leveraged, with a big, ill-timed bet sitting on short maturities. The difference lay in how they responded.

Taking the medicine 

First, First Gen sold a good asset to raise cash. It agreed to sell a controlling 60% stake in First Gen Hydro Power Corporation, which owns the Pantabangan-Masiway hydro complex, to EDC at a profit versus the roughly $129 million it had paid for the hydro asset in 2006. The cash proceeds — on the order of $100 million — were earmarked to pay down First Gen’s short-term acquisition debt, not to fund new expansion. 

This may look like moving money from one Lopez pocket to another: a hydro plant shifting from First Gen to EDC. In practice, what mattered to lenders was where the cash landed. The money went into First Gen’s coffers and was used to shrink the near-term loans sitting in First Gen’s name, while EDC — a separate listed company with its own balance sheet — took on the asset and its funding. For bankers staring at several hundred million dollars of EDC-related loans coming due, that was a real improvement. 

Second, First Gen renegotiated the EDC acquisition loans. Management sat down with banks to stretch out roughly P13.8 billion of short-term bridge facilities into multi-year loans. In plain language, they asked to convert a giant bill due “very soon” into a series of smaller payments spread over more years — swapping a cliff for a staircase. 

Third, it lined up a new refinancing package. First Gen arranged about $500 million of replacement financing from a mix of foreign and local banks to take out the maturing bridge loans, using the combination of the hydro sale and its broader plant portfolio as comfort for lenders. Instead of facing a single, scary deadline, it now had a more conventional long-term debt profile. 

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In layman’s terms, the Oscar–Piki side realized they had maxed out a very large credit card to buy EDC just before a global crisis. To avoid default, they sold a prized car (the hydro asset) to a sibling with more cash (EDC), then convinced the banks to convert the credit-card bill into a longer-term car loan. 

Unlike Bayantel and Maynilad, First Gen did not end up in court-supervised rehabilitation. There were no state-bank write-offs, no petitions to put it under receivership. Instead, there was a visible willingness to sell assets, accept that some investments had been mis-timed, and do the unglamorous work of renegotiating debt. 

Likely for Piki’s camp today, this episode is Exhibit A: when our side miscalculated, we took our medicine. 

Selling the old to save the new 

The First Gen fix did not happen in isolation. While Piki and his team were scrambling to refinance EDC-related loans, Oscar and the wider Benpres/FPH structure were deciding which legacy assets to put on the altar to make the whole group’s leverage more bearable. 

Infrastructure went first. In 2008, FPH sold its toll road business, including its stake in Manila North Tollways Corporation (NLEX), to Metro Pacific Investments. The headline rationale was to “monetize a mature asset” and use the proceeds to pay down long-term commercial papers and bank loans. More bluntly: they sold a future income stream so they could stop worrying about today’s debt. 

Then came Meralco. In March 2009, FPH agreed to sell 20% of Meralco to PLDT’s Piltel at P90 per share, raising around P20 billion in cash. In its stock exchange disclosure, FPH said the sale was part of a strategy to “pare down debts”. It followed a bruising, year-long boardroom war I covered in detail — state pension fund GSIS chief Winston Garcia trying to wrest control in the name of lower power rates and “good governance,” the Lopez camp defying an SEC cease-and-desist order on the floor of a 12-hour shareholders’ meeting, and, finally, San Miguel swooping in to buy the government block after the courts were dragged in. 

Economically, that Meralco check did two things at once. It retired a chunk of Benpres/FPH-level debt that had been weighing on everything from Bayantel to First Gen, and it freed the Oscar–Piki side to focus on being a generator and project developer rather than a politically exposed distributor.

Politically, it acknowledged a hard reality that Oscar would later say out loud: a “vital and influential” regulated business like Meralco “inevitably requires government support.” And when that support is missing, the business model weakens. The sale was not just about admitting that the Lopezes no longer had that support, but also about cleaning up the numbers. 

Inside the family, the pain was real.

Meralco was Manolo’s turf and the symbol of the pre-martial law empire. In my 2008–2009 coverage of how the Lopezes lost control of Meralco, the sting was palpable when Manolo and his allies insisted they had poured decades of capital and managerial effort into the utility, only to be painted as villains in a political and corporate drama they no longer controlled. Oscar later described the sale as “a business decision” hashed out over months of board discussion. Both can be true. 

For today’s cousins’ war, this is the line that matters: when the group needed cash and de-leveraging, it was Meralco, an asset anchored in Manolo’s branch, that was sold, and the proceeds flowed into a capital structure that supported both media and power.

ABS-CBN before and after the franchise axe

For most of the 2000s and 2010s, ABS-CBN’s numbers looked nothing like Bayantel’s or First Gen’s EDC squeeze. The network was big and capital-hungry, but it was profitable. Mid-2010s financials show solid revenues from advertising, content sales and cable, and billions in net income. It carried corporate debt but there were no rehabilitation petitions, no standstills, no headlines about default. 

That changed abruptly in 2020, when a hostile House of Representatives, in the middle of the COVID-19 pandemic, denied ABS-CBN’s application for a new broadcast franchise. Free-to-air operations stopped, advertising tied to Channel 2’s reach collapsed, the company scrambled into cable, digital and partnerships. 

Subsequent reporting shows that total debt peaked at about P21 billion around the time of the shutdown and was gradually reduced to around P16 billion by 2024, with a plan to bring it further down to P13 billion through property sales and other measures. 

This is not a Bayantel-style spiral — there is no court-ordered rehabilitation — but it is a serious, slow-burn deleveraging for a company whose main cash cow was taken away by politics. That is why the P2-billion ask feels like, depending on which cousin you ask, either paying a political bill the family knowingly ran up, or pouring fresh capital into a business model whose main pipe has been cut by forces they do not control.

The crucial difference from the earlier episodes is causality.

Bayantel and Maynilad crashed because the business model and capital structure didn’t survive a currency shock and regulatory limits. First Gen’s EDC scare was triggered by a global credit crisis colliding with short-term acquisition loans. ABS-CBN’s body blow came from politics: the state closed its main distribution pipe. 

For Gabby’s branch, that likely matters. In their view, ABS-CBN is not a reckless expansion gone wrong. It is the bill for more than three decades of editorial choices, from the Lopezes’ return to the network after Marcos in 1986 through the 2020 franchise non-renewal, and into today’s cousins’ war over what comes next. 

Likely for Piki, the origin of the damage doesn’t change the math: ABS-CBN is now a distressed media business in a hostile political environment, and any new money injected into it carries real risk.

The ₱2-billion question

Which brings the story back to Lopez Inc. and the proposed P2-billion infusion into ABS-CBN that has sent cousins to court. 

According to reports on the current feud, Gabby Lopez, his brother, and a bloc of other 3rd generation cousins want Lopez Inc. to inject around P2 billion of family capital into ABS-CBN to support its post-franchise business model and stabilize its finances. Piki Lopez has opposed the plan as originally drawn up, questioning both the structure and the beneficiaries. In his camp’s telling, more than half of the proposed funds would end up in the hands of a narrow group of executives and insiders via share purchases and debt repayments, rather than being tightly ring-fenced for a clear, value-creating turnaround plan. 

I say this with some skin in the game. I worked at ABS-CBN from 2007 to 2011, during a period when the network’s journalism was often at odds with powerful people. In those years, I saw up close that the Lopezes did not tell us to pull punches when coverage was uncomfortable for government or for their other businesses. They allowed tough reporting, even when it clearly made life harder in their boardrooms. I have a high respect for them for that, and nothing in this series is meant to diminish it. 

But strip away the emotion and the argument is familiar. Gabby is effectively saying: ABS-CBN has been the lightning rod for our politics; the family should fund a serious attempt to keep it alive. Piki is saying: when our side over-reached with Bayantel and EDC, we took the pain through asset sales and hard renegotiations. Why should ABS-CBN be treated differently? 

The rest of this series will dig into the politics that lurk underneath that question. Because once you bring Ferdinand Marcos Jr., Gloria Macapagal-Arroyo and Rodrigo Duterte back into the frame, it becomes harder to insist that ABS-CBN is just another business case — and harder for the cousins to pretend that the price of their political stance is someone else’s problem. – Rappler.com

Next: Part 2: The Lopezes, presidents, and the cost of dissent

Lala Rimando wrote about Philippine business, and managed newsrooms, including Newsbreak, ABS-CBN, Rappler, and Forbes, for over 25 years. She’s now based in La Union, taking care of her mom with dementia, and working on the multimedia biography of the late John Gokongwei.

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