[Vantage Point] The Villar empire: From untouchable to a governance test case

2 weeks ago 9

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Filipino businessman and former politician Manny Villar didn’t help his own case when, in an earlier media interview, he waved off, unchallenged, the need for rigorous valuation models. “Just multiply 3,500 hectares times the value, you can get the price,” he said — spouting off a sort of pure-vibe, offhand arithmetic one expects from a casual cocktail-napkin scribble, not from a publicly listed conglomerate that presumes its scale grants it immunity from scrutiny – or a bar-side shorthand rather than disciplined corporate finance — revealing a confidence born less of rigor than of the belief that regulators will simply look away.

Capital markets do not run on aspirational arithmetic. They run on discounted cash flows, zoning realities, infrastructure timelines, market absorption curves, and actual comparable sales. What Villar offered was not a valuation method. And in a year that demanded precision, that kind of elementary math was exactly the red flag regulators could no longer ignore.

For more than a decade, the Villar Group embodied the Filipino aspirational narrative: a self-made billionaire building a sprawling empire of homes, malls, water utilities, supermarkets, and power assets, anchored by one of the fastest-growing property ecosystems in the country. Its founder, businessman Manuel “Manny” Bamba Villar Jr. previously served as senator from 2001 to 2013 and as the 25th President of the Senate of the Philippines from 2006 to 2008. His ascent to the summit of the country’s wealth rankings seemed inevitable, supported by a constellation of businesses that fed into one another with remarkable efficiency. Investors admired the group’s ability to scale. Regulators, for the most part, kept their distance. And the public regarded the Villar brand as omnipresent — sometimes controversially so, but undeniably powerful.

From untouchable to a governance test case

That era ended this year

In 2025, the Villar Group became the center of the most momentous corporate reckoning the Philippines has seen in decades. The catalyst was a single number — ₱1.33 trillion — the headline valuation assigned to newly acquired land inside Villar City. What was initially disclosed as a triumph of scale and vision quickly unraveled when auditor Punongbayan & Araullo refused to sign off on the fair-value adjustments, prompting the Securities and Exchange Commission (SEC) to examine the appraisal methodology. E-Value, the firm responsible for the trillion-peso figure, was later sanctioned after investigators found that its valuation reports did not comply with International Valuation Standards. The result was the forced erasure of almost the entire revaluation gain, collapsing Villar Land’s unaudited asset size of ₱1.37 trillion to an audited figure of barely ₱35.7 billion. (READ: Villar Land’s paper empire unravels )

The impact was immediate and brutal. Villar Land’s stock plummeted by more than 80%, vaporizing an estimated US$18 billion in paper wealth and knocking off Manny Villar from the top of the country’s billionaire rankings. A company once positioned as the next major Philippine property heavyweight had to confront a new identity: the most prominent valuation cautionary tale in recent memory. (READ: Manny Villar is now Philippines’ richest)

Yet the valuation debacle was only one fault line in a year defined by unraveling reputational capital. PrimeWater, for so long the quiet cash engine of the Villar empire, entered the spotlight for the wrong reasons. Its aggressive joint ventures with water districts — once heralded as a template for private-sector participation — attracted growing scrutiny from lawmakers, regulators, and local stakeholders who questioned service quality, tariff changes, and contractual fairness.

Profitability remained strong, rising from ₱196 million in 2017 to nearly ₱1.8 billion in 2023, but profitability alone could no longer insulate the company from intensifying political and social pressure. By mid-2025, several water districts were openly seeking contract reviews or termination, and the administration signaled a willingness to revisit long-standing arrangements that had previously been considered untouchable.

In the power sector, the narrative darkened further. SIPCOR — another Villar-controlled utility — lost its permit to operate in Siquijor after the Energy Regulatory Commission (ERC) determined that it had failed to deliver on mandated service improvements. The decision was administratively symbolic. For the first time, the state took the extraordinary step of revoking a Villar asset’s operating authority, sending a message that even the most politically connected conglomerates must meet regulatory performance standards. Investors saw it as confirmation that the era of passive oversight was over.

From untouchable to a governance test case

Villar group was a house of cards

Even the group’s retail arm, AllDay Marts, is melting, feeling the weight of the shifting tide. Once marketed as the Villar Group’s modern retail champion, AllDay suffered a revenue decline to ₱9.25 billion and a drop in net income to ₱268 million. The market reacted quickly. The stock, which debuted at ₱0.60 during the 2021 initial public offering (IPO) hype, now trades at a fraction of that price, with its market capitalization shrinking by roughly 70% from its peak. (READ: Leadership shakeup in Villar’s AllDay, AllHome as chiefs step down)

In isolation, AllDay’s performance might be attributed to industry competition or post-pandemic normalization. But in the context of Villar Land’s valuation scandal and PrimeWater’s political exposure, the decline became part of a broader narrative: a conglomerate premium turning into a government discount.

Villar Group’s Financial Dashboard

What makes the Villar story uniquely instructive is that its decline was not triggered by external shocks or macroeconomic collapse. It was driven by internal ascendancy tensions colliding with a regulatory environment newly determined to assert authority. For years, the Villar Group benefited from tightly integrated business units and political fluency. The model worked — until auditors, regulators, and investors demanded greater transparency, and the group’s interlocking structure suddenly magnified risk instead of dispersing it.

The data tells the story of a spectacular inversion. A conglomerate that once enjoyed a reputation score of 9 out of 10 among institutional watchers witnessed the score fall to a mere 3 out of 10 by 2025. Risk indicators that hovered at low, stable levels a few years ago climbed sharply as controversies accumulated: PrimeWater’s joint venture agreement (JVA) disputes, SIPCOR’s service failures, Villar Land’s accounting restatement, and the sudden collapse of investor confidence. The market-cap curve for both Villar Land and AllDay illustrates the scale of the reputational correction. What was once a symbol of unchecked expansion became a case study in regulatory assertiveness.

For global investors assessing Philippine markets, this year’s Villar saga is far more significant than one family’s financial turbulence. It is a vivid demonstration that Philippine regulators are beginning to bare genuine teeth — and that the country’s capital markets may finally be entering a phase where valuation discipline, service performance, and accounting integrity matter as much as political access. (READ: The rise of Cynthia Villar: How politics, money, networks made her No. 1)

The irony is striking: the Villar Group’s fall from its once-untouchable position may end up strengthening the Philippines’ investment narrative rather than weakening it. By asserting control over valuation practices, utility performance, and public accountability, regulators have signaled a shift toward more credible market oversight. And conglomerates with weak governance structures are now on notice.

In the end, the year that humbled the Villar Group may be remembered not simply as the story of a billionaire empire under pressure, but as a defining moment when Philippine institutions began to rebalance the scales between influence and accountability. The empire is far from collapsing, but the mythology surrounding it has. What remains is a conglomerate forced into transparency, a regulatory system emboldened, and a market newly awakened to the cost of governance risk.

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The coming year will be pivotal for the Villar conglomerate, and investors are already parsing the signals that will determine whether the group begins to recover or continues to weather the consequences of its own excesses.

Foremost is the need for Villar Land to finally deliver a fully normalized balance sheet — one built on audited numbers, transparent related-party disclosures, and valuation practices grounded in conservative, defensible methodologies. Until the company sheds the ghost of its trillion-peso appraisal debacle, the market will remain reluctant to re-rate the stock.

Just as crucial is the fate of PrimeWater, where quiet but persistent reports of talks with the MVP group, the Philippine-based conglomerate led by Manny V. Pangilinan, could lead to an asset sale or a joint operating platform. Such a move could help reduce the Villar conglomerate’s political and regulatory exposure, but only if the structure of the deal confronts the thornier realities of liabilities, service obligations, and the consumer-protection issues that have dogged the utility across multiple provinces. Any attempt to offload risk without addressing these fundamentals will only prolong the reputational drag.

A third test lies in the operational turnaround of AllDay and whatever successor entities emerge from the remains of SIPCOR’s revoked franchise. Margin stabilization in retail and credible improvements in power and water service delivery would signal that the group is capable not merely of defending its empire, but of rebuilding it through performance rather than proximity to power. Success here would help shift the narrative away from governance failures toward genuine reform.

For now, the Villar saga stands as a stark reminder that even the country’s most entrenched commercial empires can be repriced overnight, and that in emerging markets, reputation is not an abstract concept, but a balance-sheet item waiting to be marked to market the moment regulators decide the math no longer adds up.

The Villar story reminds us of the dangers of overconfidence and recklessness. The empire’s plight mirrors the story of Icarus, a figure in Greek mythology, famous for his death when he flew too close to the sun using the wings his father Daedalus made from feathers and wax.

It may very well be the best business story of the year. – Rappler.com