‘Government takeover to boost Petron’s credit standing’

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April 5, 2026 | 12:00am

MANILA, Philippines — A government takeover of Petron Corp. could strengthen operations, safeguard debt obligations and enhance access to financing, according to financial research firm CreditSights.

The Fitch Solutions unit said the proposed sale would be “modestly credit positive” for the oil giant over the long term, given the government’s stronger credit rating compared with San Miguel Corp. (SMC).

The government is also expected to provide greater support for Petron’s operations and debt repayments while paving the way for improved access to diverse bank financing.

“We expect Petron will be considered strategically important to the Philippine government if the deal goes through, given that Petron operates the country’s sole refinery, supplying 35 to 40 percent of total domestic fuel needs,” CreditSights said in a report.

This comes after SMC chairman Ramon Ang renewed his offer to sell Petron back to the government amid the ongoing energy emergency.

Ang, who first made the offer to Congress in 2021 amid high fuel prices, said the buyback could be carried out in tranches at fair market value so the government would not shoulder a lump-sum payment.

Although the deal could be slightly credit negative for Petron in the near term,
CreditSights said the long-term benefits would ultimately outweigh the risks.

“SMC currently owns a 71.8-percent stake in Petron and can sell up to a 35.9-percent stake to the government before triggering a change of control,” the financial research firm noted.

The government previously held a 60-percent stake in Petron through Philippine National Oil Co. (PNOC), which had acquired Esso Philippines – Petron’s old name – during the first global oil crisis in 1973.

In 1994, PNOC sold a 40-percent stake to Saudi Aramco as part of preparations for the local oil industry’s full deregulation.

Petron was fully privatized that same year when PNOC sold its remaining 20-percent stake in what was called the “mother of all initial public offerings” in the Philippines.

SMC has been managing Petron since 2009 after acquiring a controlling stake from London-based investment fund manager Ashmore Group, which had earlier purchased a 40-percent interest from Aramco.

Market analysts earlier told The STAR that a takeover of Petron may not be wise for the government given its limited fiscal flexibility and that it could merely unsettle market competition.

They also flagged the government’s “poor track record” in managing businesses.