Philippines’ richest man faces scrutiny over empty land’s 25,000% gain in value

KUALA LUMPUR – Nothing about the largely empty stretch of land on the outskirts of Manila hints at how it generated a vast overnight fortune. Or a staggering write-down.

But that was what unfolded after Mr Manuel Villar, the richest man in the Philippines, transferred the land from one part of his corporate group to another and announced its value had shot up 25,000 per cent to US$23.3 billion (S$30.2 billion), from US$93 million.

The mind-boggling gain, disclosed in March by Mr Villar’s publicly traded Golden MV Holdings, perplexed Manila’s financial community. Auditors baulked, regulators halted the stock and opened an investigation, and Golden MV eventually agreed to write down the value by 99 per cent.

Five months on, the stock is still not trading. Regulators say Golden MV must first submit audited financial results that include the land. The company has said the audit is under way and that it did not break any rules, but it has left investors guessing about the maths.

The episode has triggered fresh scrutiny of the business empire that propelled Mr Villar from the slums to the country’s elite, with a fortune valued by the Bloomberg Billionaires Index at US$22.9 billion.

Golden MV, which develops cemeteries, memorial parks and low-cost housing and has less than US$100 million in annual revenue, trades at more than 1,000 times its earnings on the Philippine Stock Exchange. Mr Villar and parties related to him control 89 per cent of the float.

The nation’s Securities and Exchange Commission (SEC) has fined the company and its senior executives and directors for failing to file financial results on time and it is still considering whether to file criminal charges. Golden MV has appealed.

Villar City

In front of Brittany Hotel on Manila’s southern edge lies a panorama of bushy plains with a number of roads and residential developments. It is part of the 366ha of land at the centre of the huge gain and subsequent write-down.

The land is part of what the billionaire calls Villar City – a plan to transform a cluster of cities, roughly half the size of Manhattan, into the capital’s “new centre of gravity”. The plans include a university, shopping malls, office buildings and enough housing to boost its population to nine million from about two million currently.

Born in Tondo, a neighbourhood near the city harbour, Mr Villar sold fish and shrimp in the local market to help pay for school. After graduating with a Master of Business Administration from the University of the Philippines, he bought trucks to haul sand and gravel to construction sites and then moved into home building.

He founded Golden MV in 1982 and grew it into one of the Philippines’ largest chains of cemeteries and memorial parks – a big business in the Catholic-majority country. He also developed affordable housing and later expanded into banking, department stores and supermarkets.

On Sept 30, 2024, Golden MV paid US$93 million to acquire three closely held entities controlled by Mr Villar. Each held bits of the land. Filings show the price reflected the entities’ book value – assets minus liabilities.

Six months later, Golden MV released a preview of its annual results. They included the land valued under the “fair value” accounting method, showing it had shot up 25,000 per cent to US$23.3 billion.

The company booked it as a one-time gain, lifting its 2024 net income to US$17.2 billion – a record for the Philippines and beating global giants like Goldman Sachs and Morgan Stanley.

Fair value

It is customary for companies to value newly acquired land under the fair value method, said University of Miami accounting professor Miguel Angel Minutti-Meza. The difference between that and book value can be huge, he said, but the figure must be grounded in valuation models and techniques verified by external auditors.

Asset valuation firm EValue Phils helped Golden MV appraise the land, filings show. But Golden MV’s auditor, a member firm of Grant Thornton International, would not endorse it.

The audit dragged on, preventing Golden MV from filing results for 2024 and the first and second quarters of 2025. The company eventually agreed to value the entities holding the land at cost, bringing the total value down to US$148 million. This prompted more questions. Why would a billionaire who has been in real estate for decades record a huge gain and then reverse course?

Golden MV has yet to assuage both its auditor and the SEC.

The regulator in August said the company’s release of unaudited financials showed “a clear disregard for its regulatory obligations” and imposed a US$400,000 one-time fine and a smaller daily fee that accumulates until the audited results are submitted.

“They are basically saying they cannot be penalised because they acted in good faith because they had to resolve the issue with the external auditor,” said SEC chair Francis Lim. “If you start bending rules because the personalities involved are powerful already, our market integrity will always be a dream.” BLOOMBERG