On June 30, 1961, Don Eugenio Lopez led a group of intrepid Filipino entrepreneurs to create Meralco Securities Corporation (MSC). MSC, the forerunner of First Holdings, then carried out in January 1962 the historic purchase of the Manila Electric Company, known as Meralco, from its American owners, General Public Utilities.
The decade of the 1960s turned out to be a Golden Age for Meralco. In 1962, Mr. Lopez made Meralco to embark on a huge expansion program. It was building a new power plant every 18 months, and expanded its generating capacity fivefold, from 300,000 kw to 1.5 million kw in 10 years. Meralco’s rates were among the lowest in the world.
Meralco’s growth in the 1960s was financed solely on its superior credit standing in international capital markets, without relying on government guarantees. Meralco even got better credit terms from international banks than the Philippine government itself. By 1969, Meralco was the largest corporation in the country, worth over P1 billion. By 1972 it was worth P2.8 B.
But Meralco Securities did not limit itself to running Meralco. It also diversified into other businesses. It went into the pipeline business with Meralco Securities Industrial Corporation; the transformer manufacturing business with Philec; and the construction business with Philippine Engineering and Construction Corporation. MSC also put up Philippine Petroleum Corporation to make lubricating oil and bought a controlling stake in PCIBank.
But in September 1972, a dictator imposed martial and the company suffered many reverses. The regime used various tactics, including a government-imposed cut in power rates and the imprisonment of Eugenio Lopez Jr., to force Don Eugenio Lopez to hand over his controlling stake in MSC and Meralco to the dictator and his cronies.
MSC was renamed First Philippine Holdings Corporation (First Holdings). First Holdings embarked on a big expansion program, which included the acquisition of 25% of Pilipinas Shell. But over-ambitious plans and mistakes in execution led to the near-collapse of First Holdings by the mid-1980s.
After the 1986 EDSA Revolution, the Lopezes regained control of First Holdings. Oscar Lopez took the helm of a battered company, which was nearly bankrupt with over P1.2 B in debt. By 1987, First Holdings was able to reschedule and rearrange most of its debt load by selling some assets. It also began the long process of reacquiring part of its stake in Meralco. By 1991, First Holdings had reclaimed some 16% of Meralco shares.
In 1992, First Holdings re-entered the power generation business. In December 1992, its affiliate, First Private Power Corporation, won the bid for the 225 MW Bauang plant. This plant, which opened in 1995, was then the largest medium speed diesel plant in the world, and the lowest priced among all the country’s fast-track independent power producers.
First Holdings then set out to take part in developing the Malampaya natural gas field in northwest Palawan. In partnership with British Gas, First Holdings created First Gas Power Corporation to build and run the first gas-fired combined-cycle gas turbine power plants in the country. From zero capacity in 1993, First Generation Corporation (First Gen), the power generation holdings company of First Holdings, built a total capacity of 2582 megawatts by 2007. Its latest acquisition is its 60% economic interest in Philippine National Oil Company - Energy Development Corporation.
First Holdings also has substantial investments in areas other than power generation and distribution, such as industrial parks, property development, and manufacturing. First Holdings also ventured into tollway construction and management in 1998 with the creation of Manila North Tollway Corporation (MNTC), which would rehabilitate, expand, and operate the North Luzon Expressway (NLEX). The NLEX started operations in February 2005. As part of the asset divestment program of Benpres, the parent firm of First Holdings and 49% stakeholder in the tollway holding company, the tollroad business was sold to Metro Pacific Investment Corp. (MPIC) in 2008. First Holdings continues to look for strategic opportunities in infrastructure.