Ust Hospital Case Study
A 17- STORY hospital tower with a helipad, 1000 doctors trained in multi-disciplinary healthcare and four new health institutes, the UST Hospital (USTH) seems not only to have recovered financially, but is eager to reach for the stars. But is its P3 billion expansion plan simply too starry-eyed for comfort? Is it too ambitious?
Yes, according to Dr. Cenon Alfonso, president and chief executive officer of USTH. He said that the P3 billion financing for the expansion came from a fixed-term, syndicated loan by the Development Bank of the Philippines.
“The P3 billion is a clean loan, it has no collateral. Actually, I asked the banks to take into account the name of UST and my name as a businessman. They could look at records of the Dominicans for the past 396 years and they would know that UST’s name is good enough collateral,” Alfonso told the Varsitarian.
The P3 billion loan is tax-free. Being fixed-term in nature, the loan is not subject to any change in interest rate, regardless of the vagaries of the Philippine economy. According to Alfonso, an international financial arranger was appointed by the hospital to syndicate the loan from five to seven financial institutions.
Alfonso said that the budget fits the extensive seven-year strategic plan for the hospital. The first year is for the “recovery” phase that aims to allow the hospital to recuperate from the debts it incurred in 1996 to 2003.
The following four years is for the “development” phase focusing on eight key areas to boost profit. The Benavides Cancer Institute, built in a record eight months and which went fully operational in 11 months, is under the first stage of the development phase.
The last two years is defined by the “transformation” phase that applies indirectly to medicine graduates of the University.
Out of the sickbed
After USTH separated from the Faculty of Medicine and Surgery in September 2004, which created the USTH, Inc., the hospital started to recover from its overwhelming
Yes, according to Dr. Cenon Alfonso, president and chief executive officer of USTH. He said that the P3 billion financing for the expansion came from a fixed-term, syndicated loan by the Development Bank of the Philippines.
“The P3 billion is a clean loan, it has no collateral. Actually, I asked the banks to take into account the name of UST and my name as a businessman. They could look at records of the Dominicans for the past 396 years and they would know that UST’s name is good enough collateral,” Alfonso told the Varsitarian.
The P3 billion loan is tax-free. Being fixed-term in nature, the loan is not subject to any change in interest rate, regardless of the vagaries of the Philippine economy. According to Alfonso, an international financial arranger was appointed by the hospital to syndicate the loan from five to seven financial institutions.
Alfonso said that the budget fits the extensive seven-year strategic plan for the hospital. The first year is for the “recovery” phase that aims to allow the hospital to recuperate from the debts it incurred in 1996 to 2003.
The following four years is for the “development” phase focusing on eight key areas to boost profit. The Benavides Cancer Institute, built in a record eight months and which went fully operational in 11 months, is under the first stage of the development phase.
The last two years is defined by the “transformation” phase that applies indirectly to medicine graduates of the University.
Out of the sickbed
After USTH separated from the Faculty of Medicine and Surgery in September 2004, which created the USTH, Inc., the hospital started to recover from its overwhelming