By Francisco Liboro

Nine months into the year and we’re all still sitting and waiting for the promise of a market recovery to materialize. Like the mythical phoenix, we have been longing to see the Philippine Stock Exchange Index (PSEi) rise from the ashes of failed uptrend lines and multiple breakdowns and once again resume its stellar performance of just a year and a half ago. But this quixotic quest for market rejuvenation has been frustrating and downright irritating, to say the least.

Over the past nine months, the market has made numerous attempts (I count nine major ones) at breaking out of the downtrend that has gripped investors since October of last year. The first eight never had enough legs to sustain their respective rallies and eventually succumbed to investor cautiousness and profit taking. The present rally, which began in late June, appears to have enough steam and momentum to break free of the bear hug. It has already broken out of the major downtrend line last July 30, leading my brokerage institution’s research unit to advise our clients that the bottom may have already been hit.

Still, after months of frustration, I cannot so easily discard the cloak of gloom that has covered us all, analysts and investors alike. Notwithstanding improving technical indicators that confirm the momentum in the present rally, fundamental indicators remain in a state of flux, influenced largely by external factors such as the US economy, oil (and consequently fuel) prices, other commodity prices and the US dollar’s strength and/or weakness). After all, fundamentals such as these are what will guide analysts in arriving at their forecasts and subsequently their trading recommendations. These will in turn provide the basis for future market rallies or reversals.

But as the title of this column states, we are not going to analyze where the market is headed over the short or even long-term. Instead we ask the question on whether we hate 2008, market-wise of course (and only with regard the equities market, to be more specific). So do we?

There are a number of reasons why I, at least, do hate ’08 but I will dwell only with the more significant ones. For starters, of the nine months to date, only three months have posted Net Foreign Buying. From May to July, the market booked Net Foreign Buying of around P4.8B. Meanwhile, the other six months to date (January to June, and from September 1-8) have seen Net Foreign Selling of around P27B. For the entire period, therefore, the market has seen Net Foreign Selling of about P22.2B. If anyone wants to talk about a market that has been shunned, it might as well have been ours.

The fault does not fall squarely on the shoulders of the Philippines but largely, I would think, on the misconceptions of foreign fund managers on the real strengths of our economy and the market as well. Nevertheless, the sustained outflow of foreign portfolio investment from the market (and not necessarily from the country since our own analysis does not show any foreign capital outflows from the country’s banking system) has always overwhelmed local buying at its strongest and eventually leads to failures of previous rallies to break out of the major downtrend line.

Secondly, the fickle mindedness of US market investors is confusing. Early in the year, when oil spot prices spiked to $140, markets throughout the world posted major declines, led by the United States. As the oil price bubble began to burst at the seams, markets rejoiced and quickly staged their own respective recoveries. That sounds reasonable. However, recently, investors have begun to fear that falling oil prices are symptomatic of a weakening economy and as a result have now started to look at these as a negative. What gives? Are lower oil prices a positive or negative factor? How frustrating can this be? It’s almost become like a “damned if you do; damned if you don’t” type of analogy. I think investors in the Philippine market should not be swayed by how foreign investors see the effects of oil prices on other major economies but rather see how oil prices will affect specific markets, such as ours. After all, there’s only one way this factor will affect our economy, right?

At the end of the day, my main reason for abhorring 2008 is on what it did to the dreams that we all nurtured in 2007. The “blue sky” scenario we believed was in store for the market was actually playing itself out already before all these sub-prime and other problems external to the Philippines hit. Problems that injected fear and uncertainty into the hearts of investors in levels not seen since the mid-80’s. I hate ’08 for the fact that the growth in the Philippine stock market that was due us was robbed from us at a most inopportune time. We were recovering and had the rug pulled out from under us. It has been a year of frustrations and setbacks and I will not regret seeing the end of it come December 31.

SPANISH CONQUISTADORS
This group comes from dynastic families, many tracing their roots to the Basque region of Spain. The most famous are the Zobels, the closest thing we have to royalty, tracing their roots to Germany and Spain (they are direct descendants of the Duchess of Alba in Madrid). Jaime Zobel de Ayala, 73, (rank 1, $2 billion net worth) already passed on the torch to his sons Jaime Augusto and Fernando, the seventh generation in the family.

Jaime took over the flagship Ayala Corp. after his cousin Enrique sold the family’s shares in San Miguel Corporation without their knowledge (earning the ire of their aunt, Mercedes McMicking). Nevertheless, Enrique’s side of the family, who already passed away, remains wealthy. His heir Iñigo Zobel is worth $660 million (rank 12).

The Roxases are sugar barons from Batangas and have a long history in the country. Their patriarch, Don Pedro Roxas, was considered one of the richest men in the Philippines in the 19th century. In fact, the Roxas, Zobel, and Soriano families are all related, as Don Pedro bore the mother of Andres Soriano and the first wife of the first Enrique Zobel de Ayala. Antonio Roxas, 65 (rank 37, $36 million), who chairs Roxas Holdings (formerly, Central Azucarera Don Pedro), recently reorganized to move towards new investments.

The Aboitiz clan of Cebu is another storied family, starting in the late 1800s trading hemp and later shipping. Enrique Aboitiz, 85 (rank 16, $375 million net worth), holds forth at Aboitiz Equity Ventures.

Enrique Razon Jr., 47 (rank 8, $820 million net worth), doesn’t have the same centuries of family history in the Philippines but inherited International Container Terminal Services (formerly Risco) from his father, Enrique “Pocholo” Razon, who started the business in 1987. But it was he who turned ICTSI into a global operation, providing container port terminal services in the Philippines, Poland, and Brazil.

IMMIGRANT TAIPANS
Perhaps the most inspiring among these billionaires are these rags-to-riches stories – first-generation poor immigrants from the Fujian province in China. Henry Sy, 83 (rank 2, $1.7 billion net worth), built three of the world’s largest shopping malls, and is expected to hand over the reins to his daughter, Teresita Sy-Coson. His SM Investments also owns two of the largest banks in the country – BDO and Chinabank.

Lucio Tan, 73 (rank 3, $1.6 billion), built his wealth on Fortune Tobacco, Asia Brewery, and Tanduay Distillers. He also owns two banks (Allied Bank and PNB), two airlines (PAL and Air Philippines), among other companies.

The youngest – and newest – billion dollar tycoon in the Philippines, Andrew Tan, 55 (rank 4, $1.1 billion), started as a trader and later became one of the most successful property developers by focusing his Megaworld into building condominiums. His holding company Alliance Global sells the most number of brandy bottles in the world (Emperador) and now holds the master franchise of McDonald’s (Golden Arches).

Another real estate mogul is Andrew Gotianun, 79 (rank 7, $860 million), got started with second-hand car financing before he built Filinvest into a powerhouse. He also owns East West Bank.

THE CHINESE CLANS
As opposed to the first-generation Chinese immigrants, these Chinese taipans were born with a silver spoon in their mouth, although their family fortunes took different turns. George Ty, 74 (rank 6, $870 million), came from a wealthy family (his father owned Wellington Flour Mills). But they ran into financial difficulties in the 1950s, and that’s when he realized the power banks hold. This led him to start his own bank, and now Metrobank is one of biggest in the Philippines. He also owns Federal Land and Toyota Motors Philippines.

A somehow similar fate happened to John Gokongwei Jr., 81 (rank 15, $430 million), whose family lost everything when his affluent father died. He recovered when he started a corn milling plant. That became Universal Robina Corporation, manufacturer of such popular brands like Chippy, Blend 45, and C2. His son Lance is heir to the empire, which includes Cebu Pacific, Sun Cellular, and Robinsons Land.

Alfonso Yuchengco, 84 (rank 17, $365 million), inherited China Insurance (now Malayan Insurance) from his wealthy father, Don Enrique. The Japanese closed the business during the war, and like Gokongwei, was forced to buy and sell commodities to make ends meet. After liberation, he built the business into a financial powerhouse (Malayan, RCBC, House of Investments, and Great Pacific Life Insurance). His daughter, Helen Dee, is now in charge of the Yuchengco Group of Companies.

David Consunji, 86 (rank 19, $210 million), traces his roots to Pampanga, although he’s not pure Chinese (mixed with Spanish and Filipino blood; his mother is a Mendoza). A graduate of civil engineering from the University of the Philippines, he started D.M. Consunji, Incorporated (DMCI) in 1954 and in the succeeding decades built some of the country’s most famous landmarks, including Mactan Shangri-la Hotel, Manila Hotel, The Westin Philippine Plaza, The Asian Hospital, etc. He was also a former secretary of Public Works. Today, he and his family have interests in construction, real estate, energy, water, mining, and road infrastructure.

Before Alaska Milk Corporation, the Uytengsus already made it big with Uy Matiao and Co, built by the patriarch, Don Tirso of Dumaguete. But Wilfred Steven Uytengsu Sr., 80 (rank 31, $60 million), founded General Milling Corporation and Holland Milk Products, now Alaska. Now, his heir Wilfred Steven Uytengsu Jr., is taking the company into the next level, with 85% market share.

The Tambuntings are known for their chain of pawnshops across the country. They trace their roots to Don Ildefonso Tan Bunting, a son of a Chinese immigrant who started the pawnshop business. But his grandson Jesus Tambunting, 70 (rank 36, $47 million), has always been a banker. After resigning from a senior executive job at a large commercial bank, he bought a small bank in Bulacan and grew it into the largest development bank in the country, Plantersbank.

POLITICAL DYNASTIES
Some wealthy Filipino families are intertwined with the political landscape for decades, as kingmakers, politicians, or both. The Lopezes of Iloilo have long been part of the history of Philippine politics. They trace their origins to Basilio Lopez, a gobernadorcillo of Jaro, Iloilo City in 1849. Great grandson Fernando was a mayor, senator, and vice president of the Philippines. Geny was incarcerated during martial law for five years and pulled off a spectacular escape with Serge Osmeña. But it was Fernando’s brother Eugenio (Geny’s dad) who built the Lopez empire, with a string of companies, including an airline (FEATI), newspaper (Manila Chronicle), electric utility (Meralco), and television network (ABS-CBN). Today, his brother Oscar Lopez, 77 (rank 10, $775 million net worth) is patriarch of holding company Benpres but is set to retire, with youngest brother Manuel taking over.

One of the most powerful Filipino political families are the Cojuangcos, part of the old Spanish-Chinese mestizo landed class from Tarlac, starting with Melecio Cojuangco who served the 1st Philippine legislature in 1907. Eduardo Cojuangco Jr., 72 (rank 13, $540 million), is chairman of San Miguel Corporation. Known better as Danding, he remains active in politics as chairman emeritus of the Nationalist People’s Coalition (NPC), the party he formed for his failed 1992 presidential campaign. Nevertheless, he continues to be an influential political figure. His cousin Corazon Aquino became president of the republic in 1986. Other family members held or are holding office as mayor, governor, or congressman.

The Zamora brothers are also influential in Philippine politics. The most prominent is Ronaldo, who was a congressman and executive secretary. It is his brothers Manuel Zamora, 68 (rank 27, $105 million net worth) and Salvador Zamora, 61 (rank 32, $55 million) that are active in business. They make their money from mining, particularly through Nickel Asia, in partnership with Philip Ang, 66 (rank 34, $50 million), who was also chairman of Solid Mills.

YOUNG TURKS
There is definitely a changing of the guards among the billionaires, with the next generation taking over the chairmanship of flagship companies. There are those, on the other hand, who, still in their 40s or 50s, have made their billions by starting their own company, such as Andrew Tan and Luis Virata. And then there’s Manuel Villar, 57 (rank 5, $940 million), a shrimp vendor’s son who made his riches in real estate (his family runs Vista Land). He also married into a wealthy political family, and is now the Senate President, with plans to run for the presidency.

Tony Tan Caktiong, 57 (rank 9, $790 million), is founder of Jollibee Foods Corporation, which dominates the quick service restaurant industry. He started working in their family restaurant where his father was also the chef. He and his brothers opened an ice cream parlor (a Magnolia Ice Cream House franchise) in 1975 and gradually added burgers and other items, which grew into Jollibee. He now owns Red Ribbon, Chowking, Greenwich, and Delifrance, among others.

Coming also from a middle-class family (his parents started the Hortaleza stores that sold cosmetics), Rolando Hortaleza, 48 (rank 26, $110 million), while studying to be an ophthalmologist, quit during his third year of residency to start a business with his wife, which grew to become Splash Corporation.
Not much is known of Security Bank chairman Frederick Dy, 53 (rank 30, $70 million), but he has been the bank’s majority shareholder since 1989.

MEDIA MOGULS
Owning a newspaper or television network often meant power and influence. No wonder Iñigo Zobel owns Business World. The Manila Times went through various owners throughout its long history, including Manuel Quezon, Alejandro Roces, John Gokongwei Jr., Mark Jimenez, and Dante Ang. The Manila Standard (now Manila Standard Today) was founded by Manuel Elizalde, purchased by Andres Soriano, bought into by Alfonso Yuchengco, and taken over by Enrique Razon Jr. The Philippine Star, the second most widely read newspaper, is owned partly by the Belmontes. The number one in terms of circulation is the Philippine Daily Inquirer, chaired by Marixi Prieto, 67 (rank 39, $33 million net worth), who is related by affinity to the Roces family.

However, the richest among the top three remains Emilio Yap, 81 (rank 14, $445 million) of the Manila Bulletin, who also owns Manila Hotel, Liwayway Publishing, and Philtrust.

In television, of course the Lopez family’s ABS-CBN has always been the 800-pound gorilla. But GMA Network has been giving its rival a run for its money. With soaring ratings, increasing revenues, and its recent public listing, it has made the fortunes of the three controlling families even bigger. Gilberto Duavit Jr., 43 (rank 21, $191 million), Menardo Jimenez (rank 22, $190 million), and Felipe Gozon, 67 (rank 23, $165 million) acquired the network in 1974. Gozon, currently chairman and chief executive, was the corporate lawyer of the original owner, Bob Stewart. Menardo, who was president since 1976 until his retirement, is his brother-in-law while Gilberto Duavit Sr. was a congressman (his son is now COO).

THE TECHNOCRATS
The school dropout-turned-billionaire story is always an awe-inspiring tale. But sometimes, higher education pays off. Sure, some of our billionaires didn’t finish college, a few not even high school. But most are college graduates from good schools. A good number started out as licensed professionals like lawyers, engineers, and accountants. And then there are those who went to Ivy League schools and whose academic credentials are most impressive. And it shows in their management style and areas of expertise. Luis J.L. Virata, 53 (rank 20, $200 million), is first and foremost an investment banker, who chairs CLSA Exchange Capital Corporation (he helped Lucio Tan acquire PAL and ran it as president). He is also a majority owner of Nickel Asia. He has an MBA from Wharton School, University of Pennsylvania and an MA in Economics from Trinity College, Cambridge.

Ramon del Rosario Jr., 63 (rank 25, $137 million), is a graduate of Harvard Business School. In 1978, he was named one of the Ten Outstanding Young Men (TOYM) awardees in the field of investment banking and finance. He served as chief financial officer of San Miguel Corporation. Later he started investment house AB Capital and Investment Corp. and runs as president the Philippine Investment Management Inc. (Phinma), an industrial powerhouse co-founded by his father.

Two other billionaires are part of Phinma: chairman Oscar Hilado, 69 (rank 33, $51 million), a Smith Mundt/Fullbright scholar at the Harvard Graduate School, and vice-chairman Magdaleno Albarracin Jr., 71 (rank 35, $49 million), former dean of the College of Business Administration at the University of the Philippines and doctoral degree holder in Business Administration from Harvard University.

The Alcantara family from Davao built their wealth in logging and manufacturing wood products. Today, the Alcantara Group, founded by Conrado Alcantara, has diversified into energy and power, property development, and agri-based businesses. Son Tomas Alcantara, 61 (rank 29, $90 million), who has an MBA from New York City’s Columbia University and is a former trade secretary, heads the group.

There’s of course Manuel Pangilinan, 61 (rank 38, $35 million), chairman of PLDT. He has an MBA from the Wharton School of Finance at the University of Pennsylvania. But he started as an employee for Phinma, Bancom, and American Express Bank before he struck on his own, partnering with Indonesian Anthoni Salim to set up Hong Kong-based First Pacific Corp., which now controls PLDT (which also owns Smart, ePLDT, etc.), Indofoods, and Metro Pacific Investments (with majority stakes in Landco Pacific and Maynilad Water Services).

THE POWERFUL WOMEN
The Forbes 40 includes four women billionaires (six if we include heirs Teresita Sy-Coson and Helen Dee). There’s Vivian Que Azcona (rank 11, $670 million), daughter of Mariano Que, founder of the dominant drugstore chain in the Philippines, Mercury Drug.

Beatrice Campos (rank 18, $220 million) is the widow of Jose Yao Campos, who co-founded United Laboratories (Unilab) along with Mariano Tan (rank 24, $140 million) to be the leading pharmaceutical company, beating some of the world’s biggest multinationals. She is also heir to Greenfield Development, the family’s real estate arm.

There is Betty Ang (rank 28, $100 million), who runs Monde Nissin, which manufactures instant noodles, biscuits, and snack foods with popular brands such as Lucky Me! and Monde.

Another heir is Lourdes Reyes-Montinola, 79 (rank 40, $30 million), grand-daughter of Dr. Nicanor Reyes Sr., founder of The Far Eastern University.

After building one of the country’s foremost conglomerates, this business leader and one of Asia’s top altruists is setting his sights on affordable education and housing for the poor
By Tina Arceo-Dumlao

Most chief executive officers in the Philippines consider making money the end all and be all of their existence. But there are those who are getting converted to the idea that they should be more involved in the many social ills plaguing the country, which is still struggling to become one of the fastest-growing economies in the region.

Fortunately, there are also leaders of Philippine companies who can do both – run a successful, profitable enterprise while contributing to the improvement in the lives of fellow Filipinos.
Ramon R. Del Rosario Jr., chief executive officer of the 52-year-old Phinma group of companies, is one of those leaders.

Under Del Rosario’s direction, the Phinma group shifted to a new portfolio of businesses – from cement manufacturing to education and affordable housing, among others, and has been earning a tidy profit along the way.

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The Century Properties founder persevered and hit the big time
By Tina Arceo-Dumlao

Jose E.B. Antonio, chairman of the Century Properties group, the largest privately held real estate development company in the Philippines, is not one to let failures stop him from achieving his goals.

Antonio says that he had invested in a number of small businesses – all of which did not perform as he expected – before he finally hit the big time with Century Properties. “I went through a stage when my small business ventures failed. These happened in the eighties before I went into real estate, at a time when the Philippine economy was spiraling down. Everyone was flying out of the country and people converted their pesos to dollars. So practically, all my business initiatives became unsuccessful. But what other people label or call a failure, I have learned, is just God’s way of pointing you in a new direction. So for me there are no mistakes, only new discoveries and new opportunities,” he says.

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The chairman and chief executive of Plantersbank built one of the most successful banks in the country and a lasting legacy
By Lynda C. Corpuz

He considers himself fortunate not to have experienced a major disappointment or setback in his career, but Ambassador Jesus P. Tambunting admits though he has made a lot of mistakes. “But I consider all of them part of my lifelong journey as ‘banker for SMEs’ (small and medium enterprises),” Tambuting says. “What is important (though) is to recognize your mistake, learn from it, and move on,” he stresses.

And on he moved to strike on his own, when in December 1972, Tambunting took over the Bulacan Development Bank with the plan of relocating it to the Makati financial center and transforming it into a commercial bank catering to large corporate accounts. But the plan changed and marked the turning point in Tambunting’s banking career.

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