SM's CFO makes every step count

MANILA, Philippines - Six times a day, Jose T. Sio makes 600 steps every time he circles the OneE-comCenter where he holds office. From these rounds, not only is he able to check on his staff, he also gets his daily fix of energy from peering out on the glass windows.

Ten floors below, children on field trips are happily filing out of buses to troop to SM Mall of Asia (MOA), one of the world’s biggest shopping malls. They are joined by hundreds of visitors of trade events, conventions and international exhibitions from the nearby SMX Convention Center. Shuttle buses from Chateau Elysée and other nearby SM property developments also regularly ply residents to MOA. On Sundays, worshippers emerge from the Shrine of Jesus, the Way, the Truth and the Life, the ornately vaulted church beside Manila Bay that SM Investments Corporation (SMIC) built and donated to the Church. By 2012, Sio expects more hustle and bustle around the sprawling complex when the 16,000-seater Mall of Asia Arena opens.

All these are happening around the MOA Complex in Pasay City. Elsewhere, the same flurry of activity can be seen in the retail, commercial center, banking, property development, and hotel and tourism industries – considered the core businesses of the SM Group.

It’s all getting a bit hectic for Sio. Yet the Chief Finance Officer (CFO) and executive vice president of SMIC, the publicly listed holding company of the SM Group, does not show signs of slowing down, much like the family-owned conglomerate he has been working for in the past 21 years.

Consider it fate that the son of shoe sellers in Iloilo would end up being the financial strategist of a multibillion company that started as a humble shoe store in 1948. After studying in a Chinese school, he became its only student to pass the Certified Public Accountant examination that year. In Manila, he joined the prestigious auditing firm SGV, which sent him on an MBA scholarship to New York University and on assignments in Asia.

“SGV at the time was expanding in Asian countries. My first assignment was in Taiwan since I had the advantage of speaking Chinese,” he says. Back in those days, he was using an abacus to compute and Taiwan did not have a single hotel for tourists. “I ended up sleeping on top of tables and bathed in the office toilet. But we were paid the equivalent of our salary in US dollars,” Sio recalls.

When he became a senior partner at SGV, he was assigned to Chinese clients, and among them was Henry Sy, Sr. “One time he invited me to his office and told me, ‘You ask too many questions about SM so why don’t you just work here?’”

At the time, Sio was already handling the SM account for three years. “I saw the potential of SM because of the growth of the consumer market in the country and the company’s potential economic contribution,” he explains.

When he took on the role of CFO, Sio became one of the first non-family members to be named to a key post at SM. Working in an organization where the top honchos all have the same family names may have a bad and ugly side, but not for Sio. “The Sy family is very fair. We work like we own the business and we are made to feel we are part of the family,” he says.

Stewards of the family business also tend to take a long-term view of the company for the benefit of the next generation. “In a multinational company, you only look at the short term and if you make a mistake, they’ll just fire you. In a family business, you look at the long term and so trust becomes very critical,” Sio says.

Unlike other Filipino tycoons, Henry Sy, Sr. stays away from politically and socially sensitive, big-ticket ventures such as airlines, telecoms and utilities. The SM founder’s dictum is that the company should get involved only in businesses that it knows well. “This means retail, commercial center, banking, and real estate. The rest are more for portfolio investments,” he adds. Knowing its core strengths allows the conglomerate to ride the Philippines’ boom-bust cycles and survive.

Proof is when SMIC debuted on the Philippine Stock Exchange in 2005. Back then, investors were all on a wait-and-see mode as then President Gloria Macapagal-Arroyo fought off impeachment charges, the stock market and the peso were on a downward spiral, and newly passed tax bills threatened corporate profits. Even as the country continues to face these challenges, Sio says, “We should not lose track of our long-term goal, which is to expand so that when things stabilize, we’re ready.”

This long-term view is also evident in Sio’s adherence to risk management. He ensures that all SM’s obligations are fully hedged even if this entails additional cost. “Our discipline is not to speculate,” he says. This is why the group was left virtually unscathed during the 1997 Asian financial crisis, which saw many companies crumbling under the weight of unhedged dollar debts.

As the guardian of the company’s finances and a strategic leader – two roles that require different skill sets – Sio is able to see both the forest and the trees. This uncanny ability has earned him several accolades here and abroad, among them the “CFO Superstar” in Asia from New York-based publication Global Finance in 1997, the “CFO of the Year” from Dutch banking giant ING Bank and the Financial Executives Institute of the Philippines (FINEX) in 2009, the “CFO of the Year” for the Philippines from Hong Kong-based The Asset magazine in 2010, and one of the Best CFO at the Finance Asia Awards in 2011.

Asked what he plans to do when he retires, Sio says he does not believe in retirement. Besides, he says the last time he tried his hand at being an entrepreneur was when he set up a bakery in Iloilo and failed miserably. “Kinain lang ng panadero ang mga bagong tinapay kahit na sinabi ko nang ‘yung mga luma na lang. Sakit lang ng ulo kung pagagalitan ko,” he says, laughing.

Instead of attaching his name to the best bread in town, Sio wants to be remembered for “being part of a team that made SM one of the biggest in market capitalization which took other companies generations to do.” Just like counting his strides, this super CFO makes sure every little step counts in the company’s growth.

“At the end of the day, what is life anyway? It’s a stage and we each have to play our role to the best of our abilities,” says the unassuming CFO.