A patient man with a vision

MANILA, Philippines - Jose T. Sio is a man of patience.

As Chief Finance Officer (CFO) of the SM Group, Sio knows from experience that patience is not the absence of action; rather it is waiting for the right timing, done with the right principles in the right way. After all, it did not take him just overnight to become the guardian of the nearly P400-billion treasury chest of the richest man in the Philippines.

His relationship with SM, in fact, began when he was still a senior partner at auditing firm SGV & Co. He was assigned to handle Chinese clients, who included Henry Sy Sr. It was in the early eighties – the economy was still in the doldrums due to a severe debt and political crisis – when Sio helped put together a financing proposal for the construction of SM’s first supermall, the SM City North Edsa.

Back then, the concept of a supermall that offered one-stop shopping was still alien to many Filipinos so many scoffed at the idea. The mall was also to rise in North Edsa, a lot that was originally swampy and remotely located. “People thought, ‘Who would want to shop there?’” Sio said. Sy, however, saw its potential as a crossroad for regional traffic coming to and from the northern provinces of Luzon and surrounding suburban areas in Metro Manila. So when SM City North Edsa became a shoppers’ paradise, those who thought of Sy as a gambler started calling him a visionary.

One man never doubted and shared Sy’s vision. “Mr. Sy is a visionary man who is very disciplined. To this day, SM City North Edsa remains as our most profitable mall venture. This just proves Mr. Sy’s strong belief in the future development of the Philippines,” Sio said.

When he joined the SM Group 22 years ago, Sio said one of the earliest challenges he faced as CFO was to get investors to believe in Sy’s vision with their pockets.

When SM Investments Corp. (SMIC), the SM Group’s holding company, was gearing up for public listing in 2005, Sio said: “It was a difficult time because I had to convince investors to continue to believe in us and our vision. It also called for a transformation in my role as a CFO – from just being in the background to also becoming part of building the business and management strategy.”

Its successful public listing enabled SM to actively pursue the vision that started in a small shoe store in Carriedo Street on Avenida, Rizal in 1958. From building sprawling malls and retail outlets nationwide to growing its banking and property businesses to venturing into leisure and tourism development – SM can now rightfully claim, “We’ve got it all for you,” as the commercial jingle that helped catapult its SM brand name to fame as the one-stop shop for everyone’s needs.

Just like SM, Sio said the Philippines already has everything – from natural resources to the human capital needed for the country’s progress. He saw this potential with his own eyes when he was assigned by SGV during the early years in South Korea and Taiwan to help set up its consulting and auditing offices.

“At the time, the Philippines was much ahead, second only to Japan. More than twenty years later, how come we are no longer as progressive as these countries?” Sio said. “I always compare the Philippines to a corporation with adequate resources. But we have wasted opportunities compared to our neighboring countries with steady leadership.”

Even as the country continues to grapple with domestic and global challenges, Sio said, “We should not lose track of our long-term goal.” This, in fact, is the secret to SM’s corporate success and longevity. “We are resilient because we have a long-term view. My role as CFO is just to manage the daily ups and downs. We also do not borrow too much. Crisis or not, we always search for an opportunity to expand,” he stressed.

He adheres to the SM founder’s dictum that the company should focus on its core businesses: retail, mall, banking, real estate, tourism and leisure. Knowing its core strengths allows the conglomerate to ride the Philippines’ boom-bust cycles and survive.

The company also pays equal importance to transparency and sound corporate governance. “When we became a listed company, we have become more accountable to all our stakeholders. We regard this as sound business practice,” Sio added. This is partly the reason why SM was left virtually unscathed during the 1997 Asian financial crisis, which saw many companies crumbling under the weight of unhedged dollar debts. Its adherence to prudent risk management ensures that SM’s obligations are fully hedged even if it entails additional cost. “Our discipline is not to speculate,” said its CFO.

Patience has indeed taken SM to places and is catapulting it to become a global player. SM Prime Holdings, one of its subsidiaries, is operating four malls in China and is expanding its land bank for mall construction. Banco de Oro, its banking arm, recently completed its P43-billion stock rights offering. SMIC recently listed its P25-billion retail bonds with the Philippine Dealing and Exchange Corp.

For Sio, it is a good time to be on road shows as the company takes advantage of the country’s bright economic prospects as shown by its high GDP growth and its eight successive credit rating upgrades.

“It will still be a bumpy road ahead for the global economy although this time, it is not caused by our country’s internal problems. We just have to ride through the bumps and stay on course,” said the patient man who had seen and successfully sailed through it all and has earned several recognitions, here and abroad, for it.

New York-based publication Global Finance dubbed him the “CFO Superstar” in Asia in 1997. He was also named “CFO of the Year” by Dutch banking giant ING Bank and the Financial Executives Institute of the Philippines (FINEX) and separately by Hong Kong-based The Asset magazine, both in 2010. In July 2012, Sio was awarded “Best CFO in the Philippines” at the 2nd Annual Alpha Southeast Asia Institutional Investor Corporate Awards.

While swimming in all the glory, Sio remains a humble man who is not driven by ambition. “The essence of life is not to live to work; it is to work to live. We are a happy people. We are used, not only to surviving, but maximizing opportunities,” the always smiling Sio said.

(Editor’s Note: This is the third in a series of articles on the awardees of the ING FINEX CFO of the Year search, now on its sixth year to honor the country’s best chief finance officer. Aligned with this year’s theme, “The Filipino CFO: Rising to Global Challenges,” the series features insights from the five awardees on how today’s CFOs can tackle unique and unprecedented set of circumstances in these uncertain times. The deadline for nominations to the ING FINEX CFO of the Year 2012 search is on Sept. 27, 2012. For more information, go to www.finex.org.ph.)