John Gokongwei Jr. calls the (long) shots

Could one of the smartest taipans in Asia spark a nationwide feeling of optimism for the Philippine future? No amount of government investment missions abroad or public relations campaigns could equal the massive vote of confidence cast by business leader John Gokongwei Jr. on the future of the Philippine economy. His US$925 million purchase of control of Philippine Long Distance Telephone Co. (PLDT) and Bonifacio Land Corp. has impressed many business leaders across Asia, for it involves a Filipino billionaire, an Indonesian business clan living in Singapore, a major Hong Kong-listed firm with stakes in the biggest Philippine telecommunications giant and the most prestigious real estate project. What are the reasons for Gokongwei’s optimism about the Philippine economy? Is this an unmistakable sign that the long-awaited robust recovery is now beginning?

The afternoon before Indonesian taipan Liem Sioe Liong’s Hong Kong-based First Pacific Group on June 5 announced the sale, John Gokongwei Jr. was remarkably very cool and relaxed in his office overlooking Ortigas Center, sipping hot tea and casually discussing the deal that could be the crowning glory of his phenomenal six-decade business career and making him the undisputed "Telecom King." He was not bothered by media reports of threats from opposing camps to obstruct his deal. When talking about his educational charities such as donations to schools, the taipan’s eyes lighted up with excitement especially at the mention of his Children’s Libraries, which offer public access to free books in his Robinsons malls.

History-Making Deal That Taipans Dream About

Gokongwei’s PLDT-Bonifacio Land deal is the kind of history-setting mega-deal that Asia’s mightiest taipans dream about – the same kind that lured "Tobacco King" Lucio Tan to take over Philippine National Bank and Philippine Airlines; that had Li Ka-Shing’s son Richard buying Hong Kong’s top telecom giant; that had the late Tan Yu in the 1980s bidding for the 173-hectare Marina property by the Manila Bay; that had Henry Sy planning the world’s biggest mall called the "Mall of Asia"; and the same kind of deal that had Japanese developer Mori planning the world’s tallest building in Shanghai. During a recent dinner at The Podium, Henry Sy’s new five-storey Podium mall, Sy said he originally planned three of the country’s tallest buildings (at 55 storeys) in that site, but he postponed such grand plans due to the 1997 Asian crisis and opted to first open The Podium.

How will Gokongwei’s much vaunted efficiency and cost-conscious management revolutionize PLDT and telecommunications services to the public? Will Gokongwei’s success in clinching control of Bonifacio Land challenge Makati and the Zobel-Ayala clan’s traditional leadership in the Philippine real estate industry? What will be Gokongwei’s strategies in the new battle against the Zobel-Ayala clan’s Globe Telecom? Will his control of prime Bonifacio Land accelerate the rapid expansion of Robinsons malls vis-à-vis the SM retail chain of "Shopping Mall King" Henry Sy?

Salim, The Enigmatic Business Partner

Although already in retirement, Gokongwei recently rocked the Philippine stock market and business sector with endless speculations when he quietly flew to Singapore to negotiate the deal with the Salim family who controls First Pacific Group. The big boss is Liem Sioe Liong (also known as "Sudono Salim") and his third son Anthony Salim.

Gokongwei and Tony Salim first discussed the possible sale of Bonifacio Land in Beijing on March 22 upon the personal invitation of Citigroup Chairman Sanford I. Weill for a three-day celebration of the banking conglomerate’s 100 years of doing business in Asia. Both Gokongwei and Salim were among Asia’s taipans invited to the grand festivities. Gokongwei asked how business was and Salim replied that it was not yet so good, and asked if he was interested to buy Bonifacio Land Corp. In two months, they met eight times in Beijing, Shanghai, Hong Kong and Singapore, and had many telephone conversations to finalize the mega deal.

At its peak before the Asian crisis, the Salim Group had 500 companies. Tuntex Group founder Chen Yu-How of Taiwan told The Philippine STAR that he was the one who first introduced then Hong Kong-based banker Manuel Pangilinan to Anthony Salim. In 1999 in Jakarta, Cesar de la Cruz, the Filipino director of the world’s largest noodle producer Indofood of Salim group,said that he and Pangilinan (both Wharton graduates) both had their final interviews with the patriarch himself. The Salims had placed complete trust in Pangilinan before, and it is ironic that Pangilinan is now openly opposing the Salim family’s deal with Gokongwei.

The legendary Liem Sioe Liong personally hosted a dinner for Gokongwei and showed him around his residence in Singapore. Both are among the most extraordinary titans of Southeast Asian business. They lead modest lives of Confucian frugality and discipline. A few years ago, they transacted the sale of Salim Group shares to JG Summit Holdings in Singapore’s blue-chip United Industrial Corp. (UIC), making Gokongwei the partner of respected Singaporean taipan Wee Cho-Yao of United Overseas Bank. Through UIC, both Wee and Gokongwei control Singapore Land, the biggest office landlord in Singapore’s Raffles Place commercial center.

Liem Sioe Liong is a low-profile taipan who, despite having been the biggest foreign investor in the Philippines, has rarely been written about in the local media. Liem is also elusive to the foreign media and his only long media interview was probably the one given to Hong Kong-based Yazhou Zhoukan, the world’s biggest Chinese-language newsweekly magazine with global circulation and which is partly owned by Li Ka Shing of Hong Kong.

Liem is 10 years older than Gokongwei and did not finish formal schooling, while Gokongwei is 76 years old and has an MBA from La Salle. Yet the two taipans have many things in common. Both are rugged "rags-to-riches" entrepreneurs who helped modernize industries in their respective countries (Indonesia and the Philippines), and both are founders of the most diversified industrial conglomerates in ASEAN. Born were born in Fujian province in south China; Liem in Ngo-The Village near Fu-ching City in the north of the province and Gokongwei in Gulangyu isle across Xiamen City in the south. Both are talented industrialists who are also philanthropists, and both are now joint-venture business partners in PLDT and Bonifacio Land.

When asked if he was not worried about the country’s eroding competitiveness, population crisis and the excessive politics, Gokongwei replied: "The Philippines is still a great place for business, our economic prospects are definitely much better than those of Indonesia and many other countries. I am optimistic about the Philippine economic future."

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