MANILA, Philippines - ‘Manny Pangilinan provides the drive and direction while Ed Tortorici makes sure your foot stays on the pedal,’ says Jose Ma. K. Lim. Theirs is a tale of being in the right place at the right time, capitalizing on fantastic opportunities and overcoming a myriad of challenges.
They are two colleagues — and close friends — who have built some of the most well-known companies in Asia. Generations of managers have grown under their tutelage, while scores of entrepreneurs have been inspired by their example.
If they could just agree on when they first met.
“I don’t remember exactly when I met Ed,” laughs Manuel “Manny” V. Pangilinan, in his expansive office on the 10th floor of the MGO Building in Makati City.
“Of course he remembers!” thunders Edward “Ed” A. Tortorici, jovially.
Tortorici is looking back on a nearly three-decade friendship with the iconic Filipino businessman and taking stock of his remarkable career in Asia.
Friends And Leaders
Today, Tortorici is executive director of First Pacific Company Limited, the Hong Kong-headquartered and publicly listed investment management holding company that Pangilinan began in 1981.
Pangilinan is managing director of First Pacific, a job he has held since founding the company. Since last year, however, he has added the role of CEO of Philippine Long Distance Telephone Company (PLDT), where First Pacific has a substantial investment. (Pangilinan has served as PLDT chairman of the board for a number of years already.)
It’s a job Pangilinan knows well. He served as CEO of PLDT in the early 2000s, successfully bringing the venerated landline phone company into the mobile age. Under Pangilinan’s management, PLDT achieved renown for technological innovation and service improvements. His tenure also ushered in an era of unprecedented profits.
Now Pangilinan is bootstrapping PLDT once more, this time for a digitally focused, content-driven 21st century.
Over the years, Tortorici and Pangilinan have clearly defined their roles.
“Manny provides the drive and direction while Ed makes sure your foot stays on the pedal,” says Jose Ma. K. Lim, president and CEO of Metro Pacific Investments Corporation (MPIC).
Theirs is a tale of being in the right place at the right time, capitalizing on fantastic opportunities and overcoming a myriad of challenges. Though if you ask Tortorici, it’s a simple story.
“What our story is really about is values,” he says. “About a set of core beliefs Manny and the team were raised on, built our careers by and we hold sacred. In a nutshell: openness, transparency and honesty.”
Tortorici notes, “It might sound quaint in 2017 but when Manny set out to build this company almost 40 years ago, those were truly pioneering concepts.”
Values From The Start
Leaning back in a comfortable armchair across a glass coffee table covered in turtle talismans of all shapes, sizes and worth, Pangilinan explains how First Pacific began.
“The late 1970s were the days of syndicated loans. That, with only a bit of project finance, was the primary mode for much of Asian investment banking,” said Pangilinan, himself then a young investment banker at the American Express Bank in Hong Kong. “We did the first syndicated loan for the Salim Group. It was considered a huge deal for the times — US$45 million. In fact, it was a huge deal considering the exchange rate was only about four Hong Kong dollars to the (US) dollar.
“What made it all more remarkable was that it was the first time the Salim Group, which was the largest privately owned business group in Indonesia, went to the financial markets for any significant, external financing,” continued Pangilinan.
He describes 1970s Southeast Asia: “Business was dominated by closely held, family-owned conglomerates. Most, including many Filipino holding firms, were extremely secretive. So for that syndicated loan, it was a challenge for us at American Express — a US investment bank — to convince the Salims to give us the necessary information needed to raise the requisite financing. But the deal got done, successfully, and everyone was pleased with the outcome.”
Pangilinan recalled the first time he met Anthoni Salim.
“My first call on Anthoni was in 1978, at his office in New World Tower along Queen’s Road. Anthoni’s family had a small deposit-taking company called Central Asia Finance Limited (a subsidiary of Bank Central Asia). Through that, some Salim family businesses, notably cement, were being financed by Banco Exterior of Spain, while Bogasari Flour, the oldest of their businesses, benefitted from Italian export credits. But overall, the Salim Group’s first major external financing occurred via that initial syndicated loan.”
With an American partner, Pangilinan left American Express Bank and set up in a modest office in Central, Hong Kong. They were inspired by the world’s best.
“Since my background was investment banking, someone suggested we look to (then bank) First Boston as a model for building our business,” he said. (First Boston was a venerated US investment bank, considered among the investment banking community’s most prestigious. It merged with Credit Suisse in 1990 and was known as CS First Boston in the ensuing decade before being fully absorbed by the Swiss bank.)
“Our initial capital was only around four million Hong Kong dollars — about a million US dollars at the time,” Pangilinan remembers.
“At first, we saw ourselves as an intermediary of money. Hence, our original iteration was called First Pacific Finance. But we also saw a huge opportunity in trading, so we engaged Price Waterhouse to do a worldwide search for an available investment opportunity. We found one, in a Dutch trading company, Hagemeyer, through AMRO Bank (which merged with ABN Bank, to become today’s ABN-AMRO Bank). Anthoni and I flew to Amsterdam to make the pitch to AMRO and to Hagemeyer’s board of management.”
Pangilinan looks through his tinted glass windows, past a sumptuous terrace, to a forest of skyscrapers and construction cranes.
He adds, “The rest, as they say, is history.”
Heady Years
First Pacific’s history tracks Southeast Asia’s astonishing transformation over the past four decades from agricultural backwater to among the most diverse, dynamic and economically powerful regions in the world today.
The company was an early high-flier, its transactions front-page news, churning out deal after deal, from computer chips to potato chips.
Pangilinan even became one of Asia’s first “celebrity CEOs,” breathlessly covered by the region’s media.
“What I knew about First Pacific then was they were very active in the M&A (mergers and acquisitions) space,” remembers Lim. “Manny’s reputation was among the most successful of global Filipino entrepreneurs, competing directly with Wall Street firms.”
In a more circumspect role was Tortorici, whom Pangilinan met during an early First Pacific investment.
“We acquired Hibernia Bank in 1982,” said Pangilinan. “It was a storied San Francisco bank whose origins went back to the California Gold Rush. It owned United Savings, the first US bank focused on the lucrative Asian immigrant and Asian-American community. Ed, being a San Francisco resident, was very helpful to us there, and soon I thought he could help me back home, in Asia.”
Tortorici remembers it precisely: “I had been engaged by First Pacific’s Hibernia Bank CEO for some time, crafting a new strategic direction and business strategy for the institution. Eventually, I engineered the sale of the bank to another client of mine, Security Bank. Sometime after that, Manny called, asking if I could assist them in Hong Kong. I said yes, thinking I was in for a four- or five-year adventure.”
“Look at me now,” he adds, laughing.
Toughness And Standards
Tortorici brought his singularly unique ability to parse through Asia’s byzantine corporate layers and difficult business situations, identifying mission-critical problems that needed to be addressed, and laying out a clear course on how to fix them. High level, focused strategy and efficiency improvement was his mantra, for each investment First Pacific would enter.
He also developed a reputation for toughness, becoming to some the “most feared man” in a multinational conglomerate whose operations at one time spanned more than 50 countries.
“Why most feared? The reason is simple. Because every single time Ed would come to Manila, heads would roll,” deadpanned MPIC’s Lim.
“What our Filipino culture prevents Manny from doing, out of delicadeza, (cultural sensitivity, Filipino tact), Ed does so well,” Lim added. “That’s why they are so effective together. But its true: if you saw Ed coming your way, chances are, that meant (there was) trouble somewhere.”
Former Philippine Secretary for Foreign Affairs Albert del Rosario is a confidant and observer of both: “Early on, Ed was able to immediately identify Manny’s leadership style and saw in him the broad horizons for a positive collaboration. In working together, Manny and Ed were one in seeing that people work best when they are respected and trusted.”
Victorico Vargas, formerly president and CEO of Maynilad Water Services and now head of PLDT’s Business Transformation Office, describes, “What Ed also instituted was a culture that was global, not only in its outlook but in how it performed its internal processes, which are now done transparently, honestly, with integrity.”
Tortorici and Pangilinan hired Vargas almost 17 years ago from Citibank, itself a past proving ground for many Filipino executives.
“Until First Pacific invested in PLDT, it was a patrician, locally focused company, in outlook and also in how it served, or didn’t serve its stakeholders, to be honest,” says Vargas. “You won’t believe this now but it was not uncommon then to wait up to 10 years for a landline phone application to be approved. And that was already the late 1990’s!
“Thus PLDT‘s processes became global once First Pacific came in,” he continued. “For example, Citibank, where I worked prior to joining PLDT, was a multinational corporation with a purely global outlook. Beyond the executive boardroom, its impact in local markets was hard to say. But what First Pacific did is blend the best Filipino values with its global, transparent way of communicating. They brought a unique style of leadership that was very adaptive to Filipino culture.”
The Best Companies In Asia
“What we’ve tried to do is build a team of global managers for some of the very best companies in Asia,” remarks Tortorici. “We’ve had successes, a good stretch of them, thankfully. We also had some down times. Yet the one constant that has enabled us to build a future-focused organization and which we believe will endure, long after any of us, comes down to one simple thing: our values.”
Pangilinan agrees. “That thinking really comes from our American executive directors and, to be honest, our British, Australian and other managers, too. They are all very engaging, collaborative, collegial. Everyone can speak up and is encouraged to, on any subject matter. There’s a real duty I feel that they share, to tell me when they think I’m wrong. It goes against the typically Asian managing model, which is a very ‘Yes, sir’ type culture.”
He turns reflective. “In a way, this type of culture foreshadowed the Internet world as we see it today, doesn’t it?”
In recent years, Tortorici made sure Pangilinan spent considerable time in Silicon Valley, meeting everyone from Facebook’s Mark Zuckerberg (the Philippines is among Facebook’s highest usage markets), to touring the Googleplex, even hearing pitches from obscure, promising startups. Silicon Valley’s “can-do,” entrepreneurial spirit resounds with First Pacific in many ways and mirrors the type of culture the two colleagues sought to build in their Asian businesses.
As an example, Pangilinan is most passionate when describing First Pacific’s cultural impact on the companies it invests in. “The hallmark is our having a 360-degree perspective and respect for the dignity of all our workers. If you work for us, we want you to have a stake in this journey, to think like an owner, which goes beyond being a mere manager, or a mere employee. It presumes an entrepreneurial mindset, one that becomes deeply invested in the business. Because if you are, then everyone involved has a real stake in a common future and a more-than-reasonable shot at success.
“What that translates to is a real ability to say what’s on your mind, even if it hurts, but also not to allow your colleague to fail,” he continues. “It’s about being transparent, from a business perspective and a moral one. Having integrity about what you think and, of course, always being honest when it comes to financial matters.”
Value Of The Veterans
Pangilinan’s efforts today are focused on laying the groundwork for PLDT’s next transformation.
“Years ago, when we moved from pure voice to texting, it was a fairly seamless transformation,” he says. “Efforts today are more disruptive: we’re changing networks, improving the physical infrastructure, revisiting all the content we offer and determining how best to attract and market to millennials. We’re looking even further ahead, to Generation Z. Today’s transformation is driven by apps, by content, by constantly exploiting new technologies. It requires fundamentally new and open thinking.
“That’s where Ed has been invaluable, in helping me not only think through the transformation strategy, but also in its execution. You can call him our enforcer,” he adds, quietly. “PLDT is in the throes of a massive change effort and, as we all know, change is never easy.”
“It’s a forgiving culture, to a point,” notes MPIC’s Lim. “You’re allowed to make mistakes but you’re not allowed to repeat them.”
Vargas adds, lightheartedly, “Its like in basketball: when the game comes down to a break-or-make moment, who does the team turn to but your go-to guy, right? And who is he? It’s your veterans!”
He also explains that PLDT is embarking on a series of new hires, including millennial managers, who know their market best.
One of those helping to drive the future is Diane Dugan Eustaquio, executive director of IdeaSpace Philippines. A brainchild of Tortorici’s, Ideaspace Philippines is a pioneering technology incubator for a new generation of Filipino entrepreneurs.
Eustaquio knows the value of veterans like Tortorici.
“Ed is fierce, brave and wise,” she says. “If there’s a superlative for ‘experienced,’ that’s Ed. He is a walking atlas of strategic management and anyone who works with him and survives his energy would have acquired, I’m certain, an equivalent master’s in management and entrepreneurship. Working with him I learned what wise men are made of. They are very self-aware. They’re intelligent. They have a high sensitivity, have empathy but can distance themselves. They have done things from scratch, definitely not afraid to dig dirt. They are not complicated.”
She declares, “You know what else they are? They are composed of old-school values, sincere and think longitudinally. That’s Ed.”
Old Friends, New Adventures
Pangilinan knows his colleague and friend of over 30 years is contemplating a new set of challenges.
“One thing that I want to point out is that I know how strong Ed’s devotion to his wife Anita is, and what a truly genuine marriage theirs has been — 57 years, I believe,” Pangilinan says. “I also know Ed has wanted to contribute meaningfully to the political debate happening back in the US. We all support him.”
He pauses, mischievously. “Ed is larger than life and his impact has gone beyond the boardroom. He’s been very helpful, to a huge degree, but especially as an irritant! He’s caused the organization to shock itself… almost like the grain of sand that helps transform the oyster into a pearl.”
Pangilinan smiles. “Was that too dramatic?”
Del Rosario believes Pangilinan’s and Tortorici’s partnership was heaven-sent. “It is my belief that Manny and Ed were providentially brought together at the right time, forming an outstanding combination — along with others — that resulted in building an organization worthy of global renown in just over three decades.
“Motivated by that kind of (special) management doctrine, with Manny as quarterback, Ed has carried First Pacific’s ball so many times, with heart, conviction and toughness, over so many years to realize opportunities and surmount challenges,” he continues. “He has consistently advanced all efforts in promoting quality team play!”
Lim assesses Tortorici’s and Pangilinan’s personal impact on him, as well as on the First Pacific group. “Where would I be without Ed or Manny? I owe everything I have to both. I just don’t think (the group) would be what it is today without Ed or Manny. They are a perfect, unbreakable combination. You can see it: Manny misses Ed, complains when Ed is not here and thus has to undertake certain tasks by himself. Somehow, together, they have always found the right decisions, in so many ways.”
Voicing a thought shared by many, Del Rosario concludes, “I hope (Ed) will never totally leave us, and that he will always consider continuing to impart his invaluable guidance.”