Malacañang has been putting a positive spin to it, but even the math-challenged can see that the economy slowed down last year from 2014, growing less than the government expected despite the usual holiday surge in the fourth quarter.
If it wasn’t election season or if daang sarado had a stronger presidential candidate, Malacañang could probably afford to be more forthright about the slowdown and promise to do better in 2016. President Aquino, after all, can already take credit for sustained economic growth under his watch, although his predecessor can claim the same in her nine years in power except in 2009 amid the global financial crisis.
I’ve asked several prominent members of the business community who have been here for a long time if they are particularly concerned about the results of the presidential race in May.
The common answer, among those who didn’t build their fortunes on monopolies and oligopolies that require the right connections, is that whoever wins isn’t expected to implement any radical change in the business environment.
Those who benefit from monopolies and oligopolies are likely concerned about losing their edge if the next administration overhauls the Constitution. But their businesses didn’t grow through lack of foresight. For sure they are preparing for the impact of Charter change.
Local and foreign investors do have a common concern, which is retarding growth potentials for both private business and the national economy: inadequate infrastructure.
It’s a problem not only in Metro Manila and the growth areas around it but also in booming provinces such as Albay and Cebu.
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“Infrastructure” was the quick answer of Frank Gaisano when I asked him what he considered the biggest concern of business as another national leadership change looms.
Gaisano and his siblings Edward, Jack and Margaret have just had a successful initial public offering, raising P3.6 billion for their Metro Retail Stores Group Inc., and are embarking on a multibillion-peso expansion in the next five years.
Two of the new Metro supermarkets / hypermarkets planned for this year and 2017 will be opened in Mandaue and Cebu City, Frank Gaisano told me last Thursday night at a dinner he and his siblings hosted at the Manila Polo Club for a small group of newspaper executives.
“Ceboom” is becoming too small for its entrepreneurial spirit, he told me, and it shows in the worsening traffic. The booming IT zone, for one, needs more roads or flyovers. Like Metro Manila, he said, Cebu could also use trains.
As I wrote last week, Motoo Konishi, who yesterday ended his four years as country director of the World Bank Group, said the Philippines needs to raise its spending on infrastructure from the current six percent of GDP to about 10-12 percent.
With a logistics firm included in their ever-growing and diversifying conglomerate, the Gaisanos need the road network and other infrastructure to match their expansion zeal. Already into property development, perhaps one day they will venture into infrastructure to do the work themselves.
With the remarkable growth of their businesses particularly under their generation, the Gaisanos have been dubbed the Ayalas of the South.
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Perhaps because of last year’s IPO, the low-key siblings have been persuaded to raise their public profile. Frank Gaisano is the current face of the clan and he’s had some exposure to mass media. But last Thursday’s intimate dinner was the first time that Margaret faced media personalities together with Frank and Edward, chairman of the family’s holding firm Vicsal Development Corp.
The holding company is named after their parents Victor and Sally, explained the jolly Edward as he recounted the roots of their business empire that now includes investment and brokerage firms, WealthBank, cargo handling, pawnshops and a travel agency. He regaled us with stories about Cebu and Colon, the oldest street in the country, where the first store wholly operated by the siblings was opened in 1982.
Like the children of Cebuano taipan John Gokongwei, the Gaisano siblings are unassuming and friendly. The brothers still live together with their families in the same compound in Cebu, with only their “Atse Margaret” moving out.
Margaret, who values her privacy, overcame her resistance to face the press and delivered brief remarks at the dinner. “We’re very happy we’re in Manila finally because we thought we are probinsiyano,” she said, grinning.
They ventured into Manila with a big splash, building and opening the Metro Market! Market! department store and supermarket at the Ayala-owned complex in Taguig that is now one of the busiest commercial centers in the country. In 2012, the Gaisanos opened another Metro department store and supermarket at the Ayala-owned Alabang Town Center.
The Gaisanos have hired foreign experts to help manage their companies, led by Arthur Emmanuel, described as the “rock star of Wal-Mart” due to his decades of working at various executive positions in the US retail giant. The Columbia University-educated Emmanuel, who was at the dinner with us, is Metro Retail’s president and chief operating officer.
Their senior adviser to the board, Christopher Beshouri, is a former president and CEO of business consultancy firm McKinsey & Company Philippines, and former senior financial economist and director at the US Treasury. The Princeton-educated Beshouri also joined us for dinner.
He told me that the Metro retail chain directly employs 12,000 and indirectly helps provide jobs to workers of their 4,000 suppliers. Their Prime Asia pawnshop has 150 branches with about 500 employees.
The Metro Group estimates that the conglomerate accounts for about 0.7 percent of the country’s GDP. The brothers said they want to be “good entrepreneurs, good businessmen, good stewards, good citizens.”
Their success, the brothers said, is good news for the country. And they can achieve even more success, accelerate their expansion and create more jobs in a more enabling environment. This includes providing the infrastructure needed for greater growth.