Eternal allegiance of service

Excerpts from remarks delivered at the First Philippine Holdings 50th anniversary gala night, PICC, September 29, 2011.

OSCAR M. LOPEZ, chairman emeritus:

Our values and principles had first been established and articulated for us by my father, Eugenio H. Lopez Sr., when he established the company, then called Meralco Securities Corporation, in June of 1961. In the process of building what was then the country’s largest conglomerate, my father taught his children and his employees that in the Lopez Group, our primary reason for being is to serve the Filipino people. He called it “eternal allegiance of service.” He taught us to be always mindful of our obligations to present and future generations of Filipinos. 

My own turn at the helm of First Holdings, spanning 24 years since my return to the company after the 1986 EDSA Revolution, has given me a chance to formulate more explicitly what we in First Holdings and in the wider Lopez Group as a whole believe in. My father was a man of few words, and often his employees had to infer what he thought and believed from his actions. In the 21st century, however, companies that aim to be “built to last” need to be much more explicit and programmatic about inculcating their core values and core ideology in their employees. Last year we declared that our core values are: a pioneering entrepreneurial spirit, business excellence, unity, nationalism, social justice, integrity, and concern for employee welfare and wellness. During my 24 years at the helm, my management team and I have done our level best to live up to these distinctive Lopez values.

When we talk about the Lopez philosophy in business, it is essentially the concept of stewardship that is involved. In other words, we are not really owners but just stewards of our companies and we are here in this life to see how we can improve on these companies so that we can hand them down to the next generation in a much better shape than when we found them.

The Lopez legacy handed down to us from my father leaves responsibilities and challenges to each generation. Just as I and my generation have done our best to live up to the legacy, I know that your Chairman Piki and his fellow leaders will carry on in the same tradition. And I hope that each generation, in turn, will believe in these values with the same zeal and passion, and pass them on in the decades and centuries to come.

Remember our values and communicate them to every fellow employee. Tell them that our primary reason for being is service to the Filipino people. It is these values that will provide their compass in the years to come, as they face challenges that you and I could never anticipate. Assets come and go, industries rise and fall — our values and principles remain.

Our standing up for principles will sometimes mean that we must take risky positions — sometimes against governments that are not committed to integrity or social justice. Those who have come before you have already undergone many such storms. You yourselves have already had some experience of political pressure and financial turmoil in the past few years, and you came through with flying colors. It would be nice to say that all these kinds of troubles are behind us. But it would probably not be true. Somehow, at some point, First Holdings will have to take a stand again. And when that time comes, I expect you and this company will remain undaunted and unbowed.

May the next 50 years of First Philippine Holdings be as committed to public service and national development as the first 50. And may the generations of First Holdings leaders and employees yet to come always keep the faith in our values.

FEDERICO R. LOPEZ, chairman and CEO:

This year, as FPH and I both turn 50, many things have come full circle. It amazes and at the same time terrifies me when I consider the breadth and scope of businesses my grandfather, Eugenio Lopez Sr. brought us into. When I think of the leaps and bounds he made from first dominating the sugar industry, then spinning on a dime after more than a hundred years of family history with sugar and shifting his fortune into public utilities with the purchase of Meralco for $66.286 million. It was a huge strategic bet, probably the largest purchase in the region at that time being four and a half times larger than the original purchase of PLDT by the Cojuangco family from its American owners. He made daring moves into the transportation industry as well with fast ferry services, bus lines, and even a domestic and regional airline that predated Philippine Airlines, Japan Airlines and Cathay Pacific by almost a decade. He and my Tito Geny Lopez likewise took the same bold strides in media from his El Tiempo, Iloilo Times and Manila Chronicle newspapers into the radio, television and the cable TV business with ABS-CBN. These may not seem like daunting industries today, but back when those decisions were being made to invest millions, he was, more often than not, the pioneer at a frontier that had sparsely been walked on by Filipinos.

The golden age (of MSC) came to an end with the declaration of Martial Law and the forced takeover of all our major businesses. This was the consequence of Lolo’s intransigence, exposing Marcos’ corruption and hidden wealth in his newspapers way before they came to light a little over a decade later. He was made an example to instill fear in any of the business elite wanting to challenge the power of the new regime. Lolo died of cancer three years later in 1975, financially broken. The 14 years that followed for our family were our years in the wilderness. Life was uncertain, we had to economize drastically and because of the cloud of fear that pervaded the country we were somewhat shunned socially.

A few years after the government takeover in 1972, MSC was renamed First Philippine Holdings Corporation. It later embarked on a massive diversification into failed ventures like oil exploration, coffee trading, financial services, credit cards and an ill-timed expansion of its transformer manufacturing capacity. To fund these, they took on considerable dollar-denominated debt that brought FPHC on the brink of collapse with the onset of the Dewey Dee crisis and the turbulence caused by the 1983 assassination of Ninoy Aquino. When Dad returned to FPH after Marcos fled the country in 1986 he returned to a company that was adrift, practically bankrupt and in danger of keeling over. Yet he acted with the same equanimity and resilience displayed by his own father at various times in his life decades earlier. His first and most important task was to get the near-capsized ship back on even keel. For this, my dad always relied on the consistency and level-headedness of Nonoy Ibañez who still continues to play the role of stabilizer in many of our most important decisions today. To propel the ship forward, he had to fire up and ignite the drive of those around him. This I saw when Tito Steve Psinakis and Ernie Pantangco spearheaded FPH’s re-entry into power generation with the 225 MW oil-fired plant in Bauang; when Tito Manolo united Meralco on the warmth of his concern for employees; when Peter Garrucho with the help of then FPH board member Tito Cesar Buenaventura made those vital and key initiatives that pulled into place the gargantuan Philippine Natural Gas project.

It’s amazing how the bar just gets higher with time. The First Gas projects put in place 1,500 MW of power generating capacity in less than five years. That was 36 percent more than the 1,110MW of plant capacity built during Meralco’s “golden age” and done in half the time. Again within the next seven years, FPH through First Gen would acquire another 1,300MW of both geothermal steamfield and power plant capacity from the privatization of NPC and PNOC-EDC.

Although we now live in a world of black swans and uncertainty, and we’ve since sold and passed on our regulated franchise monopolies like Meralco and MNTC into good hands, what comforts me at night is that today we have a great team and platform of businesses from which to launch yet another new golden age, possibly taking the best of the Filipino to the global arena. I’d like to think that the pain of adversity and the passionate spirit of the champions that have come before us have etched many great lessons in the hearts of those at the helm today. On behalf of my family and FPH we would like to thank all of you for the gracious support you’ve given us this last 50 years and we hope you continue to share the exciting journey of the next 50 up ahead. Thank you very much and good evening!