For 24 years, I have addressed this assembly as your President, COO, CEO, and Chairman, as distinct positions sometimes but oftentimes as concurrent posts. Annually, it remains a privilege and a great occasion for me. But today, let me also address you as a Meralco employee who has been serving this Company for 36 years, just like so many other employees here with me today, and many more who have left us, who have served loyally and faithfully for almost a lifetime. However, there are some differences in my case, having had the unique opportunity to experience Meralco from a truly vantage point. Today, for the last time, I address you from that position as your Chairman.
Since my first stockholders meeting in 1986, as your President, I have not just reported the numbers but have put them into context and perspective. Through these reports, I have opened your Company more and more to all of you by explaining not just what happened but why they did and why they mattered. With those management reports, the management team sought not just to provide information and numbers, but converted them into human beings and feelings.
Beyond the electric rates and the generating capacity, beyond the profits and the returns on investments, beyond the frequency and the duration of brownouts, are the men and women of Meralco. I am very much aware that the numbers is the reason why we are gathered here today, but this time, I will leave this kind of message to the daily leadership of the Company. These numbers let me remind everyone, are the results of how our Meralco employees behaved and worked. They made them possible; they made them happen; they made these results come out. Let us focus therefore on what or should I say who really count. There are stories about them, too many to mention, yet too great in their own ways, to just bury in memories.
Meralco has been very lucky that it has found and nurtured people who are unwavering in their passion for this Company and their uncommon concern for our customers. We have called it Malasakit here. It has become our way of life. No matter what tragedy hit us - natural or man-made alike - Meralco service continues. At this period of unimaginable changes, of business competition and profit imperatives, and of incessant intrusion in our lives by the Internet, Facebook, Twitter, YouTube, and the like - people don’t talk about nor seem to care about what is real and what is truly important. I am referring to what actually produces results - Malasakit, integrity, teamwork, customer focus, and, social responsibility. These are the values we looked for and ingrained in our people. They guide all of us in all our decisions and actions while we perform our duties in the Company, and as we live our lives with our families and communities. Volunteerism which is the central theme of our programs in education, environment, community development, and even in outright charities, greatly enhanced responsible citizenship among our employees and much more, increased the care for the customers. That we seem to be successful through the years, with this strategy, judging by the results of our operations, is enough recompense for me.
This is the secret of why this Company is now on its 109th year, and why I am very sure, we will be celebrating another hundred years more.
The electric power business is a long-term proposition. Decisions made today impact lives and livelihood three to five years down the road. Yes, even in the distribution side of the business, such long-term commitment and long-term view is “the nature of the beast” so to speak. What we are reporting now as the state of your Company was to a great extent determined several years ago, when certain decisions were made and executed. Our commitments, choices and actions today, largely determine what we will be several years from now.
Meralco has been very fortunate that at various stages in its corporate life, the most appropriate people, management philosophy, and operation system came its way at the most opportune moment. The periods of rehabilitation, strengthening and stabilization, transformation, and attempted take-over’s necessitated and demanded distinct sets and combinations of people, processes, and culture, which either fortuitously or deliberately, were present when they were needed most.
When I came back in 1986, the rehabilitation of Meralco was the highest priority. From the lowest point in its financial position of P301 million pesos in losses in 1984 to 1985, to the dismal performance of the electric system with 21 % system loss and regular occurrences of brownouts and blackouts in the franchise at more than 30 times a year, with ever lengthening duration of no lights, we had to rebuild not only the electric system infrastructure but more so bring back the Company’s care for its employees This would ensure that the employees would in turn give back to our customers the care and concern which have been the hallmarks of Meralco service before the martial law years. Our major rallying point was the spirit of Malasakit which propelled us again to another milestone in our history – the Meralco’s IPO.
Meralco’s IPO was the biggest stock offer in the history of the Manila Stock Exchange at that time. On November 26, 1991, the IPO began, selling some 21 million shares or 23 % of the Company to the public. The issue was heavily oversubscribed, garnering P240 million pesos in three weeks. The share price quickly and steadily soared that by December 1993, the stock price reached a high of P505 pesos per share.
Two years before this Meralco public listing, in 1989, the employees’ Malasakit to their Company was met with equal Malasakit by the Company by the offering of the Employee Stock Ownership Plan or ESOP.
Although fraught with difficulties and even with some opposition, Meralco’s ESOP at 69 % participation rate from its general employee population, was and I believe still remains to be the most successful employee stock offering in the country to this day. The ESOP was a fulfillment of Management’s commitment and promise to its employees that as the Company grows and progresses, so will its employees. Backed by several studies by various institutions such as the University of the Philippines, on this employee compensation strategy, it is a known fact that the ESOP indeed improved the quality and standard of living of our employees and their families. Home and vehicle ownership became the norm and very good education for the children were ensured for their families.
Perspectives were widened and confidence was boosted as travels and quality time with families and friends were attainable. Today, after 14 ESOPs, employees, retirees and former Meralco employees convey their gratitude to the Company for this part ownership and its attendant benefits, and more importantly to express their undying loyalty to the Company. With the Rockwell property dividend, such tie of co-ownership and loyalty continues.
In the 90’s, Meralco, started to dream to be a world class company, able to compare very favorably with the best utilities in the world. To do this, we made a bet on the principles and practices of Total Quality Management with its twin strategy of Kaizen or continuous improvement and Kairyo, which is the way towards more fundamental and big changes. It was a massive and intricate culture-building period marked by a renewed spirit of pride and loyalty for the Company.
In 1996, we resolved that to be truly an excellent company, we needed to change the Company’s very fabric, processes, organization and technical infrastructure taking advantage of new technologies and anticipating the growing demands of our customers for better service and new ways of doing things. We partnered with Union Fenosa of Spain, an electric utility in Madrid, who had the same number of employees and very similar profiles of customers and franchise area with Meralco. It took us six years, from 1996 to 2002, to transform all aspects of the Company, the more apparent changes of which were in the number of employees which went down from almost 9,000 to the 6500 presently, and the more efficient and convenient services to our customers made possible to a great extent by technology.
As Meralco succeeded in providing better service to its customers and in improving its financial performance, so with its attraction to investors and other interested parties increased. There followed in the early 2000, takeover attempts by the government. Aided by unfavorable and sometimes unfair court decisions and government rulings, overcharging, rollback, refunds and provisional decisions became part of our everyday life in the early years of 2000. With the hostile environment, the Company’s financial position suffered yet again a big setback. And your Company experienced two hostile takeovers with the excuse of helping the Company get back to its feet again.
In 2004, the government attempted to gain control of the Company through a friendly and subtle way by trying to install their people in the Company’s Board of Directors and in the key positions in its Management. The timely exposure to the media of this veiled attempt put a stop to it and the government retreated in its desire for a time.
Some of you may have witnessed a few years ago, in our 2008 stockholders meeting here in this very theater, the second, bolder and more aggressive attempt by the government to takeover Meralco through the GSIS. We had the longest ever stockholders meeting in the country, lasting from 9 in the morning to 10:30 in the evening. The GSIS, with the assistance of certain elements in the Securities and Exchange Commission, tried to void a number of proxies to gain control of said stockholders meeting. With the concerted effort of everyone in the Company and our excellent team of legal experts, we defied the SEC order, continued taking control of the proceedings, and thus foiled the attempt. Thereafter, we went to the Court of Appeals to finally settle the issue.
There was even a time that charges were pressed against some Company directors and officers, including yours truly, to the point where arrest warrants were issued against us already. The threat was very real that we had to tell our families to be ready if we do not go home that evening and some of us brought bags in our cars and offices just in case we get picked up and jailed.
All of these happened against the backdrop of the beginnings of deregulation. Congress passed RA 9136 in 2002, known as the EPIRA, or the Electric Power Industry Reform Act, ushering in a new environment for the Company. As fate would have it, we completed the Meralco Transformation Project just in time. The impending deregulation of the power industry was what had spurred the then Management to begin the reengineering of the Company in 1992. In 2002, we believed that the Company was ready and poised to take on the challenges of this new life in the electric power business.
I was a very lucky CEO indeed that I was there when these all happened. How can one not leave with such mixed feelings, especially if we also consider the following?
When you had a father who showed you the way; who knew you more than anyone else; and, who believed in you when it seemed no one else did;
When you had a mother who defended you even at the most unlikely moments and against the fiercest of critics;
When you have a wife who stood by you no matter what and kept the family together when Meralco demanded so much of my time and energy;
When you have children who grew up very well, and who with their spouses and the grandchildren they gave us, is a constant source of inspiration, stability, and joy;
When you have employees, who gave you such unequalled welcome in 1986, in its exuberance and warmth;
- Who taught you the best, and the most enjoyable of the Meralco ways;
- Who supported you through the most radical of transformations and persevered with you through the most challenging of times;
- Who fought alongside with you against the bleakest odds and stood with you in the trenches against all difficulties;
- Who taught you that fun and loyalty is in genuine friendship and who gave you such lifetime and invaluable memories.
For these unparalleled experiences and much more than words can say, I thank all of you.
These lessons, this experience, I am using as I continue to serve our country and our countrymen as your Ambassador to Japan. In 2010, shortly after I stepped down as your CEO, I accepted the invitation to join the diplomatic service. While at first, I was reluctant to accept this post being a totally new world for me, with the prodding of my wife Maritess, I agreed. Little did I know that my immediate task after arriving in Tokyo in January 2011 was to deal with the devastating earthquake, tsunami and radiation threat. My years of working with all of you, the lessons we learned together pulled me through those most difficult days, and are still serving me very well till now. I am indebted to all of you for such learning experiences and toughening me up for any challenge.
Since then, aside from taking care of the 220,000 Filipinos all over Japan, with my staff of competent, devoted and persevering civil servants in the foreign service and the cooperation of a number of our government agencies, I am concentrating on further improving our relationship not only with our host country, Japan, but also with all the members of the international community. It is very gratifying to note that all indicators in 2011 showed positive results - trading between Japan and the Philippines up by 21 %; tourism up by 11 %; and, very importantly, the Overseas Development Assistance up by 35 %, from the previous year, despite Japan’s own economic troubles. We expect even more positive results in the coming years as the good image of our country continues with this government’s apparent success in its drive for more transparency and better governance.
Let me take this occasion to express my deepest appreciation and heartfelt gratitude –
- To all the members of our Board of Directors, past and present, for your continuous support to all of Management’s initiatives;
- To all our Stockholders for your patience and trust in us and for being with us through the years;
- To all Meralco employees especially the two unions and their officers; the retirees and former Meralco employees, and all your families, for the Malasakit, 24 by7, 365 days of service in good days and bad days;
- To all our contractors and service providers, for your understanding and unstinting support;
- To all our suppliers and partners, for giving the highest quality products and services to this Company; and
- Finally, to all our customers, for bearing with us, keeping us in our toes all the time and without whom we will not be here. I leave this Company, with full confidence on the leadership of Mr. Manuel V. Pangilinan, who definitely will bring Meralco to even higher levels of service and success. I wish to thank MVP for his astute leadership of Meralco and most especially for taking care of our employees.
I believe that Meralco will continue to be the country’s premier utility company, able to stand side-by-side with the best in the world. The Lopez Family also welcomes the Rockwell Company as its ownership has now been officially turned over to us. I just have one remaining request to MVP - please make the Meralco Bolts the PBA champion team just like Talk n Text.
Maraming salamat sa inyong lahat at magandang umaga.