Good evening Ladies and Gentlemen.
There is nothing a son wants more than to make his father proud.
However, I do not recall growing up as the ideal and perfect son. I still remember the scolding I got after jumping into our seven‐foot pool from a two‐story roof at nine years old. Then 15 years later I remember getting the same look from my parents, but minus the scolding, when they discovered I had jumped out of a single engine Cessna flying 3,000 feet over Batangas. Never mind the small detail that this time I had a parachute but their faces said it all: “Piki, why on earth did you do that and what were you thinking?”
This year, as FPH and I both turn 50, many things have come full circle. As I ruminate on the future of the First Philippine Holdings group I cannot help but reflect on the past. 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 USMM. 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 General Telephone and Electric. 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. So I ask myself at the dawn of our next 50 years, but with a note of awe and admiration: Lolo, how on earth did you do that and what were you thinking?
For us, even in death, he was always larger than life. The shining era we fondly remember in the group is termed the “golden age” of Meralco and Meralco Securities Corporation from 1962‐1972. After Lolo had taken over from the Americans in 1962, he was faced with three main challenges. First, was to meet the staggering demands of Meralco’s franchise area, then growing at more than 10‐12% per year. Existing power plant and distribution capability needed to rise by more than 3‐4 times in the next ten years—or an additional 1,100 MW. Second, was the challenge of financing this upsurge in capacity. Funding the acquisition was tough enough but finding the banks to lend for this tremendous growth in capacity was a challenge in itself. Third, was finding and training a new team of Filipinos to run Meralco at a higher performance level than its former American owners.
In all three challenges, Lolo proved tremendously successful. Meralco’s franchise customers doubled during this period. He added a new power plant every 18 months and augmented Meralco’s capacity by more than 1,110 MW. Their power rates were the lowest in Asia and lower than those in more than 43 U.S. states. In the area of customer service, he pioneered the 48‐hour connection time for new users and the first 24‐hour customer service in the country with response time of less than an hour. This expansion drive also created a bevy of pioneering businesses for our group as Meralco sought to backward integrate its own requirements. It established the first transformer manufacturing facility in the country, the first oil pipeline, the first lube oil refinery and the first construction company specializing in the design and building of power plants. It also had the controlling stake in PCIBank, then a necessary adjunct of any growing conglomerate. By the early 70’s it was the only conglomerate to have two subsidiaries worth more than a Billion pesos. It was in many respects, truly a “golden age.”
But the good times would not last.
On this very same day, September 21st thirty‐nine years ago, this golden age for MSC as well as the hopes and dreams of many Filipinos living at that time 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 fourteen 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. During those years you could almost hear others questioning why Lolo felt compelled to take a stand for integrity and social justice against a dictator; like people were saying, Why on earth did he do that, and what was Don Eugenio thinking?
But even then, many underestimated the true power of that legacy he left us. Former British prime minister and novelist Benjamin Disraeli once wrote that “The legacy of heroes is the memory of a great name and the inheritance of a great example.” And sometimes it’s the calm and silence of those wilderness years that allow a rekindling of the fires preparing you for greater things.
My Tito Steve Psinakis always had a framed copy of Rudyard Kipling’s poem “If” on his desk side. I’m sure you’re all familiar with it. For him, and even for me it’s a reminder of where true north should be in the face of life’s ups and downs. Long after you’ve read it for the first time, its words stay with you and selected passages spring out in relevance at various stages of your life. There’s one that leapt out at me the other night as I was thinking about what to say in this speech. It’s the phrase that says, If you can “watch the things you gave your life to broken, and stoop to build them up with worn out tools…” This, Lolo had to do several times in his life. In August 1928 when a powerful typhoon destroyed 60% of his sugarcane crop and almost wiped him out financially. Then again in 1941, during World War II, when all the aircraft of his pioneering airline INAEC were bombed by the Japanese and all his buses were commandeered by the United States Armed Forces of the Far East. But each time he did, he would always accept his circumstances with great composure and proceed to rebuild from the ashes with not a trace of bitterness or rancor. In fact he would do so only with the same infectious zeal and enthusiasm he was so known for.
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 FPHC 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. Even as he saw the things he and his father gave their lives to, broken, he soldiered on, in Kipling’s words, “to build them up with worn out tools.”
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.
As we were pulling the First Gas projects together under Peter, Tito Steve liked to call Giles Puno, Ricky Tantoco, Jon Russell and myself, the “young Turks still pissing vinegar.” He used the term interchangeably with either endearment or displeasure depending on whether we were locking horns with him or not on some issue.
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 5 years. That was 36% 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. Today us young Turks aren’t so young anymore. And hopefully, it’s not vinegar but red wine we’re expelling these days.
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.
Dad, there is no doubt in our minds that we will meet your five challenges. We WILL make you proud. Furthermore, we assure you, that at the dawn of THEIR next 50 years the next generation of leaders at FPH will be asking with that same tone of admiration we have for all of you: How on earth DID you do that, and what WERE you thinking?
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!