Lopez Holdings

 

Lopez Group Chairman Emeritus Commencement Remarks at the 87th Graduation Ceremony of the Central Philippine University on April 12, 2015
Iloilo City, Philippines

Good afternoon, and congratulations to all of you for the journey you have completed.  

Graduates, welcome to the world that you should be leading and dominating for the next forty to fifty years.  You enter that world with several advantages.  You are blessed with a good education that the officers and faculty of this university have made their life’s work.  It is an education that your parents have dreamt about and devoted themselves to for the better part of twenty years.  It is also something for which you have worked, and your degrees are well-earned from years of dedication and scholastic effort.   You enter a job market in an economy that has been growing vigorously over several years.  Next to China, the Philippines is regarded as the fastest growing economy in the region, and indeed the world, over the past several years.

But you are also entering a world that is extremely challenging.  It is a world that is extremely competitive, and the space that you will want to occupy will probably be a space that others also want to occupy.  So you will have to compete for that space.  It is a world that moves and changes very quickly due to advances in technology.  If you want to be agile, then you will have to be technology savvy.  Finally, it is a world where the ways in which we have traditionally done things for a long time are constantly being challenged or made obsolete by new ways of doing things.  It is possible that what you have learned in school is already out of date, or will be very soon.  You are, therefore, entering a world where you must constantly learn and re-learn what you know in order to stay ahead of everyone else.

From my perspective this afternoon, there is therefore more than a bit of irony in someone who has reached the status of chairman emeritus and is about to turn 85 years old offering advice to many who probably have yet to turn 22.  I think that I am here, speaking to you, not so much because of what I myself have accomplished in my lifetime. Rather, I am here because of the longevity and success of the Lopez businesses that have passed from the stewardship of my father and my older brother – both deceased -, through my stewardship, and are now under the stewardship of the next Lopez generation since I retired 5 years ago.  Permit me, then, to share with you some of the reasons for the longevity and success of the Lopez businesses.

Your university was established in 1905.  What was to eventually become the Lopez Group of Companies was established some 23 years later in 1928 here in Iloilo City by my father, Eugenio Lopez, and his brother, Fernando Lopez.  It was called E&F Lopez, Inc. It was a dual proprietorship in which everything was shared right down the middle, 50%-50%, literally hating kapatid.  This was to be maintained by my father and his brother through their lives.  Eventually, with the complications posed by the coming of the next generations, the business was split 50%-50% between the families of Eugenio and Fernando.  But if there is one thing that continues to characterize the Lopez businesses today, it is the sense of unity that permeates both the family and the companies.  

While they were blessed with sugar haciendas that they inherited from their parents, the Lopez brothers were not destined for a life of sugar planting.  Their education started in Iloilo, but then extended to Manila and overseas. In the case of my father, he spent 8 years as an intern in the Jesuit school Ateneo de Manila and then he went on to finish  law at the University of the Philippines and then he went to Harvard University Law School for 1 year post-graduate course.  My uncle Fernando went to Letran and then to Sto. Tomas University also for law. This enabled them to dream beyond the boundaries of their birthplace.  They both returned to Iloilo as aspiring young adults, and began their businesses here.  But my father, Eugenio, in particular, always had a restless pioneering entrepreneurial spirit.  He launched his career as a young crusading newspaperman in Iloilo, with the El Tiempo Times, which he inherited from his father, Benito Lopez, who was governor of Iloilo when he was assassinated by a henchman of his political rival and this would be a burning passion of Eugenio throughout his life.  But in business, he understood that mechanization and industrialization were the keys to the future of Philippine commerce.  During the 1930’s he brought modern air, land and sea transportation to Iloilo which includes the following businesses: he set up Iloilo Negros Air Express Co. or INAEC as the first airline in the country in 1932; Panay Autobus and Iloilo Transportation Company  for land transportation across Panay and ferry boats to commute between Iloilo and Bacolod.  After the Second World War devastated all the business he had built up in the 1930’s this time with Manila as his base. He started by buying a small newspaper, the Manila Chronicle, and building it up to be the second leading newspaper in the country.  He then tackled radio and television and gave it to my elder brother Geny to run, until ABS-CBN became the largest communication network in the country.   

Eugenio Lopez carved a named for himself in Philippine industry at a time when the largest companies in post-war Philippine were under the ownership and management control of our former colonial rulers, the Americans and the Spanish.  But he always believed that Filipinos had the ability to manage those large foreign-controlled companies, and he always believed that the companies, under Filipino management, could do as well or even better.  This was where his strong sense of nationalism manifested itself.  He finally got to prove this when the opportunity arose to acquire a controlling interest in Manila Electric Company in 1960 then the largest corporation owned by an American company in the country.  Under his leadership, a group of young, dynamic Filipino professionals were able to arrange the financial package needed to purchase ownership of Meralco from its erstwhile American owners.  Over the next ten years, Meralco lived through what is still referred to as its “Golden Age”, powering the growth of Philippine commerce around a rapidly expanding Metropolitan Manila. Today, the 2nd generation Lopez businesses continue to promote that sense of nationalism and belief in the Filipino by seeking to conquer new areas of businesses such as :  the biggest geothermal electricity system in the country;  the  1,500 MW natural gas-fired power plant in the Philippines with the natural gas supplied by the Malampaya gas fields off Palawan by Shell Philippines Co.; we have also gone into wind power with 150 MW plant in Burgos, Ilocos Norte and hydroelectric and solar power in different parts of the country;  we have also been in the manufacture of distribution electric transformers for all the power companies in the country for the past 40 years.  In real estate, we have Rockwell complex and the industrial estate complex in Batangas called FPIP for (First Philippine Industrial Park).

Today, we continue to regard ourselves as a corporate family where every single employee, from the company presidents down to the lowest staff levels, are given all the resources and opportunities to be the best they can possibly be.  This is not out of sheer corporate generosity.  We fully understand that the continued success of our businesses depends heavily on our ability to attract and command the loyalty of all our employees.  

The Lopez businesses constantly aspire to be model employers because, in return, we demand business excellence from our companies and their people.  It is said that even the leading companies across the globe today will have an average life of only 15 years.  In other words, many companies that are regarded as the leading companies in their respective industries today will not even be around by 2030.  I am sure that if you do online research, you will find more than enough data to more or less support this.  Our own experience will tend to confirm this.  Think back, for example, to the year 2000.  How many companies and how many brands do you remember as being dominant then, who are either gone or reduced to being marginal players today?  Today, the Lopez Group is 87 years old since 1928.  Until 2015, it is still growing vigorously under the leadership of my son Federico, who is in-charge of First Philippine Holdings set of companies and his cousin Eugenio Lopez III, who is in-charge of ABS-CBN.  I have another son with me here today, Benjamin or Jay for short who works for the Lopez, Inc. which controls all the companies in the Lopez group of companies.  Also with me here today is a daughter, Angela Guingona who works as a operation head of Lopez Group Foundation.  Finally I also have here my wife who is in charge of our 8 married children, 28 grandchildren and 2 great grandchildren.

Protecting the legacy entrusted to us by my father and his brother has been a challenge much more severe than just making the right business decisions and remaining profitable.  The legacy we’ve had to protect is playing the role of crusading journalist, on the one hand, and at the same time being in businesses that are at times monopolistic and subject to rate regulation by the government.  It has long been said that “You cannot fight
City Hall”.  Better yet, that you cannot fight the ruling administration.  My father did so, when his newspaper, Manila Chronicle, became so critical of the Marcos regime so when Martial Law was declared in 1972, my father was stripped of all the big businesses he had, namely:  Meralco, Meralco Securities Corp., ABS-CBN and Manila Chronicle.  My elder brother Geny was imprisoned for more than 5 years.  After that length of time in prison, one night my brother and his cellmate, Sen. Sergio Osmeña decided to break out of their Fort Bonifacio prison cell and fly out in a small plane to Hong Kong and from there took a commercial plane to San Francisco.  That was in 1977 and both only came back to Manila after the EDSA Revolution in 1986.

After Martial Law, the Lopez family had to start all over again.  It took us several years to regain our possessions from the government which included Meralco, ABS-CBN and the Manila Chronicle.

There is one last thing I would like to share with you.  Like all businesses, ours exist to make profit.  Profit to sustain themselves and to continue being gainful employers.  Profit to be able to continue attracting investment from stockholders.  We can only do this if we provide useful products and services for our customers at a price that they are willing to pay.  Otherwise, they would cease to buy our products and eventually, we would be forced out of business.  

But if I were to ask myself why I have waken up for the better part of sixty years and gone to work, and why I have been passionate about what I have been doing all that time, the last thing that would come to mind is profit.  We do what we do for other reasons.  In my case, it is the ideal of service that had been ingrained in me by my parents as I was growing up, and by the schools I went to as I pursued my education.  It is also my advocacies, among them my love of nature and the need to protect our biodiversity.  I believe, there is a deeper motive that underlies our sense of humanity.  We cannot enjoy something that we cannot share with others.  A Rotarian visitor to our country recently remarked:  “You are enriched by what you give away; and you are impoverished by what you keep.”  I very much believe that is true, not only for us as individuals, but even for the businesses that we own, manage or work for.   To survive and to flourish, it is not enough that businesses make profit.  They must also have a social conscience and share part of what they have with the society that they serve.  

In the credo that employees of all Lopez companies recite when they gather together, part of our covenant with each other reads as follows:

“In our service to the Filipino people, we will be guided by the following distinct Lopez values:
•    A pioneering entrepreneurial spirit
•    Business excellence
•    Unity
•    Nationalism
•    Social justice
•    Integrity
•    Employee welfare and wellness
We know from generations of experience that it is by living according to these values that a company can be built to last.”

This afternoon, I have tried to share with you how these values continue to be very relevant to us in today’s world and how they act as the compass by which we steer to our true north.  

You, my dear graduates, have the world in front of you.  You have the education to compete for your space in that world.  You have the knowledge, the youth, the passion and the energy to succeed.  You have the idealism to want to share and make your lives meaningful.  Over time, I hope that you will gain the wisdom to match your idealism to be able to share and find meaning in what you do.  You also have the tools to change the world and to make it a better place.  Through technology and your familiarity with technology, you have the means to overcome the many inefficiencies that stand in our way.  Through your social networks and the ability that they give you to coalesce and unite, you have the means to change the normal order of things.  You can do this through the power of your vote.  Or through the collective strength of your opinions and buying power.  

As we have, I hope that you will set your values as your stars and steer by them, so that you do not lose your way.  And best of luck in your journey forward in life.  And again, congratulations to all of you.

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Lopez Holdings Corporation (formerly Benpres Holdings Corporation)
4/F Benpres Building, Exchange Road, 1605 Pasig City, Philippines

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