Lopez Holdings


What can an admiring son say on his father's one hundredth birth anniversary? I honestly don't know where to begin. Obviously, my father's life was one tough act to follow or even contemplate. He was no doubt, one of the great Filipinos of his time. He was more than just a captain of industry. He showed the Filipino people how to take control of their economic destiny why they must take control of their economic destiny. He believed in the Filipino's ability to be world class.

He was also a great father, demanding of his children to be the best that we could be, disciplining us to make sure we have the right values that will govern our lives. He was also so loving as a father, always emphasizing the importance of family and family unity over everything else.

Because he came from a wealthy family and also because on his own, he scaled new heights in business, there may be those who think that he had always lived on easy street. In truth, he has had his share of ups and downs. His accomplishments were the result of hard work, and a strict adherence to a set of values taught to him by a loving and close-knit family. Material wealth to him was not as important as relationships, principles and living up to age-old values of truth, honesty and humanism.

He had his share of disappointments. In fact, he and his brother, former Vice President Fernando Lopez, were orphaned early in their childhood. Their father, who was Governor of Iloilo province, was shot right in his office by a political assassin. He eventually died from his wounds. My father was just six and a half years old when he was orphaned. An uncle, Don Vicente, raised him and his brother as if they were his own children.

In a sense, it was the extended family structure of the Lopezes that enabled my father and his brother to have a normal childhood following their father's death. Don Vicente Lopez treated them as his own children, loving them and inculcating in them the same values for which the family is known for.

This is why if there is one trait that made my father the great man that he was, it is the way he lived by the values he learned as a child. One of the more important is his word of honor. He was one of those old fashioned men who lived by their word of honor, no matter how painful or inconvenient that might be. It was perhaps his secret of success as a businessman. He would have been appalled at how words have become cheap in today's world.

His adherence to his old world values were put to the most painful test when towards the end of his life, he gave up all the wealth he has earned and accumulated over his lifetime to uphold what to him is most important --- honor and family unity.

He was a self made man. Early on, he set high standards for himself and made sure he met them. When he came to Manila to study at the Ateneo, he made the most of the experience. Not only did he excel in academics, he didn't miss out on the social life. He graduated cum laude for his Bachelor's degree at the Ateneo and he was consort to the Carnival queen and president of the Bachelors Club as well. He was a voracious reader, biography, philosophy, history and economics. He was in the words of a contemporary, fascinated by ideas of all sorts, testing them against his own. But he could also be counted upon to do a mean tango on the dance floor. He became a young adult in the era of the Roaring 20s and the Jazz Age and he enjoyed every minute of it.

He finished his law degree from the University of the Philippines with excellent grades, as usual. He proceeded to Harvard, where he pitted himself with the best minds, convinced that Filipinos are capable of world class performance. He practiced law for a while with the law office of Vicente Francisco, where he met and developed a lifetime friendship with Claro M. Recto.

But my father decided after a few years that he wanted to go back to Negros and help manage the inheritance he shared with his brother, Toto Nanding, who was already helping manage the sugar central in Negros at that time. He promised his young city-bred bride that he would be a millionaire before he was 30.

It took a typhoon that destroyed 60% of the Lopez hacienda's sugar crops to make my father realize that the future did not lie in managing a sugar plantation. Aside from the weather, much depended on world market prices and there was also the months in a year when capital lies idle. He realized that money was to be made in the centrifugal milling of sugar and also in branching out to other industries.

Soon he and his brother decided to hire an encargado to run the plantation while they moved back to Iloilo. They revived their father's newspaper, El Tiempo, went into the transportation industry, all the time sharing everything in their business, fifty-fifty.

If there are two words to describe my father's behavior in his early days in business, these are bold and audacious. He didn't pick just any target as a crusading publisher of El Tiempo, he picked the Governor of the Province. He accused the politician for corruption and for being involved in jueteng. Death threats and a libel suit didn't faze him. He was uncompromising with corruption. He saw his mission as publisher in these words, "drive away from our midst the big scoundrels in government who are devouring our country and reducing its people to poverty and misery." He was victorious in his first skirmish with corrupt government officials. The libel suit was dismissed and the Governor was removed from office.

It was also the same boldness and audacity that characterized my father's decision to go into the transportation business. At that time, very few Filipinos ventured into this sector, perhaps because of the complexity of operations and the size of capital required. But my father put up a ferry operation between Negros and Iloilo and provided the only competition to the long established dela Rama Steamship Lines. Because there was need for the capacity provided by both, both flourished.

After that, venturing into land transportation was a natural next move. He founded a bus company that introduced new amenities to the bus business, including the first double decker buses in the country. His franchise covered the city, while another company covered the province. He eventually bought out the other bus company, allowing him to operate in both the city and the provincial areas.

The boldest and most audacious of my father's early business moves is the venture into air transportation. He saw the future in air transportation following a visit to Indonesia, also an archipelago like the Philippines. Up until then, the closest to a domestic airline in the Philippines was an air ferry service called Philippne Air Taxi Corporation or PATCO. It was largely involved in servicing the requirements of the American-owned mining companies Now and then, it took on passengers and mail. The planes were spartan, small and rugged and passenger comfort was not a priority.

In 1932 or just four years after PanAm was founded, my father established the Iloilo Negros Air Express Company or INAEC. He chose a ten passenger plane that has proven itself as a workhorse for several American airlines. Called the Stinson tri-motor, the plane came with plushly upholstered seats, reading lamps, a comfort room and air conditioning. These amenities were unheard of in those days. Two American pilots were hired to fly the first plane and it flew the Iloilo-Bacolod and Iloilo-Manila routes. It soon added Cebu, Davao and Zamoboanga. By 1937, want to buy my father out but he refused. As an economic nationalist, he was not about to give the Americans control of the Philippine skies.

My father's passion for business was equaled only by his commitment to the country and its progress. He believed in the Filipino's ability to excel and to lead in any field and in any task. And like the late patriot, Don Claro M. Recto, he believed that the Filipino could be and must be, the master of his own fate. He said that feeling more eloquently in these words: "The Philippines is for us Filipinos. This country is a God-given paradise we must always love I call on all my countrymen always to beware of all forms of domination and oppression of our economy by foreign businessmen --- so that we can find solutions that will set our country free."

By the time of the Second World War, my father has made his name as a young tycoon whose business and political clout were already recognized. Everything however, came to an abrupt stop with the Second World War. Almost everything was wiped out and the family went into a survival mode. With a price on his head, my father had to keep himself several steps ahead of the Japanese.

The interlude from business concerns provided by the war years became an opportunity for the family to bond more closely, inculcate core family values and prepare for better times. It was a time when my siblings and I came to understand more clearly the kind of man my father was --- his character and his strength of will.

After the war, my father found the business empire he painstakingly built, all lost and in ruins. He had to start from scratch. The Iloilo-based businesses, including the farms, the newspaper and the bus company were revived. A college was also started. All of these were in the care and management of his brother Nanding. My father wanted something bigger, with national rather than regional impact.

It so happened that a former American pilot of his in the old INAEC came around and told him about the opportunities presented by all the surplus American war equipment including airplanes. He explored this avenue and bought a few C-47s to restart his airline business under a new name and corporation --- FEATI. The Sorianos did likewise with the old PATCO, now renamed Philippine Airlines. FEATI was the more market dominant of the two, but not for long as politics intervened to upset the playing field.

Despite the close friendship of my father and then President Manuel Roxas, the Sorianos managed to get the President's support. Soon the President started talking about the need to have just one national airline and PAL started getting more routes to fly. Two unfortunate accidents --- air crashes involving FEATI airplanes --- sealed the airline's fate. My father found it better to sell out to PAL and thus began the decades long monopoly of the airline over Philippine skies.

At this time, my father also took an interest in publishing a national newspaper. He agreed to buy the Manila Chronicle from the family of Roberto Villanueva because he felt he needed a platform to express his views on economic nationalism and governance of the country. He was also so impressed with Mr. Villanueva that he asked him to be the General Manager of the Chronicle. Bert Villanueva, however, served him in more than the Chronicle. Bert was responsible for designing the innovative financing modes that enabled my father to first successfully bid for control of the giant Biscom sugar central and eventually, Meralco. My father's interest in mass media would later include buying two broadcast networks that formed the core of what is now ABS-CBN Broadcasting Corporation.

The Biscom deal was another of my father's trademark audacious coups in local business history. He was not even seen as a competitor when government decided to auction its shares. But he managed it so that he gave what everyone thought was an outrageous bid that was way above what conventional wisdom thought the sugar centrals were worth. But it was precisely because his bid price was so high that government had no choice but to award the public bidding to him. It also enabled him to fight off later legal challenges to his assumption of control. Biscom enabled my father to grow big enough to be able to manage the next chapter of his colorful life: getting control of Meralco.

Meralco, of course, is the most daring and audacious of my father's accomplishments. At a time when no one in the country believed Meralco could be managed, much less owned by Filipinos, my father thought otherwise. Meralco was the largest local corporation and its operations involved technical expertise that were then handled by expatriates.

The American owners of Meralco were anxious to sell out to a Filipino group for a number of reasons including the pending expiration of the Laurel Langley Agreement and the increasing difficulty of remitting its earnings back to the mother company, General Public Utilities. They have approached a number of prominent Filipinos, the Ayalas and the Aranetas and they have all balked at buying even 5% of Meralco. Now, they have to sell 100%.

The amount involved was considered big in those days: million. In comparison, the Cojuangcos bought PLDT from GTE for only million and Benguet was sold years after Meralco became Filipino owned for million. Even my father was initially hesitant, not only because of the amount involved but also because buying Meralco goes against most of the business tenets that had done him well through these years.

First of all, the family business was sugar. He knew nothing about the electricity business. He knew, however, that he might have to give up sugar entirely so he can give full concentration in running Meralco. Secondly, my father always tried his best to fund his expansion using internally generated funds. He does not like borrowing, specially from government. Third, as a public utility, my father will not be able to have majority control of the business as he would normally prefer. The political vulnerability of the business as well as the large amount of long term debt it must carry, require a broader ownership base.

But he also sensed the possibilities Meralco offered and told Bert Villanueva that he will go for it if he can find a way to make it happen. And Bert did find a way. The secret, as Bert found out, was in projecting Meralco's stream of earnings over 10 or 15 years. If the Filipino buyers could assemble the .25 million down payment, the balance could be paid out of the annual earnings of the company. Meralco could pay for itself.

Well, my father did manage to assemble the investors and the down payment and Filipinos did take over Meralco from its American owners. My father believed enough in the ability of the Filipino managers and engineers to run a technologically complex enterprise like Meralco. He was proven right. Meralco during the years under Filipino management prior to the Marcos martial law era, was run as good as, if not better than when the Americans were in control. Electricity rate in its franchise area was the cheapest in the region. A new power plant was being built every 18 months. Not even the occasional political backlash from Presidents with whom my father had differences with, affected Meralco's ability to serve its public efficiently.

Then came martial law. It all started in the tumultuous era of the late 60s, when the idealism of the youth clashed with the corrupt materialism of the country's political leadership. Toto Nanding was still the running mate of Mr. Marcos in the 1969 election, but it was clear even then that the partnership has increasingly become tenuous.

My father through the Manila Chronicle had been increasingly critical of the administration as it championed reforms in the political and economic system that were sending our youth out into the streets. Marcos initially fought back the way most past Presidents did by sitting on Meralco's rate increase petitions, no matter how meritorious they might be. The intention was to force my father to acknowledge Marcos as the ultimate boss, at a time when the regime's dictatorial tendency was becoming obvious. A good example of this aching desire to institute one man rule is the way Mr. Marcos tried to bribe his way through the 1971 Constitutional Convention.

True to form, my father chose to fight. He always loved a good fight, specially if it involved certain principles he holds dear, like democracy and good government. The Chronicle and ABS-CBN were in the center of the anti-Marcos movement. The Lopez group was clearly on the side of the opposition during the mid-term election of 1971. When all but one of the senatorial candidates of Mr. Marcos lost, the President knew he had to destroy the Lopezes. By this time, Mr. Marcos had already suspended the writ of habeas corpus. It was just a matter of time before he would declare martial law and rule as a dictator way beyond his constitutionally mandated term that should have ended in 1973.

The martial law years brought us endless sufferings at the hands of the dictator. My brother Geny was thrown in jail on nebulous charges that the Marcos regime couldn't even bring up in their controlled courts. Meralco was taken from us at gunpoint, as was ABS-CBN and Chronicle. A simulated sale was later made where the Meralco takeover was legitimized at a price of P10,000 down payment. We, of course, saw nothing of any money from the regime. My father captured his frame of mind at this difficult time in there words: "The Meralco sale was a giveaway, to save the life of my son. The sacrifice of material things is easier to take than the sacrifice of the human spirit."

It is widely acknowledged that no other prominent family lost as much as the Lopezes did during the martial law years. But by giving up all, my father showed us what was essential --- more than the desire to win, much more than wealth, most important was family unity through all adversity.

As it was during the Japanese occupation, the main concern of my father in those dark martial law years was family unity. He wanted, first and foremost, to see Geny freed from prison. He give up everything to see Geny free. But he was double crossed several times and most painfully, by people he thought were friends, among them, Bobby Benedicto. Geny remained in jail for five years until he and cellmate Sen. Serge Osmena managed a daring escape. My father's health deteriorated and he died in San Francisco without seeing his fondest desire to free Geny from the Marcos jail. Manolo and I were also refused permission to leave the country to see our dying father.

With the victory of the People Power revolution, something my father knew would happen at some appropriate day, the principles and time-tested values of my father have once again been upheld. We, his children, sifted through the ruins of his life's work and started building up again from scratch. Our advantage, the secret of our subsequent success, is simply that we have learned well from the master.

Our best inheritance from our Tatay is not material wealth because Marcos took most of that away. Our best inheritance turned out to be the values he drilled into our conscious and subconscious minds. When we have a difficult business problem at hand, we always ask ourselves what would our Tatay have done under the circumstances. We remember his words of wisdom and there it is, an idea of how to go about addressing the problems before us.

Perhaps, the most important value our father taught us in the management of our business is how to regard those who work for us. He taught us never to exploit our workers and to always compensate them justly. He said it in these words: " I would prefer that we go broke first than continue to exist as a company that pays starvation wages. I would rather see this company go to pieces rather than put into practice the theory that the company's profit should be above and far above the welfare of its employees."

Finally, we learned from our father that the real reason we are in business is to render public service. His words are clear what exactly our mission is: "a commercial firm which could hardly make both ends meet but which gives service and real satisfaction to the community is, in our estimation, more successful than a multimillion corporation which reaps them and then keep them to itself, completely neglecting the community which sustains its life."

Today, we face the difficult economic and political environment in our country and the world. Some of our companies are in crisis. But we are confident that as in the past, adversities bring out the best in us. We get back to basics, to the values that helped the family through many centuries, through many wars and political uncertainties. Provided we do not lose sight of what tatay has taught us, we will emerge the better for the experience.

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Lopez Holdings Corporation 
16/F North Tower, Rockwell Business Center Sheridan, Sheridan St. corner United St., 1550 Bgy. Highway Hills, Mandaluyong City, Philippines

  • Trunkline: (632) 8878 0000
  • Fax: (632) 8878 0000 ext 2009