By Manuel V. Pangilinan

(Below is the keynote speech of Mr. Manuel V. Pangilinan, First Pacific Company Ltd. Managing Director, which he delivered during the BusinessWorld Economic Forum held on Tuesday, July 12 at Shangri-La at the Fort.)


Today can be a momentous day. By the time this event ends, we hope to walk out of this beautiful new hotel, into the air of a vindicated, and stronger nation. News from the Permanent Court of Arbitration at the Hague is expected — a decision against China for her intrusions into our national territory. We believe that history will be on our side today.

When Manny Pacquiao lost to Mayweather last year, the then Miss Philippines Pia Wurtzbach tweeted: “Bawi tayo sa Miss Universe.” We take inspiration from such chutzpah. Talo man tayo sa China sa FIBA — bawi tayo mamaya sa arbitration.

The teams I love

Speaking of FIBA — a week ago, we hosted the Olympic qualifying tournament for the Rio Olympics. Despite the spirited effort of 12 valiant men, we failed to break the glass ceiling. One blogger wrote — Sayang. Almost. Muntik. Halos. But it occurred to me, as I watched President Duterte toss the ceremonial ball to the cheers of 20,000 fans, how basketball can be a unifying force. The sublime pride one felt watching Filipinos compete against the best in the world is indescribable. I hope there could be more.

Just look what basketball has opened. Ramon Ang and I are now business partners.

If only I can get Gina Lopez to be interested in basketball.

We support many teams. I was asked once, which of our teams I love the most. I replied:
• Ateneo, of course, is my intellectual love
• Talk N’ Text — my professional love
• Gilas Pilipinas — my patriotic love
• San Beda — my emotional, and now, politically correct — love
• I support the U.P. Maroons, too. They say it’s my love for the poor.

Change has come

My task today is to start the thought process for this forum.
First, much of the interest in this event must be inspired simply by the times. Not only is this arbitration day, but we also have a new government, bringing new hopes.

President Duterte, in less than a month, has given us a reassuring view of a viable economic program, driven by decisive leadership, and a bias for action. Change has come; we welcome it.

We wish President Duterte, and Vice-President Robredo — or, shall I say, our Dubredo nation — well. More than that, business should support and collaborate with them in nation-building, as we chart our way to progress by 2020.

Addressing poverty also the business of business

The first Executive Order of the president charged Cabinet Secretary Jun Evasco with supervision over 12 government agencies to find better ways to reduce the incidence and magnitude of poverty. Apart from regarding drugs and criminality as the enemy, this government has named poverty as a target as well. My second thought touches on poverty, and starts with this premise.

Business is a partner to government in nation-building. Progress is best achieved when public and private sectors appreciate each other’s mandate, and work together in fulfilling the one and same purpose — improvement of people’s welfare. What Michael Porter calls “shared value.”

But there’s poverty standing in the way. Addressing it must be the business of business, not only of government’s. The optimum approach to poverty, in our view, is jobs — not just the quantum of jobs created, but jobs that lift families up from the bottom of the pyramid.

The new digital economy

My third point references the many soft parts of our economy begging to be addressed. The good news is that these gaping deficits represent investment opportunities. Since most are job-creating and situated in rural areas, they would help in promoting inclusive growth.

What are these opportunities?

First, businesses unique to their geographic and resource advantages, such as tourism and mining. Most of these are located in rural areas where poverty incidence is the highest. At around 40%, this is higher than the national average of 26%.

Second, businesses linked to information and communications technology, to science and engineering. The world has already entered the 4th industrial revolution — a new digital economy, which deploys, and places a premium on intellectual capital. Markets now value digital enterprises more than the smokestacks and steel and iron of yesteryears. It is also a world of disruption.

Let me illustrate briefly how technology has started to make in-roads in one of the more conservative sectors of our economy: financial institutions.

We now have a digital platform to effect remittances — cheaper, and more efficiently. Our Smart Padala already handles about 100 billion of the 300 billion pesos domestic remittances yearly.

Smart e-Money has disbursed over 5.2 billion pesos worth of government’s conditional cash transfers to 1.5 million impoverished families online nationwide.

Our mobile loansaver, with Landbank as our financial enabler, has for the last 12 months disbursed close to ten billion pesos of salary loans online, to more than 65,000 government employees. Our next step is to apply this to private sector employees. We have as well a platform for consumer loans called Lendr.

These technology solutions can disrupt the industry dynamics, by enabling anytime-anywhere convenience for consumers of financial products. They can level the playing field, and neither size nor bricks-and-mortars will matter in the long run. And since it reaches a great majority of our people, they help in financial inclusion.

Infrastructure concerns

Third, the list of infrastructure issues is long.

In power, we badly need a national policy on fuel mix for our generation plants — apportioning what comes from coal, gas, and renewables. This fuel allocation will impact both the cost of power and our environment in the long run. The recent heightened interest in renewables is understandable. But let me say this: for now, renewables cost more than conventional power, which means higher power prices. There’s a cost to protecting our environment — no such thing as free lunch.

Power supply nationally is not a cause for concern. Based on power plants being built and to be built, we’re likely to have sufficient generating capacity over the term. But majority of these plants are coal-based.

In tollways, the main deterrent has been the lack of relief in rate adjustments for the past 3 years — despite a parametric formula embedded in concession agreements allowing such periodic adjustments. These rate adjustments are necessary to fund the capex for additional toll roads to be built.

In water, we need government to honor contracts. Government’s refusal to implement the arbitral award, and grant tariff increase, have held back the build out of more pipes, and the construction of sewerage treatment plants — so important to ameliorate the discharge of pollutants into our waterways. I ask, where are the environmentalists who should take up this cause?

The list goes on — light rails to fix and expand, subways to build later; heavy rails in Luzon and in Mindanao; airports — regional and international; and the ultimate dream — bridges to connect Luzon with Mindanao.

Next, agriculture. Despite the critical place of agriculture in our economy, our attitude and laws on agricultural development are simply not investor-friendly. We need to rethink the Agrarian Reform Law, and support large-scale commercial farms. Just look at the success of plantations in Indonesia, Malaysia, and Thailand.

Our need for mining will not stop

Finally, the gorilla in the basketball court, mining. I just have two points:

First, even if we operate on the premise that all mining are bad, our need for mining products will not stop. We will import the metals and minerals we refuse to mine ourselves. We would then be paying the Indonesians, Malaysians, Australians — everybody else — for their riches. We’d be paying not only their profit, but also the cost of protecting their environment. This makes no sense at all — paying somebody else to do the job we ourselves can, and should, do.

Second, providence has endowed us with an abundance of natural resources. We can choose to develop them to benefit our people, or let them just lie fallow.

I say, we all have a sacred responsibility to our people to improve their welfare. The poetry of blue skies and tangerine sunsets should give way to the stark realities of poverty. And if we do develop these resources, we will have lived by these words of Matthew — “well done, good and trustworthy servant. I will set you over much, and now enter into the joy of your master.”

The story of Marlon Boro

In closing, let me tell you the story of Marlon Boro of Cagayan de Oro.

Marlon’s parents separated when he was only two months old. He was adopted by his childless uncle and aunt. His foster father is a carpenter. After high school, Marlon was forced to work in order to feed his family. At 15 years old, he received his first pay — 160 pesos a day — as a laborer carrying heavy loads of cements, sand and gravel. In 2010, he took and passed the PMA entrance exam but failed the medicals twice due to scoliosis.

In 2012, Marlon was accepted as a janitor in Xavier University-Ateneo de Cagayan, collecting garbage in the school complex. But he took the entrance exam, and passed! It was tough, attending classes from 7:30 in the morning until noon, and doing janitorial work from 1 p.m. to 10 p.m. With the help of a scholarship from our Gabay Guro Foundation, he managed to graduate with a degree in education.

Marlon will soon be a teacher at the lumad community in Lantapan, Bukidnon.

Marlon’s inspiring narrative brings to mind what Prime Minister Nehru said in August 1947, on the eve of Indian independence, and soon after the assassination of his mentor Mahatma Gandhi: “the achievement we celebrate today is but a step, an opening of opportunity to the greater triumphs and achievements that await us. The service of India means the service of the millions who suffer. It means ending poverty and ignorance and disease and inequality of opportunity. The ambition of the greatest man of our generation has been to wipe every tear from every eye. That may be beyond us, but as long as there are tears and suffering, our work will not be over.”

While our work in this country is indeed far from over, may everyone in this hall resolve to wipe every tear in every eye of every Filipino.
Thank you for listening. A good day to all. n

Mr. Pangilinan is also the Chairman, CEO, and President of PLDT. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — has a stake in BusinessWorld through The Philippine Star Group, which it controls.

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