At 82, Eduardo M. Cojuangco Jr. seems to have run out of ambition. Not that he has failed. Nor achieved less than what he had aimed for, from early in his business life. “I have achieved more than what I have intended to do in life,” he says. “I never imagined I could reach this far,” he muses. “Everything that has happened, I never even dreamed of.”
After eight decades of a marvelously extraordinary life, one lived mostly for the betterment of others and his country, Cojuangco is a portrait of contentment. “I have enough in life,” says the Philippines’ most successful industrialist, the chairman and CEO of San Miguel Corp. and a number of other large enterprises. “With it, I can do what I want to do.”
Forbes magazine lists Cojuangco as one of the Philippines’ 12 richest Filipinos, with wealth of $1.2 billion, a grossly understated amount in my reckoning.
Cojuangco is often known as Danding, ECJ or “Boss” to friends, allies, subalterns, and business associates. With his tremendous success and achievements as a businessman and as a public servant, he is revered, respected, loved, and sometimes, feared and loathed, by business and political rivals and critics.
ECJ’s entrepreneurship and public service have served a singular purpose—to uplift the lives of many Filipinos and contribute to a stronger national development.
His success neatly straddles many facets of Philippine society—business, agriculture, public service (he was Tarlac governor and ambassador), sports (his La Salle team is UAAP champion and San Miguel owns three champion basketball teams), education (he funded 5,000 high school teachers to get masters or doctorate degrees to improve the quality of secondary education), and philanthropy (he gave away thousands of hectares of land to poor farmers).
Cojuangco manages a number of large enterprises, many of them No. 1 in their industry. An agriculturist by training and habit, he has attempted to modernize Philippine agriculture, notably coconut and sugar.
In 1983, he borrowed P2.57 billion or 26 percent of the then P9.69 billion in coco levies collected from 1972 to August 1982 when they were stopped. Note that our so-called coconut farmers did not own a centavo of the P9.69 billion. The P9.69 billion was collected from coconut millers and exporters, not the coconut farmers. Cojuangco was a large contributor to the levy.
Cojuangco used a modest P115.52 million of the P2.57 billion of coco levy money to acquire control of First United Bank, from his uncle. FUB became what is today UCPB which quickly became the first universal bank, the No. 1 domestic bank in equity, and the No. 2 domestic bank in resources. After the 1986 People Power, Cojuangco was ousted from bank management. Politics and three decades of litigation hampered UCPB’s once-frenetic growth. Still, today, UCPB has assets of P294.22 billion, deposits of P252 billion, and equity of P17.59 billion. Thus, an investment of P115 million became an asset worth P294.224 billion by 2016, not a bad deal. It’s like earning P294.1 billion or 255,746 percent in 33 years (1983 to 2016) or 7,750 percent per year!
Also spectacular is what Cojuangco did with the P1.65 billion out of the P9.69 billion. He used the P1.65 billion to acquire 31 percent or 33.13-million common shares of SMC in 1983. The shares were later converted into preferred shares. In May 2015, the shares were redeemed by SMC management which paid in cash, P56.53 billion.
Additionally, before their redemption, the so-called government shares earned P12.727 billion from 1984 to 2009 as common shares, plus P13.569 billion in cash dividends from preferred shares (the common shares were converted into preferred). So P56.53 billion plus dividends of P12.72 billion (from common shares) and P13.56 billion (from preferred shares) ballooned to P82.83 billion in worth by the end of 2012.
That P82.83 billion, had it been properly managed, should have continued growing in succeeding years. At 5 percent interest or yield per year, P82.83 billion would be worth P86.76 billion in 2013 (P82.83 billion x1.05 percent); P86.766 billion in 2014 (P82.83 billion x1.05 percent); P91.104 billion in 2015, P91.104 billion in 2016; and P102.954 billion by the end of June 2017 (January-June 2017).
Recall that the P102.95 billion value of coco levy investment in San Miguel was only P1.65 billion in 1983. That represents an increase in value of a whopping P101.3 billion or 6,339 percent. Divided by 33.5 years (from 1983 to June 2017), that’s equivalent to a yield of 183.25 percent per year.
So Cojuangco, in effect, was making 7,750 percent per year for 33 years from the money he invested in UCPB, and 183.25 percent per year from the money invested in San Miguel for 33.5 years.
Combine the P102.95 billion present value of SMC investment of P1.65 billion and the P294.22 billion assets of UCPB today and you have P397.2 billion of assets. The government keeps insisting that those assets belong to the country’s some four million coconut farmers.
Unfortunately, the earnings from San Miguel are not worth P102 billion today, if you ask government people. Figures vary because the earnings in cash dividends from the common and later preferred shares went into the national government’s General Fund.
That leaves the P56.53 billion in redemption value personally handed over by Cojuangco to the government in 2015. It should have swelled to P68.72 billion by the end of 2016, assuming a five-percent annual yield, and to P72.159 billion by end-June 2017.
As for UCPB, the government is in the process of privatizing the bank. But it is doubtful whether the state can sell the bank without ECJ’s active consent or participation. He owns at least 7.72 percent of UCPB, probably more if a closer scrutiny of the bank’s ownership structure was made.
In tandem with his trusted friend, adviser and executive, Ramon S. Ang, Cojuangco transformed San Miguel and nurtured it to become the Philippines’ largest and most diversified conglomerate.
Cojuangco, as chairman and CEO, presides over the largest, most profitable and most diversified conglomerate in the Philippines, San Miguel Corp. where he has been the chairman and chief executive officer since 1998.
Today, SMC has P1.3 trillion in resources, P700 billion in annual sales, P52 billion in profits (in 2016), P250 billion in market capitalization, and unrivalled leadership in seven key businesses—beer and beverages, processed food, packaging, fuel and oils, power generation, tollways (58 percent of the market in kms and 80 percent of revenues), and other infrastructure.
SMC’s sales in 2016 accounted for 4.7 percent of the Gross Domestic Product or the total output of goods and services. No other company comes close.
Cojuangco sees San Miguel as only one facet of his business success. More importantly, he believes, he likes to point at the incredible earnings he has made for the Philippine coconut industry as the better yardstick of what he has done in San Miguel and for the Filipino people.