In a previous column, I said there are four ways to make money or be rich in the Philippines—one, through inheritance, like the cases of the Zobels, Ortigases and the Madrigals; through graft and corruption (well, you have plenty of examples; 40 percent of the national government budget is routinely stolen or easily P1 trillion a year); three, through professional management; and four, through entrepreneurship and innovation.
Entrepreneurship is still the best way to make money. It represents hard and honest work, persistence, and the spirit of innovation. So we have the likes of Henry Sy Sr., Eduardo Cojuangco Jr. (he was born a son of a rich man but his dad apparently was defrauded of his due share when the time to cut up the Cojuangco wealth came), John Gokongwei Jr., Carlos Chan, Injap Sia, and Tony Tan Caktiong. They should be mighty proud of their wealth although I feel they should share more of it. The founders of Microsoft and Facebook are allocating up to half of their wealth to charity and improving the quality of life of lesser mortals. The standard a rich man must allocate for charity is a minimum of two percent of his wealth.
The most iconic example of one who became rich through professional management and entrepreneurship is Ramon S. Ang, the vice chairman, president and chief operating officer of San Miguel Corp. Danding Cojuangco brought RSA to SMC in 1999 to turn around the brewery and food giant after years of mismanagement by the Soriano sons. SMC grew to being the largest and most diversified corporation in the Philippines with more than P800 billion in revenues, P50 billion in profits, and 100 factories in the Philippines and Southeast Asia. If you listen to RSA, he is just warming up. He wants to conquer more mountains and territories.
Another example, though on a smaller scale of being rich by combining professional management and entrepreneurship is a guy I met recently, Cesar Reyes.
In 1999, Reyes, an electronics engineer, retired from telco monopoly Philippine Long Distance Telephone Co. He collected a tidy sum as retirement pay and bonuses.
As PLDT senior vice president and head of development and expansion, he was a kind of miracle man, having executed the largest and most expensive expansion program of the telephone giant—the zero backlog which installed two million telephone lines, solved the telephone shortage, and brought Philippine telecommunications into the modern age.
Additionally, Cesar conceptualized the installation of cellular mobile satellite in Asia involving mobile and aeronautical satellite applications using Batam Island in Indonesia. America’s largest defense contractor, Lockheed Martin is a major partner. It has invested $170 million in the project.
Also, Cesar conceptualized and developed e-Government to speed up government transactions and enable government-business-consumer interaction transactions in a matter of seconds.
The engineer helped launch the Philippines’ satellite, Mabuhay, and laid PLDT’s fiber optic network called the Domestic Fiber Optic Network. In fiber optic, one fiber optic, can handle 10,000 lines with awesome speed and efficiency.
After retirement, Cesar bought a Batangas town electric cooperative. He put on line a one-megawatt power plant that solved Bauan’s severe electricity shortage. Today, says Cesar, the town has 24/7 electricity and his small power firm makes an average return per year of 10 percent, probably higher.
In 2012, Cesar bought from a PCGG auction a former Marcos property—a 3,800-square meter hillside lot in Baguio, on a prime location, between the Mines View Park and the presidential Mansion House. Cesar loved the place. “It is a sprawling-type property with plenty of pine trees,” he gushed.
In 2015, Cesar completed the construction of a 60-room hotel, the Grand Sierra Pines.
“We want our guests to experience three things, the reasons why they go to Baguio in the first place—to relax, enjoy the climate, feel the breeze,” says Cesar. “We offer those and more,” he says. The hotel is managed by his son, Rex Joseph “Joey” Reyes, himself a budding computer programmer and tech specialist.
Today, the Grand Sierra Pines has become the No. 1 hotel in the summer capital. Occupancy is high—at about 80 percent and booking is heavy. These days, confides Cesar, “we do as high as 100-percent occupancy.”
In two years, if not less, Cesar will recover the P300 million he invested in the hotel property. This will make him Baguio’s superstar hotel builder and hotelier.
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