Philippines - Summit Reports · the Philippines. The Philippine Stock Exchange (PSE), for example, hit a nine-year record high in 2006 and closed out the year some 28 percent higher

FINANCE Page 2

HOLDINGS Page 5

REAL ESTATE Page 8

TELECOMS & IT Page 14

TOURISM Page 16

A S P E C I A L A D V E R T I S I N G S U P P L E M E N T T O T H E N E W Y O R K T I M E S M A G A Z I N E

This supplement has been produced and sponsored by Summit Communications. It did not involve the reporting or editing staff of The New York Times.

As she took the podium at a recent conference ofPhilippine business leaders, it was clear that PresidentGloria Macapagal Arroyo was in an especially good

mood. And she had every reason to be so. During her sixyears as president, the country has recorded continuouseconomic growth and her highly regarded economic teamhas made great strides in restoring macroeconomic stabil-ity and the confidence of foreign investors.

“The Philippine money market remains firm. Exports andimports are up, inflation is weak and our stock market hassurged to record highs. We need to stay the course, withthe national leadership stewarding good governance, equi-table revenue programs, a strong fight against corruption

and a permanent campaign for social justice,” Ms. Arroyotold the 32nd Philippine Business Conference last year.

Besides her successful handling of difficult challenges toeconomic recovery, last year Ms. Arroyo also emerged vic-torious from a broad and powerful conspiracy that tried tounseat her. Months later she delivered an inspirational Stateof the Nation Address that was interrupted by applause some

Inspirational leadership and a fiercelydetermined Administration haveunleashed the potential of Asia’s risingtiger to generate a roaring economy basedon confidence and stability with surgingrealty, BPO, tourism and financial sectors

President Gloria Macapagal Arroyo has steered the nation towards economic recovery and social rejuvenation.

ROMULO L. NERISecretary ofSocioeconomicPlanning

Philippines

Continued on page 2

ON THE ROAD TO ECONOMICAND SOCIAL REGENERATION

PHILIPPINES nytmag 1-4.qxd 5/2/07 16:54 Página 1

170 times, a clear sign of continued supportfor her leadership.

The National Economic and DevelopmentAuthority (NEDA), the state-mandated socialand economic development planning and pol-icy coordinating body, ensures the president’sdevelopment goals are implemented. Ms. Arroyohas pledged to complete a ten-point econom-ic development plan before the end of her term

in 2010. Key to the plan is a $20-billion invest-ment in major infrastructure improvements,including 17 major airports, six seaports, 13 prin-cipal roads and an extensive rail network.

According to NEDA’s Director-General andSecretary of Socioeconomic Planning, RomuloL. Neri, the plan is way ahead of schedule. “Weare in a much better position than we antici-pated because we were able to turn aroundthe performance of many of our large govern-ment corporations from a loss to a profit situ-ation. Regarding infrastructure, one priority isto connect Metro Manila with Clark and Subicin the north, and the Calabarzon Industrial Plantin the south” says Mr. Neri.

The excess liquidity gained through eco-nomic reforms has enabled the government tomake headway in addressing social inequityand economic disparity. According to CabinetSecretary Ricardo L. Saludo, poor Filipinos havebeen benefiting from the six years of unbrokeneconomic expansion under the ArroyoAdministration. “In a survey last September, self-rated poverty (SRP) fell eight percentage pointsnationwide, helped no doubt by the economy’scontinuing expansion. And average SRP underPresident Arroyo from 2001 through 2006 isthe lowest among presidents in the past twodecades.” ■

The international creditor community is hard to please. Not oftenwill it look over a country’s financial affairs and reward it with admi-ration. Yet that is exactly what is happening in the Philippines these

days as the nation is set to record a balanced budget two years aheadof schedule thanks to bold fiscal reforms.

Much of the credit goes to Finance Secretary Margarito B. Teves,who pushed hard for the 12 percent extended value added tax (EVAT)and other fiscal reforms that have helped revenues climb dramatically.The country’s credit rating has been upgraded from negative to stable,and its budget deficit, which stood at $3.74 billion in 2004, is expectedto be eliminated by 2008.

“The sum total has been achieved by increasing investor interest.Multilateral institutions now come to us, instead of us going to them,”Mr. Teves says. “The world is recognizing we are serious in changingthe paradigm. The old perception was that we were financing develop-ment with our foreign loans. Now we are increasing reliance on domes-tic resources through revenue collections, and so we have turned thingsaround. We want to demonstrate this seriousness by achieving a bal-anced budget by the end of 2008 without compressing expenditures.”

The tax increase was an especially difficult decision, coming at a timeof political turmoil and rising oil prices. Budget Secretary Ronaldo G. AndayaJr recalls, “All the economic managers, including myself, supported thepresident. We knew that we should implement and bite the bullet nowand receive the benefits at a most crucial time. Sure enough, along theway, we felt the improvement. The problem I have right now in the bud-get sector is how to spend the money.”

All this has had an extremely positive effect on market confidence inthe Philippines. The Philippine Stock Exchange (PSE), for example, hit anine-year record high in 2006 and closed out the year some 28 percenthigher. PSE President and CEO Francisco Ed. Lim is even looking to offermore products, such as options to the bourse, and is pushing to inte-grate regional stock markets through an ASEAN federation of exchanges.“The business climate to say the least is upbeat. I have talked to a lot ofbusinessmen, CEO’s and industry leaders and the perception is that wehad a good year and 2007 will be even better,” Mr. Lim concludes. ■

Philippines / 2 SPECIAL ADVERTISING SECTION

For further information contact: SUMMIT COMMUNICATIONS

1040 First Avenue, Suite 395, New York, NY10022-2902

Tel: 1 (212) 286-0034 ,Fax: 1 (212) 286-8376,

E-mail: [email protected] online version is available at

www.summitreports.com/philippines2007

SUMMIT COMMUNICATIONSTEAM IN PHILIPPINES

Project and Commercial Director: M. Mercedes Pagalday

Editorial Research:Axel Favre

Continued from page 1

FRANCISCO ED. LIMPresident and CEOPhilippine StockExchange

ROLANDO G.ANDAYA, JRSecretary of Budgetand Management

MARGARITO B.TEVES Secretary of Finance

BITING THE FISCAL BULLETINSPIRES CONFIDENCE

FinanceIn Manila, the performance of the stock exchange has put it in the spotlight of global investors.


Since the banking sector of any coun-try is dependent on the overall econ-omy, the dramatic turnaround of the

Philippine economy has lead to a boomamong the nation’s banks. Consolidationand new regulations since the Asian FinancialCrisis some ten years ago have strengthenedthe Philippines’ financial services andincreased access for foreign banks.

The Metropolitan Bank and Trust Co.,Metrobank, is the country’s largest bank –a position is has held for the past 11 years.According to its president ArthurTy, the Philippine banking indus-try in general has made a lot ofprogress, but there is still workto be done, especially in terms ofconsolidation.

“The last count of banks was41. We still have quite a numberof banks, and although the lion’sshare is divided among the top tenbanks, there are still a lot of thesmaller banks around, includingthrift banks, rural banks, and devel-opment banks,” says Mr. Ty. “Consolidationis going to be driven by the nature and extentof the regulations. We have got Basel II com-ing up, which is the international standardfor measuring the adequacy of a bank’s cap-ital. I do not know how the smaller banks aregoing to be affected by that.”

With consolidated resources of some $12billion, the Metrobank group has a combinednetwork of more than 800 local and inter-national branches, remittance offices andsubsidiaries worldwide. It has 557 domes-tic branches and 32 international offices,spanning New York, Hong Kong, Tokyo,Osaka, Seoul, Pusan, Guam, Taipei,Kaohsiung, Madrid, Barcelona,Vienna, Rome, Bologna, Milan,Singapore, Chicago, Hawaii,and Shanghai.

The General Banking Law of2000 sparked a surge in foreign own-ership of banks in the Philippines. Forthe past few years, their main focushas been mostly on multinationalsand consumer credit, especiallycredit cards, but now they areincreasingly buying up local banks

and building branch networks. Despite theadded competition, Metrobank has contin-ued to outscore the big names in banking.

Mr. Ty is clear on why his bank has beenso successful in the Philippines and in thecountries where it operates. “The first thingthat comes to mind is the culture. Our cul-ture is known to be quite unique. As a com-pany, we are focused on discipline, results,and putting in as much effort into satisfyingthe clients. Also, proactive management hashelped us assess the competitors’ strengths,and base our strategies on how we canmake our services better. For instance, cap-italization—we have anticipated the incom-ing capital requirements well, whether it befor building the back structure of the bankbranches. We actively built infrastructurein the past, and were able to plan aroundBasel I and II.”

One of Metrobank’s priorities is to enhancethe efficiency of the services on offer, whichstarts with the branches. Thus Mr. Tylaunched a broad-based program he namedBEST: Branch Effectiveness and SalesTransformation.

“At the end of the day, having such anextensive network means thebulk of our business will alwaysbe from our branches. We thoughtthat it was time to take on a newperspective and put more focuson what we can provide throughour branches,” Mr. Ty explains.“At some point, when you havethat kind of volume, you have tosee whether you are actuallybuilding up the business as wellas serving customers.”

“BEST is really geared aroundour branches putting more attention intowhat they do: they do their transaction pro-cessing on the one hand, but they also sellto particular segments on the other. It is notsomething new. A lot of banks, particularlyin the more advanced economies, have fol-lowed this model. I would go so far as to

say, that for international cus-tomers, that is the kind of

bank branch that theyare used to when

they go to banksin their own

countries. Butfor us, it is not

something that isc o m f o r t a b l y

entrenched right now.So we have to movein that direction,” heconcludes. ■

SPECIAL ADVERTISING SECTION

The Metrobank Group has a combined network of over 800 local and

international branches, offices, subsidiaries, and affiliates.

It is the leading financial services conglomerate in the Philippines with diverse

interests in the areas of banking, life and non-life insurance,

real estate, automotive industry and travel.

www.metrobank.com.ph

ARTHUR TYPresidentMetrobank

METROBANKBRANCHING OUTTO CONSOLIDATEBANKING’S BESTBranch effectiveness and salestransformation is how the nation’slargest bank is adding a newperspective to the booming sector

Foreign ownership ofbanks has led to anincreased focus on

consumer credit.


Bringing banking services to the ruralareas of the Philippines since 1963, theLand Bank of the Philippines has built upan extensive rural branch network thathas become the envy of the country’sbanking industry.Striking a bal-ance between itssocial mandate ofpromoting coun-tryside develop-ment and stayingfinancially viable,Land Bank istoday the coun-try’s fourthlargest bank andbiggest govern-ment owned orcontrolled corporation in the Philippines. “Our dream really is to be at par with thebest in the industry, because being agovernment institution should not be aconstraint for us to be the best,” explainsLand Bank President and CEO Gilda E.Pico. “If you look at the top three banks,they have all benefited from the advan-tage of a merger. Land Bank is numberfour, but we have never merged. So it isreally through the efforts of the officersand staff that the bank grew.” Land Bank has three interconnectedbusiness goals: pursuit of its mandate,enhanced customer service, and institu-tional viability. The bank boasts animpressive loan portfolio: out of $2.3 bil-lion total loans, 70 percent – or about$1.6 billion – goes to the priority sectors.In 2000, it was only 36 percent. Ms. Pico adds, “Even if we are at pacewith the ongoing evolution in the bankingsystem, we do not forget our mandate,which is really the countryside. Our prior-ity sectors are the farmers and fisherfolk, micro as well as small and mediumenterprises, agri-business and produc-tion. We also cater to key developmentpartners, like the rural banks, local gov-ernment units, and to Overseas Filipino

Workers who come from all overthe country. We really want to

make a difference.”


LAND BANK OF THE PHILIPPINES

HOMEGROWN SOCIALIMPROVEMENT PAYS

GILDA E. PICOPresident and CEO Land Bank of thePhilippines

Banco de Oro (BDO) today ranks fifth inthe Philippines in terms of resources,loans and deposits, and eighth in termsof capital. BDO President Nestor V. Tancomments, “After 2000, we started to

expand anddevelop ourbranch network,focusing onareas where wefelt we couldreally compete.We then wentpublic andtapped into thecapital marketsto support ourgrowth. Along

the way, we have made the right strate-gic moves, and it has served us well.” The bank’s next major step was late lastyear, when BDO announced it hadagreed to merge with Equitable PCI BankInc. The merger, which is the largest inPhilippine banking history, is expected toreceive regulatory approval by the end ofthe first quarter of this year.The merged institution, Banco de Oro -EPCI Inc., will be among the top threebanks in the Philippines, with combinedtotal assets of round $12.3 billion andcombined market capitalization ofapproximately $1.9 billion. It will havemarket leading positions in its core busi-ness lines, which include corporate andmiddle-market banking, consumer bank-ing, credit cards, asset management,remittances, leasing and finance. Thedistribution network will be the thirdlargest footprint in the industry with 698branches and 1,171 ATMs nationwide.“First of all, I think that although we willbe big in size, the organization is notchallenging the likes of Metrobank or BPIjust yet,” Mr. Tan explains. “However, Ibelieve that Equitable PCI gives us all thethings that we need. For example, theenhanced branch network will help us inour distribution capabilities. Secondly,their businesses fit well with the busi-nesses that we are trying to build.Finally, they have anexcellent managementcore, which is vital in aservice business.”

BANCO DE ORO

LEAVING FOOTPRINTSOF ASSURED MOVES

NESTOR V. TAN President Banco de Oro

The award-winning Bank of the PhilippineIslands (BPI) is the oldest bank in thecountry, with a distinguished history thatspans more than a century. It is also thesecond largest bank in terms of assetsand the largest in terms of market capital-ization. Readers of the Asian Wall StreetJournal have rated the bank number onein financial soundness and itis quickly earning a reputa-tion as being a dynamicinstitution that caters to allsectors of Philippine society.“We have always been acatalyst for growth,” saysBPI President Aurelio R.Montinola III. “We recog-nized potential in the con-sumer business as early as1985. We established a bankcalled BPI Family Bank,which has become the con-sumer-lending leader.”BPI’s series of innovative technologieshelped shape the Philippine bankingindustry. It is currently targeting the over-seas Filipino market as part of bank’s

expansion strategy with its “Expat Pinoy(Filipino)” program.“Our motto has always been ‘Go whereyour customers are.’ We have the besttechnology and a robust operating sys-tem,” Mr. Montinola explains. At the local level, BPI’s corporate socialresponsibility programs are helping

Filipinos throughout the countryrealize their dreams. The bank’sfinancial management advisorstravel around the nation offeringadvice to small and medium-sized companies. BPI is alsoinvesting heavily in microfinancing initiatives.Mr. Montinola says, “We arereally excited about the microfinance side. We have set up atraining program in Ateneo tohelp teach people who want toenter micro finance. We will joinup with an institution that has

developed micro finance software andhelp introduce that to the people. We willalso help subsidize the software costs. Itis what we call capability building.”

AURELIO R.MONTINOLA III President Bank of thePhilippine Islands

MICRO FINANCE, MAJOR OPPORTUNITY


You’re in Manila with a pocketbook full ofpesos and an eye for the latest fashiontrends. Where do you go to satisfy your

luxury and designer shopping requirements?Ask anyone and invariably the answer will be:“Rustan’s.” Founded in 1951, the company’sdepartment stores are one of the Philippines’major outlets for famous and high-value brandnames, providing the capital’s top-end shop-pers with premiere goods ranging from cos-metics to home furnishings. A day spentbrowsing in the unhurried and courteousatmosphere of Rustan’s Tower in Manila’sprestigious Makati district is shopping at itsmost pleasurable.

“Rustan’s is best positioned to capture lux-

ury spending in the country as we have thebrand image, equity, patronage and availabil-ity of the target market’s desired brands,”explains Bienvenido R. Tantoco Jr., the com-pany’s president. Cartier, Tiffany’s, ErmenegildoZegna, Estée Lauder and Christian Dior are justsome of the top international labels availableto Rustan’s affluent customers.

What these valued clients may not knowis that it is also thanks to Rustan’s Group thatthey can shop at designer own-label stores.A major player in the global trend of brand fran-chising through its subsidiary, StoresSpecialists Inc., Rustan’s has pioneered theexplosion of luxury retailing in the Philippinesby launching hundreds of boutiques for brands

such as Prada, Lacoste and Zara. Tired of shopping, need a pick-me-up?

Starbucks coffee outlets are also present inthe Philippines as a result of Rustan’s pio-neering initiatives and desire to bring the bestto the country.

And there’s more. Shopwise Hypermarkets,established nine years ago, have won sever-al awards, including “Best Retailer of the Year”from the Philippine Retailers Association, andhave enabled Rustan’s to successfully expandinto the middle-income retail market. ■

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Holdings

Pictured from left to right: Bienvenido V. Tantoco III, President of Rustan’s Supercentres Inc.; NoeyT. Lopez, Chief Operating Officer of Rustan Coffee; Bienvenido R. Tantoco Jr, President of Rustan’sCommercial Corporation; Anthony T. Huang Jr, Executive Vice President of Stores Specialists Inc.



The Middle East continues to capital-ize on its current construction boom,enjoying an unprecedented growthfueled by oil prices, strong economicperformance, and high liquidity.This is most apparent in Saudi Arabia,where the construction sector con-tributes an annual $12 billion to theeconomy, and is expected to exceed$15 billion this year.The Philippines, with its decades-longassociation in the Gulf region and theubiquitousness of Filipino workersand firms, remains well poised tocapitalize on the numerous opportuni-ties presented by these economicdevelopments.Of the estimated eight million over-seas Filipino workers, or OFWs, about19 percent are based in the Middle

East. An International Monetary Fund(IMF) report stated that an increasingnumber of OFWs are taking highlyskilled jobs, given the strong demandfor professional and technical work-ers in the host countries.This is one of the reasons why cashremittances by OFWs are growingevery year. For 2006, the total cashremitted is expected to amount to$13 billion, higher than the originalforecast of $11.87 billion.Among the domestic firms capitaliz-ing on the construction boom in theMiddle East is Engineering EquipmentInc. Corporation (EEI).Part of the Yuchengco Group ofCompanies (YGC), EEI has enteredinto a joint venture with a Saudi com-pany, Al Rashid Construction.

EEI is the nation’s leading construc-tion company and the only one certi-fied under the ISO 9001 qualitysystem. It has been involved in infra-structure, high-rise and propertydevelopment, and industrial construc-tion in both the domestic and MiddleEast markets.The company is engaged in providingthe industrial and commercial sectorwith a wide range of industrial plantfacilities and equipment, replacementparts and supplies, and specializedengineering services.The company, through its other sub-sidiaries and affiliates, also dealswith activities in manpower services,cargo transport, ship repair, steel fab-rication, power generation and thedevelopment of real estate projects.

ENGINEERING TOP ECONOMIC PERFORMANCEThe Philippines is fast developing into ahub of English and IT education in Asia.Evidence lies in the influx of foreignnationals, such as Koreans andChinese, attracted by the abundance ofcompetent English teaching personneland excellent engineering schools.Distinguished for its engineering andIT programs, the Mapua Institute ofTechnology recently established anEnglish Language Center (ELC), mak-ing it the first technological institutionin the country to pursue progressivelanguage learning for its faculty andstudents.A member of the Yuchengco Group ofCompanies (YGC), the institute pridesitself on producing top-notch gradu-ates in the government-administeredprofessional licensure examinations.

EDUCATION

The Yuchengco Group of Companies,(YGC), a corporate empire establishedby Filipino-Chinese business tycoon

Alfonso T. Yuchengco, encompasses con-struction, engineering, information tech-nology, and investments, which includebanking, insurance, automotive vehicles,travel and tourism. YGC is among the pre-mier conglomerates in the Philippines, andis one of the largest and most diverse groupsin South East Asia.

YGC draws its origins from China Insuranceand Surety Co., a non-life insurance firm

established by family patriarch, Don EnriqueYuchengco. Following the death of DonEnrique in 1953, the reins of the companypassed to his son, Alfonso. Charting newdirections marked by rapid growth and expan-sion, Mr. Yuchengco branched out into diver-sified fields, paving the way for the birth ofthe present-day conglomerate.

YGC employs more than 14,000 people,and its roster of business enterprises andinvestments includes four flagship compa-nies: Rizal Commercial Banking Corporation,The Malayan Group of Insurance Companies,Great Pacific Life Assurance Corp. (Grepalife),and House of Investments Inc. The group'svision focuses not only on impressive returnsbut also on the social responsibility of itsbusiness activities, resulting in the 1970 for-mation of a fifth member, AY Foundation Inc.,which serves as its social development arm.

The YGC corporate logo represents inte-grated financial services and is equallysymbolic of how the member companiesof the group complement one another’sefforts to promote economic growth.Despite its diversity, the group has remaineda solid, well-directed unit, deriving itsstrength from its synergy. ■

The Philippines is set to join the“Asian Tigers” club of fast-growingeconomies. How would you

describe the current business mood inthe Philippines?

The business climate is more upbeat now,especially in the telecom and the agriculturalsectors. If the government continues to main-tain fiscal reforms, then businesses can ben-efit under a better economic environment.Buying power should improve if economicbenefits are able to flow downwards.

The Philippines is chairing the ASEANcommunity this year. What is the role of

the Philippines and its potential in SouthEast Asia?

ASEAN's strength is really about stay-ing together as a group, the same wayEuropeans have done. There is no way youcan stay on your own any more; even eco-nomic giants such as China realize the val-ue of being a part of a larger whole. ThePhilippines can act as a catalyst for enhanc-ing and maintaining unity and harmonyamong the ASEAN countries.

The Yuchengco Group of Companies isone of the leading companies in thePhilippines and South East Asia. What

YUCHENGCO AN INTEGRATEDAND DIVERSIFIEDFAMILY BUSINESS

‘The Philippines can act as a catalystfor unity among ASEAN countries’

Two generations of the Yuchengcofamily have strived to build a groupof companies that have a positiveeconomic impact on the Philippines

Helen Yuchengco Dee, Chairperson of the Yuchengco Group of Companies,outlines her vision and the role of Yuchengco in national development

The YuchengcoGroup ofCompanies hasa wellestablishedsocialresponsibilityprogram thatcontributesgreatly to theeducationaldevelopment ofFilipino youth.



Founder and Chairman ofthe Yuchengco Group ofCompanies (YGC), AlfonsoT. Yuchengco is fondlycalled “AY” in business cir-cles. He is furthermoreacknowledged as one ofthe Philippines’ most suc-cessful taipans. On top of his numerousachievements in business,he also enjoyed a distin-guished career in govern-ment service. He has served as ambas-sador to China and to Japan and asthe Philippine PermanentRepresentative to the UnitedNations. The chairman has also been a trusted

adviser to several Filipinopresidents and currentlyserves as PresidentialAdvisor for Foreign Affairswith a cabinet rank underthe Arroyo administration.Through his philanthropicorganization, the AYFoundation, Mr.Yuchengco complementshis business success withhumanitarian servicethrough meaningful, long-term civic projects. As he states in his home-

spun philosophy, “A million, a hun-dred million, even a billion can belost in a day. But a good name is for-ever. And so, for me, a good name ismuch more important.”

ALFONSO T.YUCHENGCOChairman Yuchengco Group ofCompanies

ALFONSO T. YUCHENGCO

are some of the major achievements ofthe company?

We have been able to maintain the leadposition in this country for many years,despite tough competition, and we belongto the top ten of almostevery industry we are in.This performance can beattributed to our commit-ment to pay a lot of atten-tion to detail, as well asmaintain personal rela-tionships with clients, part-ners and our employees.This probably marks thedifference between us andthe other conglomerates.

As the chairperson of YGC, what is yourvision for the group?

Our main lines will be in the banking andinsurance sectors. We will continue to followall the economic transitions taking place.

As the investment climate in the countryimproves, we are looking at expansion byinviting new strategic partners to come in.We have to be tuned to the needs of foreigninvestors for them to feel confident to comeand invest safely and profitably. We shouldbe able to service certain selected niches inthe market.

Can you elaborate on the projects youhave in the education and constructionsectors?

We have a lot of construction projectsall over the country. We are opening a neweducational institution in the South of Manilain June next year. We have also just openeda new high school. Our schools used to bemainly for engineering, but we have expand-ed them to include other courses such asbusiness, IT, nursing, accounting and hotelmanagement

The Alfonso Yuchengco(AY) Foundation con-tributes greatly toFilipino society. Whatprograms are currentlybeing carried out by thefoundation?

We build schoolhous-es in poor areas and havemedical missions all overthe country. We also

have a program which offers around fivehundred scholarships every year to highschool seniors. In Mindanao, we have justbuilt a clinic, and will also be providingeducational scholarships to deservingstudents. ■

HELEN YUCHENGCO DEEChairperson Yuchengco Group of Companies

‘WE BUILD SCHOOL HOUSESAND HAVE MEDICAL

MISSIONS ALL OVER THECOUNTRY, AND OFFER 500

SCHOLARSHIPS EVERY YEAR’

PHILIPPINES nytmag 5-7-ok sergio.qxd 5/2/07 17:37 Página 7

The general consensus among industryexperts is that the Philippine real estatemarket has taken off and is set to con-

tinue on an upswing. Second quarter figuresfor 2006 show that the industry posted sus-tained growth of 12.4 percent, according todata released by the National StatisticalCoordination Board (NSCB).

The two highest growth areas in the sec-tor are middle-income residential develop-ment and business process outsourcing (BPO)leases. BPO is an emerging industry in thePhilippines and is regarded as one of thefastest-growing industries in the world.Philippine BPO is expected to earn $13 billionby the year 2010. Local proficiency in Englishand the fact that most BPO workers in thecountry are college graduates have increas-ingly made the country the first choice for call

center placement among U.S. companies.Middle-income property sales are on the

rise in part due to this surge in BPO. Higherwages in this particular sector have helped tocreate a property-purchasing market among

the growing workforce. However, the mainreason for increased demand in this housingsegment is overseas Filipino worker (OFW)remittances. In 1996, 4.2 million OFWs sent$4.3 billion back home; there are now eightmillion Filipinos working overseas and in 2006they tripled those remittance figures to $12 bil-lion. Experts in the property consultancy sec-tor believe that 25 percent of this $12 billiongoes to real estate investment.

It is precisely in these two high-growth areasthat Megaworld Corporation is market leader,placing it in an optimum position to benefitfrom any further rise in the property sector.

Megaworld was founded in 1989 and wentpublic in 1994. One of the keys to its suc-cess, according to Executive Director KingsonU. Sian, is its pioneering approach to realestate. “We conceptualized the live-work-play

community in 1996, just before the Asian finan-cial crisis. In 1998, during the crisis, we broughtout plans for an information technology (IT)park,” he says. The end result of this approachwas Megaworld’s Eastwood City, comprisingEastwood City Cyberpark. This developmentmarked the emergence of the Philippines’ BPO


Real estateBPO BOOSTS MEGA ESTATES FOR LIFE, WORK AND PLAY

ANDREW TANChairman and CEO MegaworldCorporation

KINGSON U. SIANExecutive Director MegaworldCorporation



Days before the PeoplePower Revolution in 1986may not sound like the besttime to start a new companyin the Philippines, but JoseE. B. Antonio, Chairman ofCentury Properties Group,now believes it was perfecttiming. “This company started withsix people; today we employaround 3,000,” he says. “Weare now one of the top fivecompanies doing business inthe Philippines. We havebecome the biggest propertymanagement company and manageover $2 billion in assets.”Century has always been a very marketdriven company and avoids being

pigeon-holed by adaptingdevelopments to marketneeds. At the moment, theneed is to cater for the home-buying requirements of theexpanding middle class.Canyon Ranch, a fully wi-figated community 20 minutesout of Makati, and thecountry’s first fully furnishedand fully fitted studios andapartments at the Grand SohoMakati tower, are just acouple of the many innovativeand award-winning projects in

the company’s portfolio. Also, with a view to the growing demandfor top-grade office spaces, a five-hectareproject in Makati will include an IT parkwith residential offices, retail and a hotel.

FIRST IN TAILOR-MADE DEVELOPMENTS

JOSE E.B.ANTONIO Chairman Centuries PropertiesGroup

sector in 1999 and is now home to the coun-try’s largest BPO community.

Another influential factor has been far-sightedness. “In our business, prime land is ascarce raw material,” says Mr. Sian. “We start-ed accumulating land in 2002, when the mar-ket was at its lowest.” Megaworld’s land bankgives it an edge over other real estate com-panies in the development of previouslyuntapped high-growth areas.

The company is also willing to engage injoint ventures where further advantages canbe obtained. The 50-hectare McKinley Hilldevelopment in Fort Bonifacio, Taguig City, issuch a project. “Buying this amount of landand expanding it over ten years would meana high carrying cost for Megaworld. We min-imize the costs by joining hands with thelandowner, who will see a return on investmentwhen we succeed in setting up the develop-ment,” says Mr. Sian.

One of Megaworld’s latest ventures is withpartner Araneta Group in the construction ofthe Manhattan Garden City project. “This isthe single largest residential condominiumdevelopment in the country. The AranetaGroup owns 40 hectares of land at the AranetaCenter, and it has given us almost all of theland available for residential development,”explains the executive director. The ManhattanGarden City will consist of 20 residential con-dominium towers linked to the capital’s trainsystems and to the work and play environ-ment of the Araneta Center.

Megaworld’s Chairman and CEO, AndrewTan, is the driving force behind the compa-ny’s continued success. In addition toEastwood City, McKinley Hill, and ManhattanGarden City, he has three more key projectson the go, all mega-communities with multi-ple buildings: Forbes Town Center, Cityplace,and Newport City, which will incorporate afive-star Marriott Hotel. Finance for the hotelhas come from the July 2006 sale of $100million worth of five-year bonds, priced to yield8.25 percent. Megaworld raised another $105million in equity through a follow-on share offerearlier the same year.

Government success in raising taxes andcurbing fiscal deficit is leading to lower inter-est rates, meaning more good news for thereal estate market as a whole. Megaworld isonce again showing its pioneering capabili-ty with the development of Homelite, an inno-vative home-financing facility aimed primarilyat first-time buyers. Offering end-to-end financ-ing, Homelite will initially be available to pur-chasers of Manhattan Garden City’s 9,000condominium units. ■

In addition to Eastwood City, McKinley Hill andManhattan Garden City, Megaworld is nowdeveloping Forbes Town Center, Cityplace(pictured right), and Newport City communities.


The Araneta Center at the heart ofQuezon City in Metro Manila is one ofthe Philippines’ largest retail and enter-

tainment mixed-use centers. Built up grad-ually by the Araneta family since the 60s,it contains performance venues, malls, mar-kets, parks and office space.

Over the past few years, the Araneta Groupof Companies has embarked on a redevel-opment drive for the center by focusing onthe country’s growth areas: middle-incomehousing, and office space for business processoutsourcing (BPO), while continuing to devel-op the leisure and entertainment sectors.

The first step in this redevelopment wasachieved in 2005 with the opening of theGateway Mall, the third shop-ping center to be built on the 35-hectare site.

Gateway develops the con-cept of transport-oriented pro-jects popular in other major Asiancities, such as Hong Kong andTokyo, and connects directly totwo mass transit systems.

Built on five levels, the mallincludes a Rustan departmentstore and a luxuriously appoint-ed ten-screen cinema. It won themerit award in the 30thInternational Design and Development AwardsProgram of the International Council ofShopping Centers (ICSC) held in Phoenix,Arizona, last November.

Further steps in this projected renaissanceare also underway. BPO firm AccenturePhilippines currently occupies a four-storeybuilding next to the Gateway Mall, but AranetaGroup’s Chairman and CEO, Jorge L. Araneta,believes this is just the thin end of the wedge.

In light of the current upsurge in BPOindustry in the country, the group is devel-oping a 7.48-hectare Cyber Park within theAraneta Center, specifically created as spacefor call centers.

“The demand is very strong,” says Mr.Araneta. “There are no buildings available atpresent for a large user such as a call center.We are going to build ten premises over eighthectares, and the first is almost finished.”

Approval for IT zone status has beenobtained from the Philippine Economic ZoneAuthority (PEZA), meaning future companylocators will be eligible for tax cuts and incen-tives. The buildings will be comparativelylow-rise, comprising three to eight floors.

Comparative, that is, to the planned res-idential edifices. Araneta has entered into ajoint venture agreement with real estatedeveloper Megaworld, which will be build-ing 20 high-rise towers over five hectaresin the Araneta Center. Known as theManhattan Garden City, this residential com-

plex will be the first in the coun-try to connect directly to the masstransit system. It will also be thefirst to have retail space at groundfloor level.

“Right now, all the apartmentbuildings in Manila are gatedcommunities. Nobody can gothere except the residents, wholive in a sort of island. We wantthe opposite, we wantManhattan,” says Mr. Araneta.

Pedestrian and nature friend-ly, the Manhattan Garden City

will contain a three-storey elevated walk-way featuring garden landscaping that willconnect all the buildings to each other andto the MRT-3 and LRT-2 transport systems.

Aside from the Araneta Center itself, thegroup has interests in food, leisure andentertainment, including movie theatresand the 20,000-seat Araneta Coliseum,which are managed by United PromotionsInc. The exclusive franchisee of Pizza Hut,Philippine Pizza Inc. (PPI), owns and oper-ates over 140 Pizza Hut restaurants through-out the country.

Within the intensely competitive food indus-try, the business is doing well. Company strat-egy now visualizes elevating the tone fromfast-food outlet to casual dining location. “Weare raising standards,” says Mr. Araneta.“This is a global strategy for Pizza Hut, but wewere one of the first to implement it.” ■

JORGE L. ARANETAChairman and CEOAraneta Group ofCompanies

ARANETA OPENSTHE GATEWAYTO A PHILIPPINEMANHATTAN

Did you know that the Philippines is oneof the most attractive places to buyproperty, delivering higher returns than

in Bulgaria, Poland or Romania? In fact, it isprojected that those who invest in the Filipinohousing market could net up to 400 percentprofit in the next ten years.

Who could be behind this real estate boom?One agent is Robinson’s Land Corporation(RLC), a company whose stats speak for them-selves. It is the largest landlord of office space,the second largest diversified real estate com-pany in the Philippines, the second largestshopping center operator, the third largest res-idential condominium developer, the fourthlargest hotel owner in the country, and thefifth in housing and horizontal developments.

RLC was originally incorporated in June1980 to serve as the real estate arm of JGSummit Holdings Inc., a market leader in arange of industries in the Philippines. Since then,RLC has evolved into a real estate giant withfour major, and sometimes overlapping, corebusinesses.

Its high-rise buildings division is responsi-ble for residential condominiums, office build-ing developments and housing projects gearedtowards the middle to high-end income mar-ket. This branch has been a true pioneer inmixed-use developments, and has completedprojects such as Cybergate Center Tower andRobinsons Summit Center.

Through its commercial centers division,RLC owns and operates one of the largestand most successful chains of malls in thecountry, which generate 120 million visitsannually. There are 18 world-class shoppingcenters, including Robinsons Cebu, RobinsonsStarmills and Robinsons Galleria.

The hotels division is based on a partnership

ROBINSONS LAND CORPORATIONRAISES THE SKYLINE AND THE BAROne of the largest property expertsin the Philippines keeps a lookoutfor new high-rise, commercial,hotel and housing projects

Diversified and progressive, theAraneta Group has a track recordof embarking on businessventures characterized as the first,biggest and best in their class

Dubbed “the mall like no other”, the GatewayMall offers an uptown shopping experience.

Philippines / 1 0 SPECIAL ADVERTISING SECTION

Frederick D. Go, President and CEO ofRobinson’s Land Corporation (RLC),speaks about catering to the Filipinomarket at home and abroad, how hiscompany is revolutionizing the concept ofshopping malls, and what the future holds.

Where are the company’s currentmajor projects catering to theFilipinos living abroad?

We currently have two projects inFort Bonifacio Global City and we arebeginning on the third. We also have aventure in Woodsville in Paranaque Cityand a resort development in Tagaytay,all aimed at attracting Filipinos who areliving in other countries.

How are you reaching the Filipino-American market in the U.S.?

We have a coordinating office there,and we go on what we call property roadshows which move around the UnitedStates regularly, as well as the rest of theworld. About four times a year we try tovisit the Filipino communities in the U.S.We are very successful there. Thepopularity of the Robinson name, perhapsdue to our malls and numerous retailformats, makes quite a difference inoverseas markets.

RLC’s signature is that eachcommercial center in the chain iscreated from a vision, developed into aconcept. How are you revolutionizingthe mall concept?

INTERVIEW WITH LEADING DEVELOPER RLC

‘We always study the market: what itneeds, wants, has and does not have’

Robinsons Land Corporation is one of thelargest owners and operators of retail,office and shopping space in the country.



Constantly building up its diversified portfolio, Robinsons Land Corporation will be investing$307 million over the next two years in new malls, offices, residences, hotels and land.

That has always been answered on acase-to-case basis. Every time we gointo a locality, we study the market:what the market needs, what the marketwants, what it does and does not have.Every mall is a completely uniqueproposition. We pride ourselves on eachmall that we build because no two arethe same. Each is unique to the market itserves. The sector, however, isbecoming more and morecompetitive, and we have toput even more planning intoevery project. We alsoemploy a lot of foreignconsultants, mostly from theU.S. and Singapore,particularly for masterplanning, architecture andengineering.

How would you explain thetime that Filipino peoplespend in shopping malls?

I would say that for one, it’s becauseof the absence of major nationalattractions like parks, lakes and lagoons.We do not have many of those in MetroManila. Second is the weather. Filipinosfind the shopping malls climate-controlled and therefore morecomfortable. We want our malls to besafe, secure, convenient andcomfortable for all our patrons. They arequite big and thus quite complete, with

restaurants, all types of services,supermarkets, appliance stores etc.They are a one-stop shop.

What has been your greatestsatisfaction working for RLC so far?

I feel privileged to have built landmarksbecause they will last beyond my lifetime.I am a business development kind of guy;I like building things, especially from

scratch. Before, we had onlyone shopping mall and oneoffice building. Today we have18 malls, five office buildings,dozens of residentialcondominiums and housingsubdivisions, etc. It gives me alot of satisfaction to haveaccomplished something thatyou can actually see andtouch.

Is there a final message youwould like to pass on?

The Philippines is on the right path, atrend that I see continuing for a long time.The government is really making a bigpush in marketing the nation as aretirement destination. The quality of lifehere is really excellent, and our companyis taking advantage of this time to providethe real estate to make this happen. In afew more years you will see why thePhilippines is the world’s preferredretirement destination.

FREDERICK D. GOPresident and CEO Robinsons LandCorporation

between RLC and the Intercontinental HotelsGroup to manage the Holiday Inn GalleriaManila and the soon-to-be-open Crowne PlazaGalleria Manila, among others.

The housing and land development branchis known for its industrial plants and condo-miniums, some of which are Grosvenor Place,San Jose Estates and Southsquare Village.

Further construction is always in the cards,and the company has earmarked P15 billion($307 million) to be spent over the next twoyears, about 40 percent of which will bechanneled into the development of new malls,30 percent will go towards office buildingsand residential projects and the rest is forland banking and hotel ventures. ■



Starting as a family enterprise in 1972, Sta.Lucia Realty and Development has gainednational prominence in the field of hori-

zontal development. It has expanded its coresubdivisions business while embracing newmarket segments to reach its present portfo-lio of more than 150 development projects.

Although residential projects continue toaccount for the largest share of the company’sactivities, Sta. Lucia has become the nationalstandard for golf and country club develop-ments. Consistently introducing innovations –such as fully lit golf courses for nighttime play– it now operates 12 golf courses and six coun-try clubs, as well as diversifying into beach clubs.

Exequiel D. Robles, Sta. Lucia’s President andCEO, joined the company as vice president atthe age of 19. He is in great part responsiblefor Sta. Lucia’s depth of vision, which embracesenvironmental and social concerns, and for itscontinued commercial success.

Since it was first established, Sta. Luciahas become the Philippines’ leading golfand country club developer. How has thiscome about?

It started about ten years ago with our firstresidential and golf course development pro-ject, known as The Orchard because of itsmany mango trees. At the time, there were plen-ty of other golf courses around, but all had beenbuilt years before. Ours was one of the first tobe developed in recent times, and one of thefirst fully integrated golf and residential com-munities. The Orchard became quite a suc-cess and we found ourselves making othergolf communities in many more locations. Nowwe have 12 all over the country, and counting.

Sta. Lucia also successfully manages anddevelops beach clubs, such as the VistamarResort in Cebu. How do you see the poten-tial of leisure residential communities?

Actually, those resorts are among the bestattractions for real estate clients. If you havea big tract of land outside Metro Manila, youhave to do your best to attract the market byproviding a lot of facilities. For example, in agolf course development where you have acountry club, you need attractions with accessto the beach and beach facilities.

How do your residential devel-opments differ from those ofother companies?

Most of our products are resi-dential subdivisions. We offer lots,which are the bulk of our projects,as well as house and lot packages.We have some condominiums, butwe are not so big in this area. Rightnow, our condominium projects areonly in Cebu, although we are plan-ning to start some in Manila too.

Sta. Lucia aims to provide our lotowners not only with land on which to build ahome, but a community in which to nurture afamily, and a lifestyle of their own. That’s whyin most of our developments we provide com-munity and sports facilities such as a club-house, swimming pool, basketball court,landscaped gardens and a children’s play-

ground. In this, I believe we set the trend. Itused to be that these facilities were a specialadd-on to other developers’ projects, but weincluded them in most of our developmentswhere possible. In later years, many moredevelopers have followed suit, and today it isnormal for such amenities to be part of the basicoffering, together with concrete roads, ade-

quate water and electrical power.In bigger communities, we may

add tennis courts, water slides,bowling, or even a theater such asthe one at Eagle Ridge Golf andCountry Club. All of our projects alsohave a distinct entrance gate andguardhouse, and community mem-bers know that they live in a worldthat is secure, yet near importantestablishments.”

What has been your greatestpride working for Sta. Lucia?

Seeing my company grow is my greatestsatisfaction. A lot has changed since the ear-ly days. When I started, we were just one ofthose companies who buy real estate proper-ties and sell them on without really develop-ing the land. I was the one who started thedevelopment segment in this company. ■

EXEQUIEL D. ROBLESChairman and CEO Sta. Lucia Realty andDevelopment, Inc.

‘WE SET THE TREND, PROVIDING ACOMMUNITY AND A LIFESTYLE’In addition to soaring skyscrapers and vast retail and entertainment venues,new golf courses, country clubs and beach resorts are also in full swing


Filipinos have always enjoyed a reputationas world travelers, which is reflected inthe success of the Brittany Corporation,

the country’s leading provider of unique upscaleproperty developments. Brittany’s trademarkis the creation of themed, luxury residentialcommunities, crafted with an eye to detail andinspired by world areas of acclaimed beauty.

On returning from their travels, Filipinos cancontinue to enjoy the old-world atmosphere ofSan Francisco, the classic architectural linesof Italian cities or the pine-scented breezes ofSwitzerland by purchasing a home in one ofBrittany’s flagship community projects.

The company aptly uses the word“lifescapes” to describe what it provides its cus-tomers. Located close to leisure amenities suchas beach resorts and golf clubs, the commu-nities are also mere minutes away from localbusiness and commercial districts. TheCourtyards of Portofino; the Grand Quartier atCrosswinds; Victorianne Row at Brittany Bay;these and more than 20 other master-plannedcommunities in Brittany’s portfolio of devel-opments have set the standards for living atthe luxury end of the spectrum.

The firm conducts regular market surveysto gain a more thorough understanding of boththe local and the overseas markets. “We tryas much as possible to serve the needs ofFilipinos working overseasvia our portfolio of propertieslocated in different parts ofMetro Manila. But we do notdevelop products exclusive-ly for the overseas market.Instead, we ensure that our product portfoliois at par with international standards,” saysBenjamarie Therese N. Serrano, president andchief operations officer of the BrittanyCorporation. Road shows, internet marketingand attractive financing schemes are also usedto capture the overseas market in particular.

However, as Ms. Serrano points out, theluxury sector is not the only one to be benefit-ing from the current rise in real estate activity.“There is growth in all segments of the real estateindustry. We are witnessing double-digit growthrates, especially in the last two years. There isa building boom across the country,” she says.While the Brittany name continues to be asso-ciated with upscale lifestyles, the firm is thethird-largest stockholder in Camella & PalmeraHomes Inc. – one of its sister companies andthe biggest private housing developer in thePhilippines.

C&P Homes focuses mainly on affordablehousing in Metro Manila and other cities in thecounty. Their affordability stems from the com-

pany’s continued efforts to formulate improvedand more cost-effective models. C&P Homes’Chairman of the Board Marcelino C. Mendozabelieves that the company, with nearly 30 yearsof experience in the business, has found theright formula for catering to the middle incomemarket. “We have very good locations, verygood house models, and we have fitted theamortizations and down payments into pack-ages that are more affordable,” he says.

The company’s houses are seen as starterhomes, a popular concept in the growing over-seas Filipino worker (OFW) market as well asthe local segment. “The typical Filipino justwants to ensure that he has a house and a lot,”

says Mr. Mendoza. “He isbuying that house with a viewto expanding it in two or threeyears’ time.”

Through its marketing armC&P Properties International,

C&P Homes specifically targets Filipinos livingoverseas, fitting financing schemes to theirparticular situations. To this end, the companyhas set up marketing offices and extensive net-works in Hong Kong, Japan, the Middle East,Europe and other countries in the Asia Pacificregion.

“There are two different markets,” says Mr.Mendoza. “On the one hand you have natural-ized Filipinos, buying properties as investments.On the other, you have the OFWs who are plan-ning on returning and buying homes to live in.”

The burgeoning economy and the accom-panying real estate boom have also encouragedC&P Homes to expand into other market seg-ments. Under the brand names Camella Homesand Crown Asia, the firm caters to the moreaffluent customer.

Furthermore, with the Philippines graduallybecoming the hotspot for business outsourc-ing, C&P is even planning to enter the call cen-ter market. “But we will stick to the leasing,”says the chairman. ■


LIFESCAPING THE PROPERTY NEEDSOF FILIPINOS WORKING OVERSEASAssociated with upscale residential developments, Brittany’s themedcommunities and C&P’s affordable housing have packaged the right formula

BENJAMARIETHERESE N.SERRANOPresident and COOBrittany Corporation

MARCELINO C. MENDOZA Chairman of theBoard Brittany Corporation

‘OUR PRODUCT PORTFOLIOIS OF INTERNATIONAL

STANDARDS AND WE AREWITNESSING DOUBLE-

DIGIT GROWTH’



The history of BayanTel closely embodieswhat Chief Executive Consultant TundeFafunwa describes as “the Filipino abili-

ty to survive, adapt, and be flexible”. Soon afterits founding in 1993, BayanTel faced challengessimilar to those of other fixed-line companiesin the evolving world of wireless and cellularcommunications. Unlike many of its peers,BayanTel adapted to the new environment, andtoday boasts a 33 percent market share cov-ering approximately 25 million cus-tomers. Its international businesshas expanded to include a part-nership with AT&T that, among oth-er things, supports the Philippines’thriving business process out-sourcing (BPO) industry and com-munications between the largenumber of U.S.-based Filipinos andtheir contacts back home.

BayanTel’s success stems inlarge part from its ability to inno-vate. Its extensive infrastructure,including wireless local loop, VoIPs,WiFi, and broadband, is already helping it tocarve out a niche in the Philippines’ fast-grow-ing BPO industries, where both information andcommunications technology are crucial.

Banking on net revenue estimated to havereached $120 million last year, up from an orig-inal target of $110 million, the company isworking on an aggressive growth strategy.This growth will build on nearly $30 millionworth of recent upgrades that improved net-

work infrastructure, including the digital fiberoptic National Digital Transmission Network.Other major investments are set to expand thecompany’s capacity too. In August 2006,BayanTel signed an agreement with Sweden’sEricsson that will provide the Manila-basedcompany with Ethernet DSL Access solutions.Meanwhile, in December 2006, BayanTeldeployed cutting-edge EFMplus high-speedinternet technology developed by Israel-basedActelis Networks.

The company is cognizant of niche marketopportunities, like those catering to the Filipinodiaspora and tech-savvy customers. Lookingat the market for communications betweenoverseas Filipinos and their Philippines-based

contacts, BayanTel has developedthe Family Ties program, whichoffers a yearly flat-rate phone planfor international calls.

Aiming to break ground in anup-and-coming industry, this yearBayanTel expects to enter the mar-ket for internet-based TV. As Mr.Fafunwa comments: “If you lookat what is available over the inter-net, like user-generated contentand communities being able topay for the content they want, youcan see that the whole broad-

casting model is changing.” BayanTel is dedicated to corporate social

responsibility (CSR) too. Mr. Fafunwa points outthat one of the most exciting CSR areas for thecompany is an initiative dubbed GILAS, orGearing up Internet Literacy & Access forSchools. It has participated in the program fortwo years, and significant progress has beenmade toward its goal of providing internetaccess to all Philippine high schools. ■

TUNDE FAFUNWAChief ExecutiveConsultantBayanTel

BAYANTEL’S FLEXIBLE INNOVATIONTAPS NICHE MARKET OPPORTUNITIESAn aggressive growth strategy hasresulted in new partnerships alongwith high-tech upgrades to breakground in expanding markets

TeleTech was created in 1982 by its cur-rent Chairman and CEO KennethTuchman, a Californian entrepreneur andbusinessman who noticed somethingmissing in the link between companiesand their customers: effective manage-ment of open, real-time communicationand interaction. It has since become theleading provider of customer manage-ment solutions, spearhead-ing the growth of thebusiness process outsourc-ing (BPO) industry. Its 40,000 employees dailyserve more than two millioncustomers in 19 differentlanguages in 17 countriesaround the world. “We started our operationsin the Philippines in 2002and now have more than9,000 employees,” saysGeneral Manager and VicePresident of Operations, Maulik Parekh.“There is a lot of support from the gov-ernment to expand the BPO industry. ThePhilippines has many advantages tooffer: helpful, friendly and compassionatepeople, with a higher quality of Englishthan other Asian countries.” The nation’sinfrastructure and affinity to Westernculture also make it a more desirable

location for foreign companies wantingto set up offshore BPO operations. Government, industry associations andBPO enterprises are also making concert-ed efforts to promote high-margin, high-value services, such as softwaredevelopment and knowledge processoutsourcing. “I would not be surprised tosee the Philippines become the next fron-

tier for non-voice back-officeoperations for multinationals,”adds Mr. Parekh.Over the last five years,TeleTech has been the fastestgrowing BPO company in thePhilippines. “I am proud to saythat we continue to exceedour clients’ expectations,prompting many to extendtheir partnerships with us,”says Mr. Parekh. The company balances anexpansive global reach with

maintaining due respect for local cultureand work practices. “We truly are a ‘thinkglobally, act locally’ company,” says theCEO. “We are pioneers in bringing jobs tothe people on the outskirts of MetroManila, reducing commuting time anddiversifying the provincial economies.We also share our technical know-howwith universities and colleges.”

THE SKILL OF CUSTOMER MANAGEMENT

MAULIK PAREKHGeneral Manager and Vice President TeleTech

Its low labor costs, English-speak-ing population, and businessfriendly government make the

Philippines ideal for investors in theinformation and communicationstechnology (ICT) and businessprocess outsourcing (BPO) sec-tors. President Arroyo’s adminis-tration has signaled a strong desire to see thecountry’s high-tech industries compete withregional leaders like Malaysia and Singapore.

Ramon P. Sales, Chairman of the Commissionon Information and Communications Technology(CICT), comments, “The government is devot-ed to a multi-stakeholder approach to ICT, anda people-centered, inclusive and development-

AT THE TECHSOURCE OFBUSINESS

oriented information society, whereeveryone can access, utilize andshare information.” In January, CICTkicked off the “Philippines Computerfor All” initiative aimed at provid-ing Filipinos with low-cost PCs andinternet access.

Stunning growth of the coun-try’s BPO industries has put it wellon track to becoming an ICT hub.In 2005, the nation’s BPO sector gen-erated revenue of more than $1.1billion, up from just $24 million in2000, with some analysts expect-ing it to top $10 billion by 2010.

Bong M. Borja, the Chairman of the BusinessProcessing Association of the Philippines,believes the nation’s top asset is people them-selves. Indeed, Filipinos generally speak un-accented English and are well educated onU.S. culture and customs, attracting the BPOoperations of major companies such as Dell,AIG, and Intel. ■

RAMON P. SALESChairman of theCommision onInformation &Communications

Telecoms

TeleTech has been one of the fastest growing BPO companies in the Philippines.




Affectionately referring to the company as“Asia’s paradise”, Efraim Genuino, theChairman and CEO of the Philippine

Amusement and Gaming Corporation (Pagcor),did the impossible: he took on thetask of managing the third biggestrevenue-generating arm of the gov-ernment and turned it into one ofthe most profitable corporations inthe Philippines today.

Pagcor is the government-ownedand controlled corporation estab-lished to regulate all games ofchance in the Philippines. No onecan operate a casino or any busi-ness involving games of chancewithout a permit from Pagcor. Thatsaid, the firm collaborates withmany private companies which run casinos,and is currently in talks with Las Vegas’ Caesar’sPalace, Club Hotel Casino Loutraki in Greece,which owns the biggest casino in Europe, anda consortium made up of Koreans and Japanesewho are looking to open casinos.

When Mr. Genuino was appointed as CEOof Pagcor in 2001, the sector, and company,were far from the winning streak they’re on now.The group’s gross income in 2000 was P14.62billion ($300 million), whereas in 2005 it reachedP23.3 billion ($475.5 million).

Mr. Genuino fixed the firm in three steps. Firsthe stopped unnecessary cash drains by adopt-ing strict cost-cutting measures and doingaway with unnecessary expenses. He then

improved working conditions byexpanding employee benefits andraising salaries. Finally, he expand-ed and modernized the program tomake Casino Filipino branches glob-ally competitive, essentially con-verting them into wholesomeplaces focusing on entertainmentand leisure.

This falls in line with Mr.Genuino’s goal for Pagcor. “Ourvision is to make the Philippines nota gaming paradise, but the‘Entertainment Center of Asia’. We

are applying the paradigm shift from gamingto entertainment,” he says. While the industryis certainly one of the most popular, Pagcor islooking to reinvent casinos to provide premiergaming and world-class entertainment, andfusing it with the tourism industry.

The company is currently working to approvea 50-year charter that will convert the Philippinesinto one of the biggest gaming areas in all ofAsia in the next five years, attracting thou-sands of visitors primarily from China, the restof Asia, and eventually from all over the world.

TourismAIM OF THE GAME: CREATING THEENTERTAINMENT CENTER OF ASIA

The Filipino capacity for innovation iseasy to see at the Philippine LongDistance Telephone Company (PLDT),

and its wholly owned subsidiaries, ePLDT andePLDT Ventus. Indeed, PLDT has come along way since its founding asa fixed-line company in 1928.Today, PLDT is the Philippines’largest corporation, publicly trad-ed both locally (PSE: TEL) and inthe United States (NYSE: PHI).In 2006, the company’s marketcapitalization topped $9 billionand with new developments,especially in its business processoutsourcing (BPO) business atePLDT Ventus, the outlook for2007 and 2008 looks positive.

Ernesto R. Alberto, PLDT’sCorporate Business Group SeniorVice President, points out one ofhis company’s key successstrategies, saying: “PLDT hasveered away from a mere accessbusiness model, where we justprovide connectivity to cus-tomers. Today, we provide morevalue added content overlay totraditional access for both cor-porate and consumer markets.”

Indeed, PLDT is taking advan-tage of its fixed-line infrastruc-ture to tap the growing demandshift to broadband. At the end of2006, PLDT’s DSL capacity wasestimated at more than 300,000lines. Moreover, PLDT is allo-cating over $1 billion through2009 to upgrade its network,including 3G coverage. New net-work developments should morethan prepare PLDT for the ongo-ing convergence of voice, videoand data communications.

Meanwhile, ePLDT is expand-ing its array of ICT infrastructure in order tosupport new forms of multimedia and com-munications delivery. Ray C. Espinosa,President and CEO of ePLDT, has highlight-ed some of the emerging markets that hiscompany is entering, including internet cafes,WiFi and WiMAX technology, and data cen-ters, such as ePLDT’s VITRO center. ePLDThas inked partnerships with dozens ofrenowned foreign firms, including Microsoft,HP Compaq, and Cisco Systems.

Meanwhile, ePLDT Ventus, PLDT’s BPO-focused subsidiary, is making considerableheadway in the thriving market for call cen-ters and other back-office support, like datacenters and medical transcription.

Rosalie R. Montenegro, President ofePLDT Ventus, has confirmed what otherexecutives widely cite as the greateststrength of the Philippines’ BPO sector: thehigh level of education, unaccented English,and strong knowledge of U.S. culture com-

mon among Filipino citizens.Of course, for ePLDT Ventus—now one of the world’s largestBPO companies—successcomes from much more thanits base of educated, English-speaking workers.

ePLDT Ventus has over11,000 employees and about8,300 seats in its BPO/call cen-ter business. ePLDT Ventusplaces a premium on employ-ee retention by taking specialcare of its workers. Ms.Montenegro comments, “Howwe care for employees is prob-ably our biggest selling point.”

This good care, importantly,comes at a cost far below thatfound in the U.S.

In terms of infrastructure, thecompany is also at an advan-tage. As part of the PLDT group,ePLDT Ventus has greateraccess to high-tech buildingsand other facilities. Moreover,manager quality is serious busi-ness for ePLDT Ventus, withsome managers spendingextensive periods in the U.S.learning what the company’sAmerican clients want from theirPhilippines-based customer ser-vice representatives.

As it enters 2007, ePLDTVentus has quickly defined itselfas the premier outsourcing firmfor numerous Fortune 500 com-panies, especially from the U.S.The company’s wide range of

services, including customer support, tech-nical support, sales, email support and web-site maintenance, have become key drawingpoints for corporations keen on cuttingcosts without sacrificing quality.

The ongoing expansion of ePLDT Ventusabroad and its alliances with foreign BPOcompanies, like India’s Infosys BPO, shouldfurther increase the company’s attractive-ness in the global outsourcing market thatshows few signs of slowing. ■

CUTTING EDGE CONNECTIVITYMAKING IT A SMALL WORLDThe Philippine Long DistanceTelephone Company and itssubsidiaries add quality, value andcapacity to global communications

ERNESTO R.ALBERTOSenior Vice PresidentPLDT

RAY C. ESPINOSAPresident and CEOePLDT

ROSALIE R.MONTENEGROPresident ePLDT Ventus

EFRAIM C.GENUINOChairman and CEO Pagcor

Referred to as “Asia’s Paradise”, Pagcor is one of the most profitable corporations in the Philippinestoday and is working on large-scale projects to boost employment, tourism and foreign investment.



The company’s newest project is BagongNayon Polopino-Entertainment City ManilaProject, also known as Pagcor City. Stretchingover more than 3,000 hectares, the newproject will, in line with the new paradigmshift, focus on entertainment rather than ongambling. Mr. Genuino’s brainchild will behome to arcades, wellness spas, malls,hotels, cultural centers, sports arenas, res-idential villages, a state-of-the-art monorailsystem, theme parks, and more, forming anintegrated recreation and leisure complex.But this unique, educational, interactivepark, patterned after Macao, will do morethan just offer wholesome fun for everyone.It will work towards solving the nation’seconomic problems in terms of employment,tourism and foreign investment. By gener-ating 25,000 jobs and increasing tourism,Pagcor City could give the Philippines theboost it needs.

This focus on improving the quality of lifecomes as no surprise, as Pagcor is a drivingforce behind social activities nationwide.“There’s a bit misconception about us,” saysMr. Genuino. “People do not realize Pagcor’scontribution to the national economy.We’re the third biggest revenueearner for the government.” Thisrevenue in part goes towards ini-tiatives for public health and oth-er social issues. While 50 percentof the company’s revenue goes tothe national treasury, Pagcorenables the government to carryout priority projects for the poor.The funds to implement variouslaws come from Pagcor, such asthe Early Childhood Care andDevelopment Program and theComprehensive Dangerous Drugs Act of 2002.Also 80 percent of the budget for the PhilippineSports Commission comes from Pagcor.

Without it there wouldn’t be sports.Another of its big projects, Serbisyo Muna!,

is a public initiative that brings together socio-civic and community development programsfrom different agencies, local government unitsand representatives from various sectors.Serbisyo Muna! provides caravans with freemedical and dental care, and gives seminarson road ethics, energy conservation, urban gar-dening and values education, among otherfunctions.

Whatever Pacgor’s next move is, be it newentertainment ventures, new tourism attrac-tions or new public initiatives, it’s clear that 2005was a success story that is set to continue.Results for 2006 show that last year was evenmore lucrative for the organization, with totalincome reaching P12.22 billion ($250 million)for the first six months alone. It certainly lookslike Pagcor’s playing its cards right. ■

Revenue generated by Pagcor provides 80 percent of the budget for the Philippine SportsCommission, as well as providing the funding behind a wide range of social development initiatives.

Pagcor has plans toreinvent casinos byfusing premiergaming with tourismand entertainment.



Once the world’s only American colony,the rich history of the Philippines is anexotic blend of Asian, European and

American influences. Following independencein 1946, the Philippines has found fame as atourist paradise and a colorful cultural desti-nation, where every day of the year is anexcuse for a fiesta and where the intrinsic

warmheartedness of the Filipino peopleassures a cordial welcome.

A sprawling archipelago consisting of7,107 tropical islands, The Philippines is hometo what is regarded as the most beautifulbeach in the world – the four-mile-long WhiteBeach on the island of Boracay.

“We have all the ingredients to become a

top tourist destina-tion,” asserts JosephDurano, Secretary ofthe Department ofTourism. “We have thenatural beauty, wehave the innate apti-tude for tourism – thehospitality and thewarmth of being aninternational society– and we also have the advantage of ourproximity to the huge source markets of Asia.Tourism is the fastest growing industry in theworld. We are developing eco-tourism andwe are already the number one honeymoondestination in South East Asia.”

To tap into thehuge tourism poten-tial of the Philippines,the Department ofTourism recentlylaunched its “WOWPhilippines” market-ing strategy, aimedat increasing inter-national awareness ofthe Philippines as acomplete tourismexperience. “ThePhilippines has much

more to offer than beaches alone,” saysUndersecretary Eduardo Jarque, Jr., head ofthe department of tourism’s planning and pro-motions committee. “Discover the Philippinesand open your mind. We guarantee that youwill love it here.”

EDUARDO JARQUE Jr,Undersecretary ofTourism Planningand Promotions

JOSEPH DURANOSecretary of Tourism

SUMMIT COMMUNICATIONS WISHES TO THANK THE FOLLOWING PEOPLE IN THE PHILIPPINES FOR THEIR HELP IN THE REALIZATION OF THIS PUBLICATION:HOLAINA OBLIFIAS, HELENA ALVAREZ-VIEITEZ, VERONICA TAPIA-MERK, NORMAN BETONIO AND MAE OBLIFIAS

The third-largest English-speaking country in the world, the Philippinesis a cultural melting pot and the beach capital of Asia

Ananyana Resort is a deluxe getawaywith its own five-star PADI dive center.

ANANYANA ON BOHOL ISLAND

HOLIDAY GOLD IN THE HILLS

PALAWAN PROVINCE AND EL NIDO RESORTS

1,700 REASONS TO VISIT PALAWAN

Bohol is the tenth largest island in thePhilippines, and topographically curiousas it is home to the Chocolate Hills – anancient limestone formation thatdominates the island and, along withBohol's white, sandy beaches, providesthe main focus of tourism activity. Tucked away on the serene sands ofBohol's Doljo Beach is the AnanyanaBeach Resort. Comprising eight suitesand two, two-storey family suites, thedeluxe resort has been built following theFilipino ethos of complementing, notdominating, the natural beauty in which itis set. Gardens busting with the vigor ofindigenous flora line the sandywalkways, while the lounge offersspectacular sea views. An Italianrestaurant with highly trained chefsprovides fine cuisine, and stocks animpressive wine list.

Boracay is swiftly gaining a reputation asthe wellness capital of the Philippines.

BORACAY ISLAND

A WELL OFRELAXATION

Boracay is a four-mile-long slice ofheaven and home to the world famousWhite Beach. Away from the crystallinewaters and surf-groomed sand, theinterior of the island is dotted withtraditional villages linked by a meanderingnetwork of trails. Mandala Spa and Villasis a multiple award-winning spa-resort,regarded among Asia’s finest. Perched ona cliff and encircled by bountiful tropicalgardens, this exclusive wellness resortcombines holistic therapy with lavishaccommodation to create a retreatdesigned to refresh body and mind.Nami Resort on Boracay’s Diniwid beachis a study in privacy and class. The 180-degree panoramic views afforded fromthe resort are spectacular. An oasis ofrelaxation and style, Nami Resort ischaracterized by its chic interiors andimpeccable service.

Situated on the western border of thePhilippines, Palawan is the largestprovince in the country. An archipelago of1,700 islands with a coastline some 1,250miles long, Palawan is characterized bysecluded coves, bays and tropical islandsblanketed with verdant forests. A Unesco World Heritage Site since 1993,Palawan was named Destination of theYear by the prestigious Kalakbay Awardsin 1995. As Joel T. Reyes, the Governor of

Palawan, explains, “If you want peace andquiet, come to Palawan. You will findparadise here – every island is anadventure in itself. Unlike many othertourist destinations, we have a wealth ofoptions to offer.” Tapping in to this rich vein of tourism goldare El Nido Resorts. El Nido, 270 milessouthwest of Manila, is one of the mostimportant and biologically diverse areas inthe Philippines, and a governmentallydecreed protected area. The regioncomprises a group of 45 islands and isletsnestled on the northern edge of Palawan.El Nido Resorts seized upon the uniquelocation and outstanding natural richnessof the area to create two resorts ofunparalleled beauty, the El Nido LagenIsland Resort and the El Nido MinilocIsland Resort.Both uninhabited, the two islands providevisitors with the seclusion and comfortthat epitomizePalawan. Attentionto detail is the ethosof El Nido Resorts, ashighlighted by thelevel of serviceoffered. On arrival,visitors are taken tothe resorts via ascenic 50-minuteboat ride that offersa first taste of thisunique setting.

JOEL T. REYESGovernor Province of Palawan

Jaques Costeau has described Palawan asthe most beautiful seascape in the world.

PARADISE AT YOUR FINGERTIPS

The Philippines boasts acoastline that is twice as long as

that of the United States.




Documents

Philippines - Summit Reports · the Philippines. The Philippine Stock Exchange (PSE), for example, hit a nine-year record high in 2006 and closed out the year some 28 percent higher