REVERSAL OF FORTUNE

From his modest beginnings, the family has been one of the driving forces behind Gokongwei’s entrepreneurship and even in his foundation. In interviews he always likes to talk about the reversal of fortune in his life, how he overturned it and how the family motivated him to work.

His great-grandfather, Chinese immigration Pedro Gotiaco, rose from being an oil peddler to become proprietor of Gotiaco Hermanos, then the largest enterprise in trading and insurance in Cebu. “I salute him. He came from China with nothing. At least I had some suits and education,” says Gokongwei. Gotiaco was both a keen businessman and a philanthropist. Besides setting up a Chinese cemetery and hospital in Cebu, he saved the Aboitiz’s business from foreclosure in the 1920s. Today, the Aboitizes are an institution in the province.

Gokongwei’s father, John Sr., who owned the largest theatre chain in Cebu, and his mother, Juanita, spent their honeymoon in Gulangyu, Xiamen, where John was born on August 11, 1926. They returned to Cebu, and enjoyed the privileged life. Since his father was generous in giving, people came to him to borrow money. A turning point came when his father died in 1939. Creditors confiscated the cinemas and his debtors fled, leaving the family in dire straits.

As the eldest, 13-year-old Gokongwei looked after his mother and five other siblings. He engaged in buying and selling soap and candles and biked to the market. “I earned by peddling. I had a few hundred bucks. You lived like a king then. There’s no such thing as a budget. I was a one-man army—accountant, owner, cashier,” he recalls. He showed his knack for expanding when he sailed on a batel, or a small barge, with his wares and sold them in Manila. On those trips he would read such books as Gone with the Wind. He often likes to tell the story of when he lost his merchandise of rubber tires when the batel ran into a rock and sank. Fortunately, he and some passengers hung on to the tires. To Gokongwei, tragedies and losses should not leave scarred. Instead they should be seen as situations where one can discover the best in himself. “Those events make you stronger,” he says in hindsight.

During World War II he earned by selling cigarettes to Americans and by smuggling American and local currency. After the war in Cebu, Gokongwei, who was barely out of his teens started a trading company that imported flour, onions, fruits, used clothing and old periodicals from America. At 21, he expanded his product line and branched to Manila and Davao.

FAMILY AFFAIR

Asked about his advice to starting entrepreneurs, Gokongwei replies, “You need grit. First, build the capital. I needed money to buy my bicycle. Then, spend 10 percent of what you earn. Most people spend 110 percent of their earnings. After that, you have to be diligent and read a lot.”

Gokongwei, then a 30-year-old trader, made his foray into charity by supporting the construction of a building in San Carlos Boys’ High, his alma mater. Since trading offered low profit margins, he ventured into manufacturing glucose and cornstarch to make them accessible to the local market. From producing mere articles of trade, he stepped up to consumer products and services. In the past 50 years he has introduced many firsts: Blend 45, a robust instant coffee for the mass market; branded, munchies such as Jack n’ Jill’s Chippy and Chiz Curls; the low-cost airline Cebu Pacific; the petrochemical plant JG Summit Petrochemical Corporation; unlimited pricing in Sun Cellular mobile and the green tea beverage C2. From selling soap and candles, his business has evolved into the most diversified conglomerate in the country, including financing, real estate, retail and financial services. Last year JG Summit’s revenues posted 89.1 billion pesos, a 28 percent increase over the previous year with food and beverage, property and the airline as the top earners.

With the continuing strength of the business, Gokongwei feels it is logical to focus on philanthropy. His reason is classic: “I want to pay back the country and the people of the Philippines who have helped me. We have enough. We’re just sharing part of what we have.”

He points out that he gave half of his shares in JG Summit, not his fortune, to the Gokongwei Brothers Foundation, as some newspapers reported. “I gave half of my shares in JG Summit owned by me. I have a house; that’s part of my fortune.” The value depends on the share prices. He adds that the foundation is worth PHP 30 billion, of which 90 percent comes from him.

“I decided to give half so that he won’t spend all that money,” the patriarch chuckles, looking at Lance.

His son has supported institutions that he once worked with. “These are the people who educated me and gave me my values. I trust them and they will do a good job,” says Lance.

A voracious reader, Gokongwei cites Dynasties by David Landis as one of his favourites. He is fascinated by the stories of prominent families in the last 200 years, particularly the clan of the industrialist and philanthropist, John D. Rockefeller. One of the wealthiest men in history, Rockefeller believed that earnings from business should be used to uplift the quality of people’s lives. He also introduced an organised approach to focused philanthropy with his foundations concentrating on scientific research, medicine and education. Among his prominent descendants are grandsons Nelson Rockefeller, the 41st vice-president of the United States; David, a prominent banker; Winthrop, former governor of Arkansas; and great-grandson, Jay, a Democratic senator. When the Rockefeller clan meets, it evaluates which projects to support.

“I’m doing exactly what Rockefeller did. He didn’t give his money to his children but to charity,” Gokongwei says with a laugh. “He was deeply involved in education—University of Chicago and Rockefeller University. In the Philippines there has yet to be a tradition to give to foundations. I don’t see that many. In the West, when businessmen have extra funds, they give to foundations.”

Lance adds, “They don’t want their kids to be spoiled. They want them to make their own way.” His sisters—Robina Pe, senior vice-president and group general manager of Robinsons Retail; Lisa Cheng, group general manager of the affiliate, Summit Media; Hope Tang, merchandising head of Robinsons Department Store; Faith Lim, merchandising head of Ministop and Marcia Sy, marketing manager of Universal Robina Corporation Beverage—are all involved in the family business. In their childhood their father encouraged them to read instead of indulge their whim. “My dad would take us to the bookstore. As long as it was a book, we could take as many as we wanted. The focus was on education and self-improvement,” recalls Lance.

Giving Back

Asked if his sisters have their own charities, Lance affirms. “It’s our job to work. It’s our job to give,” he says, pointing to his father.

“That’s right. If they don’t work, I won’t have the dividends to give,” Gokongwei agrees. “What’s important is that the children will not complain so I can give. If they complain, then you will have a hard time. This is very crucial. In the Philippines, I don’t think you can just give without clearing the donation with the family. They could say, ‘Hey, Dad, I own a part of that. Why are you giving away my money?’ One thing good about these children is that they have not said one word. In fact, they’re all for it. If I didn’t give that to the foundation, they would be the ones who will inherit it. When I give my shares, it’s really the children’s part. It no longer belongs to them. They are giving to charity, indirectly.”

Gokongwei can be very gallant. “Schools don’t have money. When you give big money, they don’t ask you. You should be the one to present usually. Three years ago, I knew San Carlos wanted to build a school of engineering but it had no money, so I offered. I was educated there for seven years,” he says.

As he got more involved, he felt the need to systematise the charities, Today, his office receives piles of proposals asking for donations. His secretary screens them and trashes those that are not related to education. The committee, which includes Singson, evaluates the applications. As the GBF chairman, Gokongwei gives the vision and approves the budget. In the past four years the foundation has been donating 100 million pesos annually.

“I have an idea where the money should go, but it must have an impact on society and be good for the future. Everybody has been going West. I think it’s time to go East,” he says.

His latest project—sending 40 scholars to China to study the language and culture—is likened to the scholarship of the pensionados, or Filipinos sent to the States for education during the American regime. These young achievers will be provided with a 14-month all-expenses-paid education and an allowance of USD 1,400.

“We don’t ask them for anything. They just come back and help the country.” Gokongwei makes an analogy, “You see the growing power next door that you have to deal with and you can’t move out. It’s like being married. You’ve got to know what the fellow is doing so you can at least appreciate what he is doing; learn to live with it and, in the process, you also progress.:

Gokongwei celebrates his 81st birthday this month with the release of his biography. He is still on high gear. “I’m tough on myself. Up to now, I still pay my dues to the company. I work as hard as I did when I was 20. I don’t do the daily grind, though. That’s left with Lance and James. I’m like a housewife. I want to come to the office and ask, ‘How’s this and that?’ General MacArthur once said, ‘Old soldiers never die; they just fade away. Same thing with John Gokongwei, I guess.”