All eyes were on the China-Philippine Summit as the leaders of both countries built important new bridges for future cooperation.
No one knew what to expect when the straight talking, controversial President of the Philippines Rodrigo Duterte flew into China with an entourage of 400 businessmen lining up to sign billions of dollars of deals in his wake. Riding the wave of changing expectations between the two countries, the Philippine business community enjoyed the show as US diplomats and their supporters squirmed in their seats while the wheels turned in a new age of diplomacy between the Pearl of the Orient and the Middle Kingdom.
Coming off a tough drug war and under scrutiny by the world press for his uncompromising attitude towards everyone from US President Obama to the head of the Catholic Church, Duterte was in fighting form when he headed to China. Backed by public opinion and racking up record numbers in approval ratings polls, the Duterte Administration was in the spotlight to make a difference. With the regime’s focus on poverty alleviation, the need to generate economic growth and provide jobs is essential to the Duterte Dream and China is a critical player if this scenario is to be fulfilled.
It is not surprising that Duterte wanted to bring China onside to support his vision of a new Philippines. What is surprising is that Duterte is willing to jettison America as part of the deal. Any Filipino schoolchild can quote General Douglas MacArthur’s vow to return to defeat the Japanese, and the image of the great soldier striding through the surf of a Philippine beach with pipe in hand to make good on his promise is the stuff of Hollywood legends. Never mind that the nation was a colony of the US for almost half a century
up to 1946.
Yet, Duterte was willing to move away from the US sphere of influence that is evident to this day to push an economic policy more reliant on the Silk Road vision. The result of the Duterte swing from the US to China can be measured in new jobs and funding. If all goes as planned, the Philippine
Department of Trade & Industry believes two million jobs will be generated by industry, not to mention the opportunity to add even more tourism related jobs with the lifting of a travel advisory cautioning Chinese tourists traveling to the Philippines.
Much focus has been placed on the estimated US$24 billion in investment and credit facilities promised by Chinese enterprises and government sources. Some US$15 billion accounts for company-to-company deals from agriculture to energy, tourism to manufacturing, with credit made available to businesses for development projects and infrastructure. Though a break with the US will have economic repercussions, and may in fact not take place to the same degree with the election of Trump, in Duterte’s calculation the scales are tipping in China’s favor when all is said and done.
The respected names on the list of corporate titans who rule the growing economy of the Philippines are observing President Duterte’s pivot to China with great interest, more so those of Chinese descent, who trace their roots to Fujian Province on the southeast coast of China. For those who already have interests in China, drawn early by its massive market of over 1.3 billion people, Duterte’s policy swing provides an even greater impetus to invest more.
As the central government in Beijing warmly welcomes the thawing of ties between the two countries, it may just be a matter of time before the Filipino Chinese tycoons pour even more money into China, which continues to post notable annual growth rates compared to other developed economies. At the same time, this powerful and wealthy group will look to leverage their assets in the Philippines and co-invest with large pools of PRC capital.
As is the case across Southeast Asia, it is no surprise that the Chinese Filipinos play a significant if not dominant role in the domestic economy. Currently, the Philippines boasts one of the largest overseas Chinese communities in Southeast Asia. Filipinos with at least some Chinese ancestry compose around one-quarter of the 100 million-plus population (as much as 30 million by some accounts) and it is estimated that two million Filipinos have pure Chinese ancestry.
These Chinese Filipinos are represented in all levels of Philippine society and are integrated politically and economically. Chinese Filipinos are present within several commerce and business sectors and a significant portion of the Philippine economy is owned by Chinese Filipinos. With some 14 Chinese Filipinos listed in the top 20 of the Forbes Philippine billionaires list, it is not surprising that this ethnic group has made a success of its long time in the country and their web of businesses continue to control a major part of the national economy.
To gain a better understanding of who these Chinese Filipino tycoons are, SBR has put together a short list of those to watch, what they own and control in the local market and the role they play on
Henry Sy Sr.
SM Prime Holdings
Fondly called the Father of Modern Filipino Retail, the 92-year-old founder of the SM Group of companies has an estimated net worth of US$13.7 billion and is the richest man in the nation, according to Forbes. In 1958, Sy established a small shoe store in Quiapo, the Chinese market area of Manila that marked the modest start of SM Prime Holdings. Today, Sy’s sprawling empire extends across all part of the Philippine economy.
Sy is an old hand in China, having opened his first mall – SM Xiamen – in 2001. Now, Sy has six malls in Xiamen, Jinjiang, Chengdu, Suzhou, Chongqing and Zibo spanning a gross floor area of over 900,000 sq. m. Listed holding company SM Investments Corp. has significant interests in retail (The SM Store), property (9SM Prime Holdings Corp.) and banking (BDO Unibank and China Banking Corp). SM is exploring opportunities to open new malls in China, particularly in second and third-tier cities with attractive demographics and growing income bases.
“Big John”, as the 90-year-old is often called, established in 1957 a cornstarch plant that would eventually grow into a massive conglomerate. Big John has considerable investments in food and beverages (Univeral Robina Corp. or URC), real estate and hotels (Robinsons Land Corp.), air transportation (Cebu Pacific Air), petrochemicals (JG Summit Petrochemicals), telecommunications (minority interest in Philippine Long Distance Telephone Co.) and banking and finance (Robinsons Bank).
Today, Big John has an estimated net worth of US$6.8 billion, a number that will likely rise as his conglomerate sets its sights on expanding its footprint in Southeast Asia and China with the branded foods firm as its engine. URC China factories cater to both the domestic and Hong Kong markets. Its Mainland brands include Roller Coaster, Potato Chips, Beef Crunchies (snacks), XO Dynamite (candies), ACES Instant Cereal and ACES Health Drink (beverages). For Hong Kong, URC has Nips, Cloud 9 chocolates, Cream-O, Magic and Dewberry Biscuits.
Robinsons Land acquired the rights to over 8.5-hectares of property in Chengdu in 2015. The property unit plans to convert this land into a mixed-use development, with both residential and commercial components in the latest in a string of real estate interests in China that includes residential, office and commercial malls. In addition, Big John’s budget airline Cebu Pacific Air flies to Beijing, Guangzhou, Shanghai and Xiamen with plans to add more destinations.
Eton Properties Group
The 82-year-old business leader Lucio Tan controls an empire with an estimated net worth of US$4.9 billion courtesy of his tobacco and spirits operations, as well as airline, real estate and banking interests. Born in Jinjiang, Tan is the permanent Honorary Chairman of the Federation of Filipino Chinese Chamber of Commerce and Industry Inc., and is highly respected in China.
Tan is heavily invested in the Mainland, most notably through Eton Properties Group.
Eton boasts eight real estate companies in China, three management companies and two hotel and management groups. Eton notes its total investment on the Mainland exceeds Rmb40 billion (almost US$6 billion), with overall land reserves exceeding two million sq. m. Tan’s family also operates in beer brewing, banking and aviation in such cities and provinces as Beijing, Shanghai, Dalian, Shenyang, Xiamen, Shenzhen, Shandong, Henan, Jiangxi and Chongqing.
Tony Tan Caktiong
Jollibee Foods Corp.
The 63-year old founder of Jollibee Foods Corp., the largest fast food chain in the Philippines, has an estimated net worth of US$4.3 billion. Tony Tan brought Jollibee to China in 1994 via the acquisition of known local food brands and has made his presence felt in the Mainland food sector ever since.
In 2010, Tony Tan’s subsidiary Jollibee Worldwide Pte. Ltd. entered into a joint venture agreement with Hua Xia Harvest Holdings Pte. Ltd. to build and operate a food processing plant in Shucheng County, Anhui Province. The Philippine company has since acquired full control of the plant.
Tony Tan’s biggest brand in China is Yonghe King, which had 321 stores at the end of 2015. Other food brands include congee chain Hong Zhuang Yuan, which produced its best year in 2015 and has 42 stores serving popular dishes such as Lean Pork and Preserved Egg Congee and Kungbao Chicken. Acquired in 2010, noodle chain San Ping Wang has close to 60 outlets. Tony Tan also has a JV agreement to operate the 12 Hotpot brand in China, Hong Kong and Macau. As of December 2015, 12 Hotpot had over 20 shops in Mainland China.
Andrew L. Tan
Alliance Global Inc.
One newer name added to the list of top billionaires in the Philippines is that of Andrew Tan, son of poor immigrants from Fujian Province, who made his first fortune in the liquor business. Today, the 64-year-old founder of holding company Alliance Global Inc. (AGI) has a net worth of US$3 billion, with interests in food and beverages, gaming and real estate.
Andrew Tan’s Emperador Distillers Inc. has emerged as the world’s largest brandy company, and has made inroads into the Chinese market. Tan’s son Kevin, Executive Director of AGI, was one of those who joined the 400-strong business delegation that went with Duterte to China. Kevin Tan disclosed that Emperador wanted to expand its presence in China and was looking to forge distribution deals with local liquor partners.
Already the owner and manager of the Philippine franchise for the McDonald’s fast food chain, AGI wants to explore investments in the tourism sector. With the lifting of the travel ban to the Philippines, the Department of Tourism expects more tourists from China to visit the country and this bodes well for a group that owns Resorts World gaming resort and a string of malls and hotels.
Ramon S. Ang
San Miguel Corp.
San Miguel Corp. is Southeast Asia’s largest publicly listed food, beverage and packaging company with over 18,000 employees in over 100 facilities throughout Asia Pacific. It is among the fastest growing Philippine enterprises with a host of new investments in business ventures focused on infrastructure as well as mining and energy. With the Duterte Administration’s vow to usher in the “golden era of infrastructure”, Ang is positioning well and expressed his openness to discuss cooperation deals with Chinese counterparts.
One subsidiary, San Miguel Brewery Inc., owned jointly by SMC and Kirin Holdings Co. Ltd., is the 10th largest brewer in Asia with a presence in China. In the international arena, San Miguel Brewery started early operations in Hong Kong in 1948. San Miguel Brewing International Ltd. completed ventures into other markets in 1991, such as China. San Miguel operates six breweries outside the Philippines, including one in Hong Kong and two in China – one in Baoding, Hebei Province, and another in Shunde, Guangdong.
At the helm of the conglomerate is Ramon S. Ang, one of the latest entrants to the Forbes list of Philippine billionaires, coming in with a net worth of US$1.2 billion on the back of interests in cement manufacturing and hotel and restaurant operations, aside from shares in San Miguel Corp. Ang is responsible for steering the conglomerate away from too much dependence on business units of food and beverage and into high growth areas such as infrastructure development, including power plant operations and oil refining.
Liwayway Holdings Co. Ltd.
Carlos Chan may not be among the top billionaires on the Philippines Forbes list, but where China is concerned he is an undisputed leader. Designated by three Philippine presidents as Special Envoy to China, Chan is Chairman of Liwayway Holdings Co. Ltd., maker of Filipino super brand Oishi, which holds a major market share of the Asian
Chan is eldest son of Chan Lib and See Ying, migrants from Fujian Province. Chan’s parents had 11 children, but four passed away due to sickness during World War II. When their father died in 1977, Chan, the eldest of the seven siblings, assumed the role of patriarch. Chan studied architecture while helping in the family business, which started in 1946 as a re-packer of flour and starch.
The company was named Liwayway (dawn) to signify Filipino optimism towards a bright future after World War II. In 1966, Liwayway Marketing Corp. was created to distribute confectioneries, basic commodities, candles, candies and sauces. By 1974, Liwayway began to distribute Oishi Prawn Crackers and Kirei Yummy Flakes, with Oishi designated as the patent brand for all products.
Chan visited China in the 1980s following the liberalization of the economy to explore opportunities for growth. Believing in the great potential of China, Chan completed his first investment in 1993 employing 400 workers in two leased factories, Shanghai Liwayway Food Industries and Shanghai Prawn Cracker Co. Ltd. That business evolved into Liwayway China Co. Ltd., the biggest snack food maker in the Mainland with US$250 million in annual sales.
Today, Chan’s Chinese operations cover 15 factories in all the main cities. Oishi has established its presence in other Asian nations with sales and manufacturing facilities in Vietnam, Myanmar, Indonesia, India and Thailand. Signifying his Filipino roots, the Philippine flag flies proudly over all his
These are just some of the many Chinese Filipinos that you can expect to hear from in the days ahead. With the Duterte China campaign in full force, one can be sure that the Chinese Filipino community will be front row center in pushing for closer ties with the Mainland and supporting these ties to the fullest.