AmericA's richest self-mAde Women

EnriquE K. razon Jr. Chairman and CEO Of BlOOmBErry rEsOrts and hOtEls “I ’d rather be feared. I prefer that. people move faster by fear than by love.”

au g u s t 2 0 1 6

AmericA’s richest self-mAde Women

BPI: Hungry

StartuP at 165

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cAsino operAtor tAkes on stArtup hiccups With iron hAnd

sharp playErp195

august 2016

Proscenium at Rockwell is a 3.6-hectare lot with �ve residential towerssituated at the heart of business and lifestyle. Topped with the best

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Live A Refined Life

For more information, visit the Proscenium Lounge located at the South Court of the Power Plant Mall or call 793-1077.www.prosceniumatrockwell.com

REAL TALK

W hen a man thinks of home,he sees a special spacewhere he can unwindafter a busy week, a spacewhere friends can gather

for casual dining, or a space that providesanything he wants at his beck and call. Ifhe’s lucky, that space comes with qualitiesthat make a home especially unique, suchas elegance, security, and convenience. Atthe Rockwell Center, these qualities cometo life for the businessman who wants toput his investments in a smart place, andfor anyone who wants to make the most ofhis earnings because he knows he deservesa relaxing lifestyle. With the Proscenium,Rockwell is moving towards the future ofhigh-end developments, as well as raisingthe bar for world-class services that lie atone’s doorstep.

Envisioned by renowned Uruguayanarchitect Carlos Ott, who was responsiblefor iconic landmarks such as the L’Operade la Bastille in Paris and the HangzhouGrand Theatre in China, the Prosceniumpresents its latest phase with the LorraineTower. A pedestrian overpass will connectthe Proscenium to the heart of the RockwellCenter and allow access to the Joya RetailRow, while roads will be expanded todecrease the stress and tra�c.

Among the �ve towers, the Lorrainedistinguishes itself as a classic and accessibleone, it o�ers not only limited units at each ofits 45 �oors, but also its alluring view of theentire Rockwell Center. The unit cuts, whichrange from two-bedroom, three-bedroom

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If you prefer spending your down timewindow shopping for the latest �nds, orappreciating art and culture, The Lorrainehas easy access to the Proscenium’s retailand culture centers. The Retail Centerexhibits vibrancy as it gives people anunparalleled shopping experience withexclusive boutiques and restaurants suitedto both the residents of the Prosceniumand its visitors. Based on the Greekphrase meaning, “beyond the scene,” theProscenium’s name is inspired by thePerforming Arts Center, which will promotevarious cultures through housing the �nestlocal and international acts with a capacity of600 seats.

Connecting the Lorraine to the othertowers is the hectare-wide Amenity Deck,which provides its residents with their veryown resort to unwind after challengingdays at work. The luscious, green treesand relaxing aura help the stressed-outbusinessperson experience tranquilityand calmness that he can also enjoy withfamily and loved ones. For the advocatesof an active lifestyle, there is a tennis courtand swimming pools to help residents stay�t, healthy, and enjoy the great outdoors.These qualities also introduce the perfectopportunity to bond and make morememories with the family, as the trustyou put into the community continuesto grow.

The Proscenium showcases diversity indesign and convenience to both workplace

and recreational areas, with the Lorrainestanding out for being the epitome ofstyle and accessibility. A locale knownby the a�uent and built for the elite,this residence is truly a sanctuary wherethe successful professional can enjoyrestful days knowing that they belongto the Proscenium community. In thiscommunity, there is no shortage of classand convenience, but an outpouring ofupscale living. It is indeed that wise andsafe investment a�uent businessmenand entrepreneurs can be proud of, wherework, play, and rest merge into one placethey can call home.

REAL TALK

Maximize and design your living space withclassic furniture pieces to add to the tranquil view.

The expansive show kitchen gives you buta taste of the relaxing Lorraine Tower.

The Proscenium isthe home whereeverything you need isjust a block away.

The Prosceniumis the homewhere everythingyou need is just ablock away.

on the cover 44 | BloomBerry’s GamBle Enrique Razon Jr. is bullish about the country’s gaming prospects even as he eyes Buenos Aires and Cyprus as next destinations. by Roel landingin CoveR photogRaph by jason tablante

Contents August 2016

12 | Fact & comment // steve ForBesUncle Sam, Uncle Tyrant

leaderBoard 16 | the World’s most PoWerFul Women Meet the titans of politics, business and entertainment who

exert unparalleled influence across the globe.

18 | PhiliPPine oFFshore investors: Where they live

Most Philippine names in the Panama Papers are relatively unknown who live nowhere near any of the exclusive

communities for the rich and famous.

20 | no rest For the Wealthy Most of the Philippines’ richest men are still at work even

if many of them are past 80.

22 | coveted sPectrum Why Globe Telecom and PLDT want San Miguel’s

telco frequencies

23 | michelin stars in the sky High-flying super chefs are taking airline cuisine well beyond

a bag of peanuts and free soda.

thouGht leaders 24 | current events // raPhael P.m. lotilla

Legislating Better

25 | investinG // andreW J. Gan Capital And The Knowledge Economy

26 | leadershiP // susan Grace rivera Insider Or Outsider CEO?

27 | entrePreneurshiP // B. Paul santos Getting The Most From Employees

verticals30 | c’mon Board

With tabletop gaming, digital natives are beginning to look up from their tablets and phones.

by paul john Caña

33 | exPandinG the diGital Wallet Telco spins off fintech unit to reach more unbanked Filipinos.

by lala Rimando

36 | Family Feud Two brothers go at it as the Lotte empire gets ready to

open Korea’s tallest tower.by donald KiRK

37 | south korea’s 50 richest Fortunes are mostly down, but technology stars

are on the rise.by gRaCe Chung

40 | Billions oF neW connections Sigfox promises to make the Internet of Things a reality.

It’s racing to build a global network before the telecom giants do.

by aaRon tilley

22

37

30

6 | ForBes auGust 2016

Contents // August 2016

XX

52

58

78

Features52 | hunGry startuP at 165

The country’s oldest bank wants to be a bigger national champion under its CEO Cezar P. Consing.

by Roel landingin

58 | america’s richest selF-made Women These 60 trailblazers have crashed ceilings through

invention and innovation.

66 | skyPe meets cash TransferWise may just pull off the latest salvo

in the war for the future of money: person-to-person currency transfer.

by samantha shaRf

liFe

72 | limited edition Niccolo Jose chisels one-of-a-kind art that combines function.

by paul john Caña

76 | raisinG the steaks Steak aficionados can find something to like at three distinct

restaurants at Resorts World Manila. by gaby ignaCio

78 | sky’s the limit Philjets offers the option to fly.

80 | thouGhtsOn Women and Power

8 | ForBes auGust 2016

Contents // August 2016

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10 | forbes august 2016

Roel LandinginEDITOR-IN-CHIEF

uncle sam uncle tyrant

BY STEVE FORBES, EDITOR-IN-CHIEF

“With all thy getting, get understanding”

FACT & COMMENT — STEVE FORBES

Our FOunding Fathers understood that tyranny wasn’t likely to come from a foreign invasion but from the step-by-step erosion of our freedoms by an expanding government. This is what we are facing today. Most people have no conception of the slippery slope we’re on. Two ominous trends threaten us. One is the monstrous growth of the regulatory state, whereby “independent” agencies, such as the EPA and the FCC, are creating countless rules that carry the force of law. These entities, not our increasingly emasculated Congress, are today’s real lawmakers. More and more they conjure up mandates based on whim and fact-free ideology. And often these diktats are written in vague or ambiguous language that gives bureaucrats oppressive discretionary powers. Traditional Cabinet departments, such as the Treasury, are also engaging in government by decree. The Treasury recently issued a legally dubious rule to stop so-called inversions, whereby a company changes its headquarters’ mailing address to one outside the U.S. to save on taxes. Bureaucrats rightly calculated that companies wouldn’t undergo the years of uncertainty involved in fighting this decree through our oft slow-as-molasses court system. Another weapon of oppression is the criminalization of a torrential number of what were once civil violations. A typical example: It is now a federal crime to walk a dog on federal lands with a leash that’s longer than six feet. Instead of a fine (putting aside why there’s a need for such a prohibition in the first place), violators can be sentenced to up to six months in prison. While the Founders couldn’t have known the specifics of how a future government would seek to sink its claws into the people, they wouldn’t have been at all surprised that it would do so unless stopped. No one knows for sure how many federal laws there are these days that can trip up—and imprison—the unwary citizen. In the early 1980s the Department of

Justice came up with an estimate of 3,000 crimes. Today experts believe that number is over 5,000. Worse, there are some 300,000 criminal offenses listed in the 80,000-page Code of Federal Regulations. Noted legal scholar, defense attorney and Forbes.com contributor Harvey Silverglate wrote an aptly titled book in 2009, Three Felonies a Day: How the Feds Target the Innocent (Encounter Books). It makes the frightening case that the typical professional in this country unknowingly

commits several federal crimes during a typical workday.If Uncle Sam wants to get you, he can.

• An 11-year-old girl in Virginia, who saved a woodpecker from a cat, was hit with a fine for “transporting” a protected species.• A fisherman who threw back some undersized fish he had caught was hauled into court and convicted of violating the antishredding clause of the Sarbanes-Oxley Act. (The Supreme Court overturned the conviction by a one-vote margin.)• A Maryland developer, James Wilson, was prosecuted and sentenced to prison for violating the Clean Water Act, when he improved a piece of land the Army Corps of Engineers claimed as “navigable water”, even though the nearest river was six miles away. Wilson had the resources to fight the conviction, and, ultimately, it was overturned. But most Americans don’t have pockets deep enough to take on the federal government.• An outdoorsman named Tom Lindsey and several others began rafting down Idaho’s Snake River at 7 a.m. instead of 9 a.m. and used gas stoves for cooking at their campsite. The feds hit Lindsey with several indictments, which were later overturned.• An Alaskan fisherman sold 10 otters to a person he thought was an Alaska Native. Selling to non-Alaska Natives is a felony, and the fisherman, who was hardly rich, pleaded guilty to a felony.


forbes

FACT & COMMENT // STEVE FORBES

restaurants:go, Consider, stopEdible enlightenment from our eatery experts and colleagues Richard Nalley, Monie Begley and Randall Lane,as well as brothers Bob, Kip and Tim.

l Porter House Bar and GrillTime Warner Center, 10 Columbus Circle (Tel.: 212-823-9500)To celebrate a decade of success, chef Michael Lomonaco and his staff closed the restaurant to give it a major “lift”. The redo is indeed beautiful, but it’s the delicious food that remains the draw. Start with the fresh seafood plateau or the creamy risotto with fava beans, peas, truffles and pine nuts. Move on to a steak that’s generous and cooked to perfection or to one of the best Dover soles in the city. The puffy onion rings are a must, as is the oversized coconut cake.

l East of Eighth254 West 23rd St. (Tel.: 212-352-0075)A popular local spot that has good, old-fashioned American fare—from crisp fried calamari to steak frites generous enough to feed a small family. The slaw with the fried chicken is also particularly noteworthy. Save room for the creamy caramel-y cheesecake.

l Vivolo140 East 74th St. (Tel.: 212-737-3533)Angelo Vivolo is approaching his 40th year as owner/host of his eponymous restaurant. This romantic, flower-filled spot serves some of the best traditional Italian fare, with updated versions and presentations. Favorites: succulent pork meatballs (great as a meal or an appetizer); the frutti di mare; linguine pasta with clams, pancetta and spicy chili peppers; pan-seared grouper; grilled salmon; and veal scaloppine. End with fresh fruit, some biscotti or the tortoni, a semifreddo ice cream.

l L’AmicoEventi Hotel, 849 Avenue of the Americas, at 30th St. (Tel.: 212-201-4065)Laurent Tourondel’s latest NYC venture, a trattoria-like restaurant, is a fun place for an informal and fabulous meal. Hits among the first courses: the grilled octopus, the burrata and the arugula salad. The white mushroom pizza with truffle paste, fontina and taleggio is wonderful, as are the succulent scallops with cauliflower, hazelnut, lemon and caper-sage brown butter. Do order a homemade gelato, such as salted caramel or black cherry amaretto.

l Bangkok Cuisine1586 Second Ave., at 82nd St. (Tel.: 212-988-1112)This is stellar dining for Thai food fans. Kick off the night with a delicious Thai-version cocktail. Then start with the 5-Star Thai dumplings, filled with chicken and shrimp; the golden curry puffs; and the green papaya salad. From the tasting menu try the delicate, creamy yellow curry chicken with Thai roti or the pan-roasted sea bass with a soy ginger glaze. Everything is delicious.

• A chief engineer at a retirement home diverted backed-up sewage to a storm drain. Unbeknownst to him, the drain wasn’t connected to the city’s sewage system but to a stream that emptied into the Potomac River, a “protected” waterway. Result: a felony conviction and probation. Bureaucrats and prosecutors love this criminalization binge. Targets, especially nonrich individuals, are more likely to cop a plea when faced with criminal instead of civil charges, especially since the feds have immense resources and theirs are limited. Companies also know they can be destroyed by an indictment. Ask former accounting giant Arthur Andersen. It collapsed when hit with federal criminal charges, which were subsequently tossed out—too late, however, to save the firm.

What to do? One powerful antidote is being pushed by Senator Orrin Hatch (R–Utah) and a number of House members: the reform of criminal intent requirements. In other words, the feds won’t easily be able to go after people if those people didn’t know they were committing a crime. The doctrine is called mens rea, Latin for “guilty mind”. Mens rea has long been part of Western legal tradition but has too often fallen into disuse.

As Hatch has warned, “Our criminal code has grown too large, too complicated and too sclerotic. We have too many crimes that criminalize too much conduct and result in penalties that too often are unnecessarily harsh.”

There’s a major effort in Congress for prison-sentencing reform legislation. Hatch wants a so-called default mens rea requirement to be a part of this bill. This would “protect individuals from being convicted for conduct they did not know was wrong. At the very least, the government should have to prove criminal intent in order to convict”.

Hatch’s legislation would “set a default mens rea requirement for all statutes that lack such a requirement. It would ensure that courts and creative

prosecutors ... [can]not convict without any proof of a guilty mind”.

Senator Hatch’s assessment is correct: “I question whether a sentencing reform package that does not include mens rea reform would be worth it.”

Surprisingly, while such a reform enjoys widespread support in the House, it’s meeting stiff resistance among several Senate Republicans, who confuse prosecutors and bureaucrats abusing citizens and companies with being tough on crime. They need a reeducation course in the Constitution.

The Hatch approach would deal a badly needed blow in defense of our basic liberties.

u.s. Is real culprit

The bankruptcy of economic policy was on display with the U.S. Treasury’s recent release of its “watch list” of potential currency manipulators. Conspicuously absent was the biggest manipulator of the 21st century: Uncle Sam himself. Washington’s decision in the early part of the last decade to “gradually” weaken the dollar to stimulate the economy and boost exports led to the economic disaster of 2007–2009, which, in turn, led to the disastrous election of Barack Obama.

Countries that are fooling around with their money are only following our dreadful example.

Volatile money hurts investment, the key to a higher standard of living. Like a computer virus, currency instability corrupts the information that marketplace prices are supposed to convey. The surge in oil prices from around $20 to $25 a barrel to well over $100 led people to believe we must be running out of the stuff. As happened in the 1970s, when we last debauched the dollar, prodigious amounts of capital were directed into the energy sector. When the dollar strengthened, oil crashed and considerable anguish ensued.

Currency manipulation never leads to long-term economic strength. Ask Brazil, Argentina and Zimbabwe. F

august 2016 forbes | 13

Forbes International

Editions

Chairman & Editor-in-ChiEf

Steve Forbes

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ChiEf ProduCt offiCEr

Lewis D’Vorkin

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Tim Ferguson

Founded in 1917B.C. Forbes, Editor-in-Chief (1917-54)

Malcom S. Forbes, Editor-in-Chief (1954-90)James W. Michaels, Editor (1961-99)William Baldwin, Editor (1999-2010)


Editor’s Note

Africa • Afrique • Argentina • Armenia Brazil • Bulgaria • Belize • Costa Rica

China • Croatia • Czech Republic Denmark • Dominican Republic

Estonia • Georgia • Greece Hungary • India • Indoneia • Israel

Japan • Kazakhstan • Korea • Latvia Mexico • Middle East • Mongolia Philippines • Poland • Romania

Russia • Slovakia • Spain • Thailand Turkey • Ukraine • Vietnam

A Promising Startodrigo Roa Duterte took his oath as the Philippines’ 16th president at high noon of June 30 in circumstances and ceremonies that deliberately

veered away from tradition. More than a week before what media has billed “D-Day”, his economic managers also took the unprecedented move to meet close to 500 business leaders in two days of consultations in Davao City. That won the new administration many admirers in the business community. Donald Dee, the honorary chairman of the Philippine Chamber of Commerce and Industry, the biggest grouping of business owners and entrepreneurs in the country, hailed it as a watershed event. “This is the first time we are being consulted by an administration even before it assumes office.” The Davao City meeting was a big step in clarifying the new administration’s economic thrusts first outlined in an eight-point socio-economic program shortly after the May 9 polls. Duterte’s economic managers later expanded it to a 10-point economic program unveiled shortly before the June 20-21 business consultation. While the new government has committed itself to continue current economic policies, the newly appointed economic managers promised they would be different in one

r key respect. The Duterte presidency will strive to give more importance in the allocation of projects and government resources to areas outside Metro Manila, Southern Tagalog and Central Luzon. Despite accounting for less than 40% of the country’s total population, the three areas that make up the so-called “Mega Manila” super region swallowed up to 80% of the past administration’s Public-Private Partnership infrastructure projects, says Carlos Dominguez, the new finance secretary. “If you’re not a pro-active government in pushing the projects outside into the regions, they will all congregate around Mega Manila where two-thirds of our GDP is produced,” he says. Unlike the Aquino government, the new administration will build more infrastructure projects in outlying areas outside Mega Manila. “After all, our President was an outlier, wasn’t he?” he points out. To be sure, business leaders are still waiting for greater clarity on the new administration’s thinking on other policy areas such as mining, energy, land reform and agriculture, among others. But the frank discussions between the economic managers and business leaders in Davao City went a long way in spelling out the new administration’s economic priorities. As our features on Solaire Resort & Casino and the Bank of the Philippine Islands in this issue show, the country’s conglomerates are quite bullish about the country’s economic prospects. They are preparing to mobilize fresh capital and investments to take advantage of fresh opportunities amid faster economic growth, a tourism boom and the rise of the middle class. That signals great promise for the new administration. But to sustain investor confidence, it must continue to engage the business community in a friendly dialogue on their concerns. The new administration must also move quickly to achieve policy coherence amid what looks like disparate priorities of Cabinet members drawn from diverse backgrounds.

the Duterte presidency will strive to give more importance in the allocation of projects and government resources to areas outside Mega Manila.”

Roel LandinginEditor-in-ChiEf

LeaderBoard // August 2016

With Globe Telecom and PLDT’s mobile Internet revenues rising by a yearly average of 78% and 57% respectively from 2012 to 2015, it’s no wonder the two telcos are willing to pay $1.5 billion to acquire San Miguel’s frequencies. PAGE 22

The World’s MosT PoWerful WoMen 16

PhiliPPine offshore invesTors:Where They live 18

no resT for The WealThy 20

Michelin sTars in The sky 23

get

ty im

ag

es

LeaderBoard


1 Angela Merkel Chancellor/Germany

47 Bonnie Hammer Chair/NBCUniversal Cable Entertainment/ U.S.

65 Lubna Olayan CEO/Olayan Financing/ SaUdi arabia

66 Susan Cameron CEO/Reynolds American/U.S.

83 Ellen Johnson-Sirleaf President/Liberia

2 Hillary Clinton Presidential candidate/U.S.

48 Ertharin Cousin Executive director/ U.N. World Food Programme/U.S.

84 Fabiola Gianotti Director-general/CERN/itaLy

3 Janet Yellen Chair/Federal Reserve/U.S.

49 Laurene Powell Jobs Philanthropist/U.S.

67 Donna Langley Chair/Universal Pictures/U.K.

85 Lynn Good CEO/Duke Energy/ U.S.

4 Melinda GatesCochair/Bill & Melinda Gates Foundation/U.S.

50 Nicola Sturgeon First minister, Scotland/U.K.

51 Gina Rinehart Business tycoon-activist/aUStraLia

68 Katharine Viner Editor-in-chief/ The Guardian/U.K.

86 Mary Meeker Partner/Kleiner Perkins Caufield & Byers/U.S.

5 Mary Barra CEO/ General Motors/U.S.

19 Federica Mogherini Foreign policy chief/ European Union/ itaLy

33 Loretta Lynch Attorney General/ U.S.

69 Wang Feng Ying CEO/Great Wall Motor Co./China

87 Patricia Harris CEO/Bloomberg Philanthropies/U.S.

6 Christine Lagarde Managing director/ IMF/FranCe

20 Safra Catz Co-CEO/Oracle/U.S.

34 Ursula Burns CEO/Xerox/U.S.

52 Bidhya Devi Bhandari President/nepaL

70 Arianna Huffington Editor-in-chief/Huffington Post/U.S.

88 Eliza Manningham-Buller Chair/Wellcome Trust/U.K.

7 Sheryl Sandberg COO/Facebook/U.S.

21 Oprah Winfrey Media mogul/U.S.

35 Lucy Peng CEO/Ant Financial Services Group/China

53 Dana Walden Co-CEO/Fox Television Group/U.S.

71 Diane von Furstenberg Founder/DVF/U.S.

89 Irina Bokova Director-general/UNESCO/bULGaria

90 Sara Blakely Founder-philanthropist/ Spanx/U.S.

8 Susan Wojcicki CEO/YouTube/U.S.

22 Helen Clark Administrator/U.N. Development Programme/ new ZeaLand

36 Sheikh Hasina Wajed Prime minister/banGLadeSh

54 Phebe Novakovic CEO/General Dynamics/U.S.

72 Dalia Grybauskaitė President/LithUania

9 Meg Whitman CEO/HP/U.S.

23 Sotomayor, Ginsburg, Kagan Justices/Supreme Court/U.S.

37 Sri Mulyani Indrawati Managing director/World Bank/indoneSia

55 Marissa Mayer CEO/Yahoo/U.S.

73 Tory Burch Founder-CEO/ Tory Burch/U.S.

91 Raja Easa Al Gurg Managing director/Easa Saleh Al Gurg Group/U.a.e.

The World’s Most Powerful Women FOR THE SIXTH YEAR running, German Chancellor Angela Merkel is die Nummer eins on our ranking. (Hillary Clinton, for now, is stuck at number two). Nearly a third of these women lead a nation or play a major role in its policymaking; together they govern or directly influence more than 3.6 billion people. Nearly half run a global company; nine have built a billion-dollar business. In all, they control some $1 trillion in revenue. Four metrics determine this list: money (personal fortune, company sales, national GDP); media presence; influence exerted across multiple spheres; and success at effecting change within one’s organization, company or country.

KEY BY INDUSTRYbillionaire politics business media tech giving finance


10 Ana Patricia Botín Chair/Banco Santander/Spain

38 Margaret Chan Director-general/World Health Organization/China

56 Elvira Nabiullina Governor/Bank of Russia/rUSSia

74 Mary Jo White Chair/SEC/U.S.

92 Debra Cafaro CEO/Ventas/U.S.

11 Ginni Rometty CEO/IBM/U.S.

25 Arundhati Bhattacharya Chair/State Bank of India/india

24 Marillyn Hewson CEO/Lockheed Martin/U.S.

39 Drew Gilpin Faust President/Harvard University/U.S.

40 Chanda Kochhar CEO/ICICI Bank/ india

57 Rosalind Brewer CEO/Sam’s Club/ U.S.

75 Kaci Kullmann Five Chair/Norwegian Nobel Committee/norway

93 Shobhana Bhartia Chair/HT Media/ india

12 Park Geun-hye President/ SoUth Korea

26 Aung San Suu Kyi State counselor/myanmar

58 Peng Liyuan First lady/China

76 Gwynne Shotwell COO/SpaceX/U.S.

94 Greta Van Susteren Anchor/Fox News/ U.S.

13 Michelle Obama First lady/U.S.

14 Indra Nooyi CEO/PepsiCo/U.S.

27 Ruth Porat CFO/Alphabet/U.S.

41 Samantha Power Ambassador/ United Nations/U.S.

59 Nemat (Minouche) Shafik Deputy governor/ Bank of England/ U.K.

77 Kiran Mazumdar-Shaw Chair/Biocon/india

95 Heather Bresch CEO/Mylan/U.S.

28 Anna Wintour Artistic director/Condé Nast/U.S.

42 Pollyanna Chu CEO/Kingston Securities/ honG KonG

60 Mary Callahan Erdoes CEO, Asset Management/JPMorgan/U.S.

78 Zanny Minton Beddoes Editor-in-chief/ The Economist/U.K.

96 Ameenah Gurib-Fakim President/maUritiUS

15 Angela Ahrendts Senior VP/ Apple/U.S.

29 Queen Elizabeth II Monarch/U.K.

30 Ho Ching CEO/Temasek/SinGapore

43 Sheikha Lubna Al Qasimi Minister, Intl. Cooperation & Development/U.a.e.

61 Zhou Qunfei Chair/Lens Technology/honG KonG

79 Miuccia Prada Co-CEO/Prada/itaLy

97 Risa Lavizzo-Mourey CEO/Robert Wood Johnson Foundation/ U.S.

98 Lee Boo-jin CEO/Hotel Shilla/SoUth Korea

16 Abigail Johnson CEO/Fidelity Investments/U.S.

44 Amy Hood CFO/Microsoft/U.S.

62 Nguyen Thi Phuong Thao Chair/Sovico Holdings/Vietnam

80 Folorunsho Alakija Business tycoon/niGeria

17 Tsai Ing-wen President/taiwan

31 Adena Friedman President/Nasdaq/U.S.

45 Beth Comstock Vice-chair/GE/U.S.

63 Dong Mingzhu Chair/Gree Electric Appliances/China

81 Solina Chau Cofounder/Horizon Ventures/honG KonG

99 Beth Brooke-Marciniak Global vice-chair/EY/U.S.

18 Michelle Bachelet President/ChiLe

32 Irene Rosenfeld CEO/Mondelez/U.S.

46 Kolinda Grabar-Kitarović President/Croatia

64 Güler Sabanci Chair/Sabanci Holding/tUrKey

82 Judy Faulkner Founder-CEO/ Epic Systems/U.S.

100 Jenny Lee Managing partner/GGV Capital/SinGapore BY

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panama papers

Philippine Offshore Investors: Where They LiveMost reports on Philippine-based offshore investors linked to shell companies mentioned in so-called Panama Papers focus on well-known names in politics, business and social circles. The papers refer to an unprecedented leak of 11.5 million files from the database of the Panama-based Mossack Fonseca, one of the world’s largest law firms that specializes in setting up shell companies in tax havens. The documents detail how tycoons, government officials and celebrities use secretive offshore tax havens to keep financial information private and away from tax officials and other authorities. The graphs on this page try to give a fuller picture. An Internet search of the almost 300 or so Philippine-based names found in the database reveals that nearly 30% are either business executives, employees, owners or shareholders while 6.8% are professionals and 3.4% are government officials. However, there is no sufficient information on the remaining two-thirds of the names on the list, which suggests they are relatively unkown. Their addresses also show that only a little under a fifth reside in Metro Manila’s exclusive communities for the rich and famous. Majority lives in ordinary communities in Metro Manila. Another fifth are based in major cities such as Cebu, Davao, Angeles and Cavite. Offshore business entities are not illegal per se but these are sometimes linked to illegal activities such as fraud, evasion of tax and international sanctions. Why seemingly ordinary people set them up deserves further study.

Source: International Consortium of Investigative Journalists (ICIJ)

Makati 66

Caloocan 2

Mandaluyong 7

taguig 8

Pasay 7

Parañaque 4

Marikina 3

Muntinlupa 9

san Juan 9

Manila 26

Pasig 18

Quezon City

46

Las Piñas 2

Navotas 1

albay 1

batangas 3

rizal 3

Cavite 4

bataan 1

aklan 1

Leyte 1

bohol 1

Misamis oriental

1

Davao 3

Negros 1

Cebu 17

bulacan 2

Zambales 2

Nueva ecija 1Pampanga

13

Valenzuela 1

Profile of offshore investors in

the Philippines named in Panama Papers

No clear profile 66.1%

business owner

8.6%Professional 6.8%

Company executive 13.0%

Listed company shareholder

2.1%

government official 3.4%

ExclusivE accEss

Number of offshore investors with addresses

in neighborhoods for the wealthy.

Metro ManilaRest of luzon

visayas and Mindanao

Makati Bel-Air 2Dasmariñas 5Forbes Park 7Magallanes 2Urdaneta 3 MuntinluPa Ayala Alabang 6 Pasig Valle Verde 7 QuEzon city Corinthian Gardens 13Green Meadows 3Loyola Grand Villas 1 san Juan Greenhills 4

Thanks to the following FORBES Philippines interns for their help in processing the data for

the visuals on this page: Ivah Knefriteir De Leon, Marlette Jomeine Hernais, Trisha Ventura and

Trisha Nikki Rabulan.


LeaderBoard

Business succession

No Rest for the WealthyThough they’re past 80, many of the Philippines’ richest men continue to head their companies’ boards.

Chairman emeritus Honorary chairman Group chairman

Chairman Vice chairman President Director Other position

Legend

Lucio Tan Sr. (81) Michael Tan (49) Lucio Tan Jr. (49) John Tan (47)

LT Group 148.04

PAL Holdings 124.18

Philippine National Bank 64.64

Tanduay Distillers Asia Brewery MacroAsia Corp. 3.28

Eton Properties Philippines

David Consunji (94) Isidro Consunji (67) Victor Consunji (65) Jorge Consunji (64) Luz Consuelo Consunji (62) Ma. Cristina Gotianun (61) Ma. Edwina Laperal (54)

DMCI Holdings 172.61

Semirara Mining and Power 137.33

George Ty (83) Arthur Ty (49) Alfred Ty (48) Anjanette Dy Buncio (47) Alesandra Ty (36)

GT Capital Holdings 249.25

Metropolitan Bank and Trust 280.17

Toyota Motor Philippines Federal Land

Despite their advanced age, some of the Philippines’ richest business tycoons continue to play a key role in their important companies. Four of five of the country’s billionaires who are in their eighties continue to serve as chairman in at least one of their companies. On the other hand, some have taken an honorary or emeritus leadership role, leaving the task of steering the family-owned businesses to their children. The table below shows the management positions of these senior tycoons and their children. Data was taken from the “family relationships” section in the annual reports of their listed holding companies.

Henry Sy Sr. (Age: 91) Teresita Sy-Coson (65) Elizabeth Sy (63) Henry Sy Jr. (62) Hans Sy (60)* Herbert Sy (59) Harley Sy (56)

SM Investments 801.45

Company Market cap (Php bil)





SM Prime Holdings 723.42

BDO Unibank 382.76

China Banking Corp. 75.08

John Gokongwei Jr. (89) Robina Gokongwei-Pe (54) Lance Gokongwei (49) Lisa Gokongwei-Cheng (47) Faith Gokongwei-Lim (45) Hope Gokongwei-Tang (45)

JG Summit Holdings 664.35

Universal Robina Corp. 450.70

Robinsons Land 121.18

Cebu Air 56.35

Robinsons Retail Holdings 108.38

Sources: Latest annual reports and general information sheets Notes: Ages as of December 2015; Market cap as of mid-May 2016. *Stepping down as president of SMPH by October 2016.

IT ALL BEGAN IN FLORENCE,Italy. O�cine Panerai crafted anddeveloped watches for the ItalianRoyal Navy during the SecondWorld War. It has since held a special

place in the hearts of watch collectorsand a�cionados.

Earlier this year, the luxurywatchmaker put their history and futureon display in an exhibition called Panerai- Dive Into Time. It was only �tting thattheir timepieces were showcased in thefascinating ancient crypt of the formerchurch of San Pancrazio, home of theMarino Marini Museum in Florence. Themuseum was masterfully lit to createa display in which visitors becomeimmersed in a journey through time.

Guests were delighted to dive into a1,000-square-meter underground vaultwhere previously unseen creations fromvarious periods of the brand’s storiedpast. The chronological journey throughPanerai’s history ultimately led to theintroduction of a remarkable selection ofnew watch models.

LUMINOR DUEIt could be saidthe past andfuture of Paneraiare perfectlysynthesized inthe LuminorDue. Its caseis faithful toits DNA, butcarries qualitiesthat breakfrom tradition.For starters,it’s a mere10.5mm thick, a far cry from its 17.5mmpredecessors. It also appears to be moredelicate with a depth rating of 30 meters,which is leagues away from the 300-meterdepth rating of the entire Luminor line.Perhaps it’s about time the classic divewatch plunged into dress watch territory.

LUMINORMARINA 1950CARBOTECHWith a visionto take themanufactureinto the future,Panerai crafteda LumniorMarina madewith carbotech,a material neverused in the worldof high qualitywatchmaking until now. The material’sirregular matte black appearance variesaccording to its cut, making sure that thesewatches are as unique as thumbprints.The wood grain �nish makes the modelstand out as a sensible andsubmersible timepiece.

RADIOMIR 1940Panerai has soughtinspiration fromits own history. Forover a century, it’shad inextricablelinks to maritimetraditions, one ofthem being thesounding of aship’s bell to markthe hour. TheRadiomir 1940Minute Repeater carries a repertoireof complications. Among them, a twinrepeater that chimes both at local time andthat of a second time zone. It’s likewisehailed for turning the tool watch orientedmanufacture into a design oriented brand.

RADIOMIR FIRENZEThe �nal stop at the exhibit allowedvisitors to watch a master engraverdemonstrate the ancient techniqueusing a sparsello.The engraver isworking on thecase of a RadiomirFirenze, which isexclusively soldat the Piazza SanGiovanni. It’sdecorated withmotifs inspiredby Panerai’shome, Florence.

Panerai showcased their past, present, and futurein an exhibit featuring timepieces that invited

everyone to dive into time.

Ocean of Time

TIMEPIECESPARTNER FEATURE

Forbes Panerai - August 2016.indd 1 7/18/16 1:14 PM

Anthoni Salim (No. 3 in 2015 FORBES Indonesia’s richest with a net worth of $5.4 bil)*Chairman, First Pacific Ltd. of Hong Kong, which has a 25.6% economic interest in PLDT


LeaderBoard

Megadeals

Coveted SpectrumWhy Globe Telecom and PLDT want to get their hands on San Miguel’s telco frequencies Globe Telecom and PLDT Inc.’s acquisition of San Miguel’s telecommunication businesses for $1.5 billion, announced late May, is one of the country’s biggest M&A deals. It continues to draw public interest because of the promise it brings to improve wireless Internet services while preserving the so-called telecom duopoly. It could also be the first major test of the country’s newly created Philippine Competition Commission, which wants to scrutinize the deal even as Globe and PLDT

Average annual change (%) in selected components of telcos’ wireless revenue from 2012 to 2015

Mobile Internet

Voice

SMS

PLDT gLobe78.0%4.5%-0.5%

56.6%-2.8%-6.1%

Some of the Philippines’ and Asia’s richest persons and biggest companies are also the major owners of the three companies involved in the deal. No surprise there. Telecom frequencies, like any other scarce resource controlled by governments, continue to be an important source of wealth creation in the region.

Wealth From Telecoms

RISE OF MOBILE BROWSING

Iñigo Zobel (No. 21 in 2015 FORBES Philippines’ richest with a net worth of $870 mil)* Chairman, Top Frontier Investment Holdings, which owns 45.99% of total outstanding SMC shares

Jaime Augusto Zobel de Ayala (Leader of the Ayala family, which is No. 8 in 2015 FORBES Philippines’ richest with a net worth of $3.5 bil)* Chairman, Asiacom Philippines, which owns 50.93% of total Globe shares* Chairman, Ayala Corp., which owns 12.96% of total Globe shares

Ramon Ang (No. 29 in 2015 FORBES Philippines’ richest with a net worth of $510 mil)*Owns Privado Holdings Corp., which owns 10.67% of total SMC outstanding shares

Singapore Telecom (No. 320 in 2016 FORBES Global 2000 with a market cap of $46.7 bil)* Owns 20.13% of total Globe shares

Manuel V. Pangilinan (No. 50 in 2013 FORBES Philippines’ richest with a net worth of $105 mil)* Chairman and CEO, PLDT

Eduardo Cojuangco, Jr. (No. 23 in 2015 FORBES Philippines’ richest with a net worth of $770 mil)*Chairman and CEO, SMC

Nippon Telegraph and Telephone of Japan (No. 44 in 2016 FORBES Global 2000 with a market cap of $94.5 bil)*Owns 16.20% of PLDT common stock through two subsidiaries

PLDT

San Miguel

Globe John Gokongwei, Jr (No. 2 in 2015 FORBES Philippines’ richest with a net worth of $5.5 bil)*Chairman, JG Summit, which owns 8.01% of PLDT common stock

insist the transaction is “deemed approved”. The graph shows what is at stake. Apart from owning about 36% of the number of frequencies held by the country’s three major telecommunications groups, San Miguel alone holds frequencies in the 700MHz spectrum that is useful for 4G wireless broadband service. With the rise of mobile Internet as the fastest growing segment of the telcos’ wireless revenues (see table), San Miguel’s 700MHz spectrum has become more valuable and coveted over time.

3500 MHz5G (Potential)

2300 MHz LTE

2500 / 2600 MHzLTE

2100 MHz 3G

1800 MHz LTE / 3G

850 / 900 MHz 3G / 2G

700 MHz LTE

70

50 20

30 30

40 35 30

75 45 30

35 50 80

60 50 40

TOTAL FREquENCIES

OWNEd

PLdT

San Miguel

Globe

290280200

Frequency /use no. oF Frequencies per group

LeaderBoard

Daniel BouluD RestauRants:

Daniel, Café Boulud HIGHest MICHelIn RatInG:

3 stars aIRlIne:

air France Class level:

“la Première” (first class) and business

saMPle DIsH: Atlantic lobster with

curried coconut sauce, black rice and bok choy

(pictured above)

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Michelin Stars in the Sky Five airlines with tray-chic menus by award-winning chefs. AIRPLANE FOOD is famously unappetizing, but over the past few years partnerships between airlines and award-winning chefs and restaurateurs have really taken off. In February New York restaurateur Danny Meyer announced that food from his Union Square Hospitality Group would be served on Delta, and, in May, American announced that four acclaimed chefs would upgrade its menus, including Chicago’s Maneet Chauhan and Dallas’ Julian Barsotti. As it does on land, Michelin-worthy food comes at a price—these meals are served almost exclu-sively in first class and business. Here’s where to find those high-flying chefs.

noBu Matsuhisa RestauRants:

nobu, Matsuhisa HIGHest MICHelIn RatInG:

1 star aIRlIne:

Qatar airways Class level:

First class and business saMPle DIsH:

Oven-roasted mustard and dill salmon with dill pine-nut rice, yellow dal with shredded cucumber

and carrot salad

GeorGes Blanc RestauRants:

Restaurant Georges Blanc, l’ancienne auberge

HIGHest MICHelIn RatInG: 3 stars aIRlIne:

singapore airlines Class level:

suites, first class, business and premium economy

saMPle DIsH: Beef bourguignon with

dark wine sauce, potatoes, carrots and ham

neil Perry RestauRant: Rockpool

HIGHest MICHelIn RatInG: 0

aIRlIne: Qantas

Class level: First class, international

business class and premium economy

saMPle DIsH: Nyonya-style

curry of ling with crispy shallots, snow peas

and jasmine rice

Maneet chauhan RestauRants:

Chauhan ale, Masala House

HIGHest MICHelIn RatInG: 0

aIRlIne: american airlines

Class level: First class and business

saMPle DIsH: Cajun-spiced Chilean

sea bass with green gazpacho and Jerusalem

artichoke puree

midas mEtEr

Long and Winding Road A POLL OF FORBES’ Midas List of the world’s greatest venture capitalists showed subdued confidence in Lyft’s drive.

4 FutuRe Blue CHIP

3 ten-BaGGeR

2 solID exIt

1 Buyout BaIt

0 total wRIteoFF

lyFt 1.4

scorEcard

BILL GROSS –1,000 swiss staMPs net woRtH: $2 BIllIon the legendary bond investor sells a smidgen of his colossal philatelic holdings for $4.5 million, including six examples of the rare 1843 “Double Geneva”, which features two postal seals on each stamp.


Legislating Better

awmaking is not cheap. The combined budget of the Senate and House of Representatives for the six years covering the Benigno Aquino

III presidency totaled Php58.5 billion. From June 30, 2010 to June 30, 2016, Congress passed 788 proposed legislation. This number included legislative bills adopted by both Houses and a handful of joint Congressional resolutions having the force of law upon presidential approval. Thirty treaties which gained the Senate’s nod also formed part of the law of the land.

Based on these figures, the Filipino people spent at least Php70 million for each potential law. In reality, the cost is much higher. Lawmaking also involves the executive department, which normally prepares proposals for new legislation, and provides support to both houses until a bill is signed into law. The enormity of resources required outside of Congress in support of legislation is best seen in the annual appropriations process. The endless hours spent in preparing the President’s Budget and in defending it in each house of Congress during budgetary deliberations (in the various committees and in plenary) all add to the tab.

In terms of output, the 168 proposed laws of national application passed by the Philippine Congress in the last six years do not lag behind those under previous presidencies after Martial Law: 177 under President Corazon C. Aquino from 1987-1992; 230 under President Fidel V. Ramos from 1992-1998; 165 under President Gloria Macapagal-Arroyo from 2004-2010. President Joseph Estrada’s short tenure from 1998 to early 2001 produced 49 and the remainder of his term served out by President Arroyo up to mid-2004 accounted for 78.

But the Benigno Aquino III presidency saw the highest number of bills vetoed by any president. The vetoed 12 bills of national application cost at least Php840 million. To avoid waste, the Congressional leadership asked for better coordination between the executive and legislative branches. Cabinet members were urged to articulate their objections during Congressional hearings and not to wait until after Congressional approval. An additional 60 local bills were also vetoed increasing the cost of vetoed bills to more than Php5.74 billion. The Benigno Aquino III administration countered that 58 of these local bills converted local roads into national roads and would have required additional funding. Their veto

showed adherence to fiscal discipline at the risk of alienating individual legislators.

Overall, 82 vetoes representing 10% of the total passed by Congress should not be ignored. Contrast the numbers for other presidencies: Corazon Aquino 18; Ramos 51; Estrada 19 and Arroyo six. While President Arroyo’s low number may also reflect a reluctance to antagonize Congress, future presidencies and congresses would certainly benefit from stronger inter-branch coordination.

The Congress under President Ramos stands out in terms of productivity despite his having been elected as a minority president. At the institutional level, it was during this term that the Legislative-Executive Development Advisory Council (LEDAC) was created by law and met frequently to facilitate the approval of laws critical to national development. The National Economic and Development Authority served as the LEDAC secretariat to ensure that the government’s priorities under the Medium-Term Development Plan were reflected in the Joint Legislative-Executive Priority Legislative Agenda.

President Benigno Aquino III hardly convened the LEDAC in the previous six years despite a legal requirement for quarterly meetings. This reduced institutional opportunities for him and the Cabinet to interact with Congress, including the leaders of the opposition. Credit is due, however, to the previous leadership of the Senate and the House for keeping the legislative mill running at a healthy pace by engaging regularly in bilateral discussions to push for their own common legislative agenda.

There are infinite ways to delay indefinitely undesirable bills, starting at committee level in either house. Presidential objection communicated to Congress or its individual members in a more timely and effective manner could avoid loss of essential presidential goodwill. The veto of a legislated increase in Social Security System pension benefits or in nurses’ pay may have been absolutely sound from a fiscal standpoint. But the previous president need not have acted as their executioner.

The new presidency in coordination with the leadership of the new Congress can certainly do better in utilizing the taxpayers’ money for legislation. F

Raphael p.M. lotilla is an independent director at aboitiz equity Ventures and First Metro inVestMents. He was ForMerly secretary oF tHe departMent oF energy. il

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24 | Forbes august 2016

Raphael p.M. lotilla // cuRRent events

thought leadeRs

Presidential objection communicated to Congress in a more timely manner could avoid loss of goodwill.”

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Capital and the Knowledge Economy

hen we think of capital we tend to think of the financial variety, that is, the money. Yet much of the innovation and value

being created in the world today comes from companies whose capital is largely intellectual and are more efficient at creating shareholder value.

Think of Facebook with capital of $44 billion and a market cap of $333 billion versus AT&T with capital of $124 billion and a market cap of $248 billion. Or Gilead at $19.1 billion and $112 billion, respectively, compared with Pfizer at $66 billion and $214 billion respectively. They also tend to have little or no debt in their books – think of Apple’s cash hoard. So how does this happen? Let’s take a look at two industries.

First, pharmaceuticals. The pharma ecosystem basically revolves around three functions – research and development (R&D), manufacturing and marketing. Big pharma like Pfizer does all three.

Biotechs tend to play largely in the development side of things wherein the capital is basically all about talent. So with biotechs their capital literally walks out the door every night. With this focus on R&D, the fortunes of biotechs are completely tied to whether the drugs they have in their development pipeline work out or not. If it works, it’s a jackpot but if it doesn’t, the stock price can go to near zero. Think about Gilead with Sovaldi or Regeneron with its blockbuster eye drug Eylea. This is why hedge funds love biotech. The potential returns can be amazing.

Once biotechs get their FDA approvals (sometimes the process is several years) they then work with big pharma to manufacture and distribute the drugs as Regeneron does with Bayer. The margins are good for Bayer but manufacturing and distribution are more commoditized so margins are slimmer and the really big bucks and pure profit go to the company that owns the intellectual property, in this case Regeneron. While big

pharma does its own R&D, it seems that a lot of major breakthroughs come out through the biotechs.

The same process works in the tech space. So you see companies like Facebook or Google or Amazon dominating their spaces. In that sense they are like the biotechs; they can’t live without the telcos – like the big pharma – which invest in all the bits that require a lot of cash – spectrum, cell sites, infrastructure, cables. Netflix and its library wouldn’t really be worth very much to you if you didn’t have AT&T or Comcast to deliver those to you would it? One cannot really live without the other.

I’ve been going on and on about the need to invest in companies that “get” the new economy because they deliver the growth the markets love, and by and large, these are companies involved in the knowledge side of things and adapt successfully. Their return on capital is huge because they don’t actually have to invest in bricks and mortar. Other companies do that for them. So the money they have is largely working capital to pay salaries and R&D costs to achieve those breakthroughs. This is their capital spending.

Alas, that can only make for a quite volatile portfolio, as so much is dependent on ongoing breakthroughs and earnings beats. So what I like to do is to pair them up with the companies that they need symbiotically. One can’t live without the other!

So think about a portfolio wherein the growth (capital gain) comes from the innovators on the knowledge side such as Facebook, Amazon, Google, Netflix, Gilead or Regeneron. Then, pair them off with companies that work with them symbiotically such as AT&T, Verizon, Comcast, J&J or Roche – companies that are “steady eddies” and pay out a nice dividend to tide you over while you wait. Consistency of returns is no bad thing. F

Andrew J. GAn IS PRINCIPAL AND MANAGING DIRECTOR OF BEACON HOLDINGS INC. illu

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andrew j. gan // investing

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Think about a portfolio wherein the growth comes from the innovators on the knowledge side. Then, pair them off with the companies that work with them symbiotically.”

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AuGuST 2016 FORBES | 25

Insider or Outsider CEO?

s CEO successions loom large in the fate of today’s enterprises, company boards have become better at defining the knowledge, skills, experience and leadership

style that future corporate leaders must possess. But they continue to struggle whether it is better to look for the next CEO from inside or outside the organization.

Will familiarity with one’s environment make a difference? Will an internal candidate have greater chances of hitting the ground running than one who is absolutely new to the terrain? How will an insider or outsider CEO approach his or her mandate differently?

I did a cursory check of new CEOs in Philippine private companies in the last 12 months, and counted seven appointments that were announced publicly. These ranged from industries such as manufacturing (Nestlé Philippines) to banking (Standard Chartered Bank, ANZ), insurance (AXA Philippines, Insular Life) automotive (Mitsubishi Philippines) and media (ABS-CBN). Only one — Nina Aguas, the new CEO of Insular Life — was an outsider.

The survey, though informal, seems to suggest that most Philippine board directors believe that being a home-grown executive gives you a head start over an outsider. One wonders what kind of challenges the new Insular Life CEO will be facing if this is the prevailing view in many local company boards?

Research by the Kelley School of Business and A.T. Kearney consultants on S&P 500 companies shows that those who chose insider CEOs outperformed other companies in terms of profitability and growth. Booz Allen Hamilton’s succession study, which covered the world’s 2,500 largest public companies, found that from 2009 to 2011 almost twice as many external CEOs were dismissed compared with insiders.

After three years, Yahoo’s outsider CEO Marissa Mayer still has to deliver the promised turnaround and investors are getting increasingly impatient. On the other hand, Citigroup’s insider CEO Michael Corbat enjoyed a 27% boost in compensation in 2015 as bank profits more than doubled.

These are Western studies and examples. In the Asian context, can we categorically say that insider CEOs are likely to be more successful? I’m afraid not. There are simply too many variables that come into play. Most of the research show that on average both internally and externally recruited CEO

candidates are at par with each other. There are, however, special circumstances where outsider CEOs do better than insiders.

Recently, PwC’s strategy consulting unit, Strategy&, found in a 2015 study that companies across different markets were making a deliberate choice to bring in outsider CEOs. From 2012 to 2015, boards chose outsiders in 22% of planned turnovers, double the 14% from 2004 to 2007. Drivers for the shift included the disruptive changes industries were undergoing and the realization that current skills sets and experience might be irrelevant to future challenges.

The insider CEO clearly has many advantages, foremost of which is familiarity with the internal terrain that allows easier navigation. Knowing the key players and where they stand and awareness of the corporate culture, the prevailing relationships and access to institutional memory — all these can be quickly leveraged to execute on new strategy. These are the stuff an outsider CEO will take a bit of time learning before he or she can chart a new direction.

Yet the outsider CEO equally has her own set of advantages. When there is history of poor performance that calls for replacing senior executives, the externally-hired CEO is less tied up with relationships that could impede a major organizational restructuring. The outsider also possesses that freshness

of point of view that challenges the status quo.We are now a city planet, a highly globalized and

interconnected web of people, organizations, nations and cultures moving and changing at break-neck speed. And ours is increasingly a VUCA world, an acronym that stands for volatility, uncertainty, complexity and ambiguity that was first coined by the U.S. military to describe extreme conditions in Afghanistan and Iraq.

The question is no longer just about “who” — choosing between an “internal versus external” leader. It is more of “how” or creating and sustaining a process where leaders, wherever they reside, learn to build capacity to adapt well to a highly unpredictable environment. F

SuSan Grace rivera is managing director and executive coach of talent, leadership & change consulting and coaching solutions. she can be reached at [email protected] il

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SuSan Grace rivera // LeaderShip

thouGht LeaderS

The question now is how to create and sustain a process where leaders learn to build capacity to adapt well to a highly unpredictable environment.”

A

Getting The Most From Employees

ntrepreneurs are always trying to find better ways to build their businesses. So, if employees are truly a business’ most important asset then getting the most out of them should be a top priority. Of

course, it’s easier said than done and there are many ways to go about this. For now, allow me to narrow it down to two options. Should you focus on addressing weaknesses or building strengths?

Bridgewater Associates is a U.S.-based hedge fund manager that has taken managing weaknesses to a different level. Founder Ray Dalio grew the firm from nothing in 1975 to the largest hedge fund manager in the world with over $150 billion in assets under management and 1,400 employees today. LCH Investments, a leading investor in hedge funds, estimates that Bridgewater’s Pure Alpha Hedge Funds have generated $45 billion in net gains surpassing the $43 billion produced by George Soros’ funds.

Here are some of Bridgewater’s unique practices: J Everything is recorded. With very few exceptions, every meeting is filmed and shared with all employees. J Everyone follows the “Principles”, which is a detailed guide written by Dalio himself on Bridgewater’s management philosophy. J Total honesty is required. If you have a problem with someone, you take it up directly with him or her. There’s no sugarcoating. Talking behind someone’s back gets you fired. J All employees are rated but this isn’t your regular performance review. The firm has an app that collects real-time ratings on key attributes for every employee. You always know where you stand in the firm.

It’s obviously not a place for everyone, but it’s hard to argue with their results. Dalio calls this radical transparency. He says, “To be successful, we need everyone to think independently and work through disagreement to decide what’s best. We call this an ‘idea meritocracy’. And radical transparency is critical to having an idea meritocracy because it shows what’s actually happening without the spin and prevents people from maneuvering politically behind the others’ backs.”

The biggest challenge is that it can make people uncomfortable to have their mistakes and weaknesses transparently shown. Since everyone has weaknesses, that experience happens to everyone who comes into this culture.

Some people come to love it because they find learning about their weaknesses to be invaluable. It helps them guardrail themselves against their weaknesses and they can be more themselves because they don’t have to hide their mistakes and their weaknesses.

If you’ve ever worked in a highly political organization, then you can imagine why this might work. What if you will no longer have to worry about your image? What if all you needed to worry about is doing what’s right for the business?

Now let’s look at the other way. Can you build an organization by focusing on people’s strengths?

Donald O. Clifton pioneered a philosophy of using talents as the basis for consistent achievement of excellence. Specifically, the strengths philosophy asserts that “individuals are able to gain far more when they expend effort to build on their greatest talents than when they spend a comparable amount of effort to remediate their weaknesses” (Clifton & Harter, 2003). Clifton hypothesized that these talents were

“naturally recurring patterns of thought, feeling or behavior that can be productively applied” (Hodges & Clifton, 2004). Strengths are viewed as the result of maximized talents, which are refined with practice and combined with acquired relevant skills and knowledge.

With a market capitalization of over $300 billion and billions of users across its platforms, it’s hard to argue with Facebook’s success. Facebook COO Sheryl Sandberg once described how they manage saying, “At Facebook, we try to be a strengths-based organization, which means we try to make jobs fit around people rather than make people fit around jobs. We focus on what people’s natural strengths are and spend our management time trying to find ways for them to use those strengths every day.”

Here’s the obvious take. You need both approaches. You start by recognizing that not all weaknesses are created equal. Some you can live with because nobody’s perfect, but some can be considered fatal flaws. If you don’t identify and address them, you will eventually lose.

Assuming you have no more fatal flaws, then the way you win is by leveraging your strengths. Gallup has found that people who use their strengths every day are six times more likely to be engaged in their jobs and more than three times more likely to report having an excellent quality of life than those who don’t. I can’t imagine working any other way. F

B. Paul SantoS is an entrepreneur and a Managing partner at WaveMaker, an early stage venture capital firM With offices in los angeles and singapore. he can be reached at [email protected] il

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B. Paul SantoS // EntrEPrEnEurShiP

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Should you focus on addressing weaknesses or building strengths?”

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Verticals // August 2016

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There were at least 26 board game-friendly restaurants, bars and dining places in Metro Manila in early 2016, a sign that the previous geek phenomenon of social interaction over games played using boards has crossed to the mainstream. PAGE 30

exPanding The digiTal WalleT 33

faMily feud 36

souTh korea’s 50 richesT 37

Billions of neW connecTions 40


Hobby Games

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O n a typical Saturday night, guests at Ludo BoardGame Bar & Cafe may be battling aliens, solving crimes, building

fortresses or preventing giant reptiles from invading Tokyo. Cries of despair, whoops of victory and screams of excitement can’t be helped. Nacho chips may fly and glasses of water might get knocked over, but it’s all in good fun. Ludo is a board gaming bar and cafe and customers spend hours playing games while munching on their French fries and gyozas or drinking cocktails

C’mon Board

By Paul John Caña PhotograPhs By rox Puno

A slew of restaurants and bars that encourage tabletop gaming have opened in recent months, encouraging digital natives to look up from their tablets and phones.

after the first month of operation, Jay Mata (left) and partners Chrissy Palma and aaron tanco didn’t need to infuse more capital.

and beer. It occupies a nondescript, 94-square-meter space in a one-story building in Quezon City. Opened in March 2014, the cafe, which is named after the Latin word for “I play”, is one of the first themed restaurants in Manila to capitalize on the burgeoning trend of board gaming. College students, yuppies and thirty-and-fortysomethings congregate there every day, but Friday and Saturday nights are undoubtedly the busiest. Those without a reservation can expect to wait anywhere from 40 minutes to two hours for a table. It’s become so successful that just over a year later, the owners opened a second branch, almost triple the size of the first, in a prime location along Jupiter Street in Makati City. “We knew after the first month that the business was doing well,” says Javier “Jay” Mata, who owns Ludo with five other business partners. “We were


Hobby Games entrepreneurs

Where to play

some board game-friendly places in Metro Manila

Quezon City1. Cedric’s Diner and tabletop Games 2. Ludo3. burger Company4. the appraisery5. Mrs. Graham’s Macaron Cafe 6. Gerry’s Jeepney7. iChill theater Cafe8. Uno Morato9. antiteasis10. house of Geek 11. the Dragonforge12. Laruan atbp.13. Laro board Game Cafe14. snacks and Ladders15. fire sword Cafe16. Guildhouse enterprise Manila City1. exile on Main st. Makati City1. Ludo2. Plaza Cafe3. Makati b&b4. onboard Game + Gastro Pub5. bad bishop taguig City1. Dyce ‘n Dyne2. Puzzles pasig City1. Dyce ‘n Dyne2. boards and Pieces3. Pins and bricks parañaque City1. Puzzles

Marikina City1. breaks and shakes

expecting two to three months of losses, which is normal. But we were quite surprised because after the first month, we didn’t need to infuse more capital. We were like, wow, it was already paying for itself.” Previously confined to a niche culture (aka geeks), the phenomenon of social interaction over games played using boards, game pieces and/ or cards only recently has crossed over to the mainstream, resulting in the mushrooming of specialty restaurants and cafes that offer this novelty as a come on. An online search done by FORBES Philippines in June 2016 revealed there were at least 29 board game-friendly restaurants, cafes, eateries, bars and general dining spaces in Metro Manila. Most opened within the last year or two. That’s roughly one cafe opening every two to three months. The number includes either cafes which advertise as board gaming places or regular restaurants that offer board games and dining. And it’s not just the cafes. Sales of board games are also on the rise. Freddie Tan, founder of Neutral Grounds, a pioneering local retailer of hobby games, miniature toys and other so-called tabletop games (which he says is more accurate as some games don’t necessarily use boards to play) says the contribution of board games to his business doubled to 20% in the last two to three years. Why the sudden boom in board gaming? “I think it’s counter-culture,” says Tan. “(It’s) growing primarily because we’re all extremely connected through a monitor or screen. Go to any restaurant and no one’s talking. Everyone’s glued to their phones. So it’s a reaction. People are starting to look for something to do where they’re not connected to the Internet. That’s what tabletop gaming gives you. When you go to these places, it forces you to interact with somebody.” For Mata, it’s the novelty of playing games as a social activity. “The idea of board games is this intriguing thing and people want to try it and see that you can have fun playing. And many of these games are things that they never really experienced before.” Hobbes and Landes, one of the country’s largest hobby store chains, with 10 branches

nationwide, confirms the boom in hobby games. Although the company refuses to divulge sales figures, it acknowledges the spike in the interest for board games in recent years. “Yes, it has helped us sell more board games,” says marketing and events officer Iza Mia Gallego. “Because of this we thought of conducting (live) demos and sampling of board games inside the store.” Gallego says board games typically range in price from Php899 to Php4,999. Their most popular games are Jenga, Chess, Monopoly, Catan, Cranium, Taboo, Guesstures, Risk and Scattergories. “In spite of the prevalence of modern technology, people still seek a more interactive pastime, which they can get from playing board games.” Different places have their own ways of monetizing the board gaming trend. At The Dragonforge in Katipunan, each customer is charged a minimum of Php30 per hour of play. It goes up to Php60 per hour for premium board games. At Puzzles, which has branches in BF Homes, Parañaque and Bonifacio Global City, Taguig, guests pay a Php100 stay-and-play fee for unlimited gaming. And at Makati B&B along Arnaiz Avenue in Makati City, access is

sales of board games are on the rise. the contribution of board games to neutral grounds, a local retailer of hobby

games, doubled to 20% in the last two to three years.

Source: Forbes Philippines online search

Hobby Gamesentrepreneurs

granted by membership (Php400 per month, or Php1,100 per quarter or Php2,500 per year), although they do accept walk-ins who shell out Php80 in order to play. At most of the board gaming cafes, including Ludo, customers are required to buy at least one order of food and drink. They can stay as long as they want and play to their hearts’ content. For first-time customers, there is a “games expert” who not only recommends games but also teaches guests how to play them. “I won’t claim to know all the games,” says Martin, a college student who works part-time as Games Guru Extraordinaire Par Excellence at the Quezon City branch. “But I know more than half.” Ludo’s shelves were stocked with about 700 board games as of mid-March. “That’s enough to last you a few years,” says Mata. “But let’s say you’re bored with what we have. I can guarantee you, one month from now, we have new stuff that you’ve never played before.”

Mata and his business partners – Aaron Tanco, Carlos Sandico IV, Constantine Sandico, Marcelo “Mark” Fernandez and Christine “Chrissy” Palma – all met about four years ago while playing board games. There wasn’t a dedicated venue then for their hobby, so they hung out either at each other’s house or at any restaurant that tolerated their presence. “We’d meet in coffee shops. We used to play at Red Ribbon in BGC (Bonifacio Global City). It’s not there anymore. We just brought our own games wherever. Some didn’t like it, some were okay with it.” It was during these meet-ups that the idea of opening their own board gaming place took root. While they are gamers at heart, they also have experience in running a business. Mata is a part-time instructor at the Entrepreneurs and Accounting Academy. Tan says an understanding that running a board game cafe isn’t all fun and games ultimately determines which establishments will be left standing and which ones will fall.


tabletop gaming is “counter-culture”, says Freddie tan. It gives you something to do even if you’re not connected to the Internet. It forces you to interact with somebody.

“It’s a hobby, yes, but at the end of the day, it’s still a business,” he says. “I don’t think (the business) is already saturated. It’s still in the sunrise stage. But what I fear right now is that half of the people starting these types of businesses don’t really understand what they’re doing. A lot of people think that just because they’re good at board games, they think they can run a business. Some of them haven’t done their due diligence.” Tan knows what he’s talking about. In the early 2000s, he opened Hobby Cafe in Robinsons Galleria, which, as far as he knows, was one of the first to offer a venue for people to come and play tabletop games. While they served food and lent out board games, patrons could also play LAN video games. “It was a mishmash of ideas,” he concedes. “The concept wasn’t solid and it lasted only about two years.” Tan eventually turned it into a retail space for hobby games and other merchandise, which worked. The almost sudden proliferation of board gaming cafes today may, in fact, be just a fad, in the same way the city became suddenly inundated with lechon manok, shawarma and pearl shake stalls at various times, says Mata. He’s not too worried, though. The concept has been around in some countries a lot longer than some people realize and they continue to thrive in the world’s biggest cities. “The most successful board game cafe in the world, Snakes and Lattes in Toronto, Canada, is over five years old and they just opened another branch. There are over 300 of these places in Korea and about 400 in Taiwan. France has in the hundreds as well, and Germany, especially, where it all started, it’s much more.” In North America, the market for such hobby games is worth an estimated $880 million a year and rising by a double-digit annual rate for the past half-decade, according to ICv2, a media and consulting group specializing on geek culture. “We don’t think it’s going to fade out anytime soon, and even if it does, like all other fads, it doesn’t mean it will die. Some would survive. And these are the ones that continue to thrive.” Perhaps somebody can translate that concept into a board game. F

By LaLa Rimando

Telco spins off fintech unit to develop the full potential of the mobile money business and reach more unbanked Filipinos.

Expanding the Digital Wallet

mynt’s active account holders grew 75% in march 2016 from the same period last year. “We’re starting to get excited,” says John Rubio, its CEo.

hen Jane Dubria received a text message that her loan request for Php3,000 was approved by a bank, she screamed

in disbelief. A housemaid since she was 16, the 22-year-old Dubria used to turn to loan sharks whenever her family needed extra cash for emergencies. “I just had to pay Php200-plus a week religiously. If I was late, the penalty was about Php4 a day, which was still cheaper than if I took out a five-six loan,” she says, referring to the loan sharks’ usurious lending rate.

W Technically, Dubria, who gets a monthly pay of Php4,500, belongs to the majority of Filipinos who wouldn’t qualify for a bank loan because of her low income. Banks also find there’s insufficient financial information on her to create a credit risk profile. Fortunately, she is one of the 2.3 million users of GCash, Globe Telecom’s mobile money service, which she uses to top up her and family members’ prepaid phone loads. She does it through phone-based services offered by BanKO, a mobile-based savings bank put by the Bank of the Philippine Islands, Globe and Ayala Corp. Every month, she deposits into her digital wallet a self-imposed budget for phone credits. “I just use my phone to

technologyMobile Money


mynt aims to tap Globe GCash’s assets and regulatory license to offer new financial services.

transfer Php20 or Php30 from my BangKO account to my or my relatives’ prepaid load,” she says. “I can do it anytime — even in the middle of the night. It’s more convenient than having to go out of the house or asking someone to buy load for me.” Thanks to BanKO’s partnership with Lenddo, a technology startup that uses non-traditional data for credit scoring, Dubria was considered creditworthy based on her active usage of mobile banking services to buy prepaid phone loads. Dubria’s story underscores the immediate benefits of a wider financial inclusion that is motivating Globe to increase its GCash customers. Only half of its more than two million users use the service once a month — a rate that Globe finds extremely low. Middle of last year, Globe established Mynt, a fully owned fintech subsidiary, which will serve as the umbrella company for all of the telco’s mobile phone-based financial services. The move aims to spin off Globe’s mobile financial operations into a stand-alone unit that will develop the full potential of the mobile money business. The decision to set up Mynt reflects Globe’s dissatisfaction with the modest growth in GCash’s reach since it was launched in 2004. “After more than a decade, why are we not 10 or 20 million accounts? Why only two million when we have 48 million Globe subscribers?” asks John Rubio, CEO of Mynt or Globe Fintech Innovations. Ernest Cu, Globe CEO and president, has a ready answer: “Our fintech efforts under the old setup were

withdraw only about 85% of their monthly pay. According to Rubio, some have learned to use their GCash cards, which comes with a Mastercard prepaid facility, to pay for items in accredited groceries, drugstores or malls. Others buy gems (premium purchasable currency used in mobile games) for their Clash of Clans games or pay for items in online shopping sites, such as Lazada or Zalora. Most buy phone credits. An affiliation with a prepaid transport card called Beep, which is used in urban train rides in Metro Manila, has added up to 5,000 new accounts per week since late 2015. Beep card holders have two virtual wallets in one card that they can tap at train stations or swipe at any GCash-Mastercard debit terminals. Train riders who don’t want to queue at the station to load their Beep cards can use their GCash wallet to electronically transfer funds into their Beep wallet.

“Our fintech efforts under the old setup were stuck inside a giant organization. GCash was fun and nice and cute, but it didn’t get the attention and the people it needs to grow.” – ErnEst Cu, prEsidEnt and CEo, globE tElECom

stuck inside a giant organization where prepaid drives Php50 billion of revenues, postpaid Php2.4 billion and data another few billions. GCash was earning nowhere near those levels but it was fun and nice and cute. In other words, it didn’t get the attention and the people it needs to grow.” “We are fully-owned by Globe but under a separate ownership structure,” says Rubio of Mynt. “We have our own board, we have a business plan that we have to deliver on. It forces us to be innovative and chase things in a startup-like manner.” And chase they did. Since it started operations, Mynt has been adding 40,000 to 60,000 GCash clients every month, with a bold target of adding two million customers every year. “We also have to be efficient with our capital spend, which is now transparent. For example, we are spending one-eighth of what we used to for marketing but we are acquiring up to five times

more (new accounts) than what we acquired before,” says Rubio. Piggybacking on GCash’s assets and regulatory license as an electronic money issuer, Mynt is building financial services on top of that digital wallet. For starters, Mynt ramped up its payroll services, targeting companies that need to disburse salaries, allowances or payments to their employees, agents or suppliers who are regionally dispersed. “We also targeted companies that don’t want or cannot afford to set aside the required average daily balance in their bank accounts to cover the bank’s cost of managing hundreds or thousands of individual payroll accounts,” says Rubio. Of the more than 2.3 million current GCash accounts, about 800,000 are payroll accounts. Mynt is hoping its efforts will trigger a snowball of big wins. While payroll account holders tend to withdraw their entire salary, a growing number


technology Mobile Money

Mynt is also used in transactions with government. Users can pay online with GCash instead of lining up to pay cash at the Bureau of Internal Revenue or local government offices. The impact has been immediate. The number of active account holders — those who transact at least once a month — has grown 75% in March 2016 from the same period the year before. As well, average revenue per user has risen four-fold to Php16 per month from Php4 in the same period. Purchase of GCash load credits has been growing at 10% every two months this year. “We are starting to get excited,” exclaims Rubio. Apart from setting up Mynt as a separate unit, Globe also divested from BanKO, a mobile savings bank, which will become a fully-owned subsidiary of BPI. The divestment reflects Globe and BPI’s parent Ayala Corp.’s two-track strategy to promote financial inclusion. “BPI wanted to take it another direction, which was very microfinance, lending-focused and branch-based,” explains Rubio, a former McKinsey consultant who was BanKO’s president

in 2013. “Globe wanted to take it to the consumer and be digital-focused. Globe looks at it differently: Can I reach everyone digitally through an app or points-of-presence through our partners and deliver the services through that? Both pathways are correct and both are driven toward financial inclusion. Anyway the market is so big.” In 2015, BanKO disbursed Php300 million in loans to around 9,000 borrowers. Rizza Maniego-Eala, Globe’s chief financial officer who also sits on the board of Mynt, says that “mobile technology is still the cheapest” way to reach the most number of unbanked Filipinos. Globe’s divestment from BanKO means that existing mobile banking clients such as Dubria will be served by a finance company called FUSE Inc., which will be absorbed by Mynt after securing regulatory approvals. As a finance company regulated by the Securities and Exchange Commission, FUSE has more flexibility to grant loans to individual borrowers. In contrast, BanKO is subject to more

stringent regulations of the Bangko Sentral ng Pilipinas because it takes deposits from the public and is entitled to state-funded deposit insurance. Mynt is lining up about a dozen institutional creditors for FUSE to provide the funds for the microloans, as well as a stronger consumer data analytics to leverage on alternative credit-scoring models. “We can build one’s credit history based on, for example, payment behavior, that may prompt us to say, ‘You know what, this person has been a great subscriber who spends this much for phone credits, groceries and remits this much every week or every month. Why don’t we offer to finance his or her next handset?’” Rubio explains. Indeed, the data-driven assessment of Dubria’s creditworthiness proved to be spot on. She diligently paid her loan every week and checked her loan balance through a series of text instructions. After she paid her first loan of Php3,000 within four months, she was granted a second loan slightly higher at Php3,500. F

mynt now spends one-eighth of its previous marketing budget but acquires five

times more customers, says CEo John Rubio.


technologyMobile Money

south korea’s 50 richest

Family Feud

BY DONALD KIRK

One son fires Dad. Dad fires him in return. A court orders a check on Dad’s mental state. Meantime, the Lotte empire gets ready to open South Korea’s tallest tower.

otte World Tower rises like a giant obelisk by the twisting Han River, soaring 123 floors over a Seoul cityscape of office and apartment towers, swarming

shopping districts and broad avenues receding into shadowy mountains. As several hundred workers toil to complete the interior, Lotte Korea Chairman Shin Dong-Bin makes plans to move his headquarters into the tower early next year. It’s the world’s fifth-highest building and by far South Korea’s tallest. From his aerie on the 108th floor he’ll be ruling an empire of 129 companies,

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Towering family inferno: Chairman Shin Dong-Bin (top) and brother Shin Dong-Joo; the Lotte World Tower, “a great leap forward”.

wealth

including the country’s largest department store chain, 19 luxury hotels and the Disney-style theme park “Lotte World Adventure”. “After all the hardships and difficulties, Korea makes a great leap forward,” says the video for visitors before the ride up. The point of the edifice is “to boost Korea’s global power and world competitiveness”, the voice intones, fulfilling “the long-cherished dream of one entrepreneur”. That entrepreneur is Shin’s 94-year-old father, Shin Kyuk-Ho. He’s the honorary chairman of the empire he started in Japan in 1948 as Lotte Co., maker of cakes and chewing gum. He got the name from Charlotte, the heroine of a love triangle in Goethe’s 18th-century novel The Sorrows of Young Werther. Lately the founder has been at the apex of a different type of triangle, caught up in the strife between second son Dong-Bin, who runs the Korean

In a country where virtually everyone is connected to a high-speed Internet service, new self-made technology stars keep popping up on the list year after year. This time it’s the founders of the country’s two biggest unicorns (startups valued at $1 billion or more by investors): No. 34 Lee Sang-Hyuk and No. 36 Bom Kim. Lee’s Yello Mobile is valued at $4 billion, a billion short of Kim’s Coupang, but his 26% stake in the company makes him richer and hoists him into the billionaire ranks. An executive of Daum Communication before its merger with No. 16 Kim Beom-Su’s Kakao, Lee left the company in 2013 after just one and a half years to start Yello. It operates as an incubator, investing early and building mobile-based startups. He’s secured $240 million in funding in a series of rounds, winning the backing of U.S.-based venture capital firm Formation 8 and, most recently, Japanese financial-services company SBI Holdings. Today Yello boasts a portfolio of more than 80 companies. Seven people made the list for the first time this year, including four new billionaires. One

company produced two of them: No. 7 Lim Sung-Ki and No. 31 Shin Dong-Guk scored big with pharmaceutical star Hanmi Science. Daelim’s Lee Hae-Wook at No. 43 and private-equity player Michael Kim at No. 47 are other newbies. But for most fortunes it was a year of decline. Some 29 of those returning to the list saw their net worth take a hit; only 11 fortunes rose. A sluggish global economy hit exporters and the benchmark KOSPI fell nearly 6%. The won lost 5.6% against the dollar and the country’s economy grew by only 2.6% in 2015. Eight tycoons dropped off the list, most notably Kwon Hyuk-Woon of construction outfit IS Dongseo and Kim Seung-Youn of conglomerate Hanwha. The list was compiled using information obtained from the individuals, stock exchanges, analysts, private databases, government agencies and other sources. Net worths were based on stock prices and exchange rates as of the close of markets on Apr. 15. Private companies were valued by using financial ratios and other comparisons with similar publicly traded companies.—WITH FORBES KOREA AND YUELUN SUN

forbes asia


1. Lee Kun-Hee$12.6 BILLION SOURCE: ELECTRONICS/INSURANCEAGE: 74. MARRIED, 3 CHILDREN

2. Suh Kyung-Bae$8.4 BILLION SOURCE: COSMETICSAGE: 53. MARRIED, 2 CHILDREN

3. Jay Y. Lee$6.2 BILLION SOURCE: ELECTRONICS/INSURANCE/TOURISMAGE: 47. DIVORCED, 2 CHILDREN

4. Kwon Hyuk-Bin $4.9 BILLION SOURCE: ONLINE GAMESAGE: 42. MARRIED, 2 CHILDREN

5. Chung Mong-Koo$4.8 BILLION SOURCE: MOTOR VEHICLESAGE: 78. MARRIED, 4 CHILDREN

6. Kim Jung-Ju$4.1 BILLION SOURCE: ONLINE GAMESAGE: 48. MARRIED, 2 CHILDREN

7. Lim Sung-Ki$3.9 BILLION SOURCE: PHARMACEUTICALSAGE: 76. MARRIED, 3 CHILDREN

8. Chey Tae-Won$3.4 BILLION SOURCE: COMPUTER SERVICES/TELECOMAGE: 55. SEPARATED, 4 CHILDREN

9. Chung Eui-Sun$2.8 BILLION SOURCE: LOGISTICSAGE: 45. MARRIED, 2 CHILDREN

10. Kim Jae-Chul $2.5 BILLION SOURCE: FOOD PRODUCTSAGE: 81. MARRIED, 4 CHILDREN

11. Lee Jay-Hyun$2.4 BILLION SOURCE: FOOD PRODUCTS/ENTERTAINMENTAGE: 56. MARRIED, 2 CHILDREN

12. Lee Joong-Keun$2.35 BILLION SOURCE: CONSTRUCTION/REAL ESTATEAGE: 75. MARRIED, 4 CHILDREN

Spotting Unicorns Technology stars shine, but most fortunes fall. BY GRACE CHUNG

operations, and first son Shin Dong-Joo—who had overseen Japan—to succeed him at the helm. Dong-Bin, 61, appears to be the winner, having been elected chief executive of Japan-based Lotte Holdings last July. “So we can say that Dong-Bin is in charge of Lotte in Japan now,” says an aide. She confirms that the family—the two brothers also have two half-sisters—directly owns only 7.1% of Lotte Holdings but holds another 28.1% through a tiny family-owned entity named Kwang Yoon Sa in Korean, Kojunsha in Japanese. The deciding ballots, however, for Dong-Bin against Dong-Joo’s claim that his father wanted him in charge came from two other shareholders: an employees’ association that holds 27.8% and a managers’ association that owns 6%. “Dong-Joo has failed at many projects,” says Kim Sang-Jo of Solidarity for Economic Reform in Seoul. “Japan Lotte had nearly the same assets as Lotte Korea 20 years ago.” But last year Lotte Korea posted revenue of $72.8 billion, compared with $2.6 billion for Lotte Japan. What happened? Dong-Joo “has a very passive attitude,” he adds. “Japan Lotte has mainly … confectionery items. He has no M&A strategy. The younger brother has a very aggressive strategy.” Indeed, Dong-Bin is credited with having taken Lotte to a new level, investing in hotels and department stores abroad while his father was reluctant to go outside South Korea and Japan. Lotte is now South Korea’s fifth-largest chaebol, up from tenth a decade ago, and has 120,000 employees in South Korea plus 60,000 overseas, compared with 4,500 at Lotte in Japan. Lotte Japan declined to comment. Nonetheless, Dong-Joo, 62, is pressing his case, hoping to win over employees with promises of more stock, while his father charges Dong-Bin with having taken over illegally, using his seal to certify documents. Kyuk-Ho purportedly wrote a letter last July firing Dong-Bin and appointing Dong-Joo after Dong-Bin removed his father as Lotte Holdings chairman. But last month Dong-Bin won a legal test when the Seoul prosecutors’ office decided

UP DOWN UNCHANGED NEW TO LIST RETURNEE



13. Seo Jung-Jin$2.3 BILLION SOURCE: BIOTECHNOLOGYAGE: 58. MARRIED, 2 CHILDREN

14. Park Hyeon-Joo $2.2 BILLION SOURCE: ASSET MANAGEMENTAGE: 57. MARRIED, 3 CHILDREN

15. Shin Chang-Jae $2.1 BILLION SOURCE: LIFE INSURANCEAGE: 62. MARRIED, 2 CHILDREN

16. Kim Beom-Su$2 BILLION SOURCE: ONLINE SERVICESAGE: 50. MARRIED, 2 CHILDREN

17. Koo Bon-Moo$1.9 BILLION SOURCE: ELECTRONICS/HOUSEHOLD PRODUCTSAGE: 71. MARRIED, 3 CHILDREN

18. Lee Boo-Jin$1.85 BILLION SOURCE: COMPUTER SERVICES/TOURISMAGE: 45. DIVORCED, 1 CHILD

19. Lee Seo-Hyun$1.8 BILLION SOURCE: COMPUTER SERVICES/TOURISM AGE: 42. MARRIED, 4 CHILDREN

20. Shin Dong-Bin$1.7 BILLION SOURCE: RETAILINGAGE: 61. MARRIED, 3 CHILDREN

21. Hur Young-In$1.6 BILLION SOURCE: BAKERIES/FAST-FOOD OUTLETSAGE: 66. MARRIED, 2 CHILDREN

22. Chang Pyung-Soon$1.55 BILLION SOURCE: EDUCATIONAL PRODUCTS AGE: 65. MARRIED, 2 CHILDREN

23. Hong Seok-Joh$1.5 BILLION SOURCE: RETAILINGAGE: 63. MARRIED, 1 CHILD

24. Shin Dong-Joo$1.45 BILLION SOURCE: RETAILINGAGE: 62. MARRIED, 1 CHILD

25. Lee Hwa-Kyung$1.4 BILLION SOURCE: SNACK FOODSAGE: 60. MARRIED, 2 CHILDREN

26. Kim Jun-Ki $1.35 BILLION SOURCE: INSURANCE/STEEL AGE: 71. MARRIED, 2 CHILDREN

27. Lee Myung-Hee$1.25 BILLION SOURCE: RETAILINGAGE: 72. MARRIED, 2 CHILDREN

28. Cho Jung-Ho$1.2 BILLION

SOURCE: FINANCEAGE: 57. MARRIED, 3 CHILDREN

29. Kim Taek-Jin$1.15 BILLION SOURCE: ONLINE GAMESAGE: 49. MARRIED, 4 CHILDREN

30. Lee Ho-Jin$1.12 BILLION SOURCE: CHEMICALS/FINANCE/MEDIAAGE: 53. MARRIED, 2 CHILDREN

31. Shin Dong-Guk$1.1 BILLION SOURCE: PHARMACEUTICALSAGE: 66.

32. Cho Yang-Rai$1.08 BILLION SOURCE: TIRE MANUFACTURINGAGE: 78. MARRIED, 4 CHILDREN

33. Chey Ki-Won$1.07 BILLION SOURCE: COMPUTER SERVICES/TELECOMS AGE: 51. DIVORCED

34. Lee Sang-Hyuk $1.05 BILLION

SOURCE: TECHNOLOGY INVESTMENT AGE: 44. SINGLE

wealth

there was a “lack of evidence” that he had misused his authority. That was shortly after he’d also removed his father from the boards of Hotel Lotte and Lotte Confectionery. Meanwhile, Seoul District Court ordered the founder to enter the hospital to determine whether his mind is deteriorating (he was expected to check in by Apr. 30). “Dong-Joo showed a letter with his father’s seal to the press,” says the aide. “However, all the circumstances and details of the letter are suspicious,” and it seems “they are using the father’s mentality.” Anyway, she adds, “This kind of letter doesn’t have any legal force.” Now Dong-Bin is suing in Tokyo to have Dong-Joo fired as president of Kwang Yoon Sa. Dong-Joo also sued, claiming that the executive who runs Lotte Holdings is in league with Dong-Bin. Battles between chaebol heirs are common, but the Lotte feud, as played out in the courts, the media and in angry press conferences, ranks as perhaps the most visible and protracted of such duels. And as Dong-Bin sought to solidify his power, Lotte suffered one bitter blow. Next month Lotte Duty Free is losing its government license to operate its biggest store, on two upper floors of the Lotte World Mall next to the tower. It still boasts six other stores in South Korea, drawing hordes of Chinese tourists, and it’s expanding overseas, having opened a store in Tokyo’s Ginza in March and planning stores in Osaka and Bangkok. But the loss of its store in Lotte’s own mall is embarrassing, a result, many believe, of the feud. The license will go to Doosan, a power in heavy industries that will open its first duty-free shop, in downtown Seoul. The two brothers—who are both billionaires (see lisT)—and their father have always shunned publicity and never give interviews, so the flood of unwelcome attention must be all the more distressing for them. That policy contrasts with the high visibility of Lotte hotels and department stores flashing bold red Lotte signs; of professional baseball teams, the Lotte Giants in Busan and the Lotte Marines in Chiba Prefecture near Tokyo; and, most ostentatiously, of Lotte World Tower. Conceived 30 years ago by Kyuk-Ho, the tower has cost nearly $4 billion.

UP DOWN UNCHANGED NEW TO LIST RETURNEE



35. Koo Bon-Neung$975 MILLION SOURCE: ELECTRONIC COMPONENTSAGE: 67. MARRIED, 2 CHILDREN

36. Bom Kim$950 MILLION SOURCE: ONLINE RETAILINGAGE: 38. MARRIED, 1 CHILD

37. Chung Yong-Jin$945 MILLION SOURCE: RETAILINGAGE: 47. MARRIED, 2 CHILDREN

38. Chung Mong-Joon$940 MILLION SOURCE: SHIPBUILDING/INDUSTRIAL MACHINESAGE: 64. MARRIED, 4 CHILDREN

39. Lee Hae-Jin$935 MILLION SOURCE: ONLINE SERVICESAGE: 48. MARRIED, 2 CHILDREN

40. Koo Bon-Joon$930 MILLION SOURCE: ELECTRONICS/HOUSEHOLD PRODUCTSAGE: 64. MARRIED, 2 CHILDREN

wealth

It was up to Dong-Bin to see it to completion, overcoming issues about its impact on the environment and on military flight patterns that delayed approval by the Seoul government for 15 years. In recognition of the family split, the voice on the video shown to visitors acknowledges “hardships, dreams, tensions” as images of father and second son flash by. The show climaxes with the topping-out ceremony held last December, as a helmeted worker bangs in the final spike nailing down the last steel girder to the applause of the Seoul mayor and other officials. Sadly, first son Dong-Joo is made conspicuous by his absence. Kyuk-Ho was born in Korea but moved to Tokyo during World War II to attend a prestigious industrial high school. After the war he began selling hair tonic for Japanese men before discovering that kids were hooked on the chewing gum habit of American GIs. He returned to Seoul in the mid-1960s and established Lotte Confectionery there in 1967. The formula for producing chewing gum is slightly different in Japan and South Korea, but to

this day Lotte is the top brand in both countries. With visions of rapid expansion, he opened the first Hotel Lotte in the heart of the capital in 1973 and the first Lotte Department Store next door in 1979. One reason for his success was his relationship with long-ruling president Park Chung-Hee, who spurred on business leaders in the country’s drive for global economic power. The choice of Dong-Joo for Japan and Dong-Bin for South Korea seemed natural. Kyuk-Ho saw South Korea as the future and second son Shin Dong-Bin, an economics graduate of Tokyo’s Aoyama Gakuin University with a master’s from Columbia University’s business school in New York, as the perfect heir for building on what he had begun in his native land. Dong-Bin also speaks fluent Korean while Dong-Joo is ill at ease in anything but his mother tongue—the brothers were raised by their Japanese mother speaking Japanese. Dong-Bin’s achievements are on display all around Lotte World Tower, looming over “Lotte town”, a 21-acre enclave of recreation, shopping and

dining near Olympic Park and the upscale Gangnam district. In addition to the mall there’s a Lotte Department Store next to Lotte Hotel World and the Charlotte Theater, featuring Broadway-style shows. Lotte World Adventure beckons families with rides, food and animals. When the tower opens it will include 25 floors dedicated to Lotte’s most luxurious hotel, 29 floors for wealthy apartment dwellers, 24 floors for prime office space and an art gallery occupying three floors beneath the three top observatory floors. “Together with the dream of Korea, Lotte will make it happen,” says the video. That’s assuming the empire isn’t split by the battle of the brothers. “The succession feud,” goes a statement from Dong-Bin’s office, “is now virtually ended.” Dong-Joo “should recognize his position and not put the company in jeopardy”. The group would not “tolerate” anything to “harm the corporate value and business order”— a plea for the next generation to get on with expanding the empire from its new base in Lotte World Tower. F

41. Lee Joon-Ho$900 MILLION SOURCE: ONLINE GAMESAGE: 51. MARRIED, 2 CHILDREN

42. Cho Chang-Gul$875 MILLION SOURCE: FURNITURE AGE: 76. MARRIED, 4 CHILDREN

43. Lee Hae-Wook$850 MILLION SOURCE: CONSTRUCTIONAGE: 48. MARRIED

44. Chung Ji-Sun$825 MILLION SOURCE: RETAILING AGE: 43. MARRIED, 1 CHILD

45. Koo Bon-Sik$820 MILLION SOURCE: ELECTRONIC COMPONENTSAGE: 57. MARRIED, 3 CHILDREN

46. Chung Mong-Jin$750 MILLION SOURCE: BUILDING MATERIALS/CHEMICALS AGE: 55. MARRIED, 2 CHILDREN

47. Michael Kim $735 MILLION SOURCE: INVESTMENT AGE: 52. MARRIED, 2 CHILDREN

48. Lee Sang-Il$730 MILLION SOURCE: AUTO PARTSAGE: 77. MARRIED, 4 CHILDREN

49. Shin Sun-Ho$690 MILLION SOURCE: SHOPPING MALLAGE: 68. MARRIED, 1 CHILD

50. Cho Hyun-Joon$680 MILLION SOURCE: TEXTILES/CHEMICALS/CONSTRUCTION AGE: 48. MARRIED, 2 CHILDREN


By aaron tilley

Sigfox has developed a new kind of wireless technology that promises to finally make the Internet of Things a reality. It’s now racing to build a global network before telecom giants wake up.

technologyinternet of things

Billions of New Connections

“the internet of things is not the traditional cellular business,” says Sigfox Ceo ludovic le Moan.

n a drizzly San Francisco afternoon in March, Ludovic Le Moan, 52, climbs to the roof of San Francisco’s stately public library.

He’s there to check on a five-foot pole equipped with a small antenna and a briefcase-size box. It’s one of 22 “base stations” his French startup, Sigfox, has placed throughout the city and one of 6,000 it operates across 18 countries as part of its improbable quest: building a wireless network that will cover at least 100 U.S. cities by year’s end and eventually span much of the planet.

Global wireless networks are the stuff of Big Infrastructure—multiyear, multibillion-dollar projects that can be undertaken only by deep-pocketed corporate behemoths like telecoms. Le Moan’s startup, which has raised $150 million from investors, is aiming for something different. If the wireless networks of AT&T or Verizon are like massive water projects of canals and municipal pipes, Sigfox’s is the equivalent of a drip irrigation system. It transmits data in tiny, 12-byte packets at a time. That’s not enough to download even a lightweight app onto a cellphone, but it’s sufficient to beam a gadget’s location or a reading from a sensor or to sound an alarm. It’s aimed not at smartphones but at the long-promised next wave of Internet-connected devices known as the Internet of Things, or IoT. It could be the key to finally unlocking the tantalizing but still elusive future in which billions upon billions of gadgets—smart lightbulbs, connected thermostats, industrial sensors, biosensors, weather instruments and countless other devices—will be woven together to enhance efficiency in factories, speed up supply chains, revolutionize transportation, improve personal and public health, advance environmental protection and, yes, automate your home.

“The Internet of Things isn’t the traditional cellular business,” Le Moan says in his thick French accent. “The wireless industry’s thinking is that this market naturally follows their existing business … but the Internet of Things requires something new.”

There’s reason to believe he’s right. Traditional cellular networks—3G and LTE—are costly, suck up too much power and are just too intensive for the needs of the billions of new, low-powered devices expected to come online in the next few years.

“We’ve all heard the value of connecting everything that hadn’t been connected in the past, but now the question is, how do you actually connect everything?” says Peter Jarich, a vice president at market research firm Current Analysis. “The cost of cellular networks is arguably holding things back.”

O


technologyinternet of things

“It never occurred to me that a tiny telephone with a wireless transceiver would do whatever it is that it’s done to us.” —William Gibson

final thought

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Sigfox is building its network for a fraction of what it would cost to set up an LTE or 3G network. The company’s system beams its radio signals over an unlicensed segment of the airwaves, which is lightly regulated and free. As a result Sigfox can connect a large batch of devices for as little as $1 to $2 a year. And because its radios transmit using very little power, IoT devices that connect to the network can run for five years or more on a small battery.

Sigfox, which is based in Labège, a suburb of Toulouse in southwestern France, began building its network in 2012. Its customer base is small but growing, and the company has received endorsements from some industry heavyweights. Swedish security company Securitas Direct, one of its bigger customers, is using Sigfox radios as backup connections for its security systems. Korean electronics giant Samsung has incorporated a Sigfox radio into a new line of chips designed for IoT devices. French smart-home company Otio is attaching Sigfox radios to one million of its smoke detectors. Sigfox sees a particularly large opportunity in the future for industrial, agricultural and mining operations, such as the use of soil-moisture-and-nutrient sensors in farms or vibration sensors on oil rigs.

With only seven million devices connected to its network so far, each paying as little as $1 a year for the privilege, Sigfox made just $13.5 million in revenue last year. But Le Moan predicts that, once its network achieves true global scale, the business will ramp up quickly. He aims to surpass $100 million in revenue by 2020 in France alone.

Sigfox was founded in 2010 by Le Moan and engineer Christophe Fourtet. Le Moan had already attempted to break into the IoT business with a startup called Anyware Technology. Its intention was to help businesses connect devices in the cloud, but the market was small and still missing something. “Ten years ago people were talking about how there would be billions of connected devices by now, but it didn’t happen because they didn’t have the right technology,” Le Moan says.

Fourtet met Le Moan through a former colleague at Freescale Semiconductor, where Fourtet was a longtime cellular chip engineer. Fourtet had developed the technical

specifications for the Sigfox network but had given little thought to a business model or vision of what it could become. Le Moan was still COO of another company he had cofounded called Goojet (now scoop.it), but he was so taken by the technology that when he got home he told his wife he was going to change the world. “I was completely excited,” he says. “I didn’t sleep for a week.” Shortly after, the pair started Sigfox.

Le Moan has sold the Sigfox vision to a group of blue-chip investors that include Spanish telecom giant Telefónica and the venture arms of Intel and Samsung. He plans to raise a reported $200 million to $300 million more from investors and hopes to take Sigfox public in the next few years.

The additional cash should provide much-needed fuel for Sigfox’s rapid expansion. The company is facing stiff competition from startups like Ingenu and from LoRa, an industry alliance group headed by U.S. chipmaker Semtech that licenses its networking technology to others. “The marketplace has been dying for an alternative to cellular,” says Ingenu CEO John Horn, a wireless-industry veteran who previously headed T-Mobile’s IoT division. “Cellular is expensive, drains batteries and is not good in buildings.” Horn credits Sigfox with being a pioneer and doing “some great things” in so-called low-power wide-area networks (or LPWAN). But he’s not about to cede the market to his rival.

Neither are telecom industry heavyweights like AT&T and Verizon. As margins in the phone business are being squeezed by competition, the industry is looking beyond smartphones to new services. As a result, telecom companies are trying to develop radio chips that suck up less power. But specifications on these chips are still a few years away; Sigfox, Ingenu and LoRa are ready to go now.

“There’s a race going on,” says Jarich. “The traditional cellular guys are developing technology for this market, and there’s room for coexistence between cellular and LPWAN. But is there room for three or four different technologies all doing the same thing? Probably not.” And that’s why Le Moan is rushing to keep Sigfox at the front of the IoT pack. F

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Casino was snaredby startup hiccupsbutEnriqueRazonJr.is bullish about thecountry’s gamingprospects even as heeyes Buenos Airesand Cyprus as nextdestinations.By Roel landinginphotographs by jason tablante

45 forbes | august 2016

Gamble

enrique K. Razon Jr.,Bloomberry Resorts andHotels chairman: “i’drather be feared. i preferthat. People move fasterby fear than love.”

s o l a i R E R E s o Rt & c a s i n o

Features // August 2016The Bank of the Philippine Islands’

31st president, Cezar P. Consing, must lead the country’s oldest bank through an economic environment

marked by unprecedented asset growth and declining profit margins.

PAGE 52

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Enrique K. Razon Jr., Bloomberry Resorts and Hotels chairman: “I’d rather be feared. I prefer that. People move faster by fear than love.”

s o l a i r e r e s o r t & c a s i n o

Casino was snared by startup hiccups but enrique razon Jr. is bullish about the country’s gaming prospects even as he eyes Buenos Aires and Cyprus as next destinations. By RoEl landIngInphotographs by jason tablante


Berry’sGamble

fter hearing that government investigators in March were looking into stolen funds that had skirted the local banks’ anti-money laundering controls and found their way to some of their

VIP clients, Solaire Resort & Casino officials immediately took action. The casino froze the big-stake gamblers’ chips worth Php107.4 million. Security personnel went to the hotel’s VIP guest rooms and seized Php1.3 million worth of cash in various currencies, even briefly holding some of the high rollers who were mostly Chinese nationals.

“As soon as we heard about this we took action right away,” recalls Enrique K. Razon Jr., the 56-year-old chairman and CEO of Bloomberry Resorts and Hotels, during an interview in April. Bloomberry is the listed casino license holder that manages Solaire, the first of four giant integrated gaming resorts rising along a Las Vegas-style casino strip called Entertainment City on land reclaimed from Manila Bay. Asked if the casino’s decision to freeze the VIP players’ chips, enter their rooms and briefly hold them — in the absence of a court order — didn’t risk scaring away the high rollers, the Philippines’ fifth richest person explains they

AForBes


august 2016 ForBes | 47

We know our customers now. We focus only on the good customers who pay well and the junket operators with whom we have a long-term relationship.” – EnriquE K. razon Jr., chairman, BloomBErry rEsorts and hotEls

really didn’t have any choice. “I think the risk would be bigger if we didn’t do anything. You already know about it, so you have to stop it.” As it turned out, Razon’s instincts were right. The irregular movement of money from the Rizal Commercial Banking Corp. (RCBC) to high-stakes players and junket operators in Solaire and other casinos turned out to be linked to one of the region’s biggest bank heists. Solaire’s quick action earned praise from senators who led a legislative inquiry into the money laundering case.

The role of Solaire’s VIP clients in the money laundering mess throws the spotlight on the casino’s complex if uneasy relationship with the high rollers. While big-stake gamblers account for bulk of Bloomberry’s gaming revenues — helping it grow in three years since it started operations in 2013 — provisions for bad debts to VIP players have also crimped earnings margins last year. Of the three integrated resorts in the Philippines, Solaire relies the most on the so-called VIP market — gamers who place hundreds of thousands of pesos or even millions in a single bet — to generate revenue. About 47.6% of its total revenues last year came from VIP players, according to estimates by JP Morgan in March 2016. The comparable figure is 37.6% for Resorts World Manila, the casino beside the NAIA Terminal 3, which has been in operation since 2009, and 18.6% for City of Dreams Manila, which opened last year. Attracting the high-spending VIP players has been at the heart of Solaire’s strategy from the start. It’s a major reason why Solaire’s interiors look grander than the others. Razon often jokes the elegant interior is a reflection of his personal taste. “I don’t want people to criticize my personal taste, so I make sure that most people like what they see. Otherwise, it reflects on me.” Many of the paintings on exhibit at a hotel corridor belong to him.

In truth, the luxurious setting is part of a hard-nosed business calculation to attract the premium Chinese players in Macau to Manila, says Ron Rodrigo, an analyst who covers Philippine gaming for Maybank ATR Kim Eng Securities, a regional stock brokerage. “It’s at par with Wynn Macau or The Venetian Macao,” he says of the casino. “Even though you’re a long-time player in Macau, you’d be impressed.” Solaire’s strategy paid off handsomely. In 2014, its first full year of operation, Bloomberry’s gross revenues doubled

They were surprised that while casinos were not covered by the anti-money laundering law, the gaming companies — compared with the banks — took more proactive action in trying to recover the stolen money. “Unlike other institutions, you have shown more resolve in applying the money laundering laws of the country in spite of you’re not being covered,” said Senator Teofisto Guingona III. Another senator, Serge Osmeña, added: “You’re doing a little bit better than RCBC.” Both lawmakers want the law amended to cover casinos.

to Php31.7 billion, outpacing Resorts World’s Php31.6 billion. Bloomberry’s VIP revenues more than doubled from Php6.9 billion to Php15.2 billion. In contrast, Resorts World’s VIP revenues fell from Php15.1 billion to Php13.4 billion. But enticing VIP players entails large subsidies, ranging from free use of fancy rooms, limousine service and other perks that cost an average 20.1% of Philippine casinos’ gross revenues in 2015, according to JP Morgan estimates. Casinos also share part of their winnings from VIP players with junket operators who arrange the flights and hotel bookings of high rollers. Last year, junket fees reached 3.7% of gross revenue for Bloomberry and 15.1% for Resorts World Manila. In addition, casinos also extend credit to VIP clients, which reached an average of 13.5% of gaming revenue for the three integrated resorts in 2015. But some of the high rollers haven’t been good at paying. Most of them turned out to be Solaire’s VIP clients. About half of Bloomberry’s receivables as of end-2015 were doubtful accounts — unpaid after 90 days. That compares with almost zero for Melco Crown Philippines and Resorts World Manila. Last year, Bloomberry quadrupled its provisioning for doubtful accounts to Php2.6 billion from Php679.7 million the year before. The amount,

48 | ForBes august 2016

ForBes


which represented debts, mostly of VIP players that were not likely to be paid, contributed to Bloomberry’s net loss of Php3.4 billion in 2015, reversing profits of Php4.1 billion in 2014. Rodrigo is not surprised that the problem has struck Solaire but not City of Dreams Manila and Resorts World Manila. Unlike Bloomberry, which started on its own, the two other integrated resort operators had equity partners with lengthy experience in international gaming. “Resorts World Manila had an international partner (Genting) who has been in the business since the 1960s and they know who are the VIP players with good credit. That’s unlike Bloomberry, which started only in 2013 so they’re experiencing growing pains,” says Rodrigo, who has a buy recommendation on Bloomberry.

But Razon says Bloomberry has come to grips with the problem of bad debts of its VIP players. “We know our customers now,” he says. “We focus only on the good customers that pay well and the junket operators with whom we have a long-term relationship. They’re reliable, so we’re just sticking to them and growing with them.”

He traced the origins of the problem to loose credit standards shortly after Bloomberry started commercial operations. The casino was also under pressure to compete with existing players. “The boom year of 2013 was when credit began to loosen and you have to compete.” “People have learned their lesson now. We really have our credit operations fine-tuned now,” he says. “We learned a lot of painful lessons in 2014, and in 2015 we spent cleaning up all of that, writing off all the bad debts. We’re now much more disciplined than before.” Apart from relying more on the junket operators to bring in the high rollers, Bloomberry has also begun to use third-party information to check which VIP players are good or those with risky credits, says Rodrigo. Those with spotty payment histories may be required to put up a security before they’re allowed to play on credit. “In some cases, the required collateral is twice the amount they’re allowed to play with,” Rodrigo reveals. Bloomberry’s first quarter financial results seem to bear Razon out. To be sure, the company’s net loss expanded to Php1.1 billion in the first three months

of 2016 from Php533.1 million in the same period last year due to weaker revenue and higher expenses. However, provisioning for doubtful accounts during the three-month period fell 80% to just Php157 million from Php786 million in the same quarter last year. Gross accounts receivables declined by 5% during the quarter to Php5.4 billion from Php5.7 billion at the end of 2015. In April, the company enjoyed its best month since September 2015 with revenue rising by 84% from the year before, according to a research note from CLSA Securities released June 1, 2016. “There was a good rebound in the VIP business whilst the mass business continues to grow strongly, with its best month ever,” says CLSA. The securities firm estimates that Bloomberry’s EBITDA could hit Php3 billion in the second quarter of 2016, matching the company’s best quarter ever in 2014. Other analysts are less optimistic. JP Morgan, which has a neutral rating on Bloomberry, expects the company’s net losses to continue this year and next. The securities brokerage sees softer gaming revenue growth this year due to more sluggish demand in the local mass segment of the market and increasing

Enrique K. Razon Jr., Bloomberry Resorts and Hotels chairman, on Solaire’s interiors: “I make sure that most people like what they see. otherwise, it reflects on me.”


Enrique Razon through Three Generations

nrique “ricky” K. razon, jr. was not the first in his family to work at Manila’s docks.

nor was he the only one to carry the name. In 1937, his grandfather, enrique e. razon, was appointed manager of the Manila port terminal after a long and distinguished career as a skipper. the philippines then was an american colony but enjoyed a limited form of self-rule under the Commonwealth government led by president Manuel l. Quezon. ricky’s grandfather was born in Cabanatuan, nueva ecija in 1887, according to Miguel Cornejo’s Commonwealth Directory of the Philippines. he studied at the ateneo de Manila for his bachelor of arts degree and later at the philippine nautical school (now the philippine Merchant Marine academy) where he majored in navigation and graduated in 1905. after several stints commanding steamships plying between Manila and the Visayas as well as Xiamen (historically known as amoy) in China, the first enrique razon and his brother, benito, put up a customs brokerage company, razon brothers, in 1920. ricky says he didn’t get a chance to meet his grandfather but credits him for being the first in the family to start a ports business. “he started out in trucking, customs brokerage and cargo handling. then before the war, the 1930s, he was running what is now the south harbor of the port of Manila.” ricky

reckons he belongs to the fifth generation of the razon family whose first members came to the philippines from spain sometime in the 18th century. ricky’s father, enrique M. razon, was born in 1926 in Manila and studied at la salle and san beda in the philippines and st. Mary’s College of California in the u.s. where he obtained a b.s. Commerce degree, according to the Philippines Who’s Who 1981 edition. he was a student athlete at la salle. ricky donated php50 million to the university in 2003 to refurbish a nine-story physical education building that was later renamed enrique M. razon sports Center. the second enrique razon worked as executive in various logistics companies such as the philippine ports terminal and luzon stevedoring Corp. In 1962, he put up his own ports management company, e. razon Inc., which bid for and won a series of five-year contracts

starting in 1966 to manage the piers at the south harbor. however, in 1978, at the height of the late strongman ferdinand Marcos’ one-man rule, ricky’s father was reportedly pressured to give up his ownership of e. razon to benjamin “bejo” romualdez, the president’s brother-in-law, without compensation. the elder razon continued on as president but effective control was in the hands of romualdez. he reacquired control of the company after Marcos was overthrown in 1986. In 1987, ricky’s father incorporated International Container terminal services Inc. (ICtsI) in partnership with the soriano group and sea-land services to bid for a long-term concession being tendered by the government to run the Manila International Container terminal. the government awarded the concession to ICtsI in May 1988. ricky took over as chairman of the company in 1995.

From left: Enrique E. Razon, a sea captain, was the first in the family to establish a ports-related business in the 1920s; his son, Enrique M. Razon, put up the International Container Terminal Services Inc.; grandson Enrique “Ricky” K. Razon, Jr. expanded ICTSI to other countries and entered the gaming business in the late 2000s.

Facade of Razon Brothers Inc. in Urbiztondo, Manila. The customs brokerage was put up by Enrique E. Razon and his brother Benito in the 1920s.

E

competition. A new integrated resort, Japanese pachinko maker Kazuo Okada’s Tiger Resort, is schedule to open by the end of the year.

Whether the initial signs of recovery seen in April will be sustained remains to be seen. The uncertainty may be unsettling for Bloomberry’s investors, which could explain the share price’s volatility since the start of the year. But it doesn’t seem to unduly bother Razon who’s been through more trying times in the casino business and others. Less than a year after the casino’s opening in March 2013, Solaire seemed going off course as the initial growth spurt turned sluggish. To prevent things from getting worse, Razon fired Global Gaming Asset Management (GGAM), a group formed by former Las Vegas Sands executives, which was under contract to manage Solaire. That was in September 2013, six months after opening. Razon was disappointed with the management team’s performance and rued the fact that he was on the site more often than they were. “I started noticing problems right away. I realized it early on, even before we opened and I was already getting concerned. And then it dawned on me that they were totally incompetent. You know, they had good résumés but didn’t have any (experience with) execution.” GGAM denies the allegation and has accused Bloomberry of breaching the management service agreement. The two parties have submitted the dispute for resolution before an arbitral tribunal in Singapore. Despite having no experience in running a casino — he claims he doesn’t even gamble — Razon took on the job of managing Solaire himself, learning on the go while looking for a new COO. “I had to take over first and learn the business fast. I mean really fast,” he reminisces. “Can you imagine: huge investment and you got no management?” Bloomberry had set aside $1 billion to build Solaire in stages. About a month later, Razon hired former Las Vegas Sands executive Thomas Arasi as COO. Though Arasi’s background was in the finance and accounting side of the gaming business, Razon says the former LVS bean counter was able to assemble a good team. “He’s doing very well. I really like what we have now. We have a good team,” says Razon. PH

oTo

S: C

oU

RTES

y o

F lo

PEZ

MU

SUEM

50 | ForBes august 2016

bloomberry resorts’ gross gaming revenue are a function of total bets (called roll in VIp tables, drop in mass tables and volume in slots or electronic gaming machines) and the win rate. though the casino’s win rate in mass tables is almost 10 times that of VIp tables, the bulk of the gaming revenue still comes from the VIp segment because of the huge volume of money brought to play by high rollers.

Casino Math

VIP Roll / Win Mass Drop / Win

(Php

per

tabl

e/sl

ot p

er d

ay, 3

rd q

uart

er 2

015

)

1,000,000

3,000,000

5,000,000

7,000,000

2,000,000

4,000,000

6,000,000

8,000,000

9,000,000

Slot Volume / Win

8,104,000

273,481 425,000131,262 192,000

12,803

Win Rate

3.37%7.0%

31.0%

VIP Mass Slot

Source: morgan stanley asia

Favored by VIPsestimated 2015 revenue segments per integrated resort (%)

Source: J.P. morgan

Melco Crown

Resorts World

Solaire Casino

5.1% 12.6%25.3% 18.6%

29.2%

26.9%

29.5%

20.3%

37.6%

23.8%

23.3%

47.6%

VIP Mass Slot non-gaming

Oddly for a casino owner, Razon likes to say he feels more comfortable in a cramped gantry crane operator’s cab than a VIP gaming room, a reminder that the Bloomberry CEO also heads International Container Terminal Services Inc., the Philippines’ biggest container port operator. More commonly known as ICTSI, the company also runs 21 container ports in 19 countries, including the U.S. and Mexico. Razon usually spends his mornings at ICTSI and goes after lunch to Solaire, about 10 kilometers away, where he stays until evening. Despite his hectic schedule, Razon finds time for golf, which is a passion. It’s been a long time since he went kiteboarding, his other sports hobby. The son of a businessman who founded one of Manila port’s biggest cargo handling companies didn’t finish college at the De La Salle University and worked at the piers before he turned 18 in the late 1970s. “To me, that’s where the action was,” Razon recalls. “It wasn’t in a classroom. I’d rather be out there.” His father, also named Enrique, was not pleased. He assigned his son the hardest field job to make him quit. “My first assignment was not even at the pier. It was out at the anchorage. Until the ship left, I had to be there five days, six days. Yeah, he tried to make it impossible so I would not last a week, so I’d go back to school. But I was determined that it was not gonna happen.” Unlike today when port operations have become highly mechanized and orderly, the loading and unloading of cargo back then depended largely on manual labor. Rival unions and gangs competed against each other for turf, often resulting in brawls. “That was the nature of the business. I was involved in all of that. That’s why it was a lot more fun then,” he says, chuckling. Rough working conditions at the docks may have helped develop in Razon a certain tenacity that proved crucial in helping him survive the ups and downs of the ports business. In the aftermath of the Asian financial crisis in 1997 and 1998, ICTSI was forced to give up all six of its foreign ports to pare down debt and just retained its container port in the Philippines. The recovery came shortly afterwards, however.

4,554VIP 2,222

Mass

2,073Slotgross

gaming Revenue

(Php mil)

(3rd quarter, 2015)

3rd quarter, 2015

ForBes

B l o o m B e r ry r e s o rt s


Compared with ICTSI’s debt woes in the wake of the Asian financial crisis, Bloomberry’s losses due to higher provisioning for doubtful receivables may seem like a walk in the park for Razon. But the deeper reason he remains bullish about Bloomberry despite its recent financial losses is the Philippines’ bright prospects as a rapidly growing tourist destination. “The Philippines is well-positioned to be a tourist destination,” he explains. Tourist arrivals had grown by an average of 12.3% between 2010 and 2015. Even the volume of Chinese tourists is rising at twice the overall growth rate, which is surprising amid the troubled diplomatic relations between Beijing and Manila. What didn’t surprise was the impact on gaming. Last year, the Philippines’ gross gaming revenue (GGR), representing the revenue of all casino operators, rose 17% to $2.75 billion after rising by only 6.8% the previous year. In contrast, Macau’s GGR fell 34% to $28.9 billion as Chinese gamblers stayed away due to the Communist Party’s anti-corruption campaign. That also affected Singapore’s two integrated resorts whose GGR declined a tenth to $4.8 billion last year. In another sign of Razon’s bullishness on Philippine gaming, Bloomberry last year bought a 15.7-hectare property in Quezon City on which he plans to build another casino and hotel. “That’s going to cater only to the mass market. There’ll be some VIP tables but not as much as here,” he says. In addition, Bloomberry plans to build commercial, retail and residential components to diversify its revenue sources, he adds. Bloomberry is also expanding its international footprint. It bought a small casino on Jeju Island in South Korea (which it sold in June) and properties in Muui and Silmi Islands also in South Korea. It is in talks to invest in casino resorts in Argentina and Cyprus. “Latin America is one untapped market and the place to be there would be Buenos Aires,” he says. “Cyprus is attractive because it has an exclusive license. And anything that’s exclusive is always attractive.” While many are impressed that Bloomberry is embarking on an international expansion so soon after opening Solaire casino in 2013, others are

more cautious. “One concern is they’re quite aggressive in venturing outside. I think they have to clean up first what they have here before they venture outside,” says Rodrigo. But to Razon, going abroad is no big deal. “I don’t even look at it as international. I look at it as just one market,” he says. “You know, I don’t see the difference between being in the Philippines and being in another country.” When you travel more than 200 days a year visiting ports in almost 20 countries, the distinction between what’s local and what’s foreign gets a little blurred somewhat. “It’s the same to me. It’s just the

global market,” he says. Being away for the greater part of the year perhaps also explains his choice when asked if he prefers being loved or feared by people who work for him. “I’d rather be feared,” he replies quickly. “I prefer that. People move faster by fear than love.” He then tries to qualify his answer, realizing it may have sounded brash. “It can be both,” he says. “But, if I were to make a choice, once you make that quick decision that affects them, I don’t think they’ll love you too much. So fear always wins out,” he adds, laughing. The executives who were with him during the interview could only agree. F

The distinction between what’s local and what’s foreign gets blurred for Enrique K. Razon Jr. who travels 200 days a year.

Hungry startup

at 165 The country’s oldest bank

wants to grow bigger and under its 55-year-old CEO Cezar P. Consing it will be out there

fighting for its share.By Roel landingin

photographs by john carlos catalan g r o o m i n g b y v i d a n o n j a u c i a n


Bank of the PhiliPPine islands

s the 31st in a long line of presidents and managing directors of the 165-year-old Bank of the Philippine Islands (BPI), the country’s

oldest bank, Cezar P. Consing likes to say he has a simple job. “You have to understand how we have always thought in this bank,” says the 55-year-old CEO who is an avid runner. “It’s a relay race. My job is just to make sure when I hand this off to my successor, it’s in better shape than when I got it. It’s simple as that.” But it never really is, as Consing himself is the first to admit. Amid unprecedented growth in lending since 2013 when he was appointed BPI president, the banks’ profit margins are being squeezed. In just three years, the bank’s loan book almost doubled from Php500 billion in 2012 to almost Php900 billion last year. “You have all this growth and yet banks have been under some pressure,” Consing says as he sums up the challenge facing the bank, the country’s third largest by asset size. “The growth rate is one thing but if you look at returns of equity of banks, globally and locally, they have been trending down.” The bank’s return on equity fell to 12.3% last year from 18.1% three years ago. Another sign of the pressures weighing on banks’ return on capital is the modest growth in banks’ market capitalization compared with other companies in recent years. “I think other industries took advantage of (the recent growth) probably more than the banks.” Indeed, while banks’ market capitalization rose by 16.7% between 2012 and 2015, the value of holding firms surged by 54.6% during the same period, growing at least three times faster. Property companies’ market capitalization also grew by 41.3%, or almost two and a half times faster than banks. Consing cites three factors behind the banks’ narrowing return on capital: the huge increase in liquidity in the aftermath of quantitative easing by the world’s major central banks; tighter regulation of banks, including higher capitalization requirements; and the emergence of fintech companies that are competing with banks in their traditional turfs such as payments, fund transfers and even lending.


A

forbes


Despite the MSMEs’ significant contribution to employment, banks have found it difficult to lend to small businesses, which are seen to have a riskier credit profile. Indeed, the Bangko Sentral ng Pilipinas has to compel banks to lend to the sector by requiring them to allocate a minimum proportion of their loan portfolio to MSMEs. Consing says less than 25% of BPI’s loan book is allocated to small businesses and he is keen to make that bigger. Though he has yet to set a target, “all I know is it’s less than one-fourth of our loan book, it’s small. It’s too small. It has to be bigger just to recognize where this country is going.” This may sound like big business paying the usual homage to “inclusive growth” but Consing says there is a business case for paying attention to small businesses. “Given the way our economy is growing, SMEs will soon be the biggest component of the economy. They will become too big to ignore. They will become too important.” The growing role of small businesses is not obvious now when MSMEs account for only almost a third of the economy’s gross value added. But Consing says that is going to change as soon as young people who find limited employment opportunities in large companies set up startups or work with small businesses. “Large companies, after a while, get so big that when they grow they can actually lower their labor-capital ratios. If you have technology and you have capital, you need less people. So, you can imagine a company growing tenfold and increasing its headcount maybe only fivefold,” he explains. “Look at all the graduates every year,” he continues. “How many of them find their way into the big corporates of this country? Not many. So what are they going to do? They’re going to find their way into smaller companies, SME operations. They will become entrepreneurs, they will become self-employed. They will do what smart people do: they will adjust. And we want to be there to help and make it happen.” To prepare for the big shift in the economic importance of small businesses, Consing recently restructured BPI’s internal organization to create a separate unit to grow lending operations to small businesses. “We used to be just wholesale

The surge in liquidity in the form of more foreign funds coming into the country translated into narrower net margins for banks. “They have shrunk by 40%” he estimates. “They used to be 5% or so. Now, it’s more like three.” Tougher banking regulations to prevent asset bubbles and excessive lending entailed higher capitalization requirements. “That forced banks to basically have more capital or do less with the capital that they have,” he explains. Similarly, the rise of fintech, though still in its early days in the Philippines, represents another long-term threat. “When you look at fintech companies around the world, what they’re doing is they are attacking businesses of banks that are unregulated.”

Cezar P. Consing on his job: “it’s a relay race.”

one of the ways Consing is responding to the rapid growth and narrowing margins is to pay more attention to lending to small businesses – a hitherto underdeveloped segment of banks’ operations. Officially referred to as micro enterprises (for those employing nine or less people); small (10 employees to 99 employees); and medium (100 employees to 199 employees), these businesses make up 99.6% of the total economic enterprises in the Philippines. They account for almost two-thirds of total jobs in the country.


or retail,” he says, referring to big companies, which are served by the head office, or individual consumers, which are served by branches. “SMEs are interesting because they need wholesale products but retail coverage. So they are kind of in between.” Consing is excited at the prospect of sustained economic growth and what that implies for the bank, which is celebrating its 165th anniversary this August. Currently, there are 25 million to 30 million Filipinos with bank accounts, of which a little more than half can borrow. “Just imagine where every year, your GDP grows by six, seven or eight percent, inflation is low and your per capita incomes are growing. Then, all of the sudden the 25 to 30 million Filipinos who have bank accounts can become

40, 50 or 60 million Filipinos with bank accounts. And the percentage of those who can borrow can become 70% or 80% . The whole economy becomes more financeable.”

the foCus on small businesses is just one of the many changes that is sweeping BPI since Consing came in three years ago. He has also beefed up the bank’s investment banking arm to cater to large corporate clients who are increasingly tapping the capital markets to raise debt and equity capital for their long-term funding needs. “Traditionally we’ve been a great corporate bank but we’ve been underrepresented in investment banking,” he says. After only three years, BPI can now claim to be “formidable” in

investment banking as well. In March, it was named the Best Investment Bank by the Investment House Association of the Philippines and Best Securities House by the Philippine Dealing System for 2015. “We’re now a real player in investment banking. We’re not trying to build the country’s leading investment bank, but we need a credible investment banking operation because it feeds into all our other wholesale businesses.” To avoid being disrupted by fintech companies in the future, BPI is also making preemptive moves to invest in the sector to make financial innovations work with the bank rather than against it.

BPi thRough the yeaRs: 1.the first offices of ayala y Cia, founded in 1834, and forerunner of today’s ayala Corp., which owns about half of BPi 2 BPi’s first office building in intramuros, 1862 3 BPi iloilo, first provincial branch, 1897 4 the Zamboanga branch, housed in a building where gen. John J. Pershing used to live 5 Cebu branch, 1924 6 lobby of Cebu branch 7 BPi building at Plaza Cervantes, 1959 8 Former BPi headquarters, 1966

deClining RetuRns aMid FasteR gRoWthdespite a surge in its loan books and total assets, bank of the philippine islands’ return on capital is falling in recent years (php bil)

20060

400

800

1200

200

600

1000

1400

1600

2008 2010 2012 20142007 2009 2011 2013 2015

Loans (net)Assets

Source: BPI Annual Reports

2006

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%2008 2010 2012 20142007 2009 2011 2013 2015

Return on EquityNet Interest Margin

1 2

4

6

8

3

5

7

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ad

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“It is a potential threat to all banks now,” he says of fintech. “Banks should try to see if they can work with it, or adopt it, or do it themselves or invest in it. You have to try to co-opt it in some way.” Consing is also tweaking the bank’s hiring policy to ensure there is a healthy mix of insiders with institutional knowledge and outsiders with fresh perspectives and ideas. “We have 200 senior officers, vice presidents and up, in this bank. Of the 200, 80 are new to the positions. Half of them are external hires and half are internal promotions. If you took our 450 or 500 most senior officers in this bank, over one in five are new, brought in from the outside,” he says. “It’s always good to have good people from the outside mixed with good people from the inside.”

Consing personifies the healthy mix of insiders and outsiders that he’s trying to achieve in the composition of the bank’s officer corps. He received his A.B. Economics degree, magna cum laude, from De La Salle University in 1979 and an M.A. in Applied Economics from the University of Michigan in 1980. That same year, he joined BPI to work at the bank’s corporate planning unit and the corporate banking group. Five years later, in 1985, his boss, Xavier Loinaz, who was then executive vice president in charge of operations, seconded him to J.P. Morgan in Hong Kong. The U.S. bank was then BPI’s second biggest shareholder, owning a quarter of the bank. The Hong Kong stint was supposed to last for only two years but in 1987, J.P.

Morgan offered Consing a position at the bank’s regional investment banking unit. He consulted Loinaz who told him: “Bong, if I were you, I would stay at Morgan but I’m so upset with them for poaching you,” he recalls laughing. That was the last time BPI sent an officer to J.P. Morgan. Consing ended up co-managing J.P. Morgan’s investment banking business in Asia outside Japan in the late 1990s, focusing on parts of the region from South Korea to Australia and India. He quit in 2004, four years after another U.S. bank, Chase Manhattan, acquired J.P. Morgan. He thought he had a shot at becoming the first Asian chairman of the merged J.P. Morgan Chase in the region. “When it looked like it would never happen, I said: ‘Okay, time to move on.’” Consing then joined The Rohatyn Group, an asset management company specializing on emerging markets. Throughout the years he was away, he kept his ties with BPI. From 1995 to 2000, he was a BPI director representing J.P. Morgan. He left when the U.S. bank sold its stake in BPI to DBS of Singapore and returned as an independent director from 2004 to 2007. He rejoined the bank as an independent director in 2010. He also served as independent director at Malaysia’s CIMB Group Holdings and CIMB Group, together one of the largest banking groups in Southeast Asia. When BPI was looking for a new president to replace Aurelio Montinola, who was scheduled to retire in 2011 but was asked to stay for two more years, Jaime Augusto Zobel de Ayala, the bank’s chairman, and the directors turned to Consing. The Ayala family-owned Ayala Corp. directly and indirectly control about half of BPI. “As is common, people would like to go with the familiar. I was familiar because this was my first job. And I’ve been on the board since 1995, so I was familiar to the rest of the board,” explains Consing.

Cezar P. Consing is on the lookout for other local banks

to acquire to bulk up BPi ahead of regional banking

integration by 2020.

I want to make sure that we are out there fighting for our share, that we work and punch to our weight.” – CezAR P. ConsIng, Ceo, BAnk of the PhIlIPPIne IslAnds


Source: Bangko sentral ng Pilipinas

FoCus on sMall BoRRoWeRsthe growth in the banking system’s loans to micro and small enterprises and medium-scale businesses has been much slower than the surge in the banks’ total loan portfolio (loans, rebased 2010=100)

as a result, the proportion of total loans going to micro and small enterprises and medium-scale businesses has gone down over the years despite government programs and policies promoting financial inclusion. bpi is seeking is do more to boost lending to the small businesses. (msme bans/total loans, %)

2010 2012 20142011 2013 20150

50

100

150

200

250

300

Micro and small enterprisesMedium enterprisesTotal loan portfolio

2010 2012 20142011 2013 20150

2

4

6

8

1

3

5

7

9 MediumMicro and small

forbes

He readily agreed to take on the job in April 2013 even if it meant flying back and forth every weekend between Manila and Hong Kong for a year and a half because his son was still finishing high school in the former crown colony. “Every Friday night I’d take the last flight to Hong Kong. Every Monday morning I’d take the first flight back here,” says the BPI president who belongs to the prominent Consing family in Iloilo province.

making the full journey from being an insider to outsider and back again, Consing is well-placed to lead the bank as it prepares to confront the challenges and tap the opportunities arising from greater Asean economic integration, which began in 2015. Many banking industry insiders worry about the fate of local banks in the wake of Asean banking integration that is set to begin in 2020. Local banks are fragmented and the pace of consolidation is quite slow – there were still 41 universal and commercial banks as of end-March 2016 compared to 45 in 2000. Even the biggest local players seem puny compared with their regional peers. The largest Malaysian bank, Malayan Banking or Maybank, for example, has assets twice the combined assets of the Philippines’ top three banks. As an experienced Southeast hand, Consing has a more sober view about the pace of regional banking integration. “It’s going to be slower than people think just because in many Asean economies, domestic issues have tended to override regional issues,” he explains. “So, people will stay closer to home.” He points to how markets value banks. “If you look at bank valuations throughout Asia, the banks that are considered local champions are the banks that are valued better,” he argues. While regional players trade at just around their book value, local champions trade at a minimum of double their book value. Consing insists that the right strategy for BPI is to look for local acquisitions and become a bigger “national champion” rather than try to become a regional player. “Our preference would be domestic acquisitions rather than foreign ones because the growth is here, the real need is here.” Jan Bellens, head of Ernst & Young’s banking and capital markets group, explains the different stages of banking

development in Asean member countries underscore the uneven if slow pace of integration. Homegrown banks in countries with mature and fully consolidated banking systems such as Singapore and Malaysia would likely aim for regional expansion. However, in countries such as the Philippines and Indonesia where the banking system is highly fragmented and the economy is still growing fast, banks will prefer to become bigger domestic players. “Banks will see many growth opportunities at home that they will not venture outside,” says Bellens. Though the modest pace of regional banking integration will likely mute the immediate competitive pressures from foreign banks, it doesn’t take away the need for Philippine banks to grow bigger and stronger. “While there might not be a proliferation of new foreign entrants into the domestic financial markets, we do expect greater urgency for a long-overdue consolidation among the larger tiers (plus closures of rural and cooperative banks) within the banking sector,” says Li-May Chew, Ernst & Young associate director for banking and capital markets. Not surprisingly, Consing is on the lookout for local banks to acquire. BPI tried to woo Philippine National Bank, the country’s fifth largest bank by assets, toward a possible merger in 2014 but talks came to a sudden halt without an agreement. “Domestic banks have got to get bigger. There ought to be more consolidation,” he insists.

BPI is the country’s oldest, but, under its young CEO, it continues to be hungry and ambitious as a startup. “In the old days when I started banking, you could sit at your desk and people would line up to get loans and to get products,” he recalls. “Now you have to go out there and fight for your share. So, I want to make sure that we are out there fighting for our share, that we work and punch to our weight.” Competitors should be wary. Like the country’s national politics, banking is about to get pugilistic. F

Bank of the Philippine islands’ current headquarters on ayala avenue corner Paseo de Roxas in Makati City



THESE 60 TRAILBLAZERS HAVE CRASHED CEILINGS THROUGH INVENTION AND INNOVATION. OUR DEFINITIVE TALLY OF THE WEALTHIEST SELF-MADE WOMEN INCLUDES 13 NEW FACES—AND A SHAKE-UP IN THE RANKS: LAST YEAR’S NO. 1, ELIZABETH HOLMES, MISSES THE CUT.

6. Marian Ilitch$2.1 BILLION Age: 83 Residence: bingham farms, mich.

She and her husband, Mike, opened their first Little Caesars pizza restaurant outside Detroit in 1959. He was the marketing guy; she had the financial sense, famously stopping him from giving away free meals in the beginning. Today Little Caesars is one of the nation’s largest pizza chains, with estimated 2015 revenues of $4.2 billion. Together they also own the NHL’s Detroit Red Wings. She also owns Detroit’s MotorCity Casino.

3. Doris Fisher$2.4 BILLION Age: 74 Residence: san francisco

Iconic retailer Gap ($16 billion net sales) might have been called “Pants and Discs” if not for Fisher. She and husband Donald (d. 2009) settled on that name until she came up with “Gap”—shorthand for “generation gap”. She was its merchandiser until 2003 and a board member until 2009. She stills owns about 8% of Gap Inc., plus a valuable art collection.

3. Judy Faulkner$2.4 BILLION Age: 72 Residence: madison, Wis.

Computer programmer founded Epic Systems in Wisconsin in 1979. She remains CEO of the $2-billion (2015 sales) company, whose software stores medical information for more than half of the U.S. population; doctors exchange over one million Epic patient records daily. Among its customers are some of the nation’s biggest medical centers, including Mayo Clinic and Johns Hopkins. This fall Epic plans to provide patients with the ability to access their medical information from multiple health care providers on a single page.

5. Johnelle Hunt$2.3 BILLION Age: 84 Residence: fayetteville, ark.

Hunt and her high school sweetheart, J.B. (d. 2006), sold their home to kickstart a rice-hull packaging business in 1961; eight years later the Hunts bought five used trucks and seven trailers. Today J.B. Hunt Transport Services boasts $6.2 billion in sales and employs nearly 16,000 drivers.

2. Oprah Winfrey$3.1 BILLION Age: 62 Residence: montecito, calif.

Winfrey’s magic has rubbed off on Weight Watchers. Since the media mogul bought a 10% stake in the diet

empire in October 2015, its stock is up some 90%. The long-reigning queen of daytime TV has also proven she can thrive without a talk show. Her cable network, OWN, delivered its most-watched year in 2015, following four years of double-digit viewership growth, according to Nielsen. Next up: miniseries Queen Sugar, coproduced with Selma collaborator Ava DuVernay, and TV drama Greenleaf, about a Tennessee megachurch.

WEALTH STATUS: up Down unchangeD new ★

1. Diane Hendricks$4.9 BILLION Age: 69 Residence: afton, Wis.

“We brought distribution to the nation, to every roofer out there—not just the big guy but the little guy, the guys in between, the girls in between,” Hendricks says of ABC Supply, the roofing company she cofounded with her husband, Kenneth, in 1982. The distributor grew rapidly, fueled by a string of acquisitions. When Ken died in 2007, Diane soldiered on and rejected offers of buyouts, weathering the storm of the financial crisis before buying rival Bradco Supply in 2010. Sales more than doubled in the past dec ade to nearly $6 billion in 2015. With over 600 stores and 9,600 employees, the company, based in Beloit, Wis., is aiming to increase sales by up to another billion this year. The daughter of dairy farmers, she still goes to the office every day (“All my friends work here”) and is an ardent supporter of blue-collar causes, such as technical education for high school students.

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America’s Richest Self-Made Women

forbes


9. Jin Sook Chang$1.9 BILLION Age: 53 Residence: beverly hills

Chief merchandising officer of $4.4-billion (sales) Forever 21 appears to be experiencing some setbacks. After years of growth and ambitious expansions, her fast-fashion darling closed a few stores, and there have been reports it was late to pay some vendors. The company, which she owns with her husband, Do Won, denies any financial difficulties, saying it “cut costs where appropriate” and that business is solid. It also noted that it is opening 67 stores this year, including ones in eight new markets, mostly in eastern Europe.

9. Judy Love$1.9 BILLION Age: 78 Residence: oklahoma city, okla.

Sales of Love’s Travel Stops & Country Stores, which she and husband Tom founded in 1964 with $5,000 gift from her parents, fell by 36% in 2015 (due to lower gas prices) to $14.2 billion.

11. Gail Miller$1.6 BILLION ★Age: 72 Residence: salt lake city

Miller and her husband, Larry (d. 2009), bought their first Toyota dealership in Utah in 1979. Just seven years later they plunked down $22 million to buy the Utah Jazz. Miller still owns the Jazz (now worth $875 million), 55 car dealerships and 17 movie theaters.

12. Peggy Cherng $1.5 BILLION Age: 68 Residence: las vegas

Burmese immigrant gave up career as electrical engineer to help husband Andrew build Chinese fast-food chain Panda Express. Cherng, who is co-CEO, customized the restaurant’s operating systems. Today Panda Express has $2.5 billion in sales from nearly 2,000 locations. Daughter Andrea is chief marketing officer and oversees menu and concept innovation.

12. Elaine Wynn$1.5 BILLION Age: 74 Residence: las vegas

Cofounded Wynn Resorts with ex-husband Steve Wynn (whom she divorced twice) in 2002. She served on its board for more than 12 years, earning her the nickname “Queen of Las Vegas.” Her reign ended in April 2015 when she was ousted after a bitter proxy battle. She’s still locked in a legal fight with Steve over her ability to sell her 9% stake in Wynn Resorts. She is president of the Nevada State Board of Education, cochair of the Los Angeles County Museum of Art and board member of the Kennedy Center for the Performing Arts.

14. Sheryl Sandberg$1.4 BILLION Age: 46 Residence: atherton, calif.

A year after Sandberg’s husband, SurveyMonkey CEO Dave Goldberg, died unexpectedly at age 47, she admitted in a May

Facebook post that she hadn’t written enough about single mothers in her bestselling book, Lean In. In November she donated $31 million in Facebook stock to a charitable fund, the majority of which will go to Lean In, her nonprofit that supports women in the workplace and women’s empowerment groups. The Harvard M.B.A., who was once chief of staff to then Treasury Secretary Larry Summers, has helped boost revenues at Facebook 66-fold since becoming COO in 2008.

15. Thai Lee$1.2 BILLION Age: 57 Residence: lebanon, n.J.

CEO of SHI International since 1989, she has expanded it from a $1-million reseller that she and her then husband bought to a $6.8-billion (2015 sales) IT provider whose big customers include Boeing and AT&T. It’s apparently the largest woman-owned business, by sales, in the U.S.

16. Neerja Sethi$1.1 BILLION Age: 61 Residence: fisher island, fla.

Sethi and husband Bharat Desai started Syntel, an IT consulting and outsourcing firm, in their Troy, Mich. apartment with $2,000. Today it employs more than 25,000 people and boasts a recent market cap of $3.6 billion. Neerja is the longtime treasurer of the firm; Sethi is vice president and board member.

18. Christel DeHaan$900 MILLION Age: 73 Residence: indianapolis

German immigrant cofounded Resort Condominiums International in 1974 with then husband Jon. She was awarded half the company after their 1987 divorce and bought her ex-husband’s stake in 1989. A decade later she sold RCI for $825 million. She has since given away $220 million, mostly through her Christel Houses, which supplies goods and services for children in India, Mexico, South Africa and South America.

17. Sara Blakely$1 BILLION Age: 45 Residence: atlanta

Blakely took back the reins as CEO of Spanx in March for the first time in 14 years. She replaced former Nike exec Jan Singer, who helped expand the brand into athleisure wear but lasted less than two years in the job. The shapewear brand has always been Blakely’s baby. A one-time door-to-door fax salesperson, she founded the company at age 29, when she invested her $5,000 savings to come up with something to wear under white slacks. She still owns 100% of the $400-million (est. sales) company, which remains private despite persistent IPO rumors. In 2015 she became part-owner of the Atlanta Hawks basketball team.

8. Lynda Resnick$2 BILLION Age: 72 Residence: beverly hillsCo-owns thousands of acres of almond, pistachio, orange and pomegranate orchards in California, Texas and Mexico with husband Stewart. The two also run Fiji Water and POM Wonderful pomegranate juice. Lynda, who once owned her own ad agency, is the marketing mastermind while Stewart is the numbers chief. Marketing, at least in one case, went too far: In May the Supreme Court rejected the Resnicks’ appeal to review a case upholding an FTC ruling that some ads touting POM Wonderful’s health benefits were misleading.



6. Meg Whitman$2.1 BILLION Age: 59 Residence: atherton, calif.

CEO of Hewlett Packard for four years, she oversaw its historic split in two in November and now heads up $52-billion (sales) Hewlett Packard Enterprise, which sells servers, software and more. A former Hasbro and Walt Disney executive, she is still best known for leading online auction site eBay from $5 million in revenues in 1998 to $8 billion at the time of her departure in 2008; eBay is also by far the biggest source of her fortune. Whitman, who was cochairman of the national finance committee for Chris Christie’s presidential campaign, parted ways with him over his endorsement of Donald Trump, calling Trump “unfit to be president”. She joined Sheryl Sandberg (No. 14) on SurveyMonkey’s board in September 2015 and is a director of Procter & Gamble.

19. Eren Ozmen$750 MILLION Age: 57 Residence: reno, nev.

Ozmen’s Sierra Nevada Corp. was awarded a NASA contract in January for cargo missions via its Dream Chaser spacecraft, whose folding wings allow it to land on airport runways. It will join SpaceX and Orbital ATK in servicing and resupplying the International Space Station starting in 2019. Ozmen owns and runs SNC with her husband, Fatih—she as president and CFO, he as CEO. SNC also builds satellites and propulsion systems and is a key supplier of technologies to the aerospace and defense industries. The couple, who both emigrated from Turkey and got Master’s degrees in Nevada, bought the company, for which Fatih worked, in 1994.

19. Tory Burch$750 MILLION Age: 49 Residence: neW york city

Fashion designer known for her signature preppy-chic aesthetic debuted a stand-alone activewear line called Tory Sport, selling $145 Bermuda shorts, $185 tennis dresses and the like in fall 2015.

The New York-based mogul now has more than 160 stores in 30 countries, including 21 in China. Her Tory Burch Foundation Capital Program, a joint venture with Bank of America, has loaned $10 million to early-stage women entrepreneurs since 2014 to help them expand their businesses.

21. Sheila Johnson$710 MILLION Age: 67 Residence: the plains, va.

Cofounder of cable TV channel Black Entertainment Network, which was sold to Viacom for $2.4 billion in 2001, told FORBES in 2015 that she was disappointed with what BET has become: “I really believe the African-Americans have lost their voice. ... BET was supposed to be that voice.” Johnson, who divorced BET cofounder Robert Johnson a year after the sale, now has investments in hotels and a charter private jet service. She’s also the only black woman to own stakes in three professional sports teams: the WNBA Mystics, the NBA Wizards and the NHL Capitals.



23. Alice Schwartz$620 MILLION Age: 89 Residence: el cerrito, calif.

Cofounder of $2-billion (sales) biotechnology firm Bio-Rad Laboratories, now run by son Norman, who is chairman and CEO. The company, which she and her late husband founded with $720 in 1952, sells 10,000 different life-science research and clinical diagnostics products to more than 100,000 research and health care industry customers. Among its latest: a screening kit for cancerous genetic mutations and an HIV test that analyzes antibodies and antigens for early virus detection.

22. Carolyn Rafaelian$700 MILLION ★Age: 49 Residence: providence, r.i.

The daughter of a jewelry factory owner, Rafaelian started her New Age, celestial-chic bangle company, Alex and Ani—named after two of her daughters—in 2004. She remains its CEO and chief creative officer. To keep costs low, she uses mainly recycled materials, including scrap metals. Thanks to explosive growth, the company—known for its $28 zodiac-themed charm bracelets—now brings in an estimated $500 million in sales and has 65 stores. Rafaelian also owns Sakonnet Vineyards and 40,000-square-foot Belcourt Castle, near Newport, R.I.

25. Madonna$560 MILLION Age: 57 Residence: neW york city

The Material Girl’s recently wrapped Rebel Heart tour grossed $170 million, contributing to her career total of an estimated $1.4 billion on the road. The latest cash infusion adds to a fortune already rich with royalties and real estate, including a town house on Manhattan’s Upper East Side apparently purchased at the bottom of the market and an art collection reportedly featuring works by the likes of Picasso, Kahlo and Man Ray.

26. Kathy Fields$550 MILLION Age: 58 Residence: san francisco

26. Katie Rodan$550 MILLION Age: 60 Residence: san francisco

Dermatologists (who met at Stanford) made first fortune creating Proactiv acne treatment. Next they moved to antiaging products via Rodan + Fields, which they sold to Estée Lauder and then bought back.

28. Safra Catz$510 MILLION Age: 54 Residence: redWood city, calif.

Oracle co-CEO traveled to India in February 2016 to meet with Indian Prime Minister Modi, announcing plans to invest $400 million to build Oracle’s second-largest campus outside the U.S. A 17-year Oracle veteran, Catz has served as CEO since September 2014 and is one of the world’s highest-paid female executives, earning $53.2 million in 2015. She is credited with spearheading its aggressive acquisition strategy, helping close more than 85 acquisitions over the past five years.

29. Mary West$500 MILLION Age: 70 Residence: san diego

With husband Gary has contributed over $350 million to improve health care for senior citizens, including a May donation to fund a new geriatric emergency department at UC San Diego Health. Longtime racing fans, the couple also reportedly own more than 100 horses at their Kentucky stable. Source of fortune: West Corp., which they cofounded in 1986. Couple cashed out $1.4 billion in 2006, but Mary still holds a 10% stake.

30. Jayshree Ullal$470 MILLION Age: 55 Residence: saratoga, calif.

Ullal’s former employer, Cisco, is suing her current one, Arista Networks, for alleged patent and copyright infringement; Arista is countersuing. She spent 15 years at Cisco before leaving in 2008 to join former colleagues David Cheriton and Andreas von Bechtolsheim at Arista, their new cloud computing company. As CEO she has increased sales from zero in 2008 to $838 million last year.

31. Lynn Tilton$450 MILLION Age: 57 Residence: rumson, n.J.

Diva of distress has faced an avalanche of lawsuits, including allegations from the SEC that her Patriarch Partners improperly valued assets in its Zohar debt funds and extracted about $200 million in excess fees from investors. (Tilton denies the allegations and believes she will prevail in court.) The private equity firm recently stepped down from managing Zohar and downsized to a family office. A Wall Street veteran, she worked at Morgan Stanley, Goldman Sachs and Merrill Lynch.

24. Weili Dai$570 MILLION Age: 54 Residence: los altos hills, calif.

The Queen of America’s semiconductor industry may have lost her crown. Dai, who founded Marvell Technology with husband Sehat Sutardja in 1995, was fired as president in April following an internal investigation into accounting issues. Sutardja also got the boot as CEO. The pair allegedly put “significant pressure on sales and finance personnel to meet revenue targets” and encouraged the recognition of revenues prematurely. Investors apparently applauded their departure, boosting shares 13% on the day the news was announced; the stock is still down for the year. The couple remains on Marvell’s board.


34. Janice Bryant Howroyd$420 MILLION Age: 63 Residence: las vegas

Net revenues of her staffing and human resources firm, Act-1, have topped $1 billion, up 9% versus a year ago, solidifying her position as head of one of the biggest woman- and minority-owned businesses in America; the firm has 12,000 clients and 2,600 employees in 19 countries. Howroyd has served on presidential commissions for the past two presidents. She started her first employment agency with $1,500.

33. Marissa Mayer$430 MILLION Age: 41 Residence: palo alto, calif.

Four years after taking the helm at Yahoo, Mayer is overseeing a sale of the embattled tech pioneer’s core business amid falling traffic and ad revenues. In late 2015 the company backed away from plans to spin off its most valuable asset, a 15% stake in Chinese e-commerce giant Alibaba, currently valued at $30 billion. Much of Mayer’s personal fortune comes from her 13-year stint at Google, where she was one of its first employees. Now called Alphabet, that stock’s surge lifted her fortunes this year.

32. Donna Karan$450 MILLION Age: 67 Residence: neW york city

Stepped down in June 2015 as chief designer of her namesake brand to focus on her Urban Zen luxury lifestyle company and foundation. Karan, who became head designer at Anne Klein at age 25, made most of her fortune from selling her company and trademarks to LVMH in 2000.

53. Sophia Amoruso $280 MILLION ★Age: 32 Residence: Los angeLes

The only Millennial newcomer to the list outside the entertainment industry, Amoruso made her fortune with e-commerce retailer Nasty Gal, the rock ’n’ roll fashion company she started at age 22, when it sold mostly vintage gear to a trendy young crowd. A decade in, Nasty Gal competes with the likes of H&M and ASOS; FORBES estimates revenues of $300 million, up from $100 million in 2012. “Growth has been explosive,” Amoruso said. In 2015 she handed over the CEO role to an outsider. She remains heavily involved in day-to-day operations, including the rollout of brick-and-mortar stores, starting with two in L.A. “I’m executive chair and own most of the company,” she said. “Everyone knows Nasty Gal requires me.” Now she oversees a growing brand based on her bestselling memoir, #Girlboss, including a new podcast, #Girlboss Radio. Her first guest? Actress Charlize Theron, who’s also producing an upcoming Netflix comedy based on Amoruso’s life. As for Nasty Gal, she’s weighing options for its future, including an IPO if the time feels right. “It’s crazy to think that after a decade of building the business, we’re finding our footing,” she said. “We’re putting our big-girl shoes on.”




34. Vera Wang$420 MILLION Age: 66 Residence: neW york city

Twenty-six years after opening her first bridal boutique in The Carlyle hotel, the designer is arguably the most famous name in modern bridal wear. Her evening gowns, also prized, continue to be worn by notable names, including Michelle Obama, Oprah Winfrey and Selena Gomez. The bulk of her fortune comes from licensing deals with Zales, Kohl’s and David’s Bridal. Wang works with the New York-Presbyterian Youth Anxiety Center to address anxiety disorders in teens and young adults.

38. Barbra Streisand$370 MILLION ★Age: 74 Residence: malibu, calif.

Pick just about any award, and Streisand has won it: Oscar, Tony, Grammy, Emmy, National Medal of Arts. She’s the only act to have a No. 1 album six decades in a row, and now has 10 in all, more than any other female musician in history. And she’s grossed hundreds of millions of dollars from her live shows. Streisand lives well too: Her Malibu compound, which has a mall in the basement, may be worth close to $100 million, five times what she paid for it.

36. Liz Elting$390 MILLION Age: 50 Residence: neW york city

Cofounder of TransPerfect, a translation firm with 11,000 clients, including AT&T, Google and Wal-Mart.

37. Celine Dion$380 MILLION ★Age: 48 Residence: las vegas

Canadian-born songstress has netted some $260 million from her Las Vegas residencies since 2003, when her show, A New Day, opened. After a hiatus to care for her

ailing husband (who died in January) Dion has resumed those gigs and is on schedule to perform her thousandth show in Vegas by year’s end. She has also earned money from tours and from selling more than 220 million rec ords.

39. Kathy Ireland$360 MILLION Age: 53 Residence: santa barbara, calif.

Model turned mogul built a licensing empire by lending her name, taste and marketing prowess to more than 17,000 products. Recent shills: a line of handbags available at T.J. Maxx, tableware sold on the Home Shopping Network and an array of branded office furniture. Such unglamorous wares sell big—an estimated $2.6 billion at retail. Scouted by Elite modeling agency at age 16, she graced Sports Illustrated’s Swimsuit Issue for 13 consecutive years. She got her start in business by launching a line of socks with Kmart in 1993.

40. Sonia Gardner $350 MILLION Age: 54 Residence: neW york city

Cofounded investment firm Avenue Capital in 1995 with brother Marc Lasry. More than three decades later the still-close siblings run the firm side by side; he is the extroverted public face who handles the investments, and Gardner, who shies away from the limelight, manages the global firm’s daily affairs. (Her college best friend is married to Lasry.) Avenue’s assets under management are $11.6 billion, down from $13.3 billion a year ago.

40. Susan Wojcicki$350 MILLION Age: 47 Residence: los altos, calif.

Made a name for herself as consigliere for Google’s ads. Now as YouTube CEO she’s experimenting with an ad-free subscription model, called

YouTube Red, which launched in October 2015. Wojcicki started her first business—making spice ropes (braided yarn with spices attached)—at age 11; it was soon profitable. She joined Google as employee No. 16 in 1998; the startup initially used her Menlo Park garage as its headquarters. Her sister Anne is cofounder of personal-genomics company 23andme.

42. Jessica Alba$340 MILLION ★Age: 35 Residence: los angeles

Actress turned entrepreneur’s net worth got a boost in August 2015 when the Honest Co., the nontoxic-household-goods startup she cofounded in 2011, raised $100 million at a $1.7-billion valuation. The business began largely as an e-commerce subscription service for diapers and baby wipes but now sells some 100 items. Not everyone is a fan: There were complaints that Honest’s sunscreen didn’t work and that its detergent wasn’t quite as chemical-free as advertised. She has defended the products vigorously and keeps adding categories: Last fall she launched Honest Beauty, an 80-piece makeup and skin care line with a transparent ingredient list.

42. Nora Roberts$340 MILLION Age: 65 Residence: boonsboro, md.

Pens an average of five or more manuscripts a year with titles such as Luring a Lady and Seduction in Death. She turned to writing when snowed in during a 1979 blizzard and has since published 219 books under her name as well as a crime-novel pen name, J.D. Robb. The resulting page turners have spent nearly 1,100 weeks atop the New York Times bestsellers list; nine of her books have been made into Lifetime movies, including Northern Lights and Blue Smoke.


46. Nancy Zimmerman$320 MILLION ★Age: 52 Residence: boston

Zimmerman is comanaging partner at Boston-based hedge fund Bracebridge Capital. With more than $10 billion in assets under management, it is one of the world’s largest hedge funds with a woman at the top. She got her start buying currency options on the floor of the Chicago Mercantile Exchange. She cofounded Bracebridge in 1994 after running the interest rate options group at Goldman Sachs. Zimmerman serves as a trustee at Brown University, her alma mater.

42. Diane von Furstenberg$340 MILLION Age: 69 Residence: neW york city

Brussels-born designer became a household name in 1974 when her body-hugging wrap dress hit the market. More than one million were sold by 1976. She took a 12-year break from fashion but returned in 1997 to introduce her famous dress to a new generation. In May 2016 she handed the reins at DVF (estimated sales: $500 million) to new chief creative officer, Jonathan Saunders. Von Furstenberg will remain chair. Her husband, media billionaire Barry Diller, has his own stake in the business.

45. Kit Crawford$330 MILLION Age: 57 Residence: st. helena, calif.

With husband Gary Erickson, owns 80% of Clif Bar, maker of the organic snack bar, now sold in 14 countries. When the co-chief visionary officer is not charting the brand’s future, Crawford is advising Lunafest, a festival of short films by and about women, to raise funds for breast cancer prevention. She and her husband also run a venture firm, White Road Investments, and the Clif Family Winery.

46. Jane Hsiao$320 MILLION Age: 69 Residence: davie, fla.

Chief technical officer and vice chairman of Opko Health, which she cofounded in 2007 with business partner and biotech billionaire Phillip Frost. Opko has developed and acquired such products as Varubi, for chemotherapy-induced nausea; 4Kscore, a prostate cancer test; and Rayaldee, a treatment for vitamin D deficiencies in patients with kidney disease. Shares of the company peaked last June just after it submitted Rayaldee for FDA approval (it was rejected in March) and before it announced it would acquire the nation’s third-largest clinical diagnostic laboratory, Bio-Reference Laboratories. The company, which has yet to make a profit, is trading well below its highs.

48. Danielle Steel$310 MILLION ★Age: 68 Residence: san francisco

Romance author has published 129 books, which she writes on a 1946 Olympia typewriter, and sold 650 million copies. Her own life, including five high-profile marriages and nine children, has been rich fodder for her novels. Today she works with her two foundations, which raise money for preventing child abuse and mental illness.

49. Patricia Miller$300 MILLION ★Age: 77 Residence: fort Wayne, ind.

Miller and good friend Barbara Baekgaard (No. 54) were catching a flight in Atlanta in 1982 when they noticed how drab women’s travel bags looked. Each borrowed $250 from her husband and went to work in Baekgaard’s basement in Fort Wayne making handbags out of floral quilted cotton. Except for a brief absence to work for the state of Indiana, Mil ler ran the firm as a co-president until 2010, when it went public, and retired in 2012; she and her husband, Michael, who shares the fortune, sit on board.

49. Pleasant Rowland$300 MILLION Age: 75 Residence: madison, Wis.

Creator of American Girl dolls sold the brand to Mattel for $700 million in 1998. Former elementary school teacher and textbook author now has a foundation dedicated to helping children read by providing best-practices materials, teacher training and guidance to educators and parents.

49. Adi Tatarko$300 MILLION Age: 43 Residence: palo alto, calif.

CEO of home-remodeling site Houzz has been looking abroad, expanding the platform to seven new countries in the last year, including Singapore, Spain and Sweden. Forty million users check the site for renovation ideas each month, connecting with more than a million home- design gurus. A native of Israel, Tatarko launched the Palo Alto startup with husband Alon Cohen in 2009.

54. Dorothy Hermann$270 MILLION ★Age: 63 Residence: neW york city

Richest self-made woman in American real estate is co-owner of New York’s elite brokerage firm Douglas Elliman, which sells $22 billion worth of homes a year, netting $600 million in sales. The firm has over 6,000 agents in 85 offices. She and partner Howard Lorber bought it for $72 million in 2003. It hasn’t been an easy journey for her. A car crash killed her mother, left her father disabled and brought on seizures for then 10-year-old “Dottie”, who was thrown from the car. She became a mom at age 19. She started working as a real estate broker at Merrill Lynch on Long Island in the 1980s. It was soon bought by Prudential Long Island, and in 1990, she bought the majority of that brokerage firm.

52. Judy Sheindlin $290 MILLION Age: 73 Residence: naples, fla.

Chief justice of daytime TV still rules over the courtroom that made her a centimillionaire. Despite getting a late start—she first appeared on camera at age 52—her Judge Judy show has been on the air for 20 seasons and is watched by an average of 10 million viewers a day; she won her second daytime Emmy in 2016. Since 2012 she has banked $47 million pretax annually from her hosting gig. The straight talker is also the author of seven books, including Don’t Pee on My Leg and Tell Me It’s Raining.




57. Toni Ko$260 MILLION ★Age: 43 Residence: los angeles

Ko, who moved to the U.S. from Korea at age 13, worked after school for her parents’ beauty supply business. In 1999, at age 25, she noticed a gap in the market for department-store-quality makeup at a drugstore price. “I bought drugstore makeup that was so bad, I had to burn the tip of my eyeliner,” she said. Armed with connections in the wholesale industry and seed money from her family, Ko launched NYX Cosmetics, selling colorful, high-end makeup at bargain prices (a top seller: $3.50 lip pencils in bold pinks and purples). In her first year Ko did $4 million in retail sales. “I wore every single hat,” she said. After 15 years of growth, Ko sold the venture-backed brand to L’Oréal in 2014 in a transaction valued at $500 million. Her initial plan to retire was short-lived. “I wanted to sit by a beach and drink a margarita but thought that’d be super boring,” she said. In spring 2016 Ko launched Perverse Sunglasses, selling sexy, stylish “sunnies” for between $30 and $60 a pair. Its first store opened in Los Angeles in May. “I studied the industry and realized it was a dinosaur,” she said. “I want to bring color to the world of black and beige.”

54. Barbara Bradley Baekgaard$270 MILLION ★Age: 77 Residence: fort Wayne, ind.

Cofounder and chief creative officer of Vera Bradley, which sells half a billion dollars’ worth of handbags, luggage and other accessories a year through 154 company-owned stores and 3,220 other locations. Baekgaard, who was co-president until 2010 and is still involved in the design process of the colorful bags, named the business after her mother, a former Elizabeth Arden model. As part of estate planning, Baekgaard has put most of her shares in trusts for her family.

56. Beyonce Knowles$265 MILLION Age: 34 Residence: los angeles

The prolific songstress has already pulled in more than $500 million in gross earnings as a solo artist. With husband Jay Z (net worth: $610 million), she has also cashed in on joint tours, multimillion-dollar endorsement deals with companies like H&M and Pepsi, and investments in companies like Tidal, the music-streaming service she and her husband co-own with Madonna (No. 25) and others. Beyoncé launched her latest album, Lemonade, exclusively on Tidal in April. It was her sixth studio album to debut at No. 1.

57. Lynda Weinman$260 MILLION Age: 61 Residence: santa barbara, calif.

Stepped down as executive chairman of online-learning platform Lynda.com in June 2015, one month after selling it to LinkedIn for $1.5 billion. Weinman, who published one of the first Web-design textbooks in 1996, started the business at age 40 with her husband, Bruce. More than half of the top 50 largest publicly traded companies, like CVS and Microsoft, use Lynda.com’s online courses and video tutorials to keep employees up to speed. About 40% of all U.S. colleges and universities also subscribe to the platform.

60. Taylor Swift$250 MILLION ★Age: 26 Residence: nashville

The onetime country music starlet has transformed herself into arguably the world’s biggest pop star. Her 1989 World Tour grossed a quarter of a billion dollars, making it last year’s richest. She has also become an advocate for musicians’ rights to fair royalty rates as the industry adjusts to the streaming model, pulling her music from Spotify and penning a letter to Apple that many believe caused the company to change its tune last year. Ever the savvy businessperson, Swift subsequently appeared in a commercial for the tech giant.

57. Kathy Lehne$260 MILLION Age: 54 Residence: houston

Plunging gasoline prices took their toll on wholesale fuel marketer and distributor Sun Coast Resources, one of the largest woman-owned businesses in Texas. Lehne founded the company at age 23, and today it has a fleet of over 700 trucks and more than 1,300 drivers. Lehne reportedly plays high-stakes poker in her free time.

to compile net worths, we valued private companies by speaking with an array of outside experts and conservatively comparing the companies with public competitors. in cases in which women started businesses with, and still share with, their husbands, we’ve assigned them half of that combined wealth. We calculated the stakes in public companies using stock prices from May 13. For entertainers, we based our estimates on net lifetime earnings. Real estate, art and other assets were also factored in where applicable. to be eligible for this list, women had to have substantially made their own fortunes and be u.s. citizens or longtime residents. We attempted to vet these numbers with all list entrants. Many cooperated; some didn’t. acknoWledgments: don depalma, common sense Advisory; craig Johnson, customer growth partners; euromonitor international; Factset; William ostrove, Forecast international; pitchbook; privco; Real capital Analytics; Randle Reece, Avondale partners, llc; simeon siegel, nomura securities; brian tunick, Rbc capital Markets; Vc experts; WardsAuto; bridget Weishaar, Morningstar; stephanie Wissink, piper Jaffray cos.

skype meets cash

The latest salvo in the war for the future of money: person-to-person currency transfers. Silicon Valley’s heavyweights are betting that a $1-billion startup called TransferWise can pull off the trick right now.

By Samantha Sharf

TransferWise cofounder Kristo Käärmann is late for dinner. His Uber driver took the long route from his offices to Art Priori, a trendy restaurant set amid the winding medieval-era cobblestone streets

of Estonia’s capital, Tallinn. The driver had recognized Käärmann and wanted time to pitch an idea he had for a new app. Waiting patiently for him at the restaurant, Taavet Hinrikus, his cofounder and CEO, responds to his tardy partner’s explanation with a knowing grin. “Estonia is a small country, so it’s natural that people know TransferWise,” he says. “There’s some downside, like Uber drivers lying in wait.” He, too, has been subject to long, pitch-filled rides from local taxi drivers. So it goes when your tiny Baltic country of 1.3 million people has bet its national future on becoming a tech incubator and you’ve founded a unicorn startup. Käärmann and Hinrikus may as well be Mark Zuckerberg and Jeff Bezos here, and they have the A-list investors to back up the local hype. Peter Thiel invested early in TransferWise. So did Richard Branson. A $58-million infusion from Andreessen Horowitz last year has allowed Käärmann and Hinrikus to expand the staff to 600 people.

They’ll need all that manpower and all that money: In pushing a peer-to-peer platform for moving money—think Skype for currency—they’re taking on pretty much every global bank, along with entrenched giants like Western Union. “You have this conceptual argument that it shouldn’t cost that much to move money,” says Käärmann. “That it is really just electrons that you are moving around.” It’s a billion-dollar theory, as measured by TransferWise’s current valuation. If proven correct, it has the potential to make the two founders, with roughly a 20% stake apiece, fabulously wealthy. It could legitimize Estonia’s digital gambit. And it could, most powerfully, upend the oligopoly that controls $3 trillion of consumer currency flow around the world. Nestled iN the elboW separating Latvia and Lithuania from Russia, Estonia owes its status as the Silicon Valley of the Baltics to its former Soviet oppressors. During the Cold War the Kremlin sought to snuff out a blossoming independence movement by restricting the ability of Estonian universities to teach philosophy and social sciences. Instead, students would focus on computers and information technology. Eventually, Estonian software developers were at the center of the Soviet space program and KGB spying efforts.

forbes

Transferwise


Then, in 1989, the Berlin Wall came down. Estonia gained its independence two years later. And Netscape’s Internet browser followed three years after that. Freed of the Soviet bureaucracy, its resourceful natives, who speak a Uralic language close to Finnish, set out to create an entrepreneurial e-republic leapfrogging the restrictions of conventional infrastructure. In Estonia nearly everything is digital and decentralized, so one rarely has to visit a governmental office. Pretty much the entire landscape has access to broadband Wi-Fi—and has for more than a decade. Estonians have been voting online and using their mobile phones as identification since 2007 and paying for parking spaces via text messages since 2000. With programming entrenched in the national curriculum and more startups per capita than any other country in Europe, little Estonia has already brought the world Skype as well as once popular peer-to-peer music service Kazaa. This environment—and a belief that no system is sacred or unchangeable—nurtured Hinrikus and Käärmann, both 35, and TransferWise’s staff; while the company’s sales office and headquarters are now in London, two-thirds of its employees, including most developers, live in Tallinn. As a local computer science student, Käärmann gained notice building a Baltic and Scandinavian version of Yahoo Finance. That eventually led to a consulting gig focused on banking and finance for Deloitte in London. There he met his countryman Hinrikus, a fellow programmer who had spent so much time building websites as an undergraduate that he stopped attending classes, started working with Skype’s founders and got kicked out of school. Hinrikus was the first employee hired at Skype. Their epiphany came in 2007 as expats in London when Hinrikus, by then Skype’s director of strategy and technically based back in Estonia—and thus paid in euros—needed pounds to fund his life, while Käärmann, who was paid in pounds, needed euros for student loans and the mortgage on his flat back in Tallinn. Since banks charge transaction fees and bake in markups to exchange rates, the duo’s frequent currency transfers were costing them a small fortune. One year Käärmann thought HSBC had lost some of his Christmas bonus because 500 euros less than expected arrived in his account.

“The bank will take 10% or even 12% of the money transferred. Seeing that firsthand is what made me start to think: Is there a better way?” Hinrikus recalls. “We realized there is actually no need to move the money. No need to make an international transfer because the money already exists where it needs to.” The Estonian software engineers devised a simple solution: Hinrikus would transfer euros from his Estonian bank account into Käärmann’s Estonian account, while Käärmann would transfer pounds from his British HSBC account to Hinrikus’ at Lloyds. This would save them on international transfer fees, as well as on currency drag since they used the real exchange rate, known as

the midmarket rate. Soon they had a Skype chat going with other Estonians who wanted to exchange money this way. Eventually this Skype-linked money exchange forum morphed into TransferWise. In 2011 the pair quit their jobs and self-funded for a year before landing a seed funding round amounting to $1.3 million. A year later Thiel led another round for $6 million, and in 2014 billionaire Branson invested in a $26-million funding. To date, TransferWise has raised $91 million in VC money. “As we saw more and more adoption, there was a gradual growth in confidence that we are solving a real problem,” says Käärmann, who reasoned that sending money digitally should be as easy as sending an e-mail. “That problem is huge, and it doesn’t get solved if we don’t solve it.” So how does TransferWise work? Prior to visiting Estonia, I set out to convert money using the startup’s app, sending almost $300 via TransferWise to convert it to euros. TransferWise uses a system not unlike the ones big financial institutions use to “cross-trade” securities, without incurring costs or commissions, by internally matching buyers and sellers. In this case the official midmarket price offers clarity—neither side is speculating—so it’s simply

a balancing process, as TransferWise’s computers simultaneously verify that both sides have the money ready to swap. Indeed, its matching system means funds rarely cross international borders. (The startup has these clear “peer-to-peer currency routes” operational for 30 country combinations.) And voilà, 90 minutes later 250 euros showed up in a European account. There was no spread, just a $3 fee. (The fee goes up, depending on the amount transferred; $100,000 would cost $710.) My $300 or so was a tiny sliver of the $750 million that TransferWise is now moving each month, with one million people already sending or receiving money in some 60 countries, leading to

about 500 different possible transactions. (Polish zloty to Bangladeshi taka, anyone?) Those small fees slowly add up: The company is now producing roughly $5 million in revenue a month versus about $1 million per month a year ago.

iN a couNtry Where summer means temperatures in the 60s and where cold, snowy winters offer maybe six hours of sunlight, TransferWise’s glass, concrete and steel space in Tallinn goes overboard with the startup-fun clichés. There is a Gymboree-vibe, including bright color-coded floors with lots of comfy seating areas, Razor Scooters for zipping around the office, a ping-pong table, a sauna and the Amazeballs room on the sixth floor—a ball pit with hundreds of clear plastic spheres reminiscent of bubbles. There’s also a unicorn room, decorated with stuffed My Little Pony unicorns, complete with a giant rainbow sculpted on the wall. Such tongue-in-cheekiness aside, the levity underscores a key point: TransferWise may play in the sandbox of the big banks, but the ultimate customer is the individual consumer. A bank wire might be 10 times more expensive than TransferWise, but it’s still a rounding error on big transactions, and it’s a proven method that’s generally safe. For now most banks, which use the troubled

The founders were nurTured in esTonia, where no sysTem is sacred or unchangeable and where Today nearly everyThing is digiTal and decenTralized.

forbes

Transferwise


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Bank of america $100.14 2 days

moneygram 51.43 same or next day

transferWise 11.18 1-4 days

Western Union 44.12 Up to 5 days

Worldremit1 18.81 1-3 days

xoom 55.61 2 daysExchangE ratEs as of 05/19/16. 1cost of transfEr to nEighboring Latvia; WorLdrEmit doEs not support Estonia.

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SWIFT network to move money, are ignoring TransferWise. Of the $150 trillion in currency-transfer volume annually, the consumer portion amounts to an estimated $3 trillion. Still, that’s a decent-sized market, with the revenue generated from it exceeding $45 billion. And with the global workforce increasingly employed across borders, it’s growing (230 million people worldwide now live in a different country from the one where they were born). TransferWise’s customers predominantly use the service to move money between their own bank accounts to cover obligations back home—a mortgage, a cellphone bill, a charitable gift. Others do what the TransferWise team calls “use a friend as an ATM”. When I converted dollars to euros for use in Estonia, for example, I used the app to send money to a local’s bank account, since I didn’t have a euro account.

The real competitors in the short term are Western Union and MoneyGram. Western Union is already doing $300 million in revenue from transfers through its website and app, and it’s bolstered mightily by its 600,000 physical stores and kiosks worldwide. To compete successfully, TransferWise must prevail on interface (and, indeed, I found it easier to send money via the startup than via Western Union’s app) and on price. Hinrikus and Käärmann are fanatical about the latter. Signs on the office walls declare “Charge as little as possible” or “Customer > team > ego”.

In an effort to scale, product teams look to charge 80% less than local banks. A new partnership in India, for example, lowered TransferWise’s costs on U.S.-to-India transfers—and Hinrikus used most of that savings to reduce fees on that route from 1.5% to 0.9%. “At the bank we would have high-fived for more profit,” says TransferWise operating chief Wade Stokes, a former executive with Swedbank. Longer term, TransferWise faces a more existential threat. Its

core peer-to-peer technology dates to the 1990s. Blockchain, the type of technology that powers Bitcoin, is far more sophisticated, with the potential to disrupt both business and personal transactions. Wedbush Securities analyst Gil Luria expects that, within a decade, 20% of international person-to-person money transfers will happen via blockchain, which employs a series of public ledgers. Blockchain would eliminate third-party intermediaries and should result in nearly instantaneous money transfers. To Luria, TransferWise’s application is “an intermediate step”. Ben Horowitz of Andreessen Horo-witz, TransferWise’s big backer, counters that its relatively small niche will keep it safe. “I’m of the opinion that human-to-human payments in the first world are not a big enough problem at this point to implement Bitcoin to solve it. We find blockchain to be a really, really important new technology that will have a gigantic set of applications, but I think the ones that are going to happen first are the ones you literally can’t do today.” Adds Hinrikus: “For moving money internationally, blockchain is, at this point, a theoretical discussion. I can point you to a very practical version of it, at a very practical firm called TransferWise, which is doing this every day.” True enough. But if it starts making real money, then the big banks will stop ignoring it and a host of other startups, including WorldRemit and Xoom (owned by PayPal). That means the Estonians need to step up fast. Hinrikus and Käärmann are striving for a future in which their technology can result in instant payment. They can complete a transfer between the U.K. and the euro zone in as little as 17 seconds. Moving money from the U.S. takes longer because the Dodd-Frank Act requires that customers be given 30 minutes to cancel. Still, the founders don’t seem concerned. The earlier Estonian darling Skype carved out a healthy 30% of the international voice-call market without posing an existential threat to big telecoms like Verizon and AT&T. Says Hinrikus, “What we are doing is not the most exciting thing, moving money from A to B. But we have been able to do this in a way that brings our customers joy in a place they are not expecting it.” F

SPOTLIGHTPROMOTIONS

Time To Set Your Pace

History Comes Alive

As the leading brand ofthe Swiss watch industry,Rolex continues its pursuitof perfection in the craftof watchmaking by gettinginvolved in one of theworld’s finest sportingactivities — equestrianism.Rolex has always beena trusted apparel formen since it has proventhen and again that theirwristwatches can surviveand function in the mostextreme conditions inthe air, at sea, or on the

tallest peaks. Today, it’sonly reasonable that Rolexparticipates in a sport ofprestige, and supporting itsathletes.

Witness the world’s finestequestrian events withRolex. Soon to come are theStephex Masters at Stephex,Belgium on August 31 toSeptember 4, along with theLand Rover Burghley HorseTrials in the United Kingdomfrom September 1-4.

One of the most authenticways to preserve the historyand heritage of the Filipinopeople is through theirculture of hospitality andtheir artistic heirlooms.This is exactly what theManila Hotel has meant forit country, and to this day,the Manila continues to beManila’s symbol of historyand elegance.

For its 104th Anniversary,history comes alive as theylaunch their QR Tour andPop-up Museum for the

month of July. This tour willinvolve QR modules locatedaround the hotel, bothhistoric and new, which willfeature photos and videosfrom the hotel’s library andarchives. Manila Hotel isalso treating their guests topremium room services fromJuly 4 to July 31, 2016.

For inquiries and reservations,patrons can call our ReservationsTeam at 527-0011 local 1175 to 1178or email [email protected].

What MakesA Watch TickAudemars Piguet releases a newwristwatch that ensures world-classre�nement with its superior acousticintensity, and a supremely clear andsustained tone. Their Royal Oak ConceptSupersonnerie watch went throughrigorous development stages: PureHarmony, Rare Quality, and Brighter Tone,all of which helped produce the cleanertone and richer sound you’ll hear from theRoyal Oak watch.

Not only is this a watch likened to a musicalinstrument, but it’s also an e�cient apparelwith standard concept watch features suchas its glareproof sapphire crystal and water-resistant quality. It’s the ideal accessory togive a man that edge and sophistication.

Forbes Spotlight August 2016.indd 1 7/19/16 2:34 PM

Forbes Life // August 2016

PROFILEliMiTed ediTion 72

PERQUISITESsky’s The liMiT 78

DININGraising The sTeaks 76

Niccolo Jose chisels one-of-a-kind art that

combines function.By Paul JohN Caña /// PhotograPhs By Kyle shih

ll art is quite useless,” proclaimed Oscar Wilde, but many artists over the years have labored to prove him wrong.

Art and function are not mutually exclusive and it is a concept that lies at the heart of Niccolo Jose’s works. One might wonder what practical purpose an enormous rocking chair might serve other than as a rest stop for a weary giant, but most other pieces scattered around the lobby of the Green Canyon Eco Art Resort in Clark, Pampanga won’t look out of place in a fine home. There are rocking and stationary chairs, dining and coffee tables, benches and shelves, plus an assortment of wall pieces, all made of gleaming wood.

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Limited Edition

FORBES LIFEp R O F I L E



The resort, which opened in 2014, doubles as a gallery for Jose’s artistry. All the furniture in the 60-room hideaway tucked in the hills on the outskirts of busy Angeles were handcrafted by Jose and his team of artisans. No two pieces are alike and it’s not unheard of that these are moved around not just to be cleaned or repaired, but to reflect the owners’ changing sensibilities and tastes, or to better suit the room and match the pieces with the personalities and temperaments of the occupants. It was the Green Canyon Resort project that kickstarted Jose’s career as a sculptor/furniture maker. The 29-year-old says he was not artistic as a child, although his father’s fascination with construction and collecting different types of wood sort of seeped into his consciousness. “My toys when I was young were a hammer and chisels,” he says. “I played around with my dad’s wood collection, trying to make stuff. He’s always been a handyman, so his gifts to me were things like a Swiss knife or a handsaw.” After high school Jose went to the Lewis & Clark College in Portland, Oregon where he majored in Environmental Science and Studio Art, in preparation for his parents’ plan to turn a 29-hectare property in Pampanga into something productive and useful, or at least, something they could enjoy. In college, Jose worked as a stage carpenter, which excited his father. “He bought me things like a reciprocating saw, a jigsaw and a cordless drill. Pretty soon I had my own collection of power tools.” Jose returned home after graduating in 2010 and at his mother’s prodding, started making furniture out of his father’s wood

collection, which by then had grown so much it occupied several warehouses at the family home in Batangas. His first customer was his mother, for whom he made a bed frame, a nightstand and a TV rack, among many others. Did she pay him? “Of course not,” Jose laughs. “She paid me with even more tools.” Although he dabbled in painting, Jose says he decided to focus on sculpture and making furniture partly to prove to his parents that it is a viable career option (there is money to be made in art) and because there aren’t a lot of people working in this medium. Although there are carvers and sculptors in Paete, Laguna and there is a thriving wood furniture industry in Pampanga, most of the woodworking business in the country has shifted to the Visayas, specifically Cebu. And apart from artisans like Vito Selma, Ito Kish and Kenneth Cobonpue, who are household names in furniture design, the majority churns out mass-produced items for export. “I’m moving away from making multiple or mass-produced pieces,” Jose says. “Almost every piece is one- or two-of-a-kind, at most. If it’s a dining table, I limit those to maybe eight pieces. It’s hard because I don’t paint wood. Everything is in its natural color. So even if you make 10 of the same chairs, it’s very rare that you get them all to look the same.” One other consideration is the wood source. Jose says he works exclusively from the collection that his father had built over the years, many of them old and rare and sourced from antique homes that were torn down or pieces donated or acquired from friends or acquaintances. Commissions from clients depend on what wood is available. “You really have to work with the material,” he says. This explains the exquisite craftsmanship and attention to detail in each piece. A series of chairs, for instance, follow the natural contours of the back and the design likens the spinal cord. Jose says this was inspired by the body sweat marks on a yoga mat. All the pieces undergo a painstaking sanding process, designed to ensure a texture so smooth the hands glide easily on the surface of the wood. Depending on the piece, a table would cost from Php200,000 to Php500,000. Chairs are from Php60,000 to Php100,000, while a rocking chair ranges from Php100,000 to Php200,000. One particular rocking chair carries a price tag of Php750,000 because it is made from a rare piece of wood, says Jose. The prices are at par with premium furniture from big-name Italian brands.

Above: Some of Niccolo JoSe’S orgANic ArtworkS while he wAS A StudeNt At lewiS & clArk college iN oregoN. right middle ANd bottom: moSt of JoSe’S pieceS Are oNe- or two-of-A-kiNd At moSt.

The difference is his furniture pieces appreciate every year because just like gold, the value of wood increases. Buyers can then consider their purchases as an investment. “They’re meant to be used by the next generation,” he says. “I’ve had clients who would buy in bulk, 10 pieces or more, and they would sell them the next year or give them as gifts. I tell them that unlike buying a car, these chairs will last longer.”



With one-of- a-kind artworks, it’s specifically made for one person in my head. I can’t tell who that person is, but I have an image of this person.”– Niccolo Jose

Usually they rent it for a party or an event. And when they don’t need it anymore, they return it and pay another amount and they get another piece.” In addition to the usual pieces like beds, tables and chairs, the artist has done kitchen countertops, windows, door jambs and door handles. He has yet to say no to a project as he says he is always enticed by the idea of doing something for the first time. “It’s always nice to tell a person, for example, this is my first door, or this is my first side table and he gets to have it.” Jose used to have a showroom and boutique in Makati, but closed it down recently and transferred his entire business to Pampanga. The workshop, located off the main resort building and next to a stream, serves as an activity center for guests staying at Green Canyon. Guests can try their hand at simple crafts or just watch Jose and his team at work. The team has been kept busy with an increasing number of commissions from clients all over the world. Jose says he has not spent on advertising and relies purely on word of mouth. Last November, his pieces were featured at the International Media Center during the Asia-Pacific Economic Cooperation leaders’ summit in Manila. It was good exposure for someone who has only recently made a name for himself as an artist and furniture maker. He will also have an exhibit in October. “Art is anything that you add a story to,” he says, unknowingly issuing a rejoinder to Wilde’s ideas about the nature of art. “When you make a piece, you think that maybe one person in the world might fall in love with it. Not everyone’s going to like it, but you only need to convince one person who would be willing to buy it. And that’s the thing with one-of-a-kind artworks or one-of-a-kind furniture pieces: it’s specifically made for one person in my head. I can’t tell who that person is, but I have an image of this person. They sit on that chair, and they say it’s perfect for them, and I tell them, okay, maybe that thing is made for you.” F Jose offers after-sales service, for, say,

when a chair gets scratched by a pet cat or a table is unfortunately stained by rubbing alcohol. Clients can have the piece transported to Jose’s workshop in Green Canyon, where he and his team can work their magic and return the piece good as new. Those who can’t afford to own a Niccolo Jose original can rent one. Yes, Jose says he’s taken a page out of some artists who lend their work to clients who keep them for a specific period. “If the chair is worth, say, Php100,000, they pay a percentage of that, maybe Php10,000 for one month.

Niccolo JoSe workS excluSively from the wood collectioN thAt hiS fAther hAd built over the yeArS. All pieceS uNdergo A pAiNStAkiNg SANdiNg proceSS, deSigNed to eNSure A texture So Smooth the hANdS glide eASily oN the wood.


Dining

FORBES LiFE

E very meat lover knows that when the craving hits, nothing but a tender, juicy steak done to your liking and with just the

right sides, will do. Though a good steak isn’t terribly hard to find in Manila, a truly fantastic one worth coming back to again and again might be a bit more elusive. Luckily, three of them are within walking distance of each other in the leisure and entertainment hub of Resorts World Manila. F

Raising the SteaksSteak aficionados of every persuasion can find something to love at three distinct restaurants at Resorts World Manila. By GaBy IGnacIo PhotoGraPhy By huB Pacheco (cru) and JoJo GlorIa (WolfGanG’s, ImPressIons)

though the steaks—and the massive grill—are the highlights

at cru, the menu also offers an excellent selection of classic

dishes with a twist.

CRU SteakhouseTo take the best ingredients and make them shine is the driving force behind CRU Steakhouse at the Marriott Hotel Manila. As one of the Marriott chain’s signature brands, CRU is held to a global standard of excellence. Begin a meal with one of the restaurant’s appetizers or salads. An easy choice is foie gras (Php940), served seared atop buttery brioche and juxtaposed against date orange compote and balsamic lime reduction. Or choose the signature CRU crab cakes (Php690) accompanied by celeriac slaw and Cajun remoulade. Those who prefer seafood will be pleased to find a new take on the throwback dish shrimp cocktail (Php680), made modern with the substitution of cucumber mango salsa and bourbon cream sauce in lieu of the traditional sour-spicy dip. CRU’s salads are good enough to turn the vegetable-averse into converts. The baby spinach salad (Php560) brings together greens, orange wedges, blue cheese, a walnut parmesan crisp and an exceedingly balanced

Dijon vinaigrette. The menu’s dark horse may be the beetroot salad (Php550): peppery rocket, smoky goat cheese and maple syrup-drenched beetroot drizzled with a honey lemon vinaigrette. Though CRU offers meat from across the globe, devoted fans order the US Certified Angus prime rib steak (Php5,900/900g). It is served with any five of the steakhouse’s signature sides and two of its sauces. We recommend the black truffle risotto and creamed spinach as must-haves. End the evening on a sweet note with the award-winning banana crème brûlée (Php400), a decadent, silky nod to Philippine flavors.

C R U S te a k h o u se i s l o ca te d a t t h e G / F o f t h e M a n i l a M a r r i o t t H o te l . I t i s o p e n S u n d ay to T h u rsd ay f ro m 6 p m to 1 0 : 3 0 p m a n d Fr i d ay a n d S a t u rd ay f ro m 6 p m to 1 1 : 3 0 p m . Fo r re se r va t i o n s o r m o re i n fo r m a t i o n , c o n ta c t ( + 6 3 2 ) 9 8 8 9 9 9 0 l o c . 8 1 0 9 .

Impressions serves continental cuisine imbued with a creative modern touch by

award-winning chef cyrile soenen.

Wolfgang’s adheres to steakhouse tradition with its expertly aged steaks in a setting designed to offer guests an authentic experience.

As diners step into the country’s first Wolfgang’s Steakhouse and take in the beautiful mosaic ceilings, warm lighting and elegant dark wood details, they are all but transported to the original Park Avenue location. This is exactly what the team behind the globally recognized brand had set out to do and after months of rigorous designing and building, the steakhouse finally opened its doors, ready to offer the signature experience that is the brainchild of industry veteran and the restaurant’s founder and namesake, Wolfgang Zweiner. Though much detail has been put into the restaurant’s interiors, it’s the steak that diners go for and with good reason. Dry-aged steak, long considered the ultimate among dedicated fans, is finally getting the recognition and attention it deserves and Wolfgang’s addresses the growing demand with no frills. All USDA Prime and aged on site for roughly 28 days, each cut develops a different flavor profile. Everyone, from the most seasoned diner to the dry-aging novice, is bound to find something to please his palate. Start with the signature Wolfgang’s salad (Php438), a beautiful medley of lightly dressed chopped tomatoes, onions, bell peppers and hefty bacon bits served in a lettuce cup with a side of thickly sliced sizzling Canadian bacon (Php208/slice).

Much has been said about Impressions at the Maxims Hotel since it opened in 2012 and all the rave reviews are well-deserved. Helmed by executive chef and Maîtres Cuisiniers de France awardee Cyrille Soenen, the restaurant boasts of an authentic French culinary experience from creative amuse-bouches to internationally acclaimed desserts. Appetites are whetted by the U.S. beef bulalo (Php550), the chef’s deconstructed take on the Filipino original. Deliciously clear beef consommé geleé and a crunchy, buttery brioche soldier top silky broth panna cotta, whose richness play off shredded beef and chunks of sautéed bone marrow. There is also a currently off-menu seafood course of pan-seared scallops atop jellified savory lobster bisque. Surrounded by seafood foam, dotted with edamame mash, caviar and an araignee-inspired squid ink garnish, it is an elegant presentation of oceanic bounty. Off-the-grill is the chef’s favorite steak: a 900-gram cote du boeuf (Php4,388), whose appearance on the menu is made even more exciting with the recent lifting of the ban on meat imported from the European Union. In lieu of the usual USDA Angus, French beef is offered to those looking for flavor that goes beyond the typical. Prepared in the traditional French method, the cote du boeuf is sliced thick, succulent, rich and when paired with the ratatouille and sautéed seasonal mushrooms a la bordelaise, it’s a beautiful study in classic, hearty, timeless gastronomy. For dessert, there is minestrone of compressed fruit with strawberry mint broth and yogurt créme glace (Php460), a refreshing alternative to traditional desserts. Cap off the meal with a plate of madeleines, financiers and truffles, perfect with a cup of coffee.

I m p re ss i o n s i s l o ca te d a t t h e 3/ F o f t h e M a x i m s H o te l . I t i s o p e n M o n d ay to S a t u rd ay f ro m 6 p m to 12 a m a n d S u n d ay f ro m 1 1 a m to 3 p m a n d 6 p m to 1 0 p m . Fo r re se r va t i o n s o r m o re i n fo r m a t i o n , c o n ta c t ( + 6 3 ( 2 ) 9 0 8 8 8 8 3 ) .

Wolfgang’s

Impressions

The star of the show is the porterhouse (Php4,498/1kg; 6,998/1.5kg; 8,998/2kg) — simply seasoned, cooked to order in a blazingly hot broiler and served sizzling. This is where the dry aging process shines, with the subtle, leaner tenderloin contrasting against a bolder, more succulent strip steak. All of the sides are meant to complement the meat, but the German potatoes (Php258); onion rings (Php228); dairy-free creamed spinach (Php398); and the Philippine-exclusive steak rice (Php228) are crowd favorites. Leave room for dessert, because the Wolfgang’s dessert sampler (Php1,200) is worth it: hefty portions of authentic New York-style cheesecake, rich chocolate mousse, tart Key lime pie, decadent pecan pie, flaky apple strudel and fresh, seasonal fruit are all served with a side of light, airy schlag or German whipped cream.

Wo l fg a n g ’s S te a k h o u se i s l o ca te d a t t h e 2 / F, N ew p o r t M a l l . I t i s o p e n M o n d ay to Fr i d ay f ro m 12 p m to 12 a m a n d S a t u rd ay a n d S u n d ay f ro m 1 0 a m to 12 a m . Fo r re se r va t i o n s o r m o re i n fo r m a t i o n , c o n ta c t ( + 6 3 9 9 5 6 1 0 2 3 6 1 ) o r ( + 6 3 9 2 0 8 2 1 9 247 ) .


Perquisites

FOrBes LiFe


Philjets’s new Airbus H130 (above) which passengers can take to enjoy a bird’s eye view of Taal Lake and Tagaytay.

Few Swiss watches have achieved iconic status the way Jaeger-LeCoultre’s Reverso has. First introduced in 1931, the classic timepiece with a swiveling case that reveals a second face celebrates its 85th anniversary this year with a tribute collection that simultaneously evolves and respects its unique feature. The faces are inspired by the original models with a day/night indicator and a discreet trigger system for a second time zone integrated at six o’clock. J a e g e r- L e C o u l t re i s l o ca te d a t G re e n b e l t 5 a n d B o n i fa c i o H i g h S t re e t C e n t ra l .

Tribute To A Classic

Sky’s The LimitTraffic is the enemy. You could be sitting in a Php20-million sports car on a weekend lark to escape the city, but with the way things are going in most urban centers anywhere in the country, you’d likely be stewing in a mile-long gridlock, exchanging hopeless, exasperated looks with the other commuters in their regular sedans or public transport. It’s the scenario that local aviation company Philjets invokes when they ask, “Why drive, when you can fly?” The company, a subsidiary of Starline Global Industries, operates an air charter service that flies out of the Ninoy Aquino International Airport to any point in the country. Philjets offers flights to tourist stops like Mount Pinatubo, Corregidor Island, or farther out like the Banaue Rice Terraces, Palawan or Boracay. There’s an option for flybys out to Taal Lake in Batangas, then lunch in the swanky Antonio’s in Tagaytay, before zipping back to Manila, without the hassles of going through punishing traffic. They also offer chopper rides for other journeys to get from point A to B. Late last year, Philjets partnered with local ecommerce platform Grab for GrabHeli, where customers booked flights on

their choppers just like they would a car or taxi. The service has since ended but the company says it will explore a long-term arrangement in the future. It also offered discounted flights to regular customers through local deals website CashCashPinoy. These efforts, the company says, are aimed at making helicopter travel more accessible to the general public. VIP and corporate clients, however, make up the bulk of the company’s customer base. Philjets was especially busy during the last election season, flying candidates and officials from one campaign stop to the next. Mining company executives are also regular passengers, with frequent flights for aerial surveys. The three-year-old company’s fleet is composed of five helicopters and one fixed wing. Their latest acquisition is an Airbus H130, which the aircraft manufacturer says is one of the popular models in Asia. “This additional H130 will help us achieve our expansion plans in a sustainable manner,” says Philjets CEO Thierry Tea.

Fo r m o re i n fo r m a t i o n , v i s i t < p h i l j e t s . c o m >

Inspired by the animal known for its ability to hypnotize and seduce its prey, the Serpenti is one of Bulgari’s most recognizable collections. This year, the luxury Italian jewelry brand re-imagines Serpenti by focusing on the eyes. Using amethyst, emerald and pave diamonds, the collection highlights the penetrating stare of the snake in pendants, earrings, bracelets and rings. B u l g a r i i s l o c a te d a t t h e g ro u n d l e ve l o f G re e n b e l t 4 .

Serpent’s Stare

SPOTLIGHTPROMOTIONS

Porsche seals an 18thvictory at Le Mans

Place Of Opportunity

A Timeless Gift

Only on its third year asa participant of Le Mansendurance race, Porsche hasdominated the race twicenow with the 919 Hybrid.An astounding 900hpis generated by the 919Hybrid’s system anchoredon a deceptively compactturbocharged 2.0-liter V4and an electric motor.

Winning its 18th victoryat Le Mans truly namesPorsche as the leadingbrand of racecars. Le Mans

is known to be the mostprestigious of all races,demanding excellence inthe performance of vehicles,drivers, crew, and has beena part of the FIA WorldEndurance Championshipsince 2012. Recently,Porsche Center Philippineslive streamed the race inSM Megamall Fashion Hallwhere Filipinos were ableto see the 919 Hybrid Carup close, along with otherPorsche models.

Business meetings andgatherings always requirea proper venue where theneeds of entrepreneurs andbusinessmen are met withexcellent service. This can allbe found in the New WorldMakati Hotel which givesall its visitors the modernfunction venues they needto conduct smooth andseamless business meetings.

To enjoy a ten percentrebate or credit on meetingsscheduled from September

to December 2016, clientsmay book now until August31. Packages will be offeredwith options to avail offull-day meetings or half-day meetings. Enjoy NewWorld’s function roomswith delicious buffets anddining that’s sure to be anadded factor to successfuldiscussions.

For more information, call+6328116888 or email catering

[email protected].

A veteran in making sportswatches for over 150 years,TAG Heuer presents anotherinnovation through their TAGHEUER Connected Watch,which athletes and sportsenthusiasts alike can nowenjoy wearing to outdooractivities. As the inventorof the most accuratechronographs, it comesas no surprise that TAGHeuer createsanotheruniquewristwatch,which featuresa simpleprinciple:

The dial andthe handsremain, whilethe mostpertinentinformation

from partner applications iselegantly displayed insidethe three counters on thechronograph dial at 12, 6and 9 o’clock, completelyintegrated into the watch’saesthetic environment. Getconnected with this timelesswatch that only deserves tobe part of a man’s apparel.

For more information, visitwww.tagheuerconnected.com.

UnderwaterEssentialKeeping its strong foothold inHollywood as the pioneer ofthe iconic submersible watch,Hamilton relaunches theirKhaki Navy Frogman watch,a tribute to the �rst versioncreated for the 1950s movie,The Frogmen. This 2016 revivalfeatures a sturdy titaniumcase, water resistance to 1’000meters, and a helium valve thatequals internal and externalpressures in diving conditions.Originally made for the USNaval “frogmen,” now thiswatch meets the high demandsof all divers who want to keep alevel of style under water.For more information, contactWATCHWORKS, INC. [email protected].

Forbes Spotlight August 2016 - B.indd 1 7/19/16 6:49 PM


thoughts

“The vote, I thought, means nothing to women. We should be armed.” —Edna O’BriEn

“The man said, ‘The woman you puT here wiTh me—she gave me some fruiT from The Tree, and i aTe iT.’ ” —GEnEsis 3:12

“So here I stand, one girl among many. I speak not for myself, but so those without a voice can be heard.” —Malala YOusafzai

SOURCES: CLASSIC FILM GUIDE, BY SIMON ROSE; THE TIMES BOOK OF QUOTATIONS; MISCELLANEOUS POEMS, BY THOMAS MOORE; REFLECTIONS OF A BACHELOR GIRL, BY HELEN ROWLAND; OUTRAGEOUS ACTS AND EVERYDAY REBELLIONS, BY GLORIA STEINEM; THE FEMALE EUNUCH, BY GERMAINE GREER; A VINDICATION OF THE RIGHTS OF WOMAN, BY MARY WOLLSTONECRAFT.

On Women and Power

FINAL THOUGHT “Women now figure so prominently in business and industrial life that steps should be taken to bring the order of things into harmony therewith.” —B.C. fOrBEs

“You turn if you want to. The lady’s not for turning.” —MarGarEt thatChEr

“we hold These TruThs To be self-evidenT, ThaT all men and women are creaTed equal.” —ElizaBEth CadY stantOn

“I do not wish [women] to have power over men, but over themselves.” —MarY WOllstOnECraft

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“I’m not a member of the weaker sex.” —laurEn BaCall

“Women are the only exploited group in history to have been idealized into powerlessness.”

—EriCa JOnG

“I want to walk through life instead of being dragged through it.” —alanis MOrissEttE

“If women understand by emancipation the adoption of the masculine role then we are lost indeed.” —GErMainE GrEEr

“DISguISe our bonDage aS We WIll, ’TIS Woman, Woman, ruleS uS STIll.” —thOMas MOOrE

“iT Takes a woman 20 years To make a man of her son, and anoTher woman 20 minuTes To make a fool of him.” —hElEn rOWland

“one day, an army of gray-haired women may quietly take over the earth.” —GlOria stEinEM

AmericA's richest self-mAde Women

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