Fernando Zobel de Ayala, MAP Management Man of the Year 2018
In photo (L-R):
MVP Group of Companies Managing Director - Media Bureau and Philex Mining Corp. SVP for Public and Regulatory Affairs, Atty. Michael Toledo, MAP MMY Judging Committee Chair, Aurelio Montinola, AC President & COO and MAP Management Man of the Year 2018, Fernando Zobel de Ayala, MAP President, Ramoncito Fernandez and MAP MMY Search Committee Chair, Marife Zamora.
Harnessing the Potentials of Today towards a Future-Ready Philippines
To the Board of Governors of the Management Association of the Philippines,
Fellow members of MAP,
Ladies and gentlemen,
Good afternoon. Let me first thank all those involved in making this event and recognition possible. Thank you to the MAP Board of Governors led by Mon Fernandez, the MAP Management Man of the Year Judging and Search Committees led by Gigi Montinola, Ed Chua, Marife Zamora, and Perry Pe.
I also extend a very special thanks to the individuals who have so kindly nominated me for this honor: Amb. Albert Del Rosario, Lilia De Lima, Tony Aquino, and Jess Estanislao, as well as the many others behind the scenes who were involved in the nomination process. Let me also take this opportunity to congratulate the incoming Board of Governors, and your incoming President, Riza Mantaring.
Allow me to also acknowledge representatives from the senior management of Ayala present today. My brother Jaime and I often discuss how privileged we are to be able to work with these exceptional individuals. They are passionate about our country and share our desire to bring the Philippines to the highest stage of development within the community of nations.
I would also like to express my warmest appreciation to the many friends, partners, and customers of the Ayala group of companies. Our group’s stability and success would not have been possible without your continued trust, and we are very thankful for your faith in us throughout the years. Let me also acknowledge a good friend of our family, Mr. Fred Borromeo, who joined MAP in 1954, and at 92 years old is certainly the wisest MAP member in the room. Last but certainly not the least, I would like to thank the members of my family present today—my parents, my wife Kit and siblings, spouses and friends. We owe so much to my father, who took a risk and entrusted the leadership of Ayala to Jaime and I at a fairly young age. He had already set high standards of professionalism in the company and a deep sense of commitment to the developmental goals of the country. Jaime and I had a great platform to build from.
I am deeply honored to receive this recognition, and greatly humbled to join the company of such an illustrious group of individuals—many of whom I have admired and respected, and have had many fond memories with as friends, business partners, and mentors. We are also deeply honored as a family that I am now the third member of the family, after my father and brother, to be recognized for this award.
MAP’s overarching theme for 2018 is “Competing in the Age of Disruption.” As I was reflecting on the many achievements of our esteemed previous awardees, as well as MAP’s enduring work in advancing the management profession in the country,
I realize that this theme remains relevant and resonant, regardless of the period. In every timeframe in our history, we have had to deal with disruptions on various fronts. These challenge us to continuously find ways to put our organizations—and our country through our collective contributions—on a clear path to shared prosperity.
We live in a world that is very volatile, uncertain, complex, and ambiguous. But while current developments appear bleak, today’s dynamic times have likewise given birth to impressive advances and amazing possibilities. We live in an era where technological innovation, new business models, and new ways of thinking can be used to benefit a larger number of our population.
This is the notion that I would like to put forward today—that the ingredients to bring the country to the next level are already within our grasp. MAP and our individual organizations carry the challenge and responsibility to properly harness the potentials of today and use them to create a progressive, equitable, and Future-Ready Philippines.
Our journey towards future-readiness requires a strong platform from where we can launch ourselves. I believe that we have already been building this over the last few years. I refer to our macroeconomic foundations, and our highly talented and committed human capital.
On the former, I think we would all agree that we have had a unique period of continued economic growth that has transformed our country. This growth has largely been consumer-led, supported by strong overseas remittances, the growing BPO and services sector, and complemented by increasing investments. I would also like to emphasize the enormous role that local private capital from many of the companies represented here today has played in the growth of our economy.
We also see many positive developments with our people, whose median age is 24 and where a third of the total population are millennials. We are also seeing a continuing influx of young and talented Filipinos who have studied and trained overseas. These young Filipino professionals not only possess excellent technical skills, but are also technologically adept, and more importantly, have the ideals and innate passion to contribute to national development. They are also prepared to take on significant managerial responsibilities at a much younger age than we may have been used to in the past.
The challenge we all now face as a business community is to determine where we want our country to be in the next 10, 20 and 30 years. There are many areas where the private sector is focusing its efforts. From our point of view in Ayala, we have decided that four areas hold tremendous potential to make a lasting and meaningful impact as we build a Future-Ready Philippines. These sectors are: inclusive finance, education, healthcare, and sustainable tourism.
Let me start with financial inclusion. It is unacceptable that only 23% of Filipinos are part of the banking system. The rest are exposed to unauthorized lenders charging exorbitant rates and face the risks of the unofficial economy.
We are doing our part through banking channels and mobile solutions. BPI formed BanKo a few years ago to serve micro, small, and medium enterprises with their lending requirements. We further recognize that mobile technology has likewise provided a unique opportunity to serve the financial needs of a broad segment of our people. Through one’s mobile device, there are now several solutions available for payments and mobile wallets, digital lending, plus wealth management and credit analytics. Our partnership with Ant Financial, a subsidiary of Alibaba, has brought forth an enormous amount of knowledge in the fintech and mobile space, given the cutting edge technology that China has been deploying for their population. While the Philippines is still far from having fintech as ubiquitous as it is in China, together with Ant Financial, we are excited to further develop our fintech industry to reach our financially underserved countrymen. Ensuring the success of our financial inclusion efforts through mobile technology, however, requires massive investments in telecom infrastructure. The telcos have been spending record amounts to keep up with the exponential demand for more data and faster connections.
Let me now shift to education. McKinsey estimates that up to 15% of the global labor force, or 375 million workers, will have to switch jobs by 2030. As certain professions are rendered irrelevant, new opportunities will emerge. However, this will require the right type of training in 21st Century skills and values.
On a more basic level, we must immediately tackle the serious condition we face in many of our schools, wherein 3.6 million Filipino youths find themselves out-of-school. Even more stunning are the findings of the Philippine National Employability Report, published in 2017 by employability assessment firm, Aspiring Minds. From their survey of 60,000 fresh graduates from 80 tertiary level institutions, they found that 65% of Filipino graduates lacked the appropriate skills and were thus unemployable in their sector of choice.
Our educational system is in serious need of help and it is very encouraging that the private sector has been contributing in a significant way. In our own case, our solutions revolve around some of the key problems that we have had to address through our schools. These include a huge reduction in dropout rates; increasing the employability of our students; and producing competent teachers to sustain education reform. At the basic education level, through CENTEX and APEC Schools, we have changed the way students are taught with a curriculum that focuses on practical skills and innovative teaching methods. Through close coordination with the needs of industry, we were also able to design programs where recent graduates are employed within 90 days and receive starting salaries that are significantly higher than the average. At the teacher level, we are delighted that through our partnership with the National Teachers College, we now havean opportunity to equip our teachers with the necessary skills to drastically improve the quality of instruction in the country.
Aside from our students, we also need to give the workforce an opportunity to upskill and retrain themselves. A number of online digital learning solutions are readily accessible with content from the world’s top universities offering customized training programs, suited to the individual’s needs, and at a very modest cost. We have recently launched Ayala University, a digital learning platform that brings together carefully selected online global content from the best schools to upskill our employees at an exponential scale.
The third sector I want to highlight is healthcare. I strongly believe that the next critical need for the country is a ramp up in affordable, quality healthcare. How can we possibly have a productive workforce and a higher quality of life for our people without proper healthcare? Our research is staggering: 43% of low to middle income Filipinos have not seen a doctor in more than a year, with 6 out of 10 Filipinos dying without even seeing a doctor. The Economist ranked the Philippines 78th out of 80 countries in an index that measures the quality and availability of the country’s palliative care environment, which includes hospices, nursing homes, and professionals.
The Filipino patient deserves better—from birth to end-of-life. At Ayala, we strongly believe that healthcare is a fundamental right for all. This principle has shaped our approach to our healthcare business. Our focus has been to find disruptive models and technologies that make healthcare products and services more accessible and affordable to a broader segment of the population. A critical part of this offering is a strong emphasis on preventive healthcare, which we believe will significantly impact health outcomes and our stakeholders’ disposable incomes. This is essential as the World Health Organization reports that lifestyle-related diseases, such as diabetes and hypertension, account for as much as 70% of deaths worldwide—deaths that are easily preventable if there is a focus on proactive and preventive medicine. Towards this end, we continue to grow our FamilyDoc clinical network to expand the reach of primary care to more Filipinos. Meanwhile, through our investment in Generika drugstore, we are expanding the reach of generic medicines to help provide affordable options for preventive healthcare. We view this as a key component to democratize healthcare and promote disease prevention, as our research shows that generic medicines can be cheaper by up to 85% compared to their branded equivalents. The elements to substantially improve the state of our healthcare are within our grasp. We have excellent healthcare professionals, a plethora of health technologies are available, and favorable regulation, through the Universal Healthcare Act, exist. Let us not let this opportunity pass us by. Let us boost our efforts at giving our people the healthcare that they deserve. Lastly, let me focus on tourism. I believe it is time to dramatically focus on tourism as an industry that can have an enormous impact to our country. To illustrate the magnitude of its effects, consider Thailand that attracted close to 35 million visitors last year. According to the World Travel and TourismCouncil, tourism directly contributed close to 10% to Thai GDP in 2017.
I feel that we have yet to adequately embrace tourism as a valuable component of our development. While tourism continues to contribute much to the economy, there remains significant value to be unlocked. I say this because while we invest only $1.9 billion for tourism—which is close to last in ASEAN and below the global average—our numbers are steadily increasing. For instance, international arrivals grew from 2.8 million in 2006 to a record 6.6 million in 2017. Tourism’s direct economic impact has also more than doubled over the last 10 years, accounting for 8.7% of GDP and 2.3 million jobs. The World Travel and Tourism Council forecasts that by 2028, tourism could directly account for P2.5 trillion, close to 10% of GDP, and support 3.2 million jobs. If we are to make a quantum leap in tourism, we need to involve many more partners, have a far more holistic and visitor-centric masterplan, and be more aggressive and strategic in deploying capital. I believe that this is where the Philippines can differentiate itself from our neighbors. Too many Asian countries have developed their tourism sectors too quickly, and in the process, have severely damaged their ecosystems. It is wonderful to hear that the tourism agenda currently being discussed under Secretary Berna Romulo Puyat is one that strongly includes environmental protection and sustainability. To support this drive, we must create the appropriate governance structures to ensure that there is proper planning and project execution inour best tourism sites. This includes ensuring a seamless and
exceptional visitor experience—from arrival at the airport, to transportation to hotels, and to the overall experience at the destination. Let me also emphasize the need for strong visitor impact management—that is that we properly manage what practitioners call as carrying capacity and limits of acceptable change or put simply, the maximum number of visitors and degree of impact that any single destination can take and withstand.
From our point of view, we have moved into substantial tracts of land and are looking for more in the hope that we can create several sustainable tourism environments. In all our tourism developments, we want to make sure that the employment benefits to the local communities are maximized, environmental impact is properly managed, and that these destinations can serve as a showcase for the rest of the world on how tourism’s potentials can and should be harnessed. The multiplier effects of tourism and the impact that it can have on communities—especially the poor—is enormous. As the Ayala group enters its 185th year in 2019, we are more committed than ever, along with the rest of the business community, to continue building our growth platforms for our country, and to ensure that Filipinos have the skills necessary to take advantage of these opportunities.
It is interesting that as far back as 1962, John F. Kennedy was already anticipating the same challenge and responsibility that the world continues to face today. He stated in a speech and I quote, “if men have the talent to invent new machines that put men out of work, then they have the talent to put those men back to work.” Generating new jobs for the next generation and providing opportunities for value creation will be our utmost priority. This, however, requires a comprehensive response from the private sector and the full support of government. Like many of you, I am a great believer in the critical role that the business community plays in nation-building. Today’s disrupted times, while alarming on many instances gives us access to several resources: capital is accessible for new ventures; new technologies and business models are available to be harnessed; and there is a wealth of talent among our people waiting to be unleashed.
Through MAP and the other business organizations in the country, the private sector can accelerate efforts to build a progressive, inclusive, dynamic, and Future-Ready Philippines that we can all be proud of. With a unified public and private sector; an appropriate plan designed for the medium and long term; and a consistent vision that will keep us on track through political cycles, we can certainly direct our country on an irreversible path towards equitable and sustainable progress.
Once again, good afternoon, and thank you very much for this great honor.