MANAGEMENT ASSOCIATION OF THE

AgriBusiness and Countryside Development Foundation  Office: 22nd Floor Multinational Bancorporation Centre, 6805 Ayala Avenue, City 1600   Tel: (02) 577 7678 or 817-1511  Fax: 811-1024 Cell No: 09177777172  Email: [email protected]  Website: www.map-abcdf.com.ph

21 February 2017 7:30 to 9:00 AM  Missionaries of the Child Jesus, Estrella St. cor. Amapola St., Guadalupe Viejo, Makati City

7th Weekly Forum of 2017 Technopreneurship that Inspires By Mr. Dado Banatao, Filipino Bill Gates

Preliminaries 1. The Chairman called the meeting to order before 7:30am. He explained that we are starting earlier because there are more attendees who registered so we will have sufficienbnt time for the go around. 2. The Philippine and Finland flags and national anthems were honored. 3. He welcomed all to the 7th weekly forum for year 2017. This foundation advocates for technology transfer as a means of alleviating poverty through non violent means. 4. He also acknowledged the 10 Special Partner Institutions including their respective heads who co-sponsor our weekly forum.

Go Around 1. Ed Rojas is from MFI, the CSR of MIB, an investment bank. Ed said there seems to be no major developments to discuss. The price of oil has stabilized. Employment has improved. The economy seems strong. A possible area to watch is new President Trump who is like an apprentice. Many of the things he said during the campaign are easier said than done. 2. Lourdes Angeles is Managing Director of a company into IT solutions. She works for a global company and is charged to take the lead in CSR. 3. Dr. Lina Garan is in Education from Cagayan State University and it is her first time to attend. 4. Art Pacho has retired from LA Police Department. He has a book on Philippine Tropical Wines which will be launched on 27 Feb at the Makati Shangri-La from 6-9pm. There will also be 3 wine tasting and 20 wines for display. 5. Stuart Bloom migrated to the Philippines in 1985. He had a toy company in China and the Philippines. 6. Ernie Ordonez is from Alyansa Agrikultura which is also concerned about water, a very precious resource and what can be the next big crisis. 7. Bryan Atienza is from MAPECON Philippines Inc. It is his 1st time to attend and their company promotes organic agricultural products. He is also with the Philippine Inventors Society. 8. Dr. Arthur Ibanez is from Cagayan State University who does community service. He also mentioned that they have made a fish bagoong powder product. 9. Audy Quebral is also from Cagayan State University. The 3 of them took a long travel to be here; they arrived this 4am.

10. Oscar Barrera is from MFI and PhilExport Advocacy Committee. An area of focus is financing for SMEs which constitutes 95% of the economy and majority of whom do not have real estate as collateral. 11. Myra Gavino shared that she was one of the earlier ones trained by our resource, Dado Banatao who is a very good mentor/coach but she is jurassic. In the present Duterte administration she is wearing many hats: Consultant for BOI, DTI for PCA, the coconut industry, SME program, etc. 12. Tessie Ruutu is Philippine Honorary Consul to Helsinki, Finland. 13. Ilka Ruso is a Graduate School student of Ateneo and is engaged in Mindanao Research. 14. Tingting is a Doctor of History, Graduate of Criminology. She does work with the National Defense and Colegio de San Agustin Board. 15. Bernardine Siy says she invests in start ups and is a Trustee of Ateneo de Manila University. 16. Jeff Saez is with Nuworks Interactive which is a digital marketing company that helps transform business. 17. Jonjie Madara handles Business Development mainly on renewable energy with MPIC. 18. Vernon Belgira comes from Hopeline and he was just invited to attend. 19. Ley Karen Lacar is from BPI Family Bank which is into Ka Negosyo. 20. Jasmaine Malayang is also with BPI Family Savings Bank. 21. Miguel Encarnacion is from Novel Capital looking at venture capital for investment. 22. David King is from GEA Timber Ventures working on upland communities through fair trade and proper use of discretionary funds. 23. Maureen Ledesma said it is her 2nd or 3rd time to attend. She is working with banks for receivables financing to SMEs and trade credit insurance. 24. Vijay Dargani provides software to BSP and banks. He is also into baby food manufacturing, all locally provided such as kalabasa, malunggay, etc. 25. George Aseniero is President of a company in Zamboanga that does the corn supply chain which sells its produce to Batangas feed mills. A study was done before that said corn from Mindanao should be competitive with Batangas feed mills. 26. Pons Batugal is President of Farmers Development Learning Institute which basically caters to the poor. He also does extension program work with Cagayan, (Isabela) State University. 27. Angie Batugal is Research Director of The Farmers Development Learning Institute. 28. Ging Moreno is here to listen, she works for Marsman Drysdale which is mainly in banana plantation. 29. Ito Carlos is from RI Chem and is always interested in what dado Banatao has to say. 30. Oscar Santillan is from Hottlabs Solutions. 31. Marivic Anonuevo used to be with Millenium Challenge Account in the Philippines that is working to alleviate poverty but with its termination under Pres. Duterte she is now a Consultant. 32. Oscar Gendrano is with GEA Timber which is doing some work to help start ups. 33. Melito Salazar Jr. invited Rotarians to see the Feb. issue of the Rotary Magazine with FVR as cover to go back to the nice spirit of EDSA People Power. He also mentioned that he was a previous Director of the UP Institute for Small Scale Industry which had the first incubation center. With the foundation’s Chair requesting him to assist him run MAP ABCDF, he is now President. 34. Deanne Hernandez volunteered to be MAP ABCDF spokesperson. She was a banker for 26 years and was involved in customer care with Globe Telecoms, started the BPO and call centers, etc. 35. Sr. Paz of the Missionaries of the Child Jesus also sat in.

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36. Others in attendance: JB Badon of Zoomanity/Paradizoo Theme Park, Anita Atanacio of Terra Verde Ecofarm, John Forbes of Amcham/Arangkada, Ernie Villaluna who retired from Philex Mining, Roland Young who is RUY Corporation, Marjorie Lopinjo who was invited by Deanne Hernandez, Petri Ruutu of Finland, Arthur Yap of the 17th Philippine Congress who is Chair of the Economic Affairs Committee, May Gamir of Zoomanity- Yupangco Group, and Jose Ingles and Caroline Solis who give samples of Re-leaf stress reliever and brain booster.

Introduction of the Guest Speaker Deanne Hernandez introduced our speaker: Dado Banatao: Dado is known as the Filipino Bill Gates. Both have a technical background, introduced technology that transformed the industry, built large successful companies from ground up and are in the legacy mode. Dado made the computer lighter, faster, less expensive, more fun and easier to use. He pioneered the PC chipset and graphics acceleration architecture which is the foundation technology in every PC today. He is a venture capitalist himself who has supported 22 start ups and investments. He is with 3 non profits and leads a public company. Dado brought GPS to the consumers. He is known as the innovator of computer chips that made GUI (think point click) possible. Dado created the PCI Bus, plug and play with computer. Furthermore, Dado made internet possible with the PC chip set. With the fabless semiconductor, small players were able to enter the market without huge investments. Dado is also known as the father of semi-conductor. Every computer and laptop in existence carries technology and ideas developed by him. He received the Master Entrepreneur Award by Ernst & Young, Inc. Magazine and Merrill Lynch Business Financial Services. Dado is Founder and chairman of PhilDev which supports Science and Technology through Education. Deanne said this is close to her heart as her father was Secretary of Education during President Macapagal’s term and who perished with him on the plane crash.

Below please find the significant points made by Dado during his talk and the discussion that followed:

1. He was originally hesitant to accept to speak about Agriculture. Agriculture has a special place in his heart because his father was a farmer who sacrificed a lot to send him and his siblings to school. And they all finished college. Being a farmer was difficult as the weather changes and can affect what they plant. But he salutes those in Agriculture who make food available for everyone. 2. After graduating from MAPUA not having found a design job, he joined PAL to do flying which was not work to him as it was fun. He was hired by US Boeing to design the 747. While working there, he studied at Stanford Graduate School. 3. The now Silicon Valley was previously called the Bay Area. You can say he (Dado) started his career there. And has continued doing work there for some 15 years already. He has formed companies, investing in creativity. 4. Innovation, Technology and Entrepreneurship are what make VC (Venture Capital) meaningful. All stakeholders including the universities, must take part. It starts with thinking of a need which becomes the foundation for economic development. The idea has to be new and necessary to bring about change. The environment is complex, competitive and open. 5. Change comes with major disruptions which he calls the dynamics and can lead to expansion, progressive growth, greater productivity and better quality of life. These will occur and will need to be sustained and become part of life.

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6. We see the tremendous role that Science and Technology play. And the special role that creativity plays. There may be countries, places and people who create a favorable environment to nurture these. Among developed countries we have seen the USA being in the lead in the last 200 years. Institutions allow ideas to germinate and help those who do not have the means and capital. The concept of liberty has allowed one without capital but has an idea to be free to innovate. In the West, equality is found in the rule of the law; the intellectual property rights are protected. Eradicating poverty is not through charity but by a program that makes the economy thrive. It is enabled not by politicians but by innovation supported by business with its wealth dynamics. Incubators are established with engineers, investors, the universities, etc. This is also how the PhilDev operates. You can also see this in successful developing countries: various sectors such as government, academe, industry, the populace rallying together for major planning that is responsive to the needs. The economic point of view forms the perspective. Science and Technology are harnessed. It is not a simple equation because of the complexity of the matter. And this entails lots of risk taking. Innovation calls for an idea, product, service that has not been done before. The technology and the market need to meet to result to a high value product or service. The entrepreneur builds from ground up; the wealth is not estate inherited. Equity is the fair distribution of ownership: all employees and investors get their share. Dado cited the example of Silicon Valley where the young engineers have become multimillionaires because of fair equity distribution. The best tools to be rich: technical knowledge, creativity, responsive design. Those who have creativity make more money than those who only invest money. But this situation is not yet true in the Philippines today. And so we have to break this practice. Transformation will have to come in the area of culture: our attitudes and practices that do not favor risk taking. Long range planning is needed to sustain economic growth. 7. The creation of wealth will have competitive pressures. Research has to expand. Science and Technology have to be nurtured. And very important, fair equity distribution, has to happen. Everyone should commit to looking for a faster, shorter and better path. 8. The Philippines is said to have reached a 6% growth. Is this indicative of a functioning market? Does it have a high level of savings? Are people investing in government and private sector partnerships? Innovation calls for political leadership also and this includes defining business policies. The government has to be capable, credible and effective. Government has to work hard but it can not be the cause of growth as growth is always fueled by the private sector. Taking a look at local and global market needs show that meeting them will mean more than a country’s economic size. The revenue that government makes can then be channeled to education, health care, infrastructure building, etc. 9. If financial investment is the gauge of wealth, it will widen the gap between the rich and the poor. But when creativity and the intellect are used, wealth will significantly move from the rich to the poor and lessen the gap between them. The Philippines has to protect its intellectual property, the rights of individuals where they must be enriched and invested on. 10. Vijay Dargani commented that many US universities are coming to Asian countries but not the Philippines. Dado replied that we have to enhance our R&D. They will come if they know we have the productivity and expertise. About 8 years ago, we were above Vietnam but it has surpassed us now. Dado shared that they have 2 projects worth $150M with government for Research to create the techno products needed.

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11. Dado corrected the introduction taken from the Internet that 30% of every computer and laptop in existence carries technology and ideas developed by him because it is not 30% but 100%. 12. Even for GPS, the 1st chip can be attributed to him. And it is still there till now. 13. Dado advocates that Filipinos should focus on the intellect. Be patient and work hard. It can be done. And one could not do it alone. Let us not propagate professional mediocrity. The entire population should adapt a different mindset. And pursue further studies like in Berkeley. 14. Melito Salazar Jr. shared that last month Fred Pascual, UP President inaugurated the UP Innovation Hub in Alabang which was made possible by business and industry working with the academe led by UP College of Engineering. 15. George Aseniero was concerned about resistance to innovation notably in the Agriculture sector. Dado said they are working on precision farming. Dado further stated that it is sad we have more investments in shopping centers than in creativity and technology. It seems there are many good ideas from entrepreneurs but they could not raise money from investors. The biggest leverage should be creativity/innovation. 16. Dado has been a venture capitalist/investor for 15 years and it is the best way to multiply value by a hundredfold. You break old fashioned molds and take nice risks. 1 venture capitalist for 1 country is not enough. 17. At Silicon Valley, he invests $12B every year. He builds big companies. Companies built by talent and not money. 18. Stuart Bloom reads 50-100 research papers per week and he aggregates them. 19. Dado says through PhilDev they advance solutions and compensate great work. He hopes that money will be spent to make good end products. 20. To Deanne Hernandez’ concern, Dado said the BPO/call center industry may in less than 5 years have work displacement because of AI which is already being done as they started with it 8/9 years ago. But the companies will generate more revenues that is why it will become inevitable. 21. Ernie Ordonez said he wants Dado to share his insight and seek his guidance on matters like what George has identified. Instead of blaming government, let us work with government since we should know how to work better. A sacrifice has to be made. But we need to do this. Dado said he has worked with 3 Philippine administrations already and with so many millions poured in. But no one will invest if we do not develop the expertise. Ideas must be generated, money has to be invested which must be a holistic approach. Government provides the research resources. As of now, the Senate and Congress spend a lot which is a waste. 22. Art Yap interrupted saying he is on Dado’s side. 23. Ilka Ruso is honored by Dado’s presence. On his question about open source, Dado replied that if the industry is not yet built, open source creates activity and momentum in the industry. In a developed industry however, it is insignificant. Huge revenue generation have their proprietary software. Dado cited the example of Uber which was built on deep technology borrowed from GPS that it bought and managed the system. It is actually very complex and he is certain it will not be open sourced. On the other hand, one can start with open source and see where creativity will take it. It may deviate later depending on what business you wish to build. It becomes proprietary to the specific market you are addressing. 24. To Tingting Cojuangco’s comment, Dado said an application is based on a written code. There are different stages that are needed to move from ideas to an enterprise. If the

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creator of the application has no money, he needs help. The Chairman added that the product if good will attract capital. 25. Myra Gavino said she is challenged because she is often asked for proof of concept. Dado said we hope everyone will get it but we should not stop amidst the challenges. He often creates a company to do something. He will be providing the highest bandwidth and it will be revolutionary. Beyond that, he can not share more yet. 26. Dr. Pons Batugal said he supports Ernie Ordonez and George Aseniero. Pons asked Dado what PhilDev is doing for agriculture as the Philippines is an agricultural country. Dado said it is working with CHED on precision agriculture and it is CHED that supervises. He understands there are proposals now from both academe and industry. He asked Pons to get in touch with CHED for this. 27. On Oscar Santillan’s query, Dado said he will go for a global market if the technology is deep and the application is global. But if the market is specific, he will go local. 28. Dado continued that parents spend a lot for their kids especially for education. 29. Jose Ingles Jr. asked about the AIM Incubation program and Dado said the only criterion is a good idea. It is a project of AIM and PhilDev works with them. And it will be open even to a senior citizen like Joe. 30. Oscar Barrera commented about the BSP which has lost its food and employment concerns as it has solely focused on inflation targeting. The BSP could also influence the large commercial banks to look at soft collateral like receivables, inventory, raw materials, vehicles, etc. which it is not doing. Another problem he sees is the BSP members often are former Presidents of the commercial banks which makes it an incestuous relationship. Maybe it is time for our legislators to review these laws. In the US, there are insolvency laws that allow an entrepreneur who has failed a 2nd or 3rd chance. Dado said the BSP may be more for regulatory function but like Security Bank has an investment arm for start ups. Dado also mentioned that in the early 1970’s, Bank of America had a venture arm in Silicon Valley that grew to become the biggest there and in the USA. He hopes that the BSP will form such an arm and take more risks. 31. Hon. Art Yap said that he was speaker last week and only had a portion of Dado’s attendance and he attributes the disparity to the crowd’s respect for the speaker. The lower house is waiting for the Senate. Having been Agriculture Secretary also, Cong. Art talked about the case of India where the farmers are capacitated to produce smartly through weather reports on their mobile phones. Art thinks the technology is there but the content is missing. Dado underlined that from fearful money we need courageous money because there is money in the system. Dado said insurance companies have total funds at 1.5T placed in UITF, mutual funds, etc. and they came from the economy not from government and it is pitiful that it is not being used especially in agriculture. 32. Dado thinks that farmers are often judged already as unbankable because they have no existing data or record history. Example with AI, it should identify the perennial non paying borrower. 33. Stuart Bloom was delving on pattern recognition where produce can be photographed and broadcast but Dado said a bank will only first lend to someone he finds bankable or reliable with the bank’s money. 34. Maureen Ledesma was happy that Dado brought up the AI matter. They are doing insurance to mitigate risk. She asked Dado what would it take to be a partner? Dado emphasized the picking of the right data because the net design will follow. Dado said this is what they often refer to as meaning of data. Maureen can also seek Filipino AI students about to

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graduate from UC, Berkeley, Stanford, etc. These are the potential sources of expertise as they have looked around in the universities and there is a lack of expertise around.

Closing 1. The Chairman announced that we are 45 minutes overtime. 2. The Chairman shared that the issue of capital can also be seen in the experience of MIB which was established 45 years ago and which started with no capital in a capital intensive industry. There was no money that came from external sources. 3. Mel Salazar announced that he has a new born grandson. Tradition used to require that a cigar be given but since this practice has died, Mel gave away lollipop to each one. 4. Mel also explained that their company has provided CCT beneficiaries with a resident card that is also a debit card. This card can be used in ATMs, Sari-sari stores, etc. The mobile unit becomes a point of sale machine. The entrepreneur can also get his financial statement and inventory level through it. And for those with PAL Mabuhay miles, it can be used to pay for restaurants, etc. as it translates to cash points earned. 5. The President awarded the plaque of appreciation to Dado as today’s resource speaker together with the 4 books of the Chairman: Quantum Mutations, Poverty: Cause and Cure, Different and 1000 Great Men. 6. For next meeting, we have invited the Ramgo International President Pamela to discuss about Sunflower as Ornamental Plant and source of Sunflower Edible Seeds and Sunflower Oil. 7. The Chairman declared the meeting adjourned and the commencement of the private interaction with the resource and the other attendees.

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