The ebook version of this book may be downloaded at www.xBancom.com This Bancom book project was made possible by the generous support of mr. manuel V. Pangilinan. The book launching was sponsored by smart infinity copyright © 2013 by sixto K. roxas Bancom memoirsby sixto K. roxas With a Compendium of Recollections and Tribute Pieces from Bancom Alumni and Friends Edited by eduardo a. Yotoko Published by PLDT-smart Foundation, inc and Bancom alumni, inc. (BaLi) contents Foreword by Evelyn R. Singson 5 Foreword by Francis G. Estrada 7 Preface 9 Prologue: Bancom and the Philippine financial markets 13 chapter 1 Bancom at its 10th year 24 chapter 2 BTco and cBTc, Bliss and Barcelon 28 chapter 3 ripe for investment banking 34 chapter 4 Founding eDF 41 chapter 5 organizing PDcP 44 chapter 6 childhood, ateneo and social action 48 chapter 7 my development as an economist 55 chapter 8 Practicing economics at central Bank and PnB 59 chapter 9 corporate finance at Filoil 63 chapter 10 economic planning under macapagal 71 chapter 11 shaping the development vision 76 chapter 12 entering the money market 84 chapter 13 creating the Treasury Bill market 88 chapter 14 advising on external debt management 90 chapter 15 Forming a virtual merchant bank 103 chapter 16 Functional merger with rcBc 108 chapter 17 asean merchant banking network 112 chapter 18 some key asian central bankers 117 chapter 19 asia’s star economic planners 122 chapter 20 my american express interlude 126 chapter 21 radical reorganization and BiHL 136 chapter 22 Dewey Dee and the end of Bancom 141 chapter 23 The total development company components 143 chapter 24 a changed life-world 156 chapter 25 The sustainable development movement 167 chapter 26 The Bancom university of experience 174 chapter 27 summing up the legacy 186 Photo Folio 198 compendium of recollections and Tribute Pieces from Bancom alumni and Friends 205 4 Bancom memoirs Bancom was absorbed by union Bank in 1981. However, it lives in the hearts of people whose lives it touched. The institution is gone but the people, whose careers it built, have moved on to become important players in Philippine business and government to this day. The names are too many to mention here. The Trustees of Bancom alumni, inc. (BaLi) acknowledge the generosity of the men and women of Bancom who funded the research, writing and publication of sKr’s Bancom Memoirs. i make special mention of the generosity of our constant benefactor mr. manny Pangilinan, mr. roly Gapud, and the officers of BaLi who gave their time and financial support to get this book off the press. To sKr, who will be turning 86 on august 6, 2013, our sincerest thanks for devoting his valuable time to collecting documents and records over the years that made writing this memoir possible. With this memoir, Bancom’s memory and legacy will live on even beyond our time. evelyn r. singson Chairperson Bancom Alumni, Inc. 6 Bancom memoirs Foreword by Francis G. Estrada once every number of years, through vision, leadership, alchemy, happenstance and Providence, a special organization is born. With not a little hubris, one might say that in the tradition of venerable investment banks of the past – like Lazard Frères, s.G. Warburg, rothschild, Kuhn Loeb, mediobanca and nomura – Bancom was that and more, in the Philippines and asia in the late sixties and seventies. Bancom, and the individuals that comprised it, never saw themselves “imprisoned” in, or by, their traditions, milieu or history. The perennial question that reverberated throughout the organization as it sought new solutions to increasingly large problems was: Why not? it dared to dream the unthinkable, pioneer a different type of financial intermediation and look at the financing requirements of its large clients (private and public) as unique – not to be addressed with “off the shelf”, “one size fits all” commercial banking products. sixto K. roxas (sKr) was the visionary, augusto m. Barcelon (amB) was the ambassador, the consummate relationship manager and repository of a deep knowledge of the Philippine corporate and banking sectors. rolando c. Gapud (rcG), ramon K. illusorio (rKi) and Luis r. Villafuerte (LrV) were the first “field marshals” charged with realizing the vision. While Bancom Memoirs sees Bancom from sKr’s perspective, the accompanying Compendium reveals the perspectives of many of those who had shared the experience in some meaningful way, shape or form. one should not expect symmetry on the many Bancom accounts. a bit like the elephant and the blind men trying to figure out what was before them, Bancom was different things to the different people who underwent the exhilarating experience. The question is: Why write this Bancom book, almost 50 years from the organization’s establishment? several reasons, i submit: 1) it was a remarkable organization that – in its day – with relatively insignificant capital, was home to some of the Philippines’ best, brightest and most imaginative professionals. 2) To study its numerous achievements and customization of financial services then-available only in “developed” economies. 3) albeit partisan, it provides a comprehensive account of contemporary Philippine financial history. F o r e W o r D 7 4) Long before it became fashionable, it sought to address transcendental issues like inclusive and sustainable growth and the need to integrate financial markets with the real economy. 5) Having foreshadowed subsequent domestic, regional and global economic crises, there is much to be learned by policymakers, regulators, practitioners and stakeholders – in its successes and (probably, even more) in its failures. so what does that have to do with the price of rice? sKr’s Bancom story is the story of individuals and an organization that – naïve as it might have been – tried to address the raison d’etre of any institution based in a society with great inequalities. How does one build and conduct a business that actually addresses the needs and imperatives of the community it operates in? Perhaps a private enterprise model was not the appropriate platform to pursue an “integrated area development” vision; perhaps the inordinate focus on innovation and enterprise – rather than risk management and administrative efficiency and effectiveness was wrong; perhaps the relative disdain for financial (rather than intellectual) capital was its undoing. The fact is, this modestly capitalized investment banking organization manned by a cadre of exceptionally bright and talented individuals with “out-sized” ambitions, did test the traditional paradigms and the limits of private enterprise. its many accomplishments notwithstanding, Bancom did not achieve what it sought to do. it is our hope that sharing the Bancom dream and the experience might inspire some readers – perhaps more intelligent, or more “street smart” – to build on the experience and complete the task and realize the objectives that the original band of “dreamers” set out to achieve. Writing this book was not a “piece of cake” for sKr; nor was organizing a vast amount of material and editing numerous drafts. in addition to sKr, we are indebted to many of you who have taken time and the trouble to share your Bancom experiences with us. Danding Yotoko has been an excellent editor, thoughtful contributor and very effective cheerleader. Jacky atienza, ming roxas (sKr’s eldest) and chris Gotanco (who worked with the group in the difficult early stages) provided valuable insights and substance – let alone delightful sustenance – in the many editorial committee breakfasts held at ming’s mariposa home. To you all, thank you very much. Francis G. estrada Chairman, Editorial Committee Bancom Book Project 8 Bancom memoirs Preface Oh Lord, help me... to speak out spontaneously and say what i sincerely want readers of these memoirs to derive from it. i am writing to leave as a legacy the lessons from my over four score years of life so far. every life is meant to offer a unique contribution to the forming of the mystical Body of christ. each person born has qualities that make him unique. This is what Duns scotus, i think, labelled haecceitas, the “thisness” of every creature – every rock, every plant, or flowering tree, every bird, fish, mammal or insect, every human person – the uniqueness that the Jesuit poet, Gerard manley Hopkins, celebrates in his poetry. Those qualities and talents that make him unique impose on each individual the responsibility to do everything possible to realize the full glory of his potential. it is what caroline myss called his Sacred Contract. The fulfillment of that contract entails each person’s use of the unique combination of talents, propensities and inclinations which he was endowed with from birth, and the exercise of his free will in making the “right” choices from among the circumstances and options that his life opens up. Destiny deals a person a unique combination of cards. God leaves every person the freedom to choose how to play them. For the author, this combination of destiny and choice committed him to a calling that i define as that of a Sustainable Development Professional. This unique calling established as his life’s goal a twofold quest: to understand how communities and nations achieve a political, social, and economic structure that eliminates involuntary poverty, and to find an appropriate staging area from which he could make a meaningful contribution to its realization in his country and for its people. The professional appellation is derived from an older meaning of the term that is the reverse of its current connotation, which makes a practitioner a professional if he works for money and an amateur if he works for free or as a hobby. The original definition in medieval europe gave one the noble title of professional if he practised an art as a service to his community, and the somewhat derogatory term tradesman if he practised his art primarily for pay.