November 16, 2019

On being Lucio Tan Jr.

LUCIO "BONG" TAN JR.
BACK in 2008, I had the distinct privilege of interviewing Lucio “Bong” Tan Jr. for a magazine for which I used to work. I must admit, I approached him with some trepidation; after all, his temper on the basketball hard court and on the golf green was almost legendary.

But it was a very subdued and polite Bong who sat down for the interview, surprising me with his amiability. He even displayed the same flashes of wit his father has been known for at certain times and among certain company. He poked fun at himself — jesting that he probably looked like his achi Vivienne, as a makeup artist went on to put some light lipstick on his face for a fashion shoot — and at his powerful taipan of a father (“I don’t wear white socks.”).

Bong was nurtured by his mother Carmen, his amah, and grew up with six sisters – Vivienne, Karlu, Rowena, Sheila and Jesslyn – Bong being the fifth among the siblings. (He was father to Lucio Tan III called Hun-Hun, now 27, and Kyle, 23, his sons with the former Julie Chen, a Taiwanese-American.)

The family home
Bong grew up in the family home along Biak-na-Bato St. in Quezon City. From the outside, the property looks unremarkable except that it occupies an entire block spanning from Maria Clara St. and Dapitan St., in Sta. Mesa Heights, and has a helipad. I joked that we were practically neighbors as I grew up in the same area as well.

But it was a good place in the 1960s and 1970s to bring up one’s children especially if one were just starting a family. This was where many Manila-based Chinese-Filipino families flocked to after the Ruby Tower collapsed in 1968.

Bong said his father “trained” him and his siblings “not to splurge.” He remembered receiving a meager allowance when he went to college at the University of California in Davis, so he had to work two jobs, like his American classmates — as a gym manager and a basketball coach — just so he had enough money to spend for his needs.

Until his move to California, he also led a very “spartan life” from 1984 and 1986, as he studied at the Beijing University in China to deepen his appreciation of the native language and culture. “There was no McDonald’s yet then,” Bong recalls, but he said it was the best time to be in China. “It was actually the last chance to learn the culture before it opened up. I went back, now it’s so different. I’m still lucky that I went also during that time, under the old China, to study history and the language.”

His sense of fashion
At this interview, Bong is just wearing a powder blue shirt jack over dark pants, the kind popularized by a certain, ahem, strongman in the '70s. “I started wearing it 10 years ago, and now a lot of corporates are wearing it.” 

Asked if he liked men’s wear from Prada or Hugo Boss, he says: “Believe it or not, I also go for sales, and sometimes I give it (my shirt) away, when people like it. If it’s Hugo Boss how can you give it away?” he laughs. (Ironically, for the fashion shoot, he is dressed up in a navy blue Hugo Boss suit, which fits him rather well, although he did display some self-consciousness as the photographer flashed away. Bong does wear business suits when the occasion calls for it, but for casual wear, he uses athletic shorts, a T-shirt and sneakers when going to the mall.)

Although not really fond of luxury brands, Bong told me, “I like fresh-looking clothes,” and readily admitted to reading male fashion magazines like GQ.  “I like wearing clothes that nobody has seen yet. But I’m not brand-conscious.”

But yes, Bong says it’s not been easy carrying the name of his  namesake father, who by a recent account in Forbes, is worth $3.3 billion. As the only male in his father’s first family, he had been bruited to be the one to take over from his father, someday. (Just last October 28, he was appointed president of PAL Holdings Inc., the listed firm that owns and operates the flag carrier Philippine Airlines, aside from being vice chair already of the PAL board. He also sat on the board of the LT Group Inc. and held positions in other Tan-owned companies like Asia Brewery Inc., Eton Properties Philippines Inc., Tanduay Distillers Inc.)

“I feel pressured of course, and also it’s challenging. It is a challenge to put in practice all that you learned right?” Bong remarked. He was supposed to work in a bank after graduating in 1991 from UC Davis with a civil engineering degree, “But my Dad told me to come back [to Manila] already.”

A taste of tobacco
His first job at Fortune Tobacco Corp., was as a tobacco leaf inspector, which he described as “hell! It was so hot in the warehouse, I had to inspect all the tobacco deliveries to check if they were the right grades. I had to change my shirts at least four times a day. And that was free ha! I had no salary, parang OJT (on-the-job training).” When the tobacco season was over, he was moved around different divisions to learn up close the operations of the cigarette company.

As a manager, Bong described himself as “approachable, everyone can call me up, text me on my cell, they know I will answer unless I have a game or in a meeting.” (Indeed he was quite accessible even to media. Bong was one of the very few PAL officials who would go on record for interviews, and respond to my text messages.)

He said anyone could go to him if there were problems in the company. “I’m a guy who has to listen to both sides [of an argument]. I will always ask, ‘Okay who’s the other party?’ but I will not tell him that I will call the other side. I will say I will think about it then I call the other side. If I can settle it,  okay, if not, I consult an expert on the issue. If it’s just a small matter, I just tell the one who complained to me, ‘ibigay mo na [let it go]’.”

The succession plan
But Bong stressed even then, the succession issue in the family is not actively talked about, even as some media reports point to him as the heir apparent. Unlike other Chinoy business families, like Henry Sy Sr., John Gokongwei, George Ty, Andrew Gotianun and those of other taipans, his father has not publicly anointed anyone as his successor.

I asked Bong then about his main “rival” as heir-apparent, his half-brother Michael, who is older than him by just three months, and also holds major positions in their father’s businesses. (Few people know that Bong and Mike were actually good friends, despite being pitted against each other since birth. I am told that the Mike  had visited Bong at the ICU, and has been at the latter’s wake every night. “He is deeply affected” by his brother’s passing, said a source.)

But Bong is obviously uncomfortable discussing the issue. He leaned into me as his voice drops a tad lower, as if not wanting to let anybody hear his answers. He knows he can’t evade my questions, yet respectfully answered them without giving too many clues.“We never talk about it,” Bong stressed, adding that no one is really sure who’s going to take over from his father, if and when, the latter retires. Now at 85, Kapitan continues to attend board meetings and manages his businesses through a few trusted lieutenants.

“We have a different plan,” Bong underscored during our chat then. “We have a different system in choosing an heir apparent, whoever is more deserving.” Pressed to explain what that meant, he merely said, “It will be someone whom people will be comfortable with.”

(Our heartfelt condolences to the Tan family, friends of Bong, and his staff.)

*Originally published in the Asian Dragon, edited for brevity, and updated to include current events.

April 06, 2019

Duty Free PHL seeks higher profits by trimming staff


THE DUTY-FREE Philippines Corp. is seeking to streamline its organization in an effort to trim costs, and increase its profits.

This was disclosed by DFPC Chief Operating Officer Vicente Pelagio A. Angala to select media on Thursday, while expounding on the aim of the government corporation to be a leaner organization.

At present, he said, DFPC has some 800 employees, which includes sales staff at its malls, airport kiosks, and branches nationwide. Asked how many employees may be trimmed by the reorganization, Angala declined to say, but added, “let’s put it this way, we can work with half the number,” or about 400 employees.

He intimated that the salaries of the employees impact on the bottomline of the company, and it may be possible for its malls and outlets to operate with just a sales manager or a cashier, but the concessionaires themselves will hire their own sales force and support staff.

He said the reorganization “will be done in phases” so as not to disrupt the operations of the corporation, an attached agency of the Department of Tourism (DOT).

The new Luxe Duty Free outlet of DFPC at the Mall of Asia complex is targetting the mainland Chinese market. (Image courtesy DOT)
For the year ending December 31, 2016, personal services reached some P470.4 million, accounting for 24 percent of total operating expenses that year. No audited financial statements have been made available for the years 2017 and 2018.

Earlier, Angala said the DFPC is targetting to hit some $220 million (P11.66 billion) in sales this year,  just 1.4 percent higher than the $217 million (P11.5 billion) generated in 2018. While no figures were available yet for 2018, the corporation netted a profit of P179 million in 2017, up 9 percent from the P164 million earned in 2016.

He is hoping the opening of the new Luxe Duty Free outlet at the Mall of Asia complex, which targets the mainland Chinese tourists in the country, along with new stores in provincial airports such as in Puerto Princesa and Panglao Island, will help boost the sales of the corporation.

Meanwhile, in its thrust to help increase the income of small and medium-sized enterprises as well as local farmers, DFPC recently added homegrown brands to its online shopping web site.

Three months after the online shopping web site was launched, customers can choose from over 150 products, from perfumes and cosmetics, liquor, toys, confectionaries and now export-quality Filipino brands.

“For three decades, Duty Free Philippines has been known to be the haven of luxury and imported goods. That is still true but we want to also emphasize the importance of enabling our local entrepreneur,” said Angala.

Some of the local products available at www.dutyfreephilippines.ph are Just Fruit manufactured in Metro Manila; Kick-start Coffee of Silang, Cavite; Malagos Chocalates of Davao; Risa Chocolates of Las Piñas City; Tanay Hills Coffee of Rizal; and VuQo Premium vodka of Caloocan City.

Angala added that all 54 local brands available at all Duty free stores will be available online before the end of the year.

To shop online, customers need to provide their flight details. Items will be prepared and customers could pick them up at the airport.

Each passenger is allowed to buy up to $1,000 worth of items, 48 hours upon arrival.

At the Luxe outlet, the Filipiniana section currently featuring items from the SM Mall’s Kultura section will be slowly replaced by the premium export-quality consumer products, liquor, and furniture crafted by Filipino artisans.

Overseas Filipino workers and balikbayans (returning Filipinos) can shop up to 15 days from date of arrival. The shopping privilege is further extended to 30 days during the Christmas season (for those arriving from November 15 to January 15 the following year).

Senior citizens and persons with disabilities have an extended privilege of shopping up to 365 days from the date of their arrival in the country.

Under the Tourism Act of 2009, 50 percent of the revenue of DFPC is remitted to the DOT for tourism-development projects

*Originally published in the BusinessMirror, April 4, 2019.