At HSBC’s “On Fertile Ground – A World of Opportunity for the Philippines” event held on September 27, 2023, Lance Y. Gokongwei, President and CEO of JG Summit Holdings, shared his insights on the promising future of the Philippine economy.
Joined onstage by Nestle Chairman and CEO Kais Marzouki, Ayala Corporation President and CEO Cezar Consing, Magsaysay Group of Companies President and CEO Doris Magsaysay Ho, and HSBC Philippines President and CEO Sandeep Uppal during the event's open forum, Gokongwei emphasized the strength of the Philippines' economic landscape and the role that JG Summit as well as the other companies in the Gokongwei Group have in shaping the nation’s future.
Gokongwei's optimism was palpable as he shared his unwavering belief in the country's potential with the audience in the Rizal Ballroom of the recently reopened Makati Shangri-La. When asked by the event’s moderator, veteran journalist Ces Oreña Drilon, about his thoughts on the future of the Philippine economy, Gokongwei stated firmly, “Our outlook is fairly strong for the Philippines.”
To lend weight to this claim, he shared that JG Summit earmarked Php 73 billion for capital expenditures in 2023, the highest for the holding company since 2019. The amount would be used to fund activity in various sectors including aviation, manufacturing, property acquisition, and services.
For the Philippines to become a middle-class economy, we can’t just grow off a services base, we need to build a manufacturing base. Our investments in manufacturing are rooted in and represent our commitment to the country, to help us achieve middle-class status — Lance Y. Gokongwei, JG Summit President and CEO
Central to Gokongwei's long-term vision is the group’s commitment to the growth of the middle class, a pivotal driver for the country's economic future. "Our thesis is that the Philippines’ middle class will continue to grow. It is very consumption driven, so we’re focused on addressing customer needs and pain points for that particular sector," he explained. Expounding on this theme, Gokongwei said that the group’s companies strategically invest in sectors that directly cater to this burgeoning middle class, industries that span food, airlines, real estate, and retail, among others.
Notably, its major investments in manufacturing, including the recently completed naphthalene cracker of JG Summit Olefins Corporation, underscore the Gokongwei Group’s dedication to building a robust foundation for the nation's progress. “My father [John Gokongwei Jr.] always believed that for the Philippines to become a middle-class economy, we can’t just grow off a services base, we need to build a manufacturing base. Our investments in manufacturing are rooted in and represent our commitment to the country, to help us achieve middle-class status,” said Gokongwei.
While voicing a mostly positive outlook, he also pointed out areas where there was room for improvement, particularly in education. "We have a strong advantage in speaking English, but we all recognize the relative weakness of Philippine education," he admitted, citing global studies that manifest our academic deficiencies. To sustain the advantages of the Filipino workforce, he stressed the importance of enhancing the quality of basic and STEM (science, technology, engineering, and math) education.
When the conversation turned to public-private partnerships, a cornerstone for economic development, Gokongwei applauded initiatives like the improvement of the Ninoy Aquino International Airport, citing these as essential steps toward making the Philippines a more attractive investment destination. He also praised the government's efforts in easing regulations and reducing the cost of doing business.
Tempering expectations, Gokongwei said the benefits of the government’s “opening up” of various investment sectors would not be instant. “That requires time, that requires infrastructure, that requires commitment to make doing business easier and less costly,” said Gokongwei, stressing that a more realistic timeline for improvements to be manifested would be in around two to three years.
Discussing a recent visit abroad as part of a Philippine delegation to court foreign investment, the Gokongwei Group's leader highlighted his own personal approach. "My own experience is that investors are like children. They don’t look at what you say, they look at what you do," he said. “Our role as local investors is to lead, show our confidence, and also to partner with foreign investors, those who do want to come here,” added Gokongwei.
Giving examples of working with outside investors to bolster the local economy, he mentioned JG Summit’s participation in LIPAD, a consortium with other local conglomerates and Singapore’s Changi Airports International that successfully developed the new Clark International Airport; DHL Summit Solutions, JG Summit’s joint venture with global logistics leader DHL Supply Chain; and GoTyme Bank, the Gokongwei Group’s partnership with the Tyme Group to bring digital banking to all strata of Philippine society.
As “On Fertile Ground” concluded, Gokongwei’s hopefulness resonated in his parting words. "I’m completely optimistic about the country," he declared.
Rooted in sound economic fundamentals, this inspiring confidence combined with the Gokongwei Group’s strategic, sustainable investments and collaborative efforts with the government point to a brighter future, and, as the event’s title promises, “A World of Opportunity for the Philippines.”