CFO Forum at AGSB 50th anniversary

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
March 30, 2017

The Department of Economics Finance and Accounting held last March 28, 2017 a forum of chief financial officers on what to focus in 2017.  This was held at the Auditorium Basement 1 of Ateneo Professional School. The CFO who were present  were Francis H. Suarez Jr,  EVP,   Jose Teodoro K. Limcaoco,   CFO of Ayala group, and the moderator, Ana Bess G. Pingol, the moderators and also  CFO of Federal Land, SM Land Rockwell Land,  Deputy CFO of Metro Pacific Investment  Corporation.

What were the views of the CFO?

Both are conglomerates:  both have organic growth from core businesses, but Ayala is one of the oldest, and GT an investment arm of George Ty, the controlling stockholder of Metro Bank is the youngest, and only 5 years old.

The discussion were mostly from strategic point of view, rather from financial point of view.



External analysis:

Risks

1.  Political -  it is too early to judge the effect of DU30 in business, the EU and other investors would always complain.

2.  Economic -  rising interest rate from Fed (Yellen)

But foreigners, investors would invest always in sound businesses that are well managed and good fundamentals.

Strategies:

1.  The two focus and invest on core businesses:   real estate, banking, insurance.

The green fields are water, infrastructure, energy (solar), cars

2. The green fields are in areas where they can have synergy and strategic partner.

   Esp for GT:  insurance -  AXA, (and combining life and non life),   infrastructure -  MPIC (they invested P51B)

  Synergy -   Ayala invested in Zalora to complement their malls (bricks and mortars)  They want to be in areas where they can be ahead, and have jump start on some businesses.

  Ayala is investing in health care to serve the Ayala communities (to add value to their communities, rather than from purely investment opportunity)

3.  Thus because of the numbers, a slow, little number acquisition or business is not in the CFO gun sight.

    Thus you are existing only if your sales or Net Income is in Billions, otherwise you are just a number.  Thus for these conglomerates, new upstarts are out of the question.  They end up being sterile entities, to be money making machines.

In so far as our business memorial park is concerned:

1.  We focus on our core businesses;

2.  We acquire and invest in businesses that are complementary to our existing businesses:

    1.  memorial parks

    2.  crematorium

    3.  memorial plans

    4.  chapel memorial services

The memorial plans will be the financial arm, and the functional and service units will be chapels, crematorium

It also inspired us that for memorial plans to inspire confidence, we co brand with MetroBank (for banking services) and AXA life for insurance coverage