Ongpin: I was a technocrat, not crony

by Judith Balea,

Posted at Sep 22 2011 03:49 PM | Updated as of Oct 07 2011 03:09 AM

MANILA, Philippines - After staying under the radar for a few years following his government stint during Martial Law, Roberto V. Ongpin returned to Philippine business with a vengeance.

Slowly building his empire, Ongpin bet big on the country, snapping deals one after another.

Over the last decade, he managed to take control of five companies in gaming (PhilWeb Corp.), information technology (ISM Communications Corp.), mining (Atok Big Wedge Co. Inc.), property (Alphaland Corp.) and banking (Philippine Bank of Communications), while partnering with other investors for stakes in several others, including food-turned-power conglomerate San Miguel Corp.

All these deals eventually landed him the title of being one of the richest businessmen in the country today.

However, Ongpin’s journey through the private sector has not been without controversy.

The international deal maker has come under fire for his financial dealings involving state-owned Development Bank of the Philippines and gold and copper miner Philex Mining Corp. two years ago.

Ongpin recently sat down with Pia Hontiveros for an interview on ANC's Strictly Politics. He talked about his struggles during the Martial Law years, his return to private life, and why he "resents" being called a Marcos crony.

Ongpin first gained national prominence as trade minister of the late dictator Ferdinand Marcos from 1979 until the EDSA Revolution in 1986. He was regarded as one of the most competent technocrats whose service ended together with the downfall of the regime. How he got into the Marcos Cabinet is also quite a story.

Prior to being appointed trade minister, the Harvard-educated Ongpin served as managing partner of SGV & Co.

For 50 years, Ongpin has been married to Monica Arellano, with whom he has two children: Stephen, 48, and Anna, 45. He has two more children (Michelle, 30, and Julian, 19) by two different women.

The 74-year-old Ongpin has no plans to retire yet, saying "I'm enjoying myself. I'm still useful. I'm only half finished with what I want to do."


Transcirpt of Ongpin's interview on ANC's Strictly Politics, September 20, 2011

They're trying to pin you down on "behest" loans from DBP and according to reports they're also going to try to pin you down on insider trading. What do you make of all of these?

Well I think it's tragic. I think it's very sad. This in no way can be called a behest loan. A behest loan is very specific, it has got to be a loan that hasn't been paid or is in default or non-performing.

This loan was paid on time, in fact, ahead of time. It was fully collateralized. And it made tons of money.

I don't know why they have chosen to this loan and called this a behest loan.

Let's go into history. You have a very interesting life story to tell. You joined the Marcos Cabinet in '79. What did you think of Martial Law at that time?

Martial Law, when it was declared, was... I don't know how to describe it. But for a couple of years after it was declared, there was real discipline in this country and the economy grew quite well. Then it started to slide again.

It was tough because we had curfew. The wives had to come home early.

What was it like to have joined the Marcos Cabinet in 1979 just as Mr. Marcos had started to become unpopular?

Well, he probably started to become unpopular before that. I tried my best to escape from being conscripted into the Cabinet. I never sought the position.

In fact, when he called me, I was in London. He called at 4 o'clock in the morning, well it was one of the assistants who called and said, 'The President wants to talk to you.' I said, 'It's 4 o'clock in the morning.' So I hung up. Then he called again.

Was he trying to recruit you even before that?

That was in '79 when he (Marcos) called me. I never met him prior to the time he called. So he asked me when I would be back. He said, 'Can you come back sooner because I need to announce a change in the Cabinet.'

I said, 'Mr. President, are you considering me? I'll come back and I'll try to convince you that I'm not the right guy for you.'

Why didn't you want to a part of his Cabinet?

It wasn't that I didn't want to be part of his Cabinet. I told him I had a very complicated personal life and that I felt I would bring embarrassment to his Cabinet. But he said, 'I understand those things. They're not a problem for me.'

We were supposed to talk for 15 minutes, but we talked about three hours.

How did he hear of you? Who recommended you?

I really don't know. Cesar Virata was his finance minister for a long time and Cesar and I were partners at SGV.

Jimmy Laya, at that time, was budget minister. We were ministers because it was a parliamentary.

Fast forward to the 1981 elections. Did you know of the alleged cheating, rigging of the elections?

I would not make a judgment as to whether those were rigging or cheating. I'm not a politician.

There was a time in fact, I recall it was in '81 that he asked me if I would run for a seat in the Parliament.

I said, 'If you make me run, I'll quit, right now.' I'm not a politician, I told him.

1983. Ninoy Aquino was assassinated. What were your thoughts at the time?

It was probably the most difficult time for the Marcos government. As everyone knows, he was not well. He was sick. He just had an operation.

It was a very difficult time in the sense that the commercial banks that had lent us money, pulled out their money overnight. I remember that was around $770 million we lost overnight.

For a time, the reserves of the Philippines were down to $14 million. The total international reserves now is $75 billion.

Did you feel it was a bad time to be in the Marcos government?

All of the entire time I was in the Cabinet was very difficult. I was under attack from a lot of sectors, principally his cronies. That's why I resent being called a crony!

I told President Marcos the only way I could be of use to him is if I could speak to him frankly. So I did. I said, 'if you don't like to hear what I will tell you, you can fire me.'

And yet you stuck with him 'til the end? It wasn't something you could just walk away from?

I could have (walked away). But I felt I was making a difference. I had a very unusual relationship with him. He was a very intelligent person, very kind-hearted. I know him. I was very close. All the time we had lunch together, [we] talked about all kind of things. But I think history would judge him more fairly.

The whole world believes he was a bad guy. But I think he was a simple man, he never coveted wealth for wealth's sake.

In spite of all the ill-gotten wealth stories?

There were ill-gotten wealth, I assume. My job was to stop those hanky-panky

But there were those stuff. But I think I made some headway.

Let's go back to what you said that you resent being called a Marcos crony? Define what a crony is. And what is a technocrat?

A crony was one of his friends who took advantage of their friendship and borrowed from DBP and other government-owned banks at that time.

The technocrats were people who were in key positions in government, particularly in the economy, who were very vital in making sure...

So that will be you and who else?

Cesar was one of those and quite a few others.

So it hurt you a lot that you were called a crony?

Yeah, by this writer...

But it seems to stick, every time somebody is associated with Marcos?

At that time and not many people are still aware of what was actually happening, at that time, it was not even arguable. It was cronies versus technocrats.

Can you be specific? Give us example? How were you at loggerheads with these cronies?

There were a lot of projects that were being given behest loans. They would apply for project, no capital in the company and they would never pay. It got government banks into big trouble.

Did you try to stop it?

That was what my role was. It was difficult. Many of them were friends of Marcos and they would run to him and say, 'Ongpin is a bad guy.'

Pero sabi ko, 'kung yun ang gusto n'yo, I'm out of here. I don't need this job.'

Tell us more of what you did as minister of trade and industry?

It was very difficult to operate effectively during the Marcos era because he was a very unpopular government and we were... All the international funding agencies, the big commercial banks, were all against us. They made life very difficult for us. But we tried. We had to do our best.

Let's go back to the crony issue. Did you make your money before you jointed the Marcos administration?

Well, the answer of course, is yes. I was managing partner of SGV from 1970 until 1979, when I was conscripted to government. It was a big sacrifice for me because the managing partners of SGV are probably the most highly compensated people in the business community here. I don't know if this still exists because I've been away from the firms since 1979. I don't know what goes on. I was in private sector and was conscripted to government. The whole time was very difficult because I had to live off my capital.

And here in this country, if you steal even one cent when you're in government, the whole Chinese community, they would know.

You mentioned Chinese community. Let's talk about what you did with the Binondo central bank? You had them rounded up?

After the Aquino assassination, the commercial banks had pulled them all out. Overnight we had no money to to pay for our imports, for our debts. We had to have a debt moratorium. While this was going on, there was lack of confidence in government. The exporters that earned dollars did not turn in the dollars, they kept them overseas. The importers therefore had no money. It became a very bad situation. The official rate was P11 to $1 and went all the way to P28 to $1 in the black market.

Right now, we have $75 billion in reserves, which I didn't think I would see in my lifetime. The central bank today is doing a lot of great work. I wish we had this kind of money during that time.

Anyway, the only way to make sure that we have dollars was to put fear into those black marketers. The president issued arrest and seizure orders for them. There were 8 of them.

The reality was, the only way I could make sure that they followed my orders... You see, the government didn't have a single cent.

I told them, 'each of you, here's your ASO order. They're undated. If you don't follow my rules, I'll sign these.'

So every night, I'd tell them what the buying/selling rate will be. This went for 3 years.

You cannot get these Chinese black marketers to follow your orders unless there's a stick hanging over them. I let make them profit of 40 cents per dollar. They have a whole market. They buy dollars and sell it to a center point and fly it to Hong Kong and that would be the source for importers.

That was part of the rumor, the dollars were flown to Hong Kong and they'd disappear in some account.

There was a lot of misconception about Binondo bank. We succeeded in bringing down the rate from P28 all the way down to P14. We were successful in controlling inflation.

The only way was fear and intimidation. They had to obey or else I'd jail them. I jailed three of them.

As a minister, did you accept any bribe for any deal?

Well you don't expect me to say yes, no? Absolutely, not. The Binondo central bank, if I wanted to make money, it would have been easy. I would have made zillions of money.

That's why they say in the Chinese community, I think I'm still highly regarded because I never stole money.

They tried everything (to bribe me). They would give Rolex watches to my secretary, I gave them back.

What happened through EDSA revolution? How did you regroup after Marcos left?

The EDSA revolution, it never should have happened. Marcos was bated by David Brinkley who said 'if you're so powerful and popular, why don't you call for a snap election.' He fell for it.

We had just put the country through a wringer. The bills, we were paying short term interest rates in excess of 50% because we had to dry up the economy to control inflation. Inflation is the greatest evil. If you have hyper inflation, it's a very very damaging thing. It cuts across, doesn't care if you're wealthy or poor because everything becomes expensive.

My late brother was finance secretary of President Cory. When they took over the government, inflation was down to 4% at the time that they took over.

That was a difficult time for you? When your brother committed suicide?

My brother committed suicide two years after he took office. I don't know if you remember, it made good media copy that he (Ongpin) was a Marcos guy and he was Jimmy, my late brother, we were having 'sabong.'

He was part of three-man convenor group. Cory, Sen. Lorenzo Tañada and my brother Jimmy. He was very instrumental in all of that

They did quite well but unfortunately, it was not so easy for me to talk about this because he was in clinical depression. He was not happy. All I know is that I lost a brother.

Let's go to the DBP loan. Were you aware of the 10 waived requirements?

No, I don't think it's even relevant. These loans that DBP made to me were loans that they wanted to give me and one of the most profitable loans they gave.

The loan was fully paid. It was never in default. It was just smoke screen for what had happened, the suicide of Atty. [Benjamin] Pinpin.

It was the only two loans I ever borrowed from them. I had financing from six other banks.

For them to focus on this loan is really beyond me. They started sometime in Feb this year, basically intimidating and coursing their executives into trying to pin me down. Don't ask me why. Somebody up there doesn't like me. I have no clue.

Who is after you? Is this just business or politics?

It's probably a combination of both. I cannot for the life of me understand and will never understand why they chose this loan. It made a lot of money. Behest is a technical term. You cannot call it that if it's fully paid.

The impression is you're not too cozy with the Aquino administration?

I don't think I'm ever cozy.

You're closely associated with Vice President Jojo Binay. Did you support him?

No. I didn't even know him until after he was elected. A friend of mine who's a very close friend of VP asked me if we could have dinner. I said what for? Election's finished. I never contributed.

Did you support any of the candidates?

I didn't contribute to any of the candidates. Maybe that's the problem. They're out to get me because I didn't contribute.

Binay, I think, is a very wonderful individual. If one day he succeeds in achieving his dream of becoming president, I think he'd do a great job for this country.

In this DBP loan, was there any Arroyo connection? That you got it because close kayo ni Mike Arroyo?

No, absolutely not. I didn't even need this DBP loan. I borrowed money from six other banks.

The bank's job is to make good loans. All my loans were fully collateralized, I paid all of them on time.

So walang tumawag na Mike Arroyo na nagsabing bigyan n'yo si Ongpin ng loan?

No. I didn't need him to do any of that.

No doubt, we're friends. Mike Arroyo has been a friend of mine for a long time. I've never denied that. He is a very nice guy. But I didn't use him or need him (for any of my business dealings).

Do you believe it's important to be friends with the powers that be?

I think it goes without saying, not just in this country but any country...

But it appears now that being a friend of Mike Arroyo is considered as a crime in this country. I think it's not fair. I think it's wrong.

They're trying to get you for insider trading?

No such thing. I made a conscious decision beginning 2007 that Philex shares were undervalued. The market had assumed that the mine life of Philex was very short at that time. But I was very bullish on the price of metals, gold and copper.

I was bullish on metal prices so I started accumulating shares.

The first block I bought, 5% I bought from BDO which they inherited when they merged with PCI bank. I kept accumulating.

What was that joke about you fronting for Mike Arroyo?

I've never fronted for Mike Arroyo. Some of the guys were making a joke that it was Mike Arroyo who fronted for me.

How about Ashmore?

Absolutely not true. Ashmore is a $70 billion corporation. In fact that's one of the things I'm concerned about because I represent Ashmore which has $2 billion in this country. They summoned me to London. I'm meeting them on Monday to talk about this.

It's a very sad situation. It's a smoke screen to divert attention from the suicide of this man.

The Office of Solicitor General asked that DBP officials be suspended. What can you say?

I think it's such a shame that these poor innocent people are affected. Not a crime is committed.

But the OSG asked that they be suspended. I think it's so unfair.

What happens when you're suspended? You don't earn any money. These poor guys are being dragged into this. They're making a bad thing even worse.

The guy, Pinpin, died because he was being coerced to write an affidavit.

Who's behind the new DBP board? Who's going after you?

Frankly, I really don't know. There are rumors.

Let's talk about your personal life. You are married to the same woman for 50 years. In the Rogue article, you mentioned you have two children with two other women. And there were extra curriculars.

I did not say that. What I said was (when I was asked about my weaknesses), I have only one weakness. I really like good-looking girls.

I have only one wife. I do have four children. First two with my wife. I have a German daughter who works with me now. And my 19-year-old son is Australian.

You are the 9th richest man in the Philippines, according to Forbes, with $1.3 billion net worth.

I wish I were. That's completely wrong. It's much, much less. What they did was they took my listed companies, market price and then multiplied to how much of it I owned, which was crazy.

You own many companies.

I have five (PhilWeb, Atok Big Wedge, ISM Communications, PBCom).

You have a lot of your nephews and nieces with you in your businesses, right?

Yes, I think they're good guys. They know what they're doing. One advantage, they won't steal from me (laughs).

I think they're very competent.

Would you say you specialize in bringing in investments?

I have brought in so much investments in this country and I'll keep doing it no matter how they try to shoot me down, saying I did behest loans.

You're now 74 years old. Still no plans to retire?

Why should I retire? I'm enjoying myself, I'm still useful. I'm only half finished with what I want to do.