From left: Henry Sy, John Gokongwei and George Ty. Photos: AFP

In the span of a single year, three Filipino-Chinese taipans have passed away.

Late last year it was George Ty, founder of the second-largest bank in the country. He was owner of the Toyota franchise nationwide. He also invested in property, insurance and hospitals and amassed a massive collection of Filipino old master paintings.

Early this year, it was Henry Sy Sr, ranked by Forbes magazine as the wealthiest Filipino with an estimated fortune in the tens of billions of dollars. He built the SM Group, owner of enormous malls situated throughout the country and also in second-tier Chinese cities. Within three decades he and his daughter exponentially grew a small savings and loan into the biggest bank in the Philippines. Another son owns a top-ten commercial bank. The group has investments in power distribution, hotels and rental property. The SM Group is the Leviathan of Philippine business.

And recently John Gokongwei completed the trio of taipans who have gone. His was a riches to rags to Croesus story, with a biz empire ranging from food production, retail, banking and property to budget airline, telecom and oil refining. He was known for being frugal and, in his earlier career, as a disruptor of the old business order.

In the 1970s, although all three were successful businessmen, it would have been a stretch to imagine that they would become taipans. At that time the Big Biz playbook was to attempt to gain monopoly or oligopoly power in protected industries.

Another option was to ask the government for rent, seeking advantages or protection in the guise of a nationalist agenda. High barriers to entry for foreign firms and punitive taxes on consumption were conditions that dampened investment and demand. A nascent black market for goods and services developed, with a wink and nod from corrupt officials.

But that’s an old story. Things changed.

In horticulture and viniculture there is a practice of depriving the plant of water or sunlight. This induced stress is part art and part science since the plant is starved of basic elements. The purpose is to shock the plant so when the taps are turned on or the covers are withdrawn the plant engorges itself, compensating for its near-death experience. Of course, the risk is that the plant never fully recovers and the buds are weak or diminutive.

That is the point of this article: those taipans were able to survive the difficult macroeconomic and political conditions of the late-70s-mid-80s Philippines.

Somehow they managed to navigate the waves caused by the tsunamis that roared throughout the Philippines, which buried the old Spanish mestizo business oligarchy and the intertwined Manila 400. (There was a biz shibboleth that 40 families which had about 400 members then controlled commerce, but this is another story.)

Or like bamboo, those businessmen swayed while the tempest blew.

Then after the fall of the Marcos regime in 1986, the Filipino-Chinese Taipan took flight. (Ironically it was President Ferdinand Marcos who granted naturalization rights to Chinese born nationals in 1975, allowing ownership of land and companies.)

Huge Malls were built on swamplands. Imported goods began to be stocked on shelves, fueling consumer demand. Cars were sold on credit. Banks’ balance sheets would double in a decade. Some capital returned from abroad.

Surely those taipans took risks but there is still an air of mystery about how they were able to grow exponentially. Indeed they lived simple and frugal lives, and they were able to take advantage of the boom in consumption brought by dollar remittances. Still, it’s not textbook how their fortunes were amassed. They have biz secrets to be discovered.

The conventional question asked by businessmen is, “Will the heirs of these taipans escape the so-called third-generation curse?”

I would like to ask, rather, can these vast fortunes be used to respond to the challenges of Philippine business and economics? Be less mercantilist and more innovative? Be more focused on long term productivity and 21st-century challenges?

The empires were built on the foundation of domestic protection with tight and lean management practices financed by trade credits, run by men with local and Asian connections. Give them their due, whatever they may or may not have done, they started and built things when times were very difficult. Not a bad epitaph.

Luis Puyat is a banker and entrepreneur.

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