Non-Trading Day: Oct. 31 - Nov. 1, 2011

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In observance of the All Saints and All Souls day trading at the Philippine Stock Exchange is closed on October 31(Monday) and November 1(Tuesday) as per Memorandum TPA - No. 2011-0070.

Reason for such are the following:

 For your guidance.

CashSense Visa: A new way of receiving remittance and paying online

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Got this info through Gian Faye's blog Loading-info (http://the.loading-info.net/)

If you know about Unionbank's Eon Cards Cashsense Visa works basically the same. It is also a product of Unionbank that works like a Visa. So you can use such to make purchases online, receive remittance and withdraw the money to affiliated ATM, or better yet use it to get verified in Paypal and use it in your AdSense as your means of receiving your AdSense earnings.

You can go to Cashsense's website and apply for the card by registering as an associate. This means you have to have a blog to promote their services. Since you are an associate you can ask Cashsense to send your commissions or earnings to your Cashsense Visa as well, now that's convenient.

The Cashsense Visa is free for the first 100 affiliate applicants so if interested go and register right away.

To register to Cashsense and get the Cashsense Visa follow the following:

1. Go to http://the.loading-info.net/ and fill out registration form

2. Go to Payout and follow the instructions(it is

    recommended to chose "Payout by ATM card"

3. Add their banner in your blog or website.

4. Click the "Get me" image and it will open your mail software with a preformatted email. Place the link for your blog where the banner is shown and attached the required scanned ID(for verification) and send email.

Why did I informed you about Cashsense Visa?

Well as a future entrepreneur and as the trend requires you might be opting to received payment through this facility. Also if you are a blogger like me you can use Cashsense to received your other affiliate earnings, verify your Adsense account, or use it to recieve payments if you are selling online.

 

One thing you need is to keep with the innovation in business and online selling or what we call e-commerce is here to stay. It is highly probable that in the future all transactions will be done cashlessly or via electronic payment thus the early you start familiarizing yourself the better.

PLDT - DGTL deal finally approved

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source: http://teknisyan.net

Got this news today from Businessworld @ www.bworldonline.com

This deal has been hanging since June and PLDT has to sacrifice some in order for this to culminate. The main sacrifice made was a divestment of one of PLDT's frequencies which would as they say make the playing field level with Globe Telecom.

Below is an excerpt of the news:

source: http://www.bworldonline.com

PLDT-Digitel deal approved

PHILIPPINE Long Distance Telephone Co. (PLDT) completed on Wednesday its delayed takeover of rival Digital Telecommunications Philippines, Inc. (Digitel), saying regulators had approved the transaction. The National Telecommunications Commission (NTC) confirmed that it had greenlighted the P69.2-billion deal -- announced early this year and originally scheduled for completion in June -- but also put in place several conditions that included the dominant telco’s divestment of some of its frequencies.

PLDT said it had accepted the NTC’s requirements, while second-ranked Globe Telecom, Inc. -- which had questioned the purchase and claimed that it would lead to a return to a monopoly -- said it was satisfied that regulators had moved to protect consumers and promote fair competition.

source: http://www.philippinenewsdaily.com

PLDT’s acquisition of JG Summit Holdings, Inc.’s 51.55% stake in Digitel will give the dominant telco some 70% of the domestic mobile market, leaving Globe about 30%. PLDT said it would soon announce a tender offer for the rest of Digitel.

Shortly after PLDT’s announcement, 3.277 billion shares of Digitel changed hands via a cross sale in the stock market at P1.6033 per share.

In exchange for the Digitel stake, JG Summit will get 12.9% of PLDT, comprising 27.7 million common shares at P2,500 apiece.

PLDT also acquired the zero-coupon convertible bonds issued by Digitel to its parent and assumed P34.1 billion in advances made by JG Summit to Digitel.

“After due evaluation of the various factors and issues involved, it has granted the application for approval of the sale and transfer to the PLDT of initially approximately 51.55% equity in Digitel,” NTC commissioner Gamaliel A. Cordoba said in a press conference.

The NTC decision came a day before a 90-day review period was to expire. The protracted regulatory approval period had prompted PLDT and JG Summit to thrice suspend the deal’s planned completion.

The regulator said PLDT would have to continue Digitel’s unlimited text and call services. “Regarding the unlimited services, we want it to be permanent, continuous and we want a nationwide-reach [for these services],” Mr. Cordoba said, adding that Digitel’s mobile service should be kept separate.

PLDT was also required to divest 10 megahertz of 3G frequencies held by Connectivity Unlimited Resource Enterprises, Inc. (CURE), a unit of subsidiary Smart Communications, Inc. CURE’s frequencies will be auctioned off and PLDT will not be allowed to bid, Mr. Cordoba said.

“Another condition requires PLDT and Digitel to continue providing high quality service to their respective subscribers,” he said. 

(Click here to read more of this news)

This news suddenly made the price of TEL surge 

source: http://www.pse.com.ph

Coupled with the recent news in the Eurozone that the Greek bailout has finally been made we are hoping that today's positive news will continually drive the PSEi to rise to its previous high and hopefully bring back the bullish air in the Philippine Stock Market.

Going Fundamental: Profit and Loss Statement

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source: http://www.nvbc.org

Profit and Loss statement which is also known as Income/Loss Statement, Statement of Performance, Operations report, and better known as P&L is a summarize report of the company's earnings cost and expenses for a given period which is usually a year or fiscal year.

So why should you know what is in this statement?

Basically this statement tells you if the company is making money. It also tells how the company uses its resources well to generate income thus it is sometimes called Statement of Performance or Operations report. 

Like the Balance Sheet it has a basic equation:   

Earnings may come from sale of goods or services. For a retail company like National BookStore its earnings come from the sale of books and school supplies. For SM Malls most of their earnings come from space rental while ICT operates various ports and bill their customers for services rendered.

Now there is a must differentiation we must know when it comes to cost and expenses.

Cost is define as the value forgone to acquire more value. Say what is that again? Sorry for the gibberish definition. In simple terms cost is the value you give away to get more.

Lets make an example. If you are in a retail business which is the simple "sari-sari store" the money you use in purchasing your "paninda" is the cost. 

Now lets make it complicated. If you are in the manufacturing business the money use to purchase the raw materials and the labor you paid to make your final product are part of the cost of the product your business is selling.

But you ask me, that is like expense right? That is "I paid something" so it is an expense.

It may be like an expense and most interchange the meaning of these two words. But now you know that there is a difference between these two specially if use in deciphering important ratios in fundamental stock analysis.

So lets define expense properly.

Expense is a an outlay/outflow of resource(which could be money or a promise to pay) for services or other purchases that the company needs in its conduct of its business.

Again, it's too deep.

Expense are outflow to make sure the company operates, period. So expenses indirectly affect the company's product or service. A retail store may pay rent but it does not directly affect the value of the goods that it sells. 

I guess here is a better way of explaining cost and expenses. A company only have cost when it sells while the company pays expenses with or without a sale. In our previous example the retail store still pays the rent even if it did not sell a single product for the whole month.

Now in the equation if we deduct cost to the earnings(in most reports it is named sales, service or revenue) we arrived at Gross Profit. Gross Profit is the basically the markup on the direct cost of the product or service the company is selling. It tells us basically two things; first it tells how efficient the company is in using the limited supplies and labor and second it tells us how competitive the company is in terms of pricing.

We can see how efficient a company in using limited resource in the reflected Gross Profit. Let us say that the company can only sell its product at 100 pesos and in the past years the cost to make this product is 80 pesos thereby a 20 peso Gross profit or 20% markup. Now if they have a markup of 40 pesos in the same product sold still at 100 pesos that means they have reduced the cost to manufacture the product to 60 pesos giving them a higher Gross Profit of 40%. 

After Puregold; Cirtek Holdings Philippines Corporation

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source: http://www.cirtekholdings.com

Spotted this upcoming listing of Cirtek Holdings Philippines Corporation in the PSE's new website.

Cirtek is a semiconductor manufacturing company operating in the Laguna Technopark. Cirtek is owned by Filipino-Taiwanese businessman Jerry Liu who is also the owner of Figaro Coffee and Angel's Pizza.

Proceed from upcoming IPO will be used by Cirtek for its 3 year expansion program. 

Below is a news from Philippine Daily Inquirer for the upcoming IPO:

SEC approves P660-M IPO plan by Cirtek

By: Doris C. DumlaoPhilippine Daily Inquirer

8:35 pm | Thursday, September 8th, 2011

MANILA, Philippines—The Securities and Exchange Commission has approved a plan by Laguna-based semiconductor manufacturer Cirtek Electronics Corp. to raise as much as P660 million from an initial public offering at the local stock market.

The SEC en banc approved on Thursday Cirtek’s plan to offer up to 61.82 million in new common shares at an offer price of up to P10.68 per share.

This will bring to public hands about 34 percent of its outstanding stock after the IPO.

While it was earlier reported that Cirtek wants to conduct the IPO within September, the timing would depend on how soon the Philippine Stock Exchange will line up this offering and also on whether market conditions would be favorable.

“We’re waiting for PSE and (we’re) flexible as we’re still watching the market,”  Eduardo Francisco, president of BDO Investment and Capital Corp. which was mandated as the IPO underwriter, said in a text message on Thursday.

In its regulatory filing, Cirtek said net proceeds would be used primarily for the acquisition of new machinery and equipment as well as for general working capital requirements.

The Cirtek group plans to embark on a three-year expansion program to increase business and to further expand its customer base.

The expansion program will require the construction of a third building at its current manufacturing complex in Biñan, Laguna, which will add 180,000 square feet of manufacturing space and the acquisition of new equipment and machinery to increase production capacity.

Cirtek is owned by Taiwanese-Filipino businessman Jerry Liu, who also leads the Figaro coffee and Angel’s pizza chains.

An company presentation was made last October 11, 2011. Below is a memo from the PSE of the said presentation.

An Equity Research was made by UniCapital Securities Inc. 


Below is a screen shot of the research: 

source: http://www.unicapital-inc.com/index.php

source: http://www.cirtekholdings.com/wp-content/uploads/cec_Equity_Research_Report_09_15_11.pdf

Notice: Investing in Philippines is not paid to blog about Cirtek's upcoming IPO. Information for the above post is taken from noted sources. Caveat emptor.



UPDATE:

Please read Letter for the deferment of Cirtek's IPO

Angel's Pizza, Cirtek, Cirtek Holdings Philippines Corporation, Equity Research, Figaro Coffee, IPO, Jerry Liu, Laguna Technopark, Semiconductor, UniCapital Securities Inc., 

An update with PSE's new website

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The last time I posted about PSE's new look it was kinda wack. (Click here for the post)

I have just checked it awhile ago and it seems the slow download and the features are fixed and working now. You can check it yourself by going to:

http://www.pse.com.ph/stockMarket/home.html

If your not comfortable with the new look you can click the "Click here to view the old website". But the new site has cool features which I do like. Hope you browse and check it for yourself. 

For any thoughts on PSE website's new look leave a comment below.

What does "READY" mean?

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source: http://www.rad-aid.org

Last Friday was kinda a day for us here in the office.

I went to the office with a bright sun while I cruise my usual Lower Tumon route. Then came mid-day and the skies starts to darken. We had a pot luck in the office to celebrate the October birthday celebrants. We ate and got full with food each employee brought(I just ask our Admin to buy Vietnamese lumpia as my share :) ) 

It was already raining around 10 am and it got stronger in the afternoon. It seems non-stop until we realize that the front parking of the office started to be filled with water. The water coming in the parking is faster than the water draining in the sewer and by 2:30 the water is literally like a white water river; rushing out to the side of the property where it was lower all the way to the back parking. And by 3 pm we are all worried the the first floor office will be flooded. We even joked about our back parking being a new lake called "Lake Placid", the lower side of the building being a new tourist attraction for white water rafting, the parking of the building on the side is a new lake called "Sideway Lake" and the water rushing from the main road to our shallower front parking as a new water falls. We were thinking how to stop the flooding and that is the time it hit me the importance of readiness.

In stock investing we have always reiterated to set aside emergency money for personal and for moments like this; when the stock market is so low that you can buy so many good companies.

It will be absurd to think that we stock investors are happy when the market price of our stock is down. Yup one might think we are crazy when our portfolio is negative. We should be happy because it only means that we can buy more and accumulate more at a bargain. That is why being ready is a must.

source: http://cpaonline.blogspot.com

I know it is hard to know when, I myself was caught off guard. I was about to transfer funds which is in dollars but at that time the peso-dollar exchange rate was not good so I didn't do what I was supposed to do. Also I thought the market was really at its bottom thus with the reserved fund for bargain hunting I bought TEL and I thought I hit it right. I was wrong. The Greek debt crisis has its last hurrah and there it goes another downer.

Well the best part of it is that I learned something and  I learned it the hard way. For weeks now I am just checking my portfolio from time to time just waiting that some of my stocks will soon turn green and plan how to sell it. We are all hoping that by end of the year all the markets will be at a healthy condition with the hope of a better 2012.








exchange rate, flood, Forex, Greek Debt crisis, Lower Tumon, Peso-Dollar exchange rate, preparedness, rain, ready, TEL, Vietnam, Vietnamese lumpia, 

My personal analysis: Cebu Air Inc. (CEB)

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source: www.jgsummit.com.ph

Cebu Air Inc. which is commercially known as Cebu Pacific is JG Summit's air transportation  business. 

The company has been around since August 1988 but only listed in the Philippine Stock Exchange via IPO last October 26, 2010. Cebu Pacific has been the leading "Low Cost Carrier" in the Philippines. They started with local flights to famous Philippine destinations and now has flights in the nearby ASEAN countries, China, South Korea, Japan, and Taiwan.

From its IPO level of 125 pesos, CEB has been at the 70 level making this its support level. Though a lot were skeptical about the aviation industry due to rising fuel cost CEB has posted earnings for the past years and still  shows earnings this year to date. News of further expansion with the the additional 4 A320 planes and increase flights to some ASEAN countries come January 2012 has made analysts and investors hopeful in the carriers future. Indications is that its current price level is the best price to get in. 

source: http://investing.businessweek.com

Fundamentally CEB is in good shape. 


Current ratio is at 1.06 signifying CEB's capability to pay currently maturing payables is a good sign for a big company specially in the transportation industry.  A Debt to Equity of 101.51 may be scary but of this Long Term to Debt to Equity is at 89.76 quite manageable level. 


As mentioned earlier even with the rising cost of fuel  last year and first months of 2011 CEB still managed to be a profitable company. With operating cost almost at 50% of revenues curbing expenses is a great task that CEB is able to handle.

source: www.angdabawenyo.com

Competition has become tight with ZestAir(formerly Asian Spirit) and AirPhilExpress(Air Philippines of PAL) penetrating the market. Another issue with CEB is the so many complaints in regards to their service and hidden charges. This is one of the possible downer of CEB's passenger volume. 


A lot of investors who jump in during CEB's IPO at 125 level are either waiting or have given up. Most analyst though believe that CEB might be back at the 92-98 level thus some indicate a buy rating. The 70 level might be the lowest that CEB can get and as for the past 2-3 days with PSEi going up and regaining its 4500 level its not surprising that some are starting to accumulate.


So what are the possible reasons why I see CEB a good buy in the coming months? Lets recap:


- Expansion with 4 new planes and additional local and
  international flights
- Declining fuel price
- PAL problem
- Better business outlook in 2012


and do you remember this?
(this is the rehearsal and actual performance in the aircraft)






But again this is just my opinion; how about you what do you think of Cebu Pacific? Share your thoughts, leave some comments.   

source: http://iceylilo.blogspot.com/

Have you seen Bloomberg's new qoute page?

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I just want to share this. Bloomberg has overhauled its quote page and for me its a lot better. 

Check it out at http://www.bloomberg.com/quote/PCOMP:IND/chart

Stock News: Buy Asian Equities Now With ‘Blood on the Street’: Fund Manager

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Just got this news in CNBC 

source: http://www.cnbc.com

Many Asian stocks are trading at cheaper valuations than during the last financial crisis in 2008, according to one fund manager, who says now’s a great time to buy.

“I always go back to famous statements that people like Buffet and the Rothschilds have made about buying when there's blood on the streets,” Joshua Crabb, Director & Portfolio Manager, Asia Equities at investment firm BlackRock told CNBC on Monday. “Being greedy when others are fearful.”

According to Crabb, one in seven Asian stocks are currently trading below their 2008 price-to-book ratios. Crabb, whose Asia Pacific Equity Income Fund was down 8 percent year-to-date at the end of August, says he’s been buying equities despite recent declines.

“We're seeing a lot of value starting to develop now… Sometimes in the short run you have to wear a little bit of pain, but that's how you make the long returns,” says Crabb.

In terms of what’s cheap, Crabb says one in five stocks in South Korea are trading below their 2008 price-to-book valuations. He believes stocks there have priced in the bad news after investors punished the country, because of its export-oriented economy.

Crabb says Chinese stocks are even cheaper, with one in three below their 2008 price-to-book valuations because of fears of a hard landing.

He believes the problems in Europe and the U.S. could actually benefit Asian equities by helping to ease inflation concerns.

“The reality of this is that it brings inflation under control,” Crabb says. “If we look at the concerns Asian central banks have, a lot of it’s around inflation and some markets around property prices. With what's occurring, this is taking a lot of that pressure away.”

Despite Asian economies correlation to their Western counterparts, Crabb believes, the region has capacity for growth, as firms, governments and consumers have low levels of debt.

to read more click here.

Who is John Gokongwei Jr.?

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source: http://chuvaness.livejournal.com

I remember my Robinsons Supermarket Corporation days. 

Working for the Gokongweis was my first job. I just failed my first take on the CPA board exam and took the very first job that I can hold on to. Though I only spent about 6 months there I did learn my very first lessons as an aspiring CPA and what more to learn from the very life of this great entrepreneur.

John Gokongwei Jr. is now the chairman emeritus of JG Summit Holdings. JG Summit is the holding company of Universal Robina, Robinsons Land, Cebu Pacific, Digitel/SunCellular, United Industrial Corp., Robinsons Bank, and JG Summit Petrochemical Corp. 

source: http://www.jgsummit.com.ph

His story is one of the most inspiring story of riches to rags to riches. He was born on 1927 at Fujian, China but his family move to Cebu. His father's movie house business made them one of the riches person in Cebu but when his father died and the war broke out their family business went down and as the eldest of the family he stood as the breadwinner. 

The best way you can know John Gokongwei Jr. is to read his life story he address himself in an ad congress:

Source: http://www.millionaireacts.com

I was born to a rich Chinese-Filipino family. I spent my childhood in Cebu where my father owned a chain of movie houses, including the first air-conditioned one outside Manila. I was the eldest of six children and lived in a big house in Cebu ‘s ForbesPark. A chauffeur drove me to school everyday as I went to San Carlos University, then and still one of the country’s top schools. I topped my classes and had many friends. I would bring them to watch movies for free at my father’s movie houses. When I was 13, my father died suddenly of complications due to typhoid. Everything I enjoyed vanished instantly. My father’s empire was built on credit. When he died, we lost everything-our big house, our cars, our business-to the banks. I felt angry at the world for taking away my father, and for taking away all that I enjoyed before. When the free movies disappeared, I also lost half my friends.

On the day I had to walk two miles to school for the very first time, I cried to my mother, a widow at 32. But she said: “You should feel lucky. Some people have no shoes to walk to school. What can you do? Your father died with 10 centavos in his pocket.” So, what can I do? I worked.

My mother sent my siblings to China where living standards were lower. She and I stayed in Cebu to work, and we sent them money regularly. My mother sold her jewelry. When that ran out, we sold roasted peanuts in the backyard of our much-smaller home. When that wasn’t enough, I opened a small stall in a palengke (market). I chose one among several palengkes a few miles outside the city because there were fewer goods available for the people there. I woke up at five o’clock every morning for the long bicycle ride to the palengke with my basket of goods. There, I set up a table about three feet by two feet in size. I laid out my goods-soap, candles, and thread-and kept selling until everything was bought. Why these goods? Because these were hard times and this was a poor village, so people wanted and needed the basics: soap to keep them clean, candles to light the night, and thread to sew their clothes. I was surrounded by other vendors, all of them much older. Many of them could be my grandparents. And they knew the ways of the palengke far more than a boy of 15, especially one who had never worked before. But being young had its advantages. I did not tire as easily, and I moved more quickly. I was also more aggressive.

After each day, I would make about 20 pesos in profit! There was enough to feed my siblings and still enough to pour back into the business. The pesos I made in the palengke were the pesos that went into building the business I have today. After this experience, I told myself, “If I can compete with people so much older than me, if I can support my whole family at 15, I can do anything!” Looking back, I wonder, what would have happened if my father had not left my family with nothing? Would I have become the man I am? Who knows? The important thing to know is that life will always deal us a few bad cards. But we have to play those cards the best we can. And WE can play to win! This was one lesson I picked up when I was a teenager. It has been my guiding principle ever since. And I have had 66 years to practice self-determination. When I wanted something, the best person to depend on was myself. And so I continued to work.

In 1943, I expanded and began trading goods between Cebu and Manila. From Cebu, I would transport tires on a small boat called a “batel”. After traveling for five days to Lucena, I would load them into a truck for the six-hour trip to Manila. I would end up sitting on top of my goods so they would not be stolen! In Manila, I would then purchase other goods from the earnings I made from the tires, to sell in Cebu. Then, when World War II ended, I saw the opportunity for trading goods in post-war Philippines. I was 20 years old. With my brother Henry, I put up Amasia Trading, which imported onions, flour, used clothing, old newspapers and magazines, and fruits from the United States.

In 1948, my mother and I got my siblings back from China. I also converted a two-story building in Cebu to serve as our home, office, and warehouse all at the same time. The whole family began helping out with the business.

In 1957, at age 31, I spotted an opportunity in corn-starch manufacturing. But I was going to compete with Ludo and Luym, the richest group in Cebu and the biggest cornstarch manufacturers. I borrowed money to finance the project. The first bank I approached made me wait for two hours, only to refuse my loan. The second one, China Bank, approved a P500,000-peso clean loan for me. Years later, the banker who extended that loan, Dr. Albino Sycip said that he saw something special in me. Today, I still wonder what that was, but I still thank Dr. Sycip to this day. Upon launching our first product, Panda corn starch, a price war ensued. After the smoke cleared, Universal Corn Products was still left standing. It is the foundation upon which JG Summit Holdings now stands. Interestingly, the price war also forced the closure of a third cornstarch company, and one of their chemists was Lucio Tan, who always kids me that I caused him to lose his job. I always reply that if it were not for me, he will not be one of the richest men in the Philippines today. When my business grew, and it was time for me to bring in more people- my family, the professionals, the consultants, more employees- I knew that I had to be there to teach them what I knew. When dad died at age 34, he did not leave a succession plan. From that, I learned that one must teach people to take over a business at any time. The values of hard work that I learned from my father, I taught to my children.

They started doing jobs here and there even when they were still in high school. Six years ago, I announced my retirement and handed the reins to my youngest brother James and only son Lance. But my children tease me because I still go to the office every day and make myself useful. I just hired my first Executive Assistant and moved into a bigger and nicer office. Building a business to the size of JG Summit was not easy. Many challenges were thrown my way. I could have walked away from them, keeping the business small, but safe. Instead, I chose to fight. But this did not mean I won each time.

By 1976, at age 50, we had built significant businesses in food products anchored by a branded coffee called Blend 45, and agro- industrial products under the Robina Farms brand. That year, I faced one of my biggest challenges, and lost. And my loss was highly publicized, too. But I still believe that this was one of my defining moments. In that decade, not many business opportunities were available due to the political and economic environment. Many Filipinos were already sending their money out of the country. As a Filipino, I felt that our money must be invested here. I decided to purchase shares in San Miguel, then one of the Philippines’ biggest corporations. By 1976, I had acquired enough shares to sit on its board. The media called me an upstart. “Who is Gokongwei and why is he doing all those terrible things to San Miguel?” ran one headline of the day. In another article, I was described as a pygmy going up against the powers-that- be. The San Miguel board of directors itself even aid for an ad in all the country’s top newspapers telling the public why I should not be on the board. On the day of reckoning, shareholders quickly filled up the auditorium to witness the battle. My brother James and I had prepared for many hours for this debate. We were nervous and excited at the same time. In the end, I did not get the board seat because of the Supreme Court Ruling. But I was able to prove to others-and to myself-that I was willing to put up a fight. I succeeded because I overcame my fear, and tried. I believe this battle helped define who I am today. In a twist to this story, I was invited to sit on the board of Anscor and San Miguel Hong Kong 5 years later. Lose some, win some. Since then, I’ve become known as a serious player in the business world, but the challenges haven’t stopped coming. Let me tell you about the three most recent challenges. In all three, conventional wisdom bet against us. See, we set up businesses against market Goliaths in very high-capital industries: airline, telecoms, and beverage.

Challenge No. 1: In 1996, we decided to start an airline. At the time, the dominant airline in the country was PAL, and if you wanted to travel cheaply, you did not fly. You went by sea or by land. However, my son Lance and I had a vision for Cebu Pacific: We wanted every Filipino to fly. Inspired by the low-cost carrier models in the United States, we believed that an airline based on the no-frills concept would work here. No hot meals. No newspaper. Mono-class seating. Operating with a single aircraft type. Faster turn around time. It all worked, thus enabling Cebu Pacific to pass on savings to the consumer. How did we do this? By sticking to our philosophy of “low cost, great value.” And we stick to that philosophy to this day. Cebu Pacific offers incentives. Customers can avail themselves of a tiered pricing scheme, with promotional seats for as low a P1. The earlier you book, the cheaper your ticket. Cebu Pacific also made it convenient for passengers by making online booking available. When we started 11 years ago, Cebu Pacific flew only 360,000 passengers, with 24 daily flights to 3 destinations. This year, we expect to fly more than five million passengers, with over 120 daily flights to 20 local destinations and 12 Asian cities. Today, we are the largest in terms of domestic flights, routes and destinations. We also have the youngest fleet in the region after acquiring new Airbus 319s and 320s. In January, new ATR planes will arrive. These are smaller planes that can land on smaller air strips like those in Palawan and Caticlan. Now you don’t have to take a two-hour ride by mini-bus to get to the beach. Largely because of Cebu Pacific, the average Filipino can now afford to fly. In 2005, 1 out of 12 Filipinos flew within a year. In 2012, by continuing to offer low fares, we hope to reduce that ratio to 1 out of 6. We want to see more and more Filipinos see their country and the world!

Challenge No. 2: In 2003, we established Digitel Mobile Philippines, Inc. and developed a brand for the mobile phone business called Sun Cellular. Prior to the launch of the brand, we were actually involved in a transaction to purchase PLDT shares of the majority shareholder. The question in everyone’s mind was how we could measure up to the two telecom giants. They were entrenched and we were late by eight years! PLDT held the landline monopoly for quite a while, and was first in the mobile phone industry. Globe was a younger company, but it launched digital mobile technology here. But being a late player had its advantages. We could now build our platform from a broader perspective. We worked with more advanced technologies and intelligent systems not available ten years ago. We chose our suppliers based on the most cost-efficient hardware and software. Being a Johnny-come- lately allowed us to create and launch more innovative products, more quickly. All these provided us with the opportunity to give the consumers a choice that would rock their world. The concept was simple. We would offer Filipinos to call and text as much as they want for a fixed monthly fee. For P250 a month, they could get in touch with anyone within the Sun network at any time. This means great savings of as much as 2/3 of their regular phone bill! Suddenly, we gained traction. Within one year of its introduction, Sun hit one million customers. Once again, the paradigm shifts – this time in the telecom industry. Sun’s 24/7 Call and Text unlimited changed the landscape of mobile- phone usage. Today, we have over 4 million subscribers and 2000 cell sites around the archipelago. In a country where 97% of the market is pre-paid, we believe we have hit on the right strategy. Sun Cellular is a Johnny-come- lately, but it’s doing all right. It is a third player, but a significant one, in an industry where Cassandras believed a third player would perish. And as we have done in the realm of air travel, so have we done in the telecom world: We have changed the marketplace. In the end, it is all about making life better for the consumer by giving them choices.

Challenge No. 3: In 2004, we launched C2, the green tea drink that would change the face of the local beverage industry — then, a playground of cola companies. Iced tea was just a sugary brown drink served bottomless in restaurants. For many years, hardly was there any significant product innovation in the beverage business. Admittedly, we had little experience in this area. Universal Robina Corporation is the leader in snack foods but our only background in beverage was instant coffee. Moreover, we would be entering the playground of huge multinationals. We decided to play anyway. It all began when I was in China in 2003 and noticed the immense popularity of bottled iced tea. I thought that this product would have huge potential here. We knew that the Philippines was not a traditional tea-drinking country since more familiar to consumers were colas in returnable glass bottles. But precisely, this made the market ready for a different kind of beverage. One that refreshes yet gives the health benefits of green tea. We positioned it as a “spa” in a bottle. A drink that cools and cleans- thus, C2 was born. C2 immediately caught on with consumers. When we launched C2 in 2004, we sold 100,000 bottles in the first month. Three years later, Filipinos drink around 30 million bottles of C2 per month. Indeed, C2 is in a good place. With Cebu Pacific, Sun Cellular, and C2, the JG Summit team took control of its destiny. And we did so in industries where old giants had set the rules of the game. It’s not that we did not fear the giants. We knew we could have been crushed at the word go. So we just made sure we came prepared with great products and great strategies. We ended up changing the rules of the game instead.

There goes the principle of self-determination, again. I tell you, it works for individuals as it does for companies. And as I firmly believe, it works for nations. I have always wondered, like many of us, why we Filipinos have not lived up to our potential. To be a truly great nation, we must also excel as entrepreneurs before the world. We must create Filipino brands for the global market place.

When we started our own foray outside the Philippines 30 years ago, it wasn’t a walk in the park. We set up a small factory in Hong Kong to manufacture Jack and Jill potato chips there. Today, we are all over Asia. We have the number-one-potato- chips brand in Malaysia and Singapore. We are the leading biscuit manufacturer in Thailand, and a significant player in the candy market in Indonesia. Our Aces cereal brand is a market leader in many parts of China. C2 is now doing very well in Vietnam, selling over 3 million bottles a month there, after only 6 months in the market. Soon, we will launch C2 in other South East Asian markets. I am 81 today. But I do not forget the little boy that I was in the palengke in Cebu. I still believe in family. I still want to make good. I still don’t mind going up against those older and better than me. I still believe hard work will not fail me. And I still believe in people willing to think the same way. Through the years, the market place has expanded: between cities, between countries, between continents. I want to urge you all here to think bigger. Why serve 86 million when you can sell to four billion Asians? And that’s just to start you off. Because there is still the world beyond Asia. When you go back to your offices, think of ways to sell and market your products and services to the world. Create world-class brands. You can if you really tried. I did.

As a boy, I sold peanuts from my backyard. Today, I sell snacks to the world. I want to see other Filipinos do the same.

Want to know how his only son, Lance Gokongwei, see his father? Click this link to read it from Philstar 

source: http://www.philstar.com

Lance Gokongwei: There can only be one boss, and my dad is the boss