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Candidate No. 2: Mar Roxas (Philippine Presidentiables 2016 Series) Part 2 of 3

Introduction: This is the second installment of our Presidentiables series. If you wish to read the previous one please click Candidate No. 1: Jejomar Binay.

Six years ago, Mar Roxas gave up his presidential ambition to give way to Noynoy Aquino. The death of the latter’s mother and former President Cory Aquino on August 1, 2009 changed the tide of times and Noynoy was somehow thrust into the limelight to run for the presidency with Mar as his vice, reminiscent of Doy Laurel giving way to Cory back in 1986. Unlike the ‘80s tandem of Cory & Doy who ended up splitting during their term, the PNoy & Mar tandem is as strong as ever, as Mar is the administration’s candidate for 2016.

Mar Roxas is the first of three children of the late senator Gerardo Roxas (from Capiz, who was the son of the fifth Philippine president Manuel Roxas) and Judy Araneta (from Negros Occidental, although most of us probably say she’s from Cubao, the bahay na puti). Mar attended the Ateneo de Manila University for grade school and high school, and the Wharton School of Economics at the University of Pennsylvania where he obtained a degree in Economics. He worked as an investment banker in New York and became an Assistant Vice-President at Allen & Company. He came home to help in the campaign of Cory Aquino; afterwhich, he helped set up investment round-table discussions in the country with the American business community. Among the investment banking deals he got involved in were the Initial Public Offering (IPO) of Jollibee in the Philippines, financing for Discover Channel and Tri-Star Pictures.

It was his younger brother Dinggoy who was really the politiko in their family but he died of colon cancer at a very young age of 32 in 1993. In the same year Mar entered politics as Congressman. He was appointed Secretary of Trade and Industry in 2000 and it was during his term that the BPO industry started. He was elected Senator in 2004, served in the Department of Transportation and Communications in 2011, and the Department of Interior and Local Government a year after.

The young Mar Roxas, as student at the Ateneo, Wharton, and with younger brother Dinggoy.

  The young Mar Roxas, as student at the Ateneo, Wharton, and with younger brother Dinggoy.

Breakfast with Mar

The schedule was 7:30 am in Makati and the organizers were a bit concerned if people would arrive on time, but they did. And so did he.

Among the three contenders, Mar is definitely the one most comfortable to address the crowd of investors. He was in his comfort zone, and it showed in the way he delivered his speech. He spoke extemporaneously, enumerating his data without looking at his notes. He was engaging the audience and I saw some nodding while he spoke.

Candidate Number 2: Secretary Mar Roxas delivering his keynote speech at the dbAccess on October 8, 2015 at 7:30 am.

Candidate Number 2: Secretary Mar Roxas delivering his keynote speech at the dbAccess on                                                                           October 8, 2015 at 7:30 am.

Mar’s Speech

Welcome to all the foreigners who have come to this conference, I hope my country is showing you its unique brand of hospitality, which used to be just a lot of singing and dancing but in the recent five years, has included profits as well. I also want to thank you all as I see that it’s quite a full room for 7:30 in the morning. You know Noel & Noli were telling me about the sumptuous dinner and entertainment that they had prepared for you last night so thank you all for being here this morning.

I wish to give you a broad brushstroke or a helicopter view of what we’ve seen over the last five years, and where we intend to take the country in the coming six years. I think the fact that you’re here means that you’ve been following the country. You’ve seen all the nominal and headline statistics and would be more interested in figuring out “Are these for real? Are these going to stay? What are the drivers that make them happen? Are we going to see a refinement? A fortification? Or a reversal, depending on who comes in next year? Then I’ll leave a lot of room for Q&A for any issues you might have.”

(He went on to narrate our story.)

The Philippine Story

The story of the Philippines is that it’s the greatest turn around story in recent memory as far as countries go. From what was commonly known as the sick man of Asia (the country who couldn’t get it right, the country who never missed an opportunity to miss an opportunity), we are now known as the bright spot in Asia. And beyond the work of the Investor Relations Office of the country, beyond the work of the publicist, there is real meat to this.

The real economy is healthy and robust. There are some areas that we need to focus on, but in general you could say that there is a rising tide and this tide has affected every aspect of life in the country and you who are in the financial markets, which is a good barometer of where the country is headed, have already experienced this. What’s the turnaround story? Basically, the people, the shareholders if you will, came up in arms and changed management. The country was put under new management with a clear direction and not just an aspirational goal, but one where the direction was included, the means of how to get there. Over the last five years you’ve seen good disciplined execution of that direction. The basic premise was Kung walang corrupt, walang mahirap (If there’s no corruption, then there would be no poverty), which remains the bedrock principle of everything that we do in the Aquino government.

We inherited a government and a system where the debate was not whether there was corruption or not, but the debate was how do we moderate the corruption. That was how bad it got, it became accepted as a conventional wisdom that there would be corruption so it was just how little of it would survive as you went through all the processes. Nobody’s saying that it’s all perfect now, but certainly there’s a lot that has been eliminated, and has been eliminated in the most important part of any organization, which is at the top. Because if there is corruption at the top, it is very hard to impose an anti-corruption discipline all the way down to the bottom. For example, until recently, I was in charge of the Philippine National Police, that’s a 150,000 person force all across the country. If I was receiving something from illegal gambling for instance, how can I go to any police station and say, “Look, stop corruption!” So the corruption was stopped by a good and honest management team and that stoppage of corruption at the top has really cascaded all the way down. Our methodology was straightforward. There’s transparency, a rules-based government rather than “who brought the project to our attention.” And to have a very very strict discipline as regards stability of policies so that we would not be jumping from one policy approach to another. It has been premised on a recognition that all growth will be private sector led. The government is very good at doing certain things but not good in doing many other things; therefore, the private sector should be allowed to do these things.

All of these have led to what you now know, that the Philippines has reached investment grade. Net foreign direct investments have reached historical highs. The investment grade was quite an accomplishment, nobody thought that it was attainable at the beginning of the term but clearly a virtuous cycle came about, where from one positive change led to another and another, so the ratings agencies recognized this. This led to lower borrowing cost to the country, then greater availability of credit has allowed us to lengthen our maturities, which allowed us to reduce our debt to GDP ratio from ¾ of the economy to half (from 75% to 50%), which in turn, allowed us to reduce interest payments as a percentage to total budget.

All of these data that I’m telling you are readily available. Just go to your local Deutsche Regis website. I don’t want to go to the micro statistics, you’re all following the country so you already know. I think what is important is to know what we did.

What did we do?

In essence, we did what every good turnaround situation demands:

  1. First, we fixed our Balance Sheet. We borrowed wisely. We took advantage of both foreign exchange and market movements so we could come into the market at cheaper rates. When Pres. Aquino took office in 2010 only 6% of the non-fixed payments was available to him for essentially half the year. In those days, every peso was really very very important. The previous administration had already spent 44% of the second half’s budget. So we borrowed money wisely and we did the first concrete steps in fixing our Balance Sheet.
  1. We then used that Balance Sheet to improve our P&L (Profit & Loss or Income Statement). We collected taxes much better and much more efficiently. And our tax effort, although our target was at 16% of GDP, we’re now hitting about 14% from the lows of 12% of GDP. We did this without imposing any new tax other than the adjustments in the pricing for the sin taxes – on alcohol, tobacco and beer. Nonetheless, we’ve been able to triple our capital expenditure. Total infrastructure budget for 2009 was roughly P170 billion. This year 2015 we’re going to spend around P570 billion for infrastructure, times 3. As a percent of GDP we haven’t borrowed more nominally. What is important is that we have maintained the deficit at below the magic 2% of GDP threshold. In fact, because of underspending (and I’m gonna get to this later), we are actually below 1% of GDP.

Aside from improving our revenue stream, we became very very strict in spending. We scrapped vanity projects, projects that are useless and designed primarily for pakitang tao (just for show), or projects that are designed just so one could skim off the top. A good case in point that made a lot of headlines was PNoy’s cancellation of the Laguna Lake dredging project, which essentially would have just made people play with the mud – moving the siltation from one part of Laguna Lake to another part of the lake. It was P15 billion project signed by the previous administration.

So just to go back to the story, we fixed our Balance Sheet, we improved our revenue stream, we became very strict with the spending, and then you guys came in. When you recognized it, you came into our equity markets, our financial markets with optimism in the business climate. Ratings agencies saw this, and one success led to another.

Was it chamba? (Mar went on.)

These did not happen by chance or pa-chamba, which means pure luck. There was a philosophy behind this, which was good governance. It was in effect applying Net Present Value or Internal Rate of Return disciplines in every decision that we made. There were big decisions that we made.

Invest in People

Our country’s single biggest advantage is really the Filipino people. These are the very same people, we now have a million of them. Noel mentioned it, in the IT BPO center industry that are servicing the rest of the world. They’re educated, English-literate, appreciative of Western culture, and are particularly prized for voice interaction. And we are also moving up the value chain, and the only way to move up is by investing in our people. How did we invest in our people? Education budget over the last 5 years and into next year, we would have built 180,000 classrooms, more classrooms that all the presidents since 1986 built combined. It can be done, it just took political will to say we’re not spending for other things but we’re going to spend and close the student-to-classroom gap, and we did. By the way, each of the classroom has a teacher, desks and chairs, books and so on. It was a humungous task because not only were we filling up the student-classroom gap but we also decided to extend education by two years. The average Filipino student up to two years ago only received 10 years of basic education before going to college. The rest of the world was already at 12. (6 years of elementary and 4 years of high school). So now, our kids are better educated, learning their lessons inside a classroom instead of under a mango tree, which was the perennial image of the Philippine education.

We invested not only in the hard infrastructure of education but also in the soft infra, which is the family’s ability to send their kids to school. The 4 Ps Conditional Cash Transfer Program now has 4.5 million families and we’re spending about P65 B a year to ensure that these kids who ought to be in school are actually going to school. The only conditions are that the attendance of the kids in school, proof that they receive inoculations and proper nutrition. If parents meet these conditions, they get their monthly cash transfer, which in turn help kids stay in school.

In March of this year, which is graduation season in our country, 330,000 kids graduated from High School and are the product of this program. Who’s to say whether they would have graduated without the program? But we do know that the drop-off rates in education was moderated and in fact kids are graduating. Of those 330,000 graduates 13,000 were recipients of honors and awards – valedictorians, honors class, highest ranking students, so that’s the pay off that we’re getting from this CCT program.

Health Care

In addition we also invested in health care. One of the biggest curses that can befall a family in the Philippines is having a member stricken with some serious illness. There’s a Filipino saying Bawal magkasakit! (It’s forbidden to get sick!) because the cost of health care is just astronomical that some have to sell their livestock, land, and in some instances they sell their kidney to raise money. The proceeds of the amended sin taxes were used for health care. Last year we spent P75 billion in PhilHealth reimbursements, an amount that would have come out of the pockets of the poorest of the poor.

Underpinning all of these investments was the mantra of Good Governance, seeing us go in the world economic competitiveness rankings from the mid 80s to the mid 50s. The point is, this is a substantial change. This is not a chamba but a product of deliberate consistent application of good governance.

End (but wait…)

Let me end by simply stating another statistic. After five years of his term with less than 8 months to go, Pres. PNoy enjoys 65% trust and approval rating from our people. I think this shows that people see the programs not as a one-off but more as an institutionalization and regularization of government services, not just pakitang tao. The people appreciate the reliability and predictability no matter how nebulous or uncertain their lives are. They feel that there is some sort of certainty, an increase in certainty relative to where they were five years ago, and that has led to the high approval and trust rating of the president. I doubt if there’s any leader in a democratic country who enjoys this well into the end of his term, after five years of saying yes and no, where for every yes there is a disappointed party and for every no there are more disappointed parties. Because of transparency, people know decisions are made based on their welfare and not because somebody wants to pocket something. So this is encapsulating the Daang Matuwid that we’ve had over the last five years. The straight path, it’s not rocket science. It’s the very same discipline that each one of you look for in the companies that you invest in. Do they have a plan? Do they have a management team that will capably, competently and honestly implement that plan? And is that plan realistic? I submit that the Philippines does in fact have that plan. It does have the people at present to execute it and over the last five years we have kept true to the mantra of no corruption.

To the investors who have come in, thank you for your tourism dollars, your increased exposure to the Philippines. Oh by the way, I think the Philippines will be able to weather and do much better than our neighbors given the uncertainties enveloping across the globe. I think it’s not unknown to you that markets are down, soft, confused. The Baltic Dry Index (an index that assesses the price of moving goods by sea) is at a 30 year low, commodity prices are coming down, foretelling an uncertain period in the world economy. But here’s why the Philippines has its life preserver. My side note is becoming much longer than I thought.

Let’s take a look at the 3 areas of concern that historically have been the pitfalls of the Philippine economy.

  1. Foreign exchange crisis – when I was DTI Secretary in 2000, it was a good month if we had US$3 Billion GIR (Gross International Reserves) at the BSP. Today, the problem of not having enough dollars to pay for oil, aluminum, etc. is not longer there. In fact, the peso has been strengthening, thanks to Say Tetangco. Reason for that – $24-25 Billion annual OFW remittances plus $20B earnings from our IT BPO industry, that’s consistent, not a one-off and as we move up the value chain, that becomes more stable.
  2. Fiscal Crisis – runaway budget deficits, commitments of government for entitlements in the past. For example, there was a period when a former leader who was a trained economist guaranteed that electricity prices would be pegged at certain rates and that government will pick up the difference, clearly a political decision not having any sound foundation in the Balance Sheet and P&L of the country. This led to humungous deficits and humungous cashflow restrictions. Now it has been below 2% of GDP for our deficit, in fact below 1%, which has led to a virtuous cycle where lower debt led to lower borrowing cost, led to greater savings. It goes from strength to strength.
  3. Philippines was always known in the investment banking world to be “event rich.” Volcanoes erupting, earthquakes, strongest typhoon (Yolanda or Hyan as you know it), or even coup. I remember fund managers in HK calling and asking, “Is there going to be a coup this weekend?” Or a corruption scandal, huge uncertain political movements, but now it’s been relatively boring if you look at the newspapers – no huge corruption scandals, no threat of impeachment, no threat of political upheaval, no changes in the political firmament. It’s been a stable period. That stability has allowed the country not only to fix the many problems of the past but has allowed us to make good concrete progress, now poised to withstand the global disturbances, and so we can spring from here into a higher growth trajectory.

So I thank you all for your interest in my country.  And I hope you continue to invest in her. Thank you very much and good morning.

His speech was warmly applauded. Then he went on to make a side comment, “Noel, I understand that you also invited my competitors?” to which Noel answered, “It’s the road to elections.” Then Mar quipped, “I see, I also hope that you took note of how many times I looked at my notes and read.” To that the crowd cheered and applauded even more! Then he said, “Thank you for that, a good wake-uper!”

The Q&A

The foreign fund managers definitely understood his story as a handful of them asked their questions. They always started by thanking him for his talk and/or service to the country. Here are some of the questions from both the foreign and local guests.

1. Thank you for sharing your views and your good governance has really gotten a lot of admiration. In the light of this, would you explain this government’s breaking its own contractual obligations in the water tariff situation?

Answer: I’m not very up to date on this particular issue, and so it’s difficult for me to comment. I would comment on a similar criticism that was made on another bidding. There was a bidding some time last year for a road project where the winner came in at about P11 Billion and one of the bidders who was disallowed to bid because of a technicality opened their bid and showed that his bid would have been P19 Billion. It was a very serious matter that the government took. On the one hand, it’s the principle that the rules are the rules and we should not change rules if somebody was disqualified. In the end, the president made a political decision premised on the welfare of the people, and that decision was to have a re-bidding, which is completely legal under our bidding system. The re-bidding resulted to P27 Billion for the government, for the Filipino people. The point that I’m making here is that rules are there, they are instituted for the welfare of the people, of society. In this instance, the welfare of the people demanded a re-bid. A blind un-thinking adherence to the rules in any given situation may not entirely be the best for the people. In this case, welfare was improved from P11 to P27B. Now to relate to this particular issue, I think it’s an MVP company Maynilad where there were some promised increases in the tariff, I’m not very familiar. I think the other side was also saying that there are other things that were not delivered so there’s now back and forth between the concessionaire and the regulator. I think what is important is that this be decided in a transparent manner so that you know what the dynamics are going to the decision as opposed to kakampi ba natin? 

2. How would you fast track the PPP programs and what would be the priority projects in infrastructure?

Answer: Here’s the thing, in concept there’s nothing wrong with the PPP project. In fact, it’s a desired mechanism to get investment dollars into the country. The problem was the government’s ability to undertake these projects. In a PPP project the government says here’s what we want, here are the specs and here’s what it ought to be, this is what you ought to pay us. This would require very very sophisticated modeling – financial, engineering, etc. so that the government can peg what is a good value for that investment, The delay came in because the government’s capacity was not as strong as it ought to be, and if the bidding went on, the government would have been at a disadvantage. Let me go back to CALAX project I discussed earlier. The government thought it would have to pay P4 billion for the project. It turns out the private sector was willing to pay P27 billion. If that was an investment banker leaving that much money on the table, he’d be hung, right? That shows you the disparity in the capacity to understand the values of a 20 30 year horizon. If there’s an incapacity to value these projects, then we would be at a disadvantage. We have to consider the economic value. What do we do to solve this? We need to hire talents such as the talents in this room so we can price our projects much better. In my case, I would be willing to have third party opinions, outsourcing the valuation competence because that’s not inherent in the government. So if you compare that with a team like yours, then it would be asymmetric. How many vehicles would be passing, etc. so you can value. That was an involved explanation, but essentially that’s what it was. My answer would be in having government able to value its products.

We increased capital expenditure from P170 billion to P570 billion but we haven’t hired any more engineers. We haven’t spent any more money on CAD cams and other basic equipment so we could draw, cost and design these infra projects. In fact, one of the most important investments that we could do today is in back office type of investments. I’ll give you very specific example. Earthquake in Bohol in April. We released P2.3 billion in cash to the Bohol local government unit for the rehabilitation and repair of infrastructure. August September last year, but because there’s no ability to bid, of P2.3 billion only P0.3 billion committed to projects. So is there a delay? Yes but who are you going to blame? There are no engineers, bankers, how do you put a bid document together? Imagine the capacity of a town named Valencia in Bohol to hire the team that’s necessary to put those bids together. It’s a problem but it’s a problem that can be solved as opposed to problems that are different in nature. So that’s where it is now. DPWH does not want to take in more projects because they’re up to here now and they’re using antiquated CAD cams. We need to invest in back office so we can support all these projects. And I’m not only talking about DPWH but DOTC, all the government offices. Thank you.

3. Thank you very much for your years of service to your country. What are the PPP projects that you prioritize?

Answer: Interconnectivity. Unlike the Asian mainland, we are 7,100 islands. Physical interconnectivity is very important – ports, seaports, airports. Ask any Filipinos in this room, I doubt if anyone could have imagined that in 2015 we would have 50 million domestic passengers. There was no model that could have predicted that, 90% of which is local. There’s been a transformation. Huge companies, wealthy families – Gothong, Chiongbian who were in shipping are now replaced by Cebu Pacific, and other airlines. We just inaugurated CDO airport and it’s now up to capacity. So even going back to the government planners, we have to calibrate how we imagine so that we can have enough. Now there are 16 flights a day to CDO and the throughput is dependent on the apron space. And that’s the same with Iloilo and Bacolod. These are growing pains. Imagine a company that you’ve invested in and its sales have gone through the roof but its productive capacity hasn’t kept up. So it’s management’s fault? Yes maybe, but what’s happening is we’re building a new factory line, and eventually the curves will cross. The experience is a lot like a real estate company. The moment that you think that you’ve already built it, you have to keep investing because the demand will always grow. When I was DTI secretary It was a good year when the car manufacturers sold 60,000 cars in a year. Last year we sold 230,000, this year we’re looking at 300,000 units. What’s good is that out of that 300,000 units 200,000 are commercial vehicles, an indicator that money is going to commercial vans for delivery and other commercial undertaking. It’s growing pains making sure that we keep investing. There are parts of the country that remain unconnected so therefore cost of goods coming and going are higher. There are 2 NLEX SLEX connector projects ongoing now. By San Miguel parallel to EDSA. Another one by the Pangilian consortium nearer to Roxas Blvd. all the way to the ports and NLEX. It’s possible that by the time they’re built we may say, we should have made them bigger. Because the country is going through this resurgent dynamics. We have 100 Million people that with good government will be feeding, clothing, providing shelter, investing, growing, etc. into the future. Just the thought bubble that came to my mind now, “Oh boy, invest in cement companies.”

4. Just a follow up to the earlier questions, the common criticism is analysis paralysis. It’s great that we’re doing all the right things, but as you’ve pointed out, some of these projects may be coming in too late. By the time it’s done, it’s already at capacity. How would you address that? Investing ahead of the curve?

Answer: It’s a change in mindset. You have to remember that the bureaucrats who are making the decisions have a mindset different from yours. If you cannot imagine 50 million passengers then you would design something different. Even JICA said that’s all we needed. It’s a learning curve. We’re going to need 20% to 35% more capacity. I’ll give you an example. NAIA. There’s no way that NAIA can be a principal airport. Think of it as Haneda, Kai Tak. NAIA is 470 hectares, an airport with two runways  intersecting so essentially you only have one. No matter how much money we put in, it would just be band-aid solution. We really need to make a big decision. My view is Clark. It’s 2,000 hectares, there’s a runway there. There’s a reason why the Americans chose it – weather patterns, etc. We need to make a decision as a people. If you make a survey, Makati Business Club including yourselves here, you might say, “Clark ha? So far, keep it in Manila.” The business sector leaders didn’t want to move it out of NAIA but then Clark will not be a viable possibility until we have a high speed rail.  By the way, you have your calculators, multiply 470 hectares by 30,000/m2 or whatever the commercial value of NAIA is and it can pay for the exercise plus more. It’s not rocket science. Even Bangkok has done it. Even after that decision, the next is how do we bid out that rail system? What’s the value of that? It has to be 100 km to Clark about 25 minutes. The radius of the curve has to be this and that, there’s no capacity in the Philippines that can do that. You don’t know where to begin. This is the kind of knots and bolts and we need to wrap up our capacity to build projects. So do we recognize the problems? Yes. Are we doing something about it? Yes but it’s not as simple as going to the supermarket and buying a box of milk and it’s solved. But if you have honest people and competent people, you know that you’re going to see it through.

5. We understand you in this room, but once you get out, what’s your message going to be? What will be your message to your future bosses out there that can back you up? It’s a tight race, I just want two key messages that you’re going to go out there with.

Answer: I think the voter today is very different from the voter of the past. They see the diaspora. Our OFWs out there see how things are done in their host countries so they ask why isn’t it done here? The standard is always increasing. If you take a look at the polls that you alluded to, the recent polls are different substantially than where they were months ago. I’m hoping that it will even be more favorable in the coming months. The message is very very clear: “Performance, actual performance” vs. “I promise.” I mean the words, the slogans are there and they will be unveiled as the campaign flows out. But it’s very simple, this is what happened. Government services are delivered regardless of party affiliations. These are the things we changed over the last five years. We’ve been able to do it, it’s Politician-agnostic so to speak. We believe that that works. And the recent polls validate that so we continue with that.

Towards the end of the Q&A, Secretary Mar jokingly said, “After this question, my talent fee goes up. This is the last freebee ha, Noel.” Then Noel answered, “Compliance disallows payment sir.” When they handed their gift to the secretary, he gave his comeback, “Compliance dictates we cannot accept this gift.” to which Noel said, “It’s within the compliance budget.”

So there, the secretary also delivers jokes. 

My Burning Question:

Just like what I did with Candidate No. 1 the previous day, I approached Sec. Mar to ask my question. Here goes:

Rose: Hi Secretary, that was quite a speech, you knew everything by heart. May I ask a question?

Sec. Mar: Thank you. Sure, what’s your question?

Rose: If you win as president, what will be the role of Korina Sanchez in your administration?

(I noticed his face become serious with a glimpse of surprise.)

Sec. Mar: What do you mean? She’s my wife.

Rose: Will she be playing any special role? Have you talked to her about it?

Sec. Mar: Well, she has her foundation for children. That’s what she’s gonna do. She’s not going to hold any position in government if that’s what you’re asking.

The author asking her question to Sec. Mar Roxas.

                                         The author asking her question to Sec. Mar Roxas.

Comments from other attendees: I asked other attendees for their feedback. Here they are:

  1. His speech was very good, extemporaneous and he knew what he was talking about.
  2. Unlike the first one, which was boring, Sec. Mar was engaging.
  3. He was in his comfort zone, speaking to an audience who understands his language, but he could have done better during the Q&A. His answers were weak.
  4. He was good in delivering his speech and the audience was agreeing with him; however, he failed to nail it, to communicate what he will exactly do in his term. He still sounded like he was campaigning for PNoy. It would have been good to hear him say that he already knows what works and what the pending problems are and he will waste no time in solving them in his term. But I guess, even a status-quo in his administration will not be so bad, as long as there’s stability. 


Sec. Mar arrived with a leaner staff compared to VP Binay. He was smiling as he came in but he wasn’t offering a handshake as he walked to his table. There were a few whom he already knew who gave him a handshake or even a beso. When he took the podium, I saw a confident man talking about his team’s achievements in a narrative that was easy to understand. Okay, let me qualify that, easy to understand with someone who understands investment banking jargon.

I actually liked it when he simplified how we achieved Investment Grade status – 1.) By fixing our Balance Sheet; 2.) By improving our Profit & Loss Statement (both sides – increase income and decrease expenses) and doing all these and the other government undertakings guided by good governance. Isn’t this how we all ought to live our lives whether we’re a family or a corporation or a country for that matter? I really related to these Basic Guidelines because I like simplifying things (Remember my 3 basic laws?) and relating everything to what one values so we always have a compass.

In his speech, I felt his sincerity. Even when he hinted a bit of displeasure when I asked my question, I thought that was sincere and unrehearsed. And maybe because I imagined that I would also like my husband to be protective of me when put in a similar situation. However, during the Q&A, I agree with the common sentiment that he failed to nail it. I don’t know if he didn’t come prepared on how to answer the mega delays in the PPPs. He did try to answer by explaining that it’s not that simple and that honestly, our government is lacking in capability to successfully carry out bids. It made me recall my investment banking days when we would prepare the prospectus for Initial Public Offerings. (IPO). Each sentence that we put in the prospectus should be verifiable and quantifiable. We cannot put a claim if it’s not, and that’s why most of them sound so dry and unexciting. Was Sec. Mar acting like he was preparing a prospectus such that he refused to say, “Hey guys, I know what works and what doesn’t and given the five years in the administration, I am the one most capable among us three, no need for learning curve. I will do this and do that?”

It’s possible. As he mentioned we can choose between “I promise” and “Actual Performance.” But you see, people need leaders. You are a president because you can lead us the way, and leading the way includes being decisive and a cheerleader. You have to be the most optimistic in the group, in the hope that your optimism will rub on us and we will believe that it can be done and we end up doing our share in making it happen with enthusiasm.

The challenge of Sec. Mar is really in communicating his capability to lead. The challenge becomes bigger when, as pointed out by one fund manager, he goes out of the room. How can a regular Juan understand his Balance Sheet and P&L. He struggles with this. When they try to make him pang-masa it looks awkward like this Ako na ang papadyak! ad in the past.

One may argue, “But PNoy didn’t have to do any of those clown stunts to get elected?” Oh, but we should remember, his mother, an icon of freedom just died then and we were fighting corruption once again. And we should also remember that the second highest votes went to no other than Erap, the champion of charisma.

We’re in a different situation now. People adapt, and what we didn’t have before that we have now, we can easily take for granted. And it’s important for the candidates to address the current concerns. Today it’s primarily traffic and lack of infrastructure as we saw in the Q&A.

I admit I was a bit kinder and less dismayed than the rest of the participants when I didn’t hear very decisive answers from Sec. Mar. Want to know why? The lessons from Niccolo Machiavelli are still fresh in my mind. Niccolo Machiaveli was an Italian historian, politician, diplomat, philosopher, humanist, and writer, who is recognized as the founder of modern political science and political ethics born in the 1400s. The adjective “Machiavellian” has taken a negative connotation because it talks of duplicity, manipulation, etc. In fact, his book The Prince was banned by the Church for 200 years. But I think it’s a good read for all voters and candidates. I know it may be too much to ask, especially the young voters to read Machiavelli and learn (not blindly subscribe to the principles, ok?) from it, so I’m sharing a really nifty video that talks about some of the principles in the book. It runs for only 10 minutes and it’s so current in its language, you’ll even find Kim Kardashian in the discussion. So voters and candidates, please watch it. This may make the difference in your candidacy and your vote. The principles also apply in the many aspects of your life, and what I like is that as early as the 1400s one guy was already hinting on Behavioral Economics! Here’s the link – Machiavellian Principles in 10 Minutes.


To be continued

(Watch out for the second installment Candidate No. 3: Senator Grace Poe. It will come out tomorrow.)





  1. I will speak at the ADMU John Gokongwei School of Management during their JGSOM week on October 30, 2015.
  2. I will speak at the Knowledge Community, Inc. on How to Raise and Nurture Children to have High FQ on November 19, 2015 at the Crown Plaza Hotel.
  3. I will speak at the 6th PANA (Philippine Association of National Advertisers) Foundation IMC Youth Congress on November 27, 2015 at the Philippine Trade Training Center, Sen. Gil Puyat Ave. cor. Roxas Blvd., Pasay City.


Rose Fres Fausto is the author of bestselling books Raising Pinoy Boys and The Retelling of The Richest Man in Babylon. Her new book is the Filipino version of the latter entitled Ang Muling Pagsasalaysay ng Ang Pinakamayamang Tao sa Babilonya. Click this link to read samples of the books. Books of FQ Mom Rose Fres Fausto. She is also the grand prize winner of the first Sinag Financial Literacy Digital Journalism Awards.


Attribution: Photos taken by the author during the dbAccess Philippines Conference 2015, and photos from Roxas family photo albums obtained from Rappler put together to help deliver the message of the article.


This article is also published in PhilStar.com and RaisingPinoyBoys.com.