Alfonso Yuchengco’s legacy

Date Published: January 14, 2024


Complacency, an old adage goes, is one of life’s biggest tragedies. As American rights leader Benjamin Mays said, success breeds complacency and complacency breeds failure.

We’ve seen this happen in both politics and business, but especially in business.

The Kodak story, for instance, is one such cautionary tale. Some 11 years ago today, Kodak filed for bankruptcy, no thanks to its inability to ride on the dizzying digital camera wave. One of America’s greatest success stories came to an end.

In the Philippines, complacency is a common killer too in businesses, aside from peculiar and complex family trees, internal family squabbles and greed and corruption.

Many of the old companies weren’t able to cross generations because of these problems and more.

Among conglomerates, some have become complacent too and ignored the need to evolve.

Luckily for their stakeholders and shareholders, however, some Filipino conglomerates continue to embrace change and are striving to become even better.

The Yuchengco Group of Companies (YGC), chaired by the indefatigable lady tycoon Helen Yuchengco-Dee, is one example, unveiling recently its steps toward a major reorganization.

Her grandfather, Don Enrique Yuchengco and father, Alfonso Yuchengco, would surely be happy to see how she has been leading the group.

It’s not easy after all to lead a conglomerate which traces its origins all the way to the 1930s.

This is its story, according to YGC:

“The Yuchengco Group of Companies traces its origins to the founding in 1930 of China Insurance and Surety Co., a non-life insurance company, by Don Enrique Yuchengco, father of Ambassador Alfonso T. Yuchengco.

“Don Enrique and his wife, Maria Hao Tay, were 4th or 5th generation migrants from Southern China. Before World War II, Don Enrique had sizable interests in lumber, construction, tobacco and rice milling.

“When Don Enrique passed away, the young Alfonso took over the reins of the family enterprises and began to chart a new direction marked by rapid growth and expansion. Sharing his father’s vision, he embarked on an aggressive expansion program for the insurance company, creating the Malayan Group of Insurance Companies.”

It was under Alfonso Yuchengco’s leadership that the Yuchengco Group of Companies was born, “rooted in integrity and social consciousness.”

Fast forward to 2024 and YGC is now diversifying into non-bank financial services and is expanding its property business.

After unloading its majority stake in listed construction company EEI Corp., YGC now has a bigger war chest to fund its expansion.

Its listed holding company, House of Investments (HI), acquired a 184-hectare property in Tarlac via a P15.7-billion share swap and creating Tarlac Terra Ventures Inc.

It’s a good move because after the pandemic, the construction industry in general had been saddled with unpaid debts.

Just look at the David and Goliath-like war between a construction company and this sprawling property developer supposedly because of unpaid fees owed to the construction firm.

No doubt construction companies are vulnerable to this problem, which affects their cash flow.

But YGC won’t totally exit the construction business, Mrs. Dee told me.

“It’s not totally exit. We still have 16 percent,” she said when I asked about their plan for construction.

As for the property game plan, would the Yuchengco Group also join the residential market?

Not for now, says Lorenzo V. Tan, director, president and CEO of HI.

“Just recurring income properties for now,” he shared with me.

HI, he added, bought the BGC building which used to be the RCBC Savings Bank building, which is an office building.

“We are building an office in the former Mapua Makati campus to be completed in 2025,” he also said. The Tarlac property, meanwhile, will be developed into an industrial park.

Financial services
HI will then make non-bank financial services a core business, replacing construction. It will create a new financial services company comprising Malayan Insurance, Sun Life Grepa Financial and its existing 40 percent stake in RCBC Trust Corp.

Best Bank for Digital Solutions
Speaking of financial services, I would like to share my personal experience with the group’s banking arm, Rizal Commercial Banking Corp. (RCBC). I commend it for excellent service. I shifted to RCBC late last year because my former bank’s mobile app is intermittent and saddled with bugs.

So far, I have no complaints against RCBC’s retail banking and credit card services. The customer service hotline is likewise very efficient.

Kudos to RCBC president Eugene Acevedo for the many innovative measures the bank has been embracing. No wonder it’s consistently named Best Bank for Digital Solutions by AsiaMoney. This is a welcome relief in our banking industry where good service is few and far between.

Efficient customer service – whether it’s from a bank, a telco or a utility company, should be a given but unfortunately in the Philippines, private sector services are inconsistent and sometimes just downright ugly, in contrast to the promise of privatization.

But that’s another story.

For now, we are keeping a close watch on the reorganization of the Yuchengco Group as it strives to be a bigger and better conglomerate.

This year also marks the birth centenary of Alfonso Yuchengco.

Hopefully, YGC will also further expand and elevate its education arm.

Mrs. Dee and her father Alfonso are firm believers in education. It is, after all, one of the best steps toward nation-building.