No Free Lunch

A company ahead of its time


I was an agricultural economics undergraduate at UP Los Baños when Bancom was a familiar name to anyone with a minimum awareness of Philippine business and finance. As a young student then, all I knew was that Bancom was a formidable name in the financial industry, often in the news as a pioneer in the then new field of investment banking. Years later, while on graduate studies abroad, I was to hear of how Dewey Dee’s sudden flight to Canada had left behind a string of huge debts that spelled the downfall of a number of financial institutions, including Bancom.

I didn’t know back then that Bancom was so much more than a financial institution. It was, as envisioned by Dr. Sixto K. Roxas, its founder and leader for most of its 17-year existence, a “total development company” that sought to integrate financial markets with the real economy within its own operations. The legendary “SKR” (“Ting” to close associates and friends) recently completed writing his personal memoirs on the rise and fall of the Bancom Group. Along with it has been compiled a Compendium of Recollections and Tribute Pieces from Bancom Alumni and Friends. The book, to be launched next week, provides an arresting narrative of the contemporary history of the Philippine financial sector, and of the extraordinary men and women who shaped it from their formative years in the fertile training ground that Bancom was for them. Many of these “Bancom alumni” remain prominent movers and shakers, a virtual who’s who in Philippine business and finance.

Bancom endured the tensions that seemed inevitable in an organization that sought to address two types of market opportunities described by Roxas: “One, opportunities created by the peculiarities of regulatory and statutory ground rules that opened up niches offering profits not really related to authentic social and economic services… (economic rents) created artificially by regulations or by special privileges acquired by political means, rather than by genuinely enhanced product or service productivity. Two, opportunities for profits arising from needs that had a substantive developmental and productivity-raising function.”

He further muses: “The personal philosophies and value orientations of the persons that converged to form Bancom were such as to create an inherent tension between these two markets in the directions of development and growth that the institution would pursue: the merely opportunistic pole and the authentic development pole. These were not, of course, simply black or white choices. The trouble lay in the shades of gray in-between.”

To me, Bancom exemplified the same tensions one now sees in the Philippine economy as a whole: between a burgeoning financial economy that has thrived on speculative gains from global market movements, apart from the first type of profits Roxas describes; and a real economy whose growth has failed to deliver commensurate growth in jobs and reduction in poverty. The idea of directly delivering broadly beneficial (now termed “inclusive”) development while maintaining profitable financial operations was Bancom’s seemingly Quixotic mission. “I was obsessed with the idea of the total development company with the capacity to supply the package of services that would respond to the needs of every community for driving its development along a path that was optimally suited to its endowment of natural and human resources and its state of underdevelopment,” writes Roxas. Bancom, to him, had “a dual mission—to offer product lines of such a wide spectrum that one could always form a package to fit the needs and wants of any community at any stage of development or underdevelopment, and to be able to deliver this at a reasonable cost and profit. This was what the Bancom Group attempted to be, a company that was many things to most people.”

In its heyday, Bancom, aside from being a leader in investment banking and financial services, was into farm machineries, film production, book publishing, farm services, low-cost housing, health services, infrastructure construction, overseas manpower recruitment, steel fabrication, semiconductors, and more. That it tried to do too many things in keeping with its “total development company” vision could have been its ultimate weakness. The reader of Roxas’ and his former colleagues’ reflections would have to be the judge of that. Apart from being a chronicle of the seeming Camelot that was Bancom, the book is a colorful account of the life and ideals of a visionary whose illustrious career spanned academe, public service, industry, development management, financial markets and civil society. His vision and drive infected a distinguished cadre of luminaries in finance and development circles. In his foreword, Bancom alumnus Francis Estrada avers: “The perennial question that reverberated throughout the organization as it sought new solutions to increasingly large problems was: Why not?”

Estrada believes that having foreshadowed subsequent domestic, regional and global economic crises, Bancom’s story offers rich lessons for policymakers, regulators, practitioners and stakeholders in both its successes and (especially) its failures. To the reader who gets a fuller understanding of the company and what it sought to do from the eyes of its leader, the vision behind Bancom may well have been an idea way ahead of its time. In truth, not a few may see it to be ahead of its time even today. But current public discourse on the imperative for inclusive growth and sustainable development suggests to me that it’s an idea whose time has indeed come.

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  • batangpaslit

    Agree….a company ahead of its time.
    One of my kin’s was their corporate lawyer.
    Luis Villafuerte was once a key executive of this investment house.

  • nes911

    Or it was a company lost in time?

  • rickysgreyes

    Where is Dewey Dee? It should be easier to catch him these days when everything is interactive. Has the DOJ used Interpol? Is he dead?

    • Mon Sparks

      He is now supposedly living in Canada with his family.

  • buninay1

    I dont care less where Dewey Dee is though he had done a rather good job in upsetting the cart and setting back the country’s progress for several ages. What I care for now is the palpable lack of financial institution with the same mission and vision that Bancom had. If this scarcity will continue, the banking, financing and lending activity will remain confined in the upper crust of the social pyramid sapping its base where the multitude exists of the much needed credit and capital.

    I think in the interim the govt has an important duty to balance the flow of money to where it is in very much demand. I have been advocating that the govt should expand its Conditional Cash Transfer program to include credit extension to those poor families willing and able to run business of their own. With the govt resources ready to weigh in from advisory to facilitating roles, the poor businessmen will have a fighting chance to compete in the turbulent open market. I think that up to now the govt is not yet using to the hilt its technical expertise in so many fields to help poor filipinos transform their lives from perennial dependency to one that exudes self-reliance and sustainability.

    It is about time the govt take a bolder step of producing small scale businessmen from the ranks of the poor. Provide them with readiness they need such as soft loan and technical support and they will be on their way to proving themselves capable of standing on their own. The earlier that the Govt wakes up from the old paradigm of treating the poor like a bunch of crocodiles in the croc farm waiting for someone to throw them dressed chicken the better because that will signal the end of the vicious cycle of dependency and the start of the disappearance of poverty from our land.

  • Charlotte Samaniego

    Why is there no mention of the 1994 scam that involved Bancom, with Nunelon Bradley, Marilyn Nite, and one of Francis Magalona’s sister.?They defrauded Bancom in 1994, but how can sophisticated bankers be caught unawares of the scam? Undoubtedly Bancom officials benefited from that as well.

    • koolkid_inthehouse

      No reliable watchdog in the investment industry.

  • koolkid_inthehouse

    Maybe ahead of its time in the Philippines but not the world. Huge conglomerates has succeeded due to good management. In case of Bancom, politics probably played the biggest role to its demise.

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