Mr. Roberto De Ocampo, Chairman, Philippine Veterans Bank, Philippines

Business Focus: You are one of the most authorised voices in global finance in Asia. What are your prospects for the Filipino economy and financial sector for this year 2016?

Roberto De Ocampo (RDO): I think that the Philippine economy will continue to be resilient. However, besides the phenomenal growth of the past years, there are still a number of sectors that haven’t fully developed yet. In my mind, the economy continues to be depending on remittances and the boom of the so-called cyber sector – although it has diversified beyond that.

Right now, there is quite an interest in turning the Philippines into a manufacturing hub, because labour costs in the Philippines are beginning to be competitive as compared to China, which in terms of labour cost has been “the darling” of the past decade. At the same time, the Philippines has not taken full advantage of having a widely educated and English speaking population. In the Asian setting, the Philippines is the least complicated place for foreign investors, because they don’t need translators to figure out business and they don’t need to import costly English speaking workforce from other countries.

At the same time, there are countries in Asia, such as Japan and Korea, which are looking to diversify their supply chains. Those countries have learned the wise lesson of not putting all the eggs in one basket – and the Philippines is a great place for those looking to diversify their supply chains.

When it comes to agriculture, there are quite a number of countries around us that have grown a lot, but that don’t have their agriculture in place. On the contrary, the Philippines has a very good agricultural base. However, the country needs to implement the agrarian reform, in order to switch from its subsistence agriculture to a productivity-based one, and turn rural farms into a whole agroindustry.

For its part, the banking community of the Philippines is still small, as compared to other countries. However, the potential of the Philippines to become a regional power and the on-going ASEAN integration will attract more banks to the country and increase the size of the Philippine banking community. It is already happening, and is expected to continue.

All in all, we can see that there is still a lot of room for the Philippines to expand its economy, and that is what the country will be doing over the next decade, in the midst of the ASEAN economic integration. Therefore, we are optimistic about where the Philippines is headed, not only in economic terms, but in terms of its relationship with the global centres of trust.

Business Focus : Philippines’ Central Bank Governor Amando Tetangco recently stated that the Philippine banking industry needs to do more to prepare for the competition that will come after the ASEAN financial integration. How is Veterans Bank preparing for this new scenario?

RDO: The Philippines Veterans Bank is a medium-sized commercial bank, but its ownership is restricted to the veterans of World War 2 - therefore, it has a narrow base. The first order of the day for us is to make sure that the profitability of the bank continues to be attractive. In the future, it is possible to propose the existing stakeholders to open up to other partnerships and therefore expand the shareholder base, but if we don’t make the bank attractive nobody will want to partner with us. In this context, the first thing that we want to do is to make sure that the bank is sound – that’s why we have

implemented the governor’s practices and processes. We have identified the niches where our strengths lie, in order to avoid locking horns with bigger banks, and we’ve had good results. Over the past two years, we have modernized the processes of the bank, we have been able to clean up what had to be cleaned up, and we have been able to get much better ratings from regulators and regulating entities. That has been much part of the strategy in making the bank attractive, so that in the near future, we can continue to expand its equity base. If the current trend continues, we will continue expanding the equity base little by little, and depending on our profitability make a big leap forward in the future.

Business Focus : In one of your interviews after taking office as Chairman of the Veterans Bank, you stated that your aim was to revitalize the bank and turn it into a major player in the industry, not just locally – but globally as well. What is the roadmap of the bank in this regard, and which role do you foresee for the UK – whose capital is the world’s most important financial centre – in this process?

RDO: Right now, we have to make baby steps in order to achieve the immediate goals we are aiming for. First of all, we are aiming at changing the public image of the bank: this is important, because many people think that our bank is exclusively for pensioners of the World War 2 veterans. Others think that we are a government bank, because there is no big family behind the bank. Due to this image, the bank has not been able to grow as a robust, private, commercial bank – so the first order of business for us is to make sure we announce to the local community that we are a private, commercial bank with certain unique features.

We are one of the three banks in the country allowed by law to lend to local government entities – and we are utilizing this to develop much more holistic programs. When I go to local governments, I can advise them on proper account planning, and derive from that advice the kind of things we need to finance in order to allow the community to generate a tax base and develop economically and autonomously.

In addition to these baby steps of defining and announcing a new image, we feel that we have to continue increasing our profitability and our equity base, in order to have the prescribed equity base to be a universal bank in a few years. Once that happens, we could come to a point where we are attractive enough to consider the possibility of partnering with external entities. However, that would require amendments to the law, so we’ve got to convince two audiences: the traditional audience – which could be called the origins of the bank – and the global audience, which would be shopping around for a viable partner that can play a good role in the financial sector, not only in the Philippines but in the region. It is possible that, in the future, our qualities will catch the eyes of financial entities in the UK, and I wouldn’t mind that at all. While that is not happening yet, we continue exploring business relationships with British companies who are looking for leverage from banks like us – and we continue to provide them with such leverage.

Business Focus : Due to its strong ties with the Philippine economy, the UK is a strong source of business for Philippine Banks. What can Veterans Bank offer to the 250,000 OFWs in the UK and to the increasing number of British companies that are considering expanding their operations to the Philippines?

RDO: We are constantly in touch with the BCCP and the British Embassy Manila in order to have a sense of which companies are coming in and look at the possibilities with them. We are open to help them out and maximize their leverage.

I am happy to see that the British business community is increasingly interested in the Philippines. As chairman of the British Alumni Association, I have long spearheaded the Philippine – UK friendship. From that association, we have organized activities that have highlighted Philippine – UK relations, and we are happy that over the last years Philippine – UK celebrations have expanded from just one week to one month, then two and then three. I do what I can to prevent the Philippines from being the best-kept secret for the eyes of the UK. These efforts, together with the better government that we have been experiencing in the last years, make from this an interesting time for mutual opportunities.

Business Focus : The former British ambassador to Manila described you as a “fearless and influential advocate for friendship and cooperation” between the two island nations. What does the UK mean to you, and why are UK-Philippines bilateral relationships so important?

RDO: The UK is a second home to me and played a key role in my education, as I studied at the London School of Economics. From the beginning, there was always a part of me that preferred to think in terms of doing something meaningful, rather than just getting rich. In fact I first wanted to be a doctor, but my father discouraged me, because at that time very few people could have a business degree from a top business school. After finishing my business studies, however, I felt I had to educate myself in more meaningful matters such as economic development, and this is why I went to the London School of Economics.

Needless to say, I have a close relationship with the UK and its culture, and the historical relations between the two countries are very interesting for me. When I came back to the Philippines, having studied at the London School of Economics was unusual, and the first job I took was through one of the three key founders of the Rural Electrification Program of the Philippines. I was making less money than my father’s chauffer, but I believed in the idea that there is something more to life than making money – and I attribute a part of that to my education in the UK. Since I came back from the UK, I have strived to bring what I learned to the Philippines. I’ve always believed that having a broader exposure to the British society – which has a longer track record than younger societies such as the United States – would help us understanding the professionalism of bureaucracy, having a better idea of global relationships and having a sense of destiny.

Business Focus : Throughout your extensive career, you’ve held positions of outstanding responsibility and been awarded with distinctions as important as the Order of the British Empire and the Philippine Legion of Honour, among many others. In your eyes, which has been your biggest achievement?

RDO: My greatest achievement is being able to leave a legacy to my children and to my people – and that is more valuable than living in the comfort of my country and leaving an inheritance.

Business Focus : What would be your final message to the prestigious audience of The Guardian newspaper?

RDO: I would like to let the people of The Guardian know that I’ve been reading it since the 1970s. I am glad to see that, while many publications have come and gone, The Guardian is still there, ensuring that people have the ability to express their opinions freely and enabling the communication between different countries. As we are now looking at an era where Internet communications become more important, I hope that The Guardian will remain a sentinel of those values; contributing to the progress of civilization and, of course, to the development of good relations between the UK and the Philippines.