Lance Gokongwei On Being on Philippines' Richest List: "We'd Rather Not Be On It"

When international business publication Forbes magazine releases its annual richest Filipinos list, the names are almost always the same. Sy, Villar, Ayala, Tan (Andrew and Lucio), Razon, and Gokongwei are families who all figure prominently in the upper echelons of the very exclusive list, and are, by Forbes’ metrics, the Philippines’ wealthiest.

But ask Lance Gokongwei—son of the late John Gokongwei Jr. and current CEO of JG Summit, the country’s third-largest company by market capitalization—and he hesitates like he’s almost embarrassed to be that rich.

“It’s a list we’d rather not be on, quite honestly,” he says during a candid, freewheeling conversation with editors of the titles published under Summit Media, which includes Esquire Philippines. Summit Media is a unit of JG Summit. “We’d rather remain low-key."

“I think it’s going to be very difficult for our kids,” he adds. “Kids now…even those who are 10 or 12 years old, they can just Google your family name, and they start getting labeled or characterized or whatever in their schools. So I’d rather they have their own identities rather than be the kid of somebody.”

On Forbes’ most recent ranking of the country’s wealthiest, released last September, Lance and his five sisters (Robina, Lisa, Faith, Hope, and Marcia) made their debut at number four, reportedly with a net worth of $4.1 billion. They take their place on the list after their father, the Gokongwei patriarch, died in November 2019.

Effects of the pandemic

But not everything’s coming up roses for the family. With a health crisis that has dealt a crushing blow to businesses worldwide, the Gokongweis’ diversified conglomerate JG Summit took a hit, particularly the company’s airline unit, Cebu Pacific. The country’s largest budget carrier reported losses of P14.69 billion for the first nine months of the year, a stark turnaround from the P6.77 billion in profits the company posted during the same period last year.

Around 44,000 flights were cancelled and 2.1 million passengers were affected from March 15 to June 30, 2020 alone, according to the company. The country’s largest budget carrier said that it is now operating at only about "15 to 20 percent" compared to pre-COVID. 

In order to mitigate the effects of the pandemic and help the entire company, JG Summit raised $600 million through a 10-year fixed rate note last July, the first time it tapped the global bond market in seven years. In October, the company revealed plans to issue about $500 million (about P24.2 billion) in bonds and shares as part of its “business transformation exercise.”

Some bright spots

The CEO, however, said it wasn’t all bad news. While every business unit under JG Summit was affected one way or another, some are doing pretty well, considering the situation.

“The business that has done best is really URC (Universal Robina Corp), which is very basic foods,” he said during the Zoom call. “Some of the food products we make are really consumed at home, which is the new normal behavior. Stuff that we make, like noodles and coffee are consumed at home. To a certain extent, snacks like chocolate, biscuits, are consumed less at home, so that’s been affected, as did ready-to-drink and C2 because those are generally consumed on the road or in school and the like.”

Gokongwei added that some parts of the company’s retail unit have done well, especially the supermarket (Robinsons) and pharmacy (South Star). 

“Certain sectors in property, like office buildings have held up,” he added. “And then some of our investments particularly in telecoms, like PLDT, have done well. Especially with the great growth in demand for broadband and data.” JG Summit owns about 11.23 percent of the telecoms giant.

No sense of entitlement

As for raising his kids and preparing them for life as a Gokongwei, the 53-year-old CEO says he and his wife are trying to instill in them a sense of discipline.

“Like I said, they carry a little bit of that weight or name with them,” he said. “But I think the key is really, at home, they really have to follow the rules, they have to respect people, particularly those who work with us. There’s no sense of entitlement for them. We try to praise and acknowledge them for the effort, for working hard and not just the fortunes of birth.”