From Rags to Riches: The Success Story of John Gokongwei

By 1976, at age 50, we had built significant businesses in food products anchored by a branded coffee called Blend 45, and agro-industrial products under the Robina Farms brand. That year, I faced one of my biggest challenges, and lost. And my loss was highly publicized, too. But I still believe that this was one of my defining moments. In that decade, not many business opportunities were available due to the political and economic environment.

Many Filipinos were already sending their money out of the country. As a Filipino, I felt that our money must be invested here. I decided to purchase shares in San Miguel, then one of the Philippines’ biggest corporations. By 1976, I had acquired enough shares to sit on its board. The media called me an upstart. “Who is Gokongwei and why is he doing all those terrible things to San Miguel?” ran one headline of the day.

In another article, I was described as a pygmy going up against the powers-that-be. The San Miguel board of directors itself even aid for an ad in all the country’s top newspapers telling the public why I should not be on the board. On the day of reckoning, shareholders quickly filled up the auditorium to witness the battle. My brother James and I had prepared for many hours for this debate. We were nervous and excited at the same time. In the end, I did not get the board seat because of the Supreme Court Ruling. But I was able to prove to others-and to myself-that I was willing to put up a fight. I succeeded because I overcame my fear, and tried.

I believe this battle helped define who I am today. In a twist to this story, I was invited to sit on the board of Anscor and San Miguel Hong Kong 5 years later. Lose some, win some. Since then, I’ve become known as a serious player in the business world, but the challenges haven’t stopped coming. Let me tell you about the three most recent challenges. In all three, conventional wisdom bet against us. See, we set up businesses against market Goliaths in very high-capital industries: airline, telecoms, and beverage.

Challenge No. 1:

In 1996, we decided to start an airline. At the time, the dominant airline in the country was Philippine Airlines (PAL), and if you wanted to travel cheaply, you did not fly. You went by sea or by land. However, my son Lance and I had a vision for Cebu Pacific: We wanted every Filipino to fly.

Inspired by the low-cost carrier models in the United States, we believed that an airline based on the no-frills concept would work here. No hot meals. No newspaper. Mono-class seating. Operating with a single aircraft type. Faster turn around time. It all worked, thus enabling Cebu Pacific to pass on savings to the consumer. How did we do this? By sticking to our philosophy of “low cost, great value.” And we stick to that philosophy to this day.

Cebu Pacific offers incentives. Customers can avail themselves of a tiered pricing scheme, with promotional seats for as low a P1. The earlier you book, the cheaper your ticket. Cebu Pacific also made it convenient for passengers by making online booking available. When we started 11 years ago, Cebu Pacific flew only 360,000 passengers, with 24 daily flights to 3 destinations. This year, we expect to fly more than five million passengers, with over 120 daily flights to 20 local destinations and 12 Asian cities.

Today, we are the largest in terms of domestic flights, routes and destinations. We also have the youngest fleet in the region after acquiring new Airbus 319s and 320s. In January, new ATR planes will arrive. These are smaller planes that can land on smaller air strips like those in Palawan and Caticlan. Now you don’t have to take a two-hour ride by mini-bus to get to the beach. Largely because of Cebu Pacific, the average Filipino can now afford to fly. In 2005, 1 out of 12 Filipinos flew within a year. In 2012, by continuing to offer low fares, we hope to reduce that ratio to 1 out of 6. We want to see more and more Filipinos see their country and the world!