AUGUSTO M. BARCELON (1922-2004) - A tribute to ‘Barcy’

The Philippine banking world may never be the same again after Augusto M. Barcelon. He was, indeed – as many of his peers and colleagues can attest to – a venerable pillar whose recent passing has left many bereft of his exemplary driving force and impeccable leadership.

Except for Wilfrido Tecson, founder of then Solid Bank, all six other "horsemen" of Filipino banking are deceased now. They were in the 60s and 70s also referred to as the "Magnificent 7," for their sterling leadership in banking at the height of the restructuring of the General Banking Act during President Marcos’ tumultuous pre-martial law administration.

There was Chester Babst, founder of then Pacific Bank, Jose B. Fernandez, founder of then Far East Bank; Alberto Villa-Abrille Sr., head of the ever-stable Bank of the Philippine Islands; Go Kim Pah, founder of Equitable Bank; Edgardo Kalaw, founder of the merged IBAA; and last but not least, Augusto M. Barcelon, considered by many as banker primus interpares of his generation.

Barcelon’s colorful banking career goes back to 1954 when he co-founded the then Commercial Bank and Trust Co. (Comtrust). The bank, which was one of the first commercial banks established by Filipinos, thrived on the principle that not a single major shareholder would control it. It soon became, by the mid-60s, one of the top five Filipino-owned banks, sprouting branches in the then growing suburban communities of Metro Manila. In 1981, Comtrust was deemed a good buy and acquired by the country’s top bank, Bank of the Philippine Islands (BPI).

Having seen how investment banking had become the trigger and catalyst to the enormous economic growth of other developed countries, Barcelon in 1966, opened the doors of Bancom Development Corp. to the more aggressive and enterprising businessmen and industrialists of the Philippines.

With him as chairman and Sixto K. Roxas III as president, Bancom – a joint venture between Comtrust and Bankers Trust of New York – had blossomed into a giant but sophisticated investment banking institution. With its astounding success tagged as the "Bancom mystique," the company innovated the institutionalized money market operation and the "commercial paper" instrument which was considered a first in the world.

Barcelon also marshalled the company’s rapid pioneering and expansion in the ASEAN region during the ’70s. While all Filipino bankers were still too preoccupied with the local market, Barcelon had pushed his people to Indonesia, Malaysia, Thailand and Hong Kong where they had met equal success. The company even planted its flag in California through a commercial bank subsidiary there.

After a falling out with Comtrust in 1969, Barcelon towed his already famous Bancom to RCBC and then, in 1974, to Far East Bank. This latter strategic merger brought two of the country’s most dynamic bankers – Jose B. Fernandez as chairman and Barcelon as president – under one roof. Far East Bank had been become the repository of time-tested business wisdom, prudent aggressiveness, marketing savvy and innovative banking strategies. In a short span, it had become the third largest Filipino private bank.

In 1981, Barcelon, at age 58, retired from Far East Bank to concentrate on overseeing his other investments in the food, banana, steel and realty industries while retaining the chairmanship of Bancom. It was, however, a brief retirement for shortly, the grave impact of the Dewey Dee caper in the same year badly affected all the investment banks and weak commercial banks in the country. Investment banks, whose lifeblood was the money market operations, started to suffer runs and not even the giant Bancom nor Ayala Corp.’s investment house, AIDC, could withstand the panic caused by Dewey Dee’s huge unpaid loans.

Through some "financial reengineering," Barcelon deftly and skillfully steered Bancom to safe waters by converting its little-known banking subsidiary, Union Bank, into a commercial banking operation with infusion of fresh equity and long-term funding from the SSS. In no time was he the hands-on president of Union Bank which by then had absorbed all the assets and liabilities of Bancom.

Barcelon grew Union Bank to a leading financial player that it is today. He had turned it into a highly profitable bank that in the late ’80s, new investors like the Aboitiz Group and Insular Life had bought majority interest in the bank.

Outside the banking world, Barcelon ventured into other businesses/investments, the following of which are due to his initiatives and vision: pioneered the banana industry in Davao with the prominent Jose M. Tuason family, UFC Banana Catsup, Medical City Hospital, Milagros Farms, and Rizal Steel, among others.

A strong "people sense" was his endearing and enduring trait. When he gave his trust on the competence of a potential executive, he supported him by giving him a chance to execute and actualize his ideas. "The secret of growth," he once said, "is having people who can be delegated challenges and responsibilities, and can be left on their own to create their own niches in the company." Graduates of Barcelon’s astute mentorship are Chito Ayala, Manny Pangilinan, Ramon del Rosario Jr., Francisco Licuanan, OV Espiritu, Dr. Alfredo Bengzon, Josie Tan, Vicente Panlilio and many more "who’s who" in Philipine business.

Barcelon also pioneered and practiced "good governance." This underlying reality, which calls for utmost transparency, integrity and honor, is the bedrock of management and systems procedures that are innately collegial in decision-making. Barcelon and his close peers had practiced this all their professional lives; thus, he is known for his unsullied integrity and high moral standards for himself and his people.

Barcelon’s unblemished character can be attributed to his education and hard work during the early years of his career. Educated for the most part at the Ateneo de Manila in Padre Faura, he worked his way up, starting as a credit investigator at the old PNB office along Escolta. During the Japanese occupation, he managed to pursue his law studies at the M.Q. Quezon law night school and accountancy at the Far Eastern University.

He soon became Credit and Foreign Manager in PNB. He later resigned, however, and invested all his savings in co-founding Comtrust in 1954, together with a few managers from PNB.

Fondly called "Atos," his childhood pet name by relatives, and "Barcy" by his friends and peers, Barcelon is survived by his wife of 56 years, Teresita Ayala. The couple’s friends and close relatives attest that their marriage remained strong because both are endless romantics. Their union produced four accomplished children: Eddie (an investment banker), Louie (personable wife of Rep. Teddy Boy Locsin), Tessie and Binky (both businesswomen). Eight good looking grandchildren and two cuddly pugs are counted among their blessings.

Perhaps the apropos epithet for the endless dreamer and visionary that Barcelon was is to quote another banker par excellence, Jose "Jobo" Fernandez. Fernandez had started to conceptualize his own bank (Far East Bank) in 1959. By then, Barcelon’s Comtrust was already a stable and enviable five-year-old bank. Fernandez admitted that his model for the soon-to-be-born Far East Bank was Barcelon’s widely owned Comtrust. In training his first batch of soon-to-be managers, Fernandez exhorted them by yelling: "Let’s duplicate Barcy’s baby!" In life, no less than "the" Jobo Fernandez admired Barcelon. For us lesser mortals who had a rare and privileged chance to have the inimitable Augusto M. Barcelon as mentor, adviser, associate and friends, he shall, in life and in death, own our grateful admiration, ad infinitium!

(Editor’s Note: C.J. Panlilio was Mr. Barcelon’s executive assistant at Far East Bank in the ’70s and president of his Universal Food Corp. (UFC) in the mid-90s. Panlilio is now a businessman.)