Vince Perez: Energizing the power sector

Unknown to most people, 43-year-old Energy Secretary Vincent "Vince" S. Perez is not only one of the government’s youngest cabinet officials and important economic policy-makers, he is also the second wealthiest in terms of publicly-disclosed financial resources. When asked how much is his net worth, the first Filipino to ever become partner in a major Wall Street investment house laughed and replied: "Huwag na lang, you just ask my friends." A close friend told the Philippine STAR that his declared net worth is about P160 million, second highest to that of his predecessor in the Energy Department and now Finance Secretary Lito Camacho.

Unlike other government leaders who come from traditional political or landlord clans, Vince Perez is a self-made man whose father is former naval officer Vic Perez of Vigan, Ilocos Sur, and whose mother is Lucy Santiago Perez of Tondo and Meycauyan, Bulacan. A Business Economics graduate of UP, Perez in 1980 had barely US$1,000 in his pocket and a grant from then Business Day publisher Raul Locsin, when he accepted an Aiesec internship with New Jersey National Bank. Vince lived with a blue-collar family in a trailer. In the US, he couldn’t afford the tuition for his Master’s in Business Administration (MBA) studies. When Wharton Business School of the University of Pennsylvania accepted his application, he wrote 24 letters to professors asking for any part-time job, and only one gave him a research job.

Vince Perez made himself one of the youngest and most successful Filipino investment bankers in New York, London and Singapore for 18 years, even cited in 1994 as one of the Top 100 Emerging Market Superstars by Global Finance magazine. Perez also became the first Asian partner at Lazard Brothers investment house and the first ever Filipino partner on Wall Street, America’s financial capital. Aside from conversing in English and Filipino, Vince Perez surprised this writer by speaking good Mandarin Chinese, which he had studied for a year in Washington, DC. He even wrote Chinese characters pay-ney-shi on paper, the translation for his last name which meant "pure thoughts and deep thinking." Excerpts from the two-hour exclusive interview given Philippine STAR at the poolside of Rockwell Makati:

Philippine STAR: I hope you don’t mind, why did the President appoint you Energy Secretary when you’re not even from the energy sector, but a former investment banker?

Vince Perez: I think she felt she needed someone who could deal with all the financial reengineering needed in the Philippine power sector, a person whom she knew personally and could trust. I knew her since 1979 during my college years in UP. I became national president of the Aiesec, and she was adviser of the Aiesec group in the Ateneo. From 1979 to 1980, I kept going to her for advice. I guess, of course, I’m a neutral name that doesn’t represent any political or business group, or even any vested interest in the energy sector, so I was acceptable. I guess when my name was being floated, there was nothing derogatory about my reputation.

But you then knew little about the energy sector.

Yes, I had little knowledge of energy, but I went into it with hard work and non-stop studies. It’s like during my studies in the US, when I wrote 24 letters asking professors for a scholarship or any job, Professor Herbert Northrup was the only one who said yes, but he wanted me to write about labor unions in Southeast Asia. I also had little knowledge about the topic, but for two years I researched and worked hard. Prof. Norththrup was a gruff, mean and sour-faced professor, but he tolerated me for two years (laughs), because I worked very hard. We tolerated each other for two years. I had to work 15 hours per day, while studying full-time, so those were very tiring years. I was even active in extra-curricular activities, becoming president of the Wharton Asian Club, officer of the international club and guest member of the Latin American Club.

Do you mind being described by the President as a clone of your predecessor Lito Camacho?

(Laughs) I wonder why I’m called a clone, since Secretary Lito Camacho is better-looking and taller than me, though my staff said they will not agree to that (laughs). Seriously, the President was somewhat right, for in a sense, we both had similar backgrounds. We are former investment bankers from non-political families.

When you were starting out in America as a young banker, did you imagine yourself returning to serve as a future cabinet official?

No. My initial ambition in life then was to come home as the country manager of a foreign bank in the Philippines. My criteria of success then was rather simple: a company car and a driver. I guess that’s what I have now as Secretary of Energy (laughs).

You were only 35 years old when you became partner at Lazard. How was life on Wall Street? Was it as hectic and cut-throat competition as the movie with the same name?

Yes, it’s a dog-eat-dog rat race on Wall Street. It is only glamorous from the outside. I learned to survive and to thrive, even with the daggers already sticking out at my back (laughs).

With that training, you can do well if you enter politics.

No, I’m not interested to enter politics.

Are you confident the government can sell all of the Napocor assets in your privatization plans?

No, I have not said we can sell all. We’re hoping to sell 70 percent of the generating assets within three years.

Starting when?

Staring end of this year...We are confident that investors will come and see the opportunities. We have a new government under a credible president, I hope the foreign investors will come. They key thing is, since I’ve dealt with businesses in New York, London and Singapore where I’ve dealt with Americans, Europeans, Japanese, Singaporeans and others, I feel I could easily...I’m comfortable negotiating, I prefer to use the word "arm-wrestling" with the foreign investors.

Our economy is not in good shape, there is also economic slowdown in the US and Japan. Do you have any good news from the energy sector?

It’s good you asked that question, because the country can look forward to many good news. First, there is the Malampaya natural gas project in Palawan. The Philippines will save US$600 million each year starting year 2002, because we don’t have to import the oil so much anymore. Since government is a partner in this project, the government stands to earn US$8 billion over the next 20 years. Another good news is that by next year, for the first time in history, we will have more than 51 percent of the country’s energy needs sourced locally.

From where? We don’t have big oil wells like those of Indonesia.

Our energy sources will be from hydroelectric, geothermal, natural gas from Malampaya and some local coal. We also have minimal oil sources. Another good news for the economy will be the forthcoming privatization of Napocor, which will reduce the financial burden on the government. This means there will be lower interest charges that will be part of the power bill, which over time, will mean lower costs of power for the public. Over time, I’m confident our power costs will go down.

Don’t you think government should sell its shares in Meralco and other big assets in order to raise more funds? Napocor sales may not be enough.

I think you‚’re asking the wrong clone here (laughs). But I think that’s the plan of Finance Secretary Camacho, my supposed clone (laughs).

Having resided in London, New York, Singapore and now Manila, how would you compare life in these cities?

London is a rich historical city, full of creativity, but it dies during the weekend, since most Londoners go out of town. New York is a hyperactive, almost a 24-hour city, full of energy, competition and ambition. Singapore is a clean garden state, perhaps a bit too antiseptic. Manila is a vibrant, chaotic city, full of rich culture, like a typical capital of a developing country. Ang importante, marami tayong nightlife. It’s also friendly here, I think that’s the key word, Manila is friendly.

Wasn’t it difficult to adjust after living for 18 years in the wealthiest cities in America, Europe and Asia, then coming home?

At the beginning, I had a culture shock. I found life here too slow. I found the pace of doing business here too slow, but the quality of life can be very comfortable, if you know how to enjoy it.

How do you enjoy life?

Here, my wife and I love to go diving in Anilao, Batangas or in El Nido, Palawan. There are also many other places in the Visayas, like Malapascua in Cebu, the Tubhattaha Reef in the Sulu Sea. Also, we go to Subic because it reminds us of how organized a city could be. They follow the traffic rules there and it’s the only place in the Philippines where my wife Leigh can drive.

Is it true that on the day the President swore you in as Energy Secretary, there was a power failure when you and your wife were later eating?

Yes, June 8, 2001, the day of my swearing in. It was right after the ceremony, when my wife and I were having lunch at Heritage Hotel in Roxas Boulevard, it was just a quiet moment for us to just catch our breath from all the dramatic changes in my life over the last 24 hours. The President had only informed me of my appointment just the day before. While having lunch, the power went out. My wife said: "Hello, Energy Secretary, what’s wrong with the lights? Get it fixed." And we just laughed.

What are your impressions of the President and her leadership?

President Gloria Macapagal Arroyo is extremely hardworking. She is passionate about her concern for the plight of the poor. She is inspired by her late father, and she expects a lot from her cabinet members, probably no less than what she expects from herself in performing her ties. She has a clear vision of where she wants the country to go and of what the core beliefs or objectives of her administration are. The challenge for us cabinet members is to articulate those objectives in our respective areas and to deliver the concrete results in accomplishing those objectives.

Do you think some of our government leaders, even the military and police, have spent too much time on politics, which might harm our economy?

Yes, I‚’m very bothered with the amount of politics in the headlines, so much so, that I don’t like to read them anymore. I’m lucky my staff collates only the relevant stories and articles for me to read before 9 a.m. every morning. Therefore, I don’t even get to read the sensational headlines. Yes, it’s a distraction, and it buries the many little good news that are happening in the country.

President Gloria Arroyo had proposed that Chinese language be added as an optional foreign language course in colleges and universities. Why did you take up night classes in Chinese language in the US?

Chinese is a very difficult language but an important language to learn. You need discipline to master it, so I gained this discipline which I apply now to my daily work schedule. But on the lighter side, since I’m the last person Chinese people would expect to speak Mandarin, I tend to stay quiet, eavesdropping on their conversation, and I later speak to them in Mandarin, and I get the unique pleasure of seeing their reactions. If I have some more time, I’d like to refresh my Mandarin and study more Chinese.

Who are the people in business whom you admire the most?

I always believe in having some mentors in your career, people who can give you advice. As a student, I had then Business Day publisher Raul Locsin. I also admired Cesar Virata to the point that I wanted to go to the same school where he went to, which was Wharton. Sixto Roxas was the first Filipino vice chairman of American Express. Lilia Clemente was the most successful Filipina fund manager in New York, and that’s what I ended up doing also, managing funds. I also admire Cesar Buenaventura, former chairman of Shell and the first Filipino to be awarded an OBE, Officer of the British Empire.

Among the Cabinet secretaries, do you have mentors too?

Being the newest Cabinet secretary, I feel like the runt of the litter, so I often seek advice from my fellow Cabinet members such as Bert Romulo, Angie Reyes, Raul Roco, Dick Gordon, Pat Sto. Tomas, among others.

How is your work schedule as Cabinet official?

Extremely busy. I work and attend meetings from 8 a.m. to 10 p.m. daily. It’s a constant struggle to take control of your own time.

Do you still have time to read? What type of books do you like?

I read anything not related to my work. You’d laugh at this, I like to read books about underwater search for sunken treasures, those non-fiction sailing novels written by people who have sailed around the world. And this is where you’re gonna laugh pa talaga, I enjoy reading haiku–those short Japanese poems. I read haiku while inside the car to relax, especially during traffic.

I heard you used to own a yacht?

(Laughs) Actually a sailboat, not a yacht.

You were also member of the rowing club at Wharton. How was your experience in that school, how did it help you?

I’ve never been a serious student, meaning I balance my academic work with a lot of extra-curricular activities. For me, aside from the good academic preparation, Wharton helped me meet lifetime friends like Cito Lorenzo of Lapanday and Trade and Industry Undersecretary Greg Domingo, etc.

Isn’t it a coincidence that you’re a conservationist who is now also Energy Secretary? Will this unique mix guarantee more protection for the country’s ecology, less possibility of environmental disasters from oil or other projects?

Yes, I am committed to protecting the environment. In fact, as a kid, my original ambition was to be an ecologist, not a sexy name for an ambition, but as a boy I imagined running my own zoo...My wife and I have been involved in conservation projects in the Philippines, Nepal and even Bhutan. In fact, one of the last things my wife and I did before joining government this March as trade undersecretary was to raise a conservation investment company called Asian Conservation Corp. which my wife is managing right now. Conservation is a personal priority here in my work at the Department of Energy. I would love to promote geothermal sources of energy, wind power, solar power, gas-powered public buses, and others. As an investment banker in Lazard in the early 1990s, I was active also in debt-for-nature swap deals which helped raise US$25 million for the Philippines alone. Among the conservation projects which benefitted from these deals included the St. Paul Underground River in Palawan and the Coral Reefs of El Nido.

Honestly, why should we feel optimistic about the Philippine economy’s future amid the current crisis and too much political conflicts?

We feel the country is turning around. We are a resilient economy, not necessarily dependent on the world economy. We have a large informal sector, which one economist even valued at US$130 billion here in the Philippines.

Pesos or U.S. dollars?

US$130 billion... Also, we have more than seven million Filipino overseas contract workers sending US$8 billion in remittances to the Philippines every year, and a lot of that go to the countryside. There’s a lot of positive restructuring and reforms being initiated by the President, the benefits of which will accrue over the next few years.

How much does the President and Cabinet secretary make every month? How big was the salary sacrifice when you compare your old and present jobs?

It’s truly a painful financial sacrifice. P35,000 per month is a 99 percent drop from my previous salary. We’re lucky we managed to save some money before. But it’s an honor to be able to serve the country under a good leader... I think the President’s monthly salary is P50,000.

What cultural changes in attitude would you suggest to encourage more economic success for the whole country?

We need to hear a better can-do and can-win attitude. My parents valued education. They encouraged us to strive, to excel with whatever field we choose. They also encouraged us to go abroad to further studies... We need to encourage a cultural change, to allow people the freedom to make mistakes without being criticized in the government and the newspapers... I wish we could get rid of our crab mentality and allow talented Filipinos to really succeed. As a country, we should encourage all citizens to have a better self-worth. When you read all those negative headlines, you tend to become cynical. We need better self-worth as a nation, not be too negative.

Do you have a personal motto or guiding philosophy in life?

Hard work creates good luck.

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