Build IT, and they will come

There’s no doubt about it, information technology (IT) has revolutionized every facet of our lives. It has changed the look of our homes, the design of our offices, and the way we think and act. And yet this may just be the beginning.

One place where IT has done dramatic changes in the past several years is Fort Bonifacio, a military camp in the southeast portion of Metro Manila. Where soldiers used to march have risen skyscrapers where IT workers will soon be writing software codes and receiving calls from all parts of the world. Where open fields used to be have mushroomed fancy restaurants, offering good food and entertainment.

At the center of the sprawling camp is E-Square, a 24.4-hectare area being developed into an IT hub similar to Silicon Valley of the United States. Here, seeds of IT businesses are expected to be planted, nursed and grown. And here, the best Filipinos are foreseen to rub elbows with the best of the world as they work 24 hours a day, seven days a week in developing new technologies.

Surprisingly, the man in charge of making E-Square a reality grew up in the old, computer-less world. Rafael Bengzon, a 53-year-old economist, admits he is an "Old Economy person" who is doing his best to excel in the New Economy. As Strategic Business Unit head of E-Square, his role is to convince IT companies to transfer their offices to Fort Bonifacio. A tough task, you may say, especially at this time when some foreign investors seem to shudder at the mere mention of the name Philippines.

The STAR’s NetWorks had a chat with Bengzon at his Fort Bonifacio office. Here’s an excerpt from the conversation:

STAR: What’s happening with E-Square now?

BENGZON: We now have the HatchAsia Globalcity Center which is currently being fitted out by major tenants. It will be ready by end of June. In terms of other IT locators, we are currently having discussions with seven or eight large-area locators whom we have invited and who are interested in locating at HatchAsia Globalcity Center. We cannot reveal these locators at this stage because we are still negotiating but I assure you that if and when they do come in, there is a potential in transforming E-Square into a recognizably serious player in the IT park business.

STAR: When do you expect to see breakthroughs in the negotiations?

BENGZON: Anytime between now and September. That’s the timeframe by which we expect decisions from these players.

STAR: Isn’t it hard to sell an IT park in this part of the world at this time when the Philippines has a not-so-good image abroad?

BENGZON: We’ll it’s very competitive. Even before this Abu Sayyaf crisis, it’s already very competitive. There are many modern buildings that have been put up that are now ready. There are many choices. There are Eastwood, RCBC Plaza and Northgate. Different IT locators have different decision parameters. There are some, for example, who would go if their head offices would give the approval. If the head office is foreign-based, the cost issue is not very important. There are some that are much more cost issue-driven. It’s really very competitive. But we have certain advantages. The way the HatchAsia Globalcity Center is configured is a huge, open space. That’s one big floor space appropriate for those companies that want to have their entire operation within their control in one floor.

STAR: So that would be your edge over other IT parks?

BENGZON: We have many edges. It’s not just limited to that. Take a look at Bonifacio, it is centrally located in-between the triangle formed by the NAIA, the Makati Central Business District and Ortigas. Take a look at the road network that we have already constructed. It’s very accessible. Ultimately, the way we have masterplanned and put in all the utilities underground, the way we’ve put all the fiber optic cabling, these are all advantages that I think will manifest themselves in the eyes of an IT locator.

STAR: Has the recent economic slowdown affected your masterplan?

BENGZON: No, the masterplan has stayed the same. The question is the phase of development. We have committed to deliver what we call the ‘Big Delta’ and the ‘Expanded Big Delta.’ That’s what we are delivering now. But in addition to that, as you can see, we have completed the Kalayaan flyover. We have opened up a link that allows direct interconnection between EDSA and C-5 through 32nd street. So we have completed what we have committed to deliver, and we are holding the development of those that we have not committed to deliver.

STAR: What about the lease rates? Have you also made changes in this aspect?

BENGZON: Yes, with everybody dropping their rates like crazy, you’d be foolish not to similarly be competitive. We have to be competitive all the time.

STAR: Have you also made changes in your expectations?

BENGZON: We have viewed E-Square as an IT park, as an IT destination of choice which is recognized worldwide. That’s our objective, our vision. But as we developed this place, we realized that there were so many things that you had to do in order to stay on top of the game. And we’re doing them.

STAR: The dot-com bubble has already burst in the United States. Didn’t that scare you since most office spaces in the US were deserted suddenly when companies started to fold up?

BENGZON: Actually it was good for us. Even the US-based companies are now driven by cost pressures which are forcing them to think about overseas relocation. The relocation can be a direct relocation or can be through outsourcing. It has worked to our advantage. The bursting of the bubble meant that all of those that were not viable businesses fell on the wayside. That’s no surprise to anybody. But those business that are viable are now recognizing their vulnerability. Oops, it’s not that easy to get capital from the market in order to fuel expansion that doesn’t earn. So the pressure on them is they now have to be profitable on an operating basis. So it’s good for us since now they are considering to move here.

STAR: Let’s get a little personal. According to your resumé, you spent some years of your early professional life working abroad. Now why are you here and not in the US or any other country where IT is thriving?

BENGZON: That’s a good question. My roots are here. There is a sense of belonging, a sense of community in terms of becoming a meaningful contributor to my community. That is a motivator. There are, of course, other motivators. Family is here. We have our own independent business here.

STAR: There’s this unverified report of an exodus of the middle class because of what’s happening in the country. Don’t you also have plans to relocate?

BENGZON: No. But obviously, as a responsible family man, you’ll think of what the future will be for your family, your kids, in growing up here. Of course, you worry about it. But have we reached the stage where we have to decide to relocate? The answer is no. But if the economic recovery takes longer than what we expect, if this government turns out to be another disaster and more problems start to occur, then we’d probably start thinking about that issue. Especially in our case because we have an export-oriented business and we have a very good market in the US. It’s easy for us to relocate.

STAR: What makes you work hard to make E-Square successful?

BENGZON: My fundamental principle whenever I’m given an assignment is first, I have to believe in the project. The only way I can believe in a project is by studying that project very carefully and making things happen. The project should be consistent with my personal values. At the end of the day, you can only believe in the project if you yourself had a hand in its creation. The Fort Bonifacio Development Corp. gives wide latitude to people. You want to do it? You think you can do it? Then go ahead and do it. So far it’s working out for me and for my satisfaction. If you have invested part of yourself in something, that something becomes a part of you.

STAR: In effect, what you are building here in E-Square is a field of dreams. The movie says ‘if you build it, they will come.’ Will they really come?

BENGZON: Yes. Off the top of my head, there are three conditions that are needed. One, quality of people. The second is depth of financial pockets. And the third is good luck. I have no doubt about the quality of people here. Very driven, very enthusiastic. This is a very open corporation. There are no secrets that the president does not share with us. So if you understand what is going on, it is easier for you to take initiatives, assuming that you are the right personality. You need to be given the latitude. If you know you can do it, then go ahead, make it happen. Now, pisi? Yan, paduguan tayo ngayon diyan. Pero huwag nating kalimutan na relative to the capital base, under-leveraged kami. Kakaunti ang utang namin eh. Ang laki-laki ng capital base namin. But does that make things any easier? Not necessarily. You need to get access to financing to be able to develop the verticals at this time. And at this time, as far as financing is concerned, paduguan. So our move is not to try to overdevelop beyond which we can develop properly. There has to be judicious use of your own financial resources. Now, good luck. The Philippines has gone through several disasters recently. Sooner or later, hopefully sooner, the luck will turn. When it turns, our goal is to be in a position that we’re there riding that entire thing as it runs. If you develop so much before the market is ready, you’ll suffer from over-inventory. But what you want do is be in a state of readiness that when the time comes, you can develop very, very quickly and be ahead of everybody else.

STAR: How is IT affecting you as a person, as a father, as a human being?

BENGZON: Ang lalim no’n ha. (Laughs) I told you that you have to believe to be an effective advocate. Here I am, I’m selling E-Square which is an IT park. It’s obvious that I see how IT can impact our lives in very meaningful ways. But I have a unique opportunity to be here and have this responsibility at this difficult time. Ultimately, there is a very close link between my perception of IT and my sense as a person. Here in Fort Bonifacio, they equip us with all the opportunities to learn new developments in IT. I take full advantage of them. I use all the opportunities that I have to transform myself from an Old Economy person into a New Economy person. Look at the way I work now. (Points to the computer on his desk) This is not the way I used to work. I have to be more efficient. My kids are very computer-savvy. The older ones appreciate the way I do. They say, "Wow! You’re involved in this?"