Federico R. Lopez (FRL), chairman of First Philippine Holdings Corporation (FPH), before stockholders during the company’s annual meeting in Ortigas.No to coal. This was the declaration made by
“Today, let me state unequivocally and for the record that FPH and its subsidiaries will not build, develop, or invest in any coal-fired power plant. I’m certain that without having to look too far, this country already has energy alternatives that do not mortgage the future of our children and future of our planet,” FRL said.
According to certain quarters, the Philippines’ accounting for only 0.3% of global carbon emissions gives it the liberty to build more coal-fired power plants that will translate to much-needed jobs and cheaper electricity for Filipinos.
However, the chairman pointed out, “…every avoidable ton of carbon spewed into the air reverberates onto millions of vulnerable Filipino lives with an impact that’s disproportionate with the rest of the world.” He cited the Global Climate Risk Index released annually by the nonprofit Germanwatch, which ranked the Philippines as the country affected by the most number of weather-related disasters from 1995 to 2014 with 337 events. Vietnam and Bangladesh were a distant second and third with 225 and 222 events, respectively.
“Now, more than ever, the world needs to rapidly switch to a new energy paradigm if we want to keep the planet inhabitable in the near future and for centuries to come,” FRL said.
Forefront of transformation
FPH and its subsidiaries— with their pioneering entrepreneurial spirit—are seen to be among the companies in the forefront of the Philippines’ transformation.
“It is something we have done in the past and something we will, with certainty, do again. FPH... from page 1 From left: Chairman FRL declares FPH’s no-coal stand; During the San Gabriel power plant groundbreaking ceremonies with chairman emeritus Oscar M. Lopez, FPH president Giles Puno, Pres. Noynoy Aquino and other officials; The Orchestra of the Filipino Youth/Ang Misyon Caloocan satellite; FPH constantly works to build a culture that encourages collaboration Times may be tough but we are a business group that shines when faced with that combination of adversity and purpose. We have the opportunity to address one of the most pressing needs of our times. We cannot ask for more.”
In fact, Rockwell Land and First Philippine Industrial Park are already drawing up road maps which mandate that their power needs will “eventually come from low-carbon energy suppliers”; this preference “will serve as guide in future power supply contracts” to be signed by both companies.
For his part, FPH president and COO Giles Puno said the switch requires companies to make a “significant and deliberate mind shift” in addition to refining their strategies. At the same time, he added, “it will also bring about new opportunities that we can pursue as a point of differentiation in a highly commoditized world.”
Puno, understandably, speaks with excitement about FPH’s goals and direction.
“We have a fantastic platform of businesses. Power generation continues to be a very exciting platform especially as we grow in all of the selected fuels that we’ve been pursuing, whether it’s gas, preparing for a post-Malampaya world, bringing in LNG [liquefied natural gas], building more gas-fired power plants. EDC [Energy Development Corporation] through its geothermal operations—although EDC is challenged because it’s directly competing against coal, I believe it is a challenge we can take on because I’d rather get power from geothermal than coal simply from a carbon perspective. The wind project and solar—those are two new exciting platforms,” Puno says.
Puno also talks about the new projects FPH and its subsidiaries are getting involved in.
First run-of-river hydro plant
“What’s also exciting this year for First Gen is hydro. We are constructing our first runof- river hydro plant this year. I think that’s a milestone because building hydroelectric plants is not easy. In fact, it’s even easier to build a solar plant because it’s kind of cut and paste. A hydro plant is unique because it depends on water and terrain that you’ll get. These are located in remote areas, making them more difficult to develop. Hopefully it will have an impact on the host communities. To have an impact on those communities will be a feather in our cap. That is something we’ll remember—that their educational level and economic situation improved because of our investment. Hydro is interesting because it’s very consistent with our strategy of developing indigenous sources of energy.
FPH prides itself on sharing the work with its sister companies and other entities. Puno says one of the better parts of a project is cooperating and working with others.
“What makes it more interesting in an FPH perspective is that we’re working with Balfour so it will be a very good project where there’s a lot of synergy. It will be a synergistic approach for First Gen and Balfour. It includes introducing the TBM [tunnel boring machine] technology to accelerate the way we build tunnels. That excites me because the First Gen platform is expanding and it’s expanding the knowledge base of Balfour. We’re clear with our strategy with First Gen and with First Balfour, that they develop competencies that make them unique in what is quite a commoditized industry. But they’re unique. If they can develop the skills in hydro development— it’s not that not easy. The fact that we have Balfour is a strength and we need to use that strength,” he says.
Aside from the hydro projects, big changes are also in store for FPH’s other concerns in the near future.
“We’re quite excited about Philec. They will be moving to a new factory. That’s part of the scaling-up approach. They’re looking at expanding their market beyond Meralco. The industrial park is expanding. It has the First Industrial Township. Rockwell is looking at new areas where they can imprint the Rockwell brand. They’re successful with the upscale market but they’re also quite successful with the midmarket segment with their Primaries brand. They’re also entering the leisure business this year through an investment in Mactan. …Hopefully construction will start this year.”
In 2014, FPH launched the “Powered by Good” (PBG) campaign to introduce their company to the man on the street, and it’s been largely successful.
Powered by good people
“The whole concept of ‘Powered by Good’ resonates. PBG is powered by good people, powered by good intentions, powered by good plans and powered by good hope. Hope for the future. It’s a natural for our group,” he says.
“Adopting the tagline ‘Powered by Good’ made us reflect on our very essence as a company and has given us a clearer definition of what we can and cannot engage in. It has defined our boundaries, yet it has also broadened our horizons. ‘Powered by Good’ has become the running thread that binds all of our companies and has bolstered pride among our employees,” Puno adds.
The PBG campaign is a return to FPH’s roots and core values and to the reasons FPH was established 55 years ago. In fact, PBG can be partly credited for the current growth and expansion of the company.
“‘Powered by Good’ and uplifting the lives of the Filipino is what FPH has stood for since it was founded 55 years ago, and this is what it will stand for moving forward,” Puno said.
In his recent president’s report delivered to the stockholders, Puno said: “In the coming years, as we scale up our operations, our only choice is to mindfully work together towards the common good. This is primarily the reason why we have focused our power generation investments in providing clean and affordable electricity to the Filipino consumers. It is the reason we have prioritized investments in low-carbon sources of electricity coming from natural gas, hydro and geothermal. It is the reason why we have expanded the portfolio to include wind and solar. It is consistent with our realization that the impact of climate change is real and that there are alternatives available to reduce our country’s reliance on fossil fuels.”
However successful it has been in the past, it’s clear FPH still has a number of obstacles to overcome in the future. But it can rest in the fact that the new leaders know what they’re doing, and have clear goals and the drive to make the company even more successful and productive.
As chairman FRL himself says: “It will not be easy; we will have to explore many roads not yet taken and new business models that challenge old paradigms. But this is precisely where opportunities will be created and won.”