Feature April-May 2004
Lopez Family Values -- Philanthropy in the Philippines

For 200 years, the fortunes of the Lopez family have been closely intertwined with key moments in the history of the Philippines and the wider world. From generation to generation, dynamic leadership and a strong sense of family unity have sustained the family through numerous adversities, while an entrepreneurial spirit and commitment to country have guided their growth and renewal.

After losing nearly everything to the destruction of World War II, family patriarch Eugenio Lopez succeeded in creating the first airline in Asia, became a media magnate unafraid to take on the powerful and corrupt, and acquired and ran the country's largest power utility at a time when the biggest companies in the Philippines were foreign owned and directed. His philanthropic legacy includes the establishment of one of the earliest private museums in the country, the Lopez Memorial Museum, and major support for the region's leading graduate school of business, the Asian Institute of Management.

Oscar Lopez: creating a new framework for corporate social responsibility

When Oscar M. Lopez took the helm of the Lopez Group of Companies in 1999, he decided to apply the same hands-on management style to corporate social responsibility (CSR) as he did to the family's diverse portfolio of businesses, which included 143 firms employing more than 22,000 people.

He brought in Tuck Global Consultancy, a branch of the Amos Tuck School of Business at Dartmouth College, to examine the Lopez Group's social responsibility activities in 2001. To help implement Tuck's recommendations, Oscar has recently announced the creation of the Lopez Group Foundation, Inc., a new framework for the coordination of his company's many and varied corporate philanthropy programs.

In addition to priorities such as child welfare and education (see main story in this issue), the Lopez Group's philanthropic agenda includes environmental protection and poverty alleviation. To conserve some of the world's richest-and most endangered-regions of biodiversity, Oscar Lopez in 1999 established First Philippine Conservation, Inc. (FPCI), which partners with Conservation International on projects such as protection of the country's largest remaining block of old-growth rainforest in the Sierra Madre range. Oscar's son Federico ("Piki") is president of FPCI. On the business side, Piki heads the Lopez Group's holding company for its power generation investments, First Generation Holdings Corp.

The Lopez CSR portfolio also includes a range of community development initiatives. Under the leadership of Manolo Lopez, Oscar's younger brother, for example, the family's electric distribution company, Meralco, has undertaken an electrification program for depressed urban and rural areas in its franchise that has benefited nearly 500,000 households. The Lopez Group is also partnering with Philippine Business for Social Progress and a range of local stakeholders on an integrated development project for 4,440 families uprooted by a Manila Bay reclamation project in 1993.

With the new umbrella foundation in place, Oscar said he expects the Lopez Group to be "more organized and group-oriented in our CSR activities. We can come up with strategies to work together to promote better group-wide coordination and synergy. It also does not hurt to take the extra effort to make the community know what we are doing to demonstrate our good citizenship," he added.

With the declaration of Martial Law in September 1972, the influential Lopez family was targeted for its denunciations of the corrupt regime of President Ferdinand Marcos. In retaliation, Marcos shut down the family's media outlets and arrested Eugenio's eldest son, Geny, on fabricated charges. With his son held hostage, Eugenio was forced to give up his holdings in a group of companies worth several hundred million dollars. Marcos failed to release Geny, and Eugenio Lopez died in 1975, his son still imprisoned.

Following the "People Power" revolution that swept Marcos from office in 1986, Geny and his brothers Oscar and Manolo proceeded to rebuild the family business, taking the company in strategic new directions. Upon Geny's death in 1999, Oscar, the senior member of the family, took the helm. Today, the Lopez Group of Companies includes holdings that range from media and telecommunications to public utilities and land development, and touch on virtually every aspect of the Filipino's daily life.

Now, as the children of Geny, Oscar and Manolo take the reins, they are guided by the values of the past but are creating their own vision for the future. Several members of this generation are heading philanthropic institutions that mobilize family assets-media holdings in particular-to address the substantial economic and social challenges that face their country.

The Lopez Group possesses a powerful and profitable diversified media empire and the vision to harness it to promote philanthropic aims. Its ABS-CBN is the largest media broadcasting company in the country, reaching 97 percent of the more than 8 million television-owning households and 70 percent of the cable TV market, as well as other parts of Asia, the Middle East, Europe and the US.

"The younger generation of Lopezes have tried to make sure that they are able to identify causes they believe in fully, and they have, from the beginning, used the benefits of their media empire to be able to develop a constituency among the public for their causes," said Rory Tolentino, Executive Director of the Asia Pacific Philanthropy Consortium.

"It is obvious that this generation of the family thinks in strategic terms in their philanthropic work-looking at what resources the family has in terms of the companies they control and how that can be used to generate concern and awareness," she added.

"The key element in the philanthropic work they're doing is that they're actually using the base of their wealth as a tool for transformative change. In fact, they're getting into the core of the problem by changing consciousness in society," said Corazon "Dinky" Juliano-Soliman, Secretary of Social Welfare and Development, whose department partners with Gina's ABS-CBN Foundation in the provision of child welfare services.

Gina Lopez & the ABS-CBN Foundation: pioneering media-based philanthropy

If her father, Geny, was a pioneer in bringing the Philippines into the modern era of broadcast through the expansion of the ABS-CBN broadcast network in the 1950s and 1960s, Gina Lopez was the first in her family to systematically harness the technology of that media in novel ways for social good.

The vehicle for this philanthropic revolution is the first of the family's corporate foundations, the ABS-CBN Foundation, Inc. (AFI -- www.abs-cbnfoundation.com), established by Geny in 1989.

The foundation evolved when ABS-CBN broadcasting corporation's frequent appeals for help for victims of natural disasters generated substantial sums of money. AFI was incorporated in 1989 as the legal repository to collect and dispense donations for its child-centered programs and projects.

During the turbulent era of Martial Law, Gina had been away from the Philippines, facing her own personal challenges. In 1972, she joined a religious organization called Ananda Marga and spent the next 20 years ministering to the needy, living a hand-to-mouth existence while running orphanages and nursery schools in Africa and other impoverished parts of the world. "If I look back on it now, it really developed my will, because I had to survive," she said, reflecting on this period. "I would never have been exposed to that life if I'd stayed at home, and it developed in me a sensitivity to what the poor go through."

One of her first moves as the head of AFI was to redirect its focus toward educational television (ETV) and succeeded in popularizing it in the Philippines. ABS-CBN was already donating airtime and production services to the foundation but Gina was convinced that much more could be done with these resources.

Gina developed a science show for children called Sine'skwela and convinced the Secretary of Education to make it mandatory viewing in all public elementary schools in metro Manila. She then proceeded to equip these schools with donated television sets, which she acquired through a fundraising campaign that yielded money to purchase the equipment.

To date, the foundation's E-Media program has produced eight award-winning shows for TV and radio that reach around 14 million schoolchildren in more than 5,000 public elementary schools nationwide. Developed in coordination with the Department of Education's curriculum needs, the shows supplement the overtaxed instructional capacity of the public school system. They also form an important source of programming for the Knowledge Channel, a cable-and satellite-based ETV service run by Gina's cousin Rina Lopez-Bautista.

Another AFI initiative -- Bantay Bata 163 (Child Watch), a 24-hour hotline and child abuse intervention program -- soon followed. Launched in 1997, Bantay Bata 163 benefited from access to media outlets of ABS-CBN to advertise the hotline number and provide other programming to make the public aware of its services ("163" is the number to dial for the hotline). Overwhelmed by calls in its first year of operation, Bantay Bata has evolved from a media-based hotline to an integrated child protection system combining rescue, medical care and rehabilitation, shelter and aftercare, provided by social workers and other trained and licensed professionals.

Bantay Bata 163 (Child Watch)
Vital Statistics   
1.3 million Average calls per year received
by hotline
18,540 Average calls per year needing follow up
7 Children rescued per month and placed in Children’s Home
40% Percentage of children rescued who are reintegrated with family
100 Current residents in Children’s Home
Source: ABS-CBN Foundation, Inc.
A key factor in the effectiveness of Bantay Bata is its partnership with the national Department of Social Welfare and Development (DSWD). "We work with other foundations and organizations, but Bantay Bata is unique in that it is the only one licensed to do rescue," said Corazon "Dinky" Juliano-Soliman, DSWD Secretary. An average of seven children a month, some referred by DSWD, are removed from abusive homes by Bantay Bata's rescue staff and all are placed in Children's Village, the foundation's new PhP 120 million (about $2.15 million) state-of-the-art integrated care facility in Bulacan, about an hour from Manila.

Bantay Bata and DSWD are also working together to raise money and public awareness to address the problem of child abuse. "Violence in the home has been until recently a private thing," the Secretary said. "It's very significant that a major TV network has taken this on as advocacy."

In addition to child welfare, ABS-CBN Foundation advocates for environmental protection through its Bantay Kalikasan (Nature Watch) initiative. Established in 1998, Bantay Kalikasan in its first year conducted a media-based drive that helped collect more than 5 million signatures for the passage of the Clean Air Act in 1999, and has led a major reforestation effort in the La Mesa watershed that serves Metro Manila.

Gina said her foundation's media savvy will be helpful in meeting the new goal for a more coordinated approach to corporate social responsibility among the Lopez Group companies (see related feature). For example, her uncle, Oscar Lopez, Chairman of the Lopez Group, has made biodiversity and watershed protection a priority through the foundation he created, First Philippine Conservation, Inc., a partner of Conservation International. "I have an environmental show on ABS-CBN where I can help them with media, so there's a lot of opportunity for synergy," Gina said.

With child rescue operations as far away as Mindanao, Gina says that finding the funds for her staff-intensive services is a constant concern. AFI spends about PhP 20 million a year to administer its various programs, and Gina would like to raise a PhP 200 million endowment.

While Gina is breaking new ground with her ETV and media-assisted outreach programs, her work is squarely in the tradition of Lopez family values. "Many times, I feel like my father is very happy. The motto of ABS-CBN is "In the service of the Filipino." And the foundation just brings it to another level. I really do feel like I'm carrying on the family tradition."

Rina Lopez & the Knowledge Channel: bridging geographic and social divides

With the launch of the Knowledge Channel Foundation, Inc. (KCFI -- www.knowledgechannel.com) in 1999, Rina Lopez-Bautista took her family's move into media-based philanthropy a step further by creating the first and only all-educational cable television channel in the Philippines.

The Gift of Knowledge: What Donations Buy for the Schools (in US$)   
$20Printing 6 program calendar guides & 5 sets of teacher study guides
$1442-day training workshop for 3 teachers
$1,000Integrated cabling package for 1 school for 10 years (includes support services,training for school personnel, program calendar guides & teacher study guides)
$3,000Integrated satellite connection package (includes dish & receiver installation)
Source: The Knowledge Channel Foundation, Inc.
Rina's vision is a new twist on the Lopez family's longstanding goal of using its broadcast empire to unite the disparate people and places of the Philippines. She hopes that the Foundation's flagship project, the Knowledge Channel, will help equalize the learning field by making quality educational materials available to poor students in her country's public schools.

It's an ambitious goal, given the dismal quality of public elementary and secondary education in the Philippines, In the country's 41,350 public schools, the student-to-teacher ratio is approaching 1:70 and the book-to-pupil ratio 1:8. The massive public school system suffers from a widespread shortage of everything from chairs to schoolhouses, teaching materials to competent teachers.

Doris Nuval, the resource mobilization director for KCFI, said the Knowledge Channel responds directly to a UNDP Human Development Report that concluded that modern information technology and communications may offer the only feasible medium for delivering high-quality instruction to the millions of pupils in so many schools and places across the Philippines.

"Given the business we were in, we were able to access many resources that were needed for use in this program," said Rina, citing cable TV infrastructure around the country, satellite transponder space, programming and production consultants, and links with other cable companies and suppliers nationwide. The ABS-CBN Foundation was already producing and airing curriculum-based programs for its radio and TV stations, and agreed to let the Knowledge Channel use them in programming for public schools.

To date, KCFI has introduced the Knowledge Channel to 1,220 public schools serving 2.2 million students around the country. Programming and instructional materials are coordinated with the Department of Education's prescribed curriculum. The Department has declared the Knowledge Channel mandatory viewing for elementary and secondary students in the public schools.

KCFI offers schools a complete, integrated package that includes free cabling to schools with access to a local cable provider, or the installation of wireless (satellite) technology to remote areas unreachable by cable. To improve the odds that schools will receive the full benefit of the Knowledge Channel, KCFI provides reference materials and training for teachers and administrators.

The Lopez Group has invested about PhP 200 million (about $3.6 million) in this project, mainly for capital expenditure and production of programs, and continues to provide support through ABS-CBN. Other funders have contributed about PhP 80 million. "We used seed money and existing infrastructure of the Lopez Group. But to expand our reach into the different parts of the country, we look for sponsors for the schools," said Rina.

To accomplish this goal, KCFI has forged partnerships with Citigroup, United Way Philippines, Caltex Philippines, Procter & Gamble, Wyeth, Coca Cola Export Corp., Nestle Philippines and others. Beyond the corporate support, Knowledge Channel continues to find sponsors in far-flung and unexpected places.

One of the most recent partnerships was struck by Rina in the Autonomous Region of Muslim Mindanao (ARMM), a part of the country that has suffered from years of violent conflict and government neglect. There, a respected local leader and businessman, Datu Ibrahim "Toto" Paglas has committed to make the Knowledge Channel available to schools in his community, with the goal of expanding the channel to the rest of ARMM with the support of his family's business holdings, the Paglas Corp.

National leaders, as well, have taken note of the role that KCFI can play in addressing educational needs and bringing other partners to the table. "In the 500 insurgency-influenced barangays (villages) where teachers fear to go, the Knowledge Channel has already helped," said President Gloria Macapagal Arroyo, addressing a gathering of Filipino leaders in corporate social responsibility in 2003. She encouraged corporate foundations to provide the support required for continued access to educational TV.

For families who own neither radios nor TV sets, the Knowledge Channel is the only window to a wider world for some children. Particularly in the provinces, where a higher proportion of households are without television, the Knowledge Channel has reduced truancy levels dramatically because "kids come to school excited to watch," said Doris Nuval, who believes that the channel has created a "thirst for learning among the most marginalized of our children."

Cedie Vargas & the Lopez Museum: preserving the past and building for the future

Cedie Vargas learned about the family's media operations from the ground up. Tapped in 1986 to oversee the physical rebuilding of the ABS-CBN broadcast network after it had been shut down for years by President Ferdinand Marcos, Cedie found the company's once-proud facilities in a shambles.

Her task, to preserve as much as she could of value from the past while building for the future, provided good preparation for the mission that now confronts her as director of the Lopez Memorial Museum (she also continues to head the logistics division of ABS-CBN). "The Museum was the first institutionalized philanthropic project established by my grandfather. He was a lover of books, and every time he traveled, he would go to an antiquarian bookstore and seek out books about the Philippines," she explained.

In 1960, Eugenio Lopez, Sr. donated the bulk of his personal collection to the museum. One of the earliest private museums in the Philippines, the Lopez Memorial Museum has more than 17,000 books, 539 works of fine art and 89 pieces of pottery. This varied collection is explored through exhibitions, lectures and workshops open to the general public, and is the subject of numerous scholarly publications by the Eugenio Lopez Foundation, Inc., established in 1968. The Lopez Memorial Museum is funded primarily through donations from the Lopez Group companies.

"It's a very traditional institution, but what I wanted to do was to explore ways to use new media and more visual learning. I also wanted to make the Museum more visible in all our network's platforms -- TV, radio and glossies [magazines]. We have a lot of segmented channels in cable, so I advertise there and am able to reach a wider audience that way," said Cedie. The Museum is also broadening its audiences through a consortium with several other cultural institutions -- the Ayala Museum, the Ateneo Museo and the Museum for Children -- that all come together to mount an annual show around a single theme.

"We're not a museum-going public. People are more concerned with survival, with basic needs. The sad part is that the Filipino is so artistic -- we have such a rich and varied culture but it does not take precedence because 90 percent are below the poverty level," Cedie said. "So one of my goals is to promote museum-awareness among the younger generation."

"If Gina is feeding the body and Rina is feeding the brain, I guess I would be nourishing the soul," said Cedie, referring to the respective contributions of the philanthropic organizations headed by her cousin, her sister, and herself.