THE CHINA BANK STORY

Celebrating the past

Embracing the future
BY RAUL RODRIGO
and NANCY PE RODRIGO
EDITED BY JOSE DALISAY
100 YEARS OF TRUST: THE CHINA BANK STORY
Celebrating the Past. Embracing the Future

Copyright © 2021
China Banking Corporation

ISBN 978-971-95485-1-5

All rights reserved. No part of this book may be reproduced, distributed, or transmitted
in any form or by any means, including photocopying, recording, or other electronic or
mechanical methods, without the prior written permission of the publisher, except in the
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“Attention: Permissions” at [email protected].

Published by
CHINA BANKING CORPORATION
China Bank Building, Paseo de Roxas corner Villar St.
Makati City 1226
Tel: (632) 8885-5555
www.chinabank.ph

Produced and distributed by the China Bank Marketing Communications Department in

commemoration of China Bank’s 100th anniversary. This book is not for sale. The PDF is
available for free download at www.chinabank.ph.

Centennial Committee Chairman Alexander C. Escucha

Centennial Book Project Director Alexander C. Escucha

Project Managers Mary Ann R. Ducanes

Hermarie Liza U. Villegas

Writers Nancy Pe Rodrigo
Raul Rodrigo

Editor Jose Y. Dalisay

Cover and Book Design Jules C. Perez

Layout and Production Perez NuMedia, Inc.

Coordinators Jheen Bautista

Denise Aman
Mikkhail Guiogio

Photography Wig Tysmans

Dojo Palines
Mario Babiera
Alexander C. Escucha
Charles Ting
Jonathan Mallari
Roberto M. Leyeza
Enrico Enzo D. Perez
China Bank Aperture Club

Digital Artist Bartolome S. De Vera

Artist’s Perspective of the Museum B+C

Printer The House Printers Corporation

THE CHINA BANK STORY

Celebrating the past

Embracing the future

BY RAUL RODRIGO
and NANCY PE RODRIGO
EDITED BY JOSE DALISAY
TABLE OF CONTENTS

6 PREFACE 224 PART 3       

By Alexander C. Escucha UNPRECEDENTED GROWTH
8 MESSAGE FROM THE CHAIRMAN 2010-2020
By Hans T. Sy 226 CHAPTER 7          
Growing Fast Through
10 MESSAGE FROM THE VICE CHAIRMAN
Strategic Acquisitions
By Gilbert U. Dee  
236 CHAPTER 8           
12 MESSAGE FROM THE PRESIDENT From a Businessman’s Bank
By William C. Whang to a Bank for All
14 A JOURNEY OF 100 YEARS: MILESTONES 256 CHAPTER 9            
From a Niche Player
16 A JOURNEY OF 100 YEARS: LEADERS
to a Full-Service Bank
18 PART 1      
280 PART 4       
A DIFFERENT KIND OF BANK EMBRACING THE FUTURE
1920-1960
284 CHAPTER 10            
20 CHAPTER 1             A New Generation of Bankers
Beginnings
1920-1924 294 CHAPTER 11            
  Timely Innovation: Digital
46 CHAPTER 2             Transformation
Setting the Values
1924-1940 304 CHAPTER 12            
  Timeless Values and Time-Tested
76 CHAPTER 3             Relationships
Rising from the Ashes
1940-1960 318 100 YEARS OF ENDURING PARTNERSHIPS

112 PART 2       356 PRESERVING A LEGACY

CHALLENGE AND RESPONSE The Binondo Heritage Restoration Project and the
China Bank Museum
1960-2010
114 CHAPTER 4            
382 VISION, MISSION, AND CORE VALUES
Brave New World 384 BOARD OF DIRECTORS
1960-1980
  386 ANNEX
152 CHAPTER 5             Messages from the 90th Anniversary Book
A Time of Troubles
1981-1989 394 ACKNOWLEDGEMENTS
 
184 CHAPTER 6             395 SOURCES
The Fundamental Things Apply 396 INDEX
1990-2010
Original China Bank building in Binondo restored to its original architecture
and design, a catalyst in the renewal of the world’s oldest Chinatown.
PREFACE

Your Success Is Our Business

T
his centennial edition of the China Bank story is part unfolding stories in the extraordinary challenges posed by the
of a bigger program to celebrate the Bank’s 100th pandemic that started in 2020. At the heart of the enduring
anniversary, highlighted by the centerpiece project, partnerships is the intimate knowledge of customers, as
the faithful restoration to the original architecture and design captured in the timeless saying of Don Albino that “It is better
of its original headquarters in Binondo, which also houses a to know people than to know money.”
museum. This culture of caring for clients and customers was
The book has two main segments. The first two parts (Part 1 indeed passed on from the founders to the next generations
“A Different Kind of Bank 1920-1940” and Part 2 “Challenge and of bankers, together with the timeless values of integrity
Response 1960-2010”) cover the first nine decades of the Bank’s and doing things right as well as doing the right thing. This
history as told in the 90th anniversary edition of the book. message is very well captured in the Bank’s centennial TV
The second half of the book portrays the story of the last commercial that says, “Times change, but values remain.”
decade (Part 3 “Unprecedented Growth, 2010-2020”) — the These timeless values were at the heart of the messages of
Bank’s remarkable record of network expansion (Chapter 7 former chairman Gilbert U. Dee and former president
“Growing Fast Through Strategic Acquisitions”) and growth
beyond its Chinese-Filipino niche market (Chapter 8 “From a
Businessman’s Bank to a Bank for All”), and the establishment
“Times change,
of new businesses (Chapter 9 “From a Niche Player to a Full- but values remain”
Service Bank”).
After reaching the critical milestones of P1 trillion in Peter SyCip Dee that introduced the 90th anniversary book.
assets and P100 billion in capital, the Bank looks forward The original messages of Mr. Gilbert Dee, Mr. Hans Sy,
to its second century (Part 4 “Embracing the Future”), with Mr. Peter Dee, and Mr. Ricardo Chua (from the 2014 abridged
confidence in the new leadership team (Chapter 10 “A New version of the 90th book), are included in the annex. In fact,
Generation of Bankers”) underpinning our optimism in our the museum showcases the Bank’s historical narrative around
ability to meet the challenges of a digital world (Chapter 11 these core values.
“Timely Innovation: Digital Transformation”). And beyond the China Bank is one of the oldest listed companies in the
first century, we expect the tradition of reliable partnerships country, yet it is also at the forefront of best practices in good
to endure (Chapter 12 “Timeless Values and Time-Tested governance as evidenced by its consistent top rankings in the
Relationships”). country and ASEAN. The China Bank legacy of doing things
The themes, narratives, and stories throughout the book right and doing the right thing is indelibly etched in its history,
reveal the story of what China Bank is all about. It highlights and best illustrated in a couple of stories.
the continuing commitment to support customers in good The best example of doing things right is shown in the
times and especially in tough times, resulting in a legacy of contrast between China Bank and another bank founded by
enduring partnerships through generations of customers. Chinese businessmen in 1924, the Mercantile Bank of China.
This was clearly demonstrated in the 1930s Great Depression, While it copied the China Bank model of hiring American
the post-World War 2 reconstruction, the economic crisis of managers and even hired China Bank officers, the similarities
1983-1985, the 1997 Asian financial crisis, and the 2008 global end there. Mercantile Bank collapsed in 1931 as a result of
financial crisis. This recurring theme is again seen in the excessive lending without collateral to its own directors and

6 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
from losses due to speculation in foreign exchange. China (Rosendo Chuakaw, “An Immigrant’s Story,” Chapter 3, pages
Bank, on the other hand, strictly demanded collateral for loans 92-93).
to its directors and other borrowers; it also did not engage The client’s section was updated to include testimonies
in speculative transactions. (see pages 42-44; also in Wong from the children or grandchildren of the original clients
Kwok-Chu, The Chinese in the Philippine Economy 1898- and to include stories from clients of China Bank Savings
1941, Ateneo de Manila University Press, pages 142-148). that continued the China Bank tradition of supporting
The prudent conduct of banking even then was remarkable, entrepreneurs. These stories are a fitting tribute to the
way before the rules on DOSRI and related party transactions strength of their resolve and character, determination, old-
were conceptualized and enforced (the Central Bank of the fashioned hard work and, we are gratified to say, with some
Philippines was established only in 1949). Indeed, as the help from China Bank. These stories give life to Dee C. Chuan’s
English financial journalist Hartley Withers wrote, “Good vision as declared in the Bank’s very first print advertisement
banking is produced not by good laws, but by good bankers.” that China Bank “shall minister understandingly to their
The act of doing the right thing for depositors—even if you banking requirements.”
are not legally obligated to do so and at great cost—is best
exemplified by Don Albino’s decision to pay all depositors
whose deposits were among those liquidated by the Japanese
“Good banking is produced
forces in WW2 (see page 71 for the transcript of US Congress not by good laws,
hearings), because “it was the decent thing to do.” This but by good bankers.”
gesture was even more remarkable because China Bank
received only 4% of its claims for war compensation from the The book concludes with the story behind the authentic
US government and did not get any financial support from the restoration of the Binondo building as a heritage project that
Philippine government for their post-war reopening unlike includes a museum (“Preserving a Legacy”, pages 356-381).
other local banks. As the legacy of a century of enduring partnerships
This edition also contains a factual correction of a historical becomes the foundation for the next 100 years of constant
record. In the 90th anniversary edition of the book, based on and transformative change, certain things remain constant as
the earliest available records at the time, China Bank shares guiding posts for the future. Investment banking legend Felix
were listed shortly before January 1947. Further research Rohatyn said it well: “At its core, banking is not simply about
showed that China Bank shares were actually listed in the profits, but about personal relationships.”
Manila Stock Exchange (now the Philippine Stock Exchange) in
September 1927, one month after the opening of the MSE.
Just like the 90th anniversary edition, the book
features inspiring stories of clients (“100 Years of Enduring
Partnerships,” pages 318-355). Many of them trace their ALEXANDER C. ESCUCHA
stories from the first generation who chose to move from Chairman, Centennial Committee
the Chinese mainland to the Philippines, then started with
small ventures and grew their businesses while overcoming
tremendous obstacles. One such story is that of Siak Long

PREFACE 7
MESSAGE FROM
THE CHAIRMAN

8 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
A Bridge Between Generations

I
feel honored and delighted to be presenting this new my physical presence but more importantly in terms of a
book celebrating the centennial of China Bank to our mindset that must harmonize the greatest strengths of our
clients, partners, staff, and the public at large. It has past with the brightest prospects of our future.
been asked why, only a decade after we published a coffee Like many traditional and once family-owned enterprises,
table book chronicling China Bank’s rise to pre-eminence as China Bank has had to adapt and adjust to the realities and
an institution in Philippine banking, we saw it fit to come out challenges of banking in this new age of globalization and
with another one. Although the history remains essentially digital technology. Business principles and practices have
unchanged, this book is more than an updated edition; it is, changed. Relationships that once could be sealed with a
rather, a window on the future, a rededication of the Bank to handshake now require a mountain of studies and signatures,
its founding ideals and also to its mission to persevere. none of which can guarantee that most essential of elements
My greatest regret is that my father is no longer around between partners: trust.
to join us in marking this milestone. The consummate While China Bank must and will embrace the digital
entrepreneur that he was, he would have appreciated future, wasting no opportunity to ensure that we are
our continuing commitment to supporting the Filipino centrally engaged in 21st-century banking and can offer our
entrepreneur, to playing our part as “the businessman’s clients the cutting-edge services they expect, we will also
bank” that we have always been, a generator of growth bring to the table what no technology can buy: a century of
and positivity even in challenging economic conditions. But trustworthiness.
indeed, he lives on in the Bank’s legacy, in the values that will I extend my warmest congratulations and felicitations
sustain us into our next century. to everyone who has contributed to that glorious century,
As his son and as a steward of the Bank for many and look forward to our next one with great optimism and
years now, I feel acutely aware of my responsibility to act audacity.
as a bridge between generations—not only in terms of

HANS T. SY
Chairman of the Board

MESSAGE FROM THE CHAIRMAN 9

MESSAGE FROM
THE VICE CHAIRMAN

10 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Enduring Values

I
t has been my family’s distinct honor to have been associated Integrity lies at the heart of all our actions and decisions.
with China Bank since its founding by my uncle Dee C. Chuan A bank’s most important asset is trustworthiness, and China
a century ago. Back then, the men who set it up had little Bank has maintained a solid reputation for the past century for
to go on, aside from their capital, but their vision and audacity. its moral rectitude, at whatever cost; it will do right by its clients
Time would prove them right in striving to establish the country’s and by its sworn duty as the custodian of other people’s money.
first private commercial bank, one that catered to the needs of High performance standards have kept us at the top of
a growing business community in one of Asia’s most important the game. We demand much of ourselves, knowing that our
economies. customers expect no less. Success has been no excuse for laxity.
Since then China Bank has been led by many generations of Commitment to quality keeps us focused on doing our best.
outstanding individuals and managerial teams, each of whom We are constantly seeking to improve our services and to ensure
have helped direct and shape the Bank into what it is today: a their efficient delivery.
robust institution standing firmly on the bedrock of tradition but Concern for people drives us to think beyond the business of
prepared and eager to take on the opportunities of this digital money, to create a safe, positive, and productive workplace, and
and globalized age. From challenge to challenge, from crisis to help build a progressive and humane society.
crisis, through boom and bust, these leaders have learned not Customer service focus is what our new leadership is all
only how to survive but how to prosper by ensuring as well the about—putting the customers and their needs at the center of
security and financial health of their clients. our goals.
Few enterprises attain the privilege of marking their first Resourcefulness and initiative are encouraged in all China
century, and it is always interesting and instructive to determine Bankers, a new mindset that embraces innovation as the key to
what accounts for their stability and longevity. Surely they must success in the future.
be doing something right—and doing it better than others. Efficiency keeps us on our toes and ahead of the curve. We
Especially in today’s highly volatile business environment, where are ever aware that even with a century behind us, we have no
billions can be made and lost in minutes and companies can time to waste, and much yet to achieve.
come and go in the wink of an eye, a strategic view of corporate Loyalty assures mutual respect and mutual benefit over
growth is vital, so that aggressiveness can be balanced by time. We have treated our clients like true friends and family,
prudence, and short-term profit by long-term sustainability. providing them with support and guidance through thick and thin.
In the earlier edition of this book published ten years ago, I Fairness is the soul of justice, and maintains harmony and
remarked that, when queried about the secret to China Bank’s order in our corporate and personal engagements.
success, “We work harder than others.” Indeed that’s still true; While we are retooling and retraining to adapt to the fluid
we push ourselves hard and put in the extra effort to achieve the business environment and provide responsive and creative
results we want. solutions to new problems, some things will never change in the
But more than just exerting physical and mental labor, we way we do business and the reasons why we are in business.
work under a set of shared values that have sustained us these Service to our clients is service to our economy, our country,
past one hundred years, values without which our clients could and our people at large. That service is best provided with good
have chosen any other bank. We have enshrined these values in hearts and clean hands.
our corporate profile, and while their precise formulation may
have evolved over time, their core meanings and intents form the
bedrock of our corporate philosophy, of why we do things the way
we do. GILBERT U. DEE
Vice Chairman

FOREWORD FROM THE VICE CHAIRMAN 11

MESSAGE FROM
THE PRESIDENT

12 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Embracing the Future

T
he decision to join China Bank has become a most the human element and the streamlining of the organization to
important milestone of my professional life, as it bring to bear these new tools for the benefit of the customers.
opened opportunities for me to help bring a venerable When I first joined China Bank, I understood my mandate
institution into a new era of dynamic growth as it enters its in very clear terms—to change the culture to leverage its
second century. strengths while addressing perceived weaknesses. A primary
In a well-established bank’s life, there are the key turning goal is to enhance teamwork across the China Bank group
points and crucial transitions that determine whether it will and not just among the units within the parent bank, which
be content to rest on its laurels and trade on little more than by itself has grown in unprecedented scale. It also means
its reputation, or forge bravely into the future and take on new sometimes breaking the silos that our people had gotten
challenges and risks—not just to stay alive, but to stay ahead. used to operating within, thereby realizing the full potential of
We live in such times when innovation has become requisite cooperation between those handling customer relationships
to survival. Those who embrace it will at least stand a fair with the product specialists, and harnessing synergies across
chance; those who do not are fated to fall by the wayside. subsidiaries and affiliates with their own boards of directors
The last decade of the Bank’s first century has seen its and management teams. This direction towards more
unprecedented transformation through the growth of its openness and cooperation remains a work in progress, and
physical footprint and digital channels. The establishment I had no illusions that it would be a quick and easy job. The
of new businesses also enabled it to level up into a major longer and nobler an institution’s pedigree is, the harder in a
industry player, with full-fledged capabilities to provide a sense it becomes to transform from within.
complete offering of products and services for all market Resistance was to be expected, and it came, which was
segments beyond its original niche of Chinese-Filipino good. I happen to believe that healthy conflict can bear positive
entrepreneurs. results, because it drives people to become more expressive
It has become my great privilege and responsibility to and to question basic assumptions. Eventually, we showed
preside over the Bank at this historic juncture of its corporate that with the right training and motivation, with the retooling
life, to fully harness its enhanced capabilities to serve a of mindsets, we could effect salutary and meaningful change,
broader market while continuing to stay true to its roots and toward such new and vital goals as customer-centricity.
core values. The continuing effort to be relevant to the latest With a new generation of professional managers at
generation of young and demanding clients brings with it a the helm possessing the capabilities, the vision, and the
commitment to be prepared for the challenges of a digital determination to navigate our way through the beginning of
future. our second century, I am confident that China Bank will move
Preparation does not mean only the acquisition and on to achieve greater heights in the years ahead.
deployment of new technologies and machines, and continuing
improvement of process. These are important elements of
the strategy, and critical enablers. But even more crucial to
future-proofing the Bank will be reforming and modernizing WILLIAM C. WHANG
President

MESSAGE FROM THE PRESIDENT 13

A JOURNEY OF 100 YEARS: MILESTONES

1920 1925
Opens a branch in Xiamen, China
1945
China Bank reopens and while working

1945
towards its own recovery, lends to key industries
1927 for post-war reconstruction and long-term
Becomes one of the first companies to be listed development
on the Manila Stock Exchange

1920
Dee C. Chuan leads a group of top Chinese Filipino
businessmen to establish China Bank. The Bank
opens for business on August 16, 1920 at No. 90
Rosario St., Binondo, Manila

1924
Transfers its growing operation to its own building 1929
on Juan Luna corner Dasmarinas Sts., Binondo, Opens a branch in Shanghai, China
its head office for the next six decades
1931
The Great Depression adversely affects the
Philippine banking sector; hit by runs, a rival bank
goes under, but China Bank weathers the crisis
unshaken

1942
The Japanese military shuts down China Bank,
liquidates its assets, and jails its principal officers
Albino SyCip and George Dee Se Kiat

1946 1948
Opens China Bank Cebu, its first local branch
1955
Breaches the P100-million mark in assets,
1970
Still the biggest local private commercial

1970
becoming the biggest local private commercial bank, with P566 million in resources
bank

1960
Opens its first branch in Manila, Sto. Cristo
Branch

1949 1965
Closes Xiamen and Shanghai branches when Declares 100% stock dividend and increases its
the Communists take over China authorized capital stock from P10 million to
P40 million
1954
Albino SyCip initiates 1969
the Liberty Wells Becomes the first
project to provide bank in Southeast
potable water for Asia to process
millions of Filipinos deposits on-line,
using the IBM 360

14 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
1971 1973
Hits the P1-billion mark in assets; meets the
1988
Launches TellerPhone,
1990
Celebrates 70th anniversary

1995
Central Bank’s requirement of a P100 million the first telephone
minimum paid-up capital for commercial banks banking service in the
Philippines
1975
Increases its Filipino ownership up to the 70% level
required by the Central Bank, paving the way for 1991
China Bank’s major branch expansion program 1990 Acquires its universal banking license
Joins seven other banks
1977 to create BancNet, the 1995
Hikes capitalization to P300 million from P100 country’s largest ATM Embarks on a five-year P150 million program
million; becomes one of the first banks authorized network; transfers its to upgrade its technology infrastructure, acquiring
by the Central Bank to engage in foreign currency- corporate headquarters leading-edge Dimension software from Kirchman
denominated transactions to its present location Corp. and the latest IBM ES 9000 hardware
along Paseo de Roxas
1982 in Makati City
Establishes CBC Properties and Computer Center,
Inc. to provide computer-related services solely to
China Bank and to manage its electronic banking
and e-commerce requirements

1996 1996
Accesses the offshore capital markets for the
2012
Acquires Pampanga-based Unity Bank
2017
Gets investment grade credit rating of “Baa2”

2020
first time by issuing US$50 million Floating Rate from Moody’s; raises P15 billion from stock rights
Certificate of Deposit (FRCD) 2013 offer
Acquires Planters
1997 Development Bank 2018
Issues U$75 million FRCD; becomes the best Signs US$150 million green bond agreement with
capitalized bank during the Asian Financial Crisis International Finance Corporation (IFC)
after a 2 for every 3 shares stock rights offering
2014 2019
1998 Merges Plantersbank, like Unity Bank, with Raises P30 billion via maiden issue of fixed-rate
Establishes China Bank Insurance Brokers, Inc. China Bank Savings (the surviving bank); raises retail bonds, one of the largest bond offerings for
to provide direct insurance broking for retail and P8 billion from its stock rights offering the year; begins restoration of the original head
corporate customers, with a wide and office in Binondo
comprehensive range of plans for life and non-life 2015
insurance Enters the credit card business and launches
China Bank MasterCard; migrates to its new core
2005 banking system, Finacle Core Banking Solution
Launches its Internet (FCBS) from Infosys; incorporates its Investment
banking facility, Banking Group into a full-fledged invesstment
China Bank Online house subsidiary, China Bank Capital

2007
Acquires Manila Bank and operates it as China
Bank Savings; enters into a bancassurance joint 2020
venture with Manulife to form China Bank Manulife Marks its centennial; hits P1 trillion in assets and
Life Assurance Corp. P100 billion in capital
2016
Establishes China Bank Securities to provide
clients with stock brokerage, securities research,
and analysis services

A JOURNEY OF 100 YEARS: MILESTONES 15

A JOURNEY OF 100 YEARS: LEADERS

1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975

Dee C. Chuan - Chairman (1920-1940) Albino Z. SyCip - Chairman (1940-1976)

Albino Z. SyCip - Vice Chairman (1920-1940) George Dee Se Kiat - Vice Chairman (1940-1954)
Dee C. Chuan - President (1920-1940) Albino Z. SyCip - President (1940-1954)

Dee K. Chiong - Vice Chairman (1946-1954)

Marcelo L. Nubla - Vice Chairman (1955-1980)

George Dee Se Kiat - President (1955-1979)

DEE C. CHUAN ALBINO Z. SYCIP GEORGE DEE SE KIAT DEE K. CHIONG

ROBERT DEE SE WEE MARCELO L. NUBLA EDWARD S. GO

16 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 1980 1985 1990 1995 2000 2005 2010 2015 2020

Dee K. Chiong - Chairman (1977-1979) Henry Sy Sr. - Honorary Chairman (2004-2019)

Dee K. Chiong - President (1979-1980)

Robert Dee Se Wee – Chairman (1980-1981) Hans T. Sy - Chairman (2011-present)

Marcelo L. Nubla - Chairman (1981-1984) Gilbert U. Dee - Vice Chairman (2011-present)

Robert Dee Se Wee – President (1981-1984) Ricardo R. Chua - President (2014-2017)

Gilbert U. Dee - Vice Chairman (1982-1988) William C. Whang - President (2017-present)

Edward S. Go - Chairman (1985-1989)

Peter S. Dee - President (1985-2014)

Peter S. Dee - Chief Operating Officer (1985-1988)

Gilbert U. Dee - Chairman (1989-2011)

Hans T. Sy - Vice Chairman (1989-2011)

Ricardo R. Chua - Chief Operating Officer (1995-2014)

GILBERT U. DEE HENRY SY SR. HANS T. SY

PETER S. DEE RICARDO R. CHUA WILLIAM C. WHANG

A JOURNEY OF 100 YEARS: LEADERS 17

PART 1
A DIFFERENT
KIND OF BANK
1920-1960
 CHAPTER 1

Beginnings
1920-1924

The young lumber magnate Dee C. Chuan leads

a group of top Chinese tycoons in creating
a new kind of bank for the Philippines.

20 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Lumber king-turned-banker and
philanthropist: Dee C. Chuan
wanted a different kind of bank,
one that would help Chinese
businessmen access financing on
an unprecedented scale. With the
support of friends who shared his
passion and vision, China Bank
came to be. Dee C. Chuan was only
31 years old then.

CHAPTER 1: BEGINNINGS: 1920-1930 21

“Many Chinese known by their countrymen to be
worth half a million pesos are unable to get credit
from the present banks.” —DEE C. CHUAN

O
n the evening of December 19, 1919, eleven Chinese
men gathered at the Oriental Club on Remedios Street
corner Pennsylvania Street (now Leon Guinto Street)
in Malate, Manila. The dinner was excellent and the
company convivial—most of these men were business
allies, colleagues in the Chinese Chamber of Commerce, and old
friends besides. The Oriental Club was a Chinese-only establishment
that was familiar ground. Nonetheless, this group of eleven Fujianese
men was here not for fellowship, but to take up serious business.
Present on this night were some of the biggest names in Philippine
business—among them, the three richest Chinese in Manila, the top
Chinese-Filipino lawyer and bar topnotcher, and the dynamic young
president of the Chinese Chamber of Commerce, then only thirty-one.
It was this young man, Dee Ching Chuan (usually known as Dee C.
Chuan) who had arranged for and presided over this meeting. After
only fourteen years in business, he had become known as the “Lumber
King”—the tycoon who ran the largest integrated logging and lumber
conglomerate in the country. Despite his youth, Dee’s keen mind, his
humble and respectful personality, and his business vision
had earned him enough respect to draw the other ten men to
tonight’s meeting. Ten of these men were Manila residents:
Guillermo Cu Unjieng, Benito Siy Cong Bieng, Carlos Palanca
Tan Guin Lay, Albino SyCip, Go Jocco, Uy Yetco, Antonio MH
Limgenco, Yu Biao Son Tua, Vicente Gotamco, and Dy Buncio.

22 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 bank financing necessary to buy and build the latest milling
equipment for sugar and coconut oil. Already, the Chinese
businessmen had missed the first great wave of bank lending
for centrifugal sugar mills; during 1916-1918, the newly
created Philippine National Bank (PNB) had lent millions of
dollars for centrifugal sugar centrals to politically influential
Filipino families like the Aranetas and the Montillas.
Unless the Chinese community was able to access
Cu Unjieng, who grew rich in textiles, import-export, financing in amounts much larger than it had ever had from
insurance, and real estate; Palanca, a liquor and distillery its traditional lending systems, it would be unable to compete
magnate; and Siy, who engaged in abaca exports, rice milling, with the businessmen backed by the big banks. Slowly and
and shipping, were the three most prominent businessmen inexorably, the Chinese would be forced away from the more
of their time. The young SyCip was a brilliant University of dynamic and strategic areas of the economy. Already, the
Michigan graduate who had come seemingly out of nowhere to PNB financing to a few families allowed them to make huge
best many more prominent rivals and top the 1913 bar exams. fortunes in centrifugal sugar and displace the Chinese from
The last man present was a millionaire and former sugar their accustomed roles as muscovado sugar middlemen and
trader from Java known as Oei Ik Tjoe (or Huang Yizhu, in exporters.
Mandarin) who had amassed a huge fortune and now wanted What these men had in mind was a huge leap for them
to help his friend Dee and his colleagues achieve a dream. all. None of these men were bankers or had any training
Simply put, the group wanted to put up a new bank in in finance. For them to take on the international giants like
Manila that would enable Chinese businessmen to access Citibank and the local monoliths like PNB or the Bank of the
financing on an unprecedented scale. None of the existing Philippine Islands (BPI) was a tremendous challenge. But
banks such as First National City Bank and Hong Kong and Dee C. Chuan was undaunted. He felt that he and his fellow
Shanghai Bank would lend readily to Chinese businessmen. Chinese businessmen were faced with a choice between
They would do it only for a few men like Cu Unjieng and taking on the risk of building a new bank or sinking into
Palanca, who after decades of striving had grown too big to be irrelevance. Dee wanted a new kind of bank—one that drew
ignored. Dee said, “Many Chinese known by their countrymen on both Eastern values and Western banking systems in order
to be worth half a million pesos are unable to get credit from to serve its clients well, and enable them to participate in
the present banks.” growing the economy.
The Philippines was then in the middle of an export boom To understand Dee and his vision, and the bank that
in sugar, copra, and hemp, but the Chinese didn’t have the resulted from his dream, we need to go back in time.

CHAPTER 1: BEGINNINGS: 1920-1930 23

THE FUJIANESE IN THE PHILIPPINES they could. The people of the Chinese diaspora became known
1700-1900 as huaquiao or huaren—the overseas Chinese.
All the men dining at the Oriental Club that night had For the Fujianese, Manila was a frequent destination
Fujianese roots; all except one or two had been born there. because, with favorable winds, it was only three or four days
The Chinese of Fujian province have been emigrating to the sailing by junk from the Fujian port of Xiamen (Amoy). So many
Philippines for centuries, lured by the hope of making a better of them came here that over 80% of all Chinese Filipinos today
living on these shores. The south China province of Fujian is are of Fujianese descent. Most Chinese Filipinos today have
the size of England, but it is mountainous, with relatively little single-syllable Chinese surnames, the most common of which
arable land—particularly in relation to its high population are: Tan ( ), Ong ( ), Lim ( ), Go/Ngo ( ), Ng/Uy ( ), Chua
density. By 1500, the province had less cultivated land per ( ), Sy/See/Si ( ), Co( ) and Lee/Dy/Dee ( ). Others have
person than any other in China. Its half-acre per head was Chinese compound names such as Cojuangco, Yuchengco,
half the national average. Predictably, famine struck Fujian SyCip, SyQuia, and Coseteng.
often—228 times in the 17th century, 158 times in the 18th Many of the early Fujian Chinese were willing to put down
century. Fujian grew some fine teas for export, but by the roots in the Philippines. They converted to Christianity and
19th century their, tea trade was suffering from new and stiff cut off their Qing-era topknots. In time, their descendants
competition from India and Ceylon. Moreover, the Fujian tea
industry was risky—a single typhoon could devastate the tea
fields and negate a year’s work.
The Fujianese also had to contend with two national
phenomena: population pressure and war. China underwent
a population explosion in the 19th century, growing from
177 million in 1750 to 410 million in 1850. It also had to deal
with the two Opium Wars (1839-1842, 1856-1860), the Taiping
Rebellion (1850-1864), and many other disturbances of the
peace, both great and small. After two centuries of rule, the
Qing dynasty was decaying, and that growing weakness led to
economic upheaval, social unrest, and paroxysms of violence.
The result was inevitable: between 1840 and 1888, more
than two million Chinese left China, most from Fujian and
Guangdong, and headed for Malaya, Java, Sumatra, the
Philippines, Indochina, California, Hawaii, the West Indies,
and Australia. It is safe to say that even more would have left if

24 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
A bustling Chinatown, circa
1900s: The migrant Chinese
made their home in Binondo
and adjacent districts, turning
the little enclave into a thriving
commercial center.

became nearly indistinguishable from the Philippines’ Malay

majority—the huanna, as they called them.
But for most Fujianese who went to the Philippines in the
18th and 19th centuries, their sojourn abroad was meant
to be temporary. Manila was close enough that the more
prosperous immigrants could go back and forth every few
years, and in time—and with good luck in business—they
could go home to retire. For instance, Martin Co, the great-
great-grandfather of former president Corazon C. Aquino,
was born in Xiamen and then lived in the Philippines for
many years. In the mid 1850s, he went back permanently to
the family’s ancestral village of Hongjian in Fujian. Men like
these had come to Manila in the hope of “going home in silken
robes”—the Chinese way of saying that they would retire as
wealthy and respected men. No matter how comfortable or
successful they were in Manila, these men always longed for Castilian rulers saw the immigrants from Southern China as
hsiang—home. a necessary evil—unreliable by their standards, but vital for
The Spanish authorities were always uneasy with the keeping the local economy running. Thus the Spaniards set
immigrant Chinese who didn’t convert to Catholicism. They a policy: the unassimilated Chinese were to be taxed heavily
felt disdain for the sangley infiel, the infidel Chinese, who and closely monitored; converted, if possible; or ruthlessly
they always suspected of plotting an uprising. In 1603, 1639, suppressed, whenever necessary.
1662, and 1686, the Spaniards massacred the Chinese in Because Spanish colonial authorities placed many
Manila; tens of thousands of Chinese were killed. But after restrictions on their economic activities, it didn’t make sense
each massacre and expulsion, the Spaniards were soon for the Fujianese sojourners to farm or live off the land. But
forced to reopen the ports for more Chinese immigrants. The the Fujianese could and did become successful in trading.

CHAPTER 1: BEGINNINGS: 1920-1930 25

Dee C. Chuan wanted a new kind of bank—one that drew
on both Eastern values and Western banking systems in order
to serve its clients well, and enable them to participate in
growing the economy.

As merchants, the Fujianese could keep their assets mobile Domingo Lam-Co. Domingo became fully assimilated and in
and be ready to go home—or evade Spanish persecution—at a the 1850s, following the Claveria Decree, his descendants
moment’s notice. They soon dominated local trading, running took on the name Mercado, and later Rizal. Several Philippine
stores everywhere that sold basic goods to the consumers. presidents, including Emilio Aguinaldo, Sergio Osmeña,
They would also buy the local farmers’ produce like sugar and Elpidio Quirino, Ferdinand Marcos, Corazon Aquino, and
rice to sell to the big foreign firms. Money lending was also a Benigno Aquino III come from Chinese immigrant stock.
frequent occupation. The Fujianese immigrants provided the
country with much of its early entrepreneurial talent. They BINONDO AND ITS VALUES
founded a number of still prominent business houses—among Binondo was created in 1594 by Spanish Governor-General
them, the Lopez family of Iloilo, the Cojuangcos of Tarlac, and Luis Pérez Dasmariñas as a permanent settlement for
the Palancas. converted Chinese immigrants (called sangleys) across the
The talent they brought over to the islands was not just river from the walled city of Intramuros where the Spaniards
entrepreneurial. The national hero Jose Rizal is the direct resided. There in Binondo and the adjacent district of San
descendant of a 17th century immigrant from Jinjiang Nicolas, the migrant Chinese—the huaquiao—built their own
county in Fujian named Ke Yinan—or, as he was known here, little world on streets such as Sacristia (now Roman Ongpin),
Rosario (now Quintin Paredes), Abad Santos, Anloague (later
Juan Luna), San Fernando, Mayhaligue, Dasmariñas, and
Gandara. They established their own schools, newspapers,
restaurants, and associations to preserve the continuity
of their culture. In time, this little Chinese enclave became
influential in Philippine culture in a way out of proportion
with its size. Elements of their Hokkien dialect (such as
susi, ate, hikaw, bwisit, bakya) and cuisine (such as pancit,
siopao, lugao, mami, and so on) became part of the fabric of
their Malay hosts’ lives. By the 19th century, Binondo was
the commercial center of the city and the colony, a bustling
hive offering every kind of product from candles to jewelry to
furniture.
The thriving ecosystem of Binondo was created and was
supported by its own ethos. The Chinatown merchant’s key
values were simple: discipline, hard work, honesty, good
credit standing, and wise spending. Manila’s Chinatown was

26 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 (Opposite page) The new
export economy after 1850
created a great demand
for laborers, which led to
the influx of more Chinese
workers.

(Below) The enterprising

Chinese immigrants also
engaged in hemp-weaving.

(Left) One of the oldest

places of Christian worship
in the Philippines, Binondo
Church was founded by the
Dominican priests in 1596.

a small, tightly-knit, very informal, personalistic community A man with a solid reputation would earn a steady supply
where face-to-face interaction was and is very important. of easy credit. His goal was to be considered by lenders or
Over and above making a big profit on a single deal, these wholesalers as a shiong-keh, a “top customer,” an always
merchants valued mutual trust and the preservation of one’s reliable borrower. He would then be called a ho-heng, a good
reputation within the larger community. A culture that was credit risk.
four thousand years old knew the importance of taking the The value of xinyong interacts dynamically with other
long-term view. For them, what mattered most was xinyong— Chinese values such as lian (face), guanxi (connections), and
trustworthiness or word of honor.
In Binondo, the Fujianese merchants liked to say: “Seng-li
ke si tsue hia-e lang.” (All business operates through just one
man.) That man’s skills and sense of honor were the primary
building blocks for success. These elements will make or
break his business.
Bienvenido Tan, who comes from pure Fujian merchant
stock, said: “[In Chinatown] a man’s word was his bond,
and much of the business was transacted on the basis of a
verbal agreement, a nod of the head, a ‘yes’. My maternal
grandfather guaranteed a bank loan worth several millions
of pesos for a friend. When the debtor did not pay, my
grandfather paid the debt even if there was no document to
prove the guarantee. Chinese businessmen do not consider
the issuance of a receipt as a necessity in business.”
In a business like trading or retail, liquidity is king, and the
first index of success was the ability to give and get credit.

CHAPTER 1: BEGINNINGS: 1920-1930 27

 Chi Ku: “To eat bitterness”

I
n China, there is a phrase: “chi ku” —to eat bitterness. It means “to suffer.”  There 
was no expectation of an easy, happy life in ancient China, and the immigrants to
the Philippines brought this same attitude with them. They were willing to take
years of hard work, homesickness, and deprivation in the hope of building a better life
for their families. Only a few of those who came here (such as Son Tua, the patriarch
of the rich Tuason clan) were already prosperous merchants upon their arrival. Most
came here as common laborers, but they had big dreams. The Dee family’s patriarch,
Dy Han Kia, came to Manila in the 1830s and worked in Manila as a common laborer
for eighteen years, sleeping on a bench and saving almost all of his salary. He went
back to his native village in Fujian fabulously wealthy.
 Mall and banking tycoon Henry Sy came to Manila in 1936; he, too, came from
humble beginnings: “My father was dirt poor. Every now and then he had to go to the
market to buy supplies like soap and cooking oil from a wholesaler and bring it to our
sari-sari store. He would carry the goods from Divisoria to Echague barefoot. I felt
very bad.” He pitied his father, who walked on hot asphalt streets on bare feet:
“I said to myself then, ‘This world is not enough. It is just not good enough. I must
build a new one that is bigger and better.’” Because they were willing to suffer and
work hard, these Fujianese immigrants built strong business legacies for their
children to carry on. Henry Sy was the richest man in the Philippines for many years
until his death in 2019.

28 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
(Right) A typical Chinese mestizo.
In the 1750s up to the 1850s,
the Chinese mestizos rose to a
position of economic prominence
in the Philippines.

(Below) Dee C. Chuan, was one of

the well-educated Chinese in the
Philippines who became a leading
figure in business.

CHAPTER 1: BEGINNINGS: 1920-1930 29

Over and above making a big profit on a single deal,
Chinese merchants valued mutual trust and the preservation
of one’s reputation in the larger community.

bao (reciprocity). For instance, businessmen who had over and third-party guarantees sufficed to build many successful
time done each other favors (renqing) such as extending credit enterprises, such as those of Guillermo Cu Unjieng and
during difficult times, would build up a close relationship Benito Siy Cong Bieng. But by the early 20th century, anyone
of reciprocity or bao. A good man never forgot the debt of who wanted to build a big business needed bank financing
gratitude owed to his benefactor. The granting of favors to achieve scale. For instance, industrial milling equipment
established guanxi (personal relations) that bound a man to for rice, sugar, lumber, or coconut oil required hundreds of
his benefactor in a long-term relationship of respect. thousands or even millions of dollars. This equipment also
In a small world like Binondo, a man who reneged on a deal had to be bought abroad, which meant that any aspiring
faced risks that were both personal and business-related. Chinese miller had to have a good relationship with an
Once word of his misdeeds got around, he would be ostracized established local bank that had correspondent banks abroad
by this small society, and he would find his access to credit so that letters of credit could be opened.
increasingly being constricted. This would be an intolerable But the top banks in Manila were reluctant to lend to the
loss of face (lian). Thus, a sensible businessman acted to Chinese, who were considered by the mainstream business
preserve and defend his xinyong. He sought to become known community as suspect, alien, and unreliable. One problem
all over Binondo as a man whose word was as good as cash, was that the traditional Chinese businessmen regarded
and who would never renege on a deal. balance sheets, profit-and-loss statements, and cash flow
Eventually, as this man rose in the community, his mark statements as very private documents, which they would not
of true status became his ability to stand as a third-party readily show to outsiders. This made it very difficult for them
guarantor to other businessmen. By guaranteeing another to access financing from Western-oriented banks.
man’s debt, this man would demonstrate his own abundant The deeper problem was the Spanish and American
liquidity. Moreover, he would become a de facto arbiter of colonial discrimination against the Chinese. The Chinese
other men’s xinyong. Over time, a man like Benito Siy Cong so dominated the Philippines’ retail trade that many of the
Bieng (1865-1924) or Guillermo Cu Unjieng (1866-1953), mainstream bankers feared what might happen if more
who were often asked to provide third-party guarantees for financing were available to them.
other businessmen, accumulated a wealth of knowledge In 1919, there were only seven commercial banks in the
about Binondo business and businessmen. They knew who Philippines: Philippine National Bank, Bank of the Philippine
could and could not be trusted, who had reneged on a deal, Islands, Philippine Trust Company, First National City
and who had irreproachable xinyong. The system of third- Bank, Hong Kong and Shanghai Bank, Chartered Bank of
party guarantees created a kind of pecking order among the India and Burma (CBI, later Standard Chartered Bank), and
Binondo businessmen. Yokohama Specie Bank. BPI and PNB lent, by and large, to the
For over two centuries, the informal Binondo system of mainstream mestizo elite; the foreign banks lent mostly to
lending based on xinyong, supplier’s credit, promissory notes, their own nationals.

30 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 The Chinese businessmen in Singapore, Malaya, Thailand,
and the Dutch East Indies, in contrast, were able to access a
lot of bank financing. There was much less prejudice against
them in the host countries. The authorities recognized how
crucial they were to the local economy and they did not
discriminate against them. In the Dutch East Indies, the
Dutch relied on the immigrant Chinese to run the local opium
monopoly and to collect taxes on a contract basis. The British
were also ready to rely on Chinese as compradors in Hong
Kong, Singapore, and the China treaty ports, and Chinese Xinyong

T
 
like Robert Ho-tung (1865-1952) were able to amass huge
he Chinese word xinyong ( ) is composed
fortunes.
of two characters—one that stands for “one’s
But a simple denial of bank financing to the Chinese in the
words” and the other for “use.” Xinyong
Philippines would not have sufficed to keep these businessmen is literally “the use of one’s word”—in traditional
down. There was simply too much entrepreneurial talent Chinese business, it was the use of one’s reputation
and resources in Binondo looking for an outlet during an for honesty and reliability to gain credit and seal
economic boom. Sooner or later, someone in this community agreements. In the early 20th century, these
would find the key to unlock the puzzle. The key was provided traditional business practices based on trust were
by a man from a Fujianese family named Dee. dismissed by many as obsolete. But in recent times,
economic theorists have reestablished how important
THE DEE CLAN IN THE PHILIPPINES trust is to growth. Trust is an economic enabler and
1700-1900 lubricant, which reduces the cost of transactions,

Lee (pronounced “Dee” in Fujian) is written as in gives rise to new forms of cooperation, and furthers
business activities, employment, and prosperity.
Chinese, and means “plum.” It is the most widespread
Trust is a form of social capital. It has been widely
surname in China, with about 7.9% of the Chinese population
demonstrated that social trust benefits the economy
using this name. As of 2002, there were approximately 103
and that a low level of trust inhibits economic growth.
million people in China and 108 million worldwide with this
Of course, this was already well known among the
surname. It is the world’s most common family name.
19th century Binondo businessmen such as the
Members of the Dee clan of Shizhen village (or Chiochun, Dee family.

 
in Hokkien) in Fujian began sojourning in the Philippines since
the 1700s. The first ancestor of the most prominent branch
of the Dee clan now in the Philippines was Dee Phi Phay, who

CHAPTER 1: BEGINNINGS: 1920-1930 31

 Binondo was founded as a
Chinese town in 1594. Intended as
a settlement for Catholic Chinese
and their mestizo descendants,
Binondo soon attracted the indios
and other Chinese migrants.

on the wood-working bench he used.

For eighteen years, he entrusted almost
all his monthly salary to his boss,
building up a nest egg for going into
business for himself. Eventually, Dy Han
lived around the late 1700s and the early 1800s. Dee Phi Phay Kia went on his own and put up several businesses dealing in
was the first in a line that, seven generations later, would give lumber, chests (baul) and other wooden items. He named his
rise to Peter SyCip Dee and Nancy Dee Yang. The Fujianese first business Guan Hoc ( ) , meaning “wellspring of good
like to say: “Hu bo ke sa tai” (Wealth does not survive three fortune.” He wound up with at least eighteen stores in Manila
generations). But the Dees have been successful and wealthy and a huge fortune.
in the Philippines for seven generations. In the 1860s, Dy Han Kia went back to Shizhen a rich man.
In the early 1800s, Dee Phi Phay’s son Dee Siu Gam (Li He built four mansions in his home village for the entire clan:
Shouyan in Mandarin) traveled to the Philippines. The junk he one for his wife and his concubine, and three more for his six
was riding on barely survived a storm, and two other junks brothers—two brothers’ families shared one mansion each.
bearing two of his Dee cousins sank. But Dee Siu Gam made it The Dee clan has since been known in Shizhen (Chio-Chun)
to Manila, where, after decades of work, he made his fortune. village as the “Si Te Chu,” or the “four mansions clan.” When
He retired back to Shizhen, where he raised seven sons and a Dy Han Kia’s sixth and younger brother, Dee Han Ding, died
daughter. early at the age of forty-one, he took care of his late brother’s
In the mid-1800s, the third generation of the Dee clan sons, including the siblings Dee Chao Yi (Calixto Dyyco) and
to sojourn to the Philippine Islands was Dy Han Kia (or Li Dee Zhao Bei (Dy Chao Pak or Dy Pac).
Hanjia in Mandarin). He was the fifth of seven boys. Of the After Dy Han Kia retired, he shared his wealth with all his
seven brothers, he was the shortest. He was so short that his relatives, laying out detailed wills in booklets given to each of
Shizhen nickname was “We Kia” or “Kia the Shortie.” We Kia the six brothers’ families. His primary heir was a nephew, Dee
was frail, so he was considered useless in the seaside village Chao Si, but this nephew gambled away the bulk of his uncle’s
of Shizhen to help in farming or fishing. So his father, Dee Siu fortune, including eighteen stores in Manila. But there was
Gam, sent him to Manila to earn a living. When We Kia arrived enough left for his nephews Dee Chao Yi and Dee Zhao Bei to
in Manila, a fellow village mate and distant uncle nicknamed make their own lumber fortune in Manila.
Sa-pang Hui met him at the docks and brought We Kia to join In the early 1870s, Dee Chao Yi and Dee Zhao Bei arrived
him in a woodworking shop in Manila. in Manila and set up their own lumber shop, Chengmei
Dy Han Kia worked diligently as a laborer in that cha-diao Lumber. The Chengmei office was at No. 83 Calle Arranque,
or lumber shop. He was so thrifty he didn’t even rent an Santa Cruz, Manila. Chengmei became very successful. Dee
apartment or a room, but slept every night for eighteen years Chao Yi converted to Catholicism and was baptized Calixto

32 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Dyyco. During his years in Manila, as was customary for the Tongwen College on Gulangyu island near Amoy, which was
Fujianese sojourners, Calixto’s wife Chen Shuangniang stayed run by British consulate officials, to learn English. By then, the
behind in Shizhen to raise his family. Philippines, where the Dees made their fortune, was run by
On August 13, 1888, the eldest of Calixto’s sons was born the Americans, and the young Dee needed to become fluent in
in Shizhen. This was Dee Ching Chuan (or Li Qingqian in the new lingua franca.
Mandarin). His name literally meant “Plum-Pure-Spring.” In 1901, at the age of thirteen, Dee C. Chuan traveled to
From an early age, Dee C. Chuan showed signs of a keen Manila to live with his father, helping him out at Chengmei
intelligence and a strong personality. His father decided to Lumber and going to a local public school. But his stay there
invest a good deal in his education, confident that he would be would be short. Soon, Calixto decided that the still nascent
the Dee family leader in the next generation. American colonial school system was not enough to meet his
The young Dee went to a primary school in Shizhen village son’s needs. Calixto’s decision’s set up the key event in his
from 1896 to 1899. Then in 1900 to 1901, he attended the son’s formation—his move to Hong Kong.

CHAPTER 1: BEGINNINGS: 1920-1930 33

“I am sure that it was Dee’s inspiration that led me
to take such an interest in the science of money and
banking....” —MIGUEL CUADERNO

THE RISE OF DEE C. CHUAN extra cash, Cuaderno also worked as an intern at HSBC,
In 1903, Calixto Dyyco sent his son to study at St. Joseph’s which gave him some familiarity with bank operations. The
College in Hong Kong. Established in 1875 by the La Salle two young men promised each other that when they got back
Brothers, St. Joseph’s was the oldest Catholic boys’ secondary to Manila, they would each found a bank. And in time they did:
school in the Crown Colony. Its high standards and good Dee would build China Bank and Cuaderno, the Philippine
reputation soon made it a leading school for the sons of rich Bank of Commerce. Cuaderno also became the first governor
businessmen not just from China but from all over Southeast of the Central Bank of the Philippines.
Asia. The St. Joseph’s campus was then located halfway up Miguel Cuaderno later said: “I am sure that it was Dee’s
Victoria Peak, above the Central district, not far from the inspiration that led me to take such an interest in the science
headquarters of the Hong Kong and Shanghai Bank. of money and banking that I finally succeeded in organizing
Dee C. Chuan stayed in Hong Kong for three years, from the biggest bank in the country, the Central Bank, and in being
1903 to 1906. There, he became very fluent in English and elected in 1956-1957, chairman of the board of governors of
comfortable working in a cosmopolitan world, moving from the World Bank and the International Monetary Fund.”
Western to Chinese thinking and back again quickly. This In 1906, at the age of eighteen, Dee C. Chuan returned
experience made him an ideal man to bridge the gaps between to the Philippines to work for his father and uncle Dy Pac in
east and west back in Manila. Chengmei Lumber. He quickly gained the trust of his father
His years in Hong Kong made a deep impression on and uncle and got their go-ahead to expand the business. Dee
Dee C. Chuan. He lived in a city that had electrical power, a bought several acres of land on Juan Luna Street in Tondo
modern bank (HSBC), newspapers, telegrams, urban planning, to create room for expansion, and spent P120,000 for a new
and trams. Even then, HSBC, founded in 1876, had become so sawmill for this land.
intertwined with the life of Hong Kong that the British expats The great fortune of Dee C. Chuan, on top of his natural
referred to it as “The Bank.” As an adult, Dee C. Chuan would intellectual gifts, was that he was born into a family that had
strive to bring some of these Western innovations to Fujian already achieved considerable business success in Manila.
and to Manila. Thus, instead of having to spend his youth working as an
There in St. Joseph’s, Dee C. Chuan became friends apprentice in someone else’s business, as was customary
with his schoolmates, Central Bank governor-to-be Miguel for most Fujianese immigrants, Dee was able to get a good
Cuaderno; the future president of the Philippines, Manuel A. education abroad and then begin his business career with a
Roxas of Capiz; and Manuel Go Tianuy of Cebu, son of tycoon broad outlook and considerable resources at an early age.
Pedro Gotiaoco and uncle of John Gokongwei. Dee and Miguel Before reaching twenty, he was already making bold business
Cuaderno became particularly close. Whenever Cuaderno’s moves. By his mid-twenties, he was already a man to reckon
allowance did not arrive in time, Dee lent him money. To make with in Manila.

34 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Dee C. Chuan attended St. Joseph’s College, the oldest
Catholic boys’ secondary school in Hong Kong. His
schoolmates included Manuel Roxas and Miguel Cuaderno.

Hong Kong

T
he Manchu rulers of China
ceded Hong Kong to the British
Empire after the First Opium
War (1839–1842). Originally confined Manuel Roxas Miguel Cuaderno
to Hong Kong Island, the colony’s
boundaries were extended in stages to the Kowloon Peninsula and the New
Territories by 1898. Hong Kong was (along with Japan) one of the very first
places in Asia to industrialize and modernize. For their new colony, the
crown jewel of their empire in Asia, the British brought in electrical power,
a modern tram system, newspapers, modern schools, a legal system, and
much more. The colony had a modern bank in 1864, an electrical utility in
1890, and its tram system by 1888. In Hong Kong, many of the most aggressive
and entrepreneurial Chinese learned how to compete in the new business
environment, working as compradors for the British business houses like
Jardine Mathieson, or by trading with them. It was here that Dee C. Chuan
learned that a Chinese businessman like Robert Hotung could compete in this
new world. It was here that Dee became a cosmopolitan, speaking several
languages and moving comfortably among different worlds. And it was here
that he got the inspiration to found his own bank in Manila.

CHAPTER 1: BEGINNINGS: 1920-1930 35

 By the 1920s, Dee C. Chuan was very likely the
biggest individual lumber entrepreneur in the
Philippines. He was in control of two concession
sites that engaged in logging and saw milling,
a company that annually manufactured and
distributed millions of board feet of timber and
logs, and an inter-island shipping firm that
primarily served his own companies.

enabled him to move easily from one ethnic community to

another. He did not gamble and lived a disciplined life.
This was because in 1908, confident in his son’s business Dee grew his lumber business with the support of his
ability, Calixto Dyyco retired back to the family village in clan. In the 1920s, his younger brothers Dee Hong Lue and
China. Dee C. Chuan took over the family business, Chengmei Dee K. Chiong (born 1912) joined him in Manila and entered
Lumber. Dy Pac stayed on in Manila, but deferred to his the lumber business themselves. Dee’s cousin and good
nephew as the new head of the family business. friend Lee Thay Tay operated a sawmill on Teodora Alonzo
Over the next twenty-four years, Dee C. Chuan pursued a St., Manila, which his son Lee Tek Hong expanded, giving the
consistent policy of creating backward integration from the Dee lumber interests even more wood processing capacity.
family’s original business of lumber distribution. The new land He married a Fujianese girl, Gan Tiak, in 1910. He and Gan
he acquired in Tondo gave him the venue to go into lumber Tiak had eight children; their oldest sons George Dee Se Kiat
processing and manufacturing. The new sawmill was in full (born 1911) and Robert Dee Se Wee were expected to join and
operation by 1912. Then he started acquiring existing logging eventually run the family businesses.
companies to supply him with raw material, several ships to But unlike many Chinese businessmen, Dee was willing to
transport his lumber, and logging concessions in Negros and delegate many operational decisions in his lumber businesses
Camarines Sur to provide him with even more economies of to trusted confederates outside the family, such as the
scale. Soon he was the biggest lumber and logging magnate veteran American lumberman William W. Harris, as well as
in the country, selling tens of millions of board feet of timber, his righthand man, Francisco Go Chuico. Dee was a Chinese
logs, and wood products every year. He owned and ran nationalist who believed in his people’s potential, but he would
Negros Philippines Lumber Company, Singbe Transportation readily recognize and reward a Westerner like Harris with the
Company, Dee C. Chuan and Sons, and Philippine Lumber skills to contribute to his business. Harris was entrusted with
Manufacturing Company, among other companies. running Dee’s Negros lumber business for over two decades.
The Philippine “Lumber King” was not an imposing figure— Dee’s success owed to a number of factors—among them
he was 5’4” with a medium build. His fast rise in business his skill in acquisitions, his interpersonal skills, and his vision
would have created some tensions in Binondo’s close-knit in going for backward integration. But the other key move was
community if he had been brash and arrogant, but Dee had his decision to conquer the export market, particularly the
a genial, low-key personality that drew respect. When asked US, which at that time was beginning to rely a good deal on
about his success, he was self-effacing. Dee said of himself: Philippine lumber, and also the Chinese market. The move into
“I have no superior talents, but I am willing to think. Where the American market expanded his earning potential and gave
there is one problem, I will think of it very carefully from one him a hedge against any downturn in the local construction
angle and then another, and then delve into it more deeply.” He demand. By 1921, a single lumber firm of Dee C. Chuan sold
spoke Hokkien, English, Tagalog, and some Cantonese, which 5 million board feet to the US market, and had the potential

36 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Dee C. Chuan donated schools to his home village of Shizhen: the Chengmei School for Boys and the Yude School for Girls.
His family elders had earlier donated to the Longmen School in Shizhen.

to produce over 20 million board feet a year. The unassuming But in June 1919, a generational shift in PCGCC leadership
immigrant now had a truly international scope, and the began, to a new generation that was younger by twenty
resources and sales potential for a lasting business empire. years or more than the generation of Siy Cong Bieng and Cu
Within a dozen years after starting his career, Dee C. Unjieng. Dee C. Chuan was elected president of the PCGCC
Chuan had grown so big and so prominent that by the time he at the age of thirty-one. For the senior businessmen like Cu
turned thirty, the Chinese community called upon him to take Unjieng, Palanca, and Siy Cong Bieng, all born in the 1860s,
on a role in an arena bigger than lumber. to be willing to turn over the organization to a man who was
over twenty years younger seems remarkable. But they had
FOUNDING THE BANK spent their youth and young manhood working in a Spanish-
To represent their interests to the new colonial power, the run Manila, and Manila was rapidly becoming vastly different.
leading Chinese businessmen in Manila created in 1904 the The new educational system introduced by the Thomasites
Philippine Chinese General Chamber of Commerce (PCGCC). would soon create another kind of English-speaking culture.
In its early years, 1904 to 1918, it was led by a small group The Filipino political elite had already transitioned from the
of senior businessmen—primarily Benito Siy Cong Bieng revolutionary leadership generation of Emilio Aguinaldo to
(elected its head for nine terms between 1907 and 1916), a younger generation that was decades younger. The elite
Guillermo Cu Unjieng (its head for five terms), Yu Biao Son were now headed by young men in their forties like Manuel
Tua, Rafael Gotauco, and others. Quezon and Sergio Osmeña. The Binondo leaders like Palanca

CHAPTER 1: BEGINNINGS: 1920-1930 37

“This Bank believes that there is ample room for Chinese merchants
and others engaged in business pursuits to be represented in a
cooperative and constructive way by a bank that shall minister
understandingly to their credit requirements.” —DEE C. CHUAN

and Siy must have seen that for the Chinese community to that during this period, the Chinese in other Southeast Asian
deal effectively with the American colonizers and the Filipino colonies like Singapore, Malaya, and the Dutch East Indies
political elite, they needed younger men to speak for them— were putting up many banks to serve their needs. Thus, the
men comfortable in English and working in a cosmopolitan, top Chinese entrepreneurs in these colonies like Tan Kah Kee
polyglot world. Of these younger men, the best and most and Lim Boon Keng were able to join in and profit immensely
capable was Dee C. Chuan. from the export boom in products like rubber and tin.
Even as he rose to the top of the Binondo business To form a Chinese bank in Manila, Dee faced two key
community, Dee remained respectful of his three most problems: mobilizing the necessary capital, which he
prominent elders in the community. He said: “In matters of estimated to be around P5 million, and acquiring banking
wealth, I am not comparable to Cu Unjieng, nor with Siy Cong expertise. Mobilizing the capital to start the bank was the
Bieng and Carlos Palanca in judgement and decision. But bigger problem. Most of the big Chinese businessmen in
these elders placed much confidence in me and wanted me to Manila were in retail, import-export, and trading, and did
do something for the [Chinese] community.” not have a lot of free capital not already invested in their
After 1919, the Chinese Chamber leadership shifted to businesses. Only a few of the very richest men, such as
a younger group of men in their thirties and forties: Dee C. Guillermo Cu Unjieng in Manila and Pedro Gotiaoco in
Chuan, his brother Dee Hong Lue, Uy Yetco, Alfonso and Albino Cebu, had enough free cash to provide financing to other
SyCip, Uy Cho Yee, Eduardo Co Seteng, and others. Of these businessmen in terms of surety bonds and loans. Without
men, Dee was the pivotal figure. He founded two Chinese enough capital, the new bank Dee envisioned would be unable
newspapers (the Chinese Commercial News and the Fookien to carry out its mission.
Times), fought legal and informal discrimination against the Fortunately, during a recent trip to Fujian, Dee had met an
Chinese, and built up close personal ties with both Manuel Indonesian Chinese businessman named Huang Yizhu
Quezon and Sergio Osmeña. For the next twenty-one years, or Oei Ik Tjoe). Huang became the catalyst for the creation
Dee was seen as the paramount Chinese community leader. of China Bank. He was a very rich sugar trader from Fujian
Soon after his election, Dee began discussions with the who spent three decades earning his fortune in Java. He
other top businessmen in Chinatown for organizing a bank began his working life as a barber and by hard work became
for Chinese businessmen—his dream since his Hong Kong a millionaire. After he accumulated a fortune of about 20
student days with Miguel Cuaderno. Dee knew that the lack of million yuan, Huang retired from the Java sugar trade and
bank financing would strangle many Chinese entrepreneurs’ returned to Xiamen sometime after 1911, looking for future
dreams of participating in the ongoing Philippine export boom. business prospects. Huang soon bought the Xiamen Telephone
Dee himself was already exporting lumber to the US and Company and set up the local water utility in Xiamen. Even
had sufficient financial wherewithal to supply all his needs. after these acquisitions, and the building of several fine
But others in Binondo were not so fortunate. Dee also knew mansions, Huang still had millions left over to invest.

38 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 The Chinese Commercial News was
established in October 1919 as the
monthly newsletter of PCGCC under
the presidency of Dee C. Chuan, with
the objective of keeping Chinese
businessmen up-to-date regarding
the trends of the marketplace.

One day, while riding the train from Beijing to Shanghai,

Huang Yizhu met Hu Bijiang (1888-1938), a former branch Guillermo Cu Unjieng
manager of the Bank of Communications. The Bank of
Carlos Palanca
Communications ( or Jiatong Yin Hang) was one of the
first Chinese banks. It was founded in 1908, emerged as one

The Taipans of 1920

of the first few major national and note-issuing banks in the
early days of the Republic of China. It was chartered as “the

T
Bank for developing the country’s industries.” At that meeting, o be credible to the Chinese community, the
Hu, who had recently left the Bank of Communications, new bank had to include in its board the top
proposed that Huang establish his own bank in China that taipans of their day: Guillermo Cu Unjieng, Carlos
would specialize in overseas Chinese businesses and foreign Palanca, and Benito Siy Cong Bieng. The three tycoons
remittance. Huang agreed. Hu Bijiang became the general had come from humble beginnings. Palanca (Tan Guin
Lay) immigrated to the Philippines in 1884 and worked
manager of the bank that Huang eventually set up in Shanghai
as an apprentice at a relative’s hardware business for six
in 1921, the China and South Sea Bank ( ). Huang
years. He opened his own store in 1890 and then became
owned most of the shares, and he tapped additional capital a huge success in the distillery business. Siy arrived in
from a fellow Fujianese millionaire from Java, Xu Jingren Manila in 1886 at the age of eighteen; he worked at his
( ). Even this investment took up only around 15% of his brother’s store. Eventually he started his own grocery
capital, so Huang still had millions in yuan left over. And this on Santo Cristo St. and then put up a big import-export
was where Dee C. Chuan came in. firm, Siy Cong Bieng and Company. Cu Unjieng also
worked as a store apprentice, but by saving his earnings,
Sometime between 1913 and 1919, Dee C. Chuan met
he was able to put up his own textile firm, Cu Unjieng
Huang Yizhu during a visit to Xiamen. The two became good
and Company. Soon, he was engaged in rice imports,
friends. After Dee became president of the Chinese Chamber, commodity exports, foreign exchange, and remittances.
he contacted Huang, who agreed to support Dee’s dream of a By 1920, at the age of eighteen, Cu Unjieng amassed a
new bank in Manila. Huang became the equivalent of an “angel personal fortune of P10 million. These were the men that
investor” for China Bank. Huang put in P1 million, bought 20% Dee needed to help him put up China Bank.
of the shares and took a board seat, but did not interfere with
operations. He left the bank’s affairs largely to his two sons
Oei Yok Tjing (Oei Yok Cheng) and Oei Yok Kie, as well as his

CHAPTER 1: BEGINNINGS: 1920-1930 39

 Dee C. Chuan, second from right, enjoying an
evening with friends at his home in Manila.

At incorporation in 1920, China

Bank had an authorized capital of P10
million—of which P5,106,400 were
subscribed by around 500 Chinese
businessmen—with paid-up capital
of P2,579,800. By 1924, its paid-up
capital more than doubled to P5.713
son-in-law Lee Siau Tong. He focused on his businesses in million and remained at that level for decades, until 1957. By
China. Lee Siau Tong, a skilled forex operator honed in the October 1937, China Bank was 91% owned by Chinese, with
financial markets of Shanghai, ran the foreign department of the remaining 9% owned by Filipinos, Americans, and other
China Bank for many years. nationals. Dee himself owned about 7% of the shares of the
Huang’s investment of P1 million created a wave of Bank.
confidence in the Binondo business circle that the new Dee foresaw a bank with a mixture of cultures and banking
bank would become a reality. Dee assembled a group of ten practices that merged Western and Eastern approaches.
Chinese from Manila to provide the rest of the capital and Just as Dee had hired and trusted an American, William
form the board, along with himself and Huang: Guillermo Cu Harris, with his lumber business, he acknowledged the need
Unjieng, Benito Siy Cong Bieng, Carlos Palanca, Albino SyCip, to hire American financial expertise for his new bank. He
Go Jocco, Uy Yetco, Antonio MH Limgenco, Yu Biao Son Tua, hired Henry J. Belden, a bank executive who had come over
Vicente Gotamco, and Dy Buncio. Dee chose the new bank’s from New York to help establish the PNB in 1916, to manage
board to give a broad representation of the various industries the start-up process and organization of China Bank. But
that the Chinese were engaged in. These included: alcohol Belden declined to be the first China Bank general manager
and distillery, Palanca; lumber, Dee; trading and general because of an offer to run the local office of Morgan Guaranty.
merchandise, Siy Cong Bieng, Yu Biao Son Tua; hardware, Uy (Belden would eventually become president of the Mercantile
Yetco; textiles, Go Jocco; dry goods, Guillermo Cu Unjieng; Bank of China, a top executive of People’s Bank and Trust,
lumber, Gotamco; tobacco, Limgenco. and then the Manila branch of AG&P.) Belden’s assistant,
On December 19, 1919 (as we have seen at the beginning however, J.W. McFarren, accepted the position and became
of this chapter) these eleven men met at the Oriental Club and the first China Bank GM from 1920 to 1922. In 1922, Eugene
agreed to form the China Banking Corporation. Its Chinese E. Wing, formerly an executive with the Citibank subsidiary,
name is Zhong Xing Yin Hang (literally, “China Prosper Bank”). International Banking Corporation, took over the GM position
In Hokkien, it is Tiong Hieng Gun Hang. Yin hang is the Chinese from McFarren; Wing managed China Bank’s operations
term for bank—meaning, literally, “silver institution.” until 1936.

40 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 China Bank was incorporated on
July 19, 1920 with an authorized
capital of P10 million.

OPEN FOR BUSINESS

On August 16, 1920, China Bank opened for business at
No. 90 Calle Rosario (now Quintin Paredes Street) Binondo,
Manila. Dee C. Chuan made sure that the Bank’s first print
advertisement announced: “This bank is entering the local
financial field of commercial banking because it believes
that there is ample room for Chinese merchants and
others engaged in business pursuits to be represented in a
An old sugar mill in the Philippines
cooperative and constructive way by a bank that shall minister
understandingly to their credit requirements.”

Spotting entrepreneurs
Having established the Bank, Dee C. Chuan was content
to have its operations run on his behalf by Eugene Wing and
later, Albino SyCip. He was not a banker and he valued the on the rise

B
operational rigor that men like McFarren and Wing brought in
y providing millions in financing to many
and taught to the young China Bankers. Dee also brought into
aspiring entrepreneurs, China Bank provided
the Bank some Chinese professionals who had been trained
a springboard to success for many of the
in international banks in Shanghai, such as T. Sheng Wang big tycoons of today. The first big loans to the Sy,
and Dong Pao Loh. China Bank also formed correspondent Gokongwei, and Cojuangco families came from China
relationships with some of the top banks in mainland China, Bank. For instance, the Cojuangco family’s first sugar
such as Bank of China and the Shanghai Commercial Bank. mill was financed by a 1927 loan from China Bank.
By these methods, he established a bank that lived up to Still many more fortunes were made by other families,
both Chinese and non-Chinese, who were perhaps
international standards.
not as famous as others, but whose companies were
But Eugene Wing could not speak any form of Chinese and
substantial nonetheless; these families also relied
was not equipped to judge a Chinese loan applicant’s xinyong. on China Bank for financing. Over the decades, China
He wasn’t part of the culture. Most of China Bank’s clients Bank demonstrated a gift for spotting the talented
did not have the extensive financial records that would be young entrepreneur on the rise, providing him with
required by a Citibank or HSBC. Thus, Wing was authorized to resources to boost his ascent.
grant loans only up to P25,000. The board approved all loans
in excess of P25,000. It was at the board level that the special
Chinese character of the bank emerged.

CHAPTER 1: BEGINNINGS: 1920-1930 41

“I have no superior talents, but I am willing to think. Where there
is one problem, I will think of it very carefully from one angle and
then another, and then delve into it more deeply.” —DEE C. CHUAN

Being among the most prominent members of a tightly-knit

community, the China Bank board members either knew a
loan applicant directly or else had easy access to trusted
confidants who did, and could therefore supply them with
detailed information about the applicant.
The board scrutinized not just an applicant’s financial
information, but also his character —if he gambled, drank
heavily, had a second or even third family, or had other
personal liabilities that could possibly affect the viability of
his business and hence his ability to repay a loan. A simple
way of putting it was that China Bank saw itself lending not
to a company but to a person, and that person’s character
was his paramount asset. The Binondo proverb remained
the touchstone: “Seng-li ke si tsue hia-e lang” (All business
operate through just one man). As one source puts it: “In
approving loans, the board of directors bases its decision
upon the integrity, responsibility, and financial reputation of
the borrowers.”
But the Bank also brought in a Western approach for
dealing with loan applications. The Chinese historian
Wong Kwok-Chu in his book The Chinese in The Philippine
Economy: 1898-1941, wrote: “[The CBC directors] were
Dee C. Chuan with his wife, Gan Tiak.
nonetheless strict in demanding from others collateral
China Bank’s eleven-man board of directors collectively for loans. They seldom granted clean, or unsecured credit
set policies and made the big decisions, following the facilities, and if they did, they demanded personal and third-
recommendations of the three standing committees on party guarantees. When the Philippine Chinese Charity
administration, appraisement, and loans. Loan discussions Association sought a loan of P15,000, all of its fifteen directors
at the board level often revolved around one board member were involved in the written guarantee. As a general rule,
asking another, “Do you know this man? Will you vouch for him credit facilities granted to clients required not only promissory
and his business?” Following traditional Chinese practice, a notes cosigned by the borrowers, but also solid securities
businessman’s personal ties and the Chinese community’s like share certificates, real estate, and insurance bonds.
assessment of his xinyong were crucial in accessing loans. [CBC director] Go Jocco’s credit facilities, for instance, were

42 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
In 1926, when he was already a successful timber baron, Dee C. Chuan built his mansion, a three-storey neoclassical
villa, in Gulangyu, Xiamen—an international settlement set up in the Treaty Port era.

On this island, one would find foreign consulates, the grand houses of foreigners and of rich overseas Chinese who made
their wealth in Southeast Asia. The mansion is featured in Ronald G. Knapp’s Chinese Houses of Southeast Asia.

CHAPTER 1: BEGINNINGS: 1920-1930 43

 Gan Tiak with Helen Bau SyCip,
wife of Albino SyCip.

leading businessmen with considerable savvy. Siy Chong

Fu had a Ph.D. in economics from Columbia University
and Yu Khe Thai was one of the country’s biggest
guaranteed by personal signatures and real estate mortgages. hardware and automotive tycoons. The inspectors were
. . . These and many other similar cases attested to CBC’s authorized to look into anything that aroused their curiousity
strict approach in seeking adequate collateral of approximate and verify that the bank was carrying out its fiduciary
value for loans and overdraft accounts from its clients.” responsibilities properly.
Wong added: “In demanding collateral from even the Even here, though, a Chinese, personalistic approach can
most trusted clients, CBC was in reality managing fairly also be seen—in that the inspectors were not outsiders to
successfully the transition from relying predominantly on the world of Binondo and the Bank; they weren’t brought in
personalized xinyong patterns to the more impersonal and from a British audit firm like Fleming & Williamson or Hunter
government-regulated world of modern finance.” & Bayne, which then dominated the prewar audit business
In addition, to make sure all bank transactions were in Manila. The inspectors were either related to the board
aboveboard, the board also appointed two “inspectors” who members or were their very close friends. Siy Chong Fu was
functioned as auditors. These inspectors, such as Li Seng the nephew of Benito Siy Cong Bieng and Yu Khe Thai was a
Giap, Siy Chong Fu, Yap Tian Sang, and Yu Khe Thai, were all very good friend of both Dee C. Chuan and Albino SyCip; three
of his daughters eventually married sons of Dee and SyCip.
“Inspector” was a position of great delicacy, and the board
preferred to entrust it to people they knew very well.
CHINA BANK DEPOSITS With its combination of modern organization and practices,
1920-1930
In Million Pesos and an in-depth understanding of the way Chinese-Filipino
15 businessmen did business, China Bank steadily grew and
P13.306 M flourished. By the end of 1920, after less than five months
12 of operations, the Bank had P9.745 million in resources and
P5.32 million in deposits. By 1930, China Bank had P20.291
9
million in resources and P13.306 million in deposits. By 1940,
it had P31.77 million in resources and P21.566 million in
6
deposits. It was by then one of the country’s biggest banks,
3 a powerful magnet for the deposits of Chinese businessmen,
and their bank of choice for loans and letters of credit.
0 Dee didn’t live a long life, but he lived long enough to see
20 21 22 23 24 25 26 27 28 29 30
China Bank fulfill his dream.

44 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Dee C. Chuan with his family in China in 1930.

Gan Tiak with some of her children: Gan Tiak Sisters Gan Tiak (standing) and Gan Suat
Edward, Grace, Henry, and Herbert

CHAPTER 1: BEGINNINGS: 1920-1930 45

 CHAPTER 2

Setting the Values

1924-1940

Albino SyCip helps to lead the Bank for over four

decades, and sets the corporate DNA of China Bank—
its values, vision, and way of dealing with clients.

46 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Lumber king-turned-
banker and philanthropist:
Dee C. Chuan wanted a
different kind of bank, one
that would help Chinese
businessmen access financing
on an unprecedented scale.
With the support of friends
who shared his passion and
vision, China Bank came to
be. Dee C. Chuan was only 31
years old then.

A serious and formal man who

usually started his work day at
7:30 a.m. , Don Albino Z. SyCip,
co-founder of China Bank and also
known as the “Dean of Philippine
Banking,” operated China Bank in
the same manner as he walked—
carefully and steadily.

CHAPTER 2: SETTING THE VALUES: 1924-1940 47

Albino SyCip was known as “the dean of Philippine
banking”—the man who personified the values
of the ideal banker.

I
n 1924, two key events in the life of the Bank occurred.
First, China Bank moved to new premises on Dasmariñas
St., just around the corner from its first home on Rosario
St. The Bank had grown so quickly in just four years
that it now needed its own building—a seven-story
neoclassical edifice that is still its Binondo headquarters today.
But the more important event was the second one—the entry
of a new figure into full-time management of the Bank. In 1924, the
Bank’s board persuaded founding director Albino SyCip, then only
thirty-five, to cut back on his flourishing law practice and join the
Bank as vice president. Albino initially focused on client relations
and personnel matters, but eventually he became involved in all
aspects of bank operations—especially after Eugene Wing resigned
as GM in 1936. Albino would remain at the Bank for fifty-three years,
rising to become president and chairman. He resigned in 1977 at the
age of eighty-nine because of ill health. Because he ran the Bank
for so long and was so influential in the development of several
generations of young China Bankers, Albino SyCip was the man who
more than anyone else set the Bank’s culture—its corporate DNA,
so to speak. Even more than Dee C. Chuan,
Albino SyCip put the stamp
of his own personality on
the China Bank way of
operating.

48 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 “BIN-LO”
Albino SyCip was born in Binondo on December 17, 1887,
to Sy Ching Cip (Jose Zarate SyCip) and his wife Yu Lan. In
Mandarin, his name was Xue Min Lao, or Sy Bin Lo in Hokkien.
Thus he was called “Bino” or “Bin-lo” by his Chinese friends.
Albino’s father, Jose Zarate SyCip, was born in the early
1850s in Jinjiang county, Fujian, and arrived in Manila in the
late 1860s, at the age of fourteen. He worked hard and saved
up money to start his own trading businesses in Binondo. In
Manila, Sy Ching Cip acquired Spanish citizenship and was
baptized Jose Zarate SyCip. He took on the middle name
Zarate—apparently to honor the Spaniard who was his
baptismal godfather. (Even Jose’s grandson Washington SyCip
At first glance, the Michigan-trained lawyer seemed like used Zarate as a middle name—even though his actual middle
a counter-intuitive choice for running the Bank. Albino had name was Bau.)
no training in finance or accounting. He wasn’t a visionary By the 1880s, Jose had grown rich from trading in
businessman on the same scale as a Benito Siy Cong Bieng Manila. His wife, Yu Lan, put up her own cigar and cigarette
or Dee C. Chuan. But he had other—and in the long run, factory. They owned vast tracts of land in the Cagayan
more important—traits. He had an uncompromising integrity Valley, a distillery in Hagonoy, Bulacan, and a 472-hectare
and a keen mind, and he always put the welfare of the Bank sugar plantation in Manjuyod, Negros Occidental. The SyCip
first, even above his own. In difficult times, he kept calm plantation remained in the family until they gave it up for land
and focused, and in good times, he continually pushed the reform in 2000.
Bank to innovate and become even better. Albino was a Jose SyCip and Yu Lan had six sons—of whom, four,
child of the 1880s, when Binondo was lit by kerosene lamps, Eusebio, Policarpio, Alfonso (1883-1969), and Albino (1887-
but nonetheless, he was a progressive force in the Bank. 1978), lived to adulthood. They also had two daughters—
He pushed for the introduction of the first IBM mainframe Unchong SyCip Lin and Felisa SyCip Godinez.
computer and online operations to Philippine banking in 1967. Of their children, Albino and his older brother Alfonso
A man from a horse-drawn era brought the Bank into the became the most prominent in Philippine business. Alfonso
digital age. SyCip (who was Xue Fen Shi in Mandarin or Sy Pun Su in
By the 1960s, Albino was commonly referred to in the Hokkien) was the right-hand man of Benito Siy Cong Bieng
industry as “the dean of Philippine banking”—the man who and helped him build his companies into some of the country’s
personified the values of the ideal banker. largest. The Siy companies prospered throughout Alfonso’s

CHAPTER 2: SETTING THE VALUES: 1924-1940 49

 The SyCip brothers: (From left)
Eusebio, Alfonso, Albino, and
Policarpio.

In 1912, Albino graduated from the University of Michigan

with honors. At this point, he was given by one of his
professors a letter of introduction to the prominent Manila
judge Clyde DeWitt, later the founder of the big law firm
DeWitt Perkins Ponce Enrile (of which the founding Filipino
partner was Alfonso Ponce Enrile, father of former Senate
president Juan Ponce Enrile). But DeWitt was an examiner
for the Manila bar exams in 1913, so, in an early display of his
character, Albino delayed introducing himself to DeWitt until
after the bar exams were over.
stint with them. When Benito died in 1926, Alfonso stayed on On the way home to Manila via steamship, Albino met
briefly to help his sons, but he moved on in 1928 to Yek Hua Helen Bau Vonglin, who just graduated with an A.B. in music
Trading Corporation, which he and his brother owned. (In his from the Conservatory at Oberlin College in Ohio. Her father’s
absence, the Siy companies soon fell into decline.) With his family, the Baus, was the founder and owner of the Chinese
brother preoccupied with the Bank, Alfonso became president Commercial Press, the biggest publisher in China. Since the
of Yek Hua and he expanded its operations into Cebu, Iloilo, voyage home by ship from Los Angeles to Manila took four
Xiamen, and Shanghai. Alfonso was elected chairman of the weeks, Albino and Helen had time to get to know one another.
Philippine Chinese General Chamber of Commerce for several They eventually got married in 1916 and had five children:
years between 1934 and 1941. He was also a China Bank David, Alexander, Washington, Elizabeth, and Paz.
director for many years. Once back in Manila, Albino took bar review classes under
His younger brother Albino’s intellectual gifts were Jorge Bocobo and then at night tutored a dozen Chinese
apparent even at an early age. A Methodist missionary, Rev. students in English for income. When the results came out,
Ernest Lyons, who tutored Albino in English, spotted his talent Albino SyCip had topped the March 1913 bar examinations.
and helped him get a high school scholarship in Ann Arbor, He was a total unknown in Manila law circles, but he bested
Michigan. He left Manila in 1905 at the age of seventeen, and 117 other men, including his bar reviewer Jorge Bocobo, the
in 1908, Albino graduated from Ann Arbor High School as future senator Francisco Delgado, and his own tutor, Ernest
valedictorian. Initially, Albino intended to become a doctor, but Lyons. Albino was the first Chinese-Filipino lawyer. This
his first trip to the anatomy room at a medical school changed triumph launched him into instant prominence. In Philippine
his mind. Too squeamish for medicine, Albino decided instead society, the bar topnotchers are expected to have brilliant
on a career in law. He went to the University of Michigan Law careers in law or politics. The bar exam batch of 1914, for
School, where he was a member of the Law Journal and a top instance, included among its topnotchers Claro Recto, Jorge
debater. Vargas, Jose Yulo, and Benigno Aquino Sr.

50 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Albino joined the prominent law firm of Edward Williams 1919. The Dee-SyCip tie grew even deeper when Dee’s oldest
and practiced civil, criminal, and corporate law for the next son, George, married Alfonso SyCip’s daughter Mary in 1935.
eleven years. He also became the preferred corporate lawyer Like Dee C. Chuan, Albino saw himself as someone
for big Chinese firms like Yu Khe Thai’s Yutivo and Sons who could bridge different worlds. His Michigan training
Hardware, which trusted a fellow Chinese more readily than combined with his Fujianese background made him a credible
they would a big-time American lawyer. Albino became one interlocutor whether he was dealing with a Senate president,
of Yutivo’s founders and incorporators, because Yu Khe Thai an American governor-general, or a shopkeeper from Roman
liked and trusted him. Ongpin St. He joined both the all-Chinese Oriental Club and
Edward Williams moved back to the US in 1920, so the the Wack Wack Golf Club, a club for rich Americans and
partnership was dissolved. Albino built up his own flourishing Filipinos, and felt perfectly comfortable in both.
practice and also set up SyCip, Hanson and Winkle, a trading Albino chose not to live with his fellow Chinese in Binondo
firm. In 1928, the company would be reorganized into Yek Hua or Sta. Cruz, and instead established his home in the suburb
Trading, co-owned and run by Albino and Alfonso. of Sta. Mesa. Moreover, in his home, English was the medium
Soon after passing the bar, Albino SyCip met Dee C. Chuan of communication. This was the language in which Albino and
for the first time. The men were two of a kind—forward- Helen first communicated; their dialects, Hokkien (Fujianese)
looking young Chinese men trained abroad who wanted to help and Shanghainese, were mutually unintelligible. So his five
their community adjust and thrive in this brave new world. The children grew up most comfortable in English.
two men become good friends. It became logical for Dee to Albino SyCip insisted that his children be educated not
invite his friend to join the founding board of the new bank in in the Chinese-language schools preferred by many Manila

CHAPTER 2: SETTING THE VALUES: 1924-1940 51

“My father always told us when we were children,
‘I don’t want any of you in China Bank. If you do well,
and I promote you, they would say it is nepotism.
That embarrasses me. But if you do not do well, it
embarrasses me even more.’” —WASHINGTON SYCIP

Chinese or in the private schools such as the Ateneo de Manila school in cars and the other students had none, we might feel
preferred by elite Filipinos, but in the American colony’s superior to them.”
public schools. Albino told his sons: “We’re all going to be Albino had received much of his education in Methodist
living here; we should get to know the people here.” So young schools and baptized his children as Presbyterians, but he
Washington and his older brothers, David and Alex, went to was not a doctrinaire Christian. The Bible was read aloud at
Burgos Elementary School and V. Mapa High School, where home every evening, and the SyCip children went to church
most of their classmates were ethnic Filipinos. occasionally with their mother. But Albino SyCip preferred to
Wash said: “My father said that we should not only know spend his Sundays on the golf course. He said: “On Sunday,
the ethnic Chinese or the upper income group—which is the it is better to be on the golf course thinking of God, than in
group we would get to know if we went to La Salle or Ateneo church thinking of the golf course.” Wash SyCip said: “You
. . . .The SyCip family—meaning me, my two brothers and two might say that we were Christians, but that we were not
sisters—we very quickly integrated into Philippine society, church-going Christians.” Albino was a devoted golfer who
which many of the ethnic Chinese families have not done.” despite his diminutive frame managed to score several holes-
Albino was a wealthy man who could afford to have his in-one during his long golfing career. He would joke that he
sons chauffered around Manila, but David, Alex, and Wash could drive the ball very straight because he liked to live a
took public transportation straight life.
such as the Meralco Wash recalled that whenever ethical principles were
buses to get to school. concerned, the elder SyCip “was always very, very strong: ‘You
Sometimes they would have to do what is right,’ he would say. ” Albino SyCip’s favorite
walk part of the way, maxim was from the Bible: Do unto others as you would have
taking a short cut across them do unto you. Albino printed and distributed to clients and
some big water pipes that friends thousands of small cards bearing the Golden Rule and
crossed the Pasig River its equivalents from Islam, Confucianism, and other religions.
at Mendiola. Wash said: In a speech in 1965, Albino said: “I am not a philosopher nor
“He would not take us to a scholar nor a religionist. I have, however, in my fumbling and
school in his car, because limited way, tried to call attention to and to practice, however
the average student at imperfectly, Jesus’ teaching that ‘Thou shalt love thy neighbor
that time had no car in his as thyself.’ I believe with all my heart and all my mind that this
family. So he would tell us principle, the Golden Rule, if applied in individual relations as
that if we would arrive at well as in the relations of societies and of nations, is the one

52 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Albino and Helen SyCip
with their children.
Standing from left are
Paz, Alex, David, and
Elizabeth. Seated in
front is Washington.

Albino as family man

T
o his children, Albino was a strict but affectionate father. He stressed the
importance of academic achievement and the need to learn the true value of
money. He was willing to spend considerable sums for their education—even
sending several of them abroad to universities like Columbia for further schooling.
But he wanted his children to make their own way in the world. In the early 1930s, his
children began to enter college and decide on careers. Several of them, like David,
Washington, and Elizabeth, were mathematically gifted, and were logical candidates
for a banking career. But Albino told them to stay away from China Bank.
Wash recalled: “My father always told us when we were children, ‘I don’t want
any of you in China Bank. I do not own the Bank. I am only one of the shareholders.
If you do well and I promote you, they would say it is nepotism. That embarrasses me.
But if you do not do well, it embarrasses me even more.’ So he said that we should
keep out of the Bank.”
Albino felt that he should set an example for his partners in the Bank and make
the point that leadership in the Bank, especially at the very top, had to be earned. It
was not a birthright. Wash, in particular, took his father’s lesson to heart; when he
founded and built up his own firm, SyCip Gorres and Velayo (SGV), he told his children
that none of them could join the accounting firm.

CHAPTER 2: SETTING THE VALUES: 1924-1940 53

On June 7, 1926, the US Supreme
Court headed by Chief Justice
William Howard Taft (opposite page,
below) ruled that the Bookkeeping
Law was unconstitutional. This was a
triumph for Albino SyCip who was the
key strategist in working against the
said law. The law made it unlawful
for any person or corporation to
keep its account books in a language
other than Spanish, English or a local
Philippine dialect.

for any person, company, or partnership or corporation

engaged in commerce, industry or any other activity for the
purpose of profit in the Philippine Islands, in accordance
with existing law, to keep its account books in any language
other than English, Spanish or any local dialect.” The colonial
government felt compelled to do this because the local
Chinese kept their books in a language that its internal
revenue agents couldn’t understand and therefore they had
difficulty ascertaining if the correct taxes were being paid.
But the Chinese-Filipino community reacted very strongly
against the Bookkeeping Law, because if it was carried out,
many Chinese merchants would be forced to keep books
effective antidote to the moral degeneration amongst men in a language that they didn’t understand. They would be
and therefore among nations. For the love that Jesus taught unable to keep track of the condition of their businesses; an
makes of all men one family. It recognizes no distinction; it is unscrupulous bookkeeper or shop assistant could rob them
an absolute injunction. It is deceptively simple but it is rich and blind.
deep in meaning. A man who loves his neighbor—and everyone As head of the PCGCC, Dee C. Chuan mobilized a massive
is his neighbor—looks not at the other’s skin, his station in life, effort to repeal the law, aided primarily by Albino SyCip as
his political beliefs or his religious creed. He believes in the the chief legal strategist. Albino began strenuous lobbying
Fatherhood of God and the brotherhood of men.” efforts in both Manila and Washington. During the fight over
the law, Albino’s good friend Dean Conrado Benitez criticized
ALBINO’S CONVICTIONS him in a newspaper article. Benitez believed that as a Filipino
Yet, Albino’s religious beliefs, as idealistic as they sounded, citizen, SyCip’s first obligation was to the Philippines and its
could not be called fuzzy, feel-good, or weak. He knew how interests, not to the affected Chinese merchants who were
to fight for what he believed in, and he would persevere and predominantly not citizens of the colony. Albino replied that the
make his way past every obstacle—regardless of whether his citizenship of the merchants didn’t matter; to him, the parties
opponent was the Philippine legislature, the Kempeitai, or involved in the dispute were incidental. What was important to
even the total liquidation of China Bank. him was the injustice that the new law would inflict.
Albino made his reputation as a national figure with one Because of the battle over the new law, Albino happened
such battle—the five-year struggle against the Bookkeeping to be in Washington D.C. on June 30, 1921 on a lobbying visit
Law. In early 1921, the Philippine legislature passed this when his third son was born. Hence, he chose to name this
law, Act No. 2972, which read in part: “It shall be unlawful son Washington. Wash’s older brother Alex subsequently

54 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
liked to joke that it was a good thing that their father wasn’t in
Vladivostok, Walla Walla, or Buffalo at the time.
For his part, Dee C. Chuan mobilized considerable
resources to back Albino’s efforts: the campaign to repeal the
Act cost the Chinese-Filipino business community more than
P167,000 over the next five years. Between 1921 and 1923,
Dee C. Chuan and Albino SyCip were able to elicit statements
of support for their position from the Chinese government,
from members of the insular committee of the US House of
Representatives, from various chambers of commerce in
the United States and elsewhere, and then bring these to the
attention of the Philippine Legislature. The Filipino solons
agreed to discuss a repeal or modification of the law, but all
proposed changes were defeated decisively in the legislature
in 1923.
Dee C. Chuan and Albino SyCip did not admit defeat. They
went one step further: challenging the constitutionality of the
Bookkeeping Law before the Philippine Supreme Court, by
using the test case Yu Cong Eng vs. Trinidad (271 U.S. 500,

CHAPTER 2: SETTING THE VALUES: 1924-1940 55

 The Shanghai Bund was the financial
hub of East Asia in the early 20th
century until the Communist
takeover in China. The numerous
buildings along the Huangpu River
used to house banks and trading
houses from Europe, the United
States, and Japan. The Bund is now
a famous tourist destination.
(Inset) The Russo-Chinese Bank.

46 S. Ct. 619, 70 L.Ed. 1059). In a brief, SyCip asserted: “Yu of his business; and that the enforcement of the act would
Cong Eng is a Chinese merchant engaged in the wholesale drive the petitioner and many other Chinese merchants in the
lumber business in Manila; that he neither reads, writes nor Philippines who do 60% of the business of the Islands and who
understands the English or Spanish language or any local are in like circumstance, out of business.”
dialect; that he keeps the books of account of his business SyCip’s efforts did not succeed. In 1925, the Philippine
in Chinese characters; that by reason of his ignorance of the Supreme Court ruled that the Bookkeeping Law was
English and Spanish languages and of all local dialects, he constitutional. Dee C. Chuan and Albino SyCip took their last
is unable to keep his books in any other language than his recourse: an appeal to the US Supreme Court. Albino SyCip
own; that, even if he should employ a bookkeeper capable told the US Supreme Court that the act, if enforced, would
of keeping his books in the English or Spanish language, he deprive the petitioners, and the 12,000 Chinese merchants
would have no means of personally revising or ascertaining whom they represented, of their liberty and property without
the contents or correctness of the books thus kept; that due process of law, and deny them the equal protection under
the employment of such a bookkeeper, unless he should the law.
be a linguist, would entail as a necessary consequence the Albino SyCip was not the lead counsel of record in Yu Cong
employment of a translator or interpreter familiar with Eng vs. Trinidad. In the Philippines, the lead counsel of record
the Chinese language and the language or dialect in which was Atty. Gabriel LaO. In the US, the lead counsel of record
such books might be kept, in order to enable the petitioner were Frederic Coudert, Allison D. Gibbs, and Mahlon B. Doing.
to ascertain by hearsay the contents thereof; that he would But Albino was the key legal strategist and the guiding spirit
be completely at the mercy of such employees, who, if behind the case. Yet he preferred to let his seniors like LaO
dishonest, might cheat and defraud him of the proceeds of take the more prominent role of lead counsel. Nonetheless,
his business, and involve him in criminal or civil liability in its his importance and contributions were known and understood
conduct; that under the provisions of the act he is prohibited by the legal community.
from even keeping a duplicate set of accounts in his own On June 7, 1926, the US Supreme Court ruled that
language, and would, in the event of the enforcement of the the Bookkeeping Law was unconstitutional, and thereby
law, be compelled to remain in total ignorance of the status repealed it. Chief Justice William Howard Taft, the former

56 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
President Sergio Osmeña, third from left, was a friend and neighbor of Albino SyCip, extreme left.

Albino with the presidents

P
artly because of their triumph over the Bookeeping Act, Dee C. Chuan and Albino
SyCip began to deal a lot with the country’s top Filipino leaders, Manuel Quezon and
Sergio Osmeña. Soon the professional relationship was also personal, and Dee and
Albino became warm friends with Quezon and Osmeña. Osmeña’s house in Sta. Mesa was just
across the street from Albino’s, and Wash, Albino’s son, remembered attending many parties
in the Osmeña home when he was young. Dee and Albino served as the liaison between the
Chinese community and the political leadership of the colony. During other incidents, such as
an outbreak of anti-
Chinese rioting in 1924,
Dee C. Chuan and Albino
SyCip were the men
who smoothed things
over and restored good
relations.

Albino SyCip’s friendship

with President Manuel
Quezon, third from left,
ensured that the Chinese
community had good
relations with government.

CHAPTER 2: SETTING THE VALUES: 1924-1940 57

Wash recalled that whenever ethical principles were
concerned, the elder SyCip “was always very, very
strong: ‘You have to do what is right.’” Albino SyCip’s
favorite maxim was from the Bible: “Do unto others
as you would have them do unto you.”

US president and former Philippine governor-general, wrote: auditor familiar with both English and Chinese would examine
“In view of the history of the Islands and of the conditions the accounts, provide a full translation, and submit a sworn
there prevailing, we think the law to be invalid, because it statement to the government attesting to the accuracy of its
deprives Chinese persons situated as they are, with their figures.
extensive and important business long established, of their Albino SyCip and Dee C. Chuan had triumphed against
liberty and property without due process of law, and denies the Western colonizers, by using their own institutions and
them the equal protection of the laws . . . it is not within the methods. In a time when many Chinese had seen their country
police power of the Philippine Legislature, because it would humiliated and pillaged by imperial powers and derided as the
be oppressive and arbitrary, to prohibit all Chinese merchants “sick man of Asia,” Albino’s victory in the Bookkeeping Law
from maintaining a set of books in the Chinese language, case showed that one of their own had the talent to compete
and in the Chinese characters, and thus prevent them from with the white man as an equal.
keeping advised of the status of their business and directing
its conduct.” SETTING THE VALUES, GROWING THE BANK
This vindication by the US Supreme Court was a huge The battle over the Bookkeeping Law gave Albino
triumph for SyCip and Dee. It made them the two most immense prestige within the Binondo business community—a
prominent Chinese in the colony. Then Senate president development that in turn helped the growth of China Bank.
Manuel L. Quezon, though he had supported the law, went to The Binondo business community apparently decided that
SyCip’s house in Sta. Mesa to congratulate him for his victory. if there was a man they could trust with their money, it was
Quezon and SyCip then worked out a viable compromise on Albino SyCip.
bookkeeping requirements (embodied in Commonwealth Act As we have seen, in 1924, Albino SyCip joined China Bank on
3292): the government agreed that the Chinese could keep a more regular basis as vice president, and at first he focused
their books in their own language, and a reliable independent on personnel matters and client relationships. He could do
what the GM, Eugene Wing, could not—which was to mingle
Only a month after the with the Chinese customers, build up relationships of trust,
country opened its first
stock exchange in August and examine their creditworthiness according to the standards
1927, China Bank already
made history as one of the
of xinyong. These clients were easily convinced of his integrity
first companies to publicly and good will, and for loan applications, they would open up to
list on the Manila Stock
Exchange. him about the condition of their businesses much more readily
than they ever would for an outsider, a gweilo.
Albino understood the cultural imperatives of lian and bao
and guanxi, of “face” and reciprocity and smooth relationships.
He himself had tremendous “face” within the community—but

58 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Being a leading figure in business, Albino SyCip
would play host to prominent businessmen.
In the photo on the right, Albino (front row,
leftmost) with his guests, including Gen. Douglas
MacArthur (last row, 4th from right, between
two ladies), Jean MacArthur (seated, 4th from
left), former General Electric President Carrol
Grinnell (last row, 2nd from left), and acting High
Commissioner to the Philippines James Weldon
Jones (front row, rightmost).

In the photo below, Albino, seated extreme

left, hosts a dinner for Stephen Zuellig, seated
center, whose family ran a trading house in the
Philippines in the 1900s and who later became the
chairman of Zuellig Group, a leading healthcare
services provider in Asia.

CHAPTER 2: SETTING THE VALUES: 1924-1940 59

 (Opposite page) Taft Avenue was the major
thoroughfare in old Manila connecting north
and south. It was where government offices
and business companies were located.

of the top Chinese banks and bankers

which then ruled Chinese finance. For
the Bank, the most notable of these
contacts were the Bank of China—
this was made all the more powerful because he was low-key then led by Chang Kia Ngau, ( , or Zhāng Jiā’áo, 1889-
and unassuming, and did not like to draw attention to himself 1979) and later by Tsuyee Pei (1893-1982)—and the Shanghai
or his achievements. As the Tao Te Ching says: “When you are Commercial Bank, led by Kuangpu (KP) Chen ( , 1880-
content to be simply yourself, and don’t compare or compete, 1976).
everybody will respect you.” Both banks would later become investors in China Bank,
Given his cosmopolitan nature and international and their presidents, Pei and Chen, would sit on the board of
background, Albino also became the logical man to travel to China Bank. Albino became good friends with all three—Pei,
China and set up the China Bank branches there. He opened Chang, and Chen. In the Bank’s hour of need in 1931, and then
up the Bank’s office in Xiamen in 1925 and in Shanghai in May again after the end of WW II, Chang, Pei, and Chen would be of
1929. Since Albino had married a Shanghainese girl from great help to him and China Bank.
an impeccable local family, the Baus, his father-in-law’s Albino’s many good friendships became a competitive
connections gave him an easy entry into the elite circles of advantage for the Bank. Because of his excellent relationships
Shanghainese business. Of course, this was on top of the with people from various sectors, Albino had a finger on the
Bank’s already existing and very warm relationship with pulse of the economy and could count on being warned about
founding director Huang Yizhu and the Shanghai-based Bank important developments. Because of a nugget of information
of China and South Sea. he overheard in the Wack Wack Golf Club locker room, Albino
The Bank’s entry into mainland China gave it profitable new was able to sell the Bank’s entire stock of gold coins to
lines of business—primarily, the remittances from Chinese Citibank at a hefty profit. In the late 1930s, when the bubble
sojourners in the Philippines back to their families in Fujian, in local mining stocks burst, Albino knew about the brewing
and the opening of letters of credit for traders shipping goods trouble well ahead of time and stopped the Bank from lending
to and from China. The Bank became so entwined with the any more money against collateral of mining shares, well
Fujianese sojourners’ lives that frequently in the 1930s, a new before the other banks did.
immigrant fresh off the boat from Xiamen would be instructed Albino said: “It was a very timely step. When the bank
to go to the China Bank office in Binondo, where, he was told, examiner came to our bank, he was surprised to find that we
its staff would be glad to help him. had only one loan outstanding against mining shares. The
The entry of China Bank into Shanghai also gave Albino borrower in this case was Mr. Harris, and the amount was
SyCip and his branch staff the chance to build personal and P20,000 against Atok shares. This loan, however, was duly
professional ties with the so-called “Shanghai-Jiangsu clique” paid as Mr. Harris was financially sound.”

60 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Over and above these business achievements, Albino’s Tecson added: “Although occupying high positions,
greatest contribution to the Bank was probably the personal Don Albino is humble in word and in manners. He would
example he set for everyone. Every weekday, he would arrive sometimes say that he, a lawyer by profession, had become a
in the Bank by 7:30 a.m., ready for work. Albino would not banker only by accident, and as he had never had any formal
tolerate any instance of dishonesty in the Bank, and would study or training as a banker, he feels less competent than
weed it out promptly, regardless of the person’s rank— his subordinates who have had the necessary training and
whether it was a messenger fraudulently passing around academic background. But his humble admissions belie
envelopes for funeral contributions (abuloy) for nonexistent his firm grasp of sound banking principles and practices.
relatives, or a senior officer manipulating the Bank’s foreign As a matter of fact, there were occasions when accounting
exchange operations. He frowned on employees who gambled reports submitted to him had to be revised when he
or womanized. Albino let it be known that he did not borrow unerringly pointed to some figures which required correction
money from his own bank. Albino set this limitation on himself or adjusting. He has the knack of wading through a mass
several decades before the Central Bank started setting of figures to draw out simple facts and conclusions, to the
limits on DOSRI (directors, officers, shareholders, and related surprise of the Bank’s accountants. An obsession of Don
interests) loans in the late 1950s. Albino that impressed me over my many years working with
His onetime subordinate and protege, Wilfredo Tecson, him is his overriding concern for the safety of his Bank.
said in 1967: “I have seen how scrupulous Don Albino has There is nothing he does that is not calculated to protect and
been in all his business dealings. To my knowledge, he strengthen the Bank. Indeed, I have yet to meet a banker as
has not borrowed a single centavo from the China Banking dedicated as he.”
Corporation. Nor has he allowed any personal relationship or Wilfredo “Willy” Tecson (born Chen Wu Liang in January
interest color his judgment in bank matters.” 1922) was a young man of mixed Cantonese/Kapampangan

CHAPTER 2: SETTING THE VALUES: 1924-1940 61

“Don Albino was so kind and humble and soft-spoken
that he made you want to be as kind and humble as him.
He had that kind of effect on his people in China Bank.”
—JOSIE GARCES, DON ALBINO’S SECRETARY

heritage who joined the Bank in 1937 at the age of fifteen. His characterizes Don Albino’s relationship with them. Little
father was a bartender at the Army and Navy Club, and as wonder then that his staff members are loyal to him and
the eldest of eight children, the young Tecson needed to help respect him.”
his father support his siblings. So he joined China Bank as a He added: “Some months after my operation, I was even
messenger. more pleasantly surprised when he called me to his office to
Willy Tecson later recalled: “Several months after I was inquire what collegiate course I was intending to enroll in, since
employed, I was operated on for an inflamed appendix. While he had learned that I was about to graduate from high school
recuperating at home, I was visited not once but twice by and that I had obtained high scholastic marks. I was still unsure
Don Albino. I naturally felt embarrassed that I was receiving about what kind of career I really wanted, but my conversation
so much attention from the head of the institution who, I with Don Albino that day helped me decide on a banking career,
presumed in my young mind, must have more important and I have had no cause to regret my decision since.”
matters to occupy his time and attention than visiting a sickly Albino’s personal example was influential not just on Tecson
lowly junior clerk like me. It is his abiding interest in his but on all the senior managers of the Bank of that era and later
men and sincere concern for their health and welfare that eras—men like TS Wang, Lee Siau Tong, Yap Tian Sang, LL
Pan, Tan Kim Liong, and George
Pay. One-time assistant auditor
Ricardo Liong once wrote: “As
Chairman of the Bank, SyCip
was serious and formal. He
expressed his joy only with a
simple smile and I haven’t heard
him laugh audibly in public. His
friends said he operated his
bank in the same manner as he
walked—carefully and steadily.
. . . He personally met all the
new staff and interviewed other
higher-ranking recruits. . . . No
taller than five feet or heavier
than 100 pounds, he sported
a crew cut and wore a pair of
A Thursday luncheon meeting at the Cosmos Club, top floor, CBC Building attended by officers and employees of the
Bank, including George Dee Se Kiat, Dee K. Chiong, and Tan Kim Liong, circa 1939. tortoise-shell glasses.”

62 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Liong added: “Aside from the janitors, he was the first
to arrive in the office after finishing his daily golf session. I
had the misfortune of working in the mezzanine floor of the
chairman’s office because my colleagues and I were on a daily
eight-hour alert—no horse play, no loafing, and no fun. . . .
Setting an example, he demanded upright moral character
and decency from his staff. There was an unwritten rule
against gambling, womanizing, nightclubbing, and seeking
favors from the Bank’s clients. It was so strict that some
colleagues resorted to asking friends in placing jai-alai and
horse racing bets. Banking then was a boring profession but it
provided a lifetime job if one could remain honest.” Wilfredo Tecson
Liong also wrote down what he considered to be Albino’s
primary maxim as a banker: To know people is better than to
know money. “[Don Albino] reminded me [of it] constantly in Protégé: Willy Tecson

S
Chinese. Evidently he valued friendship more than wealth.
yCip saw the potential in his young messenger.
Translating this advice into banking, he warned me to look
By dint of hard work, Wilfredo “Willy” Tecson
into a person’s character first before his assets. This is also was soon promoted to junior clerk at the
an advice to curb one’s greed for wealth without showing Bank. Whenever someone was absent, Tecson would
concern and compassion for others.” volunteer to take over his desk for the day; by this
Late in life, SyCip expounded further on his warning method, working in every section of the bank, he
against greed. He believed that the Bank should never learned everything a bank staffer had to do. SyCip
saw that he was dedicated and intelligent and decided
focus on short-term profit making; instead it should always
to groom him for better things. By the late 1940s,
consider the overall well-being of society. He said: “What
Tecson knew the ins and outs of all aspects of bank
is good for the whole will be good for the part, and what is operations. He earned a BSC in accounting summa
temporarily good for one at the expense of the other will cum laude and a master with honors in the same
sooner or later operate to destroy the whole.” subject from Far Eastern University. By the late 1950s,
To Albino, China Bank had to think about the long term and SyCip would promote Tecson to vice president of China
the big picture. The best guarantee that the Bank would be Bank. He later said that Tecson was his intended
successor as president.
around for the long term would be to stay true to its values:
honesty, hard work, fairness, loyalty, concern for people,
respect, conservative financial management, and the belief

CHAPTER 2: SETTING THE VALUES: 1924-1940 63

“The Bank would minister understandingly to
a Chinese businessman’s credit requirements.”
—DEE C. CHUAN

that the welfare of the Bank and that of its clients were to ask for free tickets for the voyage home from the Philippine
essentially one and the same. Chinese Charity Association (Shanju Gongsuo).
Wong Kwok Chu, a Chinese historian, wrote: “Confronted
CRISIS: THE GREAT DEPRESSION with tough economic conditions, most Chinese adopted a
The first big test of the Bank’s values began in October strategy of business rationalization, either by cutting back
1929, when the Great Depression started. It created economic production, as in the lumber industry, or by minimizing costs
havoc worldwide. US industrial production dropped 46% through wage reduction and retrenchment, as in textiles,
between 1929 and 1932, and over 11,000 of the 25,000 US groceries, and hardware. Those with heavy stocks and
banks went out of business. Unemployment in the US rose to liquidity problems resorted to price-cutting in order to move
25% and in other countries it went as high as 33%. their goods in a weak market.”
By 1930, the Philippines began to feel the effects of the But there was a limit to how much good price-cutting,
Depression. The contraction of the US economy caused a retrenchment, or production cutbacks could do, when
contraction in the demand for Philippine exports. The value confronted with conditions as harsh as the Great Depression.
of Philippine exports to the US dropped 17.8% in 1930, 20.7% At some point, many of China Bank’s debtors were less and
in 1931, and 14% in 1932. Employers cut jobs and wages, less able to repay their loans. The Bank also found itself
particularly in the agricultural sector. In Central Luzon and experiencing some pressures from the overall weakness
Negros, peasant unrest was on the rise, and communist and of the economy. In 1932, China Bank had P18.67 million in
socialist organizers began to make great gains. resources and P11.49 million in deposits, compared to P21.1
As the severe economic conditions began to bite, even million in resources and P13.93 million in deposits in 1931.
some major Chinese firms in Manila went out of business, As some of the weaker debtors began to default, China Bank
such as the trading firm Ty Camco Sobrino, run by Ty Hoan found that some of their third-party guarantors also defaulted
Chay, a major China Bank shareholder. China Bank founding
director Go Jocco, a textile magnate who had diversified into
oil processing, rice sack production, and fertilizers, ran into
severe business reverses during the Depression. Another
China Bank founding director, Guillermo Cu Unjieng, lost
almost P2 million speculating on sugar and foreign exchange
during this period.
Overall, some 10,000 Chinese sojourners in the Philippines
were put out of work. In 1931 alone, 4,532 Chinese left the
Philippines and went back to China, overcome by the hard
times. Several hundred of them were so hard up that they had

64 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Dee C. Chuan, seated center, with
Dee Chian Hong, father of Joaquin
Dee, seated right, and other
colleagues in the 1930s.

on their obligations. In addition, some of the real estate and the loan, plus its interest. Foreclosing on a loan would mean
shares that were pledged to the Bank as collateral for these China Bank had to accept pennies on the dollar. But by giving
sour loans were hard to sell at fair value in a depressed a talented and solid businesssman like Carlos Palanca some
economy. time to get his businesses affairs back in order, both debtor
But despite this, the Bank didn’t resort to the usual and creditor would come out ahead. With the breathing
solution of banks in distress—that of passing on the pressure space given to him by China Bank, Carlos Palanca managed
to its clients by calling in loans. China Bank strove to use to pay off his indebtedness to the Bank and then he left the
its power to foreclose on loans judiciously, by relying on its board in 1936. (He was replaced on the board by his fellow
ability to discriminate between the clients who were merely distillery magnate Dee Chian Hong of La Fortuna Distillery.)
undergoing temporary reverses and those who had gone The Bank also cut back on its loans to its own directors and
irreversibly over the edge. stockholders, so that in a few years, these were down to more
In the early 1930s, the US colonial Bureau of Banking prudent and manageable levels.
exerted pressure on China Bank to cut credit lines and call On the other hand, if the Bank was as strict about
in loans for its troubled borrowers. But China Bank resisted foreclosure as the Bureau of Banking preferred, it would in
the pressure, knowing that moves like this would drive these the long run harm the Bank—particularly given its clientele,
debtors out of business. In a sense, China Bank had some who were frequently traders who now and then encounter
obligation to hold back, because some of its biggest debtors temporary cash-flow problems. This was the essence of
were also board members like Carlos Palanca. what Dee C. Chuan meant when he said the Bank would
But the Bank stood firm also because it felt that a larger “minister understandingly to a Chinese businessman’s credit
idea was at stake: that by being patient and understanding requirements.”
of the business cycle of a skillful and honorable debtor, the In the future, regulatory and rating agencies, such as the
Bank stood a better chance of recovering the full amount of Central Bank and Standard and Poors’, would remonstrate

CHAPTER 2: SETTING THE VALUES: 1924-1940 65

Albino SyCip always said: “To know people is better
than to know money.” He warned the Bank to look
into a person’s character first before his assets.

against the Bank’s “understanding” lending policies, but in the to 1931, the MBC was led by Khu, Gochioco, and SC Choy as
end, both of them would acknowledge the essential wisdom president, vice president, and managing director, respectively.
behind its thinking. The Bank had some rough times during The MBC was a smaller and weaker bank, without as
the 1930s, like everyone else, but when the storm passed, much capital as China Bank and not as sophisticated in its
it clearly came out ahead. By 1940, China Bank had P31.77 operations—and, it has to be said, without the same integrity.
million in resources and P21.56 million in deposits, more than The MBC had P2 million in authorized capital and P1 million
50% better than its level in 1932. paid up. Between 1924 and 1931, MBC attracted P4 million
The Great Depression served to highlight the solidity of in deposits. But it did not inspire a lot of confidence, relative
China Bank, because in 1931, its major competitor in the to China Bank, which had a better reputation. MBC suffered
Chinese community collapsed due to bad loan decisions, three bank runs in only seven years—in October 1926, August
insider abuse, and a series of bank runs. In January 1924, a 1931, and September 1931. The last one ended the bank.
group of Chinese businessmen founded the Mercantile Bank A bank examiner later said that the lack of confidence was
of China (MBC). It was organized primarily by Dee C. Chuan’s due to “the fact known to the Chinese that several members
major competitor in lumber, Rafael M. Gotauco. The MBC’s of the board of directors [are] taking undue advantage of their
leaders also included Khu Yek Chiong, JJ Gochioco, SC Choy, positions, have committed irregularities, and have borrowed
Cu Yeg Keng, Yu Ping Kun, and Quirino Uy Quioco. From 1926 heavily from the institution to promote their personal
interests.” By April 1930, its directors owed P1.5 million out of
the Bank’s total loan portfolio of P2.5 million, or 60%. At one
point the percentage reached 65%. Moreover, by late 1931, the
CHINA BANK RESOURCES MBC had lent out 80% of its deposits, choosing to leave very
DURING THE GREAT DEPRESSION little by way of reserves despite the fact the world was already
1929-1940
In Million Pesos in a depression.
35 In addition, the MBC engaged in risky ventures like forex
P31.77 M
speculation and overexposure to the textile industry. MBC
30
president Khu was later found to have engaged in defrauding
25 his own bank, by delaying payments and manipulating
exchange rates in his favor. The board of directors also helped
20 themselves to the deposits of the bank by lending themselves
large sums without adequate collateral, much of it with
15
each other’s third-party guarantees. By 1929, two thirds of
0
its loans were either “clean” (uncollateralized) or else are
29 30 31 32 33 34 35 36 37 38 39 40
secured only by a third-party guarantee. By 1930, “more than

66 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
80% of the loans and other advances are unsecured. Some
of the securities offered are also undesirable, being either
insufficient, slow liquidating in nature or stocks of closed
corporations.”
By September 18, 1931, all these factors—a poor
reputation, low collateral, low reserves, weak balance sheet—
combined to force the MBC out of business. Even an attempt
by Dee C. Chuan to lend a hand failed; the bank was too far
Albino SyCip with Yu Khe Thai
gone. By the time it closed, MBC had only P140,000 in cash,
compared to outstanding loans and other receivables of nearly
P3 million, claims by depositors and creditors totaling over Interrelated

T
 
P1.8 million, and shareholders’ funds, surplus, and undivided
he smooth functioning of China Bank’s board
profits of more than P1.3 million. There began a lengthy legal was based not just on a confluence of values
process of liquidating the bank. By the time World War II broke and business interests, but also on warm
out in December 1941, the liquidation process was still friendships. Albino, for instance, was very close to
going on. Chiang Kai Shek College founder, Yu Khe Thai. These
The MBC bank run also created a domino effect that hit friendships in turn helped shape the next generation
of bank leadership through the intermarriage of
China Bank. The irony about bank runs in a depression is that
their offspring. Dee C. Chuan’s son George married
they can take down even perfectly sound banks, as panic and
Alfonso Sycip’s daughter Mary. His second son
the herd mentality take hold of the public. Robert married a daughter of Yu Khe Thai. Yu’s two
Albino SyCip later wrote: “Soon after the Mercantile Bank other daughters Helen and Ana married Albino’s
of China failed, although we did our very best to help it, some sons David and Wash. Sons-in-law were also part
of its directors spread adverse rumors against China Banking of the picture: Guillermo Dy Buncio (himself the son
Corporation. As a result, there was a run against this Bank. of a founder) and Marcelo Nubla married daughters
of founder Antonio MH Limgenco. Over time, as
I was in Shanghai at the time. Mr. Dee C. Chuan wired me
sons suceeded their fathers on the board, the Bank
about the run and asked me to do what I could to help
continued to function very smoothly, helped along
the Bank. I received the wire on a Sunday morning and I by the interconnection of bloodlines and long shared
immediately went to see Dr. KP Chen. He told me to see histories.
Mr. Chang Kia Ngau [the Bank of China’s GM]. After I had
explained everything to both Dr. Chen and Mr. Chang, the

CHAPTER 2: SETTING THE VALUES: 1924-1940 67

68 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Although Dee C. Chuan
and Albino SyCip led
China Bank in the same
Dee C. Chuan Albino SyCip era, they were rarely
photographed together.
This 1930s photo of
them with bankers and
businessmen is one of
those rare photos.

CHAPTER 2: SETTING THE VALUES: 1924-1940 69

 A devoted golfer, Albino SyCip
strengthened his personal and
business relationships on the
golf course. Albino with his
golf buddies, including High
Commissioner and Ambassador
to the Philippines Paul V. McNutt
(2nd from left).

latter, without any hesitation, told me he would wire the Bank

of China in our Amoy office to extend what might be needed by
our Amoy office and also to make a public announcement to
the effect that the Bank of China was prepared to help China
Banking Corporation to the fullest extent and without limit.
Dr. KP Chen [on behalf of Shanghai Commercial Bank] sent
to Manila $300,000. With the announcement of Dr. Chang, the
run against our Bank stopped. We paid back the Shanghai
Commercial and Savings Bank in less than three weeks’ time.”
It would be inaccurate to say that China Bank survived Ngau and KP Chen knew that Dee and SyCyip and their bank
the 1931 bank run just because it had good friends and good had a word of honor that was as good as cash. Those who have
relationships. It was not just a question of the Bank knowing honor, others will also honor.
the right people. The important thing to know is why these China Bank’s performance during the Depression
people and institutions were so ready to help the Bank “to the burnished its reputation among its clientele. It was clear
fullest extent and without limit.” The Bank had these friends to the Manila business community that when push came to
and potential lifelines because it too had xinyong. Chang Kia shove, China Bank would not abandon its clients. It would
not prematurely call in its loans. Instead, it would stand by
its honest clients and give them every reasonable chance to
make good on their obligations.
CHINA BANK RESOURCES The Bank keeps that reputation to this day.
1942-1954 The other important point about the Bank during the Great
In Million Pesos
Depression was that it thrived and grew strong, even when
100
P98.131 M
some of its founding directors’ businesses did not. Many
of its founding directors—Go Jocco, Guillermo Cu Unjieng,
80
Carlos Palanca, the Siy Cong Bieng heirs—suffered severe
60
business reverses during the Depression and had to leave
the board. (Even earlier, founding director Yu Biao Son Tua
40 had gone bankrupt in 1927.) Go Jocco died in 1932; under his
son and heir Go Se Kim, the Go businesses declined and he
20
had to resign from the board in 1934. Siy Cong Bieng died in
1924, and his businesses were carried on by his sons Tomas
0
42 48 54 Siy Chong Fu and Siy Chong Keng. The Siys retained their

70 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Doing what is right: From the transcripts on the War
Claims Act Amendments of 1954 hearings in Washington
D.C., presided by Hon. Carl Hinshaw, chairman of the
Sub-Committee on War Claims and Trading with the
Enemy Acts of the Committee on Interstate and Foreign
Commerce. Joseph Friedman of the law office Friedman,
Locker & Schlezinger represented China Bank in the
hearings. As the dialogue shows, the Bank did not have to
pay off all its liabilities, but still decided to do so because
it was the right thing to do.

THE PASSING OF DEE C. CHUAN, 1940

In the twenty years since the founding of China Bank, Dee
C. Chuan had been a very busy man. Much of the time, he was
no longer focused on growing his businesses, neither lumber
nor the Bank. He was already rich as he had ever hoped to be
when he was growing up in Hong Kong. Now Dee wanted to
use his considerable resources and contacts to help mainland
China, which was then being torn apart by various warlords,
the vicious conflict between the Kuomintang/Guomindang
(KMT) or the Chinese Nationalist Party of Chiang Kai-shek
shares in the Bank, but their businesses were no longer as and the Chinese Communist Party led by Mao Tse-tung, and
prominent as they once were. The Great Depression also by the relentless aggression of the Japanese Imperial Army
adversely affected the Cu Unjiengs, who ran into serious into Chinese territory.
problems in the 1930s. First, Dee focused on his home village of Shizhen. He
As the American political scientist Paul Hutchcroft has donated the Chengmei School For Boys and the Yude School
pointed out in his seminal work Booty Capitalism: The Politics For Girls. He not only put up the buildings but also bought a
of Banking in the Philippines, many banks in the Philippines fishpond whose earnings would pay for school operations. He
were created to serve the larger interests of its founders— also built a new bridge and other infrastructure in Shizhen.
to provide the financial muscle to fund the growth of their From 1926 to 1928, when Chiang Kai-shek was building up
conglomerates. Thus, the fate of a bank usually marches in the KMT Nationalist army to reunite the country, Dee C.
lockstep with the fortunes of its controlling interests. When Chuan paid out of his own pocket for the steamship tickets
the controlling shareholders’ conglomerates suffer serious for many young Chinese in Manila who wanted to join Chiang
reverses, their bank usually follows—that is, if it does not in and fight. In 1931, he began to contribute heavily to the Chiang
fact precede them in decline. government as Japan started to encroach upon its northern
But the fact that China Bank could prosper between 1920 territory, including Manchuria. In 1933, Dee accepted an
and 1940, even though some of its founding directors went appointment from Chiang as one of the five commissioners
into eclipse, meant that there was now a genuine separation governing Fujian province from 1933 to 1934. In Fujian, Dee
between the Bank and its founders. It had its own values, organized a police force, built the foundation of a badly-needed
its own identity, and its own destiny. The Bank was an railroad—the Zhanglong railway, and helped improve the
independent and solid institution; it had been built to last. harbor in Xiamen.
When full-scale war between China and Japan broke out
in 1937, Dee and his good friends, Albino and Alfonso SyCip

CHAPTER 2: SETTING THE VALUES: 1924-1940 71

and Yu Khe Thai, organized the Philippine Chinese
Resist-The-Enemy Foundation. They helped raise P10
million from the local Chinese community and sent it
to aid the KMT. These men also led a vigorous effort to
boycott Japanese goods in the Philippines. The boycott
hurt Japanese interests here substantially. Dee
also conceptualized and helped set up the Nanyang
General Relief Association, which was a Southeast
Asian organization of overseas Chinese bent on
combating Japanese aggression. The Japanese have
a long memory. When they conquered the Philippines
in 1941, the Kempeitai would come looking for the men
who organized the boycott.
But Dee C. Chuan would not be around to face their
retribution. Some time in the last few years, he had
contracted tuberculosis, which was then much harder
to cure than it is now. By 1939, his condition worsened.
Dee C. Chuan with his youngest daughter Julia, left, and his eldest grandson Philip, right.
His doctors felt that the best chance for him would
be to seek extended treatment at the Monrovia Sanatorium In May 1939, Dee C. Chuan, suffering from tuberculosis, left
in California—the same one where in 1928 President Manuel Manila, with his sons Robert and Arthur accompanying him for
Quezon had recovered from the disease. what everyone anticipated would be a long convalescence. At
But Dee had a premonition that he might not return from first, he seemed to respond positively to the treatment, but in
his treatment in California. He went to visit his boyhood the following year, 1940, he took a turn for the worse.
friend Miguel Cuaderno, then president of the newly opened On October 27, 1940, Dee C. Chuan died of tuberculosis in
Philippine Bank of Commerce. Dee asked him to take over the Monrovia, California. He was only fifty-two. His second son,
management of his businesses. He said to Cuaderno: “Mike, Robert Dee Se Wee, was with him. Robert Dee brought the
my children are very young and you are like a brother to me. body home. He took the SS President Cleveland, which left San
I want you to manage my business interests. I will give you Francisco on November 8 and arrived in Manila on November
the biggest compensation you can expect.” But as much as 30. His brothers Dee K. Chiong and Dee Hong Lue flew to Hong
he wanted to help, Cuaderno was hemmed in by his respect Kong to meet the SS Cleveland there and escort the body
for the Cojuangco family; he felt he could not leave a newly home to Manila. Some 5,000 people were on hand to meet the
established bank. He had to decline his friend’s offer. casket when it arrived at Pier 7 of the Manila North harbor.

72 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Dee C. Chuan with his
youngest daughter
Julia, left, and his eldest
grandson Philip, right.

Dee C. Chuan with family. Front row, seated (left to right): Edward Dee Se Kiao, Henry Dee Se Gui, Herbert Dee Se Lu. Second row, seated: Gan Tiak (wife of Dee C. Chuan,
holding eldest grandson Philip), Dee C. Chuan with youngest daughter Julia. Third row, standing: Arthur Dee Se Chun, Mary SyCip Dee (wife of George), George Dee Se
Kiat, Robert Dee Se Wee, Juanita. Photo from Nancy Dee Yang.

CHAPTER 2: SETTING THE VALUES: 1924-1940 73

 The three-storey mausoleum at the
North Chinese Cemetery in Manila,
the final resting place of Dee C. Chuan
and his wife, Gan Tiak.

Dee C. Chuan died of tuberculosis on October 27, 1940.

Thousands of people—Chinese and Filipinos alike—paid
their last respects at the funeral of Dee C. Chuan, who
was buried on November 31 at the Chinese Cemetery.

Chiang Kai-shek, Soong Ching-ling—wife of Sun Yat-sen, Philippines but to the Filipino people. The deceased did much
the first president and founding father of the Republic of for the progress of this country and through his philanthropic
China—and her brother TV Soong, sent their condolences work, he contributed a great deal to the social welfare of
to the Dee family. Alfonso SyCip, who at the time was Chinese and Filipinos alike. The whole Chinese community
president of the PCGCC, announced the news to the Filipino mourns his loss.”
newspapers. He issued a statement: “The death of Mr. Dee C. Alfonso SyCip and Yu Khe Thai took the lead in helping the
Chuan is a great loss not only to the Chinese community in the family arrange the funeral. The funeral service was held on
November 30 at the Central Student Church in Ermita. Dee
was buried on November 31 at the Chinese Cemetery. The
honorary pallbearers were a lineup of friends and luminaries:
Rafael Alunan, Albino SyCip, Jorge B. Vargas, Vicente
Madrigal, Samuel Gaches, Ong Chuan Seng, Kwangson Young
(the Chinese consul general), and Yu Khe Thai. About 10,000
people rode or walked in the funeral cortege, which included
some 600 cars and 45 Meralco buses, which had been rented
for the occasion. The Dee family eventually put up for him a
three-story mausoleum modeled after the crypt of Sun Yat-sen.
Long after, Albino SyCip wrote: “Dee C. Chuan [was] a man
to whom the Chinese community is indebted for the goodwill
it enjoys in this country, and the Philippines owes to him
a measure of the prosperity which the local Chinese have
contributed to the economy of the nation.”
Go Puan Seng, editor of the Fookien Times which Dee C.
Chuan founded, wrote: “Dee C. Chuan’s influence will always
be felt. He belongs to that rare breed of men whose lives
never go out, but go on and on.”
With Dee’s death, Albino SyCip became the chairman and
president of China Bank, and its top man for the next three
In their school days, George Dee Se Kiat (right) and decades. Albino would now have to carry his friend’s creation
Robert Dee Se Wee, were well–known soccer players, both
in their Hong Kong school and in La Salle.
forward.

74 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 One of The Most Honest Men
By: Hon. Miguel Cuaderno Sr.
Former Governor, Central Bank of the Philippines
(Published in the China Banking Corporation Golden Anniversary special issue - The
Manila Chronicle Business Report, August 16, 1970)

I “In those days, Dee used to tell me

was inspired to become a banker by the late Dee C. Chuan.
He was, perhaps, one of the most honest men I have ever
met.
what a bank could do to develop the
I had known Dee since the time we were together in school economy of the country.”
at the St. Joseph’s College in Hong Kong, while we were still
very young boys. When, in 1938, I organized the Philippine Bank of
We developed such a close friendship that we used to spend Commerce, Dee came to see me, and after congratulating me,
long hours discussing what we planned to do after we finished he offered and did subscribe to a substantial amount of the
our studies. shares of stock in the Bank of Commerce. He extended valuable
While we were classmates in Hong Kong, Dee used to lend help to me in the early life of the bank.
me money when my allowance did not arrive on time, to keep Dee was very sick in 1940 when his family decided to take
me going. him to a specialist in California for medical treatment. I had
It was Dee who interested me in banking. While my aim was a chance to talk to him then. He wanted me to take charge
to work in a bank, his was to establish a bank, which I thought of all his business affairs. I told him, “No, I can’t. I have just
was too ambitious. organized the Philippine Bank of Commerce. It will not be fair
Anyway, while still studying, I was able to work at the for me to just leave it.”
Hongkong and Shanghai Banking Corporation. That was why Dee wanted me to consider his offer. He could foresee that
when I returned to the Philippines I already had practical he would not be coming back. “Mike, my children are very
banking experience. young and you are like a brother to me. I want you to manage
In those days, Dee used to tell me what a bank could do to my business interests. I will give you the biggest compensation
develop the economy of the country. I do not now remember that you can expect,” he appealed. That was how much he
how and why, but we made a promise to each other that when trusted me.
the time came, each of us would establish a bank. I am quite sure it was Dee’s inspiration that led me to take
After I returned to the Philippines, I lost track of Dee. Then, such interest in the science of money and banking that I finally
after more than a decade when I assumed the position of succeeded in organizing the biggest bank in the country—the
Director of the former Bureau of Supply, among the people who Central Bank, and in being elected in 1956-1957 Chairman
came to greet me was Dee C. Chuan. I did not recognize him of the Board of Governors of the World Bank and of the
until he reminded me of our long association in Hong Kong, and International Monetary Fund.
the promise we made each other about establishing a bank. Dee C. Chuan was one of the best liked and highly respected
Dee told me he had established the China Banking financiers and businessmen of this country.
Corporation. I told him I was a member of the Board of As a monument to his goodness and unquestioned integrity,
Directors of the Philippine National Bank. He said I did not there is the China Banking Corporation which has stood the test
establish the PNB, so I had yet to do what I agreed with him. of time, under the very able management of my dear friends
Albino SyCip, George Dee Se Kiat and their able associates.

CHAPTER 2: SETTING THE VALUES: 1924-1940 75

 CHAPTER 3

Rising from
the Ashes
1940-1960
The Bank is devastated by a world war, but it
emerges from the ashes stronger than ever—
so that by 1960 it is the biggest private local bank.

76 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Albino SyCip, flanked by George Dee
Se Kiat and Dee K. Chiong, would
steer the Bank from the devastating
effects of World War II to become the
leading private bank in the 1960s.

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 77

 A
lbino SyCip had been thinking about the danger of
the Philippines being at war with Japan for several
years before the Imperial Army actually arrived
on China Bank’s doorstep on January 4, 1942. The
SyCips and the Dees had fervently supported China
in its war against Japanese aggression; they organized nationwide
boycotts of Japanese goods and sent millions in aid to Chiang Kai-
shek’s government. As the Japanese Army drove across China in
1937-1938, the Nationalist army quickly collapsed and fled far
inland. Chiang’s government finally found refuge in remote
Chungking. Albino’s good friends in the Shanghai banks, such
as Huang Yizhu, KP Chen, and Tsuyee Pei, now lived under
Japanese rule. China Bank’s branches in Xiamen and
Shanghai had to be shut down, and their staff had to return
to Manila, including branch managers TS Wang and Yap
Tian Sang.
Japanese aggression was becoming uppermost in
Albino’s mind, and further events only worsened his
apprehensions. By September 1939, Europe was at war.
By May 1940, Germany had conquered France, Poland,
Norway, the Netherlands, and a host of other countries.
By July 1941, the Japanese Imperial Army had taken over
Indochina. Chiang warned that the Philippines would be
Hideki Tojo was the prime minister of Japan
next in line. during most of World War II, from 1941 to 1944.
He assumed the post of Chief of the Japanese
Imperial Army General Staff in 1944.

78 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 From the colonial era up to the post-World War II
years, the financial and trading hub of the
Philippines was Binondo. In 1924, China Bank’s
headquarters moved from Calle Rosario to this
landmark neo-classical building at the corner of
Juan Luna St. and Dasmariñas St. —the Philippine
version of Wall Street in the colonial era. This
building still stands proud today and houses the
Bank’s Binondo Business Center.

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 79

 On December 8, 1941, ten hours after Japan’s
attack on Pearl Harbor, the invasion of the
Philippines began. Under the pressure of the
Imperial Army’s superior numbers, the
defending Philippine and US troops under Gen.
Douglas MacArthur withdrew to the Bataan
Peninsula and Corregidor.

Few Filipinos believed him. They had faith in American quickly dissolved, unable to resist
might and technology, and thought that any coming conflict, if an assault of trained and battle-
it came, would be a short and painless war. They believed the hardened troops. The USAFFE
Japanese had wretched planes and even worse pilots, that (United States Armed Forces in
their navy was decrepit, and that their industries could not turn the Far East) divisions were forced
out the artillery and munitions that a modern war required. steadily back to the south. Then a new
Filipinos told each other: “The poor Japs won’t know what threat appeared far to the rear. On
hit them.” Thus, even as the Filipino people went through the December 24, two more Japanese
routine of air raid drills and blackouts, they trusted in Gen. divisions landed in Tayabas and headed for Manila. The capital
Douglas MacArthur’s promise that he was going to hurl any city was now caught between the jaws of a giant pincer.
Japanese invasion force back into the sea. But Albino SyCip did MacArthur conceded that defending the capital was a lost
not believe that defeating the Japanese was going to be that cause. He announced that Manila would be abandoned by the
easy. He knew from all the stories of his friends in China that USAFFE and declared an “open city” to prevent Japanese
the Japanese military was far more deadly and better-led than atrocities; his troops would withdraw to the mountainous
commonly believed. So Albino acted on his apprehensions. Bataan Peninsula. On December 24, President Manuel Quezon,
He began steadily depositing some of the Bank’s funds in the his family, and other Filipino officials were evacuated to
United States. By December 1941, P8.58 million, or 29.03% of Corregidor Island in Manila Bay.
the Bank’s P29.271 million in assets, had been deposited with For the citizens of Manila, it was the gloomiest Christmas
China Bank’s correspondent banks in the United States. that anyone had ever known. Christmas was marked by the
Albino’s worst fears were soon realized. On December 7, sound of explosions: US officers were blowing up oil supplies
1941, a surprise air strike by hundreds of Japanese carrier and war materiel rather than let them fall into enemy hands.
planes devastated the US base in Pearl Harbor. The air raid More than $18 million worth of petroleum owned by Shell and
sank or badly damaged 18 US ships, destroyed 188 planes, Standard Oil went up in huge black pillars of smoke, as did
left 2,403 Americans dead, and nearly crippled the US Pacific government stores of paper money, most of the trains, and
Fleet. A few hours later, the entire US bomber force in the Pier Seven at the Manila Port Area.
Philippines was destroyed on the ground by more air raids. The US government did not want the gold and cash in
Without the bombers or enough US Navy ships to oppose Manila’s banks to fall in Japanese hands, either. So the
a Japanese landing, the Philippines was ripe for the picking. Department of the Treasury ordered several Manila banks
On December 22, 43,000 Japanese soldiers waded ashore to turn over as much of their reserves as possible to the US
in La Union. The two Filipino divisions sent to stop them government. On December 27, 1941, China Bank turned over

80 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
The China Bank board,
headed by Albino SyCip,
braced for the devastation
of World War II.

to the United States High Commisioner for on the other hand, looked on, silent and
safekeeping the sum of P5,985,192.20. The sullen. The Japanese commander, Lt.
China Bank funds, along with the cash and General Masaharu Homma, raised the
gold reserves of other banks like BPI and Japanese flag over MacArthur’s old
First National City Bank, were then spirited quarters at the Manila Hotel, and then
out of the country by US Navy submarines. began to draw up the plan to take Bataan
With P14.568 million, or nearly half of and Corregidor.
its assets now held abroad (either with The Japanese occupation force also
correspondent banks or the US Treasury) mulled various plans for dealing with
the Bank had a reserve that might make the Chinese in the Philippines, who they
it possible to revive its fortunes after the considered more hostile and dangerous
war—assuming, of course, the US won. than the Filipinos. Some officers
After handing over the funds to the US suggested putting all the immigrant
government, there was nothing more for Chinese in concentration camps, just
Albino and his employees to do but wait for like the expatriate Americans and
the coming of the conqueror. British citizens. The Japanese wanted to
retaliate for the internment of its citizens.
OCCUPIED In addition, the Japanese military considered men like the
The New Year brought the Japanese to the gates of Manila. senior Dees and SyCips to be very dangerous for their “anti-
On the afternoon of January 2, Major General Koichi Abe’s Japanese activities” and wanted them punished. They even
48th Division entered the city from the north, while Lt. General had some inside information on the SyCip family’s activities; it
Susumu Morioka’s 16th Division entered from the south. turned out that Alfonso SyCip’s Japanese driver was a captain
The Japanese expats who had recently been released from in the Imperial Army who had spied on the Philippines for
internment camps cheered their soldiers loudly. The Filipinos, years.

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 81

The Japanese military considered men like the Dees
and SyCips to be very dangerous because of their
“anti-Japanese activities” and wanted them punished.

But the occupation force lacked the men and resources to expanded by conquest in China and Southeast Asia, the Bank
run a concentration camp system that large for the Chinese. of Taiwan grew with it. In the process of liquidating China
In addition, interning all the Chinese in the Philippines would Bank, the Bank of Taiwan pocketed all the cash and checks
probably have paralyzed large sectors of the economy, it found on the premises, and it collected on the accounts of
including much of the retail and milling. The Japanese needed the Bank. Debts and import bills that should have been paid
the Philippine economy strong, so that it could make its to China Bank were collected by the Japanese bank instead.
contribution to the so-called Greater East Asia Co-Prosperity Around P13.2 million was taken from the Bank in this fashion,
Sphere. as part of the spoils of war.
So the Japanese settled for a different, more cost-effective China Bank was just one of the victims. The Bank
strategy. They arrested and executed many of the top leaders of Taiwan also liquidated the other banks from “enemy
of the Chinese community who were anti-Japanese. They nations” in Manila, including First National City Bank, Bank
sentenced other top business leaders to long prison terms. of Communications, Standard Chartered, Nederlands
(This was in keeping with the old Asian military principle of Indische Handelsbank, and HSBC. The only banks in Manila
“kill one to terrorize ten thousand.”) In addition, the Chinese- that remained open were four local banks—the PNB, BPI,
dominated banks, China Bank and Bank of Communications, Philippine Bank of Commerce, and PhilTrust, and the two
were to be closed. Japanese banks—Bank of Taiwan and Yokohama Specie
On January 4, 1942, the Japanese Imperial Army shut down Bank. The PNB, BPI, and Philippine Bank of Commerce were
China Bank. The Bank of Taiwan took charge of the liquidation allowed to reopen in February 1942. Their reopening resulted
process. The Japanese government put up the Bank of Taiwan in bank runs that forced the Japanese to issue an edict limiting
in 1899 as their colony’s central bank. As the Japanese empire withdrawals to P500 per person per month. Any withdrawal
in excess of P500 would require a special permit from the
Japanese commander in the Philippines.
With China Bank as an institution neutralized, the Japanese
military then went after the men who ran it. On January 8,
1942, the Japanese Army arrested Albino SyCip and George
Dee Se Kiat of China Bank, as well as Alfonso SyCip, Yu
Khe Thai, Eduardo Co Se Teng, Go Kim Pah, James Limpe,
and others from the Binondo business elite. The Kempeitai
(Military Police of the Imperial Japanese Army) also arrested
two cousins of the late Dee C. Chuan—Dee Hoc Siu and Dee
Hoc Khe, lumber magnates who were also active in the anti-
Japanese goods boycott. These men were held in the old

82 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 (Right) Hideki Tojo visited Manila in May 1943 to
discuss Japan’s policies on the Philippines.

(Opposite page) Manila was declared an open city

to avoid its destruction and was occupied by the
Japanese on January 2, 1942.

Wash felt there was still a glimmer of hope. “I knew

he was in prison,” he said later, “but as to whether
he was alive or not during that time, I didn’t know.”
Wash decided to abandon his PhD studies in order to
do his part in the war. He joined the US Army and was
assigned to a cryptography unit in India. His oldest
brother, David, joined the Nationalist Chinese Air Force
and flew in a bomber unit.
Albino’s brother Alfonso was also declared guilty
by the Japanese and sentenced to death. At his trial,
Alfonso gave an impassioned defense, stating that
he and his fellow accused had merely helped their
fellow Chinese in need, and said that the Japanese
Bilibid Prison and then in Muntinglupa. The Army shaved their themselves would have done the same if the circumstances
heads and forced them to listen to Japanese military radio were reversed.
broadcasts every morning. The two SyCip brothers were spared from execution by
The Japanese soon executed Dee Hoc Siu and Dee Hoc a combination of several factors. By 1943, Japan was on the
Khe, for “anti-Japanese activities.” They also executed the verge of inaugurating a puppet republic in Manila and needed
Chinese consul in Manila, Kwangson Young, and eleven to put on a more conciliatory face on its rule. Having executed
members of his staff, as well as the local businessmen Dy scores of prominent Chinese already, the Japanese military
Lian Tiao, Yu Yi Tung, Sy Kaw Ki, Go Kiu Lu, Tan Diao Ting, Gan didn’t need to kill any more to make its point. In addition,
Bun Cho, Uy Lian Ta, and many others. some good friends had been lobbying discreetly among the
Albino SyCip was literally next on the list to be executed, Japanese high command to spare the SyCips and George Dee.
but he was spared at the last minute. Albino said later: “I Wash SyCip said: “My father’s friend [a certain Mr.
escaped death by just one number. The last prisoner to be Yamamoto] was the head of the Yokohama Specie Bank—
taken out and executed was number 74. I was number 75.” which later on became the Bank of Tokyo and part of the
In time, Wash SyCip, who was then in New York City Mitsubishi group. He was a very good friend of my father. He
studying for a PhD in accounting in Columbia, learned that his helped my father during the time he was imprisoned; it turns
father had been imprisoned. An article in Readers’ Digest even out this man was a colonel in the Imperial Army.”
reported that Albino SyCip had been executed. Wash tried to In addition, T. Shen Wang, Albino’s subordinate in the Bank,
verify the truth of this report, but the author admitted to him helped lobby for his boss’s release. Nancy Dee Yang, eldest
that the report of the elder SyCip’s death was just hearsay. daughter of George Dee, said: “We had a bank officer who

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 83

The Japanese invasion, accompanied
by destruction and loss of life and
property, crippled the Philippines.
Hunger and economic poverty
marked the Japanese rule over the
years as money turned into waste
paper—the invaders enforced the use
of the Japanese currency, derisively
termed as “Mickey Mouse money.”

came from our branch in Shanghai, T.S. Wang, and he had

been educated in Japan. So he could speak the language and
he was able to converse with the Japanese about the release
of my father and the rest.”
In April 1943, the lobbying bore fruit. The Japanese
premier, Hideki Tojo, was about to visit Manila in May, and the
Imperial Army wanted a few symbolic gestures of benevolence
to create a positive atmosphere for the visit. Thus on April
29, 1943, Emperor Hirohito’s birthday, the Japanese military
pardoned Albino and Alfonso SyCip and George Dee, and set
them free. WAITING FOR LIBERATION
By then, Albino, Alfonso, and George had languished in Albino and George were now free, but their bank remained
prison for a year and four months. In Muntinglupa, where shut and their country remained occupied. During 1943 and
the prisoners’ diet was meager, Albino persuaded the prison 1944, they, like most Filipinos, tried their best to adjust to the
superintendent to allow him and his fellow prisoners to plant new dispensation, while waiting for MacArthur to redeem
monggo (mung bean) on the available open space at the his promise of returning. Few believed in the Japanese
prison. Soon the monggo plots were feeding not just SyCip’s propaganda about Filipino-Japanese friendship or the
group of prisoners, but also provided a surplus to feed the ill “Greater East Asia Co-Prosperity Sphere.” At first, many
at the clinic. Albino didn’t know anything about farming, and hoped that the conquerors’ yoke would be light. A puppet
was taught how to plant monggo by Jovito Salonga, then a republic was inaugurated in October 1943, which gave
young law student being held by the Japanese for his guerrilla Filipinos the appearance of self-rule.
activities. Due to the friendship struck in prison, Albino later Soon various incidents of brutality alienated an already
hired Jovito (who became the 1944 bar topnotcher) as his suspicious populace. As a result, while outwardly, Filipinos
lawyer, and recommended him to others when Salonga came kept up the appearance of obedience, inwardly, they seethed.
back from Yale in 1949 with his doctorate in law. A few Japanese commanders knew that Filipino cooperation
Albino had a fondness for finding silver linings. He said was, by and large, just a facade. One officer said: “I am afraid
later: “It may sound strange that I should consider my being that 45% of the people remain pro-American, about 5% are
imprisoned a lucky break. I did not realize this until after pro-Japanese, and the remaining 50% are comedians.”
the liberation. Because of my imprisonment for refusing The Japanese worsened matters by frequently
to cooperate with the Japanese army of occupation, I was commandeering most of the available food and other supplies
able to save some good people from being blacklisted by the for their troops. This resulted in widespread food shortages.
American authorities under suspicion of collaboration.” The gap became acute after November 1943, when a severe

84 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 0
TOTAL ASSETS OF
CHINA BANK, 1944

typhoon hit Luzon, badly damaging crops.

The food crisis soon became permanent.
Many areas returned to the barter system.
Even the peasant staples of monggo and dried fish became
luxuries in many areas. By December 1944, with the Japanese
Army commandeering all available rice stocks, hundreds of
Filipinos were dying of hunger in the streets every day, and a
sack of rice cost P12,000, compared to P30 a sack in mid-1943.
Nick Joaquin wrote: “There was no returning to normal.
Prices began their panic spiral, money turned into waste
paper. Pushcarts replaced buggy and bike as people went
far afield looking for food. Hunger became visible as bloated
bodies died on sidewalks. The second-hand clothes on sale
were rumored to have been despoiled from the newly dead.
Hoarders locked themselves in for fear of looters.”
The Japanese were not the only danger. In early 1945,
China Bank board member and distillery tycoon Dee
Chian Hong was killed by guerrillas who suspected him of On October 20, 1944, Gen. MacArthur returned to the Philippines and the
greatest naval engagement in history ensued.
collaborating with the Japanese. His youngest son, Joaquin
Dee, however, says that his father had done nothing more than sons, James, John, and Paul, and their wives and children;
sell goods to an army that would have seized the merchandise two younger daughters Esperanza and Epifania; Mrs. SyCip’s
outright if he had refused. In occupation-era Manila, however, elderly mother; and Alfonso’s nieces Jane and Mae Lin.
that was enough for a death warrant. Dee Chian Hong’s seat Unfortunately, a Japanese force from Taiwan occupied the
on the board passed to his oldest son Mariano Mabasa, also island on September 21, 1944, and life quickly changed. The
known as Dee Hao Kim. Joaquin Dee remains on the China Japanese commander confiscated all the cattle and forbade
Bank board today. the SyCips from buying food in the local market. Instead,
Even fleeing far from Manila was no guarantee of safety. he ordered that they grow their own, and after food became
In the summer of 1944, Alfonso SyCip left Manila with his scarce, even their garden was taken over by the Japanese.
extended family and moved to tiny Fuga Island, 65 miles off After a personal appeal by Albino SyCip to Gen. Douglas
the northern coast of Luzon in the Babuyan Island Group. MacArthur, Alfonso and his family were rescued from Fuga in
Alfonso hoped that his family could wait out the war on Fuga June 1945 by commandos of the elite US army unit, the Alamo
in safety. His extended family included his wife; their three Scouts.

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 85

“I escaped death by just one number. The last
prisoner, number 74, was taken out and executed.
My number was 75.” —ALBINO SYCIP

The city that Alfonso had left behind was freed sooner than were damaged all over the city, and garbage collection had
he was. On October 20, 1944, 200,000 US troops, backed by a stopped. Even three years later, in June 1948, Manila still had
700-ship armada, stormed ashore on Leyte. In the Battle of not reached its prewar level of power or water service. The
Leyte Gulf, on October 20-25, Admiral William Halsey’s fleet national economy was in a shambles, with an estimated $790
smashed the little that remained of Japanese naval power. million in infrastructure damage. The Philippine peso was
From the beaches of Leyte, MacArthur broadcast a message worth only a seventh of its prewar level.
to the people he had left two and a half years before: “People Wash SyCip later recalled his homecoming to the SyCip
of the Philippines, I have returned.” home in Sta. Mesa after the war ended: “My father was very
Over the next few weeks, the US forces steadily gained thin. There was no fancy welcome. We hardly had anything.
ground in the Philippines. They took control of Leyte by People were living on canned goods from the military.”
November, and in December, they seized Mindoro. On This was the context that his father, Albino, faced in
January 9, 1945, the US Army landed in Lingayen. They March 1945, when he resolved to reopen China Bank. All the
reached Manila in February, triggering a fierce house-to- depositors who had accounts with the Bank before the war
house battle with the Japanese. Taking the city took a month would expect to find their accounts whole and all their money
and leveled most of Manila south of the Pasig. The once intact. Albino SyCip and China Bank were determined to
Noble and Ever Loyal City was reduced to rubble, and more keep faith with them. But the Bank’s headquarters had been
than 100,000 Filipinos died. badly damaged during the fighting for Manila and many of
In the aftermath of the battle, the citizens of Manila its records had been burned. The Bank had been liquidated
struggled to fulfill their needs such as food, water, shelter, and its funds taken. China Bank filed a war damage claim for
and basic services. There P13.22 million with the US government. But of this amount,
was no electrical power the War Damage Corporation eventually allowed only P462,185
in Manila, since the (or about 4% of the claim) to be repaid to the Bank .
Japanese had blown up Wash SyCip said: “No other country suffered the damage
the Blaisdell and Botocan and the losses that the Filipinos suffered. Roosevelt’s promise
power plants that fed [of restitution to Filipinos] had to be kept. For the war damages,
the city. The tranvías of the initial bill that was passed was completely inadequate. If
Meralco, which were for you owned a carabao that was killed, it should be replaced with
decades the backbone of a carabao—but not with the amount that it was worth before
the city’s transportation the war. Prices were up by seven times after the war, so you got
system, were gone. There only 1/7th of the carabao. Later on, additional war damage bills
was no water in the taps had to be passed because the damage was so much more than
either. Bridges and roads they thought would be the case. . . . I remember that for one of

86 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 (Left) From left: Jose Tiong, Dee
K. Chiong, Guillermo Dy Buncio, and
George Dee Se Kiat.

(Below) From left: Siy Ka Bio, LL

Pan, YL Yang, Dee K. Chiong, and
Tan Kim Liong with the newly-
acquired bookkeeping machines.

P13.219
MILLION WAR DAMAGES
SUFFERED BY CHINA BANK

P462,185
AMOUNT OF WAR DAMAGES
ACTUALLY PAID TO
CHINA BANK

the additional bills, my father had to write letters to

his banking friends abroad to get help.”
Because the war damages had been so large
and the restitution offered by the American
government was so low, even the P14.568 million
that had been hidden abroad before January
1942 was not enough to revive the Bank. Unlike
his Western competitors like First National City
Bank or HSBC, Albino could not rely on millions
of dollars in fresh capital from an offshore
headquarters. Neither could China Bank count
on the Philippine government for help. In January
1946, the Philippine Congress passed a law
granting P10 million in rehabilitation assistance to
the local banks BPI, PBC, Philtrust, and People’s
Bank and Trust.
Nonetheless, Albino SyCip and his men were going to Wash SyCip said: “My father was imprisoned during the war
rebuild China Bank. and the Bank was liquidated by the Bank of Taiwan. After the
war, when he was released from prison, he rebuilt the Bank
REBORN and made it more prosperous than the Bank of the Philippine
By April 1945, Albino SyCip reassembled around forty of his Islands [BPI]. It was just hard work. I remember that time,
old employees and went back to work. Once again, Albino was when I came back to Manila, he was working night and day.”
president and general manager, George Dee Se Kiat was vice Albino also reassembled or got in contact with the other
president. The other stalwarts of the prewar bank—such as members of the China Bank board: Huang Yizhu (Oei Ik
Martin Hopun, Yap Tian Sang, TS Wang, LL Pan, Tan Kim Liong, Tjoe), Uy Yetco, Li Seng Giap, Chong Su See, Marcelo Nubla,
and Wilfredo Tecson—were also back on board. Guillermo Dy Buncio, Dee K. Chiong, HL Huang, and Tsuyee

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 87

Unlike his Western competitors, Albino could not rely on
fresh capital from an offshore headquarters. Neither could
China Bank count on the Philippine government for help.
Nonetheless, Albino SyCip and his men were going
to rebuild China Bank.

88 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Pei. Co-founder Huang Yizhu had passed away, so he was
replaced by his son. Oei, HL Huang, and Pei represented the
mainland Chinese shareholders in China Bank.
There were three key elements in the Bank’s resurrection:
the hard work of Albino and his staff, assistance from the
Bank’s friends in China, and the support of its loyal Binondo
clientele.
In the first year or two of operations, it was common
for the Bank staff to work until 8 p.m. Bank auditor LL Pan
painstakingly reconstructed the Bank records, with the
aid of the young clerk, Wilfredo “Willy” Tecson. Both had
been witnesses when the Bank of Taiwan had liquidated the
Bank, and their notes of that process, plus some careful Albino SyCip

calculations, gave Albino a reasonably good idea of the

What the country needs

financial condition of the Bank.
Tecson recalled: “After the liberation of Manila, the banking

I
system of the country was prostrate. Even before the battle n the immediate postwar period, a prominent
smoke had cleared, we worked unceasingly and tirelessly for lumber magnate was able to wangle an order for
the reopening of the Bank. . . . It was the simple faith of Don $1.4 million  worth of lumber from US buyers.
Albino in himself and his colleagues, and the confidence of He approached many banks but couldn’t get a loan
the public that successfully rehabilitated the Bank within a to fund the equipment he needed to fulfill the order.
Finally, he approached Albino SyCip and China Bank.
few short years after reopening. Those [postwar years] were
Albino looked at the order and said: “When do you
trying years, but under his unselfish leadership, the entire
want your money?” The lumber magnate said: “But,
bank staff worked long hours with nary a murmur to put the Dr. SyCip, you have not looked at my collateral!”
Bank quickly back on its feet.” Albino replied: “This order is collateral enough for
Now that Albino had a good idea of his bank’s financial me. Do you realize that this country needs this $1.4 M
condition, he knew how much he needed to recapitalize very badly?” Albino would protect the interests of the
China Bank. During the 1931 bank run, the Bank of China and Bank, but he also would never forget the big picture
of national development.
Shanghai Commercial Bank had been crucial in shoring up
China Bank. After the war, they lent a hand again. Wash said:
“When my father wanted to start the Bank again, none of the

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 89

 (Right) CBC Board of Directors, circa 1949.
Seated from left: George Dee Se Kiat, Uy Chaw Ki,
Albino Z. SyCip, Marcelo Nubla, Mariano Mabasa,
and Alfonso SyCip. Standing from left: M.C. Navia,
Robert Dee Se Wee, Dee K. Chiong, Guillermo Dy
Buncio, and Chua Limco.

(Below) Lee Siao Tong, extreme left, head of

China Bank’s Foreign Department at the time with
Albino SyCip, third from left, George Dee Se Kiat,
second from right, John SyCip, and foreign guests.

Bank during this crucial time, KP Chen and RC Chen were

members of the China Bank board between 1946 and 1963.
The Bank also relied on the support of Tsuyee Pei, who was
president of the Bank of China from the 1930s to the 1940s.
He was a seminal figure in the creation of a modern banking
system in China. (He was also the father of the famed architect
Ieoh Ming [IM] Pei. In 1979, Dee K. Chiong would ask IM Pei,
who drew up the redesigned Louvre and the Bank of China
Building in Hong Kong, to design a new China Bank tower for
Makati.) Tsuyee Pei would soon give up his board seat to other
representatives of the Bank of China (later the International
Commercial Bank of China, ICBC). The Taiwanese bank would
retain a significant block of China Bank shares for the next
thirty years.
US banks helped out [in recapitalizing the Bank]. He got help On July 23, 1945, China Bank was reopened. On that day,
from a friend of his from Shanghai, [KP Chen]. The Shanghai the Bank had P4.225 million in deposits—a far cry from the
Commercial Bank helped him out. At that time, he said: ‘They P18.85 million in deposits it had before the war. Other banks
know that the Japanese put me in jail and they know that the also opened at this time, including BPI and Citibank. But
Bank of Taiwan liquidated the Bank. How can I be expected to China Bank’s old clients flocked back to it nonetheless.
restart the Bank with the same capital requirement?’ But he By December 31, 1945, China Bank had P49.29 million in
got no answer. Did the US banks help him out? No.” resources and P16.127 million in deposits. The Bank even
Chen Guang Fu (also known as KP Chen or KF Chen, 1880- made a remarkable operating profit of P412,355 on a gross
1976) was the founder and president of Shanghai Commercial income of P857,816.
Bank. Chen was born in Jiangsu province in China in 1880, to By December 1946, China Bank had P67.057 million in
a poor family with little education, but his talent caught the resources and P31.648 million in deposits. In only eighteen
attention of the compradores of a foreign firm who decided months, its depositors had put in P27 million more in the Bank
to sponsor his education in America. He graduated from the and made it bigger in resources than it had been after its first
Wharton School at the University of Pennsylvania in 1909 with twenty years of existence. By 1948, China Bank had P66.79
a BSc degree. He founded Shanghai Commercial Bank in 1915. million in resources and P47.70 million in deposits. The Bank’s
As a result of Shanghai Commercial Bank’s assistance to China heady growth in the postwar period, Wash SyCip said, was

90 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
primarily due to its depositors’ strong belief in the strength
and honesty of the Bank. The Bank’s capital might have been
looted, but its reputation—its brand—remained strong. In a
good bank’s direst moments, reputation weighs more than
capital. And its reputation was particularly strong among the
wealthy men and women of Binondo.
Juan “Johnny” G. Coreces, who joined the Bank in 1946 as
a clerk, and later rose to vice president and chief accountant,
said: “We have a loyal set of clients. That is a distinguishing
trait of China Bank, compared to other banks. During the war,
Binondo: a different
the Chinese community hid their money, hoarded it. And then kind of client

T
 
when China Bank opened again, they deposited it with us. he trust and closeness between the Bank
That’s how we were able to recover.” and its customers manifest very clearly in
He added: “Our Chinese clients are different. They have so how clients behave in the Binondo branch.
much money, but it’s not apparent from the outside. They’re Old-time customers visit and act as if the Binondo
discreet, they’re simple people. But they are rich. If you go office was an extension of their homes. Some like
to visit every day and chat with the bank staff. Some
to their offices, sometimes they don’t seem impressive.
of the richest will leave large amounts of money
But when you look at their books or their deposits, you’d be
in bayongs on the teller’s counter and just come
surprised to find that there is so much cash. They dressed back for the paperwork. These clients have favorite
simply, sometimes they would come to the Bank wearing tellers, and they will not want to transact business
slippers. But they would ride there in Cadillacs. And they with another teller. At Christmas time, each teller’s
would bring bayongs (bags) of money. Literally.” cage becomes inundated with gifts from customers
These clients built up strong personal ties with the staffers who have developed long-term relationships with the
tellers. Cashier Tan Kim Liong was an employee at
of the Bank. Cashier Tan Kim Liong, for instance, was so
the Binondo office from 1922 to 1983; he became an
well-liked and trusted by the clients that every Christmas, his
institution in himself, trusted and respected by all the
desk would be inundated by gifts from customers. Every year, Bank’s clients. Even after he retired, for several years
he would receive so many Christmas gifts that eventually he after, he still reported for work several days a week,
started a regular yearly raffle to give away some of them to because long-time customers would look for him. It
his staff. helped reassure the customers that the Bank was
Many of these clients were very prosperous because still the familiar place they had always known. 

during the immediate postwar period, they were bringing in

what the country needed. After three years of destruction,

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 91

 An Immigrant’s Story

T
he Chinese have been coming to and trading with the It is a familiar beginning of a Chinese immigrant’s life story, one
Philippines long before the Spanish arrived to colonize the of many, as thousands of men and women continued to leave their
country in 1521. In the 19th century, population explosion, country even after political stability had been restored in China.
famine, and wars drove Chinese nationals from Fujian, a province Siak Long joined the wave of migrants that left China after the
only four days away by boat, to migrate en masse to the Philippines. takeover of the government by the Chinese communists. Soon after his
Even during the American colonial period when the Chinese Exclusion arrival in Manila, he found a job as a helper in a store-cum-coffee shop
Act was enforced, the Chinese were able to settle in the Philippines on Elcano St. in Binondo. His options were limited because he could
with the help of other Chinese Filipinos, usually through “adopting” neither read nor write. But Siak Long had smarts, ambition, and an
relatives from mainland or by assuming entirely new identities with iron will. He opened an account at China Bank Sto. Cristo Branch and
new names. During the Japanese Occupation in the Philippines, saved as much money as he could.
thousands of Chinese soldiers and guerrillas fought side by side After some years in his job, Siak Long decided that his two sons
with the Filipinos. This unity against a common should come to the Philippines. By that time,
enemy—the Japanese, led to the formation of his family had moved to Hong Kong because life
a Chinese-Filipino identity that regarded the was a little better there than in Jinjiang. His sons
Philippines as their adoptive home. With the Rogelio and Ernesto Chuakaw, five and four
establishment of China–Philippines relations years old, respectively, traveled to the country
in 1975, many more Chinese nationals have with their grandmother, while their mother and
migrated to the Philippines. sister remained in Hong Kong. “The three of us
Majority of the first and second generation first lived with my uncle in Manila because my
Chinese immigrants in the Philippines were father did not have a place of his own,” Ernesto
very poor and uneducated, but they proved to said.
be resourceful, hard working, and resilient. After almost ten years of working as a store
Some worked as laborers, porters, and artisans, helper, Siak Long saved enough money to start
while most of them set up small businesses, a business, with some help from a brother. In
becoming traders, wholesalers, retailers, and 1959, he put up a small trading store on Sto.
manufacturers. With the establishment of China Cristo St., Binondo to sell glassware. He called
Bank in 1920, Chinese immigrants found an ally it Chuan Hong Glassware.
Siak Long or Rosendo Chuakaw was one
in achieving their dreams, many of whom started of many ethnic Chinese who overcame great With a business to his name, Siak Long’s life
hardships to build a good life in the Philippines
with nothing but the strength of their resolve improved. He rented a house for his family, and
as a naturalized Filipino citizen.
and character. Only after years of hard work after a few years, his wife and daughter arrived
and sacrifice to establish themselves do they invite the rest of their from Hong Kong. “For the first time, our family was complete, all living
family and extended family to start a new and prosperous life in the under one roof,” Ernesto said.
Philippines. Siak Long was one of them. Typical of the Chinese, Siak Long was very industrious and frugal.
Siak Long (Rosendo Chuakaw) was in his twenties when he He worked long and hard, lived simply, and trained his children to do
traveled to the Philippines in 1949 to escape extreme poverty in Jinjiang, the same. “All of us had to work hard. After school, I had to go to the
Fujian. He left his young family in their village, hoping that someday he store to help, every day, from Monday to Sunday. My brother and I did
would have the means to bring them all to the Philippines. He did not all kinds of manual work, as my father did. I did not have time to play
have a yuan on him when he boarded the boat, but he hoped that his with other kids. I never went out with friends in high school or college. I
two brothers in Manila would help him find work upon his arrival. was always either in school or at the store,” said Ernesto.

92 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Siak Long believed that it is in manufacturing that one can build Ernesto established Mitsui Industrial Corp. in 1984, and over time,
a fortune. After Ernesto completed his engineering degree, he asked developed 10 lines of spoons and forks, including a high-end line for
him to manage Chuan Hong Glassware and he put up Universal the German and US markets. Another company, Mitsuboshi Cutlery
Stainless Ware in 1979 to manufacture pots, pans, and all kinds of Corp. was put up for the high-end brand.
kitchenware. Universal Stainless, meanwhile, continued making cookware, and
A few years into manufacturing, he asked his eldest son Rogelio to still does, after 41 years. Chuan Hong, the first company that Siak Long
help manage the manufacturing plant, leaving Ernesto fully in charge put up, has diversified into plasticware, after competition from China-
of Chuan Hong. Under Ernesto, the made products forced local porcelain
glassware store grew and became an and glassware companies to shutter.
importer. Ernesto also strengthened the Ernesto is a natural entrepreneur,
family’s banking relationship with China quick to see a business opportunity
Bank, going beyond deposits to loans and exploit it. In his twenties, while
and investments. Chuan Hong was the managing the family’s glassware
company that provided work for Siak business, he ventured into property
Long’s relatives and provincemates from development with his brother and put
China, whom he encouraged to come to up Chuakaw and Sons, a construction
the Philippines. company. In 2006, Ernesto put up his
In his early years as manager of own firm and, with the help of China
Chuan Hong, Ernesto saw that of all Bank, built a 20-storey building on a
their merchandise, spoons and forks 2,000 square-meter lot in Binondo.
were always the top seller. “Our first By that time, his siblings had their
order from our Japanese supplier own businesses as well.
was 10,000 gross or more than a It has been an extraordinary
million pieces of spoons and forks. journey for Siak Long and his family,
So I proposed to manufacture spoons which began when Siak Long left
and forks, but my father would not his impoverished village in Jinjiang
hear of it because there were existing to carve out a better life in the
manufacturers of the products,” Ernesto Philippines. The years of hardship,
said sacrifice, scrimping, and punishing
“Nevertheless, I asked our work are long gone.
Japanese supplier to find me an Siak Long with his wife, Siu Keng Sy, and sons, Ernesto (left) Siak Long had realized his
and Rogelio (right). Years later, the family welcomed two more
automated machine for cutlery members: Vicenta and Alejandro.
dream. His audacity brought him
production. He showed me one that far. He built a fortune by dint of hard
cost P10 million but my father thought I should go for a second-hand work, tenacity, and business savvy. He made sure to share what he
machine, which sold for as low as P2.5 million. So, I made a study and had, not only with his family and relatives, but also with the people of
showed him that with the new machine, I could realize a good ROI in Jinjiang, by generously donating for road-building and other projects
two years. He signed off on my proposal eventually,” said Ernesto. Siak to improve his village. Most important of all, he built his dream house
Long, himself, upgraded the machines in his own factory after seeing in Jinjiang—a representation of what he had achieved, what he had
the efficiency of the new automated machines. sacrificed and worked hard for, what he left his village for.

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 93

 As the Bank rebuilt itself after the
deprivation, and scarcity, the Filipino people in 1945-1950 war, it also helped businessmen get
back on their feet.
needed to rebuild their homes and lives, and restore Manila
to its prewar condition. As a result, imports rose sharply, (above) Albino SyCip, George Dee
Se Kiat and Dee K. Chiong, with
and GNP rose a startling 38% in 1947, as industries began to guests during China Bank’s 30th
anniversary celebration in 1950.
feed several years’ worth of pent-up demand. Construction
materials, food, clothes, soft drinks, shoes—nearly anything (left) Central Bank Governor Miguel
Cuaderno speaking at the event.
that arrived at Manila’s piers—would quickly be snapped up
by the market.
For instance, the future steel and real estate tycoon Lim
Ka Thong was then a twenty-year-old China Bank client. With
a small inheritance from his father, who had been engaged
in a Binondo retail business and then retired back to Xiamen, kind of support I got from China Bank, and I am very grateful
Lim went into importing. He said: “If you got a shipment in, for their help.”
you could sell your entire stock very quickly. All you had to do Lim Ka Thong would later be head of the Linton Group,
was bring it in. Demand was so big—for food, for lumber, or which specializes in steel trading and fabrication, and
construction materials. So that was how I started in business. also Nobleland Ventures, which owns and develops prime
And China Bank was very helpful to me whenever I needed to properties all over Metro Manila and even in the provinces. He
open LCs. Dr. Albino SyCip, in particular, was very helpful. He remains thankful to China Bank for its crucial assistance at
trusted me a lot, even though I was still very young then.” the start of his business.
He added: “At first the Bank required me to put up a
deposit for my LCs, but when they saw that I paid them very A RISING TIDE
regularly and I was a very good customer, they soon waived In the postwar period, China Bank had the good fortune to
the deposit requirement for me. And, of course, if you don’t catch a rising tide. After the war, its traditional clientele, the
have that deposit requirement, then that really helps your Chinese in the Philippines, had begun to move outward from
business in terms of managing your cash. So that was the their traditional area of strength in trading and retail and into

94 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
more basic and strategic sectors, where the margins were
better, and they had more control over their own destinies.
The Philippine legislature was on the verge of nationalizing
the retail trade, anyway. So the more far-sighted among
the Binondo Chinese decided to go into new areas like
manufacturing, mining, coconut, and sugar milling.
The Binondo Chinese engaged heavily in what was called
import substitution industrialization, and they collectively
became a major engine for postwar Philippine growth. Over
the next two decades, the Bank focused on financing their
ventures into the manufacturing of textiles, food, paint, paper,
electrical parts and fixtures, cement, plywood, and steel. In
the 1940s and 1950s, several taipans, then quite young, laid
The first batch of lady employees of China Bank.
the foundations for major fortunes with the assistance of
China Bank: men like Henry Sy, John Gokongwei, and many The Bank’s clients from Binondo, who were importers and
more. George SK Ty’s parents, Norberto and Victoria Ty, were manufacturers, preferred to rely on China Bank for LCs for
flour milling tycoons, with Wellington Flour Mills, who relied three important reasons. First, the Bank’s staff in the foreign
heavily on China Bank; their success gave George Ty the department were mostly fellow Chinese, which made for a
business base to found Metrobank in 1962. Jose Cojuangco, comfortable cultural fit. Certainly it was more comfortable
a Bank client since 1927, would acquire Hacienda Luisita and for them than going to an American institution like Citibank
the Central Azucarera de Tarlac in 1958; his children and or even to BPI, which was then run by Spanish mestizos like
grandchildren remain loyal customers of the Bank. Alberto Villa-Abrille.

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 95

 (Left) George Dee Se Kiat, extreme left and
Albino SyCip, extreme right, entertaining
guests.

(Below) George Dee Se Kiat with President

Manuel Roxas.

banks, Albino SyCip built up good relationships, which made it

Second, China Bank’s staffers, because of the long- easy for China Bank to open LCs for its clients.
standing relationships of trust that had been built up between In the 1950s and 1960s, Albino sent several bright young
the Bank and certain reliable clients, were willing to waive men abroad to be trained in these correspondent banks in
certain documentary requirements, fast-track certain New York and California—among them, Wilfredo Tecson,
procedures, or otherwise give concessions that made life Lawrence YL See, Catalino Yuengtian, Dominador Bascara,
much easier for an importer. The waiving of the deposit and Antonio Tecson. Albino also built strong ties with the
requirement for Mr. Lim Ka Thong, mentioned earlier, was a Bank of China, Shanghai Commercial Bank, Bank of East Asia
typical example of this. For such a client, there would be no in Hong Kong, the Oversea-Chinese Banking Corporation
reason to look for another bank when it came to LCs. (OCBC) of Singapore, and other banks in Asia. These banks
Lawrence See, who joined the Bank’s international also helped China Bank by training its young staffers in the
department in 1953, said: “The foreign banks could be—shall intricacies of international banking. Thus, China Bank was
we say—a bit ‘bookish’ when it came to LC requirements. I’m very competitive in this aspect of financial services, even
not saying that they didn’t know how to be flexible, or that we compared to Citibank Manila.
just said yes to everything clients asked for when it came to Lawrence See said: “In the foreign department, we had, as
LCs. Of course they would try to accommodate clients, and of our co-heads, Mr. Lee Siau Tong and Mr. TS Wang, and both
course we too had to use our better judgment when it came of them were very good in foreign exchange. They had been
to deciding whether or not to give a client the accommodation trained in banking in Shanghai in the 1920s and 1930s, where
he wanted or not. We banks all follow the same procedures there were so many currencies being used—the dollar, the
when it came to LCs. But overall, I would have to say that
the strong relationships between China Bank and its clients,
these relationships of trust, made the LC transactions much
easier. Now, I, as a bank officer, would not accept a letter of
guarantee from just anybody; if he did not deliver, then I would
be in trouble. So I would have to know him and his history with
the Bank. That kind of trust is important.”
Third, in terms of competence and capacity in foreign
exchange transactions, China Bank was, at least, the equal of
its foreign competition in Manila. It had strong relationships
with various correspondent banks abroad, including the Chase
Manhattan Bank, Bank of California, and Irving Trust (later the
Bank of New York). By traveling to the US regularly to these

96 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 CBC Board of Directors, circa
1952: In this photo are Perfecto
Jose (secretary), Marcelo Nubla,
Mariano Mabasa, George Dee Se
Kiat, Albino SyCip, Chua Limco,
Uy Chaw Kui; Dee K. Chiong,
Guillermo Dy Buncio, and some
directors representing foreign
interests.

yen, the yuan, and so on. So they were very sophisticated in Tecson was referring to this: Shortly before the outbreak
these things—particularly relative to Manila, where things of WWII, China Bank received for collection from its
like arbitrage were still unknown. But TS Wang had engaged correspondent banks and firms in the US several import
in arbitrage in Shanghai, so he was really ahead of the curve. bills covering shipments of merchandise from the US to the
They were really skilled, and they taught these skills to me Philippines. When the war broke out, the Bank had not yet
and my colleagues. So I can say that our foreign department received payment of the import bills from the importers.
was equal to even the foreign banks in Manila. I think some of When the Bank was liquidated, the Bank of Taiwan collected
our correspondent arrangements were better than some of the import bills from the Philippine importers and the
theirs. And for many years, the foreign department was the proceeds were turned over to the Japanese government.
biggest earner of China Bank.” This was part of the P13.2 million that had been looted from
The Bank’s foreign operations also benefited from an China Bank. After liberation, many of the American exporters
ethical decision that Albino made after the war. Wilfredo demanded payment of the import bills from China Bank.
Tecson wrote: “Not only did Don Albino keep faith with his Albino said that the Bank was not liable to pay these
depositors, he also paid the Bank’s foreign creditors even on bills since, through no fault of its own, it had never held the
items that he could have legally avoided paying. To Don Albino, payments in the first place. He told the US exporters to look to
it is not enough that one does what is legally right, one must their own government for payment. The exporters, however,
also do what is morally right.” insisted that China Bank pay the bills and then on its own,

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 97

 (Left) Members of the 1959
board of directors.

(Below) From left: Mariano

Mabasa, Guillermo Dy
Buncio, and George Dee Se
Kiat.

attempt to recover the funds from the US government. Albino, that its standing among its fellow banks was unrivaled. After
though he was clearly in the right, nonetheless agreed to pay all, for a correspondent bank, what could be a safer bet than a
the bills, amounting to $591,414, or nearly P1.2 million—a banker who paid off an obligation he wasn’t legally required to
significant amount for a bank that had only P16 million in pay? Soon the International Monetary Fund began to consult
deposits at the end of 1945. The Bank subsequently filed a Albino on policy, and he became personally close to American
claim with the US War Damage Commission for payment of bankers like David Rockefeller of Chase Manhattan.
these bills, but the WDC refused. Even as the Bank started to grow and make a healthy profit
Albino SyCip felt that a great injustice had been done to the in the postwar period, Albino SyCip believed that it was not
Bank. To that end, in 1952, China Bank joined with PhilTrust enough that the Bank made money. He believed that China
and BPI (which had been similarly aggrieved) in retaining the Bank had to be a catalyst for growth, not just for itself or
services of Joseph Friedman, a prominent Washington lawyer. its clients, but for the country as a whole. Thus, he set the
Friedman was commissioned to seek new legislation to remedy Bank’s lending priorities, which focused on reconstruction,
the situation. Since BPI and People’s Trust had many American rehabilitation, and long-term development. Other banks did
depositors who had been disadvantaged by the WDC’s actions, not discriminate between financing a shipment of factory
their lobbying had weight in Washington. By 1954, Friedman equipment and financing a shipment of luxury items. But
managed to win passage of a law, PL 744, that corrected the China Bank did, because Albino did not want the Bank to
injustice. Dwight Eisenhower signed it into law on August 31, support the importation of non-essential items.
1954. Following the provisions of PL 744, China Bank filed a
claim in 1955 for $591,414 with the Foreign Claims Settlement
Commission to recover its losses from the payment of the
import bills. Eventually, the US government compensated the
Bank for this portion of its war-related losses.
It was actions like these that made Albino’s unimpeachable
reputation within national and international banking
circles. He agreed to pay out a substantial sum to protect
the Bank’s reputation as a reliable payer of import bills,
but then he persevered for years and finally got the initial
injustice corrected. In the meantime, the Bank was short of
a considerable sum for over a decade, but the trade-off was

98 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
“Amor con amor se paga.”

I
n the 1950s, the Bank was a big help not just to traders and entrepreneurs—
but to anyone who Albino SyCip found trustworthy. One such man was
Jose P. Bengzon, former secretary of justice and associate justice of the
Supreme Court. When he was still a junior government lawyer, Bengzon had
problems making the big banks accept that a man living on a government salary was
bankable. His son Dr. Alfredo R. A. Bengzon, former president and CEO of The Medical
City (TMC), said: “My father was looking for a loan to build us a house in San Juan.
Big banks like BPI refused to lend him anything. He felt they treated him like he was
about to steal their money. My father was very particular about his integrity, and he Jose P. Bengzon served
was offended. Finally he approached China Bank. Albino SyCip gave him a clean loan. under Diosdado Macapagal’s
administration.
My father was very happy. He felt that the bank had treated him with respect, and that
to him was the important thing.”
When Justice Bengzon retired from the Supreme Court in 1968, he took his lumpsum
funds and put it all in China Bank. When his sons said he could earn better returns in the money
market or stocks, he refused. He said: “Amor con amor se paga.” Or: Love is repaid with love.
“When I came home in 1967 from medical studies abroad, China Bank treated me with the
same respect, because of the relationship between my father and the Bank. They lent to me
readily,” said Dr. Bengzon, noting that The Medical City also found it very easy to deal with China
Bank. “We are dealing with people who are levels removed from the SyCips and Dees—but
they have the same level of respect for the client. That says a lot about the organization that the
same values are still there,” he added.
Dr. Bengzon’s nephew, TMC
Chairman Jose Xavier “Eckie”
B. Gonzales, said: “China Bank
understands my entrepreneurial
saga and journey like no other. With Dr. Alfredo Bengzon, former president
& CEO of the Medical City, served as
China Bank, I have a relationship health secretary, peace commissioner,
and vice chairman of the Philippine
anchored on wise financial counsel Negotiating Panel for the U.S. Military
with accountability, nuanced in the Facilities during the presidency of
Corazon C. Aquino.
understanding of shared risks and
rewards, and blessed with trust and
integrity in execution.”

Eckie B. Gonzalez, chairman of

The Medical City and chairman and
CEO of PSI Healthcare Development
Services, Inc.

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 99

100 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 The Dee family matriarch, Gan Tiak,
center, with her children.

The family of Dee C. Chuan. Included

in the photo are Dee C. Chuan’s wife,
Gan Tiak; their children Herbert,
Edward, Robert, George, Arthur,
Henry, Julia and Grace, and their
grandchildren, including Peter Dee,
in front of Gan Tiak, and Nancy Dee
Yang, seated extreme right, middle
row.

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 101

“After the war,  my father rebuilt the Bank and made it
more prosperous than BPI. It was just hard work.
I remember that time, when I came back to Manila, he
was working night and day.” —WASHINGTON SYCIP

Between 1945 and 1950, China Bank extended P182.84 As he once said: “What is good for the whole is good for every
million worth of credit to various rehabilitation and part, and what is temporarily good for one at the expense of
reconstruction efforts, as well as for new dollar-earning another will sooner or later operate to destroy the whole.”
industries. In 1947, the Philippine American Finance
Commission reported that many observers believed that the CHINA BANK ENTERS CEBU
“foreign banks were not using their resources, derived in China Bank seemed to live a charmed life, because
large part from local deposits, to promote the growth of the sometimes even disaster worked in its favor. When the
national economy.” China Bank, though it still had significant Communists took over China in 1949, its newly reopened
foreign ownership, bucked this trend and lent heavily to branches in Shanghai and Xiamen had to be closed again,
rebuild and expand the local economy. this time for good. Its branch staff, including Yap Tian Siang,
In only five years, China Bank had pulled off a stunning TS Wang, and Dong Pao “DP” Loh, had to leave for Manila,
comeback. The Bank in 1950 had P85.133 million in resources escaping capture by the People’s Liberation Army only by a
and P60.434 million in deposits. It earned a profit of P2.3 few weeks.
million on gross income of P4.87 million, and it was once again If these three men had been captured by the PLA, the
one of the biggest and most profitable banks in Manila. subsequent history of China Bank would have been very
But Albino himself was prouder of the fact that the Bank different. TS Wang was the brains behind the Bank’s foreign
had done so much to help rebuild the country. He was not operations, and mentor to future bank leaders like Willy
interested in creating wealth for wealth’s sake, but in what Tecson and Lawrence See. Yap Tian Sang, the son of the textile
China Bank could do for the prosperity of the whole nation. tycoon Francisco Yaptico, was an experienced loans executive
who had an eye for spotting the
talented entrepreneurs the Bank
wanted to support. He was the
man who gave Henry Sy his first
big loan back in 1949, when the
young shoe retailer had no land

(Leftmost) Dee K. Chiong and Regina Dee

welcome Gen. Chiang Kai-shek and his
wife, Soong Mei-ling.

(Left) George Dee Se Kiat and Regina Dee.

102 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 #1
RANK OF CHINA BANK AMONG
LOCAL PRIVATE COMMERCIAL BANKS
IN TERMS OF ASSETS,1955

to offer as collateral, only his talent and energy. But

Yap saw something he liked in the dynamic twenty-
five year-old, and he gave him a big loan. That loan
provided a key boost to Henry Sy’s fledgling business,
and set off a meteoric rise that came full circle in
2005, when he acquired control of China Bank. Yap From left: Guillermo Dy Buncio, George Dee Se Kiat, Marcelo Nubla,
Mariano Mabasa, and Dee K. Chiong.
was called the “Iron Man” by other China Bankers,
because he would never bend on matters of principle.
Of the three top managers who had to flee China for the
Philippines, DP Loh may have been the most pivotal for
the Bank. DP, as everyone called him, was a Shanghainese
banker whose integrity and charm made him the anchor of
China Bank’s Visayas operations for decades. In 1948, the
Bank opened its Cebu branch. In 1955, DP became manager,
succeeding Simeon Sy. He stayed in place on top of the China
Bank Cebu organization until the mid 1980s; by then he had
long since become an institution in Cebu business. During its
first thirty years, China Bank in Cebu had nearly all the big
accounts and clients because of DP’s many good friendships.
DP became a close personal friend to shipping tycoon
Known as “the banker of bankers” of Cebu, DP Loh, center.
William Chiongbian and other local magnates. He formed his
own golf group with his rich buddies, the Sunrisers Club. They It was during the decade of the 1950s and 1960s that
would play together nearly every morning at the Cebu Country Cebu took the title “Queen City of the South” from the
Club. The club included Joseph Gotianuy (of the Gotiaco erstwhile sugar capital, Iloilo City. Cebu became the center
group), Santiago Go (of the hardware firm Cebu Evergreen), of the national shipping industry, and enterprising Chinese
Cipriano Lu (of the coconut milling conglomerate Ludo from Cebu, like Chiongbian and John Gokongwei, invested
Luym) and Go Ching Hay. Nearly every morning, after golf, heavily in factories and heavy equipment. Like Singapore,
Chiongbian, Gotianuy, and Santiago Go would go to DP’s office Cebu didn’t have much by way of natural resources, but its
and sit around telling stories. In addition, DP’s wife was a entrepreneurial class, which was mostly Chinese, more than
close friend of Lily G. Ngochua, the sister of John Gokongwei. made up for it with hard work, vision, carefully monitored
So he was very well-connected in Cebu, in a way that his spending and investment, and resourcefulness. And as Cebu
competition could only envy. grew, China Bank played a key role by providing the financing

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 103

 After World War II, China Bank
developed a niche in a country that
needed rebuilding. It opened its
first local branch in Cebu along
Magallanes St. in 1948.

for many of these tycoons. Ludo Luym, for instance, expanded that big at the time, so I was surprised that he agreed to
their coconut mills, William Chiongbian bought more ships, loan me the money. It was hard for anyone to get a loan at
and China Bank lent them a hand. that time. That loan was a big help to my business. As I was
As China Bank expanded its branch network in the 1970s leaving his office, DP said to me: ‘I want to tell you why I am
and early 1980s, DP became the Bank’s area supervisor for giving you this loan. You do not have a lot of collateral, but that
Visayas and Mindanao. Even after his retirement, DP was kept is all right. There is this man’—and here he named this rich
on as a consultant and still went to work, because his clients Cebuano—‘who has so much land to offer as collateral, but I
still looked for him. He finally retired due to ill health in the will not lend to him. I do not like his character. But I like your
1990s and passed away in 2000. character; I think I can trust you. So I am giving you this loan.’
Cesar Cinco, owner and head of Central Lumber, a leading So that was the lesson I got from Mr. DP. Banking is not about
Cebu hardware firm, said: “Once I really needed a loan, and it collateral. It is about trust. It is about character.”
was during the 1980s, during a time of nationwide economic DP became a true China Bank institution, as respected as
crisis. I went to China Bank. I went to see Mr. DP Loh to apply his Manila counterparts like Tan Kim Liong. Samuel “Sammy”
for the loan. I didn’t really know him and my business wasn’t Chiong eventually succeeded DP as head of the Bank’s Cebu
operations. Sammy said: “DP was really a character. You could
not question his integrity. You could trust him down to the last
centavo; he was very, very ethical. He wouldn’t take advantage
CHINA BANK ASSETS of anything. If you are looking for something colorful in the
1945-1960 life of DP, you won’t find it. It’s very boring, because he was
In Million Pesos
such a straight guy. If you went with DP to lunch in downtown
200
P174.41
Cebu, you would go hungry first, because everybody would
greet him. And he would stop to chat. DP was in Cebu from
150 1949 up to the 1990s—so almost fifty years. So in a given
family, he would know the grandfather, the father, and the
100 grandchildren—he knew almost everybody there in Cebu.”
Nancy Dee Yang said: “DP was the man the Bank relied on
50 to pass its values to the younger employees in Cebu. He set
the tone for our staff’s ethics. When I went around and talked
to our Cebu employees, you could really see that he had a
0
45 47 50 53 55 57 60
great influence on them. . . . I remember, whenever we would

104 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 DP Loh

A feeling of family
Jose Liao Osmeña

D
P Loh created a very close-knit feeling at
China Bank Cebu, between the Bank and its
employees and between the Bank and its
clients. His secretary Nanette Jakosalem said: “Mr.
Loh really was like a father to us.” DP looked out for
his people’s welfare. He liked to give the employees
tips on how to spend their money wisely and how
to eat healthily by avoiding too much meat and
eating more vegetables and fish. China Bank SVP
and Deputy Group for Retail Banking Jose “Pines”
Osmeña is himself the son of a China Bank veteran,
Jose Liao Osmeña, and he recalled: “My Dad would
tell me that  every time they got a bonus, Mr. Lo would give them a seminar on how they should save their money. He would
give a briefing.”
The Bank’s clients in Cebu treated DP Loh like family, and their children and grandchildren were raised to do the same.
James Go, grandson of DP’s good friend Santiago Go, is today an important China Bank client. But in the 1960s, he was a little
boy running around the China Bank Cebu office, accompanying his grandfather. James said: “For as long as I remember, ever
since I was small, I always called him Lolo DP. I used to visit his office all the time. I remember running around in China Bank
on Magallanes St. before with my brothers on the second floor where DP Lo’s office was. He always gave me treats. He was
like family everytime I went to China Bank. My grandfather and he were best friends. DP was really a very nice man.”

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 105

“Not only did Don Albino keep faith with his depositors,
he also paid the Bank’s foreign creditors even on items
that he could have legally avoided paying. To Don Albino,
it is not enough that one does what is legally right, one
must also do what is morally right.” —WILFREDO TECSON

visit Cebu, he would always meet me driving his little old people were out there falling in line, queuing trying to get
Volkswagen Beetle. He did not use the Bank’s car or driver their money. And we had all these sacks and sacks of money
although he was entitled to both. He was always frugal with that were worthless.’ So he said ‘When we were asked to
the Bank’s money. He would use one teabag to make tea for come to the Philippines’—meaning he and his group of bank
three friends, and then he would keep the bag to use the next staffers—‘we vowed we would not see this again. We should
day. He was that kind of man.” never allow this to happen.’ So, when I look back on that
Ricardo “Ric” R. Chua, who joined the Bank in 1975 and dinner I had with DP Loh, somehow it captures what China
rose to become President and CEO, recalled: “As a young Bank is—very conservative. And that is not borne from a lack
man who had recently joined the Bank, I went to Cebu and of aggressiveness, but borne out of that experience. With
met DP Loh. We had dinner and DP was telling me that in these experiences of these guys back in China, they were
China, he once witnessed a time, early in his career, when really resolved they would not fail their customers. DP said:
the government closed all the banks. He said: ‘Ric, it was a ‘I saw the people crying. It was their lifetime of work, all gone.
terrible experience. Because when they closed the banks, We should never allow this to happen.’ So I said to myself:
‘This is THE bank to work for.’
I mean, if you are choosing
where to put your money—well,
these guys who got burned,
these guys who went through
this experience—they will
take care of you. So now I
understood where the Bank
was coming from. That really
had a big effect on my thinking
as a young China Banker.”
Sammy said: “You know,
when DP retired and I was
asked to take his place, he still
wanted to work. China Bank
was very good to him. He was
retired, but the Bank was still
paying him a salary. But he felt
so uncomfortable receiving the

106 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 CPA exams, became vice president and chief accountant, and
spearheaded the computerization of the Bank in the 1960s.
Ricardo Liong became assistant auditor, and in the 1970s, he
pushed successfully for the Bank’s drive into the then new
financial playing field, the money market. See became the
Bank’s international department head after the retirement
of his mentors, Lee Siau Tong and TS Wang. Soon, even the
Central Bank liked to consult him on the intricacies of foreign
exchange operations. See was the son of the late board
member Chong Su See and the grandnephew of China Bank
Albino and Alfonso SyCip co-founder Benito Siy Cong Bieng, so it can be said that the
Bank was in his blood.
salary from China Bank while doing nothing. And so he had All three, like other China Bankers before and after them,
to find something to do. But he could not do what I was doing found Albino both inspiring and a hard example to live up to.
because the responsibility had already been transferred to Johnny Coreces said: “Don Albino was the epitome of
me. And nahihiya naman siguro siya. What he did was, he went honesty, of integrity. Once he asked me to reconcile his check
around the branch and looked at who was very busy and he book. So I had to work out the balance, and I found he had
tried to help out. That’s DP. He wanted to help the signature a balance of over P1 million. Now, P1 million during those
verifiers with the checks. But he was over eighty by then and years, the 1950s—that’s a big amount. I suggested to him:
his eyesight wasn’t too good. But that’s an example to tell ‘Sir, let me transfer this balance to a savings account so that
you what the guy was like. I mean, he wouldn’t want to get you will earn interest.’ He said: ‘No. And let the Bank pay
something if he felt he didn’t deserve it.” me interest as an expense?’ So you could just imagine my
reaction. Others would just say: ‘So what if it’s the Bank’s
“THE DEAN OF PHILIPPINE BANKING” expense? That’s my money.’ But he didn’t want it. I said: ‘Sir,
As Albino was putting the Bank back on its feet and you are not taking advantage of the Bank, because this is your
bringing it to new heights between 1945 and 1960, he was money.’ But he refused. I ended the conversation there; it was
also leading and molding men. He set a warm yet strict useless to pursue it. That’s how principled that old man was.”
example for a new generation of employees—men like Johnny added: “The next time, he asked me to do his
Johnny Coreces, Ricardo Liong, and Lawrence See. All income tax return. I looked over his expenses, his checkbook
three joined the Bank between 1945 and 1955, and all and savings account, and said: ‘Dr. SyCip, let’s deduct these
three rose to leadership positions and careers of solid entertainment expenses here because you are entitled to
accomplishment in the Bank. Johnny Coreces topped the 1949 representation.’ He said, ‘No.’ I said: ‘I can give them your

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 107

 (Right) Albino SyCip, Stephen Zuellig, and
Lee Siau Tong.

(Below) CBC anniversary at the Western

Garden, August 16, 1965. From left: T.S.
Wang, Yap Tian Sang, Yao Mun Tek, Tan Kim
Liong, M.C. Navia, and Siy Ka Bio.

receipts to show that you were treating clients.’ He refused.

So his income tax was so big. That really impressed me. He
honestly declared his income, to the extent that he actually
overdid it. But these were legitimate expenses. I could prove
it. I had so many receipts. And he had so many donations to
charity, which are also deductible. It got to the point that I
felt frustrated: I mean, it’s an accountant’s job to find ways to
reduce his client’s taxes and there I was, unable to do so. But
of course, I had to follow his instructions.”
Johnny told another little story of how low-key his boss hide our Cokes, because we were embarrassed to be drinking
was: “When it was time for merienda, Don Albino would them.”
always ask our messenger to buy him sarsaparilla. Which Albino set an example in small matters as well as big.
was then I think only 2 centavos a bottle. We young clerks, we Johnny said: “He always came in early, 7 a.m. or so. Now,
would drink Coke. That was more expensive. So whenever he whoever was there early, he would say, ‘Oh, come on. Follow
came into our room during merienda, we the clerks would me.’ He would go around the Bank, floor by floor. Often, he
would bring me. He would check the
entire Bank. If he saw a paper clip on
the floor, he would say, ‘Pick up the
clip.’ We would walk around and make
sure that the Bank was clean and no
paper clips were lying on the floor. Now
that kind of experience has an effect on
you, if you are a young employee who
has just joined the Bank, and you are
going around the premises with this
great man. It teaches you to be careful
with the Bank’s resources. Even a
paper clip is an expense; even a paper
clip was important to him.”
Ricardo Liong wrote: “I first met Don
Albino in his mid-sixties in 1953 when,
fresh from high school, I joined China

108 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 80%PERCENTAGE
OF FILIPINOS WITHOUT
POTABLE WATER,
1953

President Ramon F. Magsaysay

Liberty Wells

T
he Liberty Wells came about because one morning at breakfast in late 1953, Albino SyCip learned about a
US government plan to put up a replica of the Statue of Liberty at Corregidor to commemorate the “fight for
liberty” during WWII. He believed that such an expensive project that only a few tourists would see was wrong
for a country where basic needs like potable water were still unmet for 80% of the people. In a country of 21 million,
17 million did not have access to potable water. Some 67,000 wells had to be built.
Albino later wrote: “In addition to symbolic appeals or sentiments, there must
be palpable evidence that democracy is really a government for, of, and by ALL the
people, so that our less privileged countrymen in remote rural areas, who constitute a
large proportion of our population, may never lose their belief in democracy for want
of the benefits it is supposed to offer to all citizens irrespective of class or station.”
Albino thought: “Instead of a Statue of Liberty, why not Liberty Wells?” So he
started a movement to build artesian wells for rural villages without potable water.
In January 1954, Albino convinced President Magsaysay to back him; he also got
private sector backing, both locally and abroad. US Ambassador to Manila Raymond
Spruance and Harry Brenn of ICA (now USAID) agreed to back his project as well.
Over the next thirteen years, the Liberty Wells Foundation built 20,000 wells and
developed 2,061 springs. It became one of Albino’s greatest achievements. The statue
meant for Corregidor was never put up.

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 109

Between 1940 and 1960, a new generation of China Bankers
was steeped in Albino SyCip’s values. Those values—
kindness, professionalism, integrity, and concern for the
progress of the nation as a whole—remain part of the DNA
of China Bank.

Banking Corporation as an apprentice. He personally met all teachings from the Koran, Confucius’ Analects, and other
the new staff and interviewed other higher-ranking recruits. philosophers. As a man who followed his own teachings,
. . . After four years and a commendation from my immediate Dr. Albino Zarate SyCip had truly lived up to the Golden Rule.”
superior L.L. Pan, Don Albino finally remembered me by my He added a humorous highlight: “At a Chinese wedding
family name. Once, he congratulated me for an outstanding dinner, the host made my wife and I sit next to Dr. SyCip,
task and I replied that I was only doing my duty. ‘I know, Liong,’ and I learned another lesson. Carefully selecting his food
he said, ‘but not everyone is doing his duty.’” in tiny portions, he explained, ‘Eat less so that you can eat
Ricardo added: “[Whenever it was near] election time, more.’ By being careful with our diet, we can live longer and
Don Albino would usually visit correspondent banks abroad. therefore can ‘eat more.’ In deference to his advice, that was
Publicly, he did not take sides on political issues but fulfilled the only full-course Chinese dinner that had left me starving.”
his civic duties diligently. At all times, he upheld the fiduciary Ricardo was struck by his boss’s integrity: “’I have never
nature of his profession and protected the institution from borrowed a single centavo from my own bank,’ he proudly said
scandals while maintaining his clients’ trust. In his twilight to me after reviewing some past due loans. Besides being in
years, he was promoting the Golden Rule: ‘Do not do to others the board of a few prestigious companies like Lepanto Mining,
what you would not like done to yourself.’ He distributed Don Albino dedicated his career solely to the Bank. His other
wooden rulers printed with the Golden Rule and its equivalent involvements included serving the Liberty Wells, a private
foundation that provided safe drinking water for the poor, and
other non-political institutions for the uplift of the masses.”
For his part, Lawrence See remembered another instance
of Albino setting a higher standard of behavior for bankers
and businessmen. In the 1950s, during a time of strict
forex controls, Albino SyCip needed to visit China Bank’s
correspondent banks in the US such as Chase Manhattan
and Irving Trust. He was also requested to meet with the
International Monetary Fund in Washington as a consultant on
the Philippine economy.
Lawrence said: “So Don Albino was allotted a certain
amount of dollars for his trip by the Central Bank. He returned
to Manila after several weeks, and to the shock of Central
Bank officials, he returned several hundred dollars to them.”
This had never happened before: the Central Bank never
asked people who got dollars for travel to liquidate their

110 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 It was LL Pan, the Bank’s auditor, who
painstakingly reconstructed the Bank’s
records after the war. He was aided by a
young clerk then, Wilfredo Tecson.

expenses or return any savings. But Albino SyCip had used professionalism, integrity, and concern for the progress of the
the money he was allotted very frugally, by staying in cheaper nation as a whole—remain part of the DNA of China Bank.
hotel rooms and buying very inexpensive gifts for his family
and friends. He bought nothing for himself. Albino did not want A NEW ERA
to spend the money unnecessarily, since dollars then were By 1955, China Bank had completed a remarkable
strictly rationed by the government, and a dollar he spent on comeback. It had P109.597 million in resources and P70.292
his trip would be, potentially, a dollar less for a productive million in deposits—an astonishing performance for a bank
enterprise that would help the Philippines. that had been liquidated thirteen years earlier. In 1955, China
Lawrence added: “The Central Bank would never ask this Bank earned a profit of P2.76 million on gross income of
money back from you. People then would either spend it or P7.474 million.
keep it in a dollar account. But he surrendered it, which shows More important, China Bank was, by then, the biggest
you the kind of man he was.” local private commercial bank. It had 7.8% of all the assets
Lawrence added a more personal reminiscence: “I never in the commercial banking system. Its key competitors were
saw him blow his top or get angry. When something went BPI (ranked second, with 5.2% of the assets), the Philippine
wrong, or something could not be done according to his Bank of Communications (ranked third), and Equitable Bank
wishes, he would show his displeasure, but it was always very (ranked fourth). BPI had received government assistance for
controlled. He was really a kind man. Don Albino was a caring its rehabilitation and China Bank hadn’t, but the Bank was
person. When you met each other outside of working hours, nonetheless bigger.
he would make an effort to get to know you and find out how By then, George Dee Se Kiat and Dee K. Chiong were
you were. He would say: ‘Are you taking care of yourself?’ He now in their early forties. They were ready to assume more
was a stickler for eating well and eating the right food. He responsibility. By 1960, Albino would step back from bank
would always say: ‘Health is wealth.’ For the GM of the Bank operations to focus on the big picture, and give his two young
to ask about you, and here you are, this young employee—that colleagues their chance to lead. A new era was about to begin,
makes an impression on you.” and the next generation was going to have to deal with a
Between 1940 and 1960, a new generation of China Bankers strange and challenging new world.
was raised according to Albino SyCip’s values. This new
generation stayed on in the Bank for decades—Lawrence
See, for instance, retired in 1997—and to their subordinates,
they passed on stories of the Old Man, and how much he had
affected them and their values. Thus, even new generations
of China Bankers who never met Don Albino were still
steeped in his example. So Albino’s values—his kindness,

CHAPTER 3: RISING FROM THE ASHES: 1940-1960 111

PART 2
CHALLENGE
AND RESPONSE
1960-2010
 CHAPTER 4

Brave New World

1960-1980

Under new leaders, the Bank strives to adapt to

a new and very different environment—to become
more dynamic, progressive, and competitive.

114 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
In the 1960s and 1970s, dozens of
concrete, glass, and steel edifices
rose on Paseo de Roxas, including
the China Bank Building, built in
1969. Architect Antonio Sindiong
designed the 15-storey building,
which eventually became China
Bank’s headquarters in 1990.

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 115

 G
eorge Dee Se Kiat and Dee K. Chiong, the next
generation of China Bank leadership, had to deal with
a very different world than their predecessors, Dee C.
Chuan and Albino SyCip, did. By the early 1960s, there
was aggressive new competition—banks that were
going after the same markets and opening many more branches.
Yet China Bank could not compete with them in terms of branch
expansion. It was limited by regulations in its number of branches to
four, because a significant block of its ownership was still foreign.
Also, by 1966, Manila had a newly created money market, trading
new financial instruments like the treasury bill and creating new
investment possibilities. Soon the money market offerings of the
Bank’s competitors had drawn in a good deal of the investible capital
of its traditional clients who were looking for a better rate of return.
The money market was an area where China Bank arrived late; it
began dealing in T-bills in a small way in 1972 and had a full-fledged
treasury department only in 1975.
Moreover, by 1975, China Bank was no longer the biggest private
commercial bank. By 1960-1980, it was tenth among the local private
commercial banks in terms of assets—a precipitous fall in only ten
years. On top of all the above, the Bank also had to deal with new
technology like the mainframe computer, severe economic shocks,
stricter government regulation, much higher capital requirements,
and the imposition of martial law. The period of 1960-1980 was

116 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
The top three honchos of China Bank in the 1960s and 1970s. From left: Dee K. Chiong, Albino SyCip, and George Dee Se Kiat.

not as dramatic as the previous twenty years, which had business. From then on, Albino was content to be chairman
included a world war, among other things. But in its own way, and serve as a guiding spirit and mentor to the younger
it was just as challenging for the Bank. generation of leaders.
Over its first fifty years, the Bank had developed a corps of Since DK was Dee C. Chuan’s younger brother, George
senior managers, a distinct culture, and operating practices was actually his nephew. But George was regarded by DK
that had excelled in an older playing field. But all of these and all the other Dees as the senior leader of the Dee family
things also created in the Bank an institutional inertia to following the death of Dee C. Chuan. George’s daughter Nancy
keep things just as they had always been. Yet George Dee and Dee Yang believed his having to take over the helm at a young
Dee K. Chiong knew that the Bank had to change; it was not age, because of Dee C. Chuan’s untimely death in 1940, made
well-adapted to this new world. China Bank was going to have George very serious about his work.
to reinvent itself to compete. George Dee and Dee K. Chiong She said: “My father was quite young to have to take over
would spend the next two decades working on this task. when he did. But as a dutiful and responsible son, he took care
of his brothers and sisters and became the padre de familia. It
GEORGE AND DK was a very heavy responsibility for him with so many siblings.
In 1952, Albino SyCip, who was now sixty-four, gave up the And then there was the Bank for him to run and the lumber
China Bank presidency to George Dee Se Kiat. Dee K. “DK” business. But he took these responsibilities very seriously and
Chiong became the senior vice president and later executive unconditionally.”
vice president. George and DK, then both in their early forties, George tasked his younger brothers Robert, Arthur,
became much more active and exercised more authority at the Edward, Henry, and Herbert to run the other family
Bank. By the early 1960s, they were in charge of most Bank businesses such as lumber, real estate, paint, and aluminum.

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 117

 #1
RANK OF CHINA BANK AMONG
LOCAL PRIVATE COMMERCIAL BANKS
IN TERMS OF ASSETS,1970

work to him, and he would work on the table of the officer who
was late. So when that poor officer would come in, he would
But he took on China Bank as his primary business see the president seated at his table. ‘Good morning, sir.’ ‘Yah,
responsibility. good morning.’ Then he gets up: ‘I’ll ask my secretary to get all
George and DK formed a stable, productive, and my files here later.’ He would not say any other word. No more
complementary duo—equipped with different skills, words needed to be said. So if you were that officer—my God,
personalities, and responsibilities. George tended to Bank you would want to go home and commit hara-kiri. That was
operations. DK was the gregarious, outgoing type who liked how George Dee was.”
handling clients and outside relationships. The division of Employees like George’s secretary, Lydia Yu, say that he
responsibilities was perfectly suited to the personalities of both was a fatherly man who was quiet, good-natured, and very
men; and because it was so natural, the Bank prospered. kind to employees. George didn’t like to raise his voice or draw
When it came to Bank business, George was very attention to himself. But he had his principles and he made
meticulous and demanding—albeit in a soft-spoken way. them clear to every employee.
Bank executive Honorio “Nory” Reyes–Lao said: “Mr. George George’s cousin and subordinate Gilbert Dee (who later
Dee tended to be very personal in taking a look at the became chairman) said: “I remember that George Dee—if
specific transactions and specific behavior of his employees. you fooled around even with the petty cash for a measly few
I remember several times he would ask people to be more pesos, he would fire you. We were that strict. Here, you don’t
prompt in reporting to the office. And when he came to the fool around. Even for petty cash—for P100, P200—George Dee
office, he would move around to see if these officers were at would fire you. It’s not the amount of money that matters. It is
their desks. Now if that officer was not there yet, George Dee the character. It’s the principle. It’s honesty and integrity. Skills
would just sit at his table, call up his secretary to bring his can be taught. Honesty, you can’t. Don Albino SyCip always
said to me: ‘You know, in China Bank, honesty and integrity are
not negotiable. That’s number one in China Bank.’ You don’t
fool around with your reputation. Once you do that, even with a
small infraction, that will be the end.”
Nancy Dee Yang said: “My father inculcated in all of us [China
Bankers] that we had to take very seriously our responsibility
to be the caretaker of our clients’ funds. So we had to really
understand how to make and take on calculated risk.”
Nory Reyes–Lao also recalled: “George Dee was strict
about expenses. So all expenses of the Bank were centralized
Albino Z. SyCip
with friends. through him—he would check on all of them. And it also

118 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Seated from left: Dee K. Chiong, Marcelo Nubla, Albino Z. SyCip, George Dee Se Kiat, Alfonso SyCip with other directors and associates.

became a habit that was carried over to his son, Mr. Peter The one limitation to George’s business career was the fact
Dee—he did that too.” that he suffered from diabetes, which grew more severe as he
Nory added: “Mr. George Dee was very paternalistic, got older. When he was a young executive, George used to be
very soft-hearted—although he was very strict as far as active in community affairs. He was a leader in the Chinese
compliance with rules and regulations. But if you went Chamber of Commerce, the Chinese General Hospital, and
and talked with him, if you tried to beg for his mercy, he some social groups; he also liked to go to various other socials
would sometimes give in. And I can relate to you a very vivid and Bank activities with clients and government officials.
example, where one of our employees was discovered to As his illness grew more serious, however, George could no
have committed a violation concerning moral turpitude. He longer circulate in social circles as much as he would have
had two wives. Anyway, we found out because he applied liked. So he preferred to eat his meals at home, where his
for a loan so that his wife could go abroad. Then later on he wife, Mary SyCip Dee, could monitor his food intake.
applied for another loan because, he said, his wife was going As George Dee Se Kiat began to circulate less and less in
for maternity leave. So we started asking questions and found business and social gatherings, Dee K. Chiong took over these
out. So under the rules of the Bank you would be out; there is responsibilities on his behalf. DK was tall and gregarious, with
a clause. So this gentleman brought his wife—the pregnant a big voice and an outsize presence that his employees called
one—to talk to George Dee, to beg him for another chance. “magnetic.” He liked good cigars and good food and circulating
Eventually, George Dee said: ‘But you must be punished. So in Binondo society. His son Gilbert said: “My father had a very
you will be demoted.’ The guy accepted the demotion and the strong personality. In any gathering he stepped in, you would
guy worked with us until he retired.” feel his presence. He was the life of the party. He had a very

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 119

By moving quickly and sympathetically to meet clients’
needs, George and DK made their clients feel that
China Bank was not just a bank, it was also a friend.

strong character. Even if he was not talking, people could feel during the 1930s. DK had gone to St. John’s University in
his presence there.” Shanghai during his college years, during a time when China
Whereas George was methodical, DK was very intuitive Bank still had branches on the mainland, and it was natural
as a banker. He made decisions about loans and about for him to want to bring those days back again.
people quickly. He also carefully cultivated many sources George and DK preserved the traditional China Bank belief
of information and knew who in the business community that accessing a loan was more a matter of trustworthiness
to consult about a particular applicant’s trustworthiness. and xinyong instead of balance sheets. Customers could and
Employees said DK knew how to calculate risk well and he did walk up to DK in the corridors of China Bank and ask him
had big ambitions for the Bank. Whereas George preferred to for a loan. The Bank also had a loans department, composed
minimize risk, DK wanted to grow the Bank in a big way. DK of Albino SyCip, George Dee Se Kiat, Dee K. Chiong, and Yao
would eventually plan to build a new 32-story tower for China Mun Tek, head of the Loans Department. But the Bank’s board
Bank in Makati that would have been the tallest building in gave a lot of trust to the ruling troika of Albino SyCip, George
the country for its time. Dee, and DK, and their loan recommendations were almost
Also, DK would eventually lead the Bank to go overseas always approved. For their part, the top three men understood
again, to Hong Kong and New York, in a bid to repeat the very clearly up to what amounts they were authorized to grant,
earlier successes of the Bank, in Xiamen and Shanghai, and they were quick to bring in their board colleagues on loan
applications that were beyond those limits. In this manner, by
relying on great trust and mutual respect within the Bank, the
Bank could act very quickly on loan applications. By moving
CHINA BANK ASSETS quickly and sympathetically to meet clients’ needs, George
1960-1980
In Billion Pesos and DK made their reliable clients feel that China Bank was
not just a bank, it was also a friend.
3.5
P3.45 B Gilbert added: “My father believed in xinyong. Xinyong is all
3.0
about trust. The older generation—when deals were made, it
2.5 was just a handshake, a purely verbal agreement. That was
2.0 enough. No need for a receipt, no more documents—just
your word. Your word is your honor. Of course, after so many
1.5
generations, things are not the same any more. But during my
1.0
father’s time, that was normal. That’s how things were done
.5 before, when it came to getting credit. What mattered [to my
0 father] was if you were trustworthy or not. He wanted to know
60 65 70 75 80
people well, to know if they had a good family background.”

120 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Albino SyCip, Wilfredo Tecson, George Dee Se Kiat. Dee K. Chiong, second from left, and Regina Dee, extreme right, welcome guests at a social
gathering.

Gilbert went on: “I remember people would just go DK. Once, there was a foreclosed asset that China Bank had.
directly to my father and ask him for loans. No more There was a potential buyer who quoted a higher price for that
processing. At that time there was no account management foreclosed asset. But then the original owner also offered to
group that was processing loan applications. If my father buy it, but for a lower price. The difference between the two
trusted them, he would approve and then call up the loans prices was not small. But Mr. DK said: ‘No, Rene. We will sell it
department: ‘You give this guy P100,000.’ Just like that. to the original owner. Because that is the proper thing to do.’ I
That’s how it was. . . No applications, no nothing. That’s how never forgot that.”
things were done.” Unlike George, who focused largely on the Bank, DK had
Atty. Omar Vigilia, who served the bank for thirty-five many other business involvements, such as Philex Mining,
years, and was the former head of China Bank’s legal division, founded in 1955. He was also part of the investor group led
recalled: “When somebody came to DK asking for a loan—and by his friend Ralph Nubla that in 1974 took over Philippine
I saw this—Dee K. Chiong would only ask three questions: Bank of Communications. DK also had overseas business
‘How much do you need?’ ‘When can you pay?’ ‘Who do ties. After the death of his first wife Rosa Uy Dee in the early
you know in the Bank who can vouch for you?’ If the person 1950s, he married Regina Yui, the daughter of Yu Hung-chun,
answered satisfactorily and DK had a good feeling about the ( ; 1897-1960) who, for several years, was the premier
person’s character, he would have the loans department of the Nationalist government of Taiwan. His marriage to
release the money to him. And then when the person had the Regina made DK even better connected with the Taiwanese
funds and was about to leave his office, DK would ask: ‘Do you government—on top, of course, of the Dee family’s already
have collateral?’ If the person did, DK would take the deed to long history of backing the KMT and DK’s own friendships
the property. Would he put a mortgage on it? No. He would with a large number of Taiwanese influentials. In the 1970s,
just put it in his desk drawer and forget about it. That was DK. he began to spend a lot of time in Taipei, serving as chairman
That was how he was as a banker.” of a big Taiwanese financial services company. His ties with
Like George, DK believed that the Bank had to make a Taiwan would prove to be very helpful to China Bank at a
good profit, but it also had to keep faith with its clients and crucial point in its history.
with traditional Binondo values. Retired China Bank senior
executive Rene Lao said: “I remember one incident with Mr.

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 121

The Bank’s computerization project was so successful
that it became a model for other banks in the nation
and the region. The Bank had become a trendsetter.

fascinated with the possibility of doing even more—with using

China Bank to help customers process their accounts online.
This would lead to the first online banking operations in the
country.
Johnny Coreces recalled: “Our computerization project
was done because, first, that was the trend internationally—to
computerize. We were accumulating so many transactions
per day, and if it’s all manual, that delays the entire process.
Whereas, with automation, by the following day, you would
already know the complete financial status of the Bank. So
Dee K. Chiong we embarked on this project. And we embarked on on-line
transactions—meaning if you had an account with Binondo,
1970: STILL TOP OF THE HEAP and you were in the Sto. Cristo branch, you could transact
Under the leadership of Dee K. Chiong and George Dee, from there, through the wires. That was doing banking ‘on-
China Bank remained a leader in the industry. The ten line’. Now it is normal, but we were the first bank to do that in
years between 1960 and 1970 were a prosperous time. In the Philippines—and the first in Southeast Asia.”
1970, it was still the biggest private commercial bank in the Johnny added: “IBM was trying to introduce the
Philippines. It had P566 million in resources (an 11% growth computerized banking system to the banks in this country.
over 1969) and P353 million in deposits, and it made a profit of They wanted to sell us their equipment—at first they were
P14.38 million on gross income of P57.45 million, for a return showing us the Model 1440 computer. So they sent their
on equity of 16.86%. experts here to convince us. I remember they sent a man
China Bank had 4.1% of the assets in the commercial named Hughes. And we liked his presentation, so finally we
banking system. In comparison, a rival bank which was much were convinced that we should go into automation.”
older had, in 1970, total resources of P511 million. Johnny’s chief lieutenants in the electronic data processing
The Bank’s superiority was not only financial but also (EDP) project were Rufino Tolentino and Henry Yeh. The young
technical. In 1966, the Bank’s leadership agreed to invest Henry became the Bank’s ace programmer; before an IBM-
heavily in computer technology and in a computer center—the administered test had revealed his extraordinary aptitude for
first of its kind among Philippine banks. Initially, the computer computers, Henry was quietly clipping articles in the Chinese-
was to be used to speed up back office operations, to help the language newspapers for the Bank.
Bank update its accounts and close its books much faster than The Bank had full online operations in place by 1969. Its
any manual process. But eventually, chief accountant (and the computerization project was so successful that it became a
computerization project manager) Johnny Coreces became model for other banks in the nation and the region. The Bank’s

122 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 The huge IBM System/360 could
have a storage of 1024 kb, much
less than what one finds in a
thumb drive (left), which can
have as much as 8 gigabytes.

Taking Filipino banking to the next level

A
t first, China Bank wasn’t thinking of using the top-of-the-line IBM System 360. It
was going to use a less capable System 1440. But project head Johnny Coreces had
doubts. The 1440 could handle the existing 15,000 accounts of China Bank, plus
several thousand more. But Johnny believed that the Bank’s needs would begin to grow much
faster, beyond the capabilities of the 1440. Since a mainframe was expensive, China Bank had
to make the investment count. Coreces decided to recommend the more advanced, capable
and upgradeable System 360 instead. The S/360 was at the time a new mainframe family that
IBM began selling in 1964. It was the first family of computers designed to work across the
complete range of applications, and to work well at various scales, from small to large. The
S/360 became one of the most influential
computers in history and it created IBM’s
long-held dominance in mainframe With Johnny Coreces’ foresight,
China Bank opted for the IBM
computing, partly because it allowed System/360 Model 30 which was
customers to purchase a small system then the top-of-the line. The Bank
was the first bank in Southeast Asia
with the ability to migrate upward as their to use multi-programming online
needs grew. That capability was precisely banking with the IBM 360 to process
both savings and current accounts
what China Bank needed. Johnny noted: by 1969.
“We were the very first bank to upgrade
without ever taking delivery of the first
model.”

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 123

 (Left) Jovito Salonga, seated, third from right,
joins his Japanese prison camp comrades, who
include Albino Sycip, seated, second from right,
and his brother Alfonso, seated, third from left,
and George Dee Se Kiat, standing, right most, for
this 1960s reunion photo.

(Bottom) Dee K. Chiong’s office in Binondo.

It also served as the office of Gilbert U. Dee as
Chairman until the executive offices were
transferred to the new head office in Makati City.

EDP center drew interested visitors from banks in Thailand, planning for a new Makati building that would in time serve as
Singapore, Malaysia and Taiwan, who wanted to study the its new headquarters.
system. Bangkok Bank installed its own IBM/360 after For the time being, the big new building would serve as
learning of China Bank’s successful use of the system. Others its Makati branch. In July 1970, the Bank opened the branch
soon followed. The Bank had become a trendsetter. under Antonio P. Tecson, the younger brother of one-
The Bank’s new IBM S/360 was a robust system that time bank VP Wilfredo Tecson. China Bank now had three
served as the Bank’s mainframe for the next twenty-two branches, plus the head office in Binondo.
years. In the mid-1970s, China Bank upgraded to the next The new 15-story building in Makati was designed by
level, the IBM S/370, which was backward compatible with architect Antonio Sindiong, with a look inspired from the
the S/360. China Bank stayed with this IBM configuration famous Lever House in New York City. Lever House is the
until 1988, when a new generation of computer capabilities quintessential “glass box” International Style skyscraper,
prompted an upgrade. following the principles propagated by famed architect Mies
The Bank was also keeping pace with larger national van der Rohe. The Lever House building at 390 Park Avenue
trends. Over time, the center of gravity in Philippine business became an architectural landmark, featuring a glimmering
was shifting to Makati. In the 1960s, most of the big banks and 24-story blue-green glass and stainless steel curtain wall.
corporations had begun transferring to Makati. China Bank The China Bank Bldg. differs from Lever House in that
was not about to leave its Binondo base, but in 1966 it began it is nine stories smaller and it has the Bank branch on the
ground floor, instead of the open courtyard of
Lever House (which makes the building appear
to “float.”) But much of the look and feel of
Lever House is preserved. The Makati branch
design was another concrete sign that the Bank
was ready to keep up with the times. Board
member Edward Dee Se Kiao, George Dee Se
Kiat’s brother, was an architect by training,
and had some influence on the Bank’s deciding
on such a modernist approach. China Bank’s
curtain wall tower design was later adopted by
many of its neighbors on Paseo de Roxas, such
as Citibank, Equitable, and Philamlife. But as
with computerization and online banking, China
Bank had been there first.

124 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 As the center of gravity of Philippine business
shifted to Makati, China Bank decided to build
a branch in the new financial district in the late
1960s.

NEW CHALLENGES AND PRESSURES

Even as the Bank did its best to keep up with the pace of
change, the ground was moving underneath its feet. In 1960-
1980, China Bank faced more intense competition, armed
with more advanced management techniques; it faced new
financial products and deposit substitutes such as the T-Bill;
and it had to meet higher capital requirements from the
Central Bank, which in turn led to a wave of acquisitions and
thus meteoric growth by its biggest competitors.
As the economy expanded in the 1950s and 1960s, many
more big family-owned conglomerates entered the banking
industry. Once, during the tenure of CB governor Miguel
Cuaderno (1949-1960), new bank licenses were granted only have to be very foolish not to make money. And even foreign
rarely and under very stringent terms. But his successor exchange profits then were at one per cent spread, one and a
Andres Castillo (1960-1967) chose to loosen the once-tight half per cent spread. Now, interest rates are very low.”
reins on the granting of new bank licenses. Between 1960 and Many of the new banks that were created during this
1965, the number of private commercial banks grew from only era were weak, badly run and undercapitalized, and were
13 to 33. eventually acquired by other banks. But a few of these banks
The reasons for this so-called “bank rush” were many. The would be much more successful. These would soon be some
top family-owned conglomerates needed much more financing of the biggest banks in the country. Far East Bank and Trust
in the credit crunch that ensued after the progressive was founded in 1958, Philippine Commercial and International
devaluation of the peso between 1960 and 1962. At the time, Bank (PCIBank) and Rizal Commercial Banking Corporation
there were fewer barriers to entry, since capital requirements (RCBC) in 1960, Metropolitan Bank and Trust (Metrobank) in
were low and bank regulation was then lax. And most of all, 1962, Consolidated Banking (Solidbank) in 1963. (Equitable
the business community had learned one thing from the Bank was a little older, having been founded in 1950.) These
success of older banks like China Bank: banking was very banks were all well-led, well-capitalized, and very aggressive.
profitable for those who knew how to run a bank. They began putting up the big branch network that China Bank
Eddie Go, China Bank chairman and CEO from 1985 to was restricted from building.
1989, who entered the banking industry in 1962, recalled: “In Equitable, RCBC, and Metrobank were all Chinese-
those days, if you were a bank, you were guaranteed to make owned banks, and they followed China Bank’s strategies.
profits. There was an interest rate ceiling on deposits, there RCBC, for instance, was run by Albino SyCip’s son-in-law
was a ceiling on loans. But the margin then was big. You would Alfonso Yuchengco. Equitable Bank founder Go Kim Pah

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 125

With its small staff, few branches, and insistence on close
face-to-face interaction with bank clients, the Bank was
hard-pressed to compete in an environment where the
biggest banks had dozens of branches and over a thousand
employees.

openly admitted that Willy Tecson said in 1967: “Five years ago, when I was
China Bank was his offered the general managership of the Consolidated Bank
inspiration. The Ty and Trust, I was faced with a most difficult decision. I had
family of Metrobank practically grown up in China Banking Corporation and I had
had been long-time regarded Don Albino more like a father who had guided my
China Bank clients. career up until then. The opportunity to build a new bank from
They all targeted the inception, however, was too much of a challenge to ignore
same markets as the or let pass. After several nights of soul-searching, I finally
Bank. decided to tell Don Albino. At first, he asked me to reconsider
On the other hand, and assured me that a bright future still lay ahead of me in the
PCIBank was not a China Bank. But two days later, he reopened the subject and
Chinese-Filipino bank, said that he would not want to stand in the way of my progress
but it was the bank of Eugenio Lopez, Sr. and his powerful and development. He said he knew that I had several offers
Meralco conglomerate. It, too, was very aggressive, well-led, from other banks in the past, although I had not told him about
and well-funded. In addition, the once stodgy and conservative them. He presumed, therefore, that this time, when I decided
BPI was revitalized by its takeover by the Ayalas in 1979 and to inform him about the Consolidated Bank offer, I must have
the leadership of Enrique Zobel and Alberto Villa-Abrille. It, already considered it thoroughly. He then said I could resign
too, began building a bigger branch network and acquiring from China Bank with his blessings. His is a big heart—for Don
smaller banks. By the late 1960s, these rival banks had Albino knew that he could have kept me in China Bank and all
branch networks much bigger than China Bank’s. he needed to do was to tell me that he wanted me to stay. Yet,
Solidbank, on the other hand, was put up by a good friend he chose to let me have my chance to be on my own. How can
and golf buddy of Albino, Vicente Madrigal; in the process, I ever forget such a man!”
China Bank lost one of its best men. Madrigal offered the GM Tecson would soon be promoted from EVP to president
and EVP positions in the new bank to China Bank’s VP Willy of Solidbank, and he would remain in charge until he retired
Tecson. Wilfredo was the fourth man in the Bank hierarchy in 1992 at the age of seventy. The bank prospered under his
and was known as one of the best bankers in Manila. Tecson leadership. When he retired, the bank had P20 billion in total
took the offer with the blessings of Albino SyCip, who resources, after starting in 1963 with P8 million in capital.
acknowledged that his protégé Tecson, whom he once wanted These rival banks had a much steeper growth curve, and
to succeed him as president, could rise no higher because he despite China Bank’s long-established lead in assets and
was not a member of the key shareholders’ families. It helped deposits, it was only a matter of time before they caught up.
Albino to know that his friend Madrigal would take good care In 1972, China Bank opened its fourth branch in Caloocan (in
of Tecson. addition to Santo Cristo, Cebu, Makati, and the head office in

126 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
(Opposite page) Dee K. Chiong greets sugar
magnate and banker Antonio Roxas-Chua.

(Right) With its curtain glass tower design inspired

by the Lever House in New York, the China Bank
Building built in 1969, is among the first modern
buildings along Paseo de Roxas, together with the
Doña Narcisa building (behind) and the Insular
Life Building.

Binondo). At this point, one of its biggest

competitors, which was only twelve
years old, had thirty-eight branches.
By the early 1970s, China Bank’s main
competitors now had dozens of branches
each. With their big branch networks,
they now had better access to low-cost
funds (in the form of deposits) with which
to grow even further.
In addition to sheer size, these
banks were also beginning to use more
sophisticated management tools which
had not been widely available to Manila’s
banks during the 1940s and 1950s. These
included detailed operations manuals,
budgeting procedures, performance
targeting, performance ratings for every
employee, profit-sharing based on performance, and so on. bank clients, the Bank relied on more personalistic, intuitive,
The most competitive banks had well-tested methods for and subjective management methods. In a world where the
calculating important items such as the profitability of each best banks had many branches and thousands of employees,
branch, the appropriate amount of cash in vault per branch, these old arrangements could no longer hold.
and so on. They also had manuals for control systems to A major factor in their competitors’ catching up was the
prevent fraud or abuse, and detailed procedures for more rise of the local money market in the 1960s. For the layman:
advanced financial products like treasury bills. These banks, the money market is a component of the financial markets
in addition, had departments that China Bank didn’t, such as which deals with short-term borrowing and lending. Trading in
treasury, corporate planning, branches administration, and the money markets involves treasury bills, commercial paper,
account management. bankers’ acceptances, certificates of deposit, and short-lived
On the other hand, China Bank didn’t have detailed mortgage- and asset-backed securities. The money market
operational manuals, budgeting procedures, or the modern didn’t exist in this country until it was brought into existence by
quantitative management methods being introduced by its the introduction of the treasury bill by Bancom.
competitors. With its small staff, few branches, and insistence In 1965, Bancom Development Corporation was created
on close face-to-face interaction among bank staff and with as a joint venture between Bankers Trust of New York and

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 127

 China Bank Officers’ Party, 1970. (Seated from left): Enrique Dy Buncio, Robert Dee Se Wee, Marcelo Nubla, Dee K. Chiong, Albino Z. SyCip, George Dee Se Kiat,
Vicente Uy Chaco, Yu Fu Shen, Joaquin Dee, Gilbert U. Dee. (Second row, from left) Eduardo Dy Buncio, Florentino del Rosario, Rufino Tolentino, Nancy Dee Yang,
Epifanio de Mesa, Juan Coreces, Arthur Hsu, Gonzalo Rialp, Tan Kim Liong, Juan Wong, Florentino Andrada, Lawrence Y.L. See, Eduardo Jose, Jose Ting, Leoncio Lim.

128 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
(Third row, from left) Henry Yeh, Ceferino Beltran, Jose Dy, Go Se Kieng, Antonio Dayrit, Antonio Tecson, Jose Ngkaion, Ricardo Liong, George Pay.
(Top row, from left) Leonardo Tancuan Jr., Arsenio Sy Santos, Jesus Pelea, Ramon Dee, Lin Yu, Goo Tat Chiong, Yao Mun Tek, Jose Dujunco, Alex Lim,
Buenaventura Ngkaion, James Ngkaion.

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 129

 34%
ANNUAL GROWTH OF THE LOCAL
MONEY MARKET BETWEEN 1966
AND 1973

Gilbert Dee and DP Loh.

Comtrust Bank in Manila. It was headed by the young financial Central Bank decided that commercial banks had to be better
wizard Sixto K. Roxas. With Bancom, Sixto, his brother Andy capitalized; in the absence of more capital, the smaller banks
Roxas, Augusto Barcelon, and a few other young financial would have to be forced to merge or sell out to the bigger
experts (Luis Villafuerte, Rolando Gapud, Ramon R. del players. In late 1972, President Ferdinand Marcos issued a
Rosario, Jr., among others) brought new financing techniques new order requiring commercial banks to have no less than
to the Philippines. To the once-limited horizons of Philippine P100 million in capital by September 1975.
finance, Bancom made pioneering contributions in the areas In 1975, China Bank made it to the P100 million
of money market operations, equity underwriting, accessing capitalization threshold with little trouble. It raised an
foreign credit, and project finance. additional P62 million in four years from retained earnings
With the young investment houses getting a large slice of alone, without having to bring in any new capital from its
big investors’ money that used to go to commercial banks, the shareholders—a sign of its inherently conservative policies
big banks themselves rushed in to take a share of the profits and financial strength.
by putting up big money market/treasury units of their own. But not every bank was this solid. Many banks went under
The money market grew 34% a year between 1966 and 1973. or sold out because of this new requirement. The biggest and
It provided the first serious competition to the deposit-taking most liquid banks started acquiring the smaller ones. This,
capacity of the commercial banks. By 1974, the total amount in turn, allowed them to grow at an unprecedented pace. By
invested in these “deposit substitutes” amounted to 80% of signing a sale agreement, these banks could add dozens of
the total of savings and time deposits. China Bank arrived at branches in one fell swoop. The rich, so to speak, got richer.
this new market relatively late, so the growth of the Bank’s This process of large-scale bank consolidation meant that
assets and deposits slowed down in the late 1960s and early China Bank had an even steeper climb to catch up with these
1970s, as big depositors looked elsewhere for better returns competitors.
for their money.
The 1960-1966 “bank rush” also provoked another major NEW BLOOD: GILBERT AND PETER DEE
change in the banking landscape. Several of the new banks To cope with these new challenges, the Bank needed
either failed outright because of mismanagement and younger leadership at several levels. Both Dee K. Chiong
outright fraud; others limped along, going from crisis to and George Dee had been born before World War I, and as
crisis. Eventually, the Central Bank, the IMF, and the Bankers they themselves conceded, the new environment called
Association of the Philippines came to a policy consensus for new blood, fresh ideas, and energy. In 1968, the Bank’s
that the local banking industry was too fragmented and senior managers were all in their fifties at least; men like
small-scale. It couldn’t provide financing in the scale that TS Wang, DP Loh, Yao Mun Tek, George Pay, Buenaventura
local industry needed, and its persistent weaknesses left the NgKaion, Arsenio Sy Santos, and Tan Kim Liong were in
nation far too vulnerable to bank runs and bank failures. The their sixties.

130 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Dee K. Chiong and Peter Dee.

Sixto K. Roxas
Yet the big innovations in Philippine banking then were
being put in place by men like Sixto K. Roxas and Jose “Jobo”
Fernandez, who in 1968 were then only in their forties—and
their own key assistants like Luis Villafuerte and Roly Gapud Financial innovation

B
were younger still. By the 1970s, Bancom had among its ancom provided the Filipino market with
executives fast-rising young men like Manny Pangilinan, new ideas and new instruments such as
Ramon del Rosario, Jr., Gabby Lopez, and Alran Bengzon. treasury bills and commercial paper. Since
Citibank, for its part, was giving major responsibilities to the Bancom did not have the burden of a large staff or
graduates of its own training program­—young men like Rafael hard assets, its operating costs were low. Thus, it
was able to offer better rates for investors’ money
Buenaventura, Eddie Regala, Sonny Vistan, and many others.
than commercial banks. Bancom started operations
Citibank’s so-called “University of Banking” also trained other
in 1965 with resources of P7 million. By 1973, it
young men who quickly rose to top positions in other major had increased these to P700 million, with a money
banks, such as Tony Ozaeta, Placido Mapa, Jr., Xavier Loinaz, market volume of P16 billion annually. After Bancom
Ray Orosa, and Eddie Go (who became chairman and CEO created the money market in the country, many new
of China Bank in 1985). Thus, the once staid and predictable investment houses were created to compete with
world of banking—which in the 1950s was dominated by it. Peter Dee would later say that he learned a lot
about banking innovation from working with Bancom,
cautious, conservative men in their sixties—had, in the go-go
during the years he was with RCBC.
years of the early 1970s, become a young man’s game.
In addition, by the early 1970s, the Bank’s triumvirate at
the top was no longer as active or hands-on as they used to
be. By then, Albino SyCip was fading from the picture, due
to his advancing years and occasional bouts of ill health.

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 131

 China Bank officers, led by Dee K. Chiong,
seated, center, during the Bank’s anniversary
party. Encircled are Peter Dee and
Gilbert Dee.

Dee K. Chiong was becoming more involved with Taiwanese a board member, but his initial duties
businesses, so he spent less time on China Bank matters. In were humbler than these titles implied.
the early 1970s, George Dee lost first one leg and then another Gilbert was, at first, made his
to diabetes. He had to cut back on his work load. father’s executive assistant and given
Bank executive Rene Lao recalled: “When I first entered a desk inside his father’s office. Gilbert
the Bank [in 1973], George Dee already had one leg said: “My father was very strict with me.
amputated. Once I was seated next to him, he was moving his When I first joined the Bank, my table
leg, and said: ‘There’s something not good.’ I said, ‘Sir, are you was inside his room, so he could watch
all right?’ He said: ‘This leg of mine. . . .’ That was the time me. My table was there in the corner.”
that an infection started in the other leg. And before I knew it, But as DK became more confident in his
it had to be amputated also. I felt so sorry for him. He went to son’s skills and also more involved with
work in a wheelchair.” his Taiwan businesses, he gave Gilbert
So the Bank’s first task was to bring in new leadership, more authority to decide on pending
both from the Dee family and from the ranks of the Bank’s matters in his absence. Gilbert, for his
professional managers. Between 1969 and 1972, George and part, did not shy away from making
Dee K. Chiong brought in their sons, Peter and Gilbert, then these decisions.
only in their early thirties. The two younger Dees, in turn, Gilbert said: “Every time an
would bring in many young managers, and together, they important client went to his office, he
would transform the Bank. would introduce him to me. And then
DK’s son Gilbert joined the Bank first. But his entering after a few years, when he started mellowing also, he would
China Bank was far from a sure thing. As Gilbert said: “A spend half of the year in the Bank, half of the year in Taipei. At
career in banking was really my intention, so I got an MBA in that time, there were only seven financing companies in Taipei;
finance from the University of Southern California. But my my father headed one of them as chairman. When he started
father told me that I had to work outside China Bank first and spending more time in Taipei, he would tell our clients: ‘If
to prove myself, before they could consider me joining the you want to see me, you see Gilbert; he will take care of you.’
Bank. So I joined Philippine Bank of Commerce; I started from When he was out of the country, his clients would come to me
the ranks. I was hoping that someday, I would join China Bank. and I would act on it right away. Not every decision I made was
But I was happy with the Bank of Commerce. After nine years, right. But he was not there, so I had to decide. People have to
I was head of the Credit Department.” be trained to make decisions. You do not shy away from that.”
In 1969, Albino SyCip conceded that Gilbert, then thirty- Gilbert added: “We had very big long-standing accounts
three, was qualified, and he personally extended the invitation like those of the Chiongbians and the Tagles. And these
to Gilbert to join the Bank. Gilbert became a vice president and family’s patriarchs, when they were about to retire, they would

132 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
bring their sons to the Binondo office and they would tell my got me into banking because I had no idea then of going into
father: ‘I am retiring already and my son will be taking over.’ banking. I was still studying in college at the time. I was young,
My father would say: ‘If you need anything, you see Gilbert.’ So I did not know what to do—whether to be a businessman or
the relationship between the Bank and its long-time clients what. So that’s how I joined a bank.”
was passed down to the next generation.” In 1964, Peter Dee joined RCBC as a credit investigator,
Like Gilbert, Peter Dee, who is six years younger, did working at the minimum wage of P4 a day. He hadn’t even
not start his banking career at China Bank. He too began graduated from UE yet; his BS Commerce came in 1965. Peter
elsewhere—at RCBC. In 1964, he was invited to join this young said: “I worked at RCBC for eight years. It was good for me.
bank by his father-in-law, Alfonso Yuchengco, who was then Everything was new. The people were also new. In a new
just one of several investors in RCBC—not yet its chairman commercial bank, there is more of a chance to learn. If you’re
and major shareholder. small, you have to do a lot of things yourself. So I learned a
Peter said: “My father-in-law said to me: ‘Do you want to lot. I enjoyed working with them. I learned how to play the
join?’ So I said, ‘Okay.’ I was taken aback. He was the one who game. After a while, my father-in-law became more serious

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 133

 Dee K. Chiong
congratulating Peter
Dee at the Service
Awards in 1982.

But the partnership between Bancom and

RCBC wasn’t destined to last. As Ambassador
Alfonso T. Yuchengco narrated in his biography,
To Leave a Good Name, by 1971, he and Sixto
about having more shares in the bank, and he got control and Roxas were in an all-out struggle to control RCBC. Roxas
became chairman.” teamed up with Far East Bank in an attempt to buy out
At RCBC, Peter Dee underwent training at the American Yuchengco. It was a hard-fought battle, with some major
Institute of Banking and Irving Trust in New York. He also shareholders at first sitting on the fence, and it was unclear
trained in Geneva for several months in 1971, getting more how the fight would turn out.
exposure to international banking. Peter Dee said: “At that time, Bancom and RCBC were
Another major step in Peter Dee’s banking education came quarreling. Andy Roxas, the brother of Sixto, had died in a
in 1969, when RCBC created a functional merger with Bancom. plane crash. After that, things became really bad. There
Through this merger, Bancom combined its investment were too many strong personalities. All of a sudden, my
banking capabilities with those of a commercial bank, offering father, in December 1971, asked me: ‘Do you want to join
a broad spectrum of financial services. The power of this China Bank?’ It turned out that my father-in-law was worried
combination can be seen in just a few telling numbers: In about me and thought it was safer if I transferred. I didn’t
1969, RCBC had total resources of P145 million. By 1970, it want to leave. But since my dad asked, I said: ‘Okay.’ Things
had grown to P232 million, and by 1971, to P536 million. In the happened very fast, my God! By January 1972, the first day, I
space of two years, RCBC was catapulted from 15th among was working at China Bank in Binondo.”
33 commercial banks to the top five. Peter Dee, then with As it turned out, by early 1973, Yuchengco had defeated
RCBC as an AVP with the Rosario branch, was inspired by the Roxas, backed up by a timely infusion of $7 million in new
example of Bancom and its modern financial methods. capital from two foreign banks, Continental Illinois National
Peter said: “I learned a lot from them, from the Bancom Bank and Trust Co. of Chicago and the United Financial of
people—from Sixto Roxas and Augusto Barcelon. All their Japan. He did not lose control of RCBC; it was the Bancom
people were good, all tops in their field. There were many group who had to move out. But by the time the issue was
changes for us in RCBC. So that’s how you grow, meeting settled, Peter, then thirty years old, was happily ensconced
different people, learning different ideas. That’s how I in China Bank as VP in charge of planning and operations.
learned a lot more about banking.” Peter Dee would later It probably was his destiny, in any event, to wind up in the
bring much of what he learned by observing Bancom into Bank; after all, Peter was the grandson of Dee C. Chuan,
a comprehensive long-term effort to bring new ideas and the grandnephew of Albino Sycip, and the husband of his
competitiveness into China Bank. granddaughter, Helen S. Yuchengco.

134 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Gilbert U. Dee:
A drive for change

L
ike his father Dee K. Chiong, Gilbert believed that
a banker had to have good intuition. He said: “I
learned that deciding on credit applications was
more of gut feel. There are times when, from the very
start, even if everything on paper looked okay, I would turn
the application down because I just had a feeling it would
not do well. And it would turn sour. It’s just gut feel. I was
constantly exposed to clients and their loan applications.
You develop that sixth sense of whether a man can be
trusted.” But Gilbert also wanted to improve on the banking
model that he learned from his father. He felt the Bank had
to change. He said: “At the time, China Bank had only a few
branches, and all the decisions were centered on three people: Albino Sycip, George
Dee, and my father. With a small bank, that’s okay. But as the Bank grows, you have to
delegate. Not everything can be centered on these three people. Before, every small
thing had to be handled by one person—people came for his signature. But when the
Bank grows, you have to decentralize and delegate powers and professionalize the
Bank.”

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 135

“Our old and new employees were good. It was just a matter
of how to drive them and blend them. We had to blend them
together to get the best out of everyone.” —PETER DEE

To help him run the small planning and operations the Bank as a clerk in 1970, with a BS in commerce from the
department, he brought in Gilbert Dee’s brother-in-law De La Salle University. He later got an MBA from the AIM. Rene
William Go, a young MBA graduate from the University of Lao, who was not related to Nory, was born in 1943, and then
Missouri who was also a product of the Citibank management joined the Bank in 1973 with a BS in management from the
training program. William would later become CEO of University of the East. By then, Rene had completed his Master
Philippine Bank of Communications and then CEO of in Business Administration course work from the Ateneo de
Chinatrust. Peter also helped several talented employees Manila University, attended the Management Development
to attend the Asian Institute of Management (AIM) for Program at the AIM in 1972, and had been trained in the new
their MBAs, well aware that the Bank badly needed more financial techniques at Comtrust. Ric Chua, born in 1951,
sophisticated management methods. joined the Bank in 1975 with a degree in accounting from the
Peter picked out several bright young men with MBA University of the East and an MBA from AIM.
training—in particular Honorio “Nory” Reyes-Lao, Reynaldo Among the three of them, Ric, Rene, and Nory would
“Rene” Lao, and Ricardo “Ric” Chua. For Gilbert and Peter, run many of the key departments in the Bank over the next
these three would become their three key young deputies in thirty years—building them from the ground up in several
the remaking of the Bank. Nory Reyes-Lao, born in 1944, joined instances, such as treasury, account management, branches
administration, and corporate
planning. Over time, they
and their staffs became the
vehicles by which new ideas
and practices eventually took
hold in China Bank. Ric Chua,
the youngest, eventually
became senior executive vice
president and chief operating
officer, president and CEO, and
finally, advisor to the board of
China Bank.
Peter’s and Gilbert’s
greatest asset in their efforts
to make the Bank more
competitive was that their
Nory Reyes-Lao, Ric Chua, Katherine Tancuan, Jun Tancuan, Gonzalo Rialp, and Peter Dee. fathers, George Dee and DK,

136 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Peter SyCip Dee:
Looking for new ideas

G
eorge Dee Se Kiat, mindful of his son Peter’s experiences in new
financial ideas and practices at RCBC, tasked him to find ways
to improve the Bank. Peter said: “China Bank was big and well-
established. RCBC was young, so it was very flexible and dynamic. So again, I
learned a lot of things at China Bank. It was a different atmosphere, because
the bosses were all older people, the older generation. The average age of the
executives was about 50. China Bank was not ready to compete because it did
banking in the old style—the old, very Chinese way. The entire organization
was like that. So I had a big problem. You cannot throw your weight around.
These were all seasoned, very good people, very respectable. Their system was good. But
their systems were for the old days, and those days were gone. Both the new and the older
employees had to learn the new ways of doing things.” Over the next fifteen years, Peter
carried out his father’s instructions by bringing in talented young managers and backing
their innovative ideas to help make China Bank more modern and competitive.

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 137

“When you’re only a few branches, then everything
can be centered in the Head Office. But once you start
expanding, there’s no way you can handle it. It’s too big.
Not everything can be referred to you.” —GILBERT DEE

backed them up. They, in turn, supported the innovations

brought in by their bright young men. Peter said: “The older
generation of the Bank—they knew that they needed the
younger ones, like me and Gilbert, to make changes. I think
[my father and DK] let me ‘play’ a little, experiment, try new
things. Although I was hands-on, making decisions, they were
observing me, ‘guarding’ me. But they gave us both a free
hand to face the issues. We [Gilbert and I] knew also that we
needed the new people, the younger managers [like Ric Chua].
We didn’t want to meddle. You have to give them a free hand to
make changes.”
The support of the elders was crucial, because the two
younger Dees and their bright young aides had their work
cut out for them. To catch up, the Bank needed to do several
things. First, it had to change its ownership structure so that it
would be at least 70% Filipino-owned. Only then could it build
a bigger branch network. Once it achieved this, its challenges
were only beginning. It needed better management systems
and practices, a much larger and better-trained manpower
complement, more branches, and more resources to fund
expansion. 1975, the largest block of foreign-held shares (which used
to be owned by the Bank of China) were now held by the
LEARNING TO COMPETE International Commercial Bank of China (ICBC), which was
By 1975, China Bank’s deposit base had been growing on a based in Taiwan.
trajectory that was very nearly flat for five years. This was at In late 1975, Dee K. Chiong traveled to Taiwan with Gilbert
a time when other banks had been registering strong deposit and convinced the ICBC to give up enough of its China Bank
growth, derived from their ambitious branch expansion shares in order to bring the Bank’s Filipino ownership up to
campaigns and money market operations. So George and the 70% minimum required by Central Bank regulations.
DK decided that they needed to start building many more Gilbert recalled: “I was the one who accompanied my
branches. But first they had to address the fact that the Bank father when we went to Taipei to convince International
was not at least 70%-owned by Filipinos, as required by the Commercial Bank of China to give up part of their holdings.
Central Bank, in order to be allowed a larger network. In The ICBC held one board seat. We went to see the governor

138 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Standing from left: Anthony Dee
K. Chiong, Jr. William Go (husband
of Barbara), Ruby Dee Cheng,
Barbara Dee Go, Regina Z. Dee (wife
of Anthony), Alice T. Dee (wife of
Gilbert), and Gilbert U. Dee. Seated
from left: Regina Y. Dee and Dee K.
Chiong.

(Opposite page) In most businesses,

leadership is passed on to the next
generation. Bank of Commerce-
trained Gilbert U. Dee was brought
in to China Bank by his father DK in
1969, and he too, upheld the Bank’s
tradition of xinyong but infused new
banking concepts to keep up with the
rapidly changing times.

of the Central Bank there [Yu Guo-hua] and we were able management, branches administration, and corporate
to convince him. We told them we had to have a certain planning.
percentage of the Bank Filipino-owned before we could start The very first of the new groups in the Bank was Treasury.
expanding. They understood that. And my father was very In a small form, it started in 1972 as what is known in the hi-
close to the Taiwanese government. So we were able to do it. tech industry as a “skunkworks project”—that is, one run by a
In one sitting, the agreement was done.” few people who develop a radical innovation. A “skunkworks
This agreement with ICBC allowed China Bank to become project” operates with a high degree of autonomy,
a Filipino-owned bank following the new Central Bank unhampered by bureaucracy, so that it can work freely on
guidelines and paved the way for a major branch expansion. In advanced projects. Such a project has to be run this way,
1976 alone, the Bank put up four new branches: Davao (under because the institutional resistance and bureaucratic inertia
Manny Orduna), Cubao (under Nory Reyes-Lao), Greenhills of a large organization can stifle its success.
(under Jaime Sulit), and Legaspi Village (under Alex Lim)—as In the case of the Bank’s treasury department, it was chief
many branches as it had built in the previous fifty-five years. accountant Johnny Coreces and Ricardo Liong, assistant
By 1977, the Bank had 15 branches. By 1980, it had 24, by 1983, auditor, who drove the organizing of the new unit. They knew
28—a huge leap compared to only four in 1975. A bank that that the Bank had to get into the money market fast, despite
had only 200+ employees for many years would have well over the institutional inertia against it. The new unit would at first be
a thousand by the end of the 1980s. headed in name by Coreces and Liong. But in practice, the two
But of course, the delay in expanding did mean the Bank men accepted that the money market was a bewildering new
was well behind its biggest competitors—some of whom had world and it would be easier for young staffers to adapt to it.
over a hundred branches by the early 1980s. China Bank had Nory Reyes-Lao said: “At that time, I was just a senior clerk.
made progress, but it still had a lot of catching up to do. Dick Liong called me: ‘Nory, why don’t you help Mr. Coreces
In the meantime, the Bank had to create four new in the interbank lending?’ When I was there, Mr. Coreces told
departments that didn’t exist before— treasury, account me: ‘Nory, why don’t we also go for bidding of Treasury bills?’

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 139

 along with a few others like Felizardo Laureano, Tony Ong,
and “Banong” Figueroa. Nory called it the Research and
Investment Management Department (RIMD). For his part,
Liong ran interference for Nory, by putting the weight of his
I started learning the intricacies of treasury bills. We started authority behind the startup work and defending the young
working together so closely that we thought of forming a clerk from the complaints of conservative old-timers, who
whole organization to do it, because it became so extensive. saw Nory as a young upstart.
Dick Liong was also pushing for the setting up of money Because Nory was given a big assignment with very little
market operations.” resources with which to do it, he had to find ways to learn
Liong, who found Nory bright and energetic, took him out about the intricacies of the money market without having to go
of his regular clerking duties and gave him carte blanche to abroad to learn—which was what the big Filipino banks were
set up and run the new unit. Over the next year, Nory Reyes- doing with their financial whiz kids. Nory Reyes-Lao recalled:
Lao designed the procedures and manned the operations, “These big banks sent people to London to learn about the

Epimaco “Doy” Borromeo,

Roger Roman, William Uy,
Nory Reyes-Lao, Rodolfo
Maquiran, Inocencio Cruz,
Atty. Dean Telan, Medardo
Felipe, and Benjamin Diaz.

140 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
money market. Me, a clerk from China Bank—I just interviewed
these guys who went to London. I told Mr. Liong: ‘China Bank
has set up their money market operations in the cheapest way
ever.’ Whatever I got from them, I incorporated and tailor-fit it
to the systems of the Bank.” He added: “Eventually, marketing-
wise, the new group became a tool for us to compete, as far
as sourcing and retention of clients is concerned. Because
now we could give them a better rate of return, and clients
who became more conscious about how much they could earn
would come to us because now they could buy T-bills.”
By the end of 1973, RIMD was handling around P17 million
Ricardo Chua
in money market placements—a small figure by the norms of
the day, but still a respectable figure for such a new and tiny
unit. It was not yet a “real” treasury unit; it combined treasury Street-smart

F
work with economic forecasting and research. It was done
ormer Bank President and CEO Ric Chua
this way because at the time, the Bank needed all of these
recalled: “My father advised me to work for
functions carried out, but Nory didn’t have the resources or China Bank. He said that if I wanted to learn
management approval to build separate units for them. He about how business really works, I would learn it
made do with what he had. from the Bank’s Chinese customers. And he was
When Nory Reyes-Lao took a leave from China Bank from right. Once when I was a trainee in the Binondo cash
1973-1975 to study for his MBA in AIM, the unit was turned over department, this man came wanting to encash a
check for P300,000. The teller said, “Sorry, there’s
to Rene Lao, who came over from the planning and operations
not enough money in that account.” Someone was
group. In 1975, Rene split RIMD into two units, Treasury and
trying to back out on paying him. The customer found
Corporate Planning. By then, there was a consensus among out that the account was about P30,000 short. So
top management that the two functions were sufficiently the guy left, he went to the other wing of the head
important and complex that they deserved more resources, office and deposited P30,000 in that same account.
more people, and separate structures. The new setup was Then he came back and encashed the check. So he
consistent with the way corplan and treasury were handled at got P270,000, net. What a lesson for me. The Bank’s
customers are so street-smart. You can’t learn that at
international banks.
AIM. No school will teach you this.”
While at Treasury, Rene Lao helped the Bank learn to
manage its cash much more efficiently. For instance, China
Bank then didn’t have a methodology for determining if a

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 141

“The older generation of the Bank— they knew that
they needed the younger ones, like me and Gilbert, to
make changes. [My father and DK]…. gave us a free
hand to face the issues.” —PETER DEE

particular branch had too much cash in its vault. Rene said:
“Before, people would just say: ‘Well, this is my branch and
this is my cash in vault.’ But for purposes of macro fund
management, cash in vault represented a very liquid but not
an earning asset. So as the treasury staff then, we would
have to monitor the cash and say: ‘Do you have too much cash
Dee K. Chiong George Dee Se Kiat
in vault?’ Aside from the physical risks, the Bank isn’t earning
from that money. Tulog yong pera.” thought that I was trying to take powers away from him.
As treasurer, Rene found new efficiencies and brought in I said: ‘No. You are still on top. The final approval is yours
new methods that weaned the Bank away from relying on the as far as loans are concerned. But you have to delegate and
old intuitive rules of thumb for judging financial soundness. decentralize it. Everything can’t be centered on you.’
As treasurer, Rene did very well and was promoted rapidly, I think, sooner or later, there’s no choice but to delegate. In
first to VP and then in 1980 to first vice president. the beginning, yes, when you’re only a few branches, then
While at Treasury, Rene also was pulled in by Gilbert for everything can be centered in the head office. When we had
a concurrent assignment—the new Account Management around one or two branches, you can do that. But once you
Department. Gilbert said: “One of my first recommendations start expanding, there’s no way you can handle it. It’s too big.
was to form the Account Management Department. My father Not everything can be referred to you.”
Rene said: “We felt that we had to set up a corporate
marketing arm, which is account management. There was
none then. Everything was handled in the old style, the
Chinese style—very personal, face to face. It served its
purpose at that time. But if we wanted to expand, then we
needed a corporate banking unit or an account management
unit. So I helped set that up.” Rene hired, among other people,
Margarita (Margie) L. San Juan., who succeeded Nory Reyes-
Lao as account management group head.
While Rene was dealing with account management,
Nory (after a three-year stint setting up the Cubao branch)
was setting up Branches Administration (later Branch
Banking Group). The new unit was needed to cope with the
Guided by the wisdom of the old generation and driven by the energy of the command-and-control implications of the Bank’s ongoing
new generation, China Bank pushed forward, changing with the times while
preserving its customer-centric culture. branch expansion. Nory and his staff created standardized

142 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 70%
PERCENTAGE OF FILIPINO
OWNERSHIP OF CHINA BANK IN 1975,
FINALLY ALLOWING IT TO BEGIN A
BRANCH EXPANSION

procedures and manuals for every eventuality, so that the

Bank’s operations and lending would depend much less on
purely personalistic norms and face-to-face relationships.
Nory said: “When I set up Branches Administration, I set up
three major operating units. One is the expansion department,
because we had so few branches. And the second is branches
control, which is basically credit screening. The last is for the
proper administration and operations of the branches. We
had to make sure that our officers are properly trained. And
to monitor the proper deployment of officers—you’ve got to
balance them out. Some people are good at marketing, some Florentino del Rosario and Rene Lao.

people are good at making sure that all controls are being
followed. If the branch is all about control, then the branch is The need for
specialization
dead. If it’s too much into marketing, then the branch is also in
trouble. So you have to balance all of these out. There were so

R
many issues.” ene Lao said: “The Bank had these habits
The new structures and procedures eliminated a lot which had made it grow, and made it very
of guesswork, created a common pool of information and attractive to clients and entrepreneurs. But
indicators, and standardized procedures and criteria. With as time went on, there had to be changes. You can
these in hand, the Bank could make decisions more quickly no longer have different senior guys giving different
instructions on certain corporate accounts. There had
and more accurately and then implement them more
to be specialization and focus. So that’s why we set
efficiently. At Branches Administration, for instance, Nory put
up Treasury, Account Management, and Corporate
up a credit monitoring system for doing cross-checks among Planning. You needed different units to focus on
the branches so that unscrupulous individuals or companies different tasks, because the volumes of business
could not circumvent their credit limits by getting loans from had grown. It’s not going to be efficient any more.
different branches. During the old days, it was all right, because the
While Nory was setting up branches administration, and volumes were not that large. During the old days you
knew your clients really well. Now your knowledge
Rene was engaged with treasury and account management,
of the clients is not as thorough as it used to be. With
Ric Chua was having his own journey through the Bank. He
decentralization, our reaction time became quicker.”
was the youngest of the three, with no banking experience, so
he needed training. There was no manual for training, so Ric
designed his own program. He started at the bottom, rotating

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 143

through stints at all kinds of tasks, including tellering and the fund providers and the fund users. Because the branch
clerical work. Then he worked at the branches, first Cubao, was getting the money, yet it’s not able to lend out all the
then Greenhills, then Quezon Avenue—to give him a ground- money. So, in effect, it gives the money to the head office.
level appreciation for the operations, culture, and challenges But how should they be credited for whatever earnings they
of the Bank. are entitled to? There was no such report. So I did the first
During his training at the branches, Ric realized that the transfer pool rate of the Bank, which was not sophisticated.
Bank didn’t know if particular branches were profitable or But it is practically the same methodology that we still have
not; it knew its overall profitability, of course, but it didn’t today. Whatever deposit [you as a branch] have, we deduct
have a diagnostic tool to judge the performance of individual the reserve, because the reserve is something that you need
branches. Ric said: “So I did my own study. Because in to carry on with your business. Whatever is your net-out, we
business school, they teach you about the transfer pool rate. deduct whatever you use in your own loans; whatever is the
So I said, maybe I can devise a transfer pool rate between excess, you gave to the head office; they should provide you
with an income equivalent. So the branches have their own
books. It’s shadow accounting to show you that this is what you
are entitled to.”
CHINA BANK HEADCOUNT In 1978, Ric Chua, then only twenty-seven, became head
1945-1984
of Corporate Planning. He recalled: “Peter Dee wanted me to
800 go through the experience at the ground level, at the branch
area. And then he was the one who brought me back to
600 head CorPlan. We started talking about how do we grow the
Bank. We had to see how we had to position ourselves versus
competition, how to compete, how to make this bank grow. I
400
was there at CorPlan for a while. I started recruiting people
for CorPlan. That’s one of the things that I cherished—being
200 a mentor to some people that I had chosen. At that time I had
several very good staff.”
0
45 70 84

144 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 (Opposite page) The officers
and staff of Treasury
Department in the late
1970s.

(Right) Fermin “Barry”

Barrozo, Nory Reyes-Lao,
Antonio Tecson, Alex Lim,
Rodolfo Maquiran, and
Florentino Andrada on the
4th floor canopy where the
Executive Office was put up.

For CorPlan, Ric built

a small team of talented
young women in their
twenties, such as
Rosemarie Gan, Lilibeth
Cariño, Rose Drilon, Gia
Patag, Victoria Tong, and
Jocelyn Caparas. Ric said:
“We worked hard—just to
show you how much we enjoyed the work, my staff and myself, ACCEPTING CHANGE,
we were in the Bank every Saturday, year after year. There MAINTAINING THE CULTURE
was so much information that we had to digest. And we had to The Bank had to cope with an intense internal resistance
look for information. We were building the information too, the to change. Companies intent on changing the culture often
database. It was very good training for me and for my team—a stumble on people’s powerful attachment to old ways. But as
small group. We were both building the information and the business guru Jim Collins wrote in his book How the Mighty
team, and how we would proceed with that. So we started Fall: “When institutions fail to distinguish between current
talking about how we should do branching; how do we put practices and the enduring principles of their success,
together our budgets and our plans.” and mistakenly fossilize around their practices, they’ve set
Together, this group introduced the idea of budget-setting themselves up for decline.”
and performance targeting for the branches. Rosemarie Just as Ric and CorPlan encountered some resistance,
“Rose” C. Gan, who became head of Binondo Business Center Nory found some internal resistance to his work at Branches
and eventually EVP and segment head of Retail Banking Administration. He said: “In the past, the branch managers
Business, said: “At CorPlan, we were doing budgets and used to go directly to Peter Dee and Gilbert Dee. They had a
financial research. When we were introducing the concept hard time accepting the fact that now they had to go through
of budgeting; there was so much resistance from the branch someone else, who was not a Dee and who was much younger
managers, especially the old ones. The idea of budgets and than them. I understood them; they had been around so long
targets—it was a big change. They just resisted it. Eventually, and they had been dealing directly with generations of Dees.”
because of our persistence and the support of management, it Nory was thirty years or more younger than some of the
was implemented and they just had to follow. Those were the senior branch managers. But eventually, they came around to
times.” the idea.

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 145

Marge San Juan,
Rene Lao, Gilbert Dee,
Regina Dee.

(Right) Dee K. Chiong hard

at work.

Rene Lao also found similar resistance on the account that abrupt. The changes were introduced gradually. Primarily
management side. Branch managers and senior executives because the Bank itself was sensitive to implementing those
were unhappy about having to defer decisions about big changes. And we are seeing it in some other institutions when
accounts to a new unit led by so young a manager. Rene said: they change very rapidly. Your clients get nervous, plus there
“I don’t think it’s that easy, especially for older institutions . is the internal resistance as well. You just have to work on
. . .Here you are talking about the older generation who had it slowly. And the reality was our top management was also
long relationships [with the clients and the top bosses]. So very open to change. I think that was really the best part. Top
here come guys like Nory, or me—upstarts with long hair. And management knew that changes had to come.”
they’d say: ‘What are these young guys who have been in the Yet Gilbert and Peter did not want to rush the change
Bank just a few years talking about?’ People would say: ‘No, process and lose what made the Bank special: its values,
I used to approve this and this. How come it’s no longer with its tightly-knit work force, its closeness to its clients. After
me?’ Change is never that easy.” fifty-five years, the Bank had a special character that had to
Rene added: “There had to be some getting used to the be preserved. Gilbert and Peter still respected the experience
changes. But let me just emphasize—the changes were not and wisdom of the older generation; they went for gradual
change that would make the Bank more competitive without
harming the fabric of the Bank.
Peter said: “We had to go branching and we had to develop
CHINA BANK BRANCHES the manpower. We started getting new people, some of
1950-1980
them MBAs. It was not easy, because the Bank officers were
25 all from an older generation, and the new ones would not
blend easily with the older people. We had to create a new
24

20
atmosphere. The older ones had their own peculiarities. The
younger ones were go-go. Both our old and new employees
16

15
were good. It was just a matter of how to drive them and blend
them. We had to blend them together to get the best out of
10
everyone. We were all different characters. Nobody is perfect.
5 So you had to look at the good points of a certain person and
4

4
3

you just make the best out of it. What’s nice is when you know
2

0 how to blend the very smart guys with the rest.”

50 60 70 75 77 80

146 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 China Bank tellers in 1979.

Ric Chua said: “We have to build a strong organizational

team. And in doing that, you don’t try to hire only the best and
the brightest. These guys should really be grounded also. The
MBA graduates are not the only guys that you need. . . . I keep
on saying: ‘I wish the management team will be a good blend
of being book-smart and street-smart.’”
The Bank’s staff have fun inside one of the many vaults
Even today, Ric says, China Bank strives to maintain a purchased for the branch network expansion.

balance between the energy of the young and the wisdom of

the older staff. He said: “I have to give it to the board. They
Expanding the branch
network
said: ‘There’s nothing wrong bringing in young people full
of energy. But don’t make the mistake of losing the very

N
guys who have the seasoning, because banking is about ory saw branching as a great opportunity
understanding customers. It takes years and years of for the Bank’s people. He said: “For many
experience to get that understanding.’ Because some were years, we had very few ranks and branches,
saying, we should let people go at 60. The board said: ‘We so many good people were not able to move up for
should be more flexible. Let’s not lose the experience that 20 years. So when I set up new branches and started
to recruit people, I said that this would be a chance
they have gained. What a waste.’ So I think we will see a good
for us to give something better to our people. So
combination of these two. We will keep some of the best of the
everything else being equal, a China Banker would
older generation to preserve those experiences. And hopefully have the edge [in becoming an officer in a new
we could hand them down to the guys who are coming in. I branch]. We had many who had very good academic
have always believed that a China Bank manager doesn’t have attainment, say from U.P., with high grades. For the
to be the most brilliant or be an MBA graduate. The key is to last 10-15 years, they were doing clerical work—what
find the guys who have the passion [for banking]. How do you a waste of ability. So branching was a chance for us to
give these people their due.”
convert that passion into actuality?”

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 147

 Groundbreaking ceremony
for the planned CBC Tower
at the corner of Buendia and
Ayala Avenue.

BIG PLANS entered into a consortium with several other banks to create
By 1978, China Bank was back on a strong growth path; the Asian International Bank, a Filipino bank based in New
a lot of positive change was well under way after only three York. The partners were Pacific Bank, BPI, Far East Bank,
years of work. In 1978, China Bank had P2.81 billion in Solidbank, Equitable Bank, and Ayala Corp. The six banks
resources (an increase of 24.57% over 1977) and P1.32 billion each had 15%, and Ayala Corp owned the remaining 10%.
in deposits (an increase of 17.8%). It earned P53.87 million on Gilbert said: “So the six banks thought of forming a bank
gross income of P308.74 million. These numbers are much in New York. BPI came in; at that time it was headed by Villa-
larger than the 1975 figures of P1.56 billion in resources, Abrille, and then later it was Loinaz. Then Solid Bank, with
P518.9 million in deposits, earnings of P37.02 million, and Tecson. Equitable Bank was Peter Go Pai-lian, Far East Bank
gross earnings of 195.83 million. The Bank’s capital stock was Jobo, and Pacific Bank was there. When this new bank
was P172 million in 1978, compared to 1975’s P100 million in was formed, my father was a director. After two years of that,
capital. All the indicators were looking very good. my father said: ‘Gilbert, I think you should get to know these
So Dee K. Chiong was feeling confident and expansive. people. I am resigning as a member of the board; you take my
He started to make ambitious plans for the Bank to make a place.’ So I was the one traveling with them to New York.”
mark in New York, Hong Kong, and Manila. In 1978, the Bank By then, China Bank had gone abroad once more, this
time to Hong Kong. On November 14, 1980, China Bank
inaugurated its Hong Kong deposit-taking subsidiary, CBC
CHINA BANK RETURN ON EQUITY (%) Finance Ltd. This was led by Dy Tiong, who eventually became
1965-1980
a China Bank director and a good friend of Dee K. Chiong. It
was 40%-owned by the Bank. The rest of the shares were
22.83

25 owned by various businessmen who were friends of DK. China

Bank was looking to expand internationally through Asia and
16.85
15.98

20
eventually to Los Angeles and Francisco. This move, DK felt,
13.96

was a return to the international presence the Bank used to

15
have in China before the communist takeover.
10 At around this time, the Central Bank was introducing the
idea of the expanded commercial bank or universal bank—a
5
bank that combines commercial banking with merchant
banking activities like underwriting, loan syndication, money
0 65 70 75 80
market activities, and so on. By the early 1980s, the Central

148 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Bank was going to issue unibanking licenses to the soundest building in Boston (1976) and the 52-story OCBC building in
and strongest local banks, paving the way for them to achieve Singapore (1976). He would later design the new 72-story
a quantum leap in both scale and capabilities. China Bank had Bank of China tower in Hong Kong (1982). In terms of modern
every expectation that it would qualify with the very first batch bank design, only Sir Norman Foster (of HSBC Bldg. fame)
of unibanks, and it made preparations for expanding its range is his equal. Board member Edward Dee, George’s brother,
of operations, including starting its own venture capital firm. was an architect by training and was quite familiar with Pei’s
DK also wanted a much larger, more tangible sign of China reputation. OCBC was the correspondent of China Bank in
Bank’s success than a unibanking license. So on November Singapore and it was very pleased with its Pei-designed
15, 1979, he bought from Ayala Corp. an 11,000-sqm lot at building. All of these made Pei the inevitable choice for a
the corner of Ayala and Buendia Avenue. Henry Sy, the retail China Bank tower design.
tycoon, was the agent for Ayala who convinced him to buy the On August 15, 1980, DK held a groundbreaking ceremony at
land. The lot was so large and so strategically located that it the new lot. He anticipated that the new tower would cost over
made an ideal place for China Bank to make a statement. P300 million in 1980 prices. The China Bank tower, scheduled
On this huge lot, DK wanted to build a 32-story tower for completion in 1985, would have been the tallest building
for China Bank, to be designed by world-famous architect in the country. In 1983, Pei would win the Pritzker Prize, the
IM Pei. Ieoh Ming Pei was the son of former China Bank architecture world’s equivalent of the Nobel.
board member and Bank of China president Tsuyee Pei. IM But the building he was supposed to design for China Bank
Pei had recently finished the 60-story John Hancock Bank never came to be.

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 149

Gilbert said: “One morning, I was in my office
downtown, and then a phone call came, saying that
my father had died . . . .It was a big shock.”

THE UNEXPECTED
China Bank had big plans for the decade of the 1980s, but
it would run into unexpected obstacles. The first among them
was the fact that China Bank lost its top three leaders in quick
succession, in three consecutive years. On May 2, 1978, Albino
SyCip died of pneumonia. He had been retired from the board
for a year due to ill health. He was 91 years old and he had been
with the Bank for 67 years. Then George Dee Se Kiat died on July
2, 1979, at the age of 68. He had been with the Bank for 39 years.
The Bank was somewhat prepared for the passing of
George and Albino, because their health had not been good for
years. But the next death was not at all anticipated.
On December 24, 1980, Dee K. Chiong died of a sudden
heart attack in his Forbes Park home. DK was 68, but everyone
thought he would have gone on working for years to come, since
he had seemed very vital and fit. He had been at work in Binondo
and Taiwan with all his accustomed vigor and typical hectic pace. strokes; these were warnings already. But after a few minutes
Gilbert said: “My father—they considered him ‘Superman.’ he was okay again. He ignored them. He didn’t tell us.”
I think he got used to that name. He had no health problems. George Dee’s younger brother, Robert Dee Se Wee,
Then one morning, I was in my office downtown, and then the became the Bank’s president and chairman of the board. But he
phone call came, saying that he had died already. He died in his considered himself a figurehead, since he was not a professional
room, playing solitaire. To the Bank, it was a big shock. By 9 a.m., banker. He had been on the board for many years, but he had
the news had spread around the Bank.” spent his entire career on the Dee family’s other businesses,
Gilbert added: “I had no warning. But I was talking to my such as Hooven Comalco. So Gilbert and Peter Dee, as co-SVPs,
father’s doctor, who told me: ‘Gilbert, the heart is the strongest now took more responsibility for bank operations, with the able
organ in a person’s body. There is no such thing as a sudden assistance of many top executives.
massive heart attack. There were warnings. And your father The Bank was bereft of the triumvirate that had run it for so
ignored them.’ Then I begin hearing stories that when he was in long, just as it was entering a very turbulent decade. A time of
Taipei, dining with friends, in the middle of dinner, he would stop troubles was about to begin.
and would remove his tie. He did not feel well. These were mild

150 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
The passing of
China Bank’s
beloved triumvirate—
Albino Z. SyCip in 1978,
George Dee Se Kiat in
1979, and Dee K. Chiong
in 1980—was a blow to
China Bank. The new
generation of leaders
had big shoes to fill
and a long and difficult
journey ahead.

CHAPTER 4: BRAVE NEW WORLD: 1960-1980 151

 CHAPTER 5

A Time of Troubles
1981-1989

The Bank undergoes its most severe test, buffeted

both from within and without by stresses and surprises,
but it comes out strong and ready to grow again.

152 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
By 1980, co-SVPs Peter Dee and
Gilbert Dee had to step up and
continue their fathers’ legacy. Amid
the economic crisis that ensued,
the duo, backed by their highly
capable executives, managed to
keep the Bank profitable.

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 153

 D
ee K. Chiong’s unexpected death on Christmas Eve
1980 seemed to be a sign that China Bank was in for
stormy weather. Sure enough, on that death’s heels
came a series of serious problems, the likes of which
the Bank had not yet seen. Over the next eight years,
China Bank, like every major business in the country, would be
severely tested.
The time of troubles began only three weeks after Dee K. Chiong
died. On January 9, 1981, businessman Dewey Dee fled the country
with nearly $85 million in unpaid debts. Dewey Dee was part of a
group of four Chinese-Filipino businessmen (known informally as
the “Four Horsemen of the Apocalypse”) who owned shares in both
InterBank (International Corporate Bank) and Security Bank. Dewey’s
father, Rufino Dee On Hong, had worked briefly at China Bank in
the 1950s before leaving to start his own textile conglomerate,
built around Redson Textile Manufacturing. By 1980, Dewey and his
younger brother, Donald, were running the textile firm.
Unknown to most people, the high-flying textile magnate, on
top of his legitimate businesses, was apparently engaged in other,
less savory pursuits, including smuggling and black market forex
speculation. Some sources said that he had used his strong Central
Bank connections to acquire cheap credit from the government
through rediscounts, foreign loans, and foreign exchange swaps.
(Dewey Dee used to boast that he could walk into the Central Bank

154 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 governor’s office without an began calling in loans. The domino effect traveled through
appointment.) Like other textile the entire economy. As Milton Friedman wrote in Capitalism
manufacturers, Dewey Dee had and Freedom, when a bank is faced with demands from its
been hit hard by the economic depositors and creditors, it “will put pressure on other banks
downturn of 1979-1980, cheaper by calling loans or selling investments or withdrawing its
imports, and smuggling. In an deposits, and these other banks will in turn put pressure on
attempt to recover, Dewey Dee made others. The vicious cycle, if allowed to proceed, grows on itself
a series of big bets trading in sugar and as the attempt of banks to get cash forces down the prices of
gold, but instead of getting out of the hole, securities, renders banks insolvent that would otherwise have
he lost even more heavily. With his debts coming due soon, been entirely sound, shakes the confidence of depositors, and
Dee was in desperate financial trouble. To him, flight was his starts the cycle all over again.”
only choice. As always with financial panics, just when people and
Dee left behind debts to 16 banks, 12 investment houses, businesses need liquidity the most, there is almost none to be
and 17 other financial institutions—as well as $4 million in found.
postdated checks floating around in the informal financial The Far Eastern Economic Review reported: “For a time,
markets of Binondo. Much of his debt consisted of unsecured the air was so thick with speculative talk. . . .One payroll day,
loans from banks, borrowings from the money market, and some construction workers queued before the tellers’ window
loans from foreign banks with Central Bank approval. Dee’s at a Chinese-Filipino bank, word went around that there was a
own banks, InterBank and Security Bank, naturally turned out run.” Banks like Solidbank and Pacific Bank were hit by runs.
to be among his biggest creditors, but the contagion quickly The country’s two biggest investment houses, Bancom and
spread all throughout the financial markets. Atrium Capital, were forced to shut down, along with several
The flight of Dewey Dee exposed the structural others. The feedback loop created by the financial panic made
weaknesses in the local banking industry and a general predictions of bank runs a self-fulfilling prophecy—unless the
panic began. Banks refused to roll over short-term debt and government could step in to restore confidence.

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 155

 Lawrence See Nory Reyes-Lao

But at first, the Marcos government refused to COPING WITH CRISIS 1981-1982
acknowledge the scale of the problem. The newly installed The Dewey Dee crisis had revealed that the economy had
Central Bank governor, Jaime Laya, dismissed the gravity been ill for years, but the government had been able to mask
of the crisis: “Some banks get held up. Some banks get the symptoms. During the 1970s, Philippine development had
flooded. These things happen.” President Marcos insisted been facilitated by extensive borrowing in international capital
that the banking system remained sound. Eventually, though, markets. Between 1973 and 1982, the country’s debt increased
Laya was forced to mount a huge rescue effort and concede by an average of 27% a year. Although the Philippines did get
that the banking system had “fundamental weaknesses” government-to-government loans and loans from multilateral
that “were easy to disregard, to conceal, and to overlook, in institutions such as the World Bank and Asian Development
times of easy credit, high growth, and rapid inflation.” The Bank at lower-than-market rates of interest, the debt-service
government had to take over five weak banks: InterBank, charges on those and on commercial loans continued to
ComBank, Union Bank, Associated Bank, and Pilipinas Bank. pile up. With the global economy going deep into recession,
During these years, the Philippine economy was still masking the country’s problems was no longer possible. In
reeling from the Second Oil Shock. As a result of the fall of such an environment, with both capital and trust so scarce,
the Shah of Iran and the outbreak of the Iran-Iraq war, crude even an honestly-run business suffers as a result. Just as a
oil soared from $12.70 a barrel in December 1978 to $34 a rising tide lifts all boats, a receding one can just as quickly
barrel in November 1981. In response, the world economy leave them all aground.
slowed, and the Philippines was not spared. GNP growth
dropped to 4.62% (compared to 6.39% in 1979) and inflation
went up to 17.6%. The country also suffered from plunging
prices for its major exports—coconut oil, copper concentrate,
sugar, and lumber. Meanwhile, the country’s external debt
had reached $14 billion, and was increasing by $300 million a
month. The exchange rate deteriorated to $1:P8.2, compared
to $1:P7 only a few years earlier.
It was in this environment that the third generation of
China Bank leadership, Gilbert and Peter Dee, was going to
have to steer the Bank.

156 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
In the early 1980s, as the country’s economic woes worsen, the Bank’s
executives and employees band together to overcome one crisis after
another.

The biggest banks had the resources to cut their loan

portfolios, pare down operating costs, reduce risks, and
hunker down to outlast the storm. Some of them even had the
spare cash to acquire smaller banks like Comtrust and Family
Savings Bank during this period. Moreover, big depositors fled DBP’s head office in Buendia.
the money market and the smaller banks and took refuge in
the perceived safer haven of the largest six or seven private Bailouts and behest
loans
banks—making the rich banks even richer. The biggest banks
grew tremendously during this period; for instance, both Far

A
East Bank and PCIBank tripled their assets between 1980 mong the hardest hit by Dewey Dee’s flight
and 1985. The exclusivity at the top tier of banks was further and the financial crisis in the aftermath of the
underlined when the Central Bank started issuing unibanking Ninoy Aquino Assassination were the cronies
licenses in 1982 to the most capable banks: the P500 million of the dictator, including Herminio Disini, Ricardo
capital requirement was a formidable barrier to entry to this Silverio, and Rudy Cuenca. To prevent their impending
bankruptcy, Marcos ordered five government
small “club.”
corporations—including the Development Bank of the
The commercial banks in the second tier, on the other
Philippines and the Philippine National Bank—to bail
hand, didn’t have an extra cushion of cash during these out the beleaguered crony corporations. The bailout of
difficult times, unlike those in the first tier. Initially, China Cuenca’s Construction and Development Corporation
Bank benefited from the flight from the money market, getting of the Philippines (CDCP) alone cost P6.2 billion—or
over P900 million more in deposits in 1982 than in 1981, for a 2% of GNP and 30% of the country’s tax collection in
total of P2.63 billion. By 1984, it had P3.5 billion in deposits. 1983. By 1986, the PNB and the DBP had given out
behest loans amounting to P119 billion. When the
But then its deposit growth stalled and even retreated slightly
banks were rehabilitated in 1986, DBP assets had
in 1985. As the political and economic situation grew ever
been reduced by 86% and PNB assets by 67%. Many
more uncertain, depositors’ money was fleeing even higher up leading businessmen felt that the government was
the hierarchy. throwing away public money to prop up the president’s
Since China Bank could not, for legal reasons, start its cronies—at a time when sounder, more productive
branch expansion until several years after its peers, it was no firms badly needed and better deserved the capital.
longer among the biggest players by the early 1980s. By 1980, The Philippine banking industry, already undergoing
many challenges, was weakened even further.
the two biggest private banks each had double China Bank’s
assets; by 1985, China Bank’s assets were about a fourth of

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 157

 “There are ups and downs in business. But if we feel this
client is from a good family, they have good values, [we believe]
they will recover, then China Bank will help them.” —GILBERT DEE

the biggest players. It did not have (and neither did it want) P115—only fifteen pesos above par value. The market, simply
access to the billions in cheap credit that the Central Bank put, had lost confidence. (But a particularly savvy investor and
provided to the few banks that were particularly close to the member of the board, Henry Sy Sr., was quite happy to snap
regime. up many thousands of China Bank shares at these greatly
The Bank’s profits took a hit during these years. In the reduced prices during the 1980s; in due course, his faith in the
1960s, China Bank’s average return on equity was over 25%. inherent value of the Bank would be confirmed and rewarded.)
In 1966, the Bank made a return on equity of 27.69%. On the China Bank managed its situation as best it could. It
other hand, in 1981, China Bank earned a return on equity of slowed down lending, watched its operating expenses closely,
12.13% and in 1982, 11.18%. and cut back on capital expenditure. The biggest item on
Moreover, China Bank, like many others, became the early 1980’s capital expenditure (capex) budget was the
vulnerable to rumors and runs. Many Chinese-Filipino banks, construction of the new 32-story China Bank tower on Ayala
even those not associated with Dewey Dee’s misdeeds, saw Avenue—which meant an estimated P300 million in 1980
their reputations diminish undeservedly. The Bank’s stock prices. Given inflation and devaluation, it would have cost
began a steady decline. In 1981, China Bank stock was trading more than double that by the planned 1985 completion. Yet
at P170 per share, compared to P225 in 1979. By 1982, it was some executives felt that the Bank ought to continue with
trading at P120 per share. By 1983, the stock was down to building it, partly out of respect for DK’s dream.
But Bank auditor George Pay opposed the plan vehemently.
He said that the new tower would be a white elephant for the
Bank, and eventually he won the argument. The basic problem
CHINA BANK RETURN ON EQUITY (%) was that for the Bank to use the 11,000-sqm lot efficiently,
1966-1982
it would have to fill it up and build a tower dozens of stories
20 high, with hundreds of thousands of square meters of space.
It simply didn’t have the capital for such a building. In 1981,
China Bank postponed the tower construction, and in the mid-
16.85
16.60

15
1980s, abandoned it altogether.
But China Bank remained profitable and prudent during
10
these years, and it continued to command respect in financial
11.18

circles. It did its best to keep on lending to reliable clients.

5 In 1982, its loan portfolio remained only slightly larger at
P2.5 billion, compared to P2.1 billion in 1981—the result
0 of more cautious lending. Moreover, with the slowdown in
66 81 82
the economy, its traditional clientele of manufacturers and

158 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 After a 3-year exile in the
United States, Benigno
Aquino, Jr., returned
to the Philippines on
August 21, 1983. Shortly
after setting foot at the
tarmac of the Manila
International Airport,
he was shot dead.

traders had less reason to take

out new loans.
In keeping with its
customary practice, China
Bank did its best not to cut
credit lines to temporarily distressed companies and clients took it and ran away. Issues do arise. The world is not so
in whom it had faith. Many clients were vulnerable in 1981 and insulated that we cannot find out. There is a Chinese saying:
1982. Their sales and earnings projections were off, and thus, ‘No matter how tight the egg is, liquid still evaporates through
their ability to repay debt. But China Bank—true to its history the shell.’ So we find out what is the real score.”
of, as Dee C. Chuan put it, “ministering understandingly to Nory added: “Now if the enterprise risk is properly handled
credit needs”—tried not to push them to the brink by calling in and good management is still intact, then we try to support
loans. this client during hard times. But we also must cover our
Gilbert Dee said: “That’s our policy. When a company falls, risks. And as we were trying to carry him through, we ask
we don’t automatically cut the credit line. Cutting [the line] for additional collaterals. We try to repackage our exposure
is not our policy. All businesses have good times and bad as something that will be self-liquidating, so we can protect
times. If they are not doing well, you don’t [automatically] cut ourselves. We can’t just help and help; we would just leave
the credit line. Life is not always smooth. There are ups and ourselves open for more problems. I used to tell clients:
downs in business. But if we feel this client is from a good ‘Other banks in good weather, they lend you their umbrella. In
family, they have good values, [we believe] they will recover, bad weather, they take it back. China Bank is different. In good
then China Bank will help them.” weather, we will lend you our umbrella. In bad weather, we
Nory Reyes-Lao described how the Bank determined ask you to reinforce that umbrella and we will still lend it to
which of its troubled clients it would continue to support: you—but it must be reinforced.’”
“First, we analyze the account to determine why it was having
difficulty. We do a lot of informal credit checking through our THE CRISIS INTENSIFIES
networks. We take a look at the enterprise risk—financials 1982-1983
and profitability, its competition. Is this business really worth Despite the Bank’s best efforts, it continued to be buffeted
reviving? If everything is okay, then we look at the management. by macroeconomic and sociopolitical forces. In 1982, the
Is there something wrong? Did this guy all of a sudden start economy continued to slide. GNP growth dropped further,
playing hooky? Did somebody steal his money? Did the relatives to 2.84%. The government tightened its belt, but the budget
fight, did the spouses fight? You have to find out what really deficit continued to balloon, to P14.4 billion. The country’s
went wrong. We had a case where a man entrusted his money foreign debt—which had gone from $2.3 billion in 1970 to $24.4
to a son-in-law to buy foreign exchange; the son-in-law just billion by 1983—had become a ticking time bomb. As part

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 159

 Central Bank Governor Jose “Jobo” Fernandez Gilbert Dee

of the US Federal Reserve’s effort to curb inflation between since billions in the nation’s short-term debt were coming due
1979 and 1982, US interest rates climbed, and the interest on in 1983.
Philippine commercial debt skyrocketed as a result. Throughout the first half of 1983, the pressure on the
In the early 1980s, the debt bomb had gone off in several Philippines continued to build, despite a fresh $300 million
Latin American countries. In August 1982, Mexican finance loan acquired by the Central Bank. In 1983, interest payments
minister Jesus Silva Herzog declared that Mexico would exceeded the net inflow of capital by about $1.85 billion. In July
no longer be able to service its debt. Mexico and Argentina 1983, the government was forced to devalue the peso from
declared moratoria on their debt payments and underwent $1:P8.54 to $1:P11.11.
economic meltdowns. The next ten years would be known as On August 21, 1983, with the murder of opposition leader
“La Decada Perdida”—the “Lost Decade” of Latin America. Benigno Aquino, Jr. at the Manila International Airport,
The debt crisis cut incomes, sent unemployment skyrocketing, the political and economic situation exploded. Military
and prevented any real per capita growth until the early 1990s. investigators blamed the killing on the communist New
In the wake of Mexico’s default, most commercial banks People’s Army (NPA). No one believed them. The murder
reduced significantly or halted new lending to the Third World. triggered a tremendous wave of anti-government protests
Many analysts believed that the Philippines would be next, and loud calls for Marcos’ resignation. The loss of investor
confidence resulted in massive capital flight, at the rate of
US$12 million a day. As the weeks passed and billions left
the country, the country no longer had the forex reserves to
FOREIGN EXCHANGE RATES - service its huge foreign debt.
YEAR-END On October 14, 1983, the Philippine government declared
PHP versus USD
25 a debt moratorium. A Philippine negotiating team flew to New
19.03 York City in late 1983 to discuss a rescue package. Cesar
20 Buenaventura, then CEO of Pilipinas Shell, was part of the
team. He recalled: “The country declared the moratorium in
15
October 1983. Then we went to New York. . . to negotiate with
the group of banks—[Prime Minister] Cesar Virata, myself,
10
(Central Bank Governor Jaime) Laya, and I don’t remember if
[DBP CEO Placido] ‘Cidito’ Mapa was there too. We sat down
5
to meet and we were looking at numbers. They said to us:
0 ‘Gentlemen, do you know that we cannot find $600 million
74 75 76 77 78 79 80 81 82 83 84 85
in your books?’ Virata and I looked at each other and there

160 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
was an embarrassed silence. So we went back to look at the
numbers. That’s when we found out that the Central Bank
overstated our reserves by $600 million. . . .By that time, the
credibility of the Philippine government was next to nothing.
We could have completely collapsed—the whole Philippine
economy. We really didn’t have any dollars.”
The IMF discovered that the Central Bank had been lending
and reborrowing existing reserves throughout most of 1983;
by use of this subterfuge, it was counting the funds twice Albino SyCip with his sons, Alex, David, and Wash.
in its reserve statistics. The country lost the confidence of
international lenders and it was unable to access any new
Jobo and the SyCips

T
dollar loans for over a year. Marcos was forced to transfer
Jaime Laya to the education department and find a new he new governor did have ties to the SyCips,
Central Bank head. At this point, the country had only enough both father and son. Jose “Jobo” Fernandez
was a very good friend of Washington SyCip,
foreign exchange to pay for less than a month’s worth of
who, in 1958, had convinced him to set up his own
imports; its net reserves stood at -$1.8 billion. The debt
bank. Jobo was personally indebted to Wash’s father
crisis stopped the flow of trade credit, causing a huge drop in as well. Jobo had approached Don Albino for a loan
production and consumer goods imports. to finance the organization of the new bank, Far East
Desperate times require desperate measures: on Bank & Trust Co. Jobo, while very successful as a
November 4, 1983, the Central Bank suspended the operations banker, wasn’t as liquid as the other initial investors
of the foreign exchange market, pegged the exchange rate in Far East Bank: men like Aurelio Montinola Sr.,
Senen Gabaldon, Ramon del Rosario Sr., and Carlos
at P14.002:$1, and required licenses for foreign exchange
Palanca Jr., among others. Jobo needed to borrow
payments. All local commercial banks were required to
money to pay for the one-eleventh of Far East Bank
surrender all dollar proceeds from their export remittances shares that would entitle him to a board seat. Albino
and inward transfers. The Central Bank pooled available granted Jobo the clean loan that he had requested,
dollars, and of this central forex pool, it would allocate and Jobo would always be grateful for the “Dean of
exchange for imports and payment of various foreign services. Philippine Banking”’s faith in him. Wash said of this
The Central Bank alone would decide who would get dollar loan: “My father had the authority to make certain
[clean] loans to people, and he did extend those loans
allocations and in what amounts.
to those he thought had drive and ambition and had
To plug the outflow of dollars via the black market, Trade
confidence in the country.”
Minister Roberto Ongpin centralized forex transactions with
an ad hoc currency exchange unit, created by EO 934, and

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 161

“One customer said to me: ‘If there is any bank at this
stage of the game that I will trust, it will be you guys.’”
—RIC CHUA

formally titled the “Presidential Anti-Dollar Salting Task

Force.” Cesar Buenaventura said: “That’s when Bobby Ongpin
created the Binondo Central Bank. He gathered together the
five top black marketers and he said: ‘You guys will just make
ten centavos on all the dollars that you are going to collect.
You give all of it to me and we’ll fly this haul to Hong Kong.’
That was the source of the money that we had to use for our
needs.”
This Binondo-based network of moneychangers and
currency traders continued their operations and made some
profits, but they had to cooperate with the government by
buying and selling at government-dictated rates.
This draconian dollar regime was stricter than anything
the country had ever seen—even compared to the already Marcelo Nubla and Anthony D. K. Chiong, son of Dee K. Chiong.

tight forex controls of 1949-1962. China Bank was particularly

affected, because its traditional core constituency was made long-time finance technocrats to the post. But he couldn’t,
up of Chinese-Filipino traders, retailers, and manufacturers precisely because the regime’s top finance experts, having
who were especially dependent on the free inflow of dollars. been in charge, were already considered abroad to be
They needed them to import finished goods for retail and tainted by the recent troubles. Only a man like Jobo, with
wholesale, get raw materials for assembly into finished his combination of banking skills, sterling reputation, and
goods, and buy equipment for manufacturing. The Bank didn’t known independence from the regime, would have been
have recourse to the large consumer banking base that other internationally acceptable.
banks had built; for the past sixty-three years, China Bank At first, Jobo tried to demur from taking Marcos’ offer,
had been very closely tied to the flow of international trade. saying he had enough problems protecting Far East Bank.
Marcos’ next task was to replace Laya with someone Marcos replied: “Your bank will collapse anyway if our
who could command respect internationally, find a way [external] debt problem is not solved and the entire [financial]
to tackle the balance of payments crisis, and keep the system goes down.” Once the problem was stated that way,
financial system from meltdown. He turned to Far East Bank Jobo had no choice but to accept.
president Jose B. “Jobo” Fernandez. Jobo, a 1949 graduate At the new governor’s first briefing with Cabinet ministers
of Harvard Business School, was probably the preeminent in January 1984, Jobo sardonically said: “Gentlemen, I feel
figure among his generation of bankers. He was not Marcos’ that all of us are just shuffling the deck chairs on the Titanic.”
first choice; the dictator would have preferred one of his At another moment, he would quip that he had accepted the

162 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 50.3%
PH INFLATION RATE, 1984

-8.83%
PH GDP CONTRACTION, 1984

Peter Dee briefs the Bank’s young executives.

Central Bank job “in a moment of insanity.” This line was very Jobo’s shock treatment came with large economic and
much in character—Jobo would need his sense of humor in social costs. Many small and medium enterprises had to stop
the years to come. When he won the Management Man of the operations because of the high cost of money. More than
Year Award in 1990, Jobo said that he did not understand what 400,000 workers were laid off in 1984. Exports and imports
the award was for: he quipped that all he seemed to have slowed, and for the first time since World War II, GNP actually
produced were protracted lawsuits from the banks he had contracted by 8.83%. Inflation soared to 50.3%. In June
shut down. 1984, the government announced another devaluation; the
To head off the threat of hyperinflation, Jobo Fernandez peso was worth $1: P16.69 —a 50% drop. For all of 1984, the
clamped down on excess liquidity by raising the reserve government had barely enough foreign exchange to import oil
requirement for banks. He extended billions in emergency and food. For instance, it did not have enough to pay for airline
assistance to ailing banks and helped to arrange for tickets; Northwest and other airlines were threatening to pull
acquisitions of weak banks. His key move, however, was out of the Philippines. The Central Bank managed to placate
offering a new kind of Treasury Bill with extraordinary the airlines with a sizeable IOU, with a large premium.
rates of interest, ranging from 36% to 42%. The net effect
of these so-called “Jobo Bills” was to increase bank lending CHINA BANK AMIDST
rates to astronomical levels, well over 40%. (In contrast, THE CRISIS, 1984
the US Federal Reserve during its 1979-1982 efforts to fight Given all of these macroeconomic problems, nearly every
inflation under Paul Volcker raised the prime lending rate to bank outside of the circle of the big unibanks was in trouble in
“only” 20%.) As money in circulation dried up, the Philippine 1984. Few people were willing to apply for new loans, given the
economy slowed to a crawl. The Jobo Bills achieved several ruinous rates; the banks, on the other hand, were reluctant to
important objectives: they mopped up excess liquidity in the lend. But even existing loans posed their own problems, since
system, stabilized the currency, curbed capital flight, and many borrowers could not pay off their loans; if pressed by the
provided the banking sector and other large asset-holders banks for repayment, they went out of business. The industry-
with high-yield, low-risk investments. wide past-due ratio rose from 11.5% in 1980 to 19.3% in 1986.
Cesar Buenaventura said: “The rates went up to 40%. But Yet, foreclosing the mortgages and getting the collateral
that was an effort to cut off speculation. Of course, Jobo was often did not help the banks much either; they were stuck with
maligned for that. I think that was part of the ‘medicine’ you shares or assets that they could not sell at a fair price, given
just had to take to stabilize the economy. Otherwise, the peso the down market. These banks were faced with an unpalatable
would have gone to $1:P50 or $1:P60, or who knows. It really choice between accepting a loss to generate liquidity or
was in real trouble. Everything went against us.” holding on to the undervalued asset in hopes of realizing its

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 163

true value once the crisis was over. Either choice carried its million, for a return on equity of 8.37%. Worse, the company’s
own risks. interest income of P554.26 million was actually less than its
By early 1984, many banks were limping. Even the big interest expense of P569.49 million. Since interest income was
unibank Allied Bank asked for and received P3 billion in the lifeblood of the Bank, the situation was untenable.
emergency Central Bank assistance. To prevent small Ric Chua said: “Those years were difficult. The country did
banks from toppling over and creating a domino effect, Jobo not have enough dollars. Our customers could not open LCs.
Fernandez encouraged the bigger banks to acquire them. Many banks were being closed, others were in trouble. The
PCIBank acquired the Insular Bank of Asia and America interest rate was 48%. How can you survive? Those were very
(IBAA). BPI acquired Family Bank from the Gotianuns. Jobo difficult times for us. Our net income dropped significantly. We
tried to arrange for the sale of Pacific Bank to the Bank of were only a little above breaking even.”
Hawaii or Solidbank. The Bank was forced to suspend dividend payments in
Over at China Bank, the signs were troubling. In 1984, 1984, 1985, and 1986. In 1984, China Bank stock was trading at
the Bank sharply reduced its loan portfolio by over P757.7 P70 per share, compared to P225 in 1979; by 1985, it would be
million to P2.63 billion (down from P3.39 billion in 1983), and trading as low as P55 a share at some points.
increased its reserves. Despite this, its profits were dropping The Bank still had large, valuable assets, such as the
sharply; it earned P41 million on gross income of P810.82 11,000-sqm lot on Ayala corner Buendia, plus big foreclosed
properties such as the 13-story Sarmiento Building (now the
SSS Building) on Ayala Avenue corner V.A. Rufino. It owned
many more prime properties on main streets in Baguio, Cebu,
INFLATION RATE (%) and other cities. These properties were cumulatively worth
1980-1990
tens of millions. But the market prices on the assets had
50
fallen so much that Bank leaders hesitated to accept that big a
loss. Selling would “lock in” that loss. These prime properties
40
were so strategically placed that they were guaranteed to
appreciate hugely in value once the crisis was past. But of
30
course, as in all gambles of this nature, the trick for the Bank
was staying solvent long enough to realize that value.
20
12.3 With so many commercial banks tottering, runs and

10
rumors of runs were rife in 1984. In July that year, there
were reports of anonymous leaflets being circulated urging
0 people to withdraw their money from banks or else face dire
80 81 82 83 84 85 86 87 88 89 90
consequences. The big savings bank, Banco Filipino, owned by

164 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
The anti-government protests and calls for Marcos’ resignation after the murder of Ninoy Aquino in August 1983 resulted in the loss of investor confidence in the
country and massive capital flight.

the Aguirre family, was struck by a run and was forced to close in assets and three million depositors, could go under, then
on July 23. It was allowed to reopen on August 1, 1984, with an almost everyone was vulnerable.
additional P3 billion in emergency loans by the Central Bank. In August 1984, China Bank was struck by a run that
The Aguirres insisted that they had a right to “unlimited and caused P700 million in deposits to be withdrawn in only
unrestricted financial support” from the Central Bank. But three days. Rumors on the street said that it was about to
eventually, Jobo Fernandez concluded that the bank was too follow Banco Filipino. Rene Lao, as head of Treasury, and Ric
far gone; in March 1985, Banco Filipino was shut down by the Chua, as auditor (who succeeded George Pay) were tasked to
Monetary Board. monitor the situation.
With Banco Filipino tottering, rumors spread that other Ric Chua said: “That run was caused by a lot of rumors.
banks would soon follow. One key thing to remember The Chinese market is cash-rich, but they are also prone to
about Banco Filipino is that, although it was a savings rumors. Things travel so quickly among them. You have to
bank and therefore technically a step below a commercial remember: in front of us [at the Binondo head office] was
bank, in terms of assets it was bigger than two-thirds of Banco Filipino, going through all those problems. Those
the commercial banks in the country. Ordinary folk would days were very scary moments. Day by day, I was with Rene
understandably think that if Banco Filipino, with P4 billion Lao and we were watching how the market was behaving.

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 165

 “I think we are known as the Bank with a heart.
I hope, in the future, it will always be like that. Sometimes,
you help people in their hour of need; when they recover,
they will always be grateful.” —NANCY DEE YANG

We were saying: ‘What are the steps we have to take if things

get worse?’ A bank cannot withstand a run that lasts longer
than two weeks. Even just four days is worrisome enough. The
run started on a Monday. By Thursday, fortunately, everything
had quieted down already.”
Rene Lao said: “When you are inside a bank during a run—
you’re stressed out, you don’t sleep. You watch the financials,
you take a look at liquid assets. Then you take a look at what
can be done. That was a lot of stress over three days. That was
why we have that mechanism from the Central Bank where
you can get emergency loans. We didn’t need to get the loans,
in the end. But of course, we were getting ready. We already
communicated with the Central Bank; we were prepared.
Fortunately—primarily because of our clients’ loyalty to the
Bank—it did not deteriorate to that kind of situation.”
Nancy Yang recalled: “We displayed stacks and stacks of Ric Chua said: “That incident showed that the brand of the
cash at all the tellers’ cages, and somehow that helped calm Bank was very strong. That was the best test [of our brand].
the clients.” Some customers went to the Bank and said: ‘I am not afraid
The run petered out by the fourth day, as loyal clients went about your Bank. What has changed for me to get worried?’
to the Binondo head office and made a show of support. Rene One customer said to me: ‘If there is any bank at this stage of
said: “This is where China Bank is different. Our old clients the game that I will trust, it will be you guys. I am not taking
went to the Bank carrying money and saying: ‘I am depositing.’ my money out.’”
They put in big amounts, in time deposits. There really is a Ric added: “Part of what helped us [in addition to the
special relationship between the Bank and its clients.” clients depositing more money] was we were ready with the
Long-time clients such as businessmen Luis Uy and Shao cash. No one was to be turned away. If we had slowed down
Tick Chong put in considerable sums back in the Bank. Luis the withdrawal process or seemed hesitant, then we would be
Uy said: “The Bank was very helpful to us in the past. So we in trouble. I saw that happen later with other banks. We said:
wanted to help it now. We were very confident that the Bank ‘Let people withdraw. Go ahead.’ When people hear about it,
was still strong. We said: This problem is just temporary.” As they would think: ‘Oh, the situation there is not so bad.’”
some of the Bank’s oldest customers took this highly visible In the spectrum of the bank rescues that the Central Bank
action, they helped calm their fellow depositors’ fears. carried out during the crisis years, even the never-executed
P700 million request that China Bank was contemplating

166 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 (Opposite page)
China Bank weathered the 1980s
crisis, driven by the optimism and
hard work of its people, including
vice presidents Nancy Dee Yang and
Ricardo Chua who at the time were
the head of Branches Administration
Department and the auditor,
respectively, and the support of its
clients.

(Right) Peter S. Dee, second from

right, became China Bank’s president
in 1985 at the age of 43.

was still a small amount—compared to the billions in funds box, it doesn’t matter. They feel safe, comfortable; they have
disbursed by the Central Bank to other banks between peace of mind—as long as it’s with China Bank.”
1983 and 1985: Banco Filipino (P3 billion), Pacific Bank (P2 With the government looking increasingly weak and the
billion), Manila Bank (P3 billion), Allied Bank (P3 billion), NPA insurgency gaining momentum, some clients feared a
Producers Bank (P2 billion). communist takeover might be imminent. They looked to the
Fortunately, the Bank did not need the assistance. Bank for help.
Instead, it had received an unexpected confirmation of Ric Chua recalled: “People were worried about the
just how strong its ties with its clients were. If its financial situation and thought they might have to leave the country
capital was not as substantial as other banks, its “social via the [southern] back door. They might have to take a boat,
capital”—the trust it had earned over the decades within the a small plane or whatever. They would become refugees.
business community—was as strong as ever. In a moment It was that bad. For that eventuality, one client of mine
when the institutions of government were weak and in kept some of his cash inside a safety deposit box in China
doubt, the clients’ long memories of the Bank’s past support Bank. He said to me: ‘Pakiusap ko lang: Pag may problema,
were enough to make it pull through. pakibukas ang safety deposit box ko.’ That was the kind of
Albino SyCip would have said: China Bank was simply trust he had in us.”
reaping what it sowed. With the crisis, China Bank had a problem dividing its very
limited forex allocation among many clients. International
HELPING CLIENTS WEATHER department head Lawrence YL See said: “There was such
THE STORM: 1984-1986 a scarce supply of foreign exchange allocations per bank.
Even with all its problems, the Bank still strove to serve You [as China Bank] became the allocator. So you had to
and be worthy of its clients’ trust. Nory Reyes-Lao recalled go through your list of regular import clients and use their
a particularly telling instance of this trust: “During crisis [historical] needs as the basis for a formula on how to divide
periods, some of our clients trust the Bank so much that they the pie proportionately. There was never enough for everyone.
will go to us, withdraw their money and tell us: ‘Please issue Everybody had to accept a cut. You had to be fair; you couldn’t
me a manager’s check.’ And they will bring the manager’s serve one client and let the others go down the drain. On the
check and lock it up in their China Bank safety deposit box. other hand, you had to consider also that certain clients could
Money in the millions. Of course, we were happy that they got not survive, especially in manufacturing, if they didn’t have
our manager’s check; our interest expense stops.” sufficient raw materials. We couldn’t make everybody happy.
Nory added: “They trust the Bank—to them, whether the So I—together with some officers—divided the pie. Then the
money is there as a deposit or in a check in a safety deposit clients would accumulate dollars. We would give a certain

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 167

 Gilbert’s good
relationship with
clients and Peter’s good
instincts as a banker
prove invaluable in
weathering economic
storms.

allocation for them. Maybe next month, we could give them a

little bit more. They could put the two together, and maybe it
would be enough for one shipment.” was where we got the additional protection, by saying: ‘When
Even without the regular stream of dollars it was the goods arrive, and you want to sell it to that guy, can you
accustomed to, the Bank found creative ways to help its also ask that guy to assign the proceeds to us?’ It was an extra
reliable clients during the crisis period. Nory Lao explained effort. Legally, it was a little bit more intricate. But that meant
one method they used to help: “These companies during the we were going out of our way to support this company. So as
crisis period, where there was no foreign exchange, they he imported raw materials for his products, we, as the Bank,
needed to open LCs. So what we did was we allowed the LCs to got the additional credit safety. Along the way, as he was able
be opened—provided two things. If they had cash, they gave us to complete his transaction, he made some profit on it, so
the cash—even just 20% or 30%. And when the goods arrived hopefully he would be able to continue his business. We were
in the Philippines, normally you would get a trust receipt. That willing to go and take that extra mile.”
Nory added: “This was a lot of added work. But then, think
of it this way: How much time and money and effort must you
exert to get a [new] client? Once you get that client, you are not
even sure how he will perform, and what his credit risk is. But
if you already have experience with some clients, you already
know them. And that additional effort you exert for [a trusted
client], you can equate that to the effort of trying to get a new
client. So you might as well help him.”
One good example of a business that relied on China Bank
during these difficult times was Pacific Paints, founded by
Vicente Ong Sue in February 1953. Ong was a long-time client
and friend of Dee K. Chiong; he started his business with a
loan from China Bank. In 1964, Ong secured from the top US
paint firm Boysen the license to manufacture its premium
paint products. Pacific became the Philippine market leader in
paint. But as the Ongs discovered in 1983-1986, even market
leadership is not enough when you have no foreign exchange
to pay for raw materials. By 1984, the Pacific Paints plant was
running at 50% capacity or less; sometimes the production
line had to be shut down for lack of materials.

168 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Willy Ong, now Pacific’s CEO, was then a young manager
working for his father, Vicente. He recalled: “My job then was
to buy dollars. I would go around—Ermita, Binondo, even
Clark Air Base. I would also go to the Binondo Central Bank
to get some allocation as well. Some banks could not give
you all that you needed—but they gave you something, so you
really appreciate that effort. We got a regular LC allocation of
dollars from China Bank, even during the crisis. Of course, it
was not as much as before. But at that time, if you were given
$10,000 or $20,000, that was already good enough for us.
China Bank did not let us down.”
Willy said: “The one thing we learned is, if a bank is a part Keeping one’s word
of a conglomerate that is heavily involved in manufacturing, (Palabra de honor)

I
the dollars would be allocated to them. It goes to their own
n the 1980s, China Bank had to sell some
factories or their system only. We learned from that. That’s
properties to generate new capital. Its biggest
why after the crisis, we don’t do a lot of business with a bank
and most attractive assets were in the country’s
that has behind them a conglomerate or manufacturing. With central business district, specifically on Ayala Avenue.
China Bank, yes—we still do business with China Bank.” One of these was the Sarmiento Building which
China Bank also helped the Ongs of Pacific bring in the Bank decided to sell to the SSS. But the process
their raw materials in a pay-before-delivery importing dragged on because of government red tape. Ric
arrangement, devoid of the usual LCs. Willy said: “The foreign Chua recalled: “Peter Dee committed to Joey Cuisia
of SSS to sell the Sarmiento Building. Originally, the
suppliers at that time, with any shipment to the Philippines
agreement was [a sale in] 90 days. But SSS went
would want it to be confirmed once, twice, three times before
beyond 90 days—maybe 180 days already—and we
they finally would ship out to you. I would place the money could have called off the deal. The market price went
with China Bank, China Bank would remit the money to the up, almost double. But Peter said: ‘No, Ric. We gave
correspondent bank, and then the correspondent bank would our word.’ We left a lot of money on the table—I won’t
tell the supplier: ‘I have the money. Ship it.’ Nobody was be surprised if it was P60 to P100 million.”
advancing money for anyone. It was cash basis.” Dee C. Chuan and Albino SyCip had been gone
from the Bank for many years, but their values, such
Pacific Paints remained the market leader with over 90%
as the importance of keeping one’s word, still drove
of the high-end paint market. Willy Ong remains grateful to
the institution.
the Bank. He said: “I remember the banks that supported
us during the crisis. Banks really had difficulty getting hard

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 169

“The task of achieving profitability does not belong
just to the very top. It’s everybody’s concern, and
everybody’s participation.” —EDDIE GO

currency. But those banks who still allocated dollars for you
on a monthly basis—that meant a lot. We dropped a few banks
after that and continued doing business with the banks who
were supportive. You won’t know who your friends are until you
get into a bad situation. With China Bank—we are taken care of.”
Nancy Dee Yang, granddaughter of Dee C. Chuan and
daughter of George Dee Se Kiat, who headed the Bank’s
Branch Banking Group for many years, said: “I think we are
known as the Bank with a heart. I hope, in the future, it will
always be like that. Sometimes, you help people in their hour
of need; when they recover, they will always be grateful. You’ll
forever win their loyalty.” She added: “Our current motto ‘Your
success is our business’ really shows our concern for our
clients’ well-being; it aptly describes China Bank.”

REVERSING THE DECLINE

1985-1987
Like the rest of the country, after four years of crisis, the
Bank was in precarious shape by 1985. Its assets had gone
down to P4.371 billion (from the 1984 level of P4.847 billion)
and its deposits to P3.235 billion (from the 1984 level of P3.504
billion). It earned P11.288 million on gross earnings of P746.09 The most telling statistic amid a welter of worrisome ones
million, for a return on equity of 2.18%—far below the rate of was this: In 1985, China Bank again had a “negative carry”—
inflation. the Bank’s interest expense of P566.27 million was greater
Its problems were not limited to the Philippines: its than its interest income of P479.4 million, by over P86.86
deposit-taking subsidiary in Hong Kong, First CBC Capital, million. This continued a trend that began in 1984, where
launched with high expectations in 1980, had been bleeding interest expense had begun to outrun interest income.
cash for several years. It was simply too difficult for First After protracted discussions, the Bank’s board concluded
CBC to compete there, due to the high cost of manpower that the Bank needed to get top-level management help.
and premises, and the small spread available in a market A new CEO could help the Bank make the hard decisions it
dominated by multinationals and Chinese-owned financial needed to make, and, if the right man was put in place, it
institutions. would reassure the market that the Bank was on the mend. At

170 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
(Opposite page) In 1985,
Edward Go stepped in
as China Bank chairman
and CEO and Peter Dee
became president and
COO.

(Right) Eddie Go, DP Loh,

and Johnny Coreces.

(Far right) The swearing

in of Corazon Aquino as
the 11th president of the
Philippines.

the time, Gilbert Dee was vice chairman and EVP, and Peter up because Jimmy and I were quite familiar with each other.
Dee was EVP and GM. Together with some directors, they I had a luncheon meeting with Edward Dee Se Kiao [brother
went over the names of several candidates. One name led all of George and Robert Dee] whom I knew very well. We used
the rest: Edward S. Go. “Eddie,” then forty-six, was an ideal to play golf together at Wack Wack. I think Henry Sy Sr. was
candidate for the Bank: an accomplished man of Chinese there. I think Peter and Gilbert were there. They told me that
ancestry who fit the Bank culture, but also someone with they’d like to offer me a job at China Bank. That’s how the
international banking training, and a track record of turning conversation started.”
around troubled banks. He was a 1961 graduate of the Ateneo Eventually, Eddie got some career advice from the
de Manila (A.B. Natural Science magna cum laude) and a 1963 Central Bank governor himself: “I kept Jobo apprised of
product of the Citibank Manila management training program, my discussions with China Bank. Finally Jobo said: ‘I think
which produced many of the local banking industry’s top you better just give up [Pacific Bank] and move on.’ He told
CEOs. the Monetary Board: ‘I would rather have one problem to
Eddie became known for his skills in fixing troubled banks, take care of, rather than have another problem [bank].’”
initially because of his ten-year stint at the Philippine Bank of (Eventually, in May 1986, Far East Bank bought the branch
Communications (PBCom). In March 1974, at the age of thirty- network of Pacific Bank.)
five, Eddie Go became CEO of PBCom. Soon after assuming So in July 1985, Eddie Go became chairman and CEO
the top post, Eddie, with the aid of Wash SyCip and SGV, found of China Bank. Peter Dee became president and COO, and
out that massive acts of fraud perpetrated by some bank Gilbert remained vice chairman and EVP. This new team
officers had pilfered away P29 million out of the bank’s capital defined their top priorities for the next year or two: to restore
of P40 million. Despite this unpromising beginning, Eddie Go public confidence, bring in more deposits (which in 1984
managed to turn the bank around. He expanded its branch and 1985 had declined by a total of P265 million), find new
network, and by 1980, the bank had P2.7 billion in assets. capital to reverse the “negative carry,” and cut the financial
PBCom was once again sound. losses posted by the Hong Kong subsidiary, First CBC Capital.
In 1984, Eddie moved on to become CEO of Pacific Bank, Each task in itself was formidable, but the new triumvirate
a once-strong bank which had been in bad shape since the addressed them all methodically.
death of its founder, Antonio Roxas Chua, in 1978 and the To help restore public confidence, China Bank decided
resignation of its respected president, Chester Babst, in 1980. to take advantage of the Bank’s 65th anniversary in August
Once again, Eddie had a tough job on his hands. 1985, only weeks away. Eddie Go said: “I engaged the ad
Eddie recalled: “[Then in 1985] overtures to me came firm, Basic FCB, because [top FCB executive] Herminio
from China Bank. Jimmy Dy Buncio was the one who set it Ordoñez—Minyong—was my classmate. Between Minyong

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 171

 Bank. It made people even more nervous. I officially reversed
that, to say: ‘We can give loans. We have no problem.’ After
that, the psychology of the depositors turned around. I mean,
we wouldn’t give very big loans yet, but the small loans
at the branches, we had to give that. That’s how we cured
the problem. Those two things—the advertisement on our
65th anniversary and the resumption of lending—those two
brought in more deposits.”
True enough, in 1986, the Bank reversed the two years
of hemorrhage in its deposits, adding P32 million. By 1987,
the Bank had P3.944 billion in deposits, compared to P3.267
billion in 1986 (20.7% growth). By 1988, it had P4.658 billion
in deposits. Of course, the Bank’s drive for more deposits
and more stability was greatly aided by the fall of Ferdinand
Marcos in February 1986. A spirit of optimism lifted the
economy—GNP grew by 4.15% in 1986, and domestic
production reversed its downward trend. In 1987, GNP growth
and myself, we developed a strategy. We came up with a huge rose to 4.62%, and then by 7.71% in 1988. That rising tide
advertisement about China Bank’s anniversary, with a letter helped the Bank rise as well.
from Jobo congratulating the Bank on its anniversary. This The next major problem, the “negative carry,” was a more
was in the Filipino newspapers and the Chinese newspapers. difficult problem to address. Eddie said: “The interest income
We posted this on every entrance to our branches. The of the Bank was less than its interest expense, because it
message is: Jobo will not congratulate the Bank if it has had a lot of money tied up in properties bought for future
problems. This strategy was discussed with Jobo. I said to branches—as well as foreclosed assets which management
him: ‘If you come out and say, China Bank has no problem, all was not selling because they wanted to wait for prices to go
the more, people will say, ‘Ay, may problema ang China Bank.’ up. I said to the board: ‘We can do one of two things. Either we
That’s the Filipino reaction.” start selling some real property, or we bring in new equity.
Eddie also encouraged the Bank branches to resume If it’s new equity, it has no interest expense, it takes care of
lending out small amounts. The branches had slowed down those non-earning assets. And now we will have a positive
lending in 1985. He said: “That was, in a way, systemic. I guess carry.’”
it was happening to different banks because of the crisis. But most of the board members (with the major exception
But by making that policy, it exacerbated the problem for the of Henry Sy Sr.) were reluctant to invest in Bank shares.

172 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Jaime Dy Buncio, Joaquin Dee,
Edward Dee Se Kiao, Eddie Go,
and Nancy Dee Yang.

There wasn’t much interest then

in the Bank issuing new shares
to bring in new capital. This
reluctance was understandable:
the Philippine financial sector
had done so badly in the last five
years that many big shareholders
shied away from doubling down
on Bank shares. (As we will see
in Chapter 6, Henry Sy Sr. bought
up a lot of Bank shares during this period, confident that the million far outweighed its interest expense of P300.734 million
shares were heavily undervalued and that their true value by P266.084 million—a 40.3% increase over the net interest
would eventually be vindicated. Not for the first or last time, income in 1987. It has remained healthy ever since.
Mr. Sy would prove to have great foresight.) The final hole that top management had to plug was
The Bank had to take the route of selling big assets to offshore, in Hong Kong. After going over the books and
generate new capital. The Bank’s most attractive real estate operations of First CBC Capital, Eddie Go concluded that the
assets were located on the best business address in the business model never made sense. Hong Kong banking was
country, Ayala Avenue. These were the 13-story Sarmiento simply too competitive for a Filipino firm to thrive.
Building and the Buendia corner lot that was supposed to be He said: “I knew all the Philippine deposit-taking
the site of a new China Bank headquarters. Both assets drew companies in Hong Kong were in trouble. I think [First CBC]
a lot of interest, since the lots were bound to increase hugely was capitalized at HK$10 million. But at that time it was
in value once the crisis was over—and which was why China at negative HK$7 million. I said to the board: ‘To continue,
Bank was reluctant to sell, because doing so would mean we need HK$17 million—HK$7 million to wipe out the bad
leaving money on the table. But the Bank had to first staunch accounts—the negative—and then HK$10 million in new
the financial bleeding. equity. If China Bank today had HK$17 million to spare, I would
The sale of the two big Ayala Avenue assets (as well as a rather keep it in the Philippines. It would make better returns
few other prime lots) brought in the new cash necessary to here. I recommended to the Board that we close it down.”
help stabilize the Bank. Eddie Go said: “We had to reverse Eddie added: “When I got board approval, I flew to Hong
the negative carry, otherwise we’d just be wiping out our Kong. I spoke with the Bank Commissioner, Mr. Robert Felts.
capital. So the sale of land was the cure, as far as the books I told him: ‘I am going to close our DTC, but before that, I will
were concerned.” The Bank’s interest equation had been pay all depositors. I will make sure that all the liabilities are
corrected. In 1988, the Bank’s interest income of P566.819 paid out and I will surrender the license. All I ask of you is:

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 173

 Lawrence See, Jaime Dy
Buncio, Eddie Go, Edward
Dee, and Rene Lao.

deposits, compared to P3.945 billion in 1987. The loan portfolio

grew to P3.588 billion, compared to P2.710 billion in 1987.
Do not make any announcement that you are going to close The Bank earned P146.711 million in net income, out of gross
us.’ Because there were some deposit-taking companies that income of P792.031 million, for a return on equity of 22.46%.
were closed by their order. Felts said: ‘Mr. Go, you are the first China Bank was back.
one who came to us with a sensible solution.’ So he called his
deputy and said: ‘This is what China Bank will do, and we will GROWING THE BANK AGAIN
support them.’ We surrendered the license.” 1987-1989
China Bank reduced First CBC Capital’s operations to With its finances back in order, the Bank could shift
collecting outstanding loans. The company was eventually its attention from the short-term rescue efforts—the
shut down completely. The Bank set aside P50 million as “firefighting”—of 1985 and 1986. From 1987 to 1989, it could
a provision for probable losses from First CBC. But the now begin to think about and act on growth for the long term.
important point was that the bleeding had stopped. For instance, China Bank resumed the branch expansion that
After several years of work, the Bank was healthy again. By was put on hold by the economic crisis. There had been no
1988, China Bank had P5.924 billion in resources, compared new branches since 1983. In 1989, China Bank opened two
to P5.009 billion in 1987, an 18.28% rise, and P4.658 billion in new branches, bringing the total to 30 and it aimed to open 30
more in the next three years.
To make the Bank more competitive over the long term,
the management team decided to focus on three strategic
CHINA BANK STOCK PRICE areas: first, making Makati the new headquarters of the
1985-1989
In Pesos Bank, with additional office space and more land to match;
500 second, introducing new computerized services and systems
like ATMs and telephone banking; and third, bringing in new
485

400 systems for operations and performance evaluation.

By the 1980s, nearly every major bank had moved its
300
headquarters to Makati—a process that had begun in the
220

1960s and only accelerated in the 1970s. But China Bank was
200
a late holdout; Binondo had been so central to both its culture
123

and its operations that any changes were difficult to envision.

100

100
Eddie Go set out to change that. The Binondo building had
70

0 limited space for adding more manpower. In any event, Eddie

29 30 31 32 33 34 35 36
85 86 87 88 37 38 39
89 40
felt the growth opportunities were in Makati, both in terms of

174 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 In the 1980s, new
systems for operations
and performance
evaluation were
brought in for greater
competitiveness.

space and new business. Eventually, he

convinced the board to move the head
offices to Makati. At the Makati building,
the Bank constructed more office space
as well as new executive offices and a
new board room on the fourth floor. we have to protect our strategic interests. This will be our
He said: “Moving our headquarters to Makati from head office. China Bank is [on Paseo de Roxas,] right where
Binondo—there was originally resistance to that from the biggest banks are. We have to protect this address.’
the owners because they were so used to Binondo. They Mr. Henry Sy saw the point of that, and he supported the
said all the business was back there. But I showed them recommendation. So I negotiated with Ayala, and Ayala sold it
statistics. The deposit base in Makati was much larger than to us at, I think, P7,500 per square meter. Today, I don’t know.
the Binondo area. And the growth was here. So there was The price may be P250,000 to P300,000 per square meter—it
empirical evidence.” was a real bargain.”
Eddie convinced the board partly because he made it Eddie Go knew that the Bank had once been the country’s
clear that Binondo would always be important to the Bank: pioneer in computerized banking, but by 1988, it had lagged
“Some Binondo clients will just come to your office, have behind some competitors. During the crisis years, it didn’t
coffee, and chat. These are the guys with the money. And you have the funds to invest in things like automated teller
need to maintain that relationship. I said to the board: We are machines (ATMs) or the latest mainframes. In 1987, the
not going to close ‘Downtown’ [Binondo]. In the beginning, China Bank IT system was still built around the IBM 360/370
the idea was: we [top executives] would spend a few days of mainframe architecture. This was a 1960s architecture that,
a week there, a few days of the week here [in Makati]. Part of twenty years onward, could no longer provide leading-edge
the day there, part here.” services. With the recent improvements in computerized
To maintain the Bank’s capacity to grow at the Makati banking, banks abroad now offered 24-hour ATM services,
address, Eddie Go proposed buying more land beside the faster electronic fund transfers, and shorter waiting periods
Bank—some 2,997 sqm which he felt was more within the for routine inquiries such as passbook updating, statement
Bank’s means than the 11,000 sqm that it had just sold to requests, and checkbook requisitions. Banks abroad were
RCBC. He said: “I felt we needed to buy the two lots behind using the new technology to unite the deposit system,
the China Bank building. In the discussions, some of the international operations, the general ledger, and customer
board members said: ‘Why do you want to buy lots? Didn’t information files into a centralized information system. With
you just tell us to sell these other lots?’ I said: ‘Yes—but this in hand, a bank’s officers could make better decisions
there’s a difference. When we were selling land, we were at based on timely access to data. Eddie Go wanted all of these
negative carry and we needed it. But now we are okay and capabilities for China Bank.

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 175

“We have the most successful ATMs in the country.
We have the most uptime of all the banks’ ATMs.”
—RIC CHUA

To most consumers today, their primary computerized

banking service is the ATM. The first ATMs in the country
were set up by BPI in 1981. On February 14, 1986, BPI and its
subsidiary, BPI Family Savings Bank, founded the country’s
first ATM network, Expressnet, when their ATMs were
interconnected. Over the years, other banks such as BDO
and Landbank would join Expressnet. In response, a group of
seven other Philippine banks including China Bank began to
explore forming an ATM consortium to compete.
Former chief accountant and VP Johnny Coreces, by then
retired but still a consultant to the Bank, recalled: “The idea
came from a group of, at first, seven banks: China Bank,
RCBC, Security Bank, Metrobank, Citibank, PCIBank, and
Allied Bank. We had learned about the ATM products offered
abroad and we thought: ‘Why not form a corporation to
operate ATMs? Let’s form a task force and visit the places
where there are ATM systems.’ So Ric Chua and I were
representing China Bank on that task force.”
Ric Chua recalled: “By then, we wanted to run our own
ATMs already. Definitely BPI was ahead of us by several years.
Management’s concern then was: ‘How do you justify the
capex? What is the business model?’ You were just cutting 2012, BancNet remained the largest Philippine ATM network
down on the transaction costs, but there’s no real income. So with 89 members, including two affiliate switch members,
it took us some time to implement an ATM system, and maybe and over 5,800 ATMs and 18,000 POS terminals. China Bank’s
we should regret that we did not move faster.” COO, Ric Chua, concurrently became BancNet chairman.
China Bank was a founding member of the ATM network As a result of the research that Ric Chua had undertaken
BancNet, along with PCIBank, Security Bank, RCBC, Allied for BancNet, Eddie Go chose the NCR 9844 as the new
Bank, Metrobank, International Corporate Bank (now part of backbone of China Bank’s IT system. The new system was fully
Union Bank), and CityTrust. In 1993, BancNet interconnected operational by 1990, replacing the old IBM system. Eddie said:
with MegaLink ATM network. Then in 2006, the “My strength, while I was being trained in Citibank, had been
interconnection of the three ATM networks in the country— on the operations side. For a long while, I was one of the few
BancNet, Expressnet, and Megalink—became a reality. As of bank CEOs who understood the nitty-gritty of IT. The others

176 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
BancNet founding directors 1990. From left: Freddie Villadelgado–
Allied Bank, Carlos Pedrosa–Metrobank, Jose F. Santos–RCBC,
Elizabeth “Ely” Pasion–Security Bank, Ramon “Jun” C. Arceo–PCI,
Juan G. Coreces–China Bank, Victorio Y. Lim–InterBank, Ricardo
R. Chua–China Bank.

would be calling in a consultant to recommend what system to

use. Me—I like to choose my system. So we got out of the IBM
system in 1988 and went to NCR since it had good software.”
Alex Escucha (then with InterBank), China Bank’s Ricardo
On July 1, 1990, China Bank inaugurated its ATM card, Chua, and Security Bank’s Oscar Cajipe, with BancNet’s
Juan Coreces, Founding President Ramon Arceo, Jr.,
the TellerCard. The ATM system of an initial ten machines Founding Chairman Jose Santos, and Aristeo Zafra.
was hooked up to BancNet in October 1990, which then had
200 ATMs. By the end of 2010, the Bank had 374 ATMs and The birth of BancNet

T
670,000 cardholders, and its machines had one of the highest
he Philippine banks sent their ATM study
reliability ratings in the industry. China Bank ATMs provided
task force to Asian banks to study various
a wide range of services, such as balance inquiry, checkbook ATM setups and decide on the proper
re-order, statement request, interbank fund transfer, payment structure and technology for a Philippine setting.
of bills, prepaid phone and Internet reloading, payment of But eventually, the group of banks had a falling-out
purchases by direct debit to account, and remittance of taxes over the proper management structure and the
and SSS contribution and loan repayments. The Bank was appropriate technology. One group wanted to have the
various bank CEOs form the new corporation’s board.
also the first to offer telephone banking in the Philippines.
Some objected, saying that from experience, they
Ric Chua said: “It took us a little bit longer to go to the ATM
knew that the CEOs would be so busy with regular
side. But after that, we are practically on a par with the others. bank business that they would not be able to attend to
Today, we have the most successful ATMs in the country. the ATM company’s concerns in a timely manner. The
We have the most uptime of all the banks’ ATMs. We create other key disagreement was over the IT system to be
confidence in people that they can rely on our ATMs—that’s used: some banks favored IBM mainframes; others,
what clients tell me. I check with them. They have had some the Jetco system running on NCR hardware. China
Bank became convinced that the NCR 9800 system
bad experiences with others. In the Bank’s IT system, we have
was the superior solution. (In 1986, NCR introduced
a management screen that tells us which ATMs are low on
the NCR 9800 series, a new generation of computers
cash, which one is down. The guys who are running our ATMs based on incremental architecture and NCR’s 32-bit
will notice right away—everybody is on their toes. It’s good for microprocessor chip.) But other banks insisted on
the customer. In that area, we are ahead.” the IBM solution. Eventually the disagreements could
Ric Chua also became a key aide to Eddie Go in his third big not be resolved, and the group split into two ATM
initiative, the introduction of new operations and performance networks—MegaLink, which opened in March 1990,
and BancNet, which was launched in July 1990.
evaluation systems. Ric had been the Bank’s auditor when
Eddie came in, but the new CEO soon decided Ric’s talents
were badly needed elsewhere. Ric narrated: “When Eddie

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 177

came in, he said, ‘Ric, I want you to run the operational side of
the Bank. Let’s streamline operations.’ So that’s how I got into
operations. Those were exciting times, working with Eddie. I based on the branches’ performance, and the bonuses were
learned also from him. Eddie is a straight shooter. When you released based on the evaluation.”
talk about governance issues, operations, Eddie knew a lot.” Ric explained: “We used to have profit sharing in China
One of their key joint projects was the Bank’s first Bank already, from way back. We already had budget
personnel evaluation system. Eddie said: “When we started setting before Eddie came; we had accountabilities. But the
doing profit sharing again, when the Bank became profitable measurement of performance wasn’t that clear. How do you
again, we had to have a real performance evaluation system. measure performance? With Eddie’s entry, we were able to
Peter said: ‘During my father’s time, he just decided on all of galvanize that. [Our HR consultant] Maria Goolsby was very
these things.’ I said: ‘Peter, when the Bank was much smaller, instrumental. We put that system together and we had our
he could do that because he knew everybody. But we are a first real performance ratings.”
growing bank and we are growing bigger. How can we have Ric added: “Some people were not happy because they’d
just the very top decide how much people should get?’ You never been rated that way. So some left—just a few. But we
don’t want to make it all equal shares. You have to provide thought it was a good exercise because people knew they had
incentives. So we instituted a performance evaluation system to do better the following year. Before, expectations weren’t
clear. You should have a clear understanding of what is
expected of you. Did you deliver? Did you over-deliver? Did you
under-deliver? During the time of Eddie, we worked on that.
CHINA BANK ASSETS It was not perfect. We had some rough edges that we had to
1985-1989
In Billion Pesos clean up. But it evolves, it gets better and better.”
Eddie Go concluded that the performance evaluation
10 process was a valuable step for the Bank: “I think we put
P9.41 B
a start to achieving more openness in management. That
8
was about recognizing people for what they contribute—and
6 recognizing that the task of achieving profitability does not
belong just to the very top. It’s everybody’s concern, and
4 everybody’s participation.”
Eddie Go’s years at China Bank included several other
2
initiatives, on top of these three major ones. He said: “I
0 instituted the quarterly branch managers’ meeting in Manila.
85 86 87 88 89
I’d bring all the branch managers from Metro Manila as

178 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Johnny Coreces and Peter Dee on the
former’s retirement in 1988.

(Below) Joaquin Dee and Gilbert Dee.

well as the provinces. At random, I would ask three branch

heads to present their performance—without their knowing
beforehand which ones would be asked. So everybody had to
be ready. Each branch would compete to do better than the Agro-industrial lending and home financing were a far
other branches. They were happy to be called upon.” cry from China Bank’s traditional clientele of traders and
Eddie also put up the specialized lending and home manufacturers. But even here, the Bank reaped many
financing group for China Bank, which tapped Official successes. Rene Lao said: “I really enjoyed that, because
Development Assistance (ODA) loan windows for agricultural no two accounts were the same. It taught me a lot about
and agro-industrial development projects in the countryside. different kinds of business. One day you would go to a cooking
Rene Lao left Treasury to head the new unit; Danilo Alcoseba oil mill, then fishponds, then livestock growing. I had these
was brought in by Eddie Go to run Treasury. young guys working with me. We even had folding beds in my
Eddie said: “I told Rene: ‘I will give you this new special room. We could come back late and we end up sleeping in the
lending unit which we will launch using funds from the office because it was too late to go home. That was the unit
outside’—DBP funding windows, and other [ODA] funding assignment that I enjoyed most of all.”
windows. So he, in effect, became a profit center. Rene was Eddie Go only stayed three and a half years with China
happy with that, because now he had a loan portfolio to his Bank—from July 1985 to early 1989. The initial offer that
name.” China Bank made to him in 1985, he recalled, was for a
three-year contract—an indication, Eddie believes, that he
was being brought in with a short-term mandate to fix the
Bank’s problems. But long-term Bank leadership was meant
to remain with the Dee family. As a professional, Eddie
understood that, and he had no problems with it. He told the
board in 1985: “I don’t need a contract. If at any time you are
not satisfied with my performance, you just tell me, I will go.”
In 1989, Eddie Go resigned from China Bank and moved
on. Gilbert Dee then became the Bank’s new chairman, and
Peter Dee, president and CEO. They became the same kind
of complementary duo that their fathers DK and George Dee
had formed: Gilbert became (like DK) the one who tended
to clients and maintained relationships, Peter became (like
George) the one who stayed close to home and focused on
operations.

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 179

China Bank employees on strike.

In 1989, China Bank had P9.41 billion in resources (more Bank into a family, and his successors like Gilbert and Peter
than double its 1985 figure) and P6.268 billion in deposits. The Dee continued to manage it in the same way. But once again,
net loan portfolio went to P4.34 billion, up 20.89% from P3.59 external forces would affect the Bank.
billion in 1988. China Bank earned P261.976 million on gross Nationwide, labor activism was on the rise in the
income of P1.229 billion, a return on equity of 31.05%—a profit late 1980s and early 1990s; strident left-leaning labor
performance reminiscent of the best years of Albino SyCip. organizations were starting to affect big corporations with no
The Bank’s shares were trading at P485 per share, compared previous history of labor troubles. SM was hit by a big strike
to P220 in 1988 and around P55 in 1985. in 1990 and Meralco was beginning to feel the effects of labor
agitation. By the late 1980s, the militant labor organization,
THE STRIKE IN OCTOBER 1989 the Kilusang Mayo Uno (KMU), managed to exert strong
Yet, with all the good news of 1988 and 1989, the decade influence on the China Bank union. In the 1989 collective
of the 1980s had one last surprise to pull on China Bank. The bargaining agreement (CBA) negotiations, the union made
surprise came from a most unexpected direction. China Bank many demands that new chairman Gilbert Dee found
had had excellent labor relations throughout its entire history. unreasonable and even hostile. It soon became clear to him
The Bank’s pay and benefits packages were consistently that the talks were on the verge of breaking down, despite
among the best in the industry. Albino SyCip had instituted a the fact that the Bank was willing to give employees a pay
corporate culture that was very paternalistic, with a close-knit increase well in excess of 30%.
work force, and warm relationships between management The labor unrest came as a big surprise to Gilbert not
and the rank and file. Wilfredo Tecson recalled that it was just professionally but also personally. His officers say that
the kind of bank where the president himself would readily there was probably no bank chairman in the Philippines
visit a sick messenger in the hospital. Albino had built the who was closer to his people—both to managers and the

180 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
rank and file. He made a point of eating in the canteen with
ordinary employees, and spending a lot of leisure time with
them outside of work hours. His office door was always
Pitching in until late at night: Ric Chua and his EDP guys
open to an employee in financial difficulties. Several China during the strike.
Bank managers said that when they had a sick spouse in the
hospital, they were surprised by a visit from the chairman Camaraderie

D
himself. Gilbert said: “I like being with my employees. It’s my
nature.” espite all the physical demands, the Bank
remained true to its special character,
Nory Reyes-Lao once said: “Our chairman, Gilbert Dee,
even with this latest crisis. Rene Lao said:
likes to play basketball together with our staff and officers;
“The strike wasn’t tense, because there was a lot of
he joins our chess or tennis tournaments. He is part of us. camaraderie in the Bank—even between the guys
And he is very accommodating. He will go out of his way to outside, on the picket line, and the officers inside. A
help: ‘Nory, I heard that this guy has this problem. Is there lot of these guys picketing had been to my house. We
any way I can help?’ I eventually found out that when some of drank together—these were rank and file guys who I
our employees needed money and they had reached the limit played basketball with. So when I came to work, the
picketers would say: ‘Hi, sir.’ Very friendly. I told them:
of borrowing from the Bank, Boss Gilbert would lend them
‘Hey, guys, just take it easy. Let’s just keep within the
his personal money. These recipients included several union
law, so there are no problems.’ So the picket was
officers who we later had problems with.” very civil. Once my car conked out, the battery died
Rene Lao said: “Gilbert Dee is very nice to all his or something; it was the picket guys who pushed it
employees—very generous, very helpful. When we had this for me. The picket wasn’t stressful. It was just the
problem with the union, these people whom he had helped did additional work that was hard for us.”
not want to communicate with him. I know he tried to call a Gilbert added his own personal touch. At night,
the employees inside the Binondo offices would have
few guys in the union who he knew very well. They refused to
their own get-together, in keeping with the “sa hirap
even talk to him. That was sad. I could see how hurt he was.”
at ginhawa” spirit that Gilbert wanted. He said: “I
Gilbert Dee said: “I think the worst crisis in all my years ordered two cases of brandy. So in the evening, we all
at China Bank was the strike. I remember very clearly; that had fun. We were drinking, playing mahjong, playing
was the year I took over as chairman of China Bank, 1989. We cards. It was like a big party. And even the employees
were infiltrated by the KMU. They tested me: they threatened outside who were striking, I would go out and give
a strike. I told the board: ‘We are very liquid. Let us fight them them bottles of brandy: ‘You drink also.’ That’s how I
wanted it: one big family—even those employees on
now. Because if you do not fight them today, a few years from
strike outside.”
now, you will be facing the same problem. Let’s fight them
now.’ I did not give in.”

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 181

“I think the worst crisis in all my years at China Bank
was the strike.” —GILBERT DEE

The strike began on October 16, 1989, and lasted three

weeks, until the first week of November. The strike was
not legal or even planned. It was a spur-of-the-moment
decision made by some of the more hard-line members of
the union: they walked off the job at lunchtime and did not
come back. They managed to get the support of around 70%
of the employees. Bank operations were on the verge of being
paralyzed. It quickly became an “all hands on deck” situation;
the managers pitched in to do the work of the rank and file.
Rose Gan recalled: “It happened at lunchtime; the union
people just got their things and walked out. But business
had to go on. It was good that I had some experience as a
teller before. We were able to process the transactions. Nancy Yang recalled: “Since we all rose from the ranks, we
Some employees did not go home, we stayed. I would sleep were familiar with all the tasks required of us—although some
at the CorPlan office, on a desk. We took our showers at the of us might have been a bit rusty at first. I did some tellering
bathrooms in the executive offices. We lacked sleep, we were work during the strike. Also we, the senior managers, had
tired, but we made it. I remember Gilbert Dee was there with to be around to meet clients, and attend to their needs; our
us, showing his support. All of the officers helped out.” presence assured them all was well. Senior management
The major challenge was getting all regular business had to be visible, we had to go around and boost morale and
done with the reduced manpower complement. Given the confidence, and calm their fears, if any. We were prepared to
manpower gap, each man or woman had to do the work of sleep over at the Bank.”
three. So the Bank staff focused on the most essential, time- To boost its manpower, China Bank called on scores of its
sensitive functions during regular office hours and then did retirees to man basic functions such as tellering and logging
the updating of records and other back office work at night. transactions. Gilbert recalled: “The retired employees are
One advantage of the Bank was that it could draw on very loyal to China Bank. They came in and helped out with the
managers to do all the basic jobs. Lawrence See said: “The operations. We survived.”
good thing is that China Bank officers, myself included, rose Hans Sy said: “I was here during the strike. I saw that one
from the ranks. We started at the clerical level. We know the of the biggest assets of China Bank was its employees—even
debits and credits, how to book an entry, all these details. So if there was a strike. I was surprised to see one of the oldest
we could do the work because we had that background. But of employees we had, Tan Kim Liong, coming back to help. He
course, it was still very, very taxing, very challenging. But we was in his eighties then, but he came to help. That’s where I
managed it.” saw the big asset of China Bank—its people. I said to Mr. Tan:

182 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
(Right) Many of the
Bank’s employees,
including some who had
retired, stood by the
Bank during the strike
and managed to keep
their spirits up.

(Opposite page) Working

long hours because
of the strike, some
personnel resorted to
sleeping on the office
floor.

‘Thank you.’ He said: ‘Even though I am now retired, my heart Rene Lao said: “The sad part was when we saw the people
is still with China Bank. So if my services are needed, you can that we had to terminate. We had to terminate guys who were
expect me to be here.’” our friends. We had spent time with them. Unfortunately, the
After three weeks, the strike petered out, as the employees strike was declared illegal. So we had the right to terminate
manning pickets came back to work. Rose Gan recalled: “The people. Of course, we did not terminate a whole lot. It was
strike lasted a few weeks. Every one of us was really tired. more about sending the message: ‘Hey, guys, don’t do this
The picketing employees, one by one, they started to come again.’ But that was the sad part.”
back in—until what was left outside was just a few people In December 1989, the Bank signed a new CBA, providing
picketing.” for a 37.5% salary increase across the board. Rene said: “After
Rose added: “But even at that time, I said: ‘This Bank is the strike, we [as an organization] moved on. It was over, no
really blessed.’ The clients kept coming to us. Normally, if a hard feelings. I think the Bank has this different quality. There
client sees his bank on strike, he will get nervous. But no; they was no vindictiveness. We had this bad experience: there was
supported us. They continued to deposit, they opened LCs. It a strike. Then after that, life goes on. Basically after that, we
was all business as usual—even if, I suppose, there must have all felt: ‘It’s over. Let’s go back to normal.’”
been some delays in the processing. These are the clients Nancy Yang said: “That one and only strike in the Bank’s
who are really loyal. I said to myself: ‘They are our biggest history had its pleasant moments as well as its heartaches.
asset.’ We have this solid base of loyal accounts who are there The pleasant part was that it brought all of us who stayed
with us, in good and bad times. They started their business much closer together; we have stories to tell. The
with us as their banker, and we grew together with them—so disappointment was because we felt let down by some of
until today we stay together. This Bank is so blessed. There’s those we thought we could rely on; we thought we had a good
something in here that I cannot explain.” relationship and we treated them like family. We were the top-
Afterward, the Department of Labor ruled that the strike paying local bank, and our fringe benefits were also very good
had been illegal, since no notice of strike had been filed, and compared to other banks. So after the strike, we had to deal
that China Bank had the right to dismiss the organizers. The with them strictly.”
Bank fired forty-nine union officers for leading the strike. They Since the strike, the Bank has never had another incident
were given separation pay and all the benefits due them. The of labor unrest. China Bank’s pay and benefits package
firing was a hard decision for management, because of the continues to be one of the best in the industry. And—as if
relationships involved. Gilbert Dee said: “Some people [who to make up for all the problems it faced during the “time
were fired] came to me and said they wanted to come back to of troubles,” from 1981 to 1989—for each one of the next
the Bank. I said I couldn’t do it. If I let one of them back in, how years, China Bank would be one of the country’s best
about the rest? I couldn’t do anything about it any more.” performing banks.

CHAPTER 5: A TIME OF TROUBLES: 1981-1989 183

 CHAPTER 6

THE FUNDAMENTAL
THINGS APPLY
1990-2010
The Bank becomes one of the country’s best performing
banks for twenty straight years, beginning in 1990, but
through it all, its values and character remain the same.

184 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
The new triumvirate: Gilbert Dee,
Hans Sy, and Peter Dee, steeped
in the legacy of their fathers,
and molded by their Western
education, continue the work of
building and nurturing strong client
relationships, of growing the Bank,
of taking it to the next level.

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 185

 C
hina Bank emerged from its decade of troubles primed
to grow. And grow it did. By 1996, ten years after the
EDSA revolution, China Bank had P46.404 billion in
resources (up ten times from its level in 1985), P32.118
billion in deposits, and P29.249 billion in loans. The
Bank earned a net income P921.919 million on gross revenues of
P5.449 billion. The return on equity was 16.12%. It had 106 branches,
109 ATMs, and 2,266 employees. China Bank’s shares were trading at
P1,080—a far cry from the P55 of 1985.
By 2009, on the eve of China Bank’s 90th anniversary, it was still
on the same growth trajectory; it had P234 billion in assets, P193
billion in deposits, net income of P4.1 billion, 247 branches, and 380
ATMs. China Bank was the ninth largest bank in the country, with
a profitability and a market capitalization that rivaled the biggest
players; its return on equity (ROE) was 14.62% and return on assets
(ROA), 1.85%.
The Bank’s consistently good performance from 1990 to 2010 was
a dramatic yet welcome change from all the turbulence of the 1980s.
Its excellent results every year made for predictable—almost boring—
reading for a historian or business analyst. But in the world of finance,
this brand of “boring” is a virtue. Even severe national downturns in
1997-1998 and 2001 did not faze China Bank—it came through fine, and
much less affected than its peers. A huge treasury bill scam in 1994
and the world economic crisis in 2008 didn’t make a dent either.

186 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Central Bank Governor Gabriel Singson, Gilbert Dee, and Peter Dee toast to China Bank’s future at the Bank’s 75th anniversary party.

The reasons for the Bank’s success in the last twenty time that a determined, well-funded strategic investor had an
years are manifold. But they all come down to the same opening to make his move.
formula that Dee C. Chuan and Albino SyCip established— Thus, just before the 1990s began, the Bank underwent
uncompromising ethical standards, unparalleled closeness to an important change. Retail and shopping mall king Henry
the customers, and a tightly-knit, dedicated work force. Some Sy who had joined the board in 1979, had been steadily
things have changed a great deal over the Bank’s first ninety accumulating China Bank shares for over a decade. By 1989,
years, but some things—the most important ones—have he held the largest single block. He didn’t have an absolute
remained the same. majority yet, but he became more and more influential over
bank decisions. The clearest sign of this was in 1989, when
NEW LEADERSHIP, NEW DIRECTIONS Henry’s second son, Hans, became vice-chairman and chair
From the very beginning, the Dee family owned a relatively of the newly formed executive committee of the board.
small stake in China Bank. In 1935, at the height of his Henry Sy had gotten his first bank loan from China Bank—
career, Dee C. Chuan himself owned only about 6% of the back in 1949, when he was only twenty-five and just starting
shares. (Most of the Dee family’s capital was deployed in out in the shoe retail business. That clean loan was a crucial
other businesses, such as sawmills, lumber distribution, step in the building of the Sy business empire. On top of badly-
aluminum, and automobile dealerships.) The Dees always needed capital to expand, the loan gave him tremendous
liked to look at the Bank as a continuing cooperative credibility within the Binondo business community. Henry
venture among several major business families—never a had arrived in the country in 1936 as a twelve-year-old boy,
Dee possession. Throughout the decades, the Dee family’s with literally no money in his pocket. But a twenty-five year-
leadership of the Bank depended on the shareholders’ old who could access an unsecured loan from the likes of
respect for their management skills and consistently good Albino SyCip and Dee K. Chiong was someone that the rest of
results, instead of sheer ownership of stock. But by the Binondo had to take seriously.
1980s, when the third generation of Dees was in charge, many So Henry Sy would have a soft spot for China Bank ever
of the other founders’ families were moving on and selling after. When the Uychaco family, who were the heirs of China
their stake in what was then an ailing stock. It was also at this Bank founding director Uy Yetco, decided to sell their shares

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 187

“My father’s relationship with China Bank was an old
one, and it was really special to him.” —HANS SY

in 1979, Henry bought their 5% share of the Bank without a

second thought.
Henry’s son Hans said: “My father’s relationship with
China Bank was an old one, and it was really special to him.
[In 1979] he was offered 200,000 shares by a broker, and he
decided to buy them. Then he was invited to join the board.
During that time, 200,000 shares was substantial.” Henry Sy Sr.
Upon entering the board, Henry met up with a familiar of China Bank was not so good then. Henry Sy got in at that
face—his old friend, Joaquin Dee. Joaquin was the youngest point.”
son of distillery magnate Dee Chian Hong, who was on the Joaquin added: “At first, Henry was not lucky. He bought
Bank’s board from 1936 to 1945. Since 1945, seven of his the shares of the Uychacos at around P210. Then the price
sons—Dee Hao Kim (also known as Mariano Mabasa), Silvino sank over the next few years, until it reached P60. Just
Mabasa, Tomas Dee, Paulino Dee, Laureano Dee, Domingo imagine that. But Henry’s a fighter; he never gave up. That’s
Dee, and Joaquin—took turns representing their family on the why he is where he is now.”
Bank board. As Joaquin Dee pointed out, when the economic crisis
Joaquin recalled: “Henry and I were friends even as kids, hit from 1981 to 1986, the shares went into a tailspin. By
as young men. I know him from way back. Henry was very 1985, the share price was a fourth of the value when Henry
close to my brother Mariano. He was close to us [Dee siblings] Sy bought in. So Henry was looking at a substantial loss, at
also; we used to go bowling with him. We would go to Baguio least on paper. Another businessman would have said that it
together during summer. He is a ‘koboy.’ He is very nice to was time to get out of China Bank—or at the very least, stop
get along with. Before, his business was small. Nobody knew accumulating shares to cut the risk. And indeed many long-
Henry Sy before. Nobody would believe [how he has been so time shareholders were selling their China Bank stock at the
successful]. Look at him now!” time.
But what others saw as a problem, Henry saw as a
HENRY SY BUYS CHINA BANK SHARES strategic opportunity. If the Bank was actually seriously
Joaquin recalled: “[In 1979] a big block of China Bank undervalued (and not, as some felt, on its way to failure and
shares that belonged to [Vicente] Uychaco—he was one of the insignificance), then a significant ownership stake in it could
directors for so many years—went up for sale. He offered his be bought for relatively little money. Henry didn’t believe
shares to everybody on the board, which all of us rejected. We the conventional wisdom about the Bank’s future. He was
did not buy the shares, because then China Bank was getting convinced that China Bank would rebound.
overtaken by other banks. No. 1, 2, No. 3. And by that time, we Hans Sy said: “When my father was offered his first
were down below No. 10—maybe No. 13 or 14. So the image shares of China Bank, he felt it was a good investment. It

188 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
China Bank Anniversary print ad

started really as a business opportunity—one of many that

he had—but then when he saw its potential, he decided to go
into it seriously. He wanted to get control. He persevered for
over twenty years to acquire control—even though he owned
another bank [BDO]. He saw the future of China Bank.”
As Hans acknowledged, at the time his father bought his
first China Bank shares, Henry Sy already owned another
SM City North Edsa, circa 1985.
bank, Banco de Oro (BDO). BDO was then much smaller than
it is today. In November 1976, Henry Sy acquired for P5 million
the then Acme Savings Bank, a thrift bank with two branches Henry Sy’s vision

H
which was founded in January 1968. In August 1977, Acme
enry Sy Sr.’s two-decade drive to become
Savings was renamed Banco de Oro Savings and Mortgage
the biggest stockholder of China Bank
Bank. BDO became a commercial bank in December 1984,
highlighted his ability to see the underlying
and then in September 1996, it upgraded to a universal bank. value of an asset when no else can. Henry bought the
BDO grew tremendously between 1995 and 2010, by relying 17-hectare lot for SM North EDSA from GSIS in 1977.
on a combination of hyper-aggressive branch expansion, It went for just P230 per sqm. In addition, in 1996,
the acquisition of several big and small rivals, and the deep he bought the land on which the Mall of Asia stands,
pockets of the powerful SM conglomerate. By 2008, under the when every other big player in real estate focused on
bidding for Fort Bonifacio. Some observers predicted
leadership of Henry’s daughter Tessie Sy-Coson, chairman,
that SM North EDSA and the Mall of Asia would fail;
and president Nestor Tan, BDO had become the biggest bank
they were too isolated, too big, they said, and no one
in the Philippines in terms of assets, would come. He was content to work quietly and let
loans, and deposits. It hit the trillion- his creations vindicate him. Hans said: “My father
peso mark in assets by 4th quarter of really has vision. He just knows: ‘This is the right
2010. place.’ With SM North EDSA, he saw its potential and
And yet, despite Henry’s he bought it. Even on the day before we opened SM
North EDSA, I said to myself: ‘I wonder where the
ownership of BDO (as well as
customers will be coming from?’ But from the first
a significant stake in the now-
day we opened, it was a success.” The same ability
sold Far East Bank), China Bank to see underlying value pushed Henry Sr. to acquire
remained special to him. He would control of China Bank.
demonstrate his belief in the Bank in
a very explicit way. During the crisis
Joaquin Dee of the 1980s, Henry doubled down on

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 189

 0
In 1991, China Bank
Arranque Branch
opened with
Rosemarie Gan, right,
as branch manager.
Branch Banking
Division Head Nancy
Yang, left, attended the
inauguration.

CHINA BANK LOSSES

FROM BANCAP T-BILL
SCAM, 1994

Bank shares, spending millions to buy them whenever they real estate. The shopping mall business is about real estate.
came on the market. He did this at a time when he had several When he sets his mind on investing in something, nothing will
big projects going at the same time—all of them making stop him, because he sees the end result. My father is never a
large demands on his cash reserves. SM North EDSA alone, short-term player. He never flips an asset.”
which he built between 1983 and 1986, cost P187 million to It was easy enough for Henry Sy to acquire Bank shares
construct. The country was neck deep in an economic and at the nadir of the stock in 1984 and 1985. In the depths of the
political crisis during these years. But these facts did not crisis, many shareholders were only too glad to find a buyer.
deter Henry Sy. Even after the Bank started to climb back after mid 1985, with
Hans said: “My father decided to invest even more in China the entry of new CEO Eddie Go, it wasn’t until 1988 that the
Bank. To my father, it was cheap. He was willing to spend. If Bank was able to pay dividends. So there was still an incentive
the Bank stock was at P55, it was very cheap. When people for owners to sell. By 1988, when the stock price had gone
looked at it and said: ‘Oh, the Bank is lost, wala na,’ my father back to the pre-crisis level of P220, Henry already owned the
woud say: ‘No. It’s cheap because the assets are still very biggest single block of shares.
much intact. It’s just that people don’t see the value of the With his significant ownership stake, Henry Sy was able to
assets.’ He saw the value of the Bank clearly—the way he exert a lot of influence on key Bank decisions. For instance, he
does with real estate. That’s why my father invested a lot in backed Eddie Go’s recommendation to shut down CBC Finance
in Hong Kong, when others on the board were afraid that a
closure might spark a run in Manila. And in 1988, Henry was
instrumental in the Bank’s turning down an offer from the
CHINA BANK STOCK PRICE French Banque Indosuez to buy into China Bank.
1986-2010
But owning the biggest single block of shares was not
1100
enough for Henry Sy. If China Bank was so great an asset,
1080

1000
920

900
then he wanted nothing less than an absolute majority of the
shares. From that point in the late 1980s, he left a standing
750

800
680

700 order with his brokers to buy all China Bank shares on the
625
570

market, even at a premium over market price. It was a slow

560

600
490

500
painstaking process that took him the next fifteen years, but
434
390

395

400
the man was nothing if not patient.
300
220

As Henry Sy began to buy shares heavily, his good friend

200
Joaquin Dee also followed his advice that the stock was
100

100

0 undervalued. He didn’t buy shares at the same scale, but

86 88 90 92 94 96 98 00 02 04 06 08 10
with the stock priced so low, he stood to make a huge gain

190 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Dy Tiong, Henry Sy, and Bert Uy

too. A share that cost P55 in 1985 would rise to P920 by 1994
and P1,080 in 1996. Joaquin Dee accumulated enough shares
during this key phase that in time he became, of all the Dees,
the one with the largest block of shares.
Joaquin Dee said: “We in the Bank were not making much
profit then. So the other owners started selling and selling.
They didn’t buy. It’s good that I bought and bought, so at least
Recovering from
I’m still on the board. Henry was the biggest buyer. He was Pinatubo

E
using two or three brokers to buy shares. Sometimes he was
ven clients who have been struck by acts
paying a premium over whatever the market price was at the
of God have been given a break by China
time. Normally, you don’t do that. Why should you pay more
Bank—as long as the Bank still believes
than the market price? But he wanted control. He wanted the in the client. Retired SVP Rene Lao, who once ran
Bank. Then after a few years, China Bank went ‘boom.’ The the specialized lending program for agro-industrial
shares went up by so much. People were surprised then that projects, saw this in July 1991, when Mt. Pinatubo
I owned that many shares in China Bank. Because I kept quiet erupted and lahar flows devastated much of Central
about buying. Nobody wanted to buy shares back then. It was Luzon. The Bank had lent considerable sums to
poultry contract growers in the area. Their poultry
only me and Henry.”
projects were inundated in volcanic ash. Rene Lao
Hans explained the premium-over-market buying strategy:
recalled: “After the lahar stopped, these clients came
“My father was saying: ‘Look at the big picture. I bought so to us and requested a restructuring—not a write-
many shares at P55. If you average it out, I’m still below the off. They just requested some time to get back on
market price.’ He looks at everything at long-term. And he tries their feet. And those clients did not default. We had
to do things in a way so people will not curse him afterward. If zero default.” Rene appreciated the willingness of
he buys the shares too cheap and the price suddenly goes up, the Bank to grant his clients the grace period and
restructuring they needed: “I think this [patience
people will feel bad. My father would always say: ‘It’s always
and willingness to support clients] is part of the
good that when you make money, other people are also happy.’
legacy of the Bank. Because this Bank was started
He does not take advantage of others. Especially when he by businessmen—not just by pure financiers. The
knows the real value of the asset being sold.” founders were businessmen who knew the ups and
Hans added: “Sometimes during this period, some Bank downs of business.”
shareholders would go to my dad, and they wanted to sell their
shares—people who are his friends. He would explain to them:

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 191

 In 1989, Hans Sy became
vice-chairman of China
Bank. Gilbert Dee was the
chairman, and Peter Dee,
president and CEO.

‘Just keep the shares. This stock is going to go up.’ If the other
guy still insists on selling, then that’s not an issue any more.
But at least he tried to discourage these people who were his
friends from selling the Bank shares. Some people who took Hans said: “That’s how my father does his business. You
his advice and didn’t sell would be grateful to him later, when can see it in his track record—in how he became very, very
the price went up. It would be simpler if my father just bought successful with retail. He pays his suppliers on time. Because
their shares outright, without trying to discourage them. But in the old days, other businessmen would delay payment to
he did not do it that way. Well, by doing it another way, he was suppliers by 30 days, by 60 days. Suppose the cost of money is
able to get the loyalty of that person too. So everybody came 5%. The businessman gets all the money, and makes money
out ahead.” on it first, before he starts paying suppliers. But my father
Like Albino SyCip before him, Henry saw business as a said: ‘That’s really not a good long-term business policy.’ He
matter of maintaining and promoting good relationships, pays his suppliers on time. And because of that, he always
not just the single-minded accumulation of profit. Henry gets preference from suppliers. He gets a very, very good
Sy believed what his Binondo forebearers did: that a man’s price from them. He has always been very fair with all his
reputation and sense of honor were primary building blocks dealings.”
for his success. Hans added: “That is how we want to do business. We are
very tough. We really work hard to get what we have—but we
make sure everybody else gets a fair deal too. Of course, we
will not allow people to take advantage of us. But if we feel
CHINA BANK ASSETS that our choice to buy the asset is justified—then, even if the
1996-2011
In Billion Pesos other person feels they have taken advantage of us, then that’s

300
okay—because at the end of the day, we’re ahead.”
P262.2 B
250 HANS SY JOINS THE BANK
200
The Sys were very new to banking when they bought BDO in
1976. Hans, who was only twenty-one and still in college then,
150 didn’t expect to be running any bank. His formal training was

100
in mechanical engineering at La Salle. His older brother Henry
Jr. (known as “Big Boy”) was placed on the Bank board first,
50
from 1982 to 1985. On the other hand, Hans’ youngest brother,
0
Harley, was the Sy with the most formal training in finance.
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
But because of an unexpected turn of events, it would be Hans

192 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Hans Sy with China Bank officers at the inauguration of the San Fernando
Branch in 1993.

who was on China Bank’s board when his father decided to

go into it in a big way. Hans explained: “My brother [Henry
Jr.] was the first representative of the family in the Bank. But
even then, his focus and interest was real estate development.
That’s why he headed SM Development Corporation. In the
Hans Sy
1980s, he had a real estate venture in Hong Kong. That’s why
he had to leave the board.”
When Hans Sy joined China Bank, he was only thirty-one
Hans Sy as a banker

W
and he had a lot of catching up to do. He knew about building hile he is not a banker by training, Hans
big malls and running them well—but not finance. He said: has a couple of advantages not found in
“When I was assigned to China Bank, I had no knowledge the usual bank executive. First, he has
the benefit of forty years of close-in training with
about banking. I’m an engineer. But I learned. The basics of
one of the canniest businessmen in the country, his
business are very simple after all. You will be able to analyze
father. Second, his years of running the SM malls
it—especially the credit discussions, the credit facilities, taught him that a successful mall is the result of a
the background of the people applying for loans.” Hans million and one decisions by the mall management
added: “Of course, I also had the best business adviser—my aimed at only one thing—giving the consumer the
father. I’d write things down and ask him. He knew quite best possible experience. So even in the Bank, Hans,
a lot about many people and their businesses. He liked to almost as a reflex, insists on the same things he asks
from his SM mall staff: meticulous attention to detail,
go around and meet people. He knew who in the Chinese
a passion for execution and continuous improvement,
business community was a gambler, or who was trustworthy.
and a fervor for understanding and responding
In the end, after asking my friends who work in banks, and to the consumer. He uses his mall and consumer
discussing things with my Dad, more or less I got the hang of experience to help make Bank decisions—ranging
banking.” from the proper performance expectations for its
After three years as a board member, in 1989, the chance ATMs to something as micro as the optimal design
came for Hans to become vice chairman, and to head the of parking space in a branch. With the biggest banks,
even if the service is not perfect, the consumer
executive committee (ExCom), then a newly created body.
is forced to adjust to the bank. Hans wants China
As the pace of Philippine business speeded up, the board’s
Bank to continue to be the Bank that adjusts to the
old structure could no longer make decisions at the tempo consumer.
and volume the Bank needed. In 1989, the Bank created new
committees—operations (later the management committee or

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 193

“That is how we want to do business. We are very tough.
We really work hard to get what we have—but we make
sure everybody else gets a fair deal too.” —HANS SY

ManCom) and the executive committee (ExCom)—to divide the

work load and speed up the decision flow. Out of respect for
the large Sy stake in the Bank, the board decided to offer the
vice- chairmanship and the leadership of the ExCom to Hans.
Hans recalled: “When the opportunity of being vice-
chairman came, I was a bit hesitant at first, because I was still
young, in my thirties. That was very young—especially during
the 1980s when most of the board members were in their
sixties. But because of the training my father had been sharing
with me, I had the confidence to take it on. Also, my father had
gained a lot of respect from the other board members. When
I said something to the board, they knew it wasn’t just me
speaking. I was an extension of my father.”
Hans had been on the board nearly twenty years when
the process of the Sy family buying up China Bank shares
Hans Sy with Sy Chi Shiong.
culminated in 2004, with the SM Group’s acquisition of the
combined 18.4% stake of the Yuchengco family and the The Bank’s new owner was acting in keeping with
International Commercial Bank of China (ICBC) Taiwan, which something Don Albino always said: that people and
had one board seat each. Again, the Sys bought these shares relationships are more important than assets.
at a significant premium over market. At this point, Henry Then SM Investments vice-chair and former Central Bank
Sy had 11.701 million common shares, or roughly 32% of Governor Jose Cuisia, a longtime friend and adviser of Henry
the Bank’s total shares. Other segments of the Sy business Sy, said then: “I salute Mr. Sy’s patience. He was accumulating
empire also owned significant blocks of China Bank shares. shares over a twenty-year period, he accumulated so many,
But despite his very large ownership stake in the Bank, and eventually he became the largest shareholder. He was
Henry insisted that Gilbert and Peter Dee remain in place, on not in a hurry or in a rush to become the majority shareholder.
top of the organization. He said: “The Dee family of the original I guess he didn’t want to upset the Dee family and the other
founder had managed the institution so professionally and families there. He was accumulating very cautiously. Mr. Sy
profitably that we never attempted to change the incumbent always has that sensitivity. Gilbert is the chairman, Peter is
chairman, Gilbert Dee or president, Peter Dee…. Even those the president, despite the fact that they are not the majority
executives who had been with China Bank for many years, they owners. Mr. Sy respects them. Mr. Sy has this sensitivity to the
were still there. If a venerable institution like China Bank was relationship between these families—he wants to maintain
doing so well, why make changes?” that relationship. You really have to give him credit for that.”

194 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Henry Sy with Nancy
Yang and branch
personnel during a
visit at Baguio Branch
in 1997.

All four of Henry’s sons—Henry Jr., Hans, Herbert, and

Harley—would take seats on the board. But it was Hans who banks—the ones below the top three. The opportunity over
took the lead in the Bank on behalf of the family. And his there is really very, very big. We’re barely scratching the
working relationship with Peter and Gilbert Dee remained surface. We are reviewing again all our current clients and
warm, respectful, and very smooth. Hans tried to make trying to offer them more. So that’s the direction I’m really
sure that the board’s decision-making process ran in a very pushing now—still conservative but very strong. I see China
collegial and consensus-building style. And he was always Bank growing at a much, much faster pace, but still standing
mindful of the greater banking experience of Gilbert and on a very, very solid base.”
Peter Dee. After the stockholders meeting in May 2011, Hans became
Joaquin Dee said: “[There was] this new combination chairman of China Bank.
of attitudes and leadership—with Gilbert and Peter being
conservative, and Hans being aggressive. This was a good STEADY HANDS AT THE HELM:
combination. Hans never insisted on doing something that GILBERT AND PETER DEE
the rest of the board was against. He would bring a proposal For all his skills and his keen interest in China Bank,
out in the open, but if he couldn’t convince us, he’d say: ‘We’ll Hans could not be present at the Bank all the time. He still
just take it up next time.’ Later he would take it up again. So headed the shopping mall operations and the engineering
we would discuss it and he would defend
it. He never said: ‘I want things to be this
way.’ He would never do that. But of course,
if he wanted to, he could…. But he would
never do that. He would try to convince the
board.”
As chair of the ExCom, Hans sought to
instill a more aggressive mentality in the
Bank. He said then: “What future do I see
for China Bank? China Bank in the 1960s
was THE bank. So now I am really trying
to see how I can make it bigger. Although
I know that my sister [Tessie Sy-Coson]—
who had the same training as I did—is
now running BDO. But my goal is for China
Peter Dee, Gilbert Dee, former Central Bank Governor Jose Cuisia, Henry Sy, and Central Bank Governor
Bank to be Number 1 in the second tier of Gabriel Singson at the Bank’s 75th anniversary.

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 195

 China Bank’s officers
at the Bank’s 75th
anniversary party.

and construction divisions of the SM Group. He ran SM Prime Albino SyCip, George Dee, and Dee K.
as its president, and SM Investments as EVP. Thus, the Chiong before them, were the keepers
China Bank leadership arrived at a logical and viable division of the Bank’s values. On top of their
of labor. Hans helped set the broad strategic directions, regular formal duties of interacting
demanded particular results, and monitored performance. with clients, approving policies, and
But he left the day-to-day matters to the operating team, gauging performance, Gilbert and
particularly to Gilbert Dee, Peter Dee, and then COO Ric Chua. Peter had the informal yet crucial task
With the decades of shared history among these four men, of maintaining the culture of the Bank.
that combination made for an effective and comfortable mix. They espoused and embodied the same
The mix worked because the Bank’s founding family and the traditional business values their fathers
new majority owners believed in the same values—xinyong Dee K. Chiong and George Dee did.
or word of honor, smooth personal relationships, serving the The warmth and genuineness of their
customer, conservative planning, and always striving to be fair. personal contact with their people at
Ric was the consummate operations man—the one who every level helped inspire their people
“made the trains run on time” for China Bank. He answered to adhere to the same values and to
on a day-to-day basis to Gilbert and Peter Dee, who, like perform.
Retired SVP Nory Reyes-Lao had a favorite saying: “The
nice thing about China Bank is you’re a member of the family.
The bosses treat you like family.”
CHINA BANK BRANCHES Just ask then-COO Ric Chua, who joined the Bank in 1975
1986-2000
after finishing his MBA at AIM. He planned to stay in place
150 only three years and then he would leave to start his own
138
business. Ric wound up staying in the Bank for his entire
125
106
career. He stayed partly because he was drawn in by the sheer
100 intellectual challenge of remaking a once stodgy institution
into one that would be more competitive and responsive. But
75
the draw for him was also partly emotional—the loyalty he felt
50 for his bosses.
35
28 Ric said: “One of the major reasons I stayed here was the
25
kind of bosses we had—Boss Peter and Boss Gilbert. I couldn’t
0 find more kind-hearted people than these two. You wouldn’t
86 90 96 00
have had the heart to leave them.”

196 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 He added: “Boss Gilbert did so many kind things without effect on us employees that the boss was part of us, was one
people knowing about it. He was that kind of guy. I saw him of us. So, the culture of the Bank was quite personal
do this in so many instances. He once called me: ‘Hey, I and warm.”
understand we have this lady employee who’s very sick. She’s Nory added: “During Christmas, Gilbert Dee would get a
in the hospital. What kind of benefits is she entitled to from lot of gifts. He’d call us into his office, those who were close
the Bank?” I enumerated the benefits. He said: ‘Ric, that won’t to him, who reported to him. He’d say: ‘Open that drawer. You
help her. Because I understand the bill is already so much.’ guys choose whatever gift you want. I have so many. You take
And then before I knew it, he went to pay the bill with his own one, anything. You choose.” We’d say: ‘No more, sir. We also
money. That was the kind of chairman we had. That kind of have our own gifts.’ ‘No, you pick.’ He would insist. I mean,
thing happened not once, but many times.” these were small matters, but it meant something precious to
Nory Reyes-Lao, who helped recruit his AIM classmate us. Then he would come to the canteen and eat with us. And
Ric for the Bank, said: Sometimes, Gilbert preferred to not only would he eat with us, he would call the waiter: ‘All the
go out with his bank staff than to some function of the big bills here are mine.’ We wanted to say ‘No,’ but Boss Gilbert
taipans. Once we employees were just eating in this little would insist.”
restaurant in Mandaluyong, and he preferred to be with his China Bank’s then head of Corporate Planning and Investor
people instead of going to a party of a taipan. It had a big Relations, Alexander “Alex” C. Escucha, who joined the Bank

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 197

“We are dealing with the public’s money. . . .
This sense of public trust is very strong with us.” —PETER DEE

in 1994, said: “Boss Gilbert would call: ‘Good morning. Are

you free? Can I see you for a few minutes?’ He even sounded
apologetic. These bosses were different. In the early years of
BancNet, there was a Christmas party where a buffet dinner
was served. Boss Gilbert was the first to line up—and he
started giving all of us our plates. The other bankers were
shocked. One banker said to me: ‘We can’t imagine our own
chairman doing that.’ When I got sick in 2002, he visited me in
the hospital, and then afterwards he would call me from time
to time at home: ‘How are you, my friend?’ Those were the
qualities that were really endearing. Even a simple phone call
like that—you don’t forget those things.”
Gilbert inspired great loyalty among his people. He also Peter Dee, Gilbert Dee, and Hans Sy.

provided them with an object lesson in how to win similar

loyalty from the Bank’s clients. After fifty years, he was strict about potential conflicts of interest. Whenever the board
still the quintessential “relationship banker.” He remained discussed something that involved a relative of his, he would
very concerned about the Bank responding more quickly step out: ‘Bahala kayo diyan. I don’t want to be involved.’ We
and comprehensively to clients’ needs. Then VP Patrick Go had to decide before he came back inside again.”
of China Bank Cebu and region head for Visayas/Mindanao Peter was very humble, but his instincts as a banker were
recounted that Gilbert would call him directly to expedite consistently true. Alex Escucha said: “Boss Peter kept saying:
the Cebu branches’ responses to one big client or another. ‘Me, I’m simple-minded lang.’ But over time I learned that
Clients like the Chiongbians of Cebu and the Pos of Century when his gut instinct told him something, he was never wrong.
Tuna swore by their relationship with Gilbert and through him, His investment in Russian bonds in the late 1990s, when
the Bank. nobody was paying attention to it, was proof of this. It turned
Joaquin Dee said: “We in the Bank take good care of our out to be a very good investment decision. From then on, every
clients. Of all the Dees, the one who inherited this trait of Dee time I heard his instinctive reaction, I learned not to go against
K. Chiong is Gilbert. Gilbert has these skills and all these good it, because usually he was correct. It came from his decades
relationships with clients.” and decades of experience. And I learned to respect that.”
To complement a “Mr. Outside” like Gilbert, the Bank had Samuel “Sammy” Chiong, then SVP and deputy head
its “Mr. Inside” in its president, Peter Dee. Joaquin Dee said: for branch banking, said: “Unlike other companies where,
“Peter was the opposite of Gilbert. He was quiet, not outgoing. if you wanted to see the president, you had to make an
Peter was very diligent in his work. He was very honest, very appointment, here at China Bank, the president, Peter Dee,

198 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
MILESTONES

Mr. Nakaya (second from left) and Mr. Nishida (fourth from left) join Peter Dee and Gilbert Dee in the
signing ceremony. Mr. Nishida was the president of LTCB Asia. Mr. Nakaya was the general manager of the
Asian Division of the LTCB head office.

FIRST FORAY INTO THE INTERNATIONAL

CAPITAL MARKET

O
n August 16, 1996, China Banking Corporation signed a Deposit Agreement for their maiden
issuance of a US$50 M floating rate certificates of deposit (FRCD) in Hong Kong.
The 1996 issue was arranged by Long Term Credit Bank of Japan (LTCB) Asia Limited and
was joined by a total of 11 financial institutions from Canada, Germany, Indonesia, Japan, Netherlands,
Singapore, Taiwan, and Thailand.
This was followed by another $75 million FRCD issue in March 1997 – with LTCB Asia Limited and
Standard Chartered Bank as lead arrangers—with participation from 22 financial institutions.
Gaining access to the international capital market demanded a much higher level of transparency
and disclosure. China Bank had to prepare a prospectus that contained a prodigious amount of
information—something it had never done before, and which proved useful later. With all this
information in order, it became easier every time the Bank had to undergo data review by credit rating
agencies, foreign institutional investors and counterparties.
The offer was made shortly before the Asian financial crisis struck but among all the domestic
banks that issued similar FRCDs, China Bank was the least affected. “The market value of our
certificates did not drop as much as those of other banks, which means that our investors had greater
confidence in our bank’s ability to withstand the stresses of a crisis,” said Alexander Escucha, then
head of corporate planning, who assisted then SVP and Treasury Head Danilo Alcoseba in coordinating
the FRCD issue. “Prior to the crisis, we had a stock rights issue and that placed China Bank in an
unusually strong capital position,” he added.

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 199

 Signing of a loan agreement
to finance Aboitiz Group,
Inc.’s ship acquisition, with
China Bank officers Patrick
Go, Samuel Chiong, Nancy
Yang, and Peter Dee on July
20, 1996.

Opposite page, lower right)

Estefania Santos, Caezar
Evangelista, Nancy Yang,
Patrick Go, Samuel Chiong,
Alexander Escucha,
and Elizabeth Say at the
inauguration of Tacloban
Branch in 1996.

was very accessible. You could just drop by his office. The about a project for changing lives, for teaching poor people to
communication lines were very good. This was the only bank do welding jobs, and other kinds of training—for people who
where instead of you going to see the president, the president did not have enough education. Boss Peter told him: ‘Can I
came to you. When Peter Dee wanted to talk to you, he didn’t contribute P1 million?’ I said: ‘You don’t have to do that.’ He
call you to go to his office. He came to you and talked to you. So said: ‘I want to do something that is meaningful.’ So, who’s
it was a very down-to-earth operation. People were very close.” frugal? Who’s matipid? When it comes to good deeds, these
Peter had a habit of going around the bank with reminder notes things come from the heart. That’s the kind of leaders we have.
in his shirt pocket to chat with bank officers, akin to what was He gave P1 million. I said to him: ‘You don’t have to make it that
then called “management by wandering around” or MBWA. much.’ He said, ‘No, no, no. This is good. This is going to change
Like his father before him, Peter Dee was strict about cost peoples’ lives.’ So I salute them. These guys’ hearts are really
discipline, and it rubbed off on his people and on the Bank as big. Ibang klase. It’s how they [Peter and Gilbert] were
a whole. Year after year, the annual reports showed that the brought up.”
Bank managed to keep a tight lid on costs even as it expanded Peter and Gilbert’s strict banking ethics and conservative
its branch network. Years of expansion and hefty profits usually outlook mirrored Albino SyCip’s. Peter Dee said: “We are
induced the typical bank to relax its vigilance and loosen the dealing with the public’s money. A banker can’t run a bank like
purse strings. But Peter Dee remained frugal in both good it’s his personal possession. That’s the danger. This sense of
times and bad. He did this because he felt very keenly the public trust is very strong with us. I can lose my money, but the
responsibility of holding other people’s money. public’s money? My goodness! We’d better be careful. We don’t
Alex Escucha said then: “The best part of working here fool around. I can fool around with my own money. But not in
in the Bank is the culture. Over here, there is no ‘keeping up the Bank.”
with the Joneses.’ Boss Peter himself buys second-hand cars, For instance, in May 1994, the Philippine banking industry
setting the example for us. If he doesn’t buy expensive cars, was struck by the sudden exposure of the Bancap scam.
then the rest of us can’t either. Eh kung siya ganyan lang, eh Bancapital Development Corporation had become the country’s
kami pa? The mentality of the Chinese is that they will show largest secondary dealer in T-bills—despite not actually
others only a small portion of their wealth. Many Filipinos like being authorized to sell these bills. Its success relied on the
to show off. But here in the Bank, the culture is different.” adroit use of promises of higher returns, kickbacks, and kiting
Ric Chua echoed that: “Boss Peter was really frugal, and he operations. Bancap suddenly closed shop in 1994 without
set a very good example for us. So that cascaded down to all delivering at least P1 billion in T-bills already paid for. Many
of us. And sometimes, some people misread his being frugal. big banks took a severe hit and had to ask for emergency
We once met with a common friend of ours. This guy is talking assistance from the Central Bank. To this day, the total amount

200 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Seated: Gilbert U. Dee, Peter S. Dee, Hans T. Sy, Regina Y. Dee, Benjamin D. Ynson, Pilar Nubla Liao. Standing: Herbert T. Sy, Henry Dee Se Gui, Dy Tiong, Robert Y. Dee Jr.,
Joaquin Dee.

of damage that Bancap wrought remains highly confidential. who you are. We just do our job. It helps us that management
No one was prosecuted; the scandal helped force the reform is very supportive. They say: ‘Go ahead. Do your job.’ Fixers
of the government’s treasury bill operations, to their current do not approach us and offer to help us with our cases before
electronic, “scripless” form. certain courts. They know that with the culture here, we don’t
But China Bank was untouched by Bancap, since the Bank’s do that. They know it would be a waste of time. They know our
securities traders, particularly Norberto “Bert” Uy who headed reputation.”
the trading desk in Binondo, always refused to have anything But China Bank could be even more stringent than the law
to do with the rogue outfit. China Bank didn’t compromise required. Sometimes, China Bank turned down a profitable
on ethics, said Atty. Omar Vigilia, then head of the legal business proposition that was perfectly legal but which Peter
department: “Over here, the operations are very straight, very and Gilbert Dee felt was too good to be true or ethical. They
proper. The management here is always straightforward.” never invested, for example, in CDOs (collateralized debt
Atty. Vigilia said: “Ever since I joined the Bank in 1975, I’ve
seen that it is always aboveboard. It follows whatever is in the
law, is in the CBA, or is in its contracts. That’s what I appreciate
about the management of this bank. Even when, in a lawsuit,
the other side is already hitting us below the belt, China Bank
is different: ‘Let’s do this in a fair manner.’ The Dees are God-
fearing people. That is what I like about China Bank.”
Atty. Vigilia added: “The Bank makes its decisions based
on the merits; it doesn’t matter if someone has influential
friends, powerful friends. We do our job—even if you’re a
governor, a congressman. We do what is right. If you don’t pay,
we foreclose. We will file a case if necessary. We don’t care

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 201

“We are not fair-weather friends. . . .We’ve withstood
wars. We’ve withstood calamities. And we will be a
reliable partner in good and bad times because that is
part of the China Bank DNA.” —ALEX ESCUCHA

obligation) which became very popular in the mid-2000s as standing by its good clients when they were in need. It was
vehicles for refinancing mortgage-backed securities. As something that Albino SyCip believed in and practiced during
everyone now knows, CDOs were one of the “weapons of the Great Depression, and the Bank still practices this today.
financial mass destruction” (along with the CDS, the credit The Bank sees itself not as a supplier of capital, just out to
default swap) that was at the core of the collapse of big make the best possible return, but as a partner and ally and
investment banks Bear Stearns and Lehman Brothers, the friend to businessmen—just as Dee C. Chuan and Albino SyCip
near-collapse of insurance giant AIG, and the world financial wanted it to be.
crisis of 2008-2009. During the Great Depression, as well as in the subsequent
As the 2008 crisis showed, once banks became addicted to crises, the Bank’s message to distressed clients was
passing off their default risks to others, they would no longer consistent: If you are honest, hardworking, and you know your
bother to do the most elementary credit investigation. Their business, we will go the extra mile for you during hard times.
incentive to protect against the risk of default was gone. The The Bank held to this principle during the Asian crisis of
whole banking system became a ticking time bomb. But the 1997-1998, which hit borrowers with a triple whammy of peso
financial incentive for the banks to sign on was so huge that devaluation, steep rise in interest rates and sharp drop in
even the biggest banks jumped on the subprime bandwagon, property and collateral values. In July, just after the turnover
closed their eyes, and hoped for the best. of Hong Kong from the British to China, the Asian economic
In 2008, some big Philippine banks took serious hits from crisis began with a wave of devaluations across Asia. By
investing in Lehman’s CDOs. Only the banks that insisted on January 1998, the peso lost 50% of its value compared to
keeping their eyes open, the way China Bank did back in 1998, July 1997—it was now worth P42:$1, compared to P28:$1
and again in the days leading to the Global financial crisis
triggered by the Lehman Brothers collapse in 2008, came
out whole.
China Bank, at one point, invested in $20 M worth of
derivatives just before 2008 but they eventually sold the
product when they could not figure out how it was being priced.
As one officer said, it is not their wont to get into something
they do not completely understand or invest in what some call
‘exotic financial instruments’. “The best thing for us is always
to go back to the basics of banking,” said Peter Dee.
The real character of the Bank hadn’t really changed much
in ninety years, even with the advent of the Internet Age.
Seated from left: Alex Escucha, Gilbert Dee, Rene Lao, and Lawrence See.
Another of its oldest and most remarkable values had been Standing from left: Danilo Alcoseba and Johnny Coreces.

202 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
Seated from left: Ric Chua, Nory Reyes-Lao, Rene Lao, and Masahiro Katsuno,
China Bank Japan desk officer from Long-Term Credit Bank of Japan.

before the crisis struck. The devaluation hurt importers

and manufacturers badly, especially those with no foreign
exchange inflows. As they struggled to adjust, China Bank
found ways to help its clients.
China Bank had the strongest balance sheet in the
Not “fair weather”
country at the onset of the Asian crisis, having raised P1.34 friends

I
billion in additional capital via a two for every three shares n the aftermath of the 1997 Asian financial crisis,
stock offering that started in August 1997 and completed in many borrowers were unable to pay their loans
November 1998. In addition, the Bank’s conservative lending resulting in higher past due ratios for banks.
approach saw its loan portfolio supported by a very high Alex Escucha recalled: “Gavin Gunning,
associate director for financial institutions of Standard
70% collateral ratio. Alex Escucha recalled, “Even the non-
& Poor’s based in Melbourne, Australia told me there
performing part of the loan portfolio was 70% collateralized.”
was a recommendation to downgrade the credit rating
Five years after the start of the Asian crisis, R.A. 9182, of China Bank because our past due ratio was higher
which created the SPVs, was enacted in 2002, and was than those of the other banks. I conveyed the position
designed to help banks unload their nonperforming assets of the ManCom that we could go ahead and collect
after the industry NPL ratio hit a peak of 18%. Then SVP unilaterally from the clients who are in trouble, just
like what the other banks were doing at the time. But
Rene Lao, who oversaw acquired assets, recalled, “We had
that would mean cutting off the cash flow he needs
meetings with several SPVs (special purpose vehicles). But to pay his suppliers or pay his employees—effectively
after seeing our loan portfolio and capital position, they all putting him out of business. Of course, for the
said, ‘Oh, you don’t need us after all.’ China Bank was the hopeless cases, you have no choice. But if we see that
only major bank that did not have to sell their nonperforming a client has a good chance of riding out the crisis and
he could get back on his feet if we just give him a little
assets to SPVs. As a measure of the tremendous impact of
leeway, then we are prepared to take a higher past due
the Asian crisis on the banking industry, net bank loans (gross
ratio in the meantime. Gavin Gunning said: ‘I’ll bring
loans minus reserves for loan losses) showed an increase your arguments all the way to the New York rating
only by 2007, or ten years after the start of the crisis. committee.’ S&P retained our credit rating. China
Nory Reyes-Lao said: “In 1997-1998, we were having a Bank’s founders had the same supportive stance
crisis all over the country. These clients had to pay their in the 1930s for clients who fell on hard times as a
result of the Great Depression, despite pressure from
amortization, and the rules of the Central Bank were very
officials of the Bureau of Banking (see pages 65, 66).
clear. Whatever you pay, we apply to the interest first, then Being a partner during tough times has been a China
whatever penalties, additional interest, and then principal. But Bank tradition since its first decade of existence.”
we find that if you cannot make it, then we are willing to take
whatever you pay, apply it first to principal, and let the interest

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 203

 In 1996 in Hong Kong, China Bank
Management Committee had its first
ManCom planning outside the country­.

stand for the time being—just so you can reduce the accruing VALUES DRIVE GROWTH
amount. But your interest—we still expect you to pay us, when There are at least two remarkable things about China
you are in a better position to pay.” Bank’s values. The first is that its talk of values isn’t the
Nory added: “So we don’t make as much on these loans as obligatory boilerplate that many banks trot out just for annual
we might like, but we are supporting our client. When these reports and press releases. The Bank really believes them,
problems come up, Peter Dee would tell us: ‘Let’s support and we know this because it sticks to them even when an
them. It’s better that they survive and continue with us, rather ethically correct decision costs it real money.
than we make it so difficult for them to continue.’” The second remarkable thing is that its strict values,
Alex Escucha said: “We are not fair-weather friends. The known probity, and conservative thinking aren’t a drag on the
foreign banks will always cut off their lines the moment some bottom line. On the contrary, for China Bank, its being good
bad news comes. And then they try to come back to the client and conservative is good for business. By giving up a few
during the good times again. But China Bank is not like that. basis points in interest from a distressed client or swearing
We’ve withstood wars. We’ve withstood calamities. We are off a questionable asset banked security like a CDO, the Bank
partners for the long term.” leaves some money on the table. But its reputation as a solid,
careful bank is a more valuable asset than a few basis points.
Giving up on some additional profits in the short term is fine
with a Hans Sy or a Peter Dee; in the long run, China Bank
CHINA BANK MARKET CAPITALIZATION comes out ahead. As Henry Sy would say, winning a client or a
1985-2011
In Billion Pesos supplier’s trust is the most important thing.
60
And when the Bank looks at prospective clients, it looks
for those who share these same values—the quiet, steady,
50.9

47.0

50
methodical workers, not the high-flyers and big spenders,
40
who tell a good story and cut a flashy figure, but who, in the
36.1

Bank’s long experience, are more likely to crash and burn.

30.6

30
Hans Sy said: “We have this very traditional way of
20.4

20 looking at people and their credit. We really look into the

16.5

14.3

business sense of the person. We look for people who are

10
8.2

7.5

very conscious with their money—all the more we should do

7.2
2.1
1.7
0.4
0.2

0 business with them. We look for a person with good values, a

85 87 89 91 93 95 97 99 01 03 05 07 09 11
good family background. A lot of the longtime clients of China

204 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 (Right) ManCom
Planning, Shanghai
2002.

(Below) ManCom
planning in Seoul, 2006

Bank are now handing down their

businesses to the second or third
generation. We are very conscious
of that, and if this kid who is next in
line is really very responsible, then
we tend to lend even more. I, too,
am from that second generation, so
I know what it’s like. If we see that
the next generation is complacent,
we are a bit slow to lend. But if we
see that this second-generation
leader is somebody with potential—
and also if the word of mouth that
we receive says that this is a good
kid—we will double our lending to
him.”
Hans added: “It works both
ways. If you do that for him, he will
feel very confident, and if he likes
the way you treat him, you will
get his banking business…. We’re
always on the lookout for our existing clients to see how we anyone. So what we did was, we went on buying treasury bills
can double up their relationship with us. For those clients with and government securities. That really brought us a lot of
good track records, when you double it up, you enhance the revenue.”
relationship and you have less risk.” In 1997, the Bank, based on an instruction from Peter
Because it was so sensitive to risk, the Bank managed Dee, decided to invest heavily in government securities as
to achieve a good return even in bad times. Hans Sy liked a safe haven from the Asian financial turmoil. Alex Escucha
to mention the Asian crisis as a case in point: “I’ve seen recalled: “Boss Peter said to us, ‘You should buy securities
how China Bank grows with a very conservative position. when, as they say, there’s blood on the streets. You lend at
Since we’re not leveraged, we are not pressured to do risky 9%, borrow at 5% and have a good interest spread of 4%
things. The 1990s crisis wasn’t really a big problem. We had without having to worry about getting paid because you are
so much cash, but we didn’t want to give out loans to just lending to the government.’ Our management team and

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 205

“If you ask me at any time how I feel China Bank has
been doing, on a scale from zero to ten, I always say:
8.5. We still want to do better. . . . We do not want to
be complacent.” —HANS SY

treasurer then resisted that idea. Boss Peter said, ‘Ako ang who fell along the way—because you are consistent and steady
bahala.’ So we took a big position. That made China Bank very in what you do. That is China Bank. We moved slow but sure,
profitable for many years.” very steady. In the 1980s, we had a lot of problems. But we
Hans said: “That’s how we are. We are not pressured to do must have done a pretty good job as an institution—because
something more than what is safe. I think our experience in from where it was in the 1980s, it is one of the best capitalized
the 1980s helped us develop that attitude. So our position is, banks today. Sometimes it’s good to walk slowly.”
it’s not all about just lending out. If you don’t know very well The character of the Bank could also be seen in indicators
these people you’re lending to, at the end of the day, it will go both big and small. Take its consistent cost discipline, even
against you.” as it grew its branch network from 2006 to 2010. Its cost-
Sammy Chiong said: “China Bank isn’t as aggressive as to- income ratio was one of the best in the industry. At a time
other banks, but at the end of the day, we still got to where we when its bigger competitors would regularly score in the
wanted to go. Sometimes it is not good to run very fast. The 60%-70% range, China Bank kept its ratio far below—at 57.14%
guy who walks may reach his destination first, compared to in 2006 and 57.25% in 2010. It was consistently one of the best
the guy who runs fast. Because along the way, the guy who capitalized banks in the country, well in compliance with the
runs very fast can stumble. And since you are just walking, international Basel II standards.
the chances of you falling are less. So you can overtake a guy China Bank’s entrepreneurial mindset of cost efficiency
was noticed by discerning investors. Alex Escucha said: “Once,
a couple of boutique fund management firms visited China
Bank and I briefed them. When they visited our offices—they,
CHINA BANK ROE apparently, had just come from another big Philippine bank—
1990-2010
(In %) they said, ‘We like your head office. It is not too lavish. We
35 know you are not wasting shareholders’ money.’”
Moreover, China Bank has been distinguished as one of
30
the best governed publicly listed companies in the country.
25 The Bank has been a consistent top-scorer in the Institute of
Corporate Directors’ (ICD) Corporate Governance Scorecard,
20
earning a silver award in 2010. ICD first recognized the Bank’s
15 adherence to the best practices in corporate governance in
2006. China Bank was named as one of the top 100 ASEAN
10
companies in the Stern Stewart Relative Wealth Index which
5 outperformed their peers of publicly-listed companies in
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
creating wealth for shareholders for the period 2002-2008.

206 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 0
Hans Sy and Nancy
Dee Yang receiving
the Gold Award in
Corporate Governance
from the Institute of
Corporate Directors
in 2011.

TOTAL LOSSES OF CHINA BANK

FROM CDO’S 2008-2009
GLOBAL FINANCIAL CRISIS

Its international reputation could also be seen in the fact NEVER RESTING ON LAURELS
that its foreign ownership reached over 24%, which means But in keeping with Henry Sy’s relentless character, the
it more than met international standards for transparency, great results of China Bank for those past two decades—as
governance, and creating shareholder value. stellar as they had been—were not enough.
This discipline and insistence on creating value for In 2010, Hans Sy said: “If you ask me at any time how I
shareholders has direct benefit not just to the current feel China Bank has been doing, on a scale from zero to ten,
bottom line, but to the long-term value of the brand. Since its I always say: 8.5. We still want to do better. We want a big
discipline and conservatism are well known, when the going expansion. That’s the attitude we have developed in our family.
gets tough, investors and clients stick with the Bank. We do not sit on our laurels; we do not gloat about success.
In 2008, when the global financial crisis struck and Because we learned from my father—and we’ve seen how
investors were fleeing the financial industry in droves some old rich families go down because the second or third
worldwide, all the publicly traded Philippine commercial generation or even the founder gloats about their success;
banks suffered a hit in their market cap. But only two they rest on their laurels. We do not want to be complacent—
Philippine banks did not see their market price go below their even if we are where we are. We always find room for
book value—China Bank and BPI. It is in tough times like these improvement.”
when the value of the brand really emerges. As in every Henry Sy enterprise, the goal posts were
In the years since, China Bank’s market cap has recovered. always moving. Sammy Chiong recalled: “Once, it was really
By 2010, China Bank was No. 6 in terms of
market capitalization, even though it was
only No. 8 in terms of assets. The only banks
ahead of it in market cap were competitors
many times its size in assets. The Bank was,
as they say in boxing, punching well above its
weight.
Sammy Chiong said: “Pound-for-pound, we
should be efficient, we should be profitable.
And so we looked at the average cost per
employee and the average profitability per
employee. We were conscious of that. For a bank
of our size, our income compared favorably to
other banks several times our size.”
Peter Dee, Pilar Nubla Liao (daughter of former chairman Marcelo Nubla) Herbert Sy, and Henry Sy,
Jr. during a board meeting.

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 207

“The nice thing about China Bank is you’re a member
of the family. The bosses treat you like family.” —NORY REYES-LAO

was when we decided to go into branch

expansion and into these new growth
initiatives. We want to be a major player,
not a niche player. That prodding from
Big Boy was the trigger.”
By pushing hard for expansion,
China Bank was also being mindful of
its own history. Once the biggest private
commercial bank in the country, it
elected to play it safe in the 1960s and
early 1970s—just as newer, much more
aggressive rivals were launching their
own bids for dominance. By 1975, it
had been eclipsed, and by 1985, it was
in serious trouble. Hans Sy joined the
hard for us to see a one billion-peso growth in CASA (checking board in 1986. He became determined to avert any repeat of
accounts and savings accounts). Before, we would elicit a lot “the time of troubles” by stamping out any complacency in the
of applause from the board if we hit the one billion growth present and future. As conservative as Hans liked to be, he
mark. Later, if we got just P6 billion in CASA growth, they also knew that there was such a thing as being too careful.
would just frown: ‘Not enough.’ Once, with a net income of In keeping with this new direction, under the Sy family, the
P800 million, the stockholders were happy. After some time, if Bank began to break its old rules. In 1979, when Henry Sy first
we made P5 billion net, they weren’t that happy. They wanted joined the board, China Bank had very few branches, wouldn’t
more the next year.” acquire other banks, didn’t hire any senior managers from
Alex Escucha recalled: “Our ROE had been registering at outside, and promoted solely from within. In the first decade
around 15% for several years. But then, sometime in 2005, of the 2000s, the Bank broke all these precedents. As of 2010,
in a board meeting, Big Boy [Henry Sy Jr.] challenged us: ‘Is it had 269 branches, including those of China Bank Savings.
that growth sustainable? What is the next level of growth that China Bank went into the most rapid expansion in its history,
you can target?’ That really sparked a major discussion in with the branch network targeted to grow to 400 branches by
the board and sent us all back to the drawing board. It’s not 2014. In 2007, it acquired Manila Bank, and it hired some of its
enough to be making good returns. To sustain it, you have to most senior vice presidents from rivals like Citibank.
grow your base also. You cannot forever be a small niche bank It all went back to that quote from business guru Jim
and still generate superior returns over the long run. That Collins’ How the Mighty Fall that we alluded to in Chapter 4:

208 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Nancy Yang and her

269
region heads in 1997:
Philip Tsai-South Metro
Manila/Luzon branches,
NUMBER OF Samuel Chiong-Visayas/
CHINA BANK Mindanao branches, and
BRANCHES, 2010 Atty. Robert Uyquiengco-
North Metro Manila/
Luzon branches.

#4 CHINA BANK’S RANK

IN MARKET CAPITALIZATION
PHILIPPINE PRIVATE
COMMERCIAL BANKS, 2010

“When institutions fail to distinguish between current

practices and the enduring principles of their success,
and mistakenly fossilize around their practices, they’ve set
themselves up for decline.” The Bank was now in another
era, where old assumptions were being questioned, and new
challenges were being thoroughly dissected. The Bank’s Ric Chua said: “For the longest time, we were so
enduring principles were clear, but its current practices were successful with the SME market, with the traditional Binondo
always being reviewed. Chinese market. I had this one client that started with me with
Hans said: “In the board, we talk a lot about transforming just a small line. In just a few years, his credit line with us
the organization, about sustainable growth. How do we sustain was P1.5 billion. We have many success stories like that. So
growth? Where will we get those revenues? How do we grow we want to keep that market and grow that. But it’s no longer
the Bank? And to do that, you have to look at your team. What enough for us. The economy has changed. Now the broader
kind of organization is needed to carry out this transformation consumer market is where we need to go. It’s not enough to
and this growth? And what kind of people do you use to man be a niche player. We have to go to this bigger market. And so
this team? All of these transformations and strategies have to we have to focus on the consumer and think hard: How do we
be synchronized.” capture his needs? How do we make things easier for him?”
The young Ric Chua was brought to the Bank’s attention
by his AIM classmate Nory Reyes-Lao. Peter Dee hired him
in 1975 to help remake the Bank, and until he stepped down
as president and CEO in 2017, Ric still got a terrific kick out
of that challenge. He loved meeting with clients to deepen
his understanding of their needs. He liked to say: “That’s the
beauty and the excitement of banking.”
He added: “I guess I liked that I had been given the freedom
by my bosses to test and try new things. And for me, the fun
also comes in when I work hard to understand the customer. I
learned so much from them.”
Even with its traditional Chinese market, the Bank did not
assume that it could always maintain a lock on its longtime
clients. The Chinese-Filipino family patriarchs and matriarchs
were continually passing on their businesses to their heirs,
and the Bank knew their children were frequently not as

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 209

210 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 In 2006, the Bank launched its
branch expansion plan. China
Bank SM Clark and SM Lipa
are the pilot branches for the
new branch look designed
by renowned interior design
and architecture firm SSO
& Associates. The modern
architecture features ambient
lighting, sleek teller’s counter,
and modern fixtures.

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 211

MILESTONES

China Bank President and CEO Peter S. Dee, 2nd from right, and Manila Bank Chairman Luis B. Puyat, 2nd from left, are flanked by
Manila Bank SVP for Legal David B. Puyat, left most, and China Bank Chairman Hans T. Sy. In second row are Manila Bank’s Rene V.
Jazmines, EVP for Credit Management; Emilio A. Astom, director; Benjamin J. Yambao, president; and China Bank’s Ricardo R. Chua,
EVP and COO; Samuel L. Chiong, SVP for Branch Banking Group; and Atty. Omar D. Vigilia. chief legal counsel.

ACQUIRING MANILA BANK

F
ounded in 1961, Manila Bank was the tenth largest commercial bank by 1980.
But it was closed by the Central Bank in May 1987, a casualty of the 1980s
financial turmoil. It was revived by the Puyat family as a savings bank in June
1999. By December 2006, its total assets stood at P10.2 billion. More importantly,
Manila Bank owned 75 branch licenses, of which 27 were operating branches. Most
people were aware only of the 27 operating branches, but not the 75 licenses overall.
Hans Sy, who has developed the same instincts as his father, was quick to spot the
unrealized value in this asset. The acquisition, if it happened, would grow the potential
branch network by 50% in one jump. Hans said: “When it comes to acquisitions, we look
for what potential new business it can bring us—not the cost.” The Bank initiated talks
with the Puyat family, which went very smoothly. Hans said: “I took a direct hand in the
Manila Bank acquisition. I met with the family, the Puyat brothers. One advantage was
they are all my age. I’m a second-generation businessman too, so it was easy for me to
talk to them.”
At the signing ceremony, Manila Bank Chairman Luis Puyat remarked, on behalf of the
selling shareholders, “The rapidly changing landscape of the Philippine banking industry
has made it tougher for smaller banks to compete. It was a difficult decision for the family
to let go a business we have painstakingly built over the years. In looking for a partner,
we were attracted by China Bank’s industry-best capital strength, financial stability, loyal
customers, and sustained profitability. We are gratified that Manila Bank will become a
crucial part of China Bank’s plans to become a strong major player in the industry.”

212 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
MILESTONES

China Bank and Manulife formalized their bancassurance alliance with the signing of the joint-venture agreement to form
Manulife China Bank Life Assurance Corporation. Shaking hands are China Bank President and CEO Peter S. Dee and
Manulife SVP for Regional Development-Asia John R. Spence. Looking on are China Bank EVP & COO Ricardo R. Chua,
leftmost, and Manulfe President Carl S. Gustini, rightmost.

THE MANULIFE CHINA BANK

LIFE ASSURANCE CORPORATION

I
n 2007, China Bank entered into a joint venture with Manulife Financial that is one of the leading life insurance companies in the
Philippines to set up a bancassurance joint venture company, world. MCBL is now a major business contributor to both China
Manulife China Bank Life Assurance Corporation (MCBL). Bank and Manulife. It offers a full range of innovative insurance and
Upon approval, Ricardo R. Chua, then senior executive vice financial products for protection, wealth, savings, education and
president and chief operating officer of China Bank, said, “We are all health through China Bank’s nationwide branch network.
very excited about this tie-up... Bancassurance would provide a wider “The growth and success of our bancassurance unit is indeed
range of investment and insurance options for our clients, a new a welcome development for us,” said then Manulife Philippines
source of income for the Bank, and an expanded market for Manulife.” president and CEO Indren Naidoo. The share of total Manulife
In its first three years, the Manulife China Bank Life joint venture business contributed by MCBL increased from 17% in 2009 to 31%
rapidly grew to become one of the most trusted life insurance in 2010.
companies in the country, breaching the P100 million mark in fee
Sandeep Deobhakta
income by 2010. MCBL’s insurance force has grown to over 200 MCBL President and CEO,
2019-present
financial sales associates, covering almost 300 China Bank branches.
Then president and chief executive officer of Manulife China
Bank Life, Robert Wyld, said, “Clearly, our distribution approach is
working very well. We will continue to strive to be the most reliable
bancassurance business in the Philippines.”
The Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife
Philippines) is a wholly-owned subsidiary of Canada-based Manulife

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 213

MILESTONES

New York leg: China Bank FVP Alexander Escucha, Macquarie Capital Asia Vice Chairman Stephen CuUnjieng, China Bank
Vice-Chairman Hans Sy, China Bank EVP & COO Ricardo Chua, Institutional Equities Asia Associate Director Jose Lanuza,
and Macquarie Securities Asia SVP Danny Wong at Macquarie Offices in New York.

SELLING CHIB TO FOREIGN

INVESTORS

C
hina Bank, stock symbol CHIB, successfully tapped the
international equities market for its secondary placement
offering in 2006 to enhance its trading liquidity, increase
market float and diversify its shareholder base. The international
road show from May 22 to 30, 2006 in Singapore, Hong Kong, London,
Washington DC, and New York generated significant interest among
large foreign institutional investors that $53.5 million or about P2.8
London leg: North of South Capital Partner Vikas Nath, Macquarie Associate
billion worth of outstanding shares, representing 3.39 million shares Director Alicia Weston, and China Bank’s Vice Chairman Hans Sy, EVP & COO
or 6.9% of the total shares held by the major shareholders of China Ricardo Chua, and FVP Alexander Escucha in London.
Bank, were sold to firms like Cyber Equity Ltd., Strategic Options
Ltd., Capital Research Company, and Merrill Lynch Investment
FOREIGN OWNERSHIP OF CHIB
Management at P830/share. With the offering, China Bank’s foreign (In %)
ownership tripled from 8.86% in March 2006 to 23.07% in 2007 and 25
maintained it at above the 20% level since then. 23.43
23.07

22.97

Macquarie Securities (Asia) Pte. Ltd. of Australia was the global

21.92

20
19.84

coordinator, sole lead manager and sole book runner for the offering.
15
Significantly, Stephen CuUnjieng, a great grandson of one of the
founders of China Bank, Guillermo Cu Unjieng, played a major role 10
in this secondary offering. The young CuUnjieng was vice chairman
8.86
8.08

of Macquarie Capital Asia at the time (see his “Four Generations of 5

China Bank Memories” on page 314).

0
2005 2006 2007 2008 2009 2010 2011
MAR MAR MAR MAR MAR MAR MAR

214 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
MILESTONES

CHINA BANK MARKET CAPITALIZATION

2002-2012
In Billion Pesos
70
64

60

51
50 47
46
42
40
35 36
31
30

20 20
20
16

10

0
02 03 04 05 06 07 08 09 10 11 Jun-12

CHINA BANK: ONE OF 100 BEST COMPANIES

IN SOUTHEAST ASIA IN CREATING WEALTH
FOR SHAREHOLDERS

O
nly one other local bank, Bank of the Philippine Islands, was “It clearly shows that China Bank can be benchmarked against
included in the list. The other local companies were Aboitiz peer companies in the Philippines and even in the whole Southeast
Equity Ventures Inc., Ayala Land Inc., First Metro Investment Asia and come out one of the best. This affirms our commitment to
Corp., International Container Terminal Services Inc., Jollibee Foods our shareholders and customers that we will be a catalyst of wealth
Corp., Manila Electric Co., Phil. Long Distance Telephone Co., SM creation,” he added.
Development Corp. and SM Prime Holdings Inc. China Bank achieved record growths from 2001 to 2007, posting
The RWA is a performance metrics developed by Stern Stewart & one of the highest return on investment and return on equity during
Co. to measure how a company performed against a peer group by this period. Even when the crisis hit the Philippines in 2008, China
comparing the share price of a company over a chosen period against Bank’s share prices were among the most stable, outperforming
that of a defined group of peers, taking into account new share issues the biggest banks in the country. The Bank has consistently paid its
and levels of financial risk. shareholders substantial cash and stock dividends regardless of the
“We are really proud to have made it to this list,” said then senior state of the economy.
executive vice-president & chief operating officer Ricardo R. Chua. “China Bank has always been prudent in managing its resources
In 2009, China Bank made it to the ASEAN 100 Relative Wealth and operations. It is reassuring that experts and analysts agree that
Added (RWA) index, a list of the 100 best-performing companies we are on the right track with our efforts to meet clients’ expectations,
in Southeast Asia in terms of creating wealth for shareholders, as provide efficient solutions to wealth management needs, and deliver
determined by Stern Stewart & Co., a leading management consulting shareholder value in these trying times,” Ric concluded.
firm based in New York.

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 215

“In some banks, simply getting the latest technology
drives the process. But that’s not important. What matters
most is: What is the benefit for the customer?” —RIC CHUA

banking—that was richer, more rewarding and

very comfortable. Ric Chua stressed making the
relationship with the Bank “sticky”—of making
the convenience, ease, and warmth of the China
Bank service package so superior that it far
outweighed the value of chasing just a few more
basis points at another bank.
Rose Gan said: “These Chinese businessmen
were our market niche. We had a solid base.
They were loyal and so liquid, so our risks
were low. But we had to expand our market,
otherwise we would not grow. It was no longer a
banker’s market—it was a customer’s market. It
was important for you to be flexible—especially
now that competition had intensified.”
steeped in traditional culture. Many would not look upon China The death of the old banking paradigm—where banks could
Bank as their primary bank, as their parents did. afford to sit and wait for customers to arrive—meant that now
Some, of course, did; for instance, James Go, Jr., of the at every Bank branch, acute sales management and creative
prosperous hardware firm Cebu Evergreen, banked almost thinking were the order of the day.
entirely with China Bank, following the instructions of his late Sammy Chiong said: “We had to develop our managers
father James, Sr. Years ago, he said: “Ninety percent of our and our officers to analyze the business area where their
banking is with China Bank, no matter what… If China Bank branch operated. Let’s first understand the market. Look at
had a credit card, I would have no need for any other bank.” the potentials. And how do you succeed in getting a bigger
[China Bank does, now.] share of that market? How do we sustain the growth? That’s
But other heirs, less focused on relationships and history, very, very tough. Why should a client go to this door and not
had become “rate shoppers” who were willing to move their the other door? That’s the skill that you as a banker have to
funds around from bank to bank continually in search of develop—to convince them that you can service them better
better deals. Thus, for them, the Bank had to be prepared than the other guys. China Bank has a very good brand. So, if
to compete harder for these customers in terms of services our people build on that, it is an advantage. But I tell you, it’s
and rates. Even if it couldn’t drive its rates quite as hard as a very, very, very competitive.”
bigger competitor which enjoyed more economies of scale, And that is just the way the Bank’s leaders like it.
it had to offer a total package—an overall experience of

216 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 (Below) China Bank
believes in providing
adequate training for
employees, and a robust
training program has
been in place since the
1970s. The Bank opened
the China Bank Academy
at the VGP Center in Ayala
Avenue in 2010 as part of
its continuing efforts to
develop talents.

Ric Chua
THE LEADING EDGE
As of 2010, the basics of China Bank’s business hadn’t acquisition of Manila Bank in 2007 was a telling indication of
changed in the ninety years since Dee C. Chuan founded how much the Bank had changed its attitudes in recent years.
it. But the forms and services of banking had grown more The second, on the other hand, had been a traditional Bank
complex. To compete and get consistently good growth, the strength since 1969—with Ric Chua now pushing for IT to bring
Bank ventured into many new products and services such its business processes to a whole other level of service.
as bancassurance, private banking, cash management, As late as 2006, the Bank had only 148 branches—a
e-banking, insurance, trust banking, and a savings bank. fraction of its biggest rivals. (Sister bank BDO, for instance,
This wide array was a far cry from the situation in 1972, when had 685 in 2009 and was looking ahead to a 1,000-branch
simply offering T-bills and commercial paper was already network in a few years.) But the Bank’s leaders, in particular
considered a big advance for China Bank. Hans Sy, knew that without a continually growing stream
In 2010, two key areas deserved particular attention: of low-cost funds acquired at scale through a large branch
the branch expansion program, including the acquisition of network, the Bank’s growth would slow. He pushed the board
a savings bank, and the impending developments in China to aim for a much faster growth rate. To him, a strategic
Bank’s IT systems. The first was a new area for a bank acquisition seemed the quickest way to make a big jump. Of
that once preferred to grow very slowly and organically. Its the potential takeover targets on the horizon in 2007, the one
that caught his eye was Manila Bank.
On June 21, 2007, China Bank signed an agreement to
purchase 87.51% of Manila Bank’s shares from the Puyat
family for a total of P 1.65 billion. Manila Bank had 75 branch
licenses—a fact not known to many in the banking industry
—which included 27 operating branches. The Bank retained
Manila Bank as a new subsidiary and rebranded it as China
Bank Savings to target the more retail market.
The decision to retain the savings bank as a separate
entity instead of simply absorbing it into the parent bank
network was heavily influenced by the prevailing market
research which showed that most people strongly associated
China Bank with three market segments: the Chinese, the
entrepreneurs or businessmen, and the rich. Majority of the
population generally felt that China Bank was not for them and
would feel more comfortable with other banks instead.

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 217

 Yet even with its new aggressiveness in branching, China
Bank remained careful about costs and profitability, as
always. Its branch network still had to be, pound-for-pound,
very productive. It would not do for the Bank to simply blanket
an area with branches, the way some rivals did. It didn’t have
Another key strategic decision thoroughly discussed at unlimited resources, and more important, a “brute force”
the bank’s Management Committee, which also served as solution simply wasn’t the China Bank way. In that sense, this
the savings bank board of directors, was the business model still was a bank acting in the spirit of Albino SyCip, the founder
and branding. The China Bank board of directors approved who didn’t allow even paper clips to go to waste.
the recommendation to follow the BPI/Family Savings As Sammy Chiong said: “I think there should be a more
Bank model, because it leveraged on the very strong brand deliberate pace, a very strategic way of expanding. You
franchise of China Bank, versus the Metrobank/PSBank shouldn’t just expand right and left and try to run after the
model with a completely different brand name for the savings numbers. You have to remember: every branch that you open
bank subsidiary. The wisdom of this decision was borne out by has a carrying cost. And if your branch doesn’t make money,
the sharp increase in the CASA deposits of the former Manila it’s going to be a drain on your profitability. A lot of banks set
Bank branches in the months following the acquisition. up their branches purely as a distribution network. What is
Ric said then: “This savings bank will go after the market
that did not feel that they should bank with us—young people,
people who are starting families, people who for one reason
or another aren’t our traditional customers, people in the past
who didn’t think they were bankable. Of course, the Bank itself
also targets the broader consumer market, not just China
Bank Savings. This broader market is where the action is
today. And that is where we will be. But China Bank Savings is
our opening to target that market.”
China Bank Savings would provide its parent with a
platform to focus on the consumer market. It would serve as
the “laboratory” for new products, services, and marketing
approaches for the household, small business, and younger
segments. With its lower reserve requirements and slimmer
Visionaries: In the late 1960s Johnny Coreces, right, championed China Bank’s
cost structure, it could be nimbler, fresher, and more automation efforts; Ric Chua, left, carried the torch through the 2010s, pushing
for the Bank’s IT modernization, including the acquisition of a new core banking
innovative than the parent in some key areas. system.

218 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 Conservative in credit,
very particular to China Bank is that it views the branches maverick in IT

W
not only as a distribution network, but also as a stand-alone
profit center in itself, with its own profit and loss statement. hile China Bank has earned a well-deserved
reputation for conservative and prudent
For the China Bankers, every branch should make money to
approach to lending and credit, it has also
contribute to the whole.” become known in the banking industry for charting
After its acquisition of Manila Bank in 2007, China Bank its own path on the technology front, of not following
looked at other possible acquisitions, like Philam Savings the herd. This was clearly demonstrated in 1969 when
Bank (a subsidiary of AIG eventually sold in 2009) and it became the first bank in Southeast Asia to process
deposits online. In the 1980s, the safe choice among
Premiere Development Bank (acquired by Security Bank).
bankers was encapsulated in the saying “No one lost
These possibilities didn’t pan out for various reasons. But the
his job recommending IBM.” At that time, said Ric
Bank remained on the lookout for more potential acquisitions Chua, you basically got whatever software was running
and the chance to make another big leap. on the IBM hardware. When the opportunity came
The other key frontier for the Bank in the run-up to its to select a core banking system based on software
100th year in 2020 was digital. In the past, the Bank used functionalities, China Bank got the TCFS (Total Concept
Financial System) software package but it was running
information technology to record, speed up, and connect its
on an NCR 9800 mainframe. It was an out-of-the-box
business processes. In 2010, it was going a step further; it
thinking, as TCFS was the only core banking system
wanted to rebuild its business processes on robust, well- that transformed the ATM card into a customer-centric
designed digital foundations, so that the Bank could respond relationship card, allowing depositors to access multiple
faster, better, and more comprehensively to every customer. accounts. By 1994, the bank again chose to be a pioneer
Already, the Bank had many effective e-banking channels— by implementing the Dimension core banking system by
Kirchman Corporation of Orlando, Florida despite the
ATMs, the TellerPhone, China Bank Online, for both mobile
fact that no other bank in Asia was using the system.
and Internet banking—that were robust, popular, easy-to-use It was the most integrated package at that time, the
solutions. The Bank’s IT department was one of the most only core banking system that included an efficient
respected in the industry. But Ric Chua in particular was ATM switch. China Bank is also known for being very
looking for more. thorough and objective in its evaluation of technology
solutions, and tough but fair in dealings with technology
He said: “In the past, IT in banking was mostly about
providers. As a result, its IT decisions are closely
bringing down your cost-per-transaction. But we’ve done
watched by the industry players.
that. Now we want more. What kind of technology enabler do
we need and what business process do we need to make the

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 219

Aside from the branches,
the centerpiece of
customers’ interaction with
China Bank, electronic
banking channels such as
ATMs (TellerCard), phone
banking (Tellerphone), and
Internet and mobile banking
(China Bank Online), enable
the Bank to extend its
services to customers 24/7.

banking experience better for our customers? All of these new core banking system and, over two months, redefined our
things—technology, business process—are intertwined. But business processes—like, say, loan origination. How can it be
the customers should always be at the center. In some banks, better? Faster? How can a new IT system help us? If there’s
simply getting the latest technology drives the process. a bottleneck in the process, can the IT vendor help us find it?
But here, we love our customers. Just getting the latest Put a red flag on it? Those are the questions we posed to the
technology—that’s not important. What matters most is: What vendors.”
is the benefit for the customer?” Ric Chua was very emphatic about how much he expected
The process of defining the answer to that question was a from the project: “We did not take this process of deciding
complex one—and China Bank was willing to take extra pains lightly—not just because of the cost—but because I thought
to make sure it got the answer right. Thus, the replacement of it would become the foundation of how we could change the
its core banking IT system, last changed in 1998 and planned Bank, of how the customer experienced this Bank.”
to be changed in 2010, took a little longer to complete. The In this decision—as in many others it took subsequently—
Bank tackled the issue with its customary thoroughness—so the paradoxical nature of the Bank emerged, combining
much so that, in late 2010, it stepped back from making a opposites in a way that works—just like in the traditional yin-
decision for at least six months. and-yang symbol of Chinese folklore. China Bank combines
Ric Chua said: “At the end of the day, we had to be able to East and West, old and new, conservative and progressive,
answer the question: Is this new system going to make us a traditional values with cutting-edge technology, a warm,
better bank? How does it make the banking experience better personal touch with a hard-nosed insistence on achieving
for the customer? And if that is not clear yet, then it’s not a metrics matching the best in the industry. The contradictions
good decision…. A new core banking system would cost us somehow do work in its favor. The melding of seeming
over half a billion pesos. So we wanted to be sure we got it contradictions somehow drives China Bank’s success.
right. And if, in the decision process, we took a little more time
there—that’s okay, because we would make that time up in the COMPLETING ITS FIRST CENTURY
implementation. It would go much faster, because we thought As China Bank looked ahead to marking its first century
things out already in so much detail.” on August 16, 2020, some prospects appeared certain and
Ric said: “For IT vendors, the tendency is to offer the banks others challenging. It was safe to expect that it would be much
an IT system that can do what they are doing today—maybe larger than it was in 2010 by every metric—assets, deposits,
just a little faster. But that’s not what we want. We want to do loans, branches, and so on. But sheer size alone would not
things differently—we want to be better, much much better. If be enough. For the bank’s leadership, it would be just as
our processes are not the best in the market, maybe we should important that the Bank maintain its special culture, and
look at that first, address that, and only then make a core the warm, close ties among the Bank’s employees and to its
banking decision. So we stepped back from the decision on the customers. For Hans Sy and Gilbert Dee, it is just as important

220 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
that the closeness to the customer remains and grows ever
stronger.
It would also be important that the Bank retain its identity.
For quite some time, many writers in the business press had
speculated that one day the two Sy-controlled banks, BDO
and China Bank, would be merged. There was an economic
argument in favor of such a move. The combined assets of Peter Dee (3rd from left) receives the first Bell award in 2012
from then SEC chair Teresita Herbosa (4th from left).
the two, based on early 2011 figures, would be near P1.3
trillion—an overwhelming number for the other big players to
match, let alone overtake. But Henry Sy did not get to the top
China Bank wins Bell
by paying attention just to the numbers. Award for Corporate
Hans Sy said then, before his father’s passing in 2019:
Governance
“
“Until today, my father still believes that this Bank is a very,

W
very good investment. So you shouldn’t expect him to merge
e are honored to be among the first
it with BDO. In fact, I asked him: ‘What about thinking of recipients of this prestigious corporate
merging China Bank and BDO?’ He said: ‘It’s not even in my governance award. We have always
thoughts.’ He looks at both of them, China Bank and BDO, as believed that our success stems from our corporate
being really good on their own. He doesn’t see any good in principle of doing what is right and doing right by
our main stakeholder groups. This new award is a
joining them—or getting anything better than what each bank
happy confirmation of China Bank’s stern adherence
is right now, on its own. There wouldn’t be any value-added
to corporate governance,” said then China Bank
[in a merger]. He feels that China Bank on its own has a lot of
president & CEO Peter Dee.
value. BDO on its own has a lot of value. So merging the two is The PSE launched the Bell Awards to recognize
not in his thoughts.” the best listed firms and trading participants found
China Bank’s value lies in its leadership, its commitment to have outstanding corporate governance practices.
to a high standard of professional management, and the China Bank joined an elite club in the first
strength of its relationship with its clients. 2012 Bell Awards for Corporate Governance by the
Philippine Stock Exchange (PSE)—the only bank
China Bank has always had leaders with a strong sense
among the five publicly-listed companies awarded,
of honor and concern for its clients and employees—leaders
distinguished from among 255 publicly-listed
who have the unshakable trust of the Bank’s clients and the companies.
palpable support, even affection, of its employees. This is
evident in the many stories told by the Bank’s employees
and customers. But if one looks at the long history of the

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 221

China Bank Management Committee, 2011.Seated from left: Gilbert U. Dee, Peter S. Dee, Margarita L. San Juan, and Rhodora Z. Canto. Standing from left: Alberto Emilio
V. Ramos, Ricardo R. Chua, Nancy D. Yang, Ramon R. Zamora, Antonio S. Espedido, Jr., Rene J. Sarmiento, William C. Whang, Samuel L. Chiong, Alexander C. Escucha,
and Rabboni Francis B. Arjonillo.

Bank, one also sees that very early on, its leaders had a years when management brought in the Shanghai-trained
sense of vision. “We were the first bank in Southeast Asia officers such as TS Wang and Lee Siau Tong. They were highly
to be automated. That is a testament to our leaders’ vision,” skilled in foreign exchange because Shanghai was a center
Ric said. The eventual decision to replace its core banking IT of trade and finance in the 1920s and 1930s, and because
system is consistent with that vision of seeking cutting-edge of the said officers, China Bank was way ahead of the curve
technology to continually improve operations. compared to the other local banks. In the 1950s and 1960s,
The Bank’s strong commitment to a high standard of Albino SyCip also sent a number of the bright men of the
professional management could be seen even in its early Bank to train in correspondent banks in the US such as Chase
Manhattan Bank and Bank of
California. It was no wonder,
then, that China Bank was the
top bank in the 1950s until the
1970s.
Ric Chua said that the Bank
continued to hire the best and
the brightest and he believed
that this continuing commitment
to professionalization and
excellence had prepared the
Bank for a highly competitive
banking industry. He saw
that the challenge now was
to continue to have a strong
management team—one that
was a blend of book-smart
and street-smart people. He
emphasized the importance
The Board at work.
of being grounded. His own

222 100 YEARS OF TRUST: THE CHINA BANK STORY CELEBRATING THE PAST. EMBRACING THE FUTURE.
 16.69%
CHINA BANK RETURN TO EQUITY, 2010

P257.4%
CHINA BANK TOTAL ASSETS, 2010

experience as a branch manager during his first years in the

Bank had given him valuable lessons in banking. “I love to
talk about how to take care of our customers—it’s not the
textbook approach. We don’t want to lose that character of
the Bank of understanding the customer,” he concluded.
The abiding loyalty of its customers was a result of the
Bank’s commitment to certain values: honesty, integrity, hard
work, fairness, concern for people and the belief that the
welfare of the Bank and its clients were one and the same.
These were the values that the Bank’s leaders, then and now,
adhered to and that generations
of employees have internalized.
It is common to hear
longtime customers say “They
never take advantage of their
clients” or “They are always
fair.” Many of them say, “We
will never look for another
bank because we trust China
Bank.” Albino SyCip had always
believed that staying true to
these values was the surest way
for the Bank to last.
After 90 years, the China
Bank way was still all about the
customers and the banker’s
relationship with them. As
Albino SyCip liked to say: “It is
better to know people than to
know money.”

CHAPTER 6: THE FUNDAMENTAL THINGS APPLY: 1990-2010 223