Pro-Files: This country needs professional
managers like FELIX ENRICO R. ALFILER

(By Bernie Cahiles-Magkilat, published in Manila Bulletin, B-15 – February 25, 2004)

Felix Enrico R. Alfiler

He is the perfect choice for a job in a trade association whose image has been tarnished one way or another, largely because of the very nature of its operation. Felix Enrico R. Alfiler, president of the Cement Manufacturers’ Association of the Philippines, formerly the Philippine Cement Manufacturers Corp. (Philcemcor), offers an air of freshness for an industry that’s aching for change.

THE MAN FOR THE JOB

It was an executive search agency that got Alfiler’s name into the pool of candidates for the job of running the trade association of the country’s 17 cement companies. His background readily appeals to the taste of the international cement players, which now account for 90 percent of the industry’s total production capacity.

Prior to this, Alfiler was Philippine representative to the World Bank Group of Executive Board in Washington D.C. (1998-2001) and also Special Assistant to the Philippine Secretary of Finance for International Operations and Privatization.

His impressive resume stated that he started his career in government as a senior tax researcher at the National Tax Research Center, a government tax policy think tank, in 1975 with a salary of P700 a month and a peso-dollar exchange rate of P7 to $1.

When he became director in charge of Foreign Exchange, Alfiler ensured the compliance of banks with the country’s foreign exchange regulations. He also initiated a number of liberalization efforts leading to complete deregulation of transactions in the current account.

As the Monetary Policy expert in the Economic Sub-Committee of the 1985-86 Philippine Debt Negotiating team, he actively participated in the negotiations with over 400 private international creditors for rescheduling of the country’s medium and long term-debts.

When he left government service in 1996 and before rejoining the government in 1998, Alfiler was president of Pilgrims (Asia pacific) Advisors, Ltd. providing expert financial, technical, economic and practical advice to prospective investors in the Philippines.

Alfiler completed his undergraduate and graduate studies in Statistics at the University of the Philippines in 1973 and 1976. He also undertook various continuing education programs at the IMF Institute in Washington, D.C. and in London.

Such an impressive credential has made him the perfect choice for the industry that is rebuilding its image and re-establishing a more harmonious relationship with the government and the consumer at large.

WHAT’S IN A NAME

The entry of Alfiler in the trade association was an opportunity for the much-needed change. To start with, the association’s name was changed to Cement Manufacturers’ Association of the Philippines (CeMAP) from Philippine Cement Manufacturers Corp. (Philcemcor). This was done primarily to reflect the changing landscape of a domestic industry that is now dominated by international players.

“We felt that Philcemcor represented the old system. Ninety percent of the total cement production of CeMAP is now owned by the world’s big three cement players,” noted Alfiler.

In fact, the association went beyond superficially changing its name. It is not the same dog with a different collar for along with changing the name is the shift of the articles of incorporation as the association shed off its commercial function, making it purely non-stock non-profit trade organization.

“We just want to provide service to the industry and its members,” he said. CeMAP has 17 company members dominated by the three large players-Holcim Ltd. of Switzerland, Financiere Lafarge S.A. of France and Cemex S.A. of Mexico, which account for over 90 percent of the industry’s total production capacity.

The fourth biggest is the Japanese-owned Taiheiyo Cement Philippines. The only big Filipino player is Northern Cement and the Pacific Cement in Surigao. Another Filipino-owned cement firm Mayon in Bicol is not yet a member. The total industry has a capacity of 22 million metric tons but the utilization is only at 50 percent due to poor domestic demand.

CONTINUING LOSSES

Although there were some recovery towards the latter part of last year, Alfiler said the industry is still reporting losses because the market is still down. “Hopefully, this year there will be a recovery,” he said.

Alfiler admitted that the continued imposition of the import duty P20.60 per bag of imported cement is a bag help to the industry but even with that, the industry is still being besieged by increasing cost of production, particularly the cost of power, coal and imported raw materials. Power cost accounts for as much as 40 percent in the total production cost.

The industry too cannot adjust their prices as much as they want to reflect the high cost of production for fear they might price themselves out of market. In the long run, however, Alfiler said the cement industry could recover but that is when the infrastructure demand goes up.

So far, domestic demand is fueled largely by housing construction projects of overseas Filipino workers but this sector is not enough to make up for the absence of big infrastructure projects. In fact, cement demand last year was three percent lower than the demand in 2002.

“Hopefully, demand after the election will pick up,” he said.

NO CARTEL

Alfiler has vouched for the industry’s integrity. “It is not involved in any cartel-like operation is impossible for his industry. International players are governed by very strict laws against collusion in their home countries that even if they operate abroad, such laws will still apply to them.

“So, it is not only the Philippine laws that will run after him but the anti-trust and competition laws in their own countries as well,” Alfiler said. “This should provide comfort—that these players are not readily inclined to collude and the fact that they compete against each other worldwide makes it doubly hard,” he said.

The industry is also cooperating with the Department of Trade and Industry (DTI). While cement prices are going high, the DTI is also making sure that the monitoring is accurate and that if there is abuse in the pricing scheme then the government regulators can step in.

CONTINUING THREAT

Alfiler said that once demand for cement picks up the industry would be able to recover but at the same time he argued that the safeguard tariff is still needed because of the continuing threat posed by the excess capacity in the region.

“If there is no safeguard tariff then the opportunity of dumping is there and that is what the safeguard is guarding against,” he said. Importers will take advantage of such an opportunity because they have no fixed cost to maintain, he pointed out.

The safeguard measure, which will end by the end of this year, is supposed to help make the cement firms recover their lost markets while undertaking adjustments in their operations to improve production systems and reduce overall cost. Aside from that, cement makers are also implementing environmental protection measures.

The loss of the safeguard measure, which will end by this year, is supposed to help make the cement firms recover their lost markets while undertaking adjustments in their operations to improve production systems and reduce overall cost. Aside from that, cement makers are also implementing environmental protection measures.

The loss of the safeguard measure by December has made cement firms a bit jittery because China is building up a big capacity for the 2008 Olympics.

China’s additional capacity is equivalent to Japan’s total capacity, which is 60 million metric tons, Alfiler pointed out.

By 2007, China’s demand for cement would subside because most of the infrastructure projects for the 2008 Olympics would have been completed by then.

“Now, where are they going to put this excess capacity? The likelihood of dumping is high. In fact, the whole region is fearing that eventuality. Dumping is a real threat,” Alfiler feared.

Even if the big three players in the local market have presence in China, their capacity is still going to be small compared to the total capacity of China, he added.

PSYCHIC INCOME

According to Alfiler, his salary at CeMAP may pale in comparison to what he got from World Bank but this is one local job where he got plenty of psychic income.

“There is psychic income in being able to contribute in the local industries. Unlike in the WB where the impact can hardly be measured, here we are talking of an industry that has a direct impact on the country’s economic development,” he said.

“Cement is a natural partner of development and there are areas that government and the industry can cooperate,” he said. “I have been with the industry for two years now and I am still excited because there are still a lot of things to be done,” he said. CeMAP has a three-year image rebuilding program.

In the medium-term, Alfiler would like to see cement considered as an ordinary commodity that people can buy anything because the industry has flourished with no more concerns in pricing or tariff. As president of CeMAP, Alfiler is a director of the Federation of Philippine Industries, an advocacy group for government support to industries.

“After a time when the industry is already in perfect harmony, then that would be the time for me to go,” he said.

AS A MANAGER

Alfiler has proven himself to be an effective manager. He is good at motivating people to do their job efficiently.

In the government service, his most significant experience was when he was part of the Philippine debt negotiating team led by then Central Bank Jose Fernandez and Finance Minister Cesar Virata for the reconstructing of the country’s $30 billion debt in 1983 when the government called for a debt moratorium.

“We were crossing time zones and hit cities from Tokyo to Paris and all major financial centers. That was the most difficult time for the country,” he recalled.

Their work resulted in the granting of a debt relief for the Philippines where half of the debt were either forgiven or their maturity period extended.

Looking back, Alfiler seemed to impart a lesson that there should have been greater monitoring of how the borrowed money was being used to prevent diversion and leakages of funds.“If I look back at my generation, I think we lived in the most difficult times. We went through the economic crisis so we became sturdier and able to survive a lot of hardships. We are better equipped to survive anywhere than the young generation who have had it better,” he said.

On top of this, it could also be said that Alfiler and his generation has been made tougher by their experiences as active participants in the Third Quarter Storm and the famous “Barikada”. Alfiler has only this word of advice the young executives – to always look out for challenges to hone their managerial skills.

THE DEVOTED FATHER

Alfiler’s family has relocated to the U.S. His anaesthesiologist wife Joel Palomique and three children, Corina, Rupert and Carlos have lived there since 1987. Last year, he visited them four times. He even called his wife and sent a bouquet of flowers last Valentine’s Day.

“My daughter is a struggling actress in New York after taking theatre acting in Boston and film acting in Hollywood,” he said.

His son is graduating in Virginia Technical Mechanical Engineering while the youngest child is a freshman in East Carolina University.

“My wife and I try to bring them back to their roots,” he said noting that his eldest was only eight years old and the youngest only three when they relocated to Washington.

His kids still know how to speak Tagalog. It helped though that his mother-in-law was with them to help rear the kids.

“Wherever you are as long as you impart the right values to your children and as long as they have a good concept of what is right and wrong, they can never go wrong. We believe it is important that we teach them the right values. They are still family-oriented and we don’t have any problems with them,” he said proudly.

But like most parents, Alfiler said he could have done better as a father.

“I could have done better, even given the fact that it is difficult to raise a child. I still feel I could have done better, spent more time with them. I had been more career-oriented,” he said.

His only dream for his children is to become successful in their own careers.

“For my daughter to become the next Lea Salonga,” he said.

LEARNING TO SING

To unwind from pressures of work, Alfiler is honing his vocal chords. This executive is serious in his singing. In fact, he is into voice lessons since November last year.

“So I won’t get embarrass at parties,” he said. At the same time, he realized that singing helps him in public speaking because he got to exercise his diaphragm.

Well, his voice coach said that he has similar voice with Baritone Michael Buble. He has been training to expand his voice range.

At the age of 54, it is not yet too late for this singing executive to hone his other talent.

It could be said that Alfiler is pretty much happy where he is now. And this makes his retirement from an active professional life still far from the horizon.

Well, professional managers like him should not retire yet. They are the kind that this country needs the most.

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