Defying The Odds

Me and the Kapitan: 
How PAL’s Jimmy Bautista earned Lucio Tan’s trust

6 October 2018


By Ces Drilon

Running a national carrier isn’t the easiest thing in the world, but running it under a visionary like Lucio Tan had made for an eventful 26 years for Jimmy Bautista. In the midst of PAL’s new achievements, its president and COO sits down with Ces Drilon to talk about the rudiments of building an empire, his relationship with the 7th richest man in the country, and that unfortunate distinction of being the oldest airline president in Asia.

He has steered the country’s flag carrier through turbulent skies. Name a crisis and Philippine Airlines President and COO Jaime Bautista has piloted through it, from staggering debts, loan defaults, soaring fuel prices to crippling strikes by pilots and stewardesses.

Early this year, Philippine Airlines was awarded 4 stars by Skytrax, the international air transport rating organization. The coveted rating comes after many years of ups and downs for the once-ailing flag carrier. Bautista has seen it all and is on the pilot’s seat for the second time around, after PAL owner, Chinese-Filipino billionaire Lucio Tan, took back management control in 2014.

Jimmy, as Jaime Bautista is known in the airline industry, and Kapitan, as Tan is fondly called by his employees, go back a long way. Just emerging from his teens and fresh from taking the board exam for certified public accountants, Jimmy landed a job in the prestigious accounting firm SyCip, Gorres and Velayo, the most sought after employer for accounting graduates. But three years into his job, Bautista was recruited to join the Lucio Tan group. Thus began the rise of the young accountant, his fortunes tied to the legendary businessman, whose trust he began to gain through years of dedicated and loyal service. Tan’s Fortune Tobacco was by then the Philippines’ largest cigarette manufacturer. Tan rose from even more humble beginnings, as a janitor in a cigarette warehouse—but that is another story.

When Bautista joined Tan, the latter was at the cusp of aggressively expanding his holdings from cigarette manufacturing and banking to spirits and agriculture. “They were looking for somebody who can help evaluate projects. Mr Tan set up this department called corporate planning and development in Fortune Tobacco. It was its Vice President Roberto Baksal, who introduced me to Mr. Lucio Tan, but I was reporting directly to him.” Bautista belonged to a tight-knit group of advisers including Tan’s brothers, whose work was highly confidential.

For many years, Bautista was a virtual nomad, moving from company to company, setting them up and moving on to the next, helping the Kapitan in his insatiable quest to acquire companies and establish a business empire. It was not until 11 years later, in the acquisition of PAL, where he began as Vice President for Finance, that he was to find a home. He believes luck played a big role in his rise to the top, “I joined the Lucio Tan group at the right time and that was the time it was growing. Joining PAL was not in my dreams. I never thought of working in an airline company,” he says candidly.

Building an Empire: The pioneering 80s

Bautista’s first project was the acquisition of an electronics company, which manufactured television sets, radios and cassette recorders way back when the Philippines was exporting consumer electronics to China. After setting up the accounting and finance systems that allowed the company to run smoothly, Bautista would move on to the next target. “I got involved in a lot of companies in the Lucio Tan Group and PAL was one of them. I was involved in the acquisition of Tanduay from the Elizaldes in 1988. I was also involved in putting up new ventures.” Asked what the astute businessman saw in him, Bautista says, “I don’t really know. I think he noticed that I finished projects on time, that we were successful in project acquisitions, that we were successful in financing new projects—and because of that, I was given more assignments. I was even involved in the acquisition of PNB in 2002.”

By the mid-80s, Jimmy was beginning to spend more time with the Kapitan. “We were in Fortune Tobacco when we wanted to modernize the facilities. He wanted to operate new cigarette-packing machines, tobacco processing machines and we were telling him that there might be an overcapacity if we bought new equipment.”

But the Kapitan was all for modernity. “We modernized the cigarette company. In the end, we were able to recover the cost of the equipment in a few years because the new equipment was very efficient. The percentage of wastage was minimal. Just for saving on wastage, we were able to pay for the cost of the equipment. So it turned out that he was right.” That experience revealed Mr. Tan to Bautista as a real visionary. “So those years after following him, the business became very successful,” he says.

PAL in the 90s

In 1992, the administration of President Corazon Aquino put PAL up for sale. Asia’s first airline was saddled with gargantuan losses, with government assuming more than half a billion dollars of its debt. Under the Marcos regime, PAL partly operated as First Lady Imelda Marcos’ private fleet of planes.

The bidding was won by PR Holdings Inc., a consortium headed by Antonio ‘Tony Boy’ Cojuangco—then Chairman of PLDT. “I think the group paid a down payment to the government after they won and they were given a few months to pay the balance, which they didn’t have—so they invited Mr. Tan to finance it,” Bautista recalls. In the end, Tan was asked to be an investor in PAL and he agreed, despite his team’s reservations. “My position then was not to invest in PAL, since we didn’t know the business. Mr. Tan was very good in manufacturing, but we didn’t have much experience in the service business.” Despite the fact that they would be the inheritors of several problems from the government, the visionary saw it as a challenge. Again, Tan decided against the advice of his team—much to the company’s gain.

Bautista remembers what Mr. Tan told his think tank in going against their advice: “This is one way I can return the favor to the country which gives me good fortune,” Bautista says, echoing his boss’s words. “He said the country needs an airline that should be efficient.” Tan managed his companies very efficiently and thought he could also do it for PAL. He took the challenge. Adds Bautista, “The sizable investment (P5.1 B) was Manila’s best-kept secret for almost a year.”

It was Tan’s desire to be kept away from the glare of public scrutiny. “We know that if you have invested in an airline you will be in the limelight, people will talk about you and there is so much scrutiny. That was his initial decision, to be quiet about it. But I think he said he wanted PR Holdings to manage it as long as he was consulted and informed about major decisions. Maybe there was some information that wasn’t sent to him. He decided it’s better to go out in the open and control the company.”

And so the secret was revealed the following year, 1993—to the shock of the Cory administration, and to the dismay of Tan’s co-investors in the consortium, who also invested in the Cojuangco-led PR Holdings. The new owner inherited not just an aging but a mismatched fleet from the government-run airline. “We have B747-200s with different types of engines, different configurations and avionics so the cost of operations was very high,” says Bautista. “The ideal is operating one type of airplane—for example B747s—the engine should be the same, as well as the configuration and the avionics, so that your maintenance cost will be lower also. In the case of disruption, you can easily change one airplane with another.” To solve these concerns, PAL decided on a re-fleeting program.


It was also at this time that Bautista buckled down to work as Vice President for Finance. “When we took over, we started modernizing not only the airplanes but also the systems,” he says. “For example, we had an accounting department with almost 900 people, because everything was manual. We started putting up computerized accounting systems, treasury systems to see to it to that cash is properly monitored, invested and accounted for.”

Because PAL was a government corporation, some employees were recommended by politicians. “Maraming complimentary tickets, during that time,” Bautista says, “We were operating three classes of service: 1st class, business class and economy, the first class passengers are mostly non-revenue passengers, the business class passengers are passengers upgraded from economy.” He can now laugh at the memory.

A turnaround eluded PAL for a long time, it lost money every year until the early 2000s. Throughout all the trials, Tan remained optimistic. “He never lost hope. In fact there was a time I personally recommended to him not to put in more money.” Even as Tan and his team took over in 1993, and tried to modernize the enterprise, a pilot strike crippled operations in 1993 and the company had to default on their loans.

For nearly a month, PAL had a complete shutdown of operations. It was the deepest crisis the airline would fall into. The new administration under Joseph Estrada brought in Cathay Pacific Airways to the rescue and talk was rife of a takeover.

At that time, Bautista was actually working with the Cathay Pacific group. “They did a due diligence audit of PAL. Unfortunately we did not agree on the terms. We filed for what you call a petition for restructuring and rehabilitation. I was the chief finance officer so I led a team that prepared the rehabilitation plan of PAL.” Bautista worked with creditors to restructure the debts. “It was one of my most challenging days in PAL,” he says, “to face our creditors.”

One of the requirements of the creditors was for Tan to put in another $200M in equity. Bautista advised Tan to allow other parties to invest, and to welcome these parties as partners. Tan put in the $200M and the rehab plan was approved by creditors. As part of the plan, Bautista resigned as CFO, but remained with PAL as Executive Assistant to Tan.

Capturing the Filipino heart in the 2000s

For one brief period, in 2001, PAL made a profit. But the following year, the bird flu scare hit Asia. Again PAL registered a loss which extended until 2003.

In 2004, Bautista, on his 24th year with the Lucio Tan Group and his 11th with PAL, was placed in the pilot’s seat—during a board meeting called by Tan. Bautista was called on to steer the airline out of turbulence. For four straight years, PAL finally took off and became profitable.

It would suffer losses anew from 2008 to 2010 when the price of fuel skyrocketed, but it bounced back in 2011, right before the entry of businessman Ramon Ang’s San Miguel the following year. For Bautista, it was time to unfasten his seat belt and retire. But these retirement plans were to be short-lived. “Mr. Tan thought that he needed a partner. He was getting old,” Bautista says. “So, he allowed San Miguel to invest $500M.”

After two years, it was Ramon Ang’s hope to buy out Tan, but they weren’t able to agree on the terms. In the end, Tan bought him out. Bautista was out of PAL at this time, returning only in 2014 when Tan acquired the majority shares. Bautista could not say no to Tan and reassumed the presidency of PAL despite his family’s reservations.

Bautista’s lucky streak brought PAL back to profitability from 2014-2016. As luck would have it, fuel price went down at that time. But it certainly took more than luck to sail through smooth skies. Bautista knew that cost had to be controlled and that the right revenue had to be generated—a plan that necessitated deferring the delivery of airplanes due to a lack of support in terms of airport infrastructure, maintenance and runways.


The Sweet Touchdown to Retirement

At 61, retirement (his 3rd) sweetly beckons for Bautista. “In our group, it comes after 30 years of service, or at 60 years old, whichever comes first. So, I have retired twice. Because in 2010 I was 30 years with the group, I got my first retirement. Then in 2015 I got my 2nd retirement at age 55.”

Bautista is now on contract with PAL, renewable annually. It’s his cheerful disposition and even-temperedness that have served him well these last 25 years. “It’s 24/7 work, it’s a service. Even at home we have to work. And I got used to it.” At the time of this interview, because of the Xiamen Air mishap in August, PAL had to accommodate non-stop calls from media and passengers due to the closure of the NAIA runway. “Every day, you expect something wrong is going to happen. I try to be cheerful—if there are many problems and you feel very sorry, it does not contribute to the solution of the problem. If you have a positive outlook in life you can think of more solutions.”

Before Bautista can make his final touchdown, there’s still one more deal to seal for his Kapitan. Bautista is in talks with a potential strategic foreign investor in PAL. “The government, I think, will treat us better if there are foreign investors because investors mean a vote of confidence in the country,” Bautista contends.

Bautista’s Travel Bucket List

For a PAL million miler cardholder and an airline president, it’s ironic that travel is what Bautista wants to pursue in his retirement. And he has quite the bucket list. “I want to see the Aurora Borealis, go to Antarctica, Galapagos, Machu Pichu. It will be when I retire. If you are the president of an airline, you travel for only a few days. There have been times that I have been to the US for just a day to attend a meeting. In Europe, for example, you arrive in the evening, you have dinner, a meeting the next day and afterwards fly back to Manila. You know the position of being a president is very stressful, most of the airline presidents, they are young. In Asia, I am the oldest president of an airline.”

The frenetic pace of the buyouts and takeovers of the 80s and 90s are now behind him. The Kapitan calls him on the phone now and then, and occasionally drops by his office at the PNB Complex along Roxas Boulevard.

For Bautista, his job is almost done, and all past maelstroms have been weathered. He has aided the Kapitan through changing climates across the years, and has helped him build both his legacy and his empire. Together, they’ve captured the heart of the Filipino, and are steering the company into a calm and graceful touchdown.

The article first appeared on ABS-CBN News on October 5, 2018

How is it to be Jaime J. Bautista?

29 October 2015

By Lorenz S. Marasigan

THE halls of Colegio de San Juan de Letran were witnesses to how a terror professor once prophesied Jaime J. Bautista’s ascension to presidency of a company, adding fuel to his hope of being—at the very most—a firm’s vice president for finance.

Jimmy, as he is known in the airline industry, was not much of a career-driven person, when he was 25. His only goal back then is to settle with a family and enjoy what life has to offer. He never really imagined of leading a company, much more the flag carrier of the country.

The vision was only casted to him by his professor in Finance 101. He was then taking up accountancy at Letran, when a professor once mentioned to him that he can be a manager if Bautista passes his subject.

“He was a terror professor who once told me ‘You can be a manager in five years if you pass my subject. But when the grades came out, I got a 95 for his subject, which was above the average grade of 85,” he recalled. “Then he told me: ‘You exceeded my expectation, you can be a president of a company in the future.’”

The professor who said this to Bautista, however, did not live to see his prophecy come to fruition.

“His name is Nick Limjoco. I can never forget his name,” he said. “The highest position that an accountant like me can attain, according to my other professors, is to be a vice president for finance. It was fine by me back then.”

Today, Bautista sits as the president and COO of Philippine Airlines (PAL), the first commercial carrier in Asia. He just celebrated his first comeback anniversary as the aviation company’s chief honcho this month.

The 58-year-old executive was personally asked by no less than Lucio C. Tan to return to the flag carrier after the exit of San Miguel Corp. in the company. The diversified conglomerate divested its 49-percent shareholding in October 2014, leaving the presidential post open for Bautista to take.

Love at first sight

Before joining El Kapitan in his quest for success in business, Bautista joined Sycip Gorres Velayo & Co. (SGV), the largest multidisciplinary professional services company in the Philippines, as an accountant.

“I joined SGV & Co. when I was 20 years old, right after taking the board for certified public accountants. I got involved in auditing mining companies, logging companies, manufacturing service companies, among others,” he said.

Bautista, at that time, looked up to the renowned auditor Washington C. Sycip, who, he describes as a jack of all trades.

“When I was in my 20s, my idol was Washington Sycip, because I saw how he handled his profession. He is one of the best accountants there is, and I told myself I want to be like him someday. Mr. Sycip is a jack of all trades, which I think, is an important qualification of a leader of a good company,” he said.

At Sycip’s company, he met his wife, Joji, who—as cliché as it may sound—he immediately thought of to be his future wife.

“She was my classmate in training. I got attracted to her even before our training, when I saw her in a van. Then one time, we were in the stockroom, as newbies, we need to line up to get our supply papers. I was ahead of her in the queue, so, I let her take the go first, so I would see on the paper what her name is,” Bautista recalled, chuckling.

Then he told himself: “She’s a fine woman. Maybe she’ll be my wife some day.”

Joji, a Cavitena, did become his wife, and they were married at the time when Bautista, who hailed from Nueva Ecija, was 25, two years before he left the accounting firm.

“We lost communication when I left SGV, and when I joined the Lucio Tan Group, I saw her one time, and we greeted each other. I was able to get her telephone number, and I frequently called her. She became my girlfriend for two-and-a-half years, then we decided to get married. I was 25, and she was 24,” he said, with eyes gleaming, as if they were crystals.

They exchanged their vows on January 9, 1982, at the San Agustin Church in Intramuros.

“I still remember that whenever I visit her at their home in Cavite, her father will always clean his 45-caliber gun in front of me,” he said, laughing at the distant thought.

Bautista joined the tycoon when he turned 23, and eventually he became an assistant to the vice president of the corporate planning of the Lucio Tan Group of Cos.

“One of our managers in SGV is a batchmate of one of the officers in Lucio Tan Group, and that person was the vice president of the corporate planning division of the group. That was the time when Lucio Tan was expanding its business interest, from cigarettes to bank to brewery to agriculture to piggery to construction to hotel,” he recalled.

Close to the captain

Thanks to his dedication for the craft, and his outspoken, yet subtle manner of voicing out his thoughts, El Kapitan saw a potential in him, and eventually had him lead the diversification efforts of the company.

“So, I got involved in all these new ventures in the Lucio Tan Group, particularly in the acquisition of new companies, where I normally handle the finance role. After setting up the finance, I will leave the company and go back to the parent, and get involve again in new ventures,” Bautista said.

He then got involved in the flag carrier in 1992, after being the launchpad for so many projects, like the acquisition of spirits maker Tanduay, the expansion of Asia Brewery, the inauguration of a new farm in Teresa, Rizal.

“In 1992 Mr. Tan made a decision to invest in PAL. The year after, we went out in the open that we are the majority shareholder, and they asked me to head the accounting division to see if the records were properly accounted for, and that the financial reports were correct,” he said.

Two years later, he got promoted as the chief finance officer of the carrier. He then served as the company’s president for eight years from 2004.

“The secret to this might be my transparency in work, and my dedication and love for the company. My personal interests were far beyond my interest for the company. I think Mr. Tan trusted me because of that and gave me a good package,” he said.

The captain and his copilot are bonded with a brotherly kind of tie, although most of the time, their phone conversations were mainly about business.

“There was a time before when he used to call me every day. We got close through work, when he saw how I worked with the project of his company,” Bautista said. “I live by the principles of honesty, integrity and efficiency.”

Bautista is one of Tan’s most trusted allies, and it is reflective of the former’s reinstatement as the president of the legacy carrier.

“For you to be able to lead the big organization like PAL, you can’t just be an accountant. You also have to be a marketing person, a human-resource person, an operations person, a tourism person—basically, you have to be a jack of all trades,” he said.

Keeping the company afloat for eight years, Bautista now knows the ropes of the airline industry. He was instrumental in finally allowing the company to snap back from the red into the black last semester.

“All these learning that I gained over the years helped me in gaining Mr. Tan’s trust. He trusted me, and that’s one of the reasons I can’t say no to Mr. Tan when he asked me to be reinstated as president of PAL,” Bautista said.

Family first

Despite all these achievements, Bautista looked back and remember that his primary goal in life was not to be a good businessman, but be a good family man.

“I thought to myself that I wanted to be a successful, still my goal back then was to have a good family. Career was not my top priority, it only comes next to family,” he said. “If you ask me, family will always be family.”

Now, more than ever, he can enjoy the company of his family, especially since he now has more guns in his wallet to do anything that his “good package” of a salary can afford.

“Now that I have reached the top, now that I have nothing to race for, I could enjoy my family even more. It’s a different kind of enjoyment when you are with your family, and so I will always choose family over career,” he said. “What will you do with money from success if your family is a failure?”

He has two grandkids, gifts from God that came through his only daughter Jaymee.

“My grandson and granddaughter sometimes go to the office,” he said, adding that moments with these little ones, Joseph and Maria Elena, are precious ones that he will cherish forever.

The family-centric value is just one of Bautista’s wisdom that he wants to pass on to the millennials.

“To become successful you have to aim high. Don’t just be satisfied with mediocrity, because this hampers success. This generation should never settle for something that is ‘just fine,’ they should always aspire for the best, and they have to work hard to meet their dreams,” he said.

Bautista added that today’s generation should also consider that each one has his own story, that each one deserves respect, and none deserve it more than another.

“Be fair with everybody. It is not good that you are power tripping because you are at the top,” he said. “A leader must strive to strike a balance, which as an accountant is very important to me. A single ounce—or a centavo, for an accountant—of irregularity will always be a setback.”

This also applies to one’s personal life.

“You have to learn how to relax. It’s not okay to always think about work. I sometimes watch ‘AlDub,’ he said, referring to the segment of noontime show Eat Bulaga that features the split-screen romance of Alden Richards and Maine Mendoza, commonly known as Yaya Dub. “There should be a balance.”

Soon, after he officially retires from PAL, Bautista plans to travel the world with the love of his life.

“When I retire, I will travel. In fact, I have a bucket list of the trips that I want to go. I want to go to Antartica, Machu Pichu, Galapagos,[and see the] Aurora Borealis and many more,” he said.

He also wants to play golf with his wife in famous golf courses in the different parts of the globe.

“I’m really in love with my wife. Until now, we play golf together; we travel together; we take care of our grandchildren together,” he said. “The secrets to a successful family are for both of you to give and take, have the a wide understanding, for you to trust each other.”

Bautista has investments in different businesses, but his greatest investment is in his wife.

“You have to be generous to your spouse, not only in terms of material things, but be generous of your time,” he said. “If you’re financially stable, the more important requirement of marriage is for you to invest in time.”