FINANCE has been a key concern worldwide, particularly in the last 50 years, as the world has become more and more interconnected in a web weaved by technological, geopolitical and commercial co-dependencies. Fortunes of individuals, companies, enterprises, industries and entire economies rise and fall on the basis of events that sometimes occur time zones and continents away.
Understanding the underpinnings of finance and its related disciplines in our increasingly globalized context, was just what the 12 founding fathers of the Financial Executives Institute of the Philippines (FINEX) had in mind when they registered with the Securities and Exchange Commission (SEC) on January 15, 1968.
Since then, the non-stock and non-profit organization, has been at the forefrontof finance in the country, setting the pace in professional development, corporate governance, capital markets development, national policy reforms, entrepreneurship, social involvement, and financial education.
The idea to form an association of finance professionals was conceived by a breakaway group from the financial affairs committee of the Philippine Institute of Certified Public Accountants (PICPA) circa 1967. FINEX’s 12 founders were Elmer Aguilar, Reneo Albano, Edgardo Bacani, Romeo Co, Romeo Esteban, Ramon Ilusorio, Jaime Ladao, Vicente Muro, Joaquin Olano, Vicente Pacis Jr., Antonio Sta. Ana, and Arsenio Vistro.
Although accountants by profession, they wanted to know more about the financial management concepts that were then proliferating in many business publications. Most, if not all, held top management positions in their companies, which motivated them to propose the holding of fora to discuss the financial executive’s functions apart from those of an accountant. But PICPA’s leaders did not act speedily on these proposals, understandably because of their focus on the development of the accounting profession.
Vistro chanced upon a professional magazine published by the Controllers Institute of America (CIA), which advocated reforms in both accountancy and management. He decided to consult CIA’s officers regarding the establishment of a Filipino counterpart organization. After several exchanges of correspondence, a vice president of CIA visited the Philippines and advised the group of 12 to organize formally, helping them in drafting the articles of incorporation.
FINEX’s original corporate name approved by the SEC in 1968 was the Financial Executives Association of the Philippines Inc. or FEAPI, which was changed to the current name and acronym in 1970 when the CIA was renamed the Financial Executives Institute of America.
Ladao recounted that during their organizational meeting, Ilusorio nominated Vistro to become the first FINEX President. Monthly meetings were conducted initially at the Manila Hilton along United Nations Avenue, and eventually moved to the Top of the Intercon at the roofdeck of the Hotel Intercontinental in Makati.
FINEX continued to grow despite the imposition of Martial Law in 1972 by President Ferdinand Marcos, who took over the executive and legislative functions of government. One of the roles that FINEX assumed during this period was to act as a communication link between the government and private business. Under the presidency of Romeo Co in 1973-1974, FINEX held various symposia to explain to businessmen the financial implications of the decrees enacted during Martial Law.
Meanwhile, the Central Bank (CB) started to emerge as a very powerful regulatory agency, promulgating new rules on interest rate ceilings and restricting corporate borrowings under certain conditions. FINEX teamed up with the University of the Philippines in conducting studies on how borrowing restrictions and other CB rules might affect business performance.
On its fifth year, FINEX was chosen to host the 6th World Congress of the International Association of Financial Executives Institutes (IAFEI), of which it was a founding member. This event put to test the organizational abilities and marketing skills of FINEX officers. “The Martial Law regime created ambivalent attitudes toward the Philippines and in some ways discouraged congress participants from the United States. But nevertheless, there was a sizeable attendance from Europe and Asia,” recalled Co.
Membership in FINEX increased remarkably after the IAFEI World Congress, further boosted by the holding of annual national conferences starting 1975 and the establishment of the FINEX Research and Development Foundation in 1976. Capping FINEX›s rise to international prominence was the election of Co as the first Asian President of IAFEI in 1977-1978, during which Francisco Floro was the FINEX President.
Floro believed that it was the start of FINEX members’ growing consciousness toward small and medium enterprises (SMEs). According to him, “it was also a time when ASEAN unity was high in the agenda of Southeast Asian countries, and moved FINEX to reinforce this by adopting the theme ‘Financing Investments in the ASEAN” for its annual conference.”
In the early 1980s, the business community was rocked by the Dewey Dee scandal that triggered a financial crisis. As a result, FINEX got a mandate from the CB to organize the Credit Information Bureau Inc. (CIBI). Aimed at systematically assessing the financial requirements and conditions of major Philippine companies, CIBI administered the country›s credit information exchange and credit rating systems.
After the assassination of opposition leader Benigno Aquino Jr. in 1983, the Philippines unilaterally declared an international debt moratorium because it could no longer pay its loan obligations for lack of foreign exchange. The confluence of political and economic events created a crisis of shattering proportions. In spite of this bleak scenario, FINEX maintained its support of SME development through livelihood financing programs.
Massive protests against the dictatorship led to snap elections in February 1986, the results of which did not sit well with millions of Filipinos who ousted the Marcos regime through the bloodless EDSA Revolution.
As the nation went into recovery mode, FINEX pushed for the establishment of a truly independent central monetary authority, an idea subsequently adopted in the Philippine Constitution that was ratified in 1987. That year, Vistro spearheaded the launch of the FINEX Foundation for Entrepreneurship to operate a privately initiated fund for SMEs.
During the presidency of Renato Valencia in 1987-1988, FINEX hosted the 19th IAFEI World Congress graced by President Corazon Aquino. By then, the Philippines had secured a debt rescheduling package from creditor nations while the United Nations Conference on Trade and Development urged commercial banks to write off 30% of the debt owed by the 15 most heavily indebted countries, including the Philippines.
More than three years of economic progress went down the drain after the bloody coup attempt of a renegade military faction in December 1989. The Philippines was also beset with power shortages, a destructive earthquake, and a devastating volcanic eruption in the early 1990s.
Filipinos witnessed the country’s first democratic transfer of power in three decades with the ascendance of President Fidel Ramos in 1992, followed by four more Chief Executives in 1998, 2001, 2010, and 2016.
Over the past quarter-century, FINEX launched more flagship projects such as the Inter-Collegiate Finance Competition, the CFO of the Year Award, and the Outstanding Finance Educator Award. What used to be a predominantly male organization is now headed by women leaders back-to-back with Benedicta Du-Baladad and Ma. Victoria Espano as Presidents for 2017 and 2018, respectively.
Throughout this seemingly never-ending cycle of booms and busts, FINEX has survived and flourished to become the premier organization of finance practitioners today. Happy Golden Jubilee, FINEX!
Sources: “The FINEX Story” by Santiago Dumlao Jr. and ZoiloDejaresco III; “FINEX’s Early Days” by Jaime Ladao; “The Man Behind the FINEX Story” by Franklin Ysaac.