Top US banker Thomas Johnson on what it takes for RP to recover

With the US having recovered from the September 11 by defeating Osama bin Laden’s forces in Afghanistan and helping fight terrorism in other parts of the world, the world is now awaiting an American-led world economic recovery.

One of America’s most respected bankers recently visited the country. Sixty-one-year-old Thomas S. Johnson headed a six-person delegation from Trinity College in Hartford, Connecticut and signed an academic linkage agreement with the Jesuit leaders of the Ateneo de Manila University.

Unknown to most people, Johnson’s visit to Manila was a homecoming of sorts. The Harvard-trained banker started his distinguished career as a young instructor in the Master of Business Management Program of Ateneo de Manila University from 1964 to 1966. Many of his former students are now top executives in some of the country’s biggest corporations and leaders in academic institutions.

Johnson is chairman of the board of trustees of Trinity College, but he is more known as a banker. He is chairman and chief executive officer of Greenpoint Financial, based in Park Avenue, New York and director or trustee of other major corporations and institutions such as printing giant R. R. Donnelley & Sons Co. (with 34,000 employees in year 2000 and sales of US$5.764 billion), US-Japan Foundation, Alleghany Corp., Online Resources & Communications Corp., Phoenix Home Life Mutual Insurance Co., Institute of International Education, and Cancer Research Institute of America. He also served as president and director of the giant Chemical Bank from 1969 to 1989 and as president and director of Manufacturers Hanover Trust Co.

Johnson is member of the board of trustees of the prestigious Asia Society in New York, whose president is former US ambassador to Manila Nicholas Platt, and AIG/Philam Insurance boss Maurice Greenberg as chairman. With the help of Asia Society-Philippines CEO Doris Magsaysay Ho, Johnson gave The Philippine STAR an exclusive interview right after a dinner reception hosted by Ateneo president Fr. Bienvenido Nebres, SJ.

Excerpts:

Philippine STAR: After graduating with distinction from Harvard Business School, how did you end up teaching at the Ateneo? Isn’t Manila too far away from Boston?

Thomas Johnson: (laughs) Yes, it’s quite far. I went straight to the Philippines after Harvard due to Steve Fuller. He was associate dean of the Harvard Business School and was advising the Ateneo on starting a new business school in the Philippines. The Ateneo wanted a professor from Harvard. Though I wasn’t a professor, I was recommended by Prof. Fuller.

You’ve led some of the world’s biggest banks based in Wall Street, and now you are also head of Trinity College. How do you compare managing a bank and running a school?

Trinity College is an Episcopalian school, I studied AB Economics there. Banks and schools…(smiles) you make more money running a bank, but beyond that there’s really not much difference. Running any institution or organization requires the same basic things–vision, leadership and discipline. I believe managing anything requires the same qualities.

A lot of people are optimistically waiting for the US to lead the world towards economic recovery. Is this optimism valid? What can we expect from the US economy?

I think the US economy is on the way up. Personally, I think it will continue to accelerate, but not at the high rates of growth of the late 1990s, which had produced some harmful effects.

What are the harmful effects of too fast a growth?

The too fast US economic growth created excessive investments in telecommunications and technology and, of course, this led to the bust that we have been experiencing in the last couple of years. Maybe we were kidding ourselves then, when many of us thought that we could sustain those too high rates of growth. I think the past slowdown was actually good for the long-term strength of the US economy.

Have you gotten in touch with your former Ateneo students?

Yes. In fact, I’m very glad to have met some of them earlier at the dinner. Some of my former students are Bank of Philippine Islands senior vice president Ramon Sales, Alsons Consolidated Resources executive vice president Tirso Santillan Jr., Renato Lirio is senior vice president of a company (looking for his calling card), PICOP Resources, Inc., director Pedrito Aragon, Baby Pimentel, two professors of the Asian Institute of Management (AIM), Victor S. Limlingan and Toby Canto. I am proud of my former students and their accomplishments.

As a top Wall Street banker, how do you assess the Philippine economy today?

The Philippine economy is not as strong as it might be, but it is also not as weak as it could be. I’m really impressed with the resourcefulness and the entrepreneurial spirit here in your country.

What is your impression of the country’s leadership?

I think the many good qualities of the Philippine people will make your economy good and strong... I think the leadership of your country is very strong now.

What advice would you give our leaders to improve the economy and uplift the people’s quality of life?

It’s not for me to advise your leaders... I think the strength of the Philippines is in your education, your culture and your country’s affinity for the whole world. I believe the Philippines will succeed just by being yourselves, not by copying other countries’ models, but by developing your own development model.

Don’t you think that compared to many other Asian countries, it seems our leaders have squandered many opportunities and advantages, causing the country to suffer crises? What reforms are needed to make the Philippines globally competitive?

(Pauses to think) I think it’s important for the Philippines to get back to the basics of knowing your competitive advantages. You must build on your strengths, and not get too tangled up in excessive politics and corruption – politics and corruption become very expensive, because if you have to pay more than a certain amount for a hyper-political environment, your overhead will be too high and your country will not be competitive. If you can do these, then there’s no reason for the Philippines not to be progressive and globally competitive.

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