THE LOPEZ FAMILY

Short Background:

The Lopez family of Iloilo are a wealthy and influential dynasty of business owners, politicians, and philanthropists in the Philippines. They trace their origins to Basilio López, a trader of Chinese (Mestizo de sangley) origin who adopted the López surname and became district mayor of Jaro, Iloilo City, in 1849. Basilio married Sabina Jalandoni and they had sixteen children.

Prominent members of the family include Fernando López, who served three terms as Vice President of the Philippines and, with his brother Alberto, founded the college which became the University of Iloilo.

Most of the family's current business interests are represented in the Lopez Group of Companies, which includes the media conglomerate ABS-CBN Corporation, First Philippine Holdings Corporation, and Lopez Holdings Corporation.

THE FIRST GENERATION

“The progenitors of the Lopez clan of Iloilo were one Basilio Lopez [ ca. 1800 - 1875 ] and one Maria Sabina Jalandoni y Jaranilla [ 1816 - 1882 ].”

THE SECOND GENERATION

“Basilio Lopez and Sabina Jalandoni had sixteen children:  Eulalia, Clara, Eulogia, Eugenio, Gregoria, Estanislao, Marcelo, Claudio, Simon, Agripino, Francisco, Cipriana, Agripino, Eusebio, Ysidora, and Maria, all surnamed Lopez y Jalandoni.”

“Among their sixteen children were Eugenio and Marcelo.  Eugenio Lopez y Jalandoni [ 1839 - 1906 ] married Marcela Villanueva y Felipe .  Marcelo Lopez y Jalandoni [ 1843 - 1882 ] married Julita Villanueva y Felipe.  Two Lopez brothers from Jaro married two Villanueva sisters [and heiresses] from Parian [ Molo, Iloilo ].”

“The Villanuevas were already rich when the Lopezes were emergent businessmen.   The parents of Marcela and Julita were Eusebio Villanueva and Maria Felipe [of Malinao], whom they fondly called “Lala.”  They had made a fortune in the shipping business.”

THE THIRD GENERATION

“Eugenio Lopez and Marcela Villanueva had sixteen children [Paz Lopez de Laguda maintained that they were sixteen siblings; various genealogies list only fifteen children].  Unfortunately, Marcela died young.  So the elder daughters like Maria “Bibing” helped their father Eugenio raise the younger children.  Although rich, the family lived frugally, and an austere way of life was instilled on the children.”

The sixteen children of Eugenio Lopez y Jalandoni and Marcela Villanueva y Felipe were Maria “Bibing” [ 1866 - 1945 ];  Pacifico [ 1867 ];  Eusebio “Sebio” [ 1868 - 1932 ] who married Ana Ledesma y Villalobos [ the parents of Victoria "Vic" Lopez de Araneta ];  Gil ”Tan Gil”  [ 1870 - 1946 ] who married Albina “Albin” Hofilena [ the owners of the famous "Hacienda Faraon" in Cadiz, Negros; the parents of the sisters Marcela Lopez de Kabayao, Benita, Honey Lopez de Panganiban, Lawaan, and Fe Lopez de Facultad ];  Eugenio who married Magdalena Ledesma;  Rosario ”Sayong” who married Francisco “Paco” Santos;  Basilio;  Jose Ma.;  Benito [ 1877 - 1908 ] who married Presentacion Hofilena y Javelona [ the parents of the tycoon Eugenio "Ening" Lopez and Vice-President Fernando "Nanding" Lopez ];  Vicente “Cente” [ 1879 - 1963 ] who married Elena Hofilena y Javelona [ sister of Presentacion; the couple built the elegant "Nelly Gardens" mansion in Jaro, Iloilo in 1928 ];  Carmen [ 1880 - 1911 ] who married Atty. Salvador Laguda;  Ramon who

married Amalia Hernaez; Paz [ 1883 - 1955 ] who became the second wife of Atty. Salvador Laguda [ the parents of Congresswoman Hortensia Laguda-Starke ];  Remedios who married Delfin Mahinay;  Carlos who married Jovita Deles.

In those olden and old-fashioned days, great fortunes were built on sheer frugality.   The Iloilo Lopezes, already affluent by the 1860s, lived austerely so as to efficiently manage and expand their businesses, which were the purchase and operations of sugar “haciendas” plantations as well as sugar trading.  Sheer frugality and exceptional business acumen allowed the family’s continuous purchases of vast tracts of sugar lands in the neighboring islands of Panay and Negros.

THE FOURTH GENERATION

The apogee of the Lopez family of Iloilo was reached with the life of the extremely accomplished and extraordinarily successful tycoon Eugenio “Ening” Lopez y Hofilena.  During the prime of his fortunes, he was the most powerful man in the Philippines.

While Eugenio Lopez, Vice President Fernando Lopez, Victoria Lopez de Araneta, and Congresswoman Hortensia Laguda-Starke represented the popular achievers of the fourth generation of Iloilo Lopezes, there was another variety to them — the dreamy, poetic, and lyrical kind — represented by their first cousins the Lopez-Hofilena ladies of “Hacienda Faraon” in Cadiz, Negros:  Marcela Lopez de Kabayao, Benita, Honey Lopez de Panganiban, Lawaan, and Fe Lopez de Facultad.

The history of the modern Lopez family begins with the marriage of Basiliio Lopez and Sabina Jalandoni in the Jaro district of Iloilo City sometime in the early 1830’s. Between 1834 and 1859, Sabina gave birth to sixteen children of whom ten survived to maturity.

Basilio Lopez

A prosperous, Chinese-mestizo, timber merchant sufficiently to serve as one of Jaro’s cabeza de barangay from 1842 to 1862 and as its gobernadorcillo for one term in 1849.

Sabina Jalandoni Lopez

Was known for her love of ostentation and was prosperous enough on her own account to bequeath a 148-hectare hacienda in Sarabia, Negros Occidental, to her heirs in the late 1870’s

Despite Sabina’s legacy, neither spouse participated in the opening of the Negros plantation frontier, leaving that venture to their sons.

Among the ten surviving children, seven were active as entrepreneurs (five sons crossed the Guimaras Straits to become major Negros sugar planters, two of the five daughters stayed home in Iloilo where they prospered as merchants and speculators.

Indeed the entrepreneurial character of the Lopez women is marked even in this second generation.

Clara (1836-1887)

Eldest child Was an active merchant and moneylender, often serving as a banker to her

brothers’ plantation ventures.

Eulogia (1838-1897)

The second child Was also a banker to her generation.

Eugenio (1839-1906)

The third son Was “the central figure among the second generation Lopezes.”

In his teens he acquired 1,500 hectares of sugar land in Balasan, Iloilo before crossing the straits of Negros in the early 1860s where he spent the next fifteen years developing sugar plantations.

Returning home to Jaro in 1876, after the death of his father, Eugenio became the town’s gobernadorcillo and a prominent member of the community.

A leading philanthropist, he established schools for the city’s workers and provided extensive relief during the disastrous famine of 1878.

Although he was a nationalist, and his brother Claudio was patron to the firebrand propagandista Graciano Lopez-Jaena, Eugenio never used his position to challenge Spanish authority.

He was a moving force behind the colonial government’s investiture of an elected municipal council, the Ayuntamiento de Jaro, in 1891, and served as its regidor, or councillor.

In March 1897, he was one of the main contributors to the five-hundred-man Ilonggo Volunteer Battalion sent to fight Gen. Emilio Aguinaldo’s revolutionary army in Luzon.

Upon his death in 1906, Eugenio left a substantial estate and twelve surviving children, the first of 605 direct descendants among whom are found the family’s most dynamic leaders.

The Lopezes had by the 1890’s emerged as one of the region’s wealthiest families.

No longer mere local merchants and parochial politicians, they had spread far beyond Jaro to achieve wealth and influence throughout the Western Visayas region.

Third Generation Challenges and Success

Like all Negros planters, the third-generation Lopezes had to overcome three threats: a protracted sugar crisis from 1896-1913, the upheaval of Philippine Revolution (1896-1902), and, gravest of all, the Philippine laws of inheritance.

Most importantly, the third generation negotiated the transition of the new technology of mechanized milling, becoming one of the few planter families to acquire a major sugar factory.

During the first decades of American colonial rule, the Lopezes survived by mastering the new electoral politics and learning to deal with the nascent Philippine state.

Just as Eugenio exemplified the family’s success as plantation pioneers, so his son Benito (1877-1908) discovered the power of the uncensored press. Founded soon after the Revolution, El Tiempo became Iloilo City’s best daily newspaper, and it served as an effective vehicle for launching its publisher’s political career.

Because of the laws of inheritance, which mandated bilateral division among siblings, Eugenio’s ninth child, Benito, inherited only a half-share of the 535-Hectare Hacienda Casalagan, located in Pontevedra, Negros Occidental.

Benito Lopez (1877-1908)

Like his father, he remained aloof from the Revolution. In 1900 or 1901, he joined the conservative Federalista party after a branch

was established at Iloilo City.

As publisher of El Tiempo, he became an influential political figure and won the first elections for Iloilo’s provincial governorship in 1903.

A dynamic and hardworking Governor, he toured remote municipalities to support the educational reforms and infrastructure development sponsored by the American colonial regime.

He ran for reelection in October 1907 against Nacionalista Party candidate Francisco Jalandoni, another wealthy Jaro planter.

In an extremely bitter campaign, the Nacionalistas attacked Governor Lopez as a pro-American collaborator, charges that would later trouble his children as well.

After his tragic death, his widow, Presentacion Hofilena, and then two children, Eugenio and Fernando, inherited Benito’s share of Hacienda Casalagan, a printing press, and miscellaneous properties.

Rise of the Lopez Brothers

Eugenio Hofileña Lopez (1901-1975)

Born in Jaro, Iloilo, the eldest son of Benito Orphaned at age 7, with his only sibling, Fernando, when Governor Lopez was

assassinated.

As a law student in Manila and at Harvard in the 1920’s, He developed the national and international contacts that distinguished him from his more parochial kin.

He acquired access to powerful social networks.

Upon leaving the management of his Hacienda to his uncle, he began his career as a lawyer in the offices of Vicente Francisco, one of Manila’s most influential attorneys and his future advocate.

Fernando Hofileña Lopez

Finished his law degree at University of Santo Tomas in 1924, and married a close relative, Mariquit Javellana of Jaro, earning him abiding ties in his home region.

In effect, Eugenio’s education and marriage gave him an entree to national circles, while Fernando’s marriage to a relative facilitated a strong regional base.

The careers of the brothers form one of the most spectacular success stories of the post war Republic.

Interrelated Factors in Eugenio’s Success

Instead of building single corporations slowly, he was a financier who mobilized capital to build a succession of interlocking conglomerates, acquiring rather than building to accelerate growth.

Investing just enough capital to gain corporate control, he would then drain the company’s assets through a percentage-basis management contract or lavish executive benefits, practices that often aroused charges of profiteering from minority stockholders.

With his financing for future acquisitions thus secured, he would then buy a controlling interest in a larger corporation. By means of this pyramid-building technique, and unrestrained by the feeble regulatory efforts of a weak state, Eugenio steadily increased the size of the consortia he controlled—from P250, 000 in 1937 to more than P1 billion in 1973.

Judging from his investment decisions, Eugenio Lopez had a clear understanding of the relationship between technology and capital accumulation.

With machines driving their capital accumulation year-round, the Lopez brothers soon emerged as the most successful entrepreneurs in their home province.

Aside from his financial skills, Eugenio maintained excellent relations with his close kin and allies, avoiding the bitter internal battles that have damaged families such as the Cojuangcos.

Lacking his brother’s entrepreneurial flair, Fernando, an open, likable man, embarked upon a successful political career, building a formidable political apparatus on both the national and provincial levels after WWII. Elected Mayor of Iloilo in 1945, he became a Senator in 1947 and Vice-President of the Philippines in 1949.

Fernando’s political success afforded Eugenio access to government contacts for his business concerns. Indeed, this symbiosis of political influence and corporate growth was a key factor in Eugenio’s spectacular rise from provincial bus operator to the Philippines’ most powerful entrepreneur in only a quarter century.

The Lopez Family Character

They first appeared as local merchants and barangay leaders in Iloilo province during the 1850’s, and then became pioneer planters in Negros from the 1870’s to 1890’s. They diversified into sugar milling and commerce during 1920’s and 1930’s, and shifted their capital, contacts, and residence to Manila after independence in 1946.

Overtime the Lopezes have demonstrated an almost intuitive understanding of capital and a seemingly innate capacity to make it grow.

They have skilful female entrepreneurs and successful male politicians.

In a society with a bilateral inheritance, the family has preserved its position by profiting from the endeavours of both male and female entrepreneurs.

Although there have been intra-family battles over business, the Lopezes generally have managed to maintain solidarity.

The Lopezes also have formed important, kin-based, political alliances.

The leading Lopezes have shown skill in their dealings with both foreign financiers and the emerging nation-state.

Among the families five generations and more than twenty-six hundred descendants, it was the brothers, Eugenio and Fernando, who initially rose beyond the family’s position within entrenched regional elite to the first rank of national prominence.

Their dramatic rise to the apex of economic power in just sixteen years, and the destruction of their corporate empire in only two, provides clear evidence of the rent-seeking character of Philippine politics.

The Theory of Rents

As defined by James Buchanan, rents appear when the state uses regulation to restrict “freedom of entry” into the market. If these restrictions create a monopoly, the economic consequences are decidedly negative—slowing growth and enriching a few favoured entrepreneurs. Competition for such monopolies, a political process called “rent-seeking,” can produce intense conflict.

To illustrate this point, Buchanan offers a parable that seems surprisingly germane to both electoral politics under Philippine Republic and to “crony capitalism” under President Marcos.

In a “profit-seeking” economic structure, assets and income are won and lost on the basis of the ability of the business owner to develop the property...

In a “rent-seeking” society, ownership of property alone guarantees the access to wealth...

In a profit-seeking society, the existence of a state that protects property is a necessary but not sufficient condition for maintaining such property. In contrast, in a rent-seeking society, the operations of the state determine the assignment of and the continued enjoyment of economic advantages...

The rent-seeking economic structure is consistent either with an authoritarian political system or a democratic one, as long as system of patronage determines political and economic relationships...

References:

http://en.wikipedia.org/wiki/L%C3%B3pez_family_of_Iloilo

http://remembranceofthingsawry.wordpress.com/2007/07/06/to-the-sugarcane-born-the-lopezes-of-iloilo/

Rent Seeking Families and the Philippine State: A History of the Lopez Family, Alfred W. Mccoy