Why Fil-Am tycoon flew 12 hours to RP, left same day

by Lito Gutierrez

Philippine Daily Inquirer

PALO ALTO, California – President Benigno Aquino III had barely warmed his seat in Malacañang in May when he was visited by Silicon Valley entrepreneur and philanthropist Diosdado Banatao.

Banatao, who flew to Manila largely as chair of what was then known as Ayala Foundation USA (since renamed Philippine Development Foundation), freshened up from his 12-hour trans-Pacific flight and motored to the Palace. He flew back to San Francisco that same evening.

He was accompanied in the trip and subsequent audience with the new President by Ayala Corp. president and COO Fernando Zobel de Ayala and Vicky P. Garchitorena, foundation vice chair and president, respectively.

Much has been written about Banatao, a farm boy from Iguig, Cagayan, who made the chips that are at the heart of every computer today. In the process he amassed a fortune that includes two executive jets, a multimillion-dollar house in leafy Atherton (which is also home to such high-tech icons as Steve Jobs), and an estate in the wine country in Sonoma.

He is known for his generous philanthropy, which he pursues with his wife Maria Cariaga Banatao. (Apart from running their own family foundations, Maria has a seat at the University of California at Berkeley Foundation Board of Trustees, Lucille Packard Children’s Hospital Foundation Board and the then Ayala Foundation USA.)

Top 8 engineering schools

In an interview on September 21 in his office at Tallwood Venture Capital here, Banatao said he had merely asked the President to please keep supporting the science and technology projects he had initiated with the previous President, Gloria Macapagal-Arroyo, and the Department of Science and Technology.

“I just told him there are ongoing programs right now that cannot be interrupted,” Banatao said, referring to Engineering Research and Development for Technology (ERDT), which at its inception in 2007 was given a three-year P3.5-billion budget that runs out this year.

ERDT is a consortium of the Philippines’ eight top engineering schools – University of the Philippines, Ateneo de Manila University, De La Salle University, Mapua Institute of Technology, UP Los Baños, Central Luzon State University, San Carlos University and Mindanao State University-Iligan Institute of Technology.

Banatao said Mr. Aquino made no promises but somehow got his message.

“I think he understands that the growth of the [Philippine] economy would depend on how we take advantage of the global demand,” Banatao said, adding that the demand could be met only if the Philippines produced high-value-added, high-technology products, which in turn could only be conceived with properly educated and trained scientists and engineers.

Fervent passion

What is largely unknown about Banatao is the fervent passion with which he pursues his ideas, whether it be looking for the next-generation semiconductors or challenging a community civic fund. (Some years back he told the San Francisco-based Manila Heritage Foundation that he would contribute a large amount of money, but only if members of the community would match it. “They did,” he said. “But it took them a while.”)

On the day of our interview, this ardor was as radiant as the early morning sun that bathed Banatao’s airy, glass-enclosed offices at the second floor of the Wells Fargo Bank building, a gentrified enclave that is the birthplace of much of the high technology out there today.

Tallwood, of which Banatao is managing partner, is in the middle of it all, with $500 million to invest on “disruptive” ideas, products and technologies with market potential.

Its portfolio includes startups with esoteric-sounding promises, such as “enabling the photonic future” or providing “low-powered integrated circuits for the next-generation mobile-media devices.”

Full throttle

At 64, Banatao is still at full throttle. He optimized the time of the interview by having breakfast – two cans of an “energy” drink.

He is lean and sprightly, which his executive assistant, Stacey Holmes, attributed to “a vigorous workout regimen, including running.”

And he “almost always has meetings through lunch,” which is “usually salmon, salad and soup,” she added.

That Banatao would travel from the United States for an hour’s chat with President Aquino was an indication of his doggedness and commitment. He could have flown in on his Bombardier, a long-range executive jet he uses to shuttle among the global financial and high-tech capitals, but there was no available hangar at the Manila airport. (He has two full-time pilots for the Bombardier. His other jet is a Cessna, which he uses to tool around California skies.)

“Sometimes you have to do these things,” he said of the quick visit to Malacañang. For to him, ERDT, with its objective to produce at least 500 scientists and engineers with master’s and doctorate degrees, would provide the brains that would propel the Philippine economy by producing high-value products and services that could compete in the global market.

On a visit to UP in 2007, Banatao was told that its budget was being held. He recalled his frustration when the news hit him.

So he urged the engineering faculty to come up with ideas on the best science and engineering programs, which they later brought to then President Gloria Macapagal-Arroyo. To convince her of his commitment, he said he was putting up $500,000 to fund a “high-impact” research institute at the UP College of Engineering.

Arroyo bought the idea, for which Banatao is thankful.

“President Arroyo was the first-ever president I worked with who really did something about science and engineering education,” he said. “I told her we [were] going to provide the guidance, the ideas, but that government had to contribute to this cause because philanthropy can only go so far. She said, ‘Okay, let’s spend some money on this.’”

Talent, skills bank

ERDT’s goal is to create a bank of talent and skills that will raise the quality of teaching science and engineering in the Philippines, according to Banatao.

It will create a number of institutes, such as the Institute of High-Impact Engineering Research at UP. From this effort, he said, a new generation of innovators would hopefully come up with ideas for high-tech, high-value-added products for the Philippines to sell in the international market.

At present, most Philippine industries are producing “very low” value-added products and services, such as call centers, Banatao observed.

It’s the same with the academe, said Banatao, who holds a bachelor’s degree in electrical engineering from Mapua and a master’s degree in the same course from Stanford University.

“We are woefully behind in the quality of teaching,” he lamented. “There is just not enough quality to get [the teaching] of science and engineering to a level that can self-propagate. So we are just producing mediocrity everywhere.”

But he scaled back on his tone, as if he had realized that he was sounding offensive: “As much as I know that it’s hard to listen to these things, it’s harder for me to say these because of how much I care about our country.”

Working with the best

Banatao got his degree from Mapua at the time when it was the country’s premier engineering school.

He said that was why he went there, and not to UP. He recalled that his batch (1966) seized the top 20 slots of the board exams except for the 11th, which was taken by a UP graduate.

But UP has since caught on and Banatao has no doubt it is molding the best engineering minds in the Philippines today.

He said he wanted to work only with the best, and that he would continue to put money where his mouth was.

Today six UP engineering professors are Banatao fellows at UC Berkeley, where the man chairs the College of Engineering Advisory Board and is a member of the Chancellor’s Executive Advisory Council.

“They are doing pure research and are working with the best engineering minds from all over the world,” he said.

In fact, Banatao’s philanthropy is not limited to the Filipino community. At Berkeley he funded the Center of Information Technology Research in the Interest of Society (Citris), to look at “big-scale (global) social issues” such as energy and health care.

And within Citris, there is the Dado and Maria Banatao Center for Global Learning and Outreach from Berkeley Engineering (or Globe), which “reaches out to and collaborates with engineering colleges and universities all over the world.”

Venture capitalist

For all the money that he has invested in civic works, Banatao is not a social entrepreneur.

“My gift-giving is all about education, not entrepreneurship. Social entrepreneurship funds small efforts that benefit the individual immediately, such as microfinancing. The recipients are required to repay their loans. I don’t do that,” he said, adding:

“I am a venture capitalist … That is the business from which hopefully I can make money to fund my philanthropy.”

Banatao said he required no commitment of any sort from the recipients of his scholarships and fellowships.

He said he just hoped that his Berkeley fellows would return home and “apply the knowledge they received.” But putting “handcuffs” on them, such as “requiring of them service to repay the cost of the fellowship, is totally out of the question.”

“There is no required commitment for them to stay in the Philippines,” he added. “You can’t force people to stay. All you can do is provide the environment for them to stay.”

And that is what ERDT is all about.

What if, for some reason, President Aquino fails to provide the funding it needs?

“We’re not about to stop helping now,” Banatao said. “When my wife and I decided to start our foundations, we were determined that nobody was going to get in the way of these good things.”

Topics : erdt