The Philippines Growth Dialogues: Jaime Ayala

Jaime Ayala, founder of Hybrid Social Solutions and former managing partner of the McKinsey Philippines office, discusses tourism and rural communities in the Philippines.

Jaime Ayala is the founder of Hybrid Social Solutions and the chair of Solar Village Foundation and its network partner at Hystra. In recognition of his work in the social-enterprise environment, he was named as the Social Entrepreneur of the Year by the Schwab Foundation for Social Entrepreneurship in 2013 and as the Entrepreneur of the Year and the Social Entrepreneur of the Year, Philippines, by EY in 2012.

Before entering the social-enterprise sphere full time, Jaime worked with Ayala Corporation, where he was senior managing director and the president and CEO of Ayala Land, as well as a trustee of Ayala Foundation. Prior to that, he was the managing partner of the Philippines office at McKinsey. Ayala recently spoke with McKinsey about tourism in the Philippines and the uplifting of rural communities for a more inclusive country. This conversation is part of the broader Philippines Growth Dialogues interview anthology, which explores the opportunities and challenges to future-proof the country's next horizon of growth and innovation. An edited version of the discussion follows.

Leading the charge

McKinsey: What are some recent developments in the Philippines that you’re excited about?

Jaime Ayala: I am really excited that there has been a pronounced shift to a more sustainable development paradigm. Whether it’s companies or government or civil society or even the youth, there has been a lot more focus on climate sustainability and on inclusiveness. How do we do business to be more inclusive? There has been a lot of effort on using technology to enable more far-flung areas to get access to really important services. So there’s been a really pronounced shift, and I see the Philippines as leading the charge globally in this sector.

I am really excited that there has been a pronounced shift to a more sustainable development paradigm … there has been a lot more focus on climate sustainability and on inclusiveness.

Getting organized to distill uniquely positioned strengths

McKinsey: In your view, what are new areas of growth for the country? How can the Philippines expand into new categories it is not yet competing in?

Jaime Ayala: I think there’s a new area of growth that’s not so new, and that’s tourism. The Philippines has so much to offer, and tourism has always been there, but somehow the Philippine tourism scene has not kept up with other countries. We are definitely punching beneath our weight. But when people come here, they love it. How do we then grow that?

There are so many specific types of opportunities—for example, African safaris. How about doing sea safaris in the Philippines? But instead of going to see big game, you’re going to these remote islands and seeing the flora and fauna both above and below the water. Tourism as food. You don't really hear about Philippine restaurants overseas. And yet when people come here, they love Philippine food.

There’s been such a movement in Philippine cuisine, which itself presents a big opportunity. There’s so much talent that we have, especially in terms of art and design. Going back thousands of years, if you look at our fabrics, for example, they are exquisite and unique, but our textile industry is dying out. This is a huge opportunity loss, as we’ve got such a heritage, and we have so much talent. The key is in getting organized so we can really tap into those strengths.

The key is in getting organized so we can really tap into those strengths.

Recognizing value chains as powerful institutions

McKinsey: What are some areas of stagnation in the Philippines, and what can be done to uplift the Philippine economy?

Jaime Ayala: The Philippines overall is doing pretty well, but because of our geography and just because of the way that things work, there are many areas that are getting left behind—and of course, part of it is just in the Philippines’ geography. We’ve got 7,600 islands. We’ve got mountains. So there are many areas of the population that are separated.

The key is to build institutions that enable these isolated areas to be connected to the economy and, in turn, to society. One of the things I learned through McKinsey at the McKinsey Global Institute was that value chains are powerful institutions that can last a long time. And I think that there’s a lot of work that can be done to build the value chains that will enable goods and services to reach these villages.

But equally, we need to help these villages reach the markets. I think that the government and businesses can work more proactively to put in place the value chains that enable goods and services to reach the far-flung areas and to enable those villages to access markets and a livelihood.

Comments and opinions expressed by interviewees are their own and do not represent or reflect the opinions, policies, or positions of McKinsey & Company or have its endorsement.