Duterte takes on, or vows to take on, the oligarchs

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PRESIDENT Duterte’s fifth State of the Nation Address (SONA) is historic in that it is the first to make a clarion call for the country to fight the scourge of oligarchy, one of the obstacles to becoming a developed nation. How difficult and messy that could be has been demonstrated in the battle against, and defeat of, the Lopez oligarchic clan.

Even if he fails in this agenda, Duterte has undoubtedly made what before was an obscure academic term, part of this country’s political discourse, to inspire future leaders to take on the challenge.

Who would have predicted that ordinary Filipinos would be talking about the “oligarkiya”? If that term gets traction, Duterte would steal the thunder from the communists’ claim to be the champions against exploitative elites. What could be more elitist and exploitative than the oligarchy? Yet the communists as well as the Yellows have mobilized all their forces to save the Lopezes. How could they claim they represent the people?

I certainly applaud Duterte’s call to end the rule of the Philippine oligarchs. Former Marxists such as Philippine Star columnist Alex Magno and myself and not a few US academics studying the Philippines in the early 1990s, used the term to explain why even after the “glorious People Power revolution” things didn’t change much.

An oligarchic empire, or not? A partial depiction of the Indonesian-owned First Pacific’s firms in the country. Numbers denote economic interest. Image From the firm’s 2019 annual report

Oligarchs supported Marcos, except for a few like the Lopezes who went against him; they helped oust him when they no longer needed him. Yale academic Paul Hutchcroft wrote the first academic article in 1991 that had the term for its title: “Oligarchs and Cronies in the Philippine State: The Politics of Patrimonial Plunder.”

My passion (or anger) over the topic is such that I even read too much into former President Fidel Ramos’ moves against the Antonio Cojuangco-controlled PLDT at that time, that I titled my article on it in the May 6, 1993 issue of the defunct Far Eastern Economic Review, “Opposing the Oligarchs.”

But Ramos never mentioned that term in any of his speeches. It turned out that what Ramos merely did was to arm-twist Antonio Cojuangco Jr. to stop opposing with his clan’s political power the opening up of the telecoms industry, to allow in a second player.

Ramos cleverly maneuvered (or asked?) Lee Kuan Yew, who had just stepped down as Singapore’s prime minister to visit Manila in 1993 to deliver that famous speech at the Makati Business Club in which he described in vivid detail how the PLDT monopoly was ruining the country. That was the opening salvo in the Ramos-orchestrated intense propaganda campaign against PLDT monopoly.

While we were all cheering Lee, Singapore Telecoms — owned by the state that he ruled for 31 years — partnered with the Ayalas in setting up Globe Telecoms Inc., which would become the other half of the duopoly in the telecoms.

The Cojuangcos of course still controlled PLDT. It would be Ramos’ successor Joseph Estrada who would arm-twist them, as well as minor stockholder Alfonso Yuchengco — for a fee of P3 biilion* — to sell the company to another oligarch the Indonesian one, Anthoni Salim, through First Pacific Co.

Such is the power of Philippine oligarchs: they can even topple one oligarch, with the country not even knowing a new oligarch has emerged, and a foreign one at that, in utility industries in which the Constitution bans non-Filipinos from controlling. Already, Congress has moved to help out Salim, through a bill that would allow foreigners to own utilities by changing the English dictionary so that utilities are merely public services. That’s how powerful an oligarch is.

“Oligarchy” actually has long departed from its original ancient Greek meaning of rule (“arkhein”) by a few (“oligoi”), a fact which Senate President Franklin Drilon and economist Raul Fabella seem ignorant about when they remarked that “oligarchs will always be with us.”

Ironically, its modern usage became popular after the Union of Soviet Socialist Republics imploded and communism as a political and economic system was thrown to the dustbin, and Russian and Ukrainian “businessmen” in a few years became billionaires mainly through the help of these countries’ political leadership. To add notoriety to them, the Western press dubbed them “oligarchs.”

Thus, an academic study on Ukraine’s oligarchs defines “true oligarchs” not just as rich businessmen but a conglomerate or a magnate that satisfies the following conditions:

– The owners are among the largest private owners in the country;

– It possesses sufficient political power to promote its own specific interests and even influence national economic policy; and

– Owners control multiple businesses, which intensively coordinate their activities.*

Sorry, but the high-profile Philippine Daily Inquirer owners, the Rufino-Prieto clan, won’t fit into such a definition, although they did have political clout. The Mile Long commercial area it had controlled since the Marcos era and held until Duterte’s watch more appropriately fits the definition of small-time crony business.

But the subject of oligarchy in the Philippines is the far side of the moon for us for various reasons, and we don’t know much about these creatures who have been dragging down the economy.

Career path
Studying an oligarch requires intensive investigative journalism, which few business journalists can do or are doing. If the freedom of the press has been threatened in the Philippines, it has been and will be by oligarchs who either threaten with libel suits or outrightly buy journalists. Many of the country’s most promising business journalists in fact have ended up as the PRs of oligarch-owned firms, which sadly seem to be the dreamed-of career path of many media people now.

Using the definition for Ukranian oligarchs above, I can however, “without malice,” identify the following whom I am convinced are Philippine oligarchs:

The Lopez clan of course, with the two Lopez brothers and their nephew Eugenio 3rd described in so many richest lists as among the wealthiest in the country. They’ve had political power because of their special connection with Corazon Aquino and then through their ABS-CBN network. They are in multiple businesses, mainly in power,

The Indonesian magnate Anthoni Salim, through his First Pacific conglomerate headed by Manuel Pangilinan. Salim’s capture itself of PLDT, the Fort Bonifacio estate, and of Meralco* is evidence enough of his political power, as I have documented in my book Colossal Deception.

When Duterte implied that oligarchs controlled the telecoms and water industries, he was of course referring to the Ayalas and Salim, who are in both.

Media power
Salim’s media power is 10 times that of the Lopezes, as he is in all media platforms, the Philippine Star group for print; Channel 5 and two dozen radio stations for broadcast; Cignal TV for cable; and interaksyon.com for the internet. Such is an oligarch’s power: Salim has been for almost the entire media establishment, except for this column, “He who cannot be named.”

Salim’s conglomerate is 100 times bigger than that of the Lopezes, as his Metro Pacific Group is in power generation, electricity-distribution monopoly (Meralco) and expressways all over the country. Check out the chart accompanying this article on Salim’s empire, and think of how many of his companies depend on government regulations, and tell me he isn’t the quintessence of a foreign oligarch.

Salim had partnered with Enrique Razon, and both, as I have discussed in recent columns on the country’s spat with China, demonstrated their vast political power when they got both the Arroyo and Aquino 3rd administrations to support them in their reckless rush to develop gas in the Reed Bank, claimed not just by us but by China, Taiwan and Vietnam. Satisfying all three requirements, Razon certainly hews to the definition of an oligarch, even if one totally dismisses the rumors that he had been close to past president Gloria Macapagal Arroyo when she was in power.

In business circles, Razon’s most jaw-dropping venture was when he led in December 2007 a consortium, mainly with the State Grid Corp. of China, that won for $4 billion the license to run the country’s power grid now called the National Grid Corp. of the Philippines (NGCP). In just about two years, in March 2010, he sold his entire 30 percent stake to Henry Sy Jr., his profits, businessmen say half in jest, more than enough to fund his huge Solaire casino resort complex. Did Razon win the bid for NGCP totally without government connections?

The Spanish-descended Ayala clan, its political power demonstrated even in such a relatively small issue as its successful fight to stop the construction of a common station linking the Metro Rail Transit (MRT) system linking lines 1, 3 and 7 from being sited at the Sy-owned SM North and not at its Trinoma mall. Is it just coincidental that the Ayalas were the first in line when Ramos broke PLDT’s monopoly, and quickly grew to become its only competitor?

7-Eleven stores
The Araneta-Roxas clan, with presidential candidate Manuel “Mar” Roxas 2nd having been its principal representative in the political realm. In my previous columns on the 7-Eleven convenience stores, I pointed out that I couldn’t help suspecting that the retail trade liberalization law that Roxas had championed was designed to allow the Taiwanese company 7-Eleven — in partnership with the Araneta-Roxas clan — to enter and dominate the convenience store business in the Philippines, which had been banned through a law in the 1960s.

Manuel Villar, an oligarch even if only by definition, as he himself had been Speaker of the House of Representatives and his wife is currently a senator. In the 2010 presidential elections, the Aquino 3rd camp claimed that with his political power Villar managed to get highways to be built to cut through his lands, which have boomed precisely because of those highways.

Is he a “good” oligarch as not a few think he is?

Villar could be used as some kind of dividing line. We have magnates such as the Sys, the Yuchengcos, Lucio Tan (starting in Ramos’ time), the Gokongweis, Tony Tan Ciaktong, Ramon Ang, the Consunjis, Iñigo Zobel, the Gotianuns, Andrew Tan, and William Gatchalian.

But I have not read or found any demonstration of oligarchic political power by them. Or maybe I just don’t know. Email me if you have, dear Reader. Or maybe these tycoons show that you don’t really have to be an oligarch to be billionaires.

My fellow columnist, Ramon Tulfo, in his column wrote that Davao businessman Dennis Uy is the “new oligarch” in Duterte’s watch and listed the scores of company he had set up since 2016.

I would have to suspend judgment though until I find indications that Uy used his connections with the current regime to win such a huge license as that of NGCP, capture a huge firm as Meralco, enact a law designed for his clan’s firm, own very lucrative utility monopolies, or to be a maker of presidents.

My information though is Dennis Uy is not acting alone but represents a group of Chinese-Filipino businessmen based in Davao.

But Tulfo’s is a serious allegation, and Duterte has to address this charge or his anti-oligarch agenda will be hypocritical.

But from this discussion, you can deduce whom Duterte is referring to as oligarchs whose rule he vowed he would topple during his term. It’s not really a long list, and going by his victory over the Lopezes — which battle shows how powerful oligarchs are — he could do it.

To whom it may concern: The above listing is a rushed one for an article with a press deadline. My apologies if I have not listed you as an oligarch. Email me so I can correct the oversight.

*These claims are narrated in detail, with sources provided, in my book Colossal Deception: How Foreigners Control Our Telecoms Sector: A Case Study of Corruption, Cronyism and Regulatory Capture in the Philippines.

Email: tiglao.manilatimes@gmail.com
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This Post Has One Comment

  1. Naty Cheng

    I am a fan of yours.
    Thank you for all the facts & info.
    Looking forward to read more your incoming articles
    fr you!

    Pls take good care & stay safe & healthy!
    Mabuhay kayo👍🇵🇭

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