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It’s not the Constitution, but EDSA

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OUR political leaders are so insanely wrong in claiming that restrictions on foreign investments enshrined in the 1987 Constitution have resulted in our economic quagmire, and therefore this should be amended. The reality is that it is the “EDSA People Power Revolution’s” ramifications that have created obstacles to economic growth so serious that we have fallen behind most of our neighbors in Asia.

EDSA had three major consequences that were deleterious to economic growth in the past four decades. First, it toppled a dictatorship but reinstated elite rule focused on their wealth accumulation and indifferent to the nation’s growth. Second, EDSA’s “democratic space” — as the Communist Party of the Philippines put it — allowed insurgencies to grow, which discouraged local and foreign investments. Third, it demonized the kind of state-directed economic policy responsible for the growth of the “Dragon and Tiger” economies of Asia.

Strongman Marcos and now President Marcos in 1986.

First, while toppling a dictatorship, EDSA swiftly restored the Philippines’ anarchy of elite families, which was the situation since the nation’s birth. This remains the reality concealed through the scheme of popular voting, which has the added advantage though of preventing inter-elite conflicts from turning violent, which would be disastrous for everyone.

Emblematic of the return of the old oligarchs — whose unabated rule Marcos used as a justification for martial law — was the quick turnover of the giant broadcasting firm ABS-CBN and Meralco to the oligarchic Lopez family, despite the huge debts to government they had incurred even before martial law. The Lopez clan would then incur additional gargantuan loans from the Development Bank of the Philippines post-Marcos period to expand their empire. Antonio Cojuangco, Cory Aquino’s favorite nephew, would find one fine morning the stock certificates of PLDT in his father’s drawer to prove that his father owned it (rather than Marcos) and thus managed to take over the telephone monopoly.

So symbolic was Cory Aquino’s Cojuangco clan, representing the old landlord elites, evading the agrarian reform program she had boasted about as her key agenda through the flimsy scheme of turning Hacienda Luisita’s tenants into purported stockholders. It would be only 25 years later, in 2012, that it would be ordered to comply with the agrarian reform law — by the Supreme Court whose chief justice Renato Corona, Cory’s son, President Benigno Aquino 3rd, in vengeance, caused to be impeached.


Our representative democracy has degenerated in the new era in which TV, movies, the internet and social media have become the most dominant forces in shaping people’s consciousness. Thus, we have actors becoming senators, and because of sheer name recall (because of media), we have even the children of actors and of old elites joining them. One doesn’t need to be intelligent or a leader to become a senator or even a president. One just has to name-recall for any reason, even for being the son of a toppled dictator or having billions of pesos required to finance national elections, much of which involves bribing the masses or their leaders.

Second, because the Maoists and Islamic separatists were allies of the Yellows in overthrowing the dictatorship, the two immediate post-Marcos administrations — under Corazon Aquino and Fidel Ramos — followed a policy of appeasement toward these insurgencies, allowing them to survive and even grow to be huge disincentives for foreign investments of the magnitudes China and Malaysia received since the late 1980s.

The biggest factor that boosted East Asian economies in the post-war era was the massive migration of Japanese capital starting in the mid-1980s. This was the result of the devaluation of the yen in 1985 (forced by the West) that prompted Japanese capital to migrate to Southeast Asia to take advantage of the larger amount of capital the devalued yen could generate in these countries. Thus, mainly because of Japanese investments, foreign net direct investments (FDI) as a percentage of Malaysia’s GDP averaged 5.1 percent from 1986 to 1999, and Thailand’s averaged 2.3 percent. In our case, our FDI averaged a measly 1.6 percent of GDP in the same period.


That’s not surprising: the communists’ New People’s Army grew even to threaten Davao City and control several parts of Mindanao and the Visayas. The giant Mitsui Co.’s executive Nobuyaki Wakaoji was kidnapped by an NPA unit in November 1986 and held for four months until a $5 million ransom was paid. Japanese investments in the Philippines ground to a halt and instead went to Malaysia, Thailand and Indonesia. Even the Japanese executives assigned here were given strict orders to limit their movements from office to home. Japanese executives refused to be stationed in Manila.

Third, because of the view spread by the Yellows that the kind of government programs to direct industrial development bears the demonic DNA of the Marcos dictatorship, we’ve never undertaken that kind of economic policy referred to as “industrial policy.” Instead, we believed the myth spread by the World Bank, the International Monetary Fund, and the US called the Washington Consensus that free markets with stable exchange and inflation rates, with the least state intervention, would result in economic growth.

Our anarchy of elite families thus extended to the economic sphere. Even to this day, that’s the economic-policy dogma, what with formerly anti-Marcos professors, now top economic advisers of the son — Benjamin Diokno and Felipe Medalla.

Marcos technocrats like Cesar Virata and Gerardo Sicat, who were true believers of that Washington Consensus, got new, better professional careers in the post-Marcos period. The center of student (read: communist) protests against Marcos renamed its School of Business as the Cesar Virata School of Business, located just a stone’s throw from the Martial Law (i.e., anti-Marcos) Museum that will be built with a P500 million allocation ordered by former president Benigno Aquino 3rd.


But it was precisely that kind of government-directed economic program that explains the amazing growth of China, Japan, South Korea, Singapore and Malaysia from the 1970s to the 1980s. Even today, the power of government industrial policy is being demonstrated by Vietnam, with its one-party rule. Thus FDI as a percent of Vietnam’s GDP has averaged 3.8 percent from 1997 to 2021; China’s 3.1 percent; ours is just 2 percent in the same period.

Nothing probably represents better the EDSA tragedy in the business sphere than the takeover by Indonesian magnate Anthoni Salim (through the First Pacific he is the majority owner of) of the most lucrative public utility firms in the country, Meralco and PLDT, from the Lopez oligarchs.

I had estimated in my book “Colossal Deception” that the Indonesian Salim has remitted over $1 billion annually in profits from these two firms, a huge decapitalization of our economy. This would be many times more than the purported Marcos wealth, which had been kept in the Swiss banks and sent back to the country by a Swiss Supreme Court.

The phenomenon of our overseas workers buoying up the economy started during the Marcos era, initially as big Filipino construction firms brought Filipino workers with them in their projects in Saudi Arabia. This functioned as an escape valve for the rising pressures in the economy during the second half of the Marcos era.


Partly because of government support and even romanticization (such as the absurd “Bagong Bayani”), the country now has the dubious distinction of having the most number of OFWs abroad that is not due to sheer overpopulation (as it is for China and India) or war (as in the case of Syria, Bangladesh, Pakistan, and now Ukraine).

If not for OFWs, the deep flaws of our economic structure, among them, that it is not being guided by the state, would have torn the country apart or would have allowed the communists to seize power because of massive poverty in the country. OFW remittances have been the economy’s escape valve.

Ironically, our EDSA had been a boon to other countries, and to the US, as it had a global psychological domino effect that led to peaceful revolutions against communist rule (among them Poland, Hungary and Czechoslovakia, all in 1989). This led to the implosion of the USSR, thus making the US the sole hegemonic superpower until the People’s Republic of China and Russia, whose economic and military strength grew, challenged it in the new millennium.

The US wanted, and is said to have plotted for, China to follow these precedents, with the watershed event being the Tiananmen Square demonstrations from April to June of 1989 by at least hundreds of thousands of Chinese youth. Unlike Marcos, though, and since there wasn’t in China’s case a US ally-turned-backstabber, Chinese Premier Li Peng, with the crucial support of “Paramount Leader” Deng Xiaoping, ordered the violent dispersal of the demonstrators, using the People’s Liberation Army employing tanks.


Political stability was restored after that, and under the authoritarian rule of the Chinese Communist Party and with its economic reforms, China grew the decade after the Tiananmen incident at an unprecedented rate of 10 percent, which would lead to 800 million Chinese lifted out of poverty and by this year, the world’s biggest economy.

In our case, in the 10 years after the EDSA revolution, the Philippines would grow at a measly rate of 3 percent, just barely covering its average annual population growth rate of 2.4 percent.

The romanticization of EDSA has been fast declining, as more and more Filipinos intuitively have realized it changed very little and even made the country worse off. The Catholic Church that helped trigger the EDSA revolution has lost its prestige by having been servile to the Yellow leaders.

President Rodrigo Duterte had started to bury EDSA’s consequences. His very presidency — a president coming from the farthest city from Manila, his bold blows against the Lopez oligarchy represented by its loss of ABS-CBN and the humbling of the Yellows controlling the Philippine Daily Inquirer, his expressed distaste for the US, which had been the patron of the Philippine elite, his demonstration through his war against illegal drugs, and his Build, Build, Build program — evincing how much we need a strong state.

Quite ironically, President Ferdinand Marcos Jr., the son of the dictator toppled by the EDSA 1 revolution, has been reversing Duterte’s policies, restoring the hegemony of the elite, the government’s subservience to the US, and entrenching the proven-wrong “Washington Consensus” economic policy.

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This Post Has One Comment

  1. Dorina S. Rojas

    EDSA is a coup d’etat romanticized and intended to be a Filipino fairy tale but without a happily ever after ending.

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