First of 3 parts

MY columns last month centered on the Philippine oligarchy and political dynasties. This week opens with the “Taipans,” a complimentary term referring to the powerful billionaire-founders of Chinese Filipino business empires. Originally, the appellation referred to foreign entrepreneurs and carpetbaggers operating in 18th and 19th century China and Hong Kong. For this column’s purposes, the term “taipan” is broadened to include the local Chinese Filipinos in the Forbes magazine list of 50 wealthiest Filipino entrepreneurs. (www.forbes.com/philippines-billionaires/list/#tab:overall)

It is worth noting that when President Rodrigo “Deegong” Roa Duterte (PRRD) boasted that he had dismantled the oligarchy, he mentioned only the Lopez family and in passing, the Zobel de Ayalas, the Rufino-Prietos and Roberto Ongpin. One wonders why not one taipan was mentioned. The first 10 names in the Forbes list include six taipans with total net worth of $34.25 billion (P1.665 trillion); two of Filipino-Spanish/American bloodlines, $8.8 billion (P428 billion); and two, I expediently term ethnic Pinoys — non-Chinese/Spanish/American lineages, $9.40 billion (P457 billion).

“Chinese Filipinos dominate the Philippine economy. Different reports estimate their share of local business at more than 50 percent, or even as high as 90 percent. Their major investments cover a wide range of activities, like retail, light manufacturing, banking, food, consumer products, electronics, and real estate… they own more than 30 percent of the country’s top 1000 corporations controlling more than half of the publicly listed companies.” This, according to former senator Manny Villar (Business Mirror, Nov. 22, 2016), an oligarch himself, married to incumbent Senator Cynthia, father of Public Works Secretary Mark and Representative Camille.

Philippine brands that have gained international recognition are the Emperador brandy (Andrew Tan); and Jollibee Foods (Tony Tan Caktiong), popular among the Filipino communities abroad. It has eclipsed the McDonald’s franchise in the Philippines.

The SM Prime Holdings of the late Henry Sy holds the top spot and owns some of the biggest real-estate projects and large shopping malls in the country with an estimated 9.24 million gross floor area (GFA) with 17,230 tenants and seven malls in mainland China with 1,867 tenants, as of end 2019. It is the Philippines’ biggest employer (ref. “SM through the Years,” SM Prime Holdings, Inc. annual report).

Mainland Chinese connection

But the Forbes list does not tell the whole story. There is a sinister reality unfolding, of infiltration by mainland Chinese companies encroaching into legitimate businesses in collusion with the taipans. This, by the sufferance of the complacent and fawning attitude of the government itself. We all know by now the entry of the Chinese Philippine offshore gaming operations, or POGOs, the online platform that caters mainly to mainland Chinese — satisfying their compulsive craving for gambling. The downside to this is the influx of criminality, corruption, and prostitution. This is similarly being replicated on a massive scale but surreptitiously creeping into the country.

Belt and Road Initiative

On the macro level no less than the President, enamored with China as his Build, Build, Build (BBB) initiative relies on Chinese capital goods, grant, and loans, is being drawn into Xi Jingping’s deadly embrace. China’s aggressive use of concessionary loans and bribes to gain influence is its main tool. When the country can’t pay, China takes over the project. This formula was used to chilling effect over the Port of Hambantota in Sri Lanka. China’s Belt and Road (BRI) global investment and lending program amounts to a debt trap for vulnerable countries around the world, fueling corruption and autocratic behavior in struggling democracies.

This is also happening now in Laos. Vientiane has been borrowing heavily from China to build its first hydropower dam to sell electricity to neighboring countries. As usual, big kickbacks were paid to politicians for the government to sign off on the project. Now Laos can’t pay its debt to China. The state-owned Electricite du Laos is about to cede control of its electricity grid to China Southern Power Grid Co.

Which brings to mind that in the Philippines, the transmission of electricity across the Philippines is now in the hands of taipans (Sy/Coyiuto), the National Grid Corp. of the Philippines (NGCP) in partnership with the State Grid Corp. of China. The latter’s 40 percent stake in the NGCP is a controversial issue in the country today as the 19,490 kilometers of power transmission lines can be held hostage to Chinese interference. This paranoia is not entirely without basis as four-fifths of all households and practically all industries draw electricity from several power generation and distribution companies but relying solely on the NGCP transmission system.

Blacklisted notorious Chinese behemoths

But what could be unconscionable are that Chinese companies blacklisted by the United States and World Bank are welcomed by PRRD to bid for the BBB projects, with the taipans as the main proponents. A case in point is the notorious China Communications Construction Co. and its subsidiary, China Road and Bridge Corp. involved “in the anomalous awarding of a contract under phase one of the Philippines’ National Roads Improvement and Management Project.” The World Bank in 2011 barred these companies from participating in projects financed by the institution. True, as Duterte’s bromance with China bloomed, financing came easily from China. But just the same, why deal with companies already internationally banned?

And these are the same notorious companies that were also blacklisted by the US Department of Commerce “for their roles in constructing artificial islands in the disputed South China Sea that infringed on other nations’ claims,” including the Philippines’ Kalayaan island group in the Spratlys and Pag-asa (Scarborough Shoal). PRRD has allowed those companies, complicit in China’s usurpation of Philippine-owned islands in the West Philippine Sea to bid projects even on Clark and Subic Bay and Sangley International Airport. This is verging on the criminal if not immoral!

China State Construction Engineering Corp. and China Geo Engineering Corp. were barred by the World Bank from participating in projects financed by the bank for colluding with local companies in the Philippines to rig the bidding of road projects in 2009. In 2004, our very own Department of Public Works and Highways blacklisted these companies for violations of the procurement law. “The two companies are now part of the Bangon Marawi Consortium, a group of Chinese and Filipino companies handpicked by the government to rebuild areas [in Marawi].…”

Now they are out to screw our Muslim brothers!

And our government is shamelessly nonchalant about it all.

The presidential spokesperson made clear the Philippine position: “The US government can enforce its blacklists of Chinese companies in American territory, but he (PRRD) will not follow the directives of the Americans because we are a free and independent nation and we need investors from China.”

This is of course understandable as PRRD has already declared long ago his fealty to Xi Jinping even laying aside our advantage at the arbitral court. It is unfortunate though that the President chooses to take sides with the taipans — Chinese-Filipino oligarchs — against the Filipino people. And the method used here is the world’s oldest quid pro quo. This type of transactions is locally known as prostitution — and the Deegong is the éminence grise — the “bugaw.”

To be continued next week

LONG before the mid-March lockdowns, this column warned against a looming pandemic. The first sentence of my January column reads: “We are facing one of the biggest threats in the world today: the possibility of the annihilation of our species, the human race, no less, and only one country, so far, has understood the magnitude of the impending disaster and has responded accordingly. This is the spread of coronavirus, the disease first detected in the central China city of Wuhan in December 2019.” (“The pandemic of 2020,” The Manila Times, Jan. 29, 2020.) I compared this to my blog of Aug. 11, 2014 on another outbreak, the Ebola virus, which razed countries in Central and West Africa. Then as now, there was no known cure or vaccine. There were no lockdowns then, resulting in world economic disruptions.

I wrote 13 other articles on Covid-19. I will now move on and instead dwell on the solutions to the multitude of problems confronting the Philippines today, running the gamut from this plague to the societal ills of widening poverty, injustice, corruption, impunity, economic dislocations and the overall contempt for the rule of law. All these are merely symptoms of failure of governance. I have always argued that no single president can solve these problems unless he or she recognizes that these are a festering cancer of misgovernance that must be surgically excised from the system itself. All presidents, this current one not exempted, always debut into power with good intentions and beautiful platforms of government; all eventually proving to be mere palliatives.

Inevitably, they are consumed by the very system that enticed them like a siren song to bid for power in the first place. I will not put the onus of blame only on President Duterte. The road to political hell is paved with good intentions. And in the general political dynamics, we the Filipino voters, who put these men in power, are complicit.

State of the presidency

In my past columns, I have outlined the Centrist Democrats (CD) framework for political reforms. In various permutations, all candidates for the highest office of the land always articulate similar morally correct and idealistic reform agenda, but once elected somehow manage to degrade the same into a menu of discarded pledges opting instead for the personally expedient.

At this late date, the most the Deegong’s government can do is to concentrate on the doables, as the president may no longer have the time, the energy nor the inclination to push for his original reform agenda of “Pagbabago” for the Philippines’ long-term emancipation. In a few more months, he will enter the twilight zone of his regime — his “lame duck hiatus” — when his power and influence wane and the political dynasts and the oligarchy, his political allies, opportunists all, then begin an exodus towards their next designated political Caesar. Such is the cycle of life and the dynamics of a dysfunctional governance system we inherited from America and subsequently modified.

We will allow future historians to render their verdict on the first four years of this presidency. With Covid-19 exposing the incompetence and vulnerability of the political leadership, the promised political reforms that will require Charter revisions may no longer be possible unless the President miraculously translates his blusters into real engagement. But gauging by his recent public appearances, he now projects weakness, an aura of invincibility gone. The cultivated persona of a charming, cursing promdi no longer has traction. His lingering autoimmune disease and chronic neuro-muscular disorder obviously taking its toll now requires his most trusted subaltern as a prop by his side. His alpha-male character that once dominated friends and foes, leaving his Cabinet squirming albeit arousing a certain sense of depraved accolade from the DDS — Diehard Duterte Supporters, propelling them to brandish their sieg heil of a Duterte fist bump. no longer comes across. He appears a pitiable broken man.

CD doables

To reiterate, four guiding CD principles were recommended to encapsulate his political reforms: adherence to the rule of law; creation of real political parties; establishing social market economy and federalism (TMT, Aug. 19, 2020, and CDP/CDPI philosophy www.cdpi.asia). But these require the revision of the 1987 Constitution. And the last four years were wasted waiting for his move.

But to emerge from the economic pit the country dug itself into as a consequence of inept government response to this eight-month pandemic, the imperative is for the government to reopen the economy safely yet vie for what this pandemic may have offered countries in Asia — a silver lining.

The world’s reaction to the emerging bully of a hegemon has been very negative. China finds itself the odd man out when Covid-19 came out of Wuhan to devastate the world, triggering a decoupling from China as the world’s manufacturing hub. American and Japanese companies are abandoning China in droves. Japan of late has started subsidizing 57 companies with billions of yen to relocate back to Japan. Telecom equipment makers, computers, electronic components, heavy construction equipment, auto parts and robotic components are now repositioning manufacturing sites in several Asian countries.

Worldwide brands, Harley-Davidson, Nintendo, Panasonic, Apple, Sumitomo Heavy Industries, Citizen Watch, Sharp Electronics, etc. — a mind-boggling compendium of world brands — are now uprooting from China and moving to Thailand, Vietnam, Malaysia, India, Myanmar and Cambodia. None to the Philippines. We are under the radar simply due to our antediluvian anti-FDI — foreign direct investment — policies protected by our 1987 constitution.

Foreign direct investment

FDIs are needed to inject badly needed capital to develop businesses and to generate jobs. The Philippines has some of the best and talented people and workforce in Asia. Yet we export them to other countries simply because we don’t have work for them here at home — or if there are, the pay can’t compete with our neighbors’. Thus, we drain our country of its best assets.

All these because of the shortsightedness of our policies and the provisions of our Constitution. As propounded by the National Economic and Development Authority: We have “…restrictions on foreign ownership, inadequate public investment in infrastructure, and lack of transparency in procurement tenders [that] hinder foreign investment. The Philippines’ regulatory regime remains ambiguous in many sectors of the economy, and corruption is a significant problem. Large, family-owned conglomerates, including San Miguel [Corp.], Ayala [Corp.] and SM [Group], dominate the economic landscape, crowding out other smaller businesses.”

The Deegong and his administration need to comprehend that in order for the Filipino to survive and flourish post-Covid, we need to attract and capture FDIs, repair our statutory inadequacies, and act to mitigate them by providing solutions — perhaps through a constitutional amendment (ConAss), people’s initiative (PI) — short of constitutional revisions. If only by doing this he is able to lift the Filipino from the quagmire we are in, he may be forgiven his transgressions; his contempt for civilized behavior; his irreverence towards the men of the cloth, religion and God; his disdain for women; and his cavalier attitude towards human rights. He may even redeem his legacy, promised at the outset of his regime, and be remembered as a great president, beyond the grave.

Thus, this president cannot fail.

Last of 5 parts

THIS five-part series started with President Rodrigo Roa Duterte’s fight with the oligarchy by closing down the Lopez-owned ABS-CBN Corp.; then a brief review of the Philippine oligarchy; political dynasty as its vital appendage; and establishing real political parties to impede the growth of this twin evil. This last article provides recommendations toward the eradication not only of the oligarchy and the political dynasties but for the other ills plaguing Philippine society. This invariably needs the overhaul of the 1987 Constitution to dismantle the scaffolding upon which all these are braced. I draw heavily from the Centrist Democrats (CD) ideological perspective calling for systemic changes to the political, economic and cultural underpinnings of Philippine society. The Centrist Democratic Party (CDP), the Centrist Democratic Political Institute (CDPI), the Young Centrist Union (YCU) and allied CD sectors have for decades been advocating for this restructuring (please access www.cdpi.asia).

Similar changes could have set PRRD apart from Presidents Fidel V. Ramos’ and Gloria Macapagal Arroyo’s half-hearted drives to revise President Corazon Aquino’s 1987 Constitution. Duterte was propelled to the presidency partly on his campaign commitment to a set of political reforms, including establishing a federal system of government. It was assumed that the President would keep his word, ushering all these under his promise of “pagbabago.” But somewhere along the way he dropped the ball, degrading his agenda into mere motherhood statements — amounting to nothing! But he can still redeem himself in the last remaining two years to orientate this administration’s trajectory, focusing on what is really important — uprooting the causes of the country’s tribulations. The repercussions will result in long-term positive impact on the country’s future, cementing his legacy, if ever.

Nary a serious historian, political scientist and economist will deny the country’s decline from the end of World War 2. From a prominent position as second only to Japan economically, we have begun to lose our preeminence among the nations in our region after we gained independence and regained our sovereignty. Currently, states and countries like South Korea, Singapore, Malaysia, Thailand, etc. are much ahead of us in three categories: GDP, global trade (exports/imports) and per capita income. For this decline, the temptation to lay the blame on the Filipino character is strong but ultimately false.

PH and Duterte need a reset

Thus, it is but fitting at this point to review and examine the premises surrounding this regression, unfortunate consequences of historical blunders bequeathed to us from our political past. The logical start would be the post-Spanish ascendancy when a concept, alien to the Filipino political psyche, was transplanted to these shores under American guidance and carried on to the Commonwealth period. At this point I burrow into our CD documents (A Call for New Leadership… www.cdpi.asia).

Democracy, a much revered and heavily Westernized concept, first took root in the virgin soil of Asia forcibly breaking the hymen of our political innocence within a short period of 50 years, when the same concept ironically took America more than 100 years to conceptualize and apply. The word doesn’t even appear in the 1776 United States Constitution. Yet this was the primary underpinning of our governance when we reacquired our sovereignty in 1946. But Ferdinand Marcos tore the concept to shreds during his martial law years. The EDSA Revolution in 1986 reestablished democracy but history’s verdict is still out whether what was restored was authentic or just a mirage — or even worth restoring at all.

But Democracy and its handmaiden, the untrammeled free market economy, married to our practices of traditional politics bore congenital deformities haunting us up to the present: “…hardening poverty, ongoing impunity, low competitiveness, weak rule of law, no real democratic participation of the citizens.” (CD documents www.cdpi.asia)

The political architecture handed down to us differed from that implemented in the US. Too much power was concentrated in the president and the executive branch dominating the legislature, subsequently distorting the principle of check and balance. The role of the president installed as the nation’s patron elevated the highest elective office in Philippine cultural tradition as the ultimate wellspring of patronage, thus impelling corruption in the bureaucracy and extending down to the local government units.

This unitary-presidential system imposed on us was arbitrary and experimental at best. America’s own was a federal government composed of autonomous states. Our centralized system concentrating decision-making process situates governance far away from the clientele, the Filipino people, alienating the populace, robbing them of their heritage as stakeholders.

All these iniquities complicate and characterize the Philippines as a weak state. It exposes the government’s inability to provide a modicum of security and maintain order although it has the monopoly on the legitimate use of violence.

The state is also unable to put in place a minimum of social security and universal health care for the weak and disadvantaged; or prevent environmental degradation and emboldens the over-consumption of precious natural resources depriving the same for future generations.

Centrist framework for pagbabago

These societal ills that existed for generations is by no means unsolvable. And President Duterte understood the magnitude of his task. His campaign commitment of “pagbabago” encapsulated these in his reform agenda. Among the crucial items is the revision of the 1987 Constitution. The CD group submitted to him our own framework which he allowed to be presented to the Malacañang Press Corps in September 2017. This is an abridged version of the guiding principles.

The CD credo is centered on our core value of human dignity, guided by principles of Christian and Muslim social teachings. Political, economic and social order must be so logically designed that the dignity of each person is protected and promoted. An atmosphere of freedom is a prerequisite upon which human dignity is enhanced. Self-determination by everyone, an essential component, is the impetus for collective expression toward the development of a just society.

These guiding principles can best be implemented through the following ideals: 1) a strict adherence to the rule of law; 2) a representative democracy based on program-oriented political parties; 3) a decentralized state structure with regional autonomy and local self-government, leading towards federalism; and 4) a “social market economy” with a well-functioning open market, protected by a strong state. (CDP/CDPI philosophy www.cdpi.asia).

The pandemic

And then Covid-19 burst into the scene! All these societal anomalies and distortions surfaced with abandon, exposing the failures in governance. PRRD and his team, handicapped by a military mindset, is incompetent to handle the tragedy. An unsuspecting deer caught in the headlights. With death counts rising, they are merely coping. And the strategy is simply to await a vaccine mixed with a copious amount of bluster. The repercussions to the country’s economy and well-being are incalculable.

Our biological and economic survival naturally trumps everything. But putting constitutional revisions and reforms in the backburner could be shortsighted. They are key to the short- and long-term solutions to the distortions our country faces. Absent these reforms, he and his legacy would be exposed for what it is, in the words of Walden Bello, his harsh critic “…an incompetent, blundering regime that relies on the deployment of coercion for everything.”

Fourth of 5 parts

THE oligarchy is a multifaceted class, and the term is by no means neutral. Political science practitioners and political economists oftentimes differ in their definition and clarity of interpretation. I have adopted the contemporary definition as used by ordinary citizens, which in most cases is colored by their politics and heavily weighted by their acuities and biases. It can be vituperative and, at times, benign or even uplifting. Some popular definitions describe the nature of the oligarchy as a power structure that allows members to accumulate economic and political clout, influencing governance directly or indirectly and distorting functions and policies for their benefit to the exclusion of the rest of society. This complex power structure invariably is a composite of privately owned and controlled multiple large businesses involving allies or adjuncts in elective and appointive positions in government manning captive regulatory agencies. The latter describes aptly the special class of mostly elective officials, the political dynasts capable of passing on their political clout and entitlements to family members over generations.

I have often maintained that individual families or personages composing the oligarchy, which in contemporary parlance are also interchangeable with “Filipino family business elite” are not all enemies of the President. I cited some members of the Filipino business elite going back to the American and Spanish regimes. “These people are the risk-takers, with long-term views, pioneers in industries that need big capital and managerial talents — where government is incompetent to tread into.” (“The Philippine oligarchy, The Manila Times, July 29, 2020.) What is unconscionable are those of the same elite that suck the bone marrow of the Filipino, using their wealth to corrupt public office holders. At this level, a macabre partnership is forged between the financiers and bankrollers with those who seek political power using the tools of democracy and republicanism — the legitimizing process of elections and general suffrage. This synergy between the business elite and the elected government officials are the systemic twin evils hovering over our democratic space — anchored by traditional political practices. At this point, the lines are blurred as to how economic and political power are exploited and utilized. The biggest myth being propagated is the singular notion that there are good and moral oligarchs and political dynasts. There are none! A fine distinction has to be drawn at this point. True, there are “good and bad” businesspeople, as there are “good and bad” politicians. But the very concept of the oligarchy and the political dynasty as power structures embedded in the body politic safeguarded by our laws is abhorrent. This unwanted offspring borne out of an incubus of an anomalous forced marriage of the Filipino culture, with that of 300 years of Spanish influence, and 100 years of American impositions of their distorted ideals of democracy and republicanism, underlined by the untrammeled practices of the free market economy, must be aborted. (“The Philippine oligarchy,” TMT, July 29, 2020.)

A case for structural reform

For decades, laws upon laws were enacted allowing the proliferation of these twin evils that preserve political and economic power among and within their families. This in turn breeds and nurtures a culture of impunity, corruption and criminality. The absurdity of it all is that the purveyors of these laws are the miscreants themselves in all levels of government, particularly the lawmaking bodies — the two Houses of Congress.

A case in point is the proscription on political dynasties in the 1987 Constitution. Its Article II, Section 28 states: “The State shall guarantee equal access to opportunities for public service and prohibit political dynasties as may be defined by law.” No law was ever passed by Congress to enforce the same in the past three decades. The reason for this is simple — 80 percent of both Houses are composed of members of political dynasties.

What underpins the systemic ills of this country is basically our anomalous political structure, from whence emanates policies and laws that either redound to the benefit of the people or to their perdition. Among the legacies handed down by American colonial tutelage is the two-party system, basic building blocks for a truly functioning democracy — if we want it. Filipino politicians, however, have been abusing this concept since. Today, we have close to 169 political parties accredited by the Commission on Elections.

Senate Minority Leader Franklin Drilon, an opposition stalwart, has this to say on President Duterte’s claim that he has dismantled the oligarchy when ABS-CBN Corp. was closed effectively, decoupling it from the Lopez family: “Dismantling oligarchy’ means fewer dynasties, stronger parties…[this] can only be brought about by structural reform and an overhaul of existing laws that allowed oligarchy to persist.”

The good senator understood too well the symbiosis between the oligarchy and the political dynasty. Both need to be obliterated, but the political dynasts have priority. His solution, similar to that of the Centrist Democratic Party (CDP), is to push for the passage of an anti-political dynasty law and the political party reform act.

Political parties

Let me quote verbatim my take on the precepts of CDP written as a blog in 2012 as part of our recruitment pamphlet.

“Political parties are key actors in a democracy. They serve as a linking and leading mechanism in politics being a means of mobilization of the masses as well as the socialization of leaders. They also function as a source of political identity — next to religion, political parties should be how citizens are identified or the point of reference. Furthermore, political parties are a channel of control. Without political parties, citizens are not represented in governing institutions, cannot control power, and participate in decision-making. Thus — in the long term — they cannot prevent the abuse of power.

Political parties are the backbone of democracy in modern societies. They are organizations that aggregate the interests and resources behind policies. They gain power and authority by engaging in elections.

Political parties are supposed to be the channels of communication between policy makers and citizens. They should also take an active role in informing and educating the country’s citizens about politics so they could make informed choices. They should have a fair, democratic and reasonable process of selecting candidates for different public positions.

Political parties are crucial in turning the tide of public opinion, in the creation of laws and in public administration at all levels. They offer the population their plans to implement these changes.

A party must write a unique platform or vision of governance with a set of principles and strategies. This vision defines the ideological identity of that party; and members are expected to go by these principles and strategies as political parties offer the direction of government. Voters must be given a choice as to who must govern them based on what candidates and their parties stand for.

It is therefore important for political parties to be owned and controlled by their members.”

And not by the oligarchs, not by the political dynasties and not even by the political clan of President Rodrigo Duterte.

Next week: Call for change — constitutional revisions