• Crony capitalism thrives under Pnoy


    ANTI-MARCOS warriors on the business and finance front used the term “crony capitalism” to demonize the big businessmen and industrialists who flourished under Martial Law and the succeeding years when presidential decrees trumped fundamental laws and the Constitution.

    Most Filipinos and Philippine-watchers abroad clearly saw the beginning of the end of the Marcos Regime, when after the assassination of Senator Benigno “Ninoy” Aquino, the anti-Marcos movement launched a campaign to boycott the products and businesses owned by “crony capitalists.”  The companies and products boycotted included San Miguel beer and the San Miguel Corporation. SMC by then had transferred from Soriano and Zobel hands to those of Ferdinand Marcos’ friend, compadre and political ally, Eduardo “Danding” Cojuangco.

    The campaign against “crony capitalists” made many businessmen distance themselves from Marcos.  This was because, according to economists, whose assessments were quoted by The Asian Wall Street Journal and other credible news organizations, the campaign had succeeded in making Filipino consumers boycott banks, companies and products perceived to be owned by Marcos crony-capitalists.

    One of the changes in our political-economy most desired by the reformers working to make our country a strong Republic, with massive poverty greatly reduced, is for democratic capitalism to take root.  They saw how crony-capitalism made a mockery of our electoral democracy and boosted dynasties and warlords and political kingpins.  With Ferdinand Marcos and his crony-capitalists driven out to Hawaii by the EDSA People Power Revolt, the reformers hoped the Cory Aquino presidency would make democratic capitalism the basis of its policies.

    “Dr. Boom” Bernardo Villegas of the Center for Research and Communication (which would grow into the University of Asia and the Pacific) gave talks and wrote articles about Michael Novak’s seminal book, The Spirit of Democratic Capitalism.

    The reformers’ hope of a serious democratic capitalist thrust were painfully frustrated when they saw that the Cory presidency would in fact restore some of the long-established crony-capitalist institutions. Chief among these was the Lopez Meralco and media empire.  The Lopezes’ Meralco and radio-TV networks had flourished thanks to the Lopez family’s being the kingmakers who blessed Ferdinand Marcos against Diosdado Macapagal. The younger brother Fernando Lopez of patriarch Eugenio Lopez Sr. (“Eñing”) was Marcos’ vice-president.

    Throughout the first four years of the Marcos Regime, the Marcos-Lopez alliance—which began even when Marcos was a congressman and then a senator—would bring vast benefits to the Lopez businesses and industries.  The Lopez Empire benefited from large loans from government banks and financial resources.

    The relationship between Marcos and the Lopezes deteriorated, so the later lost the advantages of being a crony-capitalist conglomerate.  And when Marcos declared Martial Law, he had his people take over Meralco and the Lopezes’ media empire—and had the leader of the Lopez Empire, Geni Lopez, arrested.

    Cory Aquino became president. One of the first things she did was restore the Lopez Empire to its owners.  Some of her finance experts wanted the Lopezes to sign an IOU to settle their debts to the government—for the Lopezes owed government financial institutions the equivalent of billions of pesos today.  But President Cory Aquino decided to be completely magnanimous to the Lopezes.

    No. 6 crony capitalist capital

    Last Saturday’s issue of the Economist has a cover story about its editors’ “Crony capitalism index.”

    The Philippines ranks 6th most crony-capitalistic country in the world. In 2007 we ranked only 9th.

    Our reports about the growth of corruption between government officials and private companies, such as the case of the scandalous rise of Meralco’s electric power rates, prove that we are indeed a major capital of crony-capitalism.

    We must pray that the next regime after that of President Benigno Cojuangco Aquino will take democratic capitalism seriously and terminate crony-capitalism.

    And we must do what we can individually and in our groups work, as we did when we were under the Marcos dictatorship, to fight for democratic capitalism to reign in our country. We must defeat crony capitalism if we want to have a real democracy.


    Please follow our commenting guidelines.

    Comments are closed.