I planned to reserve the term “oligarchipelago” for a book that I am writing and which keeps me awake most nights these days, but President Duterte‘s loud blast against oligarchs last Wednesday in Malacanang has forced a change of plans.
The subject cannot wait. The issue is rife for comment. As I write this, I read in the news that Roberto Ongpin, the business tycoon singled out by the president as an oligarch, has resigned his positions as board chairman and director in Philweb, the online gaming company.
President Duterte’s denunciation of oligarchs sent me scurrying for my research notes on the Philippine oligarchy, and for competent information on the concept of oligarchy.
By highlighting Ongpin for shaming, DU30 actually moderated the bite and sting of his declaration that Philippine wealth is controlled by only a few, because Ongpin is hardly the only oligarch in this country.
The reality is that this country is controlled and run by oligarchs in cahoots with political dynasts.
100 ruling families
A foreign friend and analyst has described the Philippines in this fashion:
“The Philippines is a rich country, where the people are poor, and there is extreme wealth sitting alongside extreme poverty.
“It is an archipelago of 7,107 islands, and an oligarchipelago of 100 ruling families.
“Business oligarchs and political dynasties have combined to turn the opportunity of becoming a democracy into creating a full- blown plutocracy.”
This is quite a mouthful. But I haven’t been able to dismiss from my mind his descriptive term for what we have become: an “oligarchipelago.”
By conflating the word “oligarchy” and the word “archipelago,” he gives us a neologism to help us comprehend quickly the true situation of our people and our country today.
To serious foreign observers, who live and breathe the air of democracy in their homelands, it is evident that the Philippines has not reached a state of real democracy.
From 1986 onward, both the established oligarchs and political leaders embarked on a course that veered towards plutocracy, with the oligarchs and the dynastic clans serving as the driving force and prime beneficiaries.
The years since 1986 have seen a greater concentration of wealth and centralization of power.
A few definitions are in order so readers can comprehend the picture that I am painting here.
An oligarchy is a form of government in which power is vested in a few persons or in a dominant class or clique. It literally means government by the few.
Aristotle pioneered the use of the term “oligarchy.”
A plutocracy is a form of oligarchy and defines a society ruled or controlled by a small minority of the wealthiest citizens.
Lee Kuan Yew was advocating a form of plutocracy when he suggested that rich people should be given two votes in an election, compared to one vote for ordinary citizens. Even autocratic Singapore felt ashamed to implement such an outrageous and undemocratic idea.
When Duterte attacks the oligarchs, he is really mixing both concepts. He is decrying not the actual rule by the very rich, but their influence on policy and the corridors of power, which results in their accumulation of more wealth.
The wealthy do not rule in the Philippines; they just shape and direct political events in a way that favors the politicians that they support, and the policies that they advocate.
Statistics tell the story
My analyst-friend marshalls compelling facts and statistics to support how oligarchs control most of the wealth in this country.
1.Wealth of top 10 Filipino oligarchs
2009 — $11.1 billion
2014 — $50.6 billion
Increase — $39.5 billion
2. National GDP
2009 — $168.3 billion
2014 — $284.5 billion
Increase — $ 116.2 billion
3. Tax of top 10 oligarchs
2009-2014 – only $2 billion
Only 25 of the top 50 oligarchs are on the list of top 500 taxpayers.
Quite striking is his table of the wealth of the top 10 richest Filipinos
as percentage of national G DP in comparison with those of other countries, which have the same number of billionaires as we do.
4. Wealth of top 10 individuals
As percentage of national GDP
Saudi Arabia—6.9 percent of GDP
Norway – 4.9 percent
Australia – 3.0 percent
South Korea – 3.0 percent
Philippines – 17.0 percent (this is an increase from 15percent in 2012)
My friend says the Philippine situation has no parallel anywhere in the world. It is not the personal wealth per se that is alarming, but the fact that a small group has dominant control of all key industries/sectors, and therefore control of the system itself.
The Philippines is Asia’s second fastest growing economy next to Chna. The growth has been a boon to the country’s 50 richest families.
According to the latest statistics from Forbes magazine, the collective wealth of the country’s richest grew by about 13 % in 2014, standing at $74.2 billion. Up from $65.8 billion in 2013.
Here’s the most interesting fact: The collective wealth of the country’s 50 richest individuals in 2014 accounted for 25.7 % of the country ‘s full-year GDP.
Partnership with political dynasts
The most alarming aspect of the Philippine situation is the way business oligarchs have combined with political dynasts to control policy and power in the country.
Seventy-five percent (75%) of Filipino lawmakers come from dynastic families. Oligarchs help them get elected or reelected by providing substantial campaign contributions in every election.
Together, oligarchs and dynasts have a stranglehood on political and economic power. This is what keeps our people and our country poor.
In his book, Capital in the 21st Century, French economist Thomas Picketty contends that the world is seeing the return of patrimonial capitalism, under which the circulation of wealth is restricted within the confines of the family.
Wealth concentrates at the top, and social mobility becomes all the more difficult to achieve. The rich stay rich and get richer; the poor stay poor, and get poorer.
Piketty describes it all as “hereditary oligarchy.”
End of contractualization?
It is commendable that President Duterte is now moving decisively to force big business to stop the practice of contractualization, under which workers are exploited and denied fair wages and mandated benefits.
The very rich prop up their profits and incomes through contractualization, which keeps workers in temporary employment no matter how long they serve, and prevents them from attaining regular employment status.
The Department of Labor has been slow in enforcing the Philippine labor code, which bans such practice as illegal.
If President Duterte will keep his finger pressed on this issue and end contractualization, it will be a major victory for labor and a major setback for the oligarchs.
The oligarchs could regroup with political dynasts to stop policies that will end their combined grip on economic and political power.
President Duterte is on the right track in declaring that he will end the grip of the oligarchs on the economy.
If he expands his reform to loosen as well the hold of political dynasties on political power, I will forswear the term “oligarchipelago.”