Has the Philippines become an oligarchipelago?

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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.”

yenmakabenta@yahoo.com

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25 Comments

  1. Simeon E. Anekang on

    Good afternoon, we had been informed before that around 100 families controlled the Philippines including of course the political arena – because they need it in order for them to continue getting rich. During con – ass, con-con, or con-com they must review all laws with regards to withholding tax or any tax that must be due to the government there must be no exception including the church once it ventures into business – schools, hospitals, etc.. Donations of wealthy people or big companies through a groups that they create must not be used as an excuse not to pay to the correct taxes and earnings from dividends must also be taxed (agree?) unless of course corporate/company or proprietor tax is the same with withholding tax that it will 35% once the earn 500,000 and above. We have a lot of laws, but there are flaws which our lawyers can see and take advantage of it once they fight for it with their client especially if he/she is a wealthy one. Hope they will prioritize laws on tax system during con-ass, con-con, or con-com in order for us to have a fair playing field. We must also thanks DU30 for awakening us that it is possible to have change and not just to follow the 100 wealthy families, we must continue supporting him until the end of his term. Then we will choose again the once that will lead us to continue the change, until all of us will be living fairly and helping one another. I will wait for your book..

    Thanks and more power.

    Simeon

  2. This comparison of individual taxes paid vis-a-vis personal net worth is a timeless fallacy that has sadly not been corrected because of most people’s shallow understanding of the nuances. Personal net worth is different from taxable income. Taxable income is wealth that was earned in a tax period, and subject to income tax. If, for example, a tycoon does not work for an entire year, and does not derive any taxable income, then he doesn’t have to pay taxes. But will he still appear on the Forbes richest list? Yes. Because his net worth—the assets he holds from previous years of wealth accumulation—still qualifies him to be on the Forbes list.

    The situation in the Philippines and other countries is not that different. Steve Jobs, when he was alive, only got US$1 per year of salary as CEO of Apple. SM, PNB, AyalaLand, are all top taxpayers in the BIR roster, even if their individual founders are not deriving income that is substantial enough to put them on the BIR’s Individual Taxpayers List. These rich people dont’ need to have multimillion incomes because they derive the value of their wealth from their shareholdings in said companies.

    That said, the Philippines does have a problem with oligarchy. The great white elephant that this writer has failed to address in more detail is COMPETITION. The presence of giants like Smart, Globe, SM, AyalaLand and their sister companies has effectively choked off small-time players that wish to enter the same industries. That is what’s really preventing the maturation of the Philippine economy.

  3. Prinze Fisher on

    The BIR is remiss in their mandate to collect tax and could be in cahoot with these Oligarchs as well? Malinaw sa article mo Yen, bakit 2Billion land ang tax na nakolekta sa mga Oligarchs from 2009 to 2014? Nababayaran kasi e kaya nagiging bungal. The President should look into this not just the “contractualization” issue.

  4. There is no society that can thrive if the very few live in gross luxury while the many are living in poverty and debt just to survive..
    There is nothing wrong in being rich ,,,the fault is if wealth is achieved and maintained at the cost of keeping people poor and or depriving them of the very basics in life by keeping them at sustenance levels. When utlities of power, water, telecommunications, medicines are owned or controlled by a very few, and unregulated… in the sense that they control the regulator… this is a classic case of abuse …when toll roads are privately owned and left practically unregulated that is wrong,,,,when basic commodities are very expensive government is to blame…. we cannot uplift the poor by destroying the rich.. but we can remove their stranglehold on the basics… infrastructure,power water,telecommunications by opening the same to competition and proper regulation and overseeing by government..

  5. In destroying the oligarchs PDD will have gigantic obstacles to face and if he would make a wrong move he could be ousted. The oligarchs control the supplies of water, electricity, communications, finance and food. The oligarchs with their money are capable of sowing trouble and make the life of PDD difficult. They can just bust the water pipes along the roads and make it appear they are repairing it for days and chaotic traffic will occur- this will sabotage the easing of the traffic program of the government. They can just take out one nut of their power plants and they can declare that the supply of electricity is thin and be ready for brown outs. The national grid is controlled by the local rich and foreigners.

    In his SONA PDD cited the words a famous man which simply means you cannot enrich the poor by eliminating the rich. This statement run counter with his statement of destroying the rich. This makes him according to the song of Kris Kristofferson “A walking contradiction partly truth and partly fiction taking all the wrong directions on his way back home.”

    I campaigned for PDD even if he does not know me because I believe in his capability and sincerity in uplifting the lives of the poor. I believe in his anti-corruption stand. PDD Sir marami kang problematic please stay alive until the end of your term and take care of our republic. After your term bahala ka na sa buhay mo but this time we need you.

    • With Pres. Duterte’s “fear factor”, I don’t think even the richest oligarchs will try doing what you described, which are clearly sabotage strategies. With the Congress, government machinery, military and police totally supportive of him and are willing to do whatever he orders, the oligarchs will certainly “behave”, toe the president’s line, and try to lie low so that they will not get into the firing line of the pres. They have seen what terrible thing happened to the billionaire and influential Mr. Ongpin when the pres. singled him out in a speech and they certainly won’t want to be in the same predicament.

  6. Its brilliant this has been explained to people,i think we sort of knew it but didnt understand it before. I always used to complain to my wife that all supermarket employees were not employed by the supermarkets but by agencies. At age 27 they then have to leave the supermarket. I said to my wife that should be illegal & its truly immoral, but look who owns the supermarkets, exactly the people this article is about. I feared for the Philippines when electing duerte but i think i was mistaken & the filipino people right in electing him. He does seem to care about the people. Good luck to him & the filipino.

  7. Our dysfunctional system could be more described as ‘plutarchy’, a system controlled by the greedy oligarchs and plutocrats. The restrictive economic provisions in our constitution is a stark evidence that made sure that the interests of the privileged few mare well protected at the expense of the economic progress of the nation. Thirty years has been wasted. I support the president in this fight to stamp out the stranglehold of these oligarchs and plutocrats on our economy. Let everyone benefit from the bountiful riches of our country.

  8. Vincent de Belen on

    The practice didn’t create middle class but widens the gap between the rich and the poor. The rich expands business while their employees are working works hard to make a living. They were able to make life comfortable for them and their children’s children while dwindling the working class . They have created imbalance sharing of wealth

  9. Digong has zeroed in with one of the largest cancerous tissues, will the amount of radiation chemo theraphy intended to be applied will be enough to neutralize the seriousness of the affliction?????????

    What if after 6 years of constant radiation, this cancerous malady will rebound back to a vengeance and spread further beyond recall?????

  10. The 16 million Filipino voters ( my 1 vote included) for PDigong longs for a leader who will break this oligarchy milking us. He is doing a blitzkrieg on the elimination of the drug menace. He has just started on these oligarch and its a good suggestion to unmask and break these politicians in cahoots with these ruling class just like eliminating the drug pushers to deny the drug lords of their market. Drug lords are the same as Lard ( oligarch) lords. Both are unhealthy to common folks like us.

  11. Jaime Dela Cruz on

    It’s interesting to note that TUCP is not up in arms to support Duterte in his efforts to temper the greed of the oligarchy. Right after Duterte’s press con on the matter, TUCP should be conducting seminars and labor sit-ins to educate the workers of their plight and rights under the law. I suppose they (TUCP) too has fallen under the grip of the oligarchs. A very sad state of affairs indeed.

  12. Im waiting for your book, sir. It should have more substance, facts, and named names just like the book,”Anarchy of Filipino Families” unlike those yellow minions’ tsismis books against anyone their Yellow Puppeteers want to humiliate and destroy.

  13. Leodegardo Pruna on

    PDU30 has set the tone for people and business to a compromise. We cannot uplift the welfare of the poor by killing the rich. The rich have the money to invest and create jobs and income. What the President wants to do is to eliminate the greed that seems to abound among the rich. The rich should somehow temper their greed and government comes in with just regulation allowing the growth of business and jobs. God bless the Philippines.

    • The Great Defiant on

      yes tatay Leo….
      this country will never progress unless you help the poorest of the poor.

  14. Amnata Pundit on

    You did not mention the role of the Church in the grand scheme of things here in the Philippines, and if fascism is defined as the merger of state power and corporate power- which makes it a synonym for oligarchy- then you have clerico-fascism, the term Joma Sison invented when he first appeared on the scene in the early seventies until for some unstated reason he dropped it altogether and concentrated his struggle on anti-Marcosism. Today Marcos is gone and Joma’s forces have lost their focus, and yet they don’t seem to see clerico-fascism as the enemy anymore. Bakit kaya?

    • Leodegardo Pruna on

      The separation of the church and state is enshrined in the Constitution. There is no reason why we should disturb the paradigm. Let the Church evangelize and preach the gospel to strengthen morality and the Government in the pursuit for peace and prosperity by attending to the physical and material welfare of the people God bless the Philippines.

    • Amnata Pundit on

      The Church is one of the most successful and wealthiest investors in this country( remember these clerics started only with the bible and a few samples of their wooden cross 500 years ago) so by definition she belongs to the oligarchy. Therefore, any discussion of the oligarchy that doesn’t include the Church cannot be considered complete.

  15. hairsplitting/nitpicking lang.

    to my linguistically-untrained mind “oligarchipelago” is more about the land mass,archipelago not about the political system.

    In short “oligarchipelago.” does not strike me as a political system, such that it can be inflected into “oligarchipelagism.”

    But, of course, I’m usually wrong, kaya, to each his own na lang.

  16. ernie del rosario on

    Yen, yes pls ! Fast-track that book on this curse we have been suffering from for maybe more than a hundred years as Bobbi Tiglao mentions. Majority of Filipinos do not have an inkling of this evil or even an iota of understanding of its effect on us. Many of the poor have lost all hopes in their lives except for death at some point.

  17. ernie del rosario on

    Which is worse ? A Narco-State or an Oligarchipelago. Darn ! There is no choice, we are both.

  18. Then he (JESUS) will say also to those who are at his left (oligarchs), ‘Depart from me, you cursed ones, into eternal fire, that which was prepared for The Devil and for his Angels.

  19. Josie Asuncion on

    With President Duterte, I hope and pray that these capitalists who benefitted in the contractualization will be punished. My son who worked more than 10 years as porter in Domestic Airport is still under this unhuman system.

    Yearly he has to sign renewal contract. My poor son couldn’t do anything, because the past administration always favored these oligarchs.

    May the Good Lord bless and keep President Duterte in good help and free from harm so he could continue combatting these oligarchs, drug lords, corrupt officials and authorities.