• PLDT now an Indonesian-Japanese joint venture

    19

    Sixth of a series on the Salim empire in the Philippines

    “ The finest trick of the devil is to persuade you that he does not exist.”
     —Charles Baudelaire, 1869 (popularized in the hit movie
    The Usual Suspects, 1995).

    What the hell has happened to our country?

    In 1968, the General Telephone & Electronics Corporation, then the world’s largest telephone firm, had to give up its Philippine Long Distance Telephone Co., and sell it to a Filipino elite clan, because the treaty that represented US neo-colonial rule in our country, the Laurel-Langley Agreement that allowed American firms to own public utilities was to end in 1974.

    Fast forward to the first decade of the 21st century: PLDT has become one of the biggest and most profitable corporations in the country—to a great extent because it is a public utility that dominates the telecommunications industry. Last year, its assets totaled P391 billion, revenues P125 billion, and net income after tax P29 billion.

    But three decades after Americans were booted out of PLDT, it again got to be controlled by a foreigner: Indonesian tycoon Anthoni Salim who, through his companies, has the biggest controlling 26 percent of the firm’s stocks.

    His partner: the Japanese Nippon Telecommunications and Telegraph (NTT) whose subsidiaries together own 21 percent of PLDT. NTT is the world’s largest telecommunications firm in terms of revenue. Its two subsidiaries with shares in PLDT are NTT Communications and NTT Docomo. (“Docomo”, the firm says, for “do communications over the mobile network”, and also for the Japanese word “dokomo”, meaning everywhere.) The two NTT firms provide all the technical expertise PLDT needs.

    The next largest stockholder, and a Filipino, is tycoon John Gokongwei, whose shares through his various firms are a far third, 8 percent.

    PLDT now is tightly controlled by Salim’s companies and Japanese NTT firms.

    PLDT now is tightly controlled by Salim’s companies and Japanese NTT firms.

    Can you believe that? We are the only country in the world, in which foreigners, an Indonesian tycoon and a Japanese conglomerate, control a strategic industry, one based on our sovereign power to extend a public utility franchise.

    Cellular (or mobile) phones have become the game-changing device of the 21st century, and the Philippines is the 12th country with the largest number of mobile phones — 107 million, more than our population.

    PLDT, through its subsidiaries Smart and Sun, account for 70 million of those phones. The Internet has become the tool of this knowledge-based era. PLDT accounts for about 35 percent of the 10 million Internet connections in the country. It also accounts for 80 percent of fixed lines in the Philippines.

    And what have we done?

    We’ve turned over that industry–which our government has absolute power over because it has sovereign rights over the use of such medium–to an Indonesian magnate, Salim, and to the world’s biggest telecoms firm, the Japanese NTT.

    As I will detail in subsequent columns, company data would indicate that Salim’s First Pacific from 1999 (after it bought its PLDT shares) to last year has remitted to Hong Kong as its profits $2 billion. NTT most likely remitted $1 billion.

    That means that Salim’s First Pacific already recovered by 2007 the $749 million it used to purchase its controlling stakes in 1998, during President Estrada’s watch, and all its profits from 2008 are pure income. PLDT has in fact been First Pacific’s cash cow; the $2 billion it generates is twice what it gets from its Indonesian operations.

    First Pacific’s control of PLDT is the most enduring impact of the regime of President Estrada, who, by various accounts, arm-twisted Antonio Cojuangco’s clan in selling the shares to Salim, with his crony Mark Jimenez allegedly getting $50 million for his role in maneuvering the sale.

    Salim even used PLDT’s resources for capturing another utility firm, the power monopoly Meralco. It was PLDT’s subsidiary Piltel (later renamed PLDT Communications and Energy Ventures) that bought in 2009 20 percent of Meralco. PLDT’s Beneficial Trust Fund acquired another 10 percent in the same year, in exchange for Salim’s Metro Pacific Investment stocks, later on sold in the stock market. (See my column Feb. 26, “Salim brought in zero funds to capture Meralco.”)

    That quote above, from one of my favorite poets, the French Charles Baudelaire was popularized in the movie The Usual Suspects, in which the “Devil” was the Turkish global crime lord, Keyser Söze, as follows: “The greatest trick the Devil ever pulled was convincing the world he didn’t exist.”

    Salim and his top executive in the Philippines, Mr. Pangilinan, certainly aren’t “Devils” in any way. They are in fact the demigods in the global and Philippine corporate universe.

    But a paraphrase of that quote wouldn’t be inaccurate: “Salim’s greatest trick has been to hide from Filipinos and make them think he doesn’t control public utility firms in the country.”

    One way for this was for Pangilinan to put into PLDT’s board of directors, and advisers, representatives of the country’s biggest conglomerates, even if they have only minor or even token shares in PLDT, to project an image — an artifice — that it is controlled by the crème de la crème of Philippine business.

    In PLDT’s board of directors are Helen Dee of the Yuchengcos; Pedro Roxas of the old Spanish elite; Alfred Ty of the George Ty-Metrobank conglomerate, Jollibee hamburger magnate Tony Tan Caktiong, and SSS chairman, and apparently PLDT’s connection to President Aquino’s administration, Juan Santos. (John Gokongwei’s brother, James is also in the board, because of their group’s 8 percent holdings in PLDT.)

    Not only that, placed in PLDT’s “advisory committee” are former Chief Justice (and Philippine Daily Inquirer columnist Artemio Panganiban), former foreign affairs secretary Roberto Romulo, and the “senior business leader,” the 92-year-old Washington SyCip.

    Pangilinan even in effect got the Catholic Church — the Jesuits at least — to bless PLDT, when he appointed in 1998 as soon Salim got control of it, Fr. Bienvenido Nebres, the longest-serving Ateneo de Manila University President. Nebres resigned only in Sept. 2012, after Pangilinan publicly announced his “disengagement” with his alma mater that opposed his support for mining and the pro-contraceptives law.

    Only a genius — but a bold one — could ever think of using the country’s top magnates and brains as fixtures to prettify a company’s image, and keep out of sight its foreign controlling owner,

    There is not a single Indonesian or known Salim personality in the board of directors, although his close associate Benny Sentoso and Christopher Young (who sources claim really controls PLDT’s finances) are in PLDT’s board of advisors.

    But of course what has been Salim’s main mechanism to, as it were, persuade you that he doesn’t exist, is his vast media empire, for which his firms have spent P27 billion to put up. (See my column March 10, “PLDT pension used for Salim’s PH media empire.”

    This media empire, some say, may have another big, not impossible, mission to accomplish: To drum up support to amend our Constitution to lift all restrictions on foreign investments, which would make questions over Salim’s hold on utility industries moot and academic. That in a future installment of this series.

    tiglao.manilatimes@gmail.com
    www.trigger.ph and www.rigobertotiglao.com

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    19 Comments

    1. Why did the Cojuanco’s sell their shares in PLDT to Metro Pacific Corp.before? The answer is because the price is right. Then I guess any Filipino businessman can buy PLDT shares from Salim Group if the price is right. But most if not all big Filipino businessman have international partners. Look at San Miguel Corp & GlobeTelecom.

    2. Peter Gonzales on

      It is time to nationalize Meralco and PLDT and other power and telecommunications utilities to safeguard the security of our country as the constitution demands. There are a lot of Philippine corporations who can take over the business and security operations of these utilities after its nationalization.

    3. There will be a time when we Filipinos will wake up that we’re already foreigners in our own land. Wala na tayong say kung pano natin papatakbuhin ang sariling bansa. Fools we are…

    4. Sa ganang akin lang wala namang masama sa ginagawa ni Salim, to think nakapagbibigay pa sya ng trabaho sa mga pinoy at nakatutulong pa sa ekonomiya. Kung tutuusin dapat pa nga pati gobyerno palitan na ng mga dayuhan upang umunlad na tayo ng husto. Marami ng dumaan ng pinoy pero anung nangyayari sa atin ngayon, paurong tayo hindi paabante! Nakaw dito nakaw duon! Pulitika dito pulitika duon! Napagiiwanan na tayo ng ating mga kapitbahay sa Asya, NAKAKAHIYA NA ANG KASALUKUYANG TINAGURIANG LIDERATO SA GOBYERNO!

    5. Hindi nagkakalayo, pare-pareho at iisa ang modus ng mga DAMBUHALANG NEGOSYONG tulad ng PLDT. Pilipino man ito , Indonesian, japanese, Singaporean, American or European…TUBO at pagsasamantala ang bottom line ng mga KAPITALISTANG MONOPOLYO.

    6. Iyan and dahilan kung bakit ‘di nakararating sa mga mahihirap ang pag-angat ng ekonomiya ng ‘pinas dahil lumalabas ang pera papunta sa mother companies ng mga investors.

    7. So what is wrong if the major industrial corporations, public utilities and financial organizations are controlled by foreign investors. All the presidents who followed President Marcos, including the movie personalities, basketball players etc. elected to Congress lack the intellectual integrity to be able to understand the negative impact of
      selling out to foreign investors the country’s major business entities. Sadly, so do the millions of Filipinos voting for all the inept, stupid politicians. So who bears the blame for the selling out of the Philippines, the Filipino people.

    8. The key fact here is that corporate acquisitions by other companies as long as majority shareholders are Filipinos is allowed by Philippine law. The thing here is that PLDT is a transformed and revitalized company after Manny Pangilinan took over. I dont care if Russians are behind him as long as PLDT employees are happy and that they are bringing in better services. Its a dog eat dog competition in the telecommunications industry. Hey we are in the process of opening our economy to foreign investors even and expect more acquisitions to come. Soon MERALCO and MWSS will be foreign equity owned as well. As long as they give better service to Pinoys then the vast majority of the Pinoys dont really care. Its better to have a foreigner boss who pays better than a Pinoy Tsinoy or Mestizo who pays below minimum wage just to maintain their profitability of the business.

      • There is nothing wrong of foreigners owning businesses in our country if, the shares they own is not more than the shares owned by pinoy shareholders. this is a scary thought, and our future will always be uncertain. If Filipino americans are limited to owning properties in the Philippines, foreigners should be limited to such a point where their share does not exceed the Filipino owned. with the majority of stocks in their hands, they will have more votes and they can change the policies of the company very easy. then they can buy more shares if the pinoys counterpart are greedy for money and soon, pinoys will wake up with nothing and their country being ran by foreigners. we should be afraid!

    9. The saga continues and majority of us are still silent, refusing to admit that the threat to our national survival is real. Salim’s clandestine use of known Filipino personalities to conceal the purpose he is determined to achieve, something that the public is unlikely to wield its authority over an infraction of the law, is already exposed. Controlling one of the country’s top corporations is an amazing feat had it been allowed by our Constitution. By exploiting its loophole, Salim was able to penetrate the core of Philippine businesses. It chills me to think that Salim accomplished everything with just a mere “drop of saliva” without our lawmakers raising a howl over it. The silhouette in the shape of a predator out to devour its prey is, after all, a solid, opaque monster we ought to crush.

      • one of the reasons for this booboo is, politicians are dumb and greedy of money. as long as the foreigners keep dumping millions in their accounts they don’t care of accurately, they don’t know what will happen to their country. dumb and greedy are the best adjectives to describe our politicians and the sad things is, they fight for whatever wrong doing they did, as if fighting for what is right. they have no concept of what is right at all. they are shameless ignorant people. sad!!!! pinoys should not be carried away by popularity or promises next elections, they should scrutinize every politician and opt for the least evil. at least!

    10. Matagal ng alam ng SEC at Malacanyang yan, kaya lang si MVP marunong talaga makipaglaro sa mga pulitiko natin. Ang mga senatong at tongressman takot din imbestigahan si MVP.

    11. MR. TIGLAO, ITO BA KAYA ANG DAHILAN MINAMADALI NI $PEAKER BELMONTE ANG CHA-CHA SA KONGRESSO PARA WALA NG ” RESTRICTION AT MAGING MOOT AND ACADEMIC’ NA ANG PAGBILI NG SALIM GROUP SA PHILSTAR NA ANG MAY-ARI AY HALOS FAMILY NI $PEAKER BELMONTE? TANONG LANG MR. TIGLAO AT SANA NAMAN SAGUTIN DIN NI SPEAKER BELMONTE NG TAPATAN, DI BA HO?

    12. Wes Rollolazo on

      If revenues are 125B pesos and net income is 29B pesos that means that PLDT paid 96B pesos in taxes.

      At 44 to 1 exchange rate, 132B pesos was remitted out of the country. How much more can foreign owners take out of the country?

      What’s happening? Is this highway robbery legal?

    13. Hermenegildo Rivera on

      Kaya pala ang mag-ama ay madalas sa Malaysia at Indonesia !!! Yung mas matanda nuong araw pa. Itung anak , bago at kasalukuyang ARCHETECTO ng current administration

      PORBIDA IKA NGA NG BISAYA !!!

    14. grabe naman “dog eat dog “world akin to “Filipino deceiving another Filipino” instead of helping to alleviate d poverty in Phil these so called Filipino are undermining fellow kababayan.Thank U Mr.Tiglao.Let’s rise up Filipino….

    15. Manuel C. Diaz on

      The ruling elites will sell the Philippines down the river for “thirty pieces of silver”.