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Revolt of the Masses—Marcos Style, January 30, 1971
Revolt of the Masses—Marcos Style
By Teodoro L. Locsin Jr.
A spectre is haunting Europe—the spectre of Communism. All the Powers of old Europe have entered into a holy alliance to exorcize this spectre; Pope and Czar, Metternich and Guizot, French Radicals and German police-spies.
Where is the party in opposition that has not been decried as communistic by its opponents in power? Where the Opposition that has not hurled back the branding reproach of Communism against the more advanced opposition parties, as well as against its reactionary adversaries?
Two things result from this fact.
I. Communism is already acknowledged by all European Powers to be itself a Power.
II. It is time that Communists should openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the spectre of Communism with a Manifesto of the party itself.
—From the communist manifesto by Karl Marx and Friedrich (just call me “Fred”) Engels
January 30, 1971—A SPECTRE is haunting the Philippine oligarchy: the spectre of the Revolt of the Masses led by no less than the President of the Philippines, Ferdinand Marcos, the biggest oligarch of them all, according to the opposition, not to mention close friends, who add, however, that since he has amassed a fortune which three generations of Marcoses cannot spend, he desires now to serve the nation.
All the powers of the Establishment, all vested interests should enter into a holy alliance to exorcise this spectre; owners of public utilities, sugar centrals and estates, mines, cement factories, oil companies, banks, etc., as well as the Fourth Estate and the CIA.
To this end, one of these Powers has gathered in “that tall building in the suburbs”—the publishers and editors of the nation’s leading newspapers and magazines—to vilify the Marcos administration and bring it down through a series of “pooled editorials.”
The debauchment of the currency, political terrorism on a scale and of a virulence never reached before, the deterioration of public order, the utter loss of confidence in the institutions of the republic on the part of the common people have all been blamed on President Marcos by these conspirators. Two things have resulted from their efforts.
I. The universal opinion is that Marcos is the worst president this nation has ever had.
II. Anyone who says a good word for the President damages his reputation irreparably.
It is high time that this fairy tale of Marcosian malevolence is shown for what it is: a vicious lie started by certain vested interests who would bend the President to their corrupt will. For this purpose, President Marcos has come out with a declaration of war on the Oligarchy.
“It is now time to fight the pressure groups and the oligarchs in the name of the people,” said the President. “There are too many inequities. The rich continue to grow richer and the poor continue to grow poorer. I will see to it that my remaining three years will be devoted to removing these inequities.”
He confessed to having compromised with the oligarchs in the past. He had thought that the rich could be counted on to help in the development of the nation, to give it the industrial base without which it could never pull itself out of the quagmire of feudal poverty and stagnation and the condition of an economic colony of the industrial states. But all that is past! The President said he had finally realized that nothing can be expected of the rich except progressive greed and an inexorable instinct for monopoly. Conscience, it seems, is one luxury the rich cannot afford to have.
If it was a blinding vision that converted Saul of Tarsus from a pagan inquisitor on the trail of fugitive Christians into Saint Paul, it was a brownout plunging Greater Manila into a darkness only relieved by a full moon just five minutes before President Marcos was to deliver a speech on the crippling jeepney strike that transformed “the richest man in Asia”—as his enemies call him—into a protector of the common people, the leader, as he would like to style himself, of a popular revolution from the top. “Revolution from the top,” an old slogan used with no effect during last year’s student riots, will become a reality at last!
Convinced that the brownout was not an accident but contrived by the Lopezes, who own the controlling stock of the Meralco, to humiliate him and exacerbate the tensions generated by a seemingly insoluble strike—which he suspected was inspired and financed by the same party—President Marcos publicly pointed at the Lopezes an accusing finger, calling them the most malevolent of the oligarchs who are strangling the common people with high prices.
In the darkness, before a dead microphone, what he had wanted was not light but electricity which would give him the voice to reach his people, for whom he was no longer the President of the Republic but a dangerous nuisance they would have to endure for three awful years more because he has the armed forces at his beck and call.
The increasing cost of living is responsible for the credibility gap, the President is aware. He insists, however, that the blame be not placed on him. True, he had devalued the peso, but it was the increase in Meralco rates that started the spiraling of prices.
The Lopezes, he said, had tried to intimidate him into approving several projects of dubious advantage to the nation. One of these would give them a monopoly of this country’s oil supply. They had threatened, if he did not accede to their request, to launch a vehement campaign in the media they own to discredit him before the nation.
(Vice-President Lopez resigned from the Marcos Cabinet. The Department of Agriculture, which he had charge of, is one of the few departments that exudes a good smell. But he had to go—and he did.)
Labor groups, said the President, have been clamoring for a rollback of the new Meralco rates—“one of the major causes for the spiraling of prices of all other prime commodities.” He has, therefore, ordered a restudy of the Public Service Commission decision granting the Meralco increased rates up to 54 percent over the previous rates.
Emilio Abello, chairman of the board of directors of the Meralco, criticized the President’s move for a retrial of the Meralco case.
“The President should know that under our system of the tripartite separation of powers and under a rule of law, the President of the Republic should not directly or indirectly interfere in the free and untrammeled exercise by the Supreme Court of its powers under the Constitution.”
If the trade unions are really intent on rolling back the Meralco rates, said Abello, “they should ask the President to roll back the rate of exchange from over P6 to $1 to the previous rate of P3.90 to $1, and we will immediately also roll back our present increased rates to what they were before the floating rate.”
President Marcos said that the favorable PSC decision on the Meralco case was achieved by bribery. The Meralco, which has an income of P93 million annually, pays only 25% on its income instead of 75% because the Lopezes were able to have a bill passed in Congress requiring the Meralco to pay only that comparatively small amount, said the President.
Labor, the President went on, has answered his call to arms and has rallied to his side. Labor leaders submitted a resolution encouraging the fight against the “oligarchs.” The resolution, according to the President, clearly proves just where the sympathies of labor truly lie—with him!
The next day, however, the President was criticized by the labor leaders for “giving a slant to the resolution” they had given him.
“We are not for anybody,” said Roberto S. Oca, president of the Pinagbuklod na Manggagawang Pilipino. The workers had been invited to the Palace and they could not refuse, said Oca. “As union men,” Oca went on, “we would be untrue to our cause if we didn’t support any effort for the uplift of the groaning workers.”
The unions, he said, are not only interested in rolling back the new Meralco rates but also the price of fuel and other products as well. The President, said Oca, even promised to go after businesses supposedly owned by his “cronies.”
“If the President reneges on his promise,” Oca warned, “then the workers will join the activists in the streets.”
The labor leader concluded by saying, “I will never allow myself and labor to be made an instrument of President Marcos to put down the Lopezes. I am closer to Vice-President Lopez than to anybody else.”
Cipriano Cid, national president of the Philippine Association of Free Labor Unions, and of the Lapiang Manggagawa sa Filipinas, denounced Malacañang’s efforts to use the labor groups to serve its own selfish purposes, as Cid put it.
“The practice of professional labor leaders who flop over to the politicians whenever an opportunity arises to publicly declare their ready subservience is a highly condemnable practice which has retarded the progress of labor all these years,” said Cid.
“If the trade unions and labor leaders had noted deterioration of any matter prejudicial to the workers economically or socially, they could have spoken without waiting to be called and be used for purposes other than their own.
“They had to use President Marcos and Malacañang as a forum for their traditional subservience to politicians and government officials at the sacrifice of their cause and their own dignity and independence.
“No wonder Filipinos and foreigners, particularly Americans, feel they can use Filipino unions and their leaders as doormats.”
Cid informed Secretary Allegedly of Labor Blas Ople that he was aware of Malacañang’s “efforts to promote and continue dividing the labor front by the formation of multiple labor centers with the support of the President and the Labor Department.” For labor to be effective in its demands, it must be united, he said. But the Marcos administration has made it a policy to establish many centers of authority in the labor movement.
“We do not deny any damn fool’s right to form and organize any and all kinds of unions to his heart’s content if this would satisfy his vanity and his ends but not with the open support of the President and his labor secretary,” Cid concluded.
Unfazed by labor’s repudiation of his “revolution,” the President declared that he would fight the cartels and monopolies “to the finish.”
“It is high time that we did something about them. And we are now moving against these business and political empires for the good of the state.”
It was not desire for revenge but the interests of the people that motivated his “revolts,” according to the President.
“I did not ask for this fight. I am a patient man but I will not run from a fight, especially from those who seek to further their own selfish interests at the expense of all, particularly of the poor.”
President Marcos vowed that he would end once and for all the control of big sectors of the media by vested interest groups. These groups cannot be made to account for their actions, according to the President, since they control so much of the press, radio and television. There is no way to bring their anomalies to public notice.
“This only proves my earlier statements that it is dangerous for any single man or group to own such a substantial portion of the media in the country, without having to account for it to the people.”
The Roces and Prietos are not only in the lumber industry, the movie business, real estate and racing but also in the publishing business, with the Manila Times, the Daily Mirror, Taliba, Women’s Magazine, and in radio and television.
The Elizaldes are not only in sugar, rope, rhum, steel but also in publishing, with the Evening News and The Sun, and in radio and television.
Hans Menzi is in zippers, fruit, and has just gotten a huge loan from the government or a government guarantee of one for a paper mill or something—and is also in publishing, with Manila Daily Bulletin and Liwayway.
The Sorianos have beer, ice cream, soft drinks, Bislig, and so forth and so on—and also the Philippines Herald and Channel 13.
And there is President Marcos’s own close associate, Roberto Benedicto, who is not only in this and that but also in television, having acquired for himself and others (?) at something like P10 million the formerly Lopez-owned Channel 9.
Not only the Lopezes but also these would come under the presidential classification of groups that “cannot be made to account for their actions, since they control the media,” with “no way to bring their anomalies to public notice,” should they be guilty, one might add, of anomalies. There is the Department of Justice, of course, which the Presidnet could order to go after them, as he has done in the case of the Lopezes, but this is not the time to quibble with the President and his war against the oligarchs.
“Down with the oligarchs!”
To be precise, “Down with the oppressive oligarchs!” For President Marcos makes a distinction between mere oligarchs and “oppressive” oligarchs, a distinction, however, which escapes one, for what is an oligarch if not oppressive? Where would be the profit, where would be the power and the glory in being an oligarch if one did not exploit the advantages of one’s position? One might as well be a diabolist who did not go for the Black Mass or would have nothing to do with Satan. An oligarchy is government by the rich few, of the rich few and for the rich few and must necessarily be oppressive of the impoverished many. The rich are either oligarchs, and, therefore, oppressive, or they are not oligarchs at all, merely people with a lot of money. Concentrations of wealth in a few tend, however, to further concentration of wealth in ever fewer, that is, toward monopolies and cartels, and President Marcos, forgetting his distinction between mere oligarchs and “oppressive” oligarchs, announced that he would extend the Revolt of the Masses that he led to bring down monopolies and cartels outside of the Lopez economic empire. He would subject to government investigation oil companies, rumored to be operating as a cartel, that is, a conspiracy against the consumers, keeping prices up through price-fixing and suppression of competition. He would deal similarly with such public utilities as the Philippine Long Distance and Telephone Company, which had increased its rates like Meralco, and airlines like Toda’s Philippine Air Lines, and the shipping lines and bus companies, presumably.
The Lopez brothers do not owe any government financial institution nor do they enjoy any government guarantee for their loans, but other “Oligarchs” are up to their eyeballs in government guarantee. Sen. Benigno Aquino Jr. has furnished the Free Press with a list of those who enjoy government guarantees of loans in the tens and hundreds of millions of pesos. Among them is the Negros group which recently acquired the Esso fertilizer plant through a huge government guarantee. And there is the Elizalde Steel Rolling Mills, Inc., which enjoys a government guarantee of a loan in the tens of millions of pesos. And the Iligan Integrated Steel Mills, Inc., which, also according to the senator, enjoys a government guarantee of five hundred million or half a billion pesos! These are completely at the mercy of the Marcos administration. Any complaint, for instance, of undue increase in the price of fertilizer or discriminatory conduct on the part of the fertilizer company should bring down upon the head of the management the wrath of the Leader of the Revolt against the Oligarchs—Oppressive Style.
Complaints against the price of steel, which is so essential to the industrialization of the country, should lead to quick and ruthless presidential action against the Elizalde Steel Rolling Mills and Iligan Integrated Steel Mills.
“Bethlehem Steel Gives in to Nixon: Price Cut Ok’d.”
It can happen here under the new Marcos dispensation.
And naturalized Chinese who control the food supply have been designated by the President as special targets of investigation. In other words, watch out, Antonio Roxas Chua and others—however much you might have contributed to President Marcos’s campaign for reelection! This is the new Marcos and no “oppressor” of the people will be spared.
“X-Y-Z” should tremble before the wrath to come.
Encouraging the President, “a majority party congressman urged President Marcos to expand his crackdown on economic oligarchy to include giant private corporations in which the government has substantial investments,” according to an Evening News report last week.
“Rep. Gaudencio Beduya (N, Cebu) said he had in mind private firms in which the government has sunk hundreds of millions of pesos in investments with very little hope of at least recovering them.”
The handwriting on the wall?
Is the “revolution from the top” finally here?
With such a revolution going on, President Marcos, assured of the support of the broad masses of the people, as the communist jargon goes, would no longer need a huge military establishment in order to maintain his establishment. There would be no need to spend P700 million a year for the armed forces. Against whom would they be defending this regime? Huks would be defecting to the government side as the Marcos-led Revolt of the Masses becomes even more revolting to the Oligarchy. The money saved by reducing drastically the army budget could go into the massive implementation of land reform, finally liberating the toiling peasants from their ancient bondage to feudalism as practiced by some of the President’s best friends.
“Arise, ye wretched of the earth, and follow the Leader!” (The President, not the magazine.) “You have nothing to lose but your change.
“You have a world to win!”
Then comes the dawn.
The Ruling Money, August 29, 1970
The Ruling Money
By Quijano de Manila
Anatomy of the Republic as a plutocracy.
August 29, 1970–THE RICH are different,” said the American novelist F. Scott Fitzgerald, who spent his youth singing hooray for the difference and the rest of his life suffering from it. Though a great writer, Fitzgerald was a naïf. He knew the rich had the power to escape the usual penalties attendant on living at all in this world, but he thought the power to be a special quality bred in the rich by their money—a special strength or glamour, or magic even, that made them able to charm their way out of the consequences of what they did.
This, of course, is bull. As the Ted Kennedy drowning case showed, the rich can get into a stupid funk just like you and me. They get away with it because they are indeed “different,” not as Fitzgerald mystically thought but as Hemingway bluntly put it when fed that line about the rich being different. “Yes,” said Hemingway, “they have more money.” Because the Kennedys have more money, son Ted could be given the benefit of the doubt—though it would be hard to say whose doubt that was. Not the American public’s to judge from the polls.
The Kennedy case did dent a Philippine superstition about the United States: that there, unlike here, rich and poor are equal before the law. But the larger superstition that implies still persists, which may be put this way: if money is power, then the American common man has more power than, say, the Latin American, not only because of the greater amount of American money but because of its more general distribution.
In a densely documented exposé entitled The Rich and the Super-Rich, the American economist Ferdinand Lundberg explodes that superstition. More than 30 percent of American wealth, he found out, was owned by only 1.6 percent of the adult population of 103 million. Since the government owned 20 percent of the wealth, that left less than half of the wealth to be divided among some 98 percent of the population, as of figures for the 1950s.
Of the top 1 percent who are rich, a fraction (0.11 percent) are super-rich; they own 45 percent of their group’s concentrated wealth.
The rest of the American people may be considered poor, and not just in comparison with the rich and the super-rich.
Of the have-not majority, 21.89 percent have gross estates averaging $ 15,000— “just enough to cover a serious personal illness.”
Another 18.4 percent of the population were “worth $6,000 on the average, which would probably largely represent participation in life insurance or emergency money in the bank… or two or three shares of AT&T.”
The remainder of the have-not group form the super-poor and they are the 50 percent of the population that own only 8.3 percent of the wealth. “They had an average estate of $1,800—enough to cover furniture, clothes, a television set and perhaps a run-down car. Most of them had less, many had nothing at all.”
Half of the US population are composed of the super-poor while a fraction of 1 percent are super-rich!
Even if we regard the group in between as “middle class” we are still without an argument for the United States as a popular democracy—that is, where the people have the power. Money is power, but the American “middle class” don’t have that kind of money. They may have two cars in the garage, a TV in every room, insurance and savings accounts—but all that doesn’t make them the ruling money. Of a population of 103 million, says Lundberg: “We see that 1.4 million households own 65 percent of the investment assets, which are what give economic control. Automobiles and home ownership and bank deposits do not give such control.”
So, there goes the picture of the United States as a “people’s capitalism” with a widely diffused ownership of industry. The statistics are indeed impressive: in 1962 more than 17 million Americans owned shares in business enterprises and the figure was believed to have swelled to 20 million in 1968.
But: “Most stockholders own trivial amounts of stock; anybody would qualify as a stockholder if he owned only one share worth 10 cents. We are already aware that 1.6 percent of the population own more than 80 percent of all stock, 100 percent of state and local government bonds, and 88.5 percent of corporate bonds.”
And the “people capitalists,” how much do they own?
“Less than 20 percent of all stocks in 1963 were owned by some 15.4 million people.”
And the rest of the 103 million Americans had no share at all in this “people’s capitalism.” The gap between rich and poor that’s supposed to be narrower in the United States turns out to be a Grand Canyon.
But at least, surely, the American masses do have political power? Lundberg says that this, too, like the “Affluent Society,” is a delusion. Without economic power there’s no political power; and the American masses are either too cowed or too indifferent to exercise even what power they have.
“Officials nominated by either one of two major parties are periodically elected at local, state and federal levels by a largely inept electorate that in most elections fails to participate to the full and in general turns out far below 50 percent. Whether the electorate fully participates makes no difference because most of the candidates are handpicked by nominating caucuses of the two major parties rather than of one party as in Russia. The caucuses function in default of popular activity; the populace simply has no political drive of its own. If Russia permitted a Socialist Party and a Communist Party (joined behind the scenes) it would be on all fours with the United States in respect of parties in the field; the candidates in the field might be politically identical twins, as is often the case in the United States (Johnson versus Goldwater). Money plays a large role in the manipulation of this system—much larger than is usually conceded.”
Not the people but the super-rich finance the “system” and the financing is “down payment on future influence in government.” Since the people cannot or will not actively participate in government, Lundberg calls the set-up in the United States an “oligarchy by default.”
“Writers, focusing attention on Central America, refer caustically to the ‘banana republics’—those countries, economically dominated by the United Fruit Company, whose political leaders are bought and sold like popcorn. Conditions in the United States, mutatis mutandis, are not nearly so different. Even in such a presumably distinctive Latin American feature as the intervention of the military, the United States now clearly overshadows anything in this line the Latin American republics are able to show. Except that the United States has such large numbers of industrial and office workers, rather than landless peasants, it has few features to which general descriptions of Latin American society do not apply. It might almost be said that there’s a growing tendency to mold the United States, apart from its industrial features, upon the ‘banana republics,’ this making it the Banana Republic par excellence.”
On top of the pile is a “well-established hereditary propertied class.” It’s the ruling money, the privileged oligarchy, the super-rich one percent. And it didn’t even earn its money or privilege.
“Great wealth in the United States is no longer ordinarily gained by the input of some effort, legal or illegal, useful or mischievous, but comes from being named an heir. Almost every single wealth holder of the upper half of 1 percent arrived by this route.”
No more room at the top.
The rest of the Americans find how insecure “affluence” is when they lose a job.
“As was shown in the 1930s, Americans can become destitute overnight if deprived of their jobs, a strong support to mindless conformity. As a matter of fact, many persons in rather well-paid jobs, even executives, from time to time find themselves jobless owing to mergers, technical innovations or plant removal. Unable to get new jobs, they suddenly discover, to their amazement, that they are really poor.”
Ability, skills, talent, merely personal qualities, cannot be depended on as assets in the exploitative society.
“The incandescent Marilyn Monroe, as big as they come in filmdom and a veritable box-office Golconda, died broke.”
For that matter, so did poor Scott Fitzgerald, his talent worn out and wasted in the Hollywood dream factories, in the service of the big money that awed him when young.
Insecurity—Thoreau’s “quiet desperation” —is the American way of life.
How is the Philippine picture similar and different?
“FANTASTICALLY LOPSIDED” is how Lundberg describes income distribution in the United States. The Philippines money graph would provoke the same exclamation.
In May, 1969, the Senate committee on economic affairs issued a report on the country’s development from 1955 to 1968.
The most depressing finding was that, in a period of 13 years, “there has been no substantial change in the structure of our economy.” We were still an agricultural country of low productivity, with 58 percent of the labor force tied up in food production, only 11 percent engaged in manufacture. We had no capital-goods industry to speak of; our industry was more assembly than manufacture; and our manufacture was limited to durables like furniture and non-durables like cigarettes, had remained static since 1958, was heavily dependent on imported raw materials.
As a result, our foreign-trade deficit rose from over $147 million in 1955 to over $301 million in 1968: “The deficit in the last two years alone [1967-68] is greater than the combined deficit from 1957 to 1966.”
The national income had increased by 94 percent during the 13-year period, from almost P8 billion in 1955 to almost P15 billion in 1968. But again, this was partly a depressing finding. Despite an increase in average family income, and a shrink in the bottom group of society, the income structure had not changed either. The gap between rich and poor remained just as wide, or had widened further.
“In 1965, as in 1957, the 10 percent of our families who comprise the highest income bracket received 40 percent of the total income, leaving 60 percent of the income to be divided among 90 percent of the families.”
The figures for 1957 may be broken down thus:
2.8 percent of Filipino families earn over P5,000 a year.
17.1 percent earn between P2,001 and P4,999.
This 19.9 percent of Filipino families may be regarded as our “middle-class”—and it’s as meager as the incomes that make it comparatively well-to-do.
78.12 percent of all Filipino families earn less than P2,000 a year.
These are our poor and they comprise almost 80 percent of the nation’s households.
In this group are two subgroups that may be called the super-poor, because the figures on them are:
17.7 percent of Filipino families earn less than P1,000 a year.
11.6 percent earn less than P500.
Or almost 30 percent of the nation’s households living in stark misery.
Now for the other end of the scale.
1 percent of the nation’s families earn over P25,000 a year. These are the rich.
And one-tenth of this 1 percent earn over P100,000 a year. These are the super-rich.
So, in a country where 50 percent of the households live in poverty and 30 percent in utter misery, 1 percent of Filipino families live in affluence and a fraction of them live in super affluence.
Do these happy few constitute, as in the United States, an oligarchy?
Sen. Benigno Aquino Jr., who helped prepare that Senate report, thinks so. The 1 percent on top are the ruling money not only because they monopolize the wealth but because they control the sources of wealth (land, industry) and the forces of wealth (banking, politics). But the Philippine picture differs from the American in that we are still, more or less, in the robber-baron and nouveau-riche stage.
There’s still room at the top.
THREE LAYERS of wealth have accumulated since the turn of the century and Senator Aquino identifies these layers with lands, politics and banks.
“When the Americans came, a group of young lawyers started titling lands: this was the beginning of the big estates. Gregorio Araneta, for example, became the lawyer of the Tuason family that claimed this tremendous tract of land from Sampaloc to the Marikina Valley. The original source of the Philippine fortunes was, therefore, land—either Spanish grants, like the Ayala estate, or the acquisitions titled during the 1900s.
“The second generation of Filipino wealth came from government connections. In the 1920s when Quezon was financing his independence missions, certain people got choice contracts from the government, like the Teodoros of Ang Tibay, the Madrigals of the shipping line.
“Then we have a third generation of millionaires: those who got concessions from government financing institutions, like the sugar barons. The Philippine National Bank was set up and it financed practically the entire sugar-mill construction of the period. The movement was from Negros Occidental to Iloilo and the sugar barons—the Lopezes, the Javellanas, the Aranetas—started taking over virgin forest.”
The PNB marked an important development: Filipinos—or, at least, some Filipinos—began to have access to capital. Previously, all banks in the country were foreign-owned. Not until 1938 was the first Filipino private commercial bank founded: the Philippine Bank of Commerce. And only after the war, during the Garcia era, did the native entrepreneur really understand why he should have his own bank.
“This cue was Garcia’s Filipino First. The Americans in the Philippines, the British, the Chinese—they had their own banks. But Filipinos had only the PNB to rely on and even there they were not, so to speak, getting the lion’s share, because the Chinese were more adept in the lagay system. So, we began putting up our own banks. The Rufinos set up the Securities Bank, the Santos family, their Prudential Bank; a group of sugar planters (Sarmiento, Antonino), their PCI Bank; and young professionals, graduates of foreign schools, came back and put to use what they had learned by establishing a bank of their own : the Far East.
“There was this proliferation of banks because the Filipino had suddenly realized that money begets money and that he who holds capital can control the economy. The development of native banking system spurred activity in all directions. Now, for the first time, the Filipino had his own capital. On it, he could borrow foreign funds to use for his own development. So, you had the opening of subdivisions, another source of funds, of capital, and you had the rise of local manufacturing industries, all financed by local banks. This is a healthy sign: the Filipino is becoming the master in his own house.”
But Senator Aquino sees one great danger: the Filipino who becomes master in Juan’s house may not be Juan de la Cruz himself. Juan may find that the foreign exploiter he kicked out has been replaced by a native one. “The Spanish exile, Salvador de Madariaga, warned that a country can become the colony of its own people.” And the hurt is that it’s Juan’s money that will be used to make him poorer and his master richer. As the taxes that Juan pays to the government too often are used merely to enrich a few politicians, so, in the banking system, the money of the depositors, of the people, may be used merely to capitalize the owners of the banks.
Senator Aquino says that this is already happening.
“That’s why when Licaros became governor of the Central Bank he came up with the controversial Circular No. 306. This circular makes it official, in writing, that there are tremendous arrears (unpaid debts) in private banks—arrears accountable by the majority stockholders, officers and directors of private banks. In other words, they borrowed money from their own banks, they used the money that people had deposited with them—and they are in arrears. So, according to Licaros, the entire private banking system must never have more than 5 percent in arrears. [The present rate is at least 10 percent.] And he has suggested to us in Congress an amendment to the General Banking Act to penalize bank directors, officials and stockholders who borrow more than their equity in their bank.”
Such a curb, if imposed abruptly, would, thinks Senator Aquino, result in financial chaos: the rich who have been growing richer through two decades by using the depositor’s money would have to be given time to restructure their loans; and the senator also sees how these rich folk who compose a “syndicate” that controls the banks might evade the curb by lending their banks’ money to one another.
“But Licaros says that the moment you go from your bank to another, the application for a loan will have to be examined by two sets of people; it becomes an arm’s-length deal; you will have to put up some collateral; and if there’s somebody on the board of directors who’s not a member of the ‘syndicate’ he could raise hell if the loan is not aboveboard. Licaros maintains that, while this may not completely eliminate the practice, it would minimize it. My contention is: unless we restructure the banking system to break the stranglehold of a small elite of the affluent, this country will definitely become a colony of its own people.”
Already, warns the senator, around 50 super-rich families have become, in effect, the oligarchy that rules our lives.
“These 50 families or so control the private banking system and they now control about 50 percent of the total money in circulation. They are interlocked among themselves through marriage; they join together to buy up foreign corporations. So, already in control of capital, they end up owning the sources of capital. And this new breed of colonizers is sometimes more rapacious than the old ones.”
A public-utility firm previously foreign-run is taken over by the super-rich Filipinos—and what’s the first thing they do? Raise the rates. The service remains just as awful, or gets worse. This, grimaces Senator Aquino, is the fulfillment of Quezon’s wish: a Philippines run like hell by Filipinos.
And it’s not only in the private sector that the 50 super families are taking over. They have also become the State; at least, they alone seem to know how to use it. For their own profit, of course. A good illustration of this is the priority they enjoy when it comes to loans of government funds. Those funds are supposed to be the people’s money. Do “the people” ever get a crack at it?
COMPOUND INJUSTICE it cannot but seem that the elite 10 percent who get 43 percent of the nation’s income should also monopolize the State funds available for capital.
The monopoly, as exemplified during the Marcos era, has been examined by Senator Aquino.
“We cannot get complete solid detailed data, but this much we know. The government has granted around ₱4.5 billion in loans during the Marcos administration. Of this, from 40 to 50 families got 2.3 billion, either by borrowing directly from, or getting their foreign loans guaranteed by, government financing institutions. In other words, some 40-50 families got almost 50 percent of the total loanable funds of the government.
“One family got a loan guarantee for ₱300 million; another, for ₱263 million; a third, for ₱178 million. Sunod-sunod na ‘yan.”
Just the names of those families betray their political connections; those actually—and eminently—in politics enjoyed even larger drafts.
“Two senators each got over ₱400 million; a congressman got ₱180 million. Now what could you possibly say about that?
“It’s true the loans may be not money given out by the government but money borrowed from abroad, on guarantees of the Philippine government—but if the borrowers fail to pay it’s the government that will have to pay.”
In snide terms: to favor 40 or 50 families, the government is willing to risk bankrupting 38 million Filipinos. And these favored families may not even have to risk a signature. A joke in banking circles is that if you belong to the elite just the sound of your name (and the proper amount of kickback, of course) will suffice to get you a government loan. Once the deal is set you can line up your housemaids, chauffeurs and gardeners and make them sign the deed; you’ll get the money just the same.
One gigantic loan being negotiated by a top favorite of the regime had Senator Aquino worried because it looked at first like a direct loan from the government—which is supposed to be lean on funds. Though even a government guarantee for such a huge loan still seems too great a risk, Senator Aquino is more or less resigned to letting the favorite get it— “as long as he himself signs for it.”
Making the State’s fiscal machinery exploitable by an elite is not peculiar to the Marcos administration. Every Philippine president, says Aquino, spawned his own set of millionaires. Quezon did it, to fund his own political machine, and the millionaires he created repaid love with love. “When the T-V-T became obnoxious to Quezon he called in his group of millionaires led by Madrigal and told them to put up a newspaper chain and they came up with the D-M-H-M.” Even the “freedom of the press” depends on the requirements of the ruling money.
Under the Republic the successive sets of millionaires have been identifiable with their respective gold mines.
“The first set was the surplus-property millionaires under Roxas. Then you had the immigration-quota millionaires under Roxas. Then you had the immigration-quota millionaires under Quirino; the import-control millionaires under Quirino and Magsaysay; the reparations millionaires under Garcia; and Macapagal’s government-financed millionaires: the Todas, the Delgados, who put up the Hilton. Under Marcos we have the money-manipulators, the quick artists who dabble in stocks and make money on such manipulations as the devaluation of the peso.”
Of each new set, a few millionaires will survive the passing of the regime, the rest will sink back to obscurity, as a Tony Quirino fades away with the passing of his brother. Those who survive “institutionalize” themselves; they can still be tagged according to their respective eras—a Dindo Gonzalez from Quirino times; a Chiongbian or Antonino or Rustia or Tantoco or Durano from Garcia days; a Toda from the Macapagal era—but where, before, they were identified with a specific administration, now they can influence any administration. They can join the “syndicate” of the super-rich who control the nation’s wealth, the money supply, the banks and the State funds; and it’s this elite, says Senator Aquino, who really control the economic and political destinies of the country.
“Why do I say political? First: these bankers who control 50 percent of the total money in circulation can gang up against any political candidate, or, for that matter, can meet together and agree among themselves to support a particular candidate. Now, big politician needs big money. Big money only comes from big businessman. Big businessman gives big money to big politician. Then big politician repays the favor. That’s the cycle of corruption.
“Second: big businessman gets to feeling it’s more economical to seek public office himself instead of funding candidates who may become unreliable or recalcitrant. This is the beginning of the businessman turned politician. So now we have millionaires and bankers and industrialists going into politics to protect their interests. Not content with economic power, they want it combined with political power. And if they can’t run themselves, they make their wives run for office. This is the development of the dynasties.”
The senator thinks this “pyramiding” of wealth and power unhealthy.
“When the wealth of a country is used by a handful to make the rest of the population virtual slaves, that is unhealthy because it’s no longer a democracy. This is what the young activists denounce as feudalism: a small group of families controlling the destinies of the bulk of the population.”
Moreover, by controlling the politicians, or by being in politics themselves, the elite families ensure that no attempt to reform them out of power can ever succeed. How impose tax laws or inheritance laws to redistribute the wealth when those whom these laws would hurt control the Palace and the Congress and the courts?
Nevertheless Senator Aquino insists that a beginning can be made.
“For example, in the matter of the government loans, I propose that any such loan over half a million be granted to a corporation only if 40 percent of its shares are offered to the public. A corporation not open thus to the public should not be granted a government loan. Why should the money of the people go to one rich family to make that family super-rich? Only public-held corporations should enjoy priority.
“Another thing I would propose: rigid anti-trust laws. In the United States you can’t have what are called ancillary businesses. For example, you are General Motors, you have to purchase tires. You can’t set up a tire company because that would give you undue advantage. Nor a battery factory, because that’s also related to your main line.
“Now the Meralco: it generates 90 percent of the total power in this country. It’s putting up a transformer company. So, that new company will have a 90 percent captive market. If you were an individual wanting to put up a transformer company of your own, how can you compete? You would be fighting only for a 10 percent free market. But Meralco, which, under the law, may not make more than 12 percent profit, can pass all its income to that ancillary transformer company.”
That’s how the rich become richer.
And that’s why they will block anti-trust laws, anti-monopoly laws, inheritance-tax laws, land reform, tax reform, and every attempt to diffuse and equalize wealth.
But the situation is not entirely hopeless. The ruling money is also a built-in bomb.
“Divine Providence,” says Senator Aquino, “has provided for certain checks to self-perpetuating royalty, as can be seen in what happened to European royalty.”
The built-in bomb is in-breeding.
“Sila-sila ang nagasawahan,” laughs the senator.
THE INCESTUOUSNESS of ruling money ensures its downfall better than any socialist law—especially in the Philippines, where energy seems to drain out of a family in two or three generations.
In two generations the Quezon, and in three generations the Legarda, family is faced with extinction. The Castelvi were authentic bluebloods but in barely a century slid from top drawer to déclassé. The Ayala-Zobel business empire rides the impetus brought in by two outsiders, McMicking and Soriano; the direct heirs have turned to art and culture. Of the two boys who inherited the Cojuangco hacienda, neither is running it; authority has passed to those who married into the family. The department-store Aguinaldos were a tycoon family before the war; the third generation has run out of steam. A similar attenuation of spirit imperils every big business family in the country, whether it be the Elizalde or the Yulo or the Roces, and the trend is to bring in outsiders: the family itself can no longer supply the talent. The Madrigals have to employ professional managers to run their businesses; so do the Lopez brothers, who own the biggest fortunes in the country but, alas, cannot count on their sons to take over and carry on.
This is our protection against “dynasties”: that they don’t last long enough to be a dynasty.
“Therefore,” says Senator Aquino, “you really cannot talk of old fortunes in the Philippines. The oldest fortune today would not be more than a hundred years old. It’s money without pedigree. All of it started, somehow, somewhere, in corruption; then the children gamble it away.
“It’s a phenomenon: how the children of the rich tend to backslide. They join the jet set, or they go into art. It’s very rare for the children of the founder to take over the business and improve it. By the third generation you get the young heirs stricken with guilt and social conscience, and the rich hippies rebelling against their own Establishment, and the alienated young who take pot because they have so much money. The rich plant the seeds of their own destruction.”
Even if there are competent heirs to take over the family business, outsiders must still be brought in and allowed to occupy positions of power.
“You are a millionaire with 20 industries and three sons. How can they run all those industries? The era of the individual swashbuckler, the one-man show, is passing; Gonzalo Puyat, Amado Araneta—they are a vanishing breed. Modern industry demands so many different special talents you can only be chairman to a board composed of those talents. And whereas, before, a family could raise a million and start an industry, today capital is in terms of tens of millions. You would have to invite 20 or 30 other families to join in—and the diffusion of wealth begins. It’s no longer a closed family corporation, a tayo-tayo outfit where father is the president, mother is the treasurer, and the children are the directors. You have to hire professional managers.
“This is the new development. An elite is developing which Adolf Berle calls ‘the powerful without money.’ Before, you could have power only with money. Now, you can have power without money, by becoming the professional manager of a giant corporation, not because you own stock in it but because of sheer talent. For example: McNamara of Ford, Lyn Townsend of Chrysler, Knudsen of General Motors. They are technical people who rose from the ranks to wield tremendous power without money. The same thing, I submit, is happening in our country: the rise to power of technical talent who do not come from landed families. A classic example is Leo Virata.”
The trend is most visible in the Marcos cabinet.
“To the credit of Marcos, no other administration has given so much opportunity to the technocrats. The President has realized that to come up with a government for the 1970s he can no longer rely on the old political talent; he has to backstop his political organization with an army of technocrats. That is why he brought in management experts like Ponce Enrile, Alex Melchor, Cesar Virata, Gerry Sicat, Placido Mapa. The age of the technocrat has come.”
What this means is that technical talent is becoming a counterforce to the ruling money. If they should put up a candidate for president against the candidate of the plutocrats, the technocrats could change Philippine society without a revolution—because, says Aquino, the presidency is armed with revolutionary power. “I have always contended that the successful Philippine revolution will be a Palace coup.” A young president elected to power by the technocrats, should he wish to destroy the Establishment that opposed him, has only to use the laws that empower him to take over all public-utility and communications companies, seize their assets and equipment, recall the franchises. With one stroke he could raze the Establishment. No president has yet dared use this power of his against the plutocrats because every president has owed his position to them.
“But the elite have now realized the implications of this terrible power concentrated in the hands of the chief executive and that’s why they’re going to make their influence felt in the Constitutional Convention, to have that power diluted. This is one of the current moves of the elite.”
The senator is strongly against such a dilution of presidential powers, even if, ultimately, he is not so despairing of the elite as he may sound.
“The advantage of the money establishment in this country is its resiliency. It is not rigid, you can move it; it is not impervious to public opinion. Look at the Church: it is changing. The Filipino elite may not even have to respond to the challenge, because they will do the challenging. They will grab the leadership again, this opportunistic elite of ours. And they are pragmatic, they are innovators. They will lead the Revolution. They realize that, if the old system is not changed, their hard-earned money will go.”
THIS OPTIMISM may be justified. Ours is, after all an Establishment that hardly deserves the name, so barely founded is it; and many of the plutocrats can remember the days when papa rode the buses and mama was the neighborhood usurer. Money itself upstart has no nose to turn up at upstarts, nor can “society” crystallize in a country where each change of regime brings on a crop of parvenu.
Despite the great distance, the view from the bottom is still of room at the top. McMicking and Soriano began as accountants for the Ayalas; and Gregorio Araneta, as the Tuasons’ attorney. With the rapid attenuation of blood, today’s plutocrat, when considering an applicant, whether for manager or son-in-law, may not be so concerned to ask what family he comes from as what business school: Harvard? Wharton? Since it’s talent that counts in such schools, their Filipino graduates today are apt to be poor boys who made it aboard on fellowship or grant. If, says Senator Aquino, we spent as much effort searching for such talent to send to good schools as we spend searching for shapely girls to send to beauty contests, we would be hastening social reform.
That the rich can be scared into conscience was proved by the number of balls canceled in the wake of the riots and by the sudden swell of the Christian Social Movement, at whose meetings, one hears, Mr. Manglapus has only to shake a warning finger to get, like another Savoranola, the greatest ladies stripping off their jewels to cast at his feet. But even apocalypse may at last come to feel like something one can live with; and the latest communiqués from the front—Bantay and Cadiz and Cotabato, Expo and Customs, ballroom and fashion salon—indicate that the powerful have recovered from shock and it’s business as usual. Optimism over their voluntary reform should therefore be tempered by the thought of the Bourbons who came and went, and came back again, having learned nothing and forgotten nothing.
If one has any doubts about who rules and owns this country, one has only to consider the curious upsurge of violence by the “forces of the law,” as if the Establishment, having got over its scare, would have us remember who holds the fire power. Polcom is supposed to have reported an increase of violence but most probably didn’t say if the increase was of violence done by the people or done to the people—and included the burning of that barrio in Bantay, the massacre of those barrio officials in Tarlac. One could then go and ask on which side the police always are during labor strikes; or the PC, when peasants are being burned out of their property or being shot down in cold blood; or the courts, when the question is the defense of Establishment property. Since ours is a plutocracy, they rule the country who own it—and the police agencies are their private security guards. That’s the best index of where power resides—and how uneasily.
In Canton, an island on the river served as castle for the ruling of money, which was foreign, in the days when such enclaves in China could keep a snigger at the gate: No dogs or Chinese allowed. There were tycoon of taste in Canton and the enclave they built was beautiful—tree-shaded lanes, a splendid mall, lordly manors spaced by lawn or garden—but they didn’t know whom they were really building for. They are long gone now and, in what was their Forbes Park, Chinese workers share the houses from which, before the Revolution, money ruled.
In Havana, there are similar relics from the days of the ruling money: elegant villages, a yacht club, a polo club, exclusive beaches. Again, the tycoon, both native and foreign, of Batista days didn’t know for whom they gilt a ceiling or marbled a floor. They couldn’t take it with them—and the people have taken over. In the stylish villages, the great houses are now clinics or colleges or rest homes for workers. The yacht club is a fishermen’s cooperative and on weekends turns into a rendezvous for proletarian boating aficionados. On the beaches once exclusive to those who had the color of money now swim every shade of sepia, every kind of black. The polo club has been turned into a boarding school for young talent and on the grounds where the jet set gamboled teenage Cubans paint, sculpt, dance, compose music, stage dramas, put on concerts—and all as wards of the State, which scouts for talent.
“For the children of this world are in their generation wiser than the children of light.”
Next time you ride past Forbes Park, remember: the ruling money never knows for whom it builds a Versailles.