By: Tony Lopez from The Standard
Who or what is an oligarch?
The ordinary concept of oligarchy is that it is a rule by the few, from the word “oligos,” meaning “few.” Oligarchs follow the Golden Rule, which is, he who has the gold rules. Gold means wealth, of course. Wealth creates power which in turn generates more wealth.
In this country, there are four ways of creating wealth—inheritance, entrepreneurship, corruption and crime, and excellence in professional management.
The Ayala, Madrigal, and Tuason families are classic examples of wealth by inheritance, the first category. Their ancestors got access to huge tracts of land and now all the heirs have to do is employ professional managers to manage the wealth while they sit on their asses or pretend to conduct corporate social responsibility projects (to assuage perhaps their conscience why they were born to so much privilege).
Henry Sy, John Gokongwei Jr., Manny Villar, Andrew Tan, Tony Tan Caktiong, and Edgar Sia are primal examples of wealth by entrepreneurship.
Corrupt political families (easily 90 percent of our politicians) and drug lords and smugglers are prototypes of wealth by corruption and crime.
Ramon S. Ang, Manuel V. Pangilinan, and Roberto “Bobby” Ongpin are fine examples of wealth by professional management excellence. To me, the hardest wealth to accumulate is that through professional management (because you have to lick the assess of the first three categories before you are recognized on your own), followed by wealth by entrepreneurship.
The problem with wealthy people is that they gravitate towards political power. They sponsor it or buy it outright during elections. So the wealthy start ruling two ways—through their stranglehold of the economy, and through their stranglehold of politics. In so doing, they end up owning the people and owning the country.
Only 100 families have ruled this country in the last 100 years. That is why we cannot say the Philippines is a true democracy. It is a rule by the elite, the 0.02 percent of the population. It is a rule by a few oligarchies. In cruder times, a guy like Pol Pot would know how to deal with them.
Or ask Rodrigo Duterte, today the most popular president ever, and whose solution to every major problem is the bullet—by biting it or by releasing it with lethal effects.
The question of oligarchy has suddenly become relevant after President Duterte speaking Wednesday night before free election advocates in Malacañang, the presidential palace, disclosed his real motive behind constitutional change—it is to destroy oligarchs, especially those embedded in the government. He then cited a particular example of such an oligarch, Roberto “Bobby” V. Ongpin, the chair of the Alphaland real estate, high-end resorts, and wellness center conglomerate.
Bobby Ongpin should be the last to be cited by Duterte, usually an extraordinarily perceptive person and politician, as the epitome of an oligarch, much less an oligarch embedded in government.
Ongpin is not an oligarch embedded in government. There are a few others who come first and foremost—the primus inter pares of the oligarchy. Let me mention a few.
There is Environment and Natural Resources Secretary Gina Lopez of the powerful Lopez clan which owns huge media, energy, infrastructure, and property assets. A basic natural resource is coal. Being the cheapest source, coal accounts for half of energy generation in the Philippines. The Lopez family is into energy, renewable energy whose price double that of coal-sourced energy. If you ban coal, you make RE attractive. If RE is viable, only because of massive government subsidy which subsidy at times is higher than the price of coal-sourced energy. It is like selling hamburger for only P50, even if your cost is P100, simply because half of the cost is shouldered by government subsidy.
The Lopez family’s ABS-CBN, feared by all politicians, including Duterte, claims to be No. 1 nationwide (with a claimed 41 percent share) and has a market cap of P41.68 billion ($886.8 million). Her uncle, Manolo Lopez has been chair and CEO of the family holding company, Lopez Holdings Corp. (market cap: P35.27 billion), even while serving as ambassador to Japan under the BS Aquino administration. Now, that is what I call an oligarchy embedded in government.
There is Mark Villar, the congressman-son of tycoon-politician Manuel B. Villar Jr., who once served as speaker of the House and president of the Senate, the first to hold both positions since 1946. Manny is worth $846 billion based on his ownership in Vista Land which has a market value of P76.78 billion. He has another $139 million based on his ownership of his memorial park company Golden Haven which has a market cap of P7.7 billion. Mark Villar is the Public Works and Highways secretary of Duterte. His wife is a congressman who inherited the post. Villar epitomizes dynasticism and oligarchy at its best—and worst. Mark claims there is no conflict of interest in his DPWH position since his job is roads and highways while the family business is subdivisions. Have you ever heard of a subdivision not traversed by roads and highways? Villar is what I call an oligarchy embedded in government.
The most classic of the oligarchs is the Ayala family. Their Ayala Corp. has a market cap of P545.7 billion of which 49.01 percent is owned by the family, inherited from their aunt, Mercedes McMicking.
No Ayala is in government. But their subalterns are embedded in sensitive sectors of government having to do with the Ayala businesses. A former Globe Telecom senior vice president, lawyer Rudy Salalima, is the secretary of the new Department of Information and Communication (DIC, for short), which is in charge of telcos. Globe had assets of P195 billion, revenues of P122.67 billion, and profits of P16.48 billion (P1.37 billion a month profits) in 2015. Four of every P10 of Globe profits go to Ayala Corp.
Another ex-Ayala exec, Noel Kintanar, is the railways chief of the Department of Transportation and Communications. Ayala is going big into railways having bagged the extension of the LRT to Cavite and gotten P8 billion in advance from the BS Aquino government. In effect, Ayala is jump-starting LRT expansion using taxpayers’ money.
Finally, we have the affable Secretary of Finance, Sonny Dominguez. He used to run Ayala’s smallish BPI Agricultural Bank. Of course, he now is wealthy on his own, having become rich by professional management.
If you believe Ongpin is an oligarch embedded in government, what do you call Gina Lopez, Mark Villar, the Ayala boys, and Sonny Dominguez? Crusaders for democracy. Don’t laugh.