Archive for August, 2012


Lucio Tan

It could be said that the merger of Lucio Tan’s Fortune Tobacco and the Philip Morris Philippine subsidiary (the Philip Morris Fortune Tobacco Corp., Inc) in 2010  is the equal of a marriage between Jollibee and McDonalds.  The result is control of the market. The Fortune-Philip Morris merger reportedly controls over 90% of the market.

While Fortune and Philip Morris consumated their marriage, a union between Jolibee and McDo was not, to my knowledge, even thought of by both parties.

The Senate is discussing several versions of the sin tax bill after the House of Representatives passed its version.

It is clear that the bill is not only about taxes; it is also about fair market competition.

British American Tobacco (BAT), the outsider protesting the Lucio Tan monopoly in the cigarette inIn other markets outside the Philippines, is supporting the sin tax bill for obvious reasons.  And that is, to find a place in a market dominated by another firm because of, among others, tax advantages.   In a sense, BAT is batting (pun intended) for a more competitive market in the Philippines.

However, BAT is not necessary a consistent champion for fair market competition.  In some markets outside the Philippines, BAT is dominant.  In Papua New Guinea, BAT is the only cigarette maker and distributor.  This drives home the truth that all firms with substantial investments will want to monopolize markets to ensure better profitability and lesser risks.  This insight is not the original contribution of a neoclassical economist.  The much-maligned Karl Marx made it first; more precisely, he observed that competition among capitalists and the workings of the modern financial system lead to market concentration and centralization.

This topic will be the subject of my next blog posts together with the items below:

Newly named Supreme Court Chief Justice Maria Lourdes Sereno beams before her oath-taking rites August 25, 2012

1. Ante the Supreme Court, Prof. Meilu Sereno, my UP Hardin ng Rosas neighbor and Christmas potlatch dinners

2. A logical analysis, based on open sources, of the political struggle over Secretary Jesse Robredo’s confirmation

3. Continuation of posts (about 4 more) on the property rights of the poor in the Philippines

4. Good politics, bad politics: Can we unite for the national interest while respecting our differences?

Dear reader, you are free to suggest topics that I should write on. Thanks and best wishes.


Jesse Robredo (photo from Philippine Daily Inquirer)

In the popular movie Troy, Achilles (played by Brad Pitt) taunted the Trojans after he vanquished Hector by bellowing: Is there no one else?

Today, many Filipinos may be asking the same question.

The remains of Interior Secretary Jesse Robredo have yet to be buried.  However, this did not seem to stop influence peddlers and lobbyists to work for their ‘manoks’ (favored persons) as possible successors.

Former President Estrada (photo from Philippine Daily Inquirer)

In today’s news, former President Joseph Estrada was quoted as saying he will respect whatever decision President Benigno Aquino III makes in choosing the next Interior Secretary.  In almost the same vein, he dropped the name of Vice President Jejomar Binay, current head of the Home Development Mutual Fund (Pag-IBIG Fund).  Binay was Estrada’s running mate in the 2010 general elections; Binay expressed very strong interest in the Department of Interior and Local Government (DILG) post before he was appointed to Pag-IBIG.

Vice President Jejomar Binay

Estrada was further quoted that Binay is already doing well as Pag-IBIG chairman and is needed by the agency.

Mr. Estrada:  if Binay is doing well and is needed in Pag-IBIG, why make these statements?  Trial balloons?

Another name being bruited about is Senator Panfilo Lacson, who will lose his job next year.

Senator Panfilo Lacson

Wala na bang iba?

Is there no one else?

Robredo’s death presents two related problems for President Aquino.

The first one is to appoint his replacement.

The second, a more difficult one, is to appoint somebody who surpasses or just approximates the integrity, intensity, and quiet industry of Robredo.

If not, the nation will not confirm his replacement.


Jesse M. Robredo

I  have a small story about Interior Secretary Jesse Robredo, whose death was officially announced yesterday after his body was brought up from the depths off Masbate island.

I have a big story about his nemesis, Luis Villafuerte Sr., currently serving his third term as representative of the 3rd district of Camarines Sur province.

Camarines Sur province

 

 

I met and interviewed Robredo in 1998 when he was mayor of Naga City.  I was then commissioned by the Associates for Rural Development (ARD), in turn commissioned by the US Agency for International Development (USAID) to do a ‘rapid field appraisal’ (RFA) of several local governments within the Philippines.  Specifically, I was tasked to find out if the local government units (LGUs) were able to avail of the Local Government Code’s provisions for innovative fund raising.

 

 

 

Robredo and his city administrator shared that while Naga City was affected by the decision of then President Joseph Estrada to withhold a percentage of internal revenue allocations (IRA) across the board, the city still did well.  They then told me of plans to build a new public market-cum-transport terminal for Naga City.

 

Luis R. Villafuerte Sr. (LRV)

Naga City public market

 

 

I met Villafuerte, fondly called LRV, earlier in 1976.  Through a friend, I got my first job at the Bancom Group, Inc., the holding company of the Bancom corporations.  Or so I thought.  I noted that something was not in order because I reported to work at the Villafuerte, Zamora, and Associates, at the Solid Mills Building in front of the Makati Medical Center instead of the Bancom Building along Pasay Road.

Our group was soon organized as the Media Systems, Inc., and its first project was to publish the “Investment Banking in the Philippines” book in time for the joint annual conference of the International Monetary Fund and the World to be held for the first time in the country.

LRV was a feisty and demanding boss with very little appetite for niceties.  Through the grapevine, we heard that the formation of Media Systems meant the final divorce between LRV and Sixto K. Roxas (SKR).  The two were considered to be key to the rise of Bancom Development Corporation (BDC), the first merchant bank of the Philippines.  SKR was considered the visionary while LRV was the operations man.  LRV will soon ridicule SKR as “strutting around as if he was God’s gift to finance” in his newspaper column.  After the publication of the investment banking book, I left Media Systems and rejoined Bancom as a member of its corporate research group.  There was not much space in the Bancom building so we had our offices in SKR’s personal library.

Ok, ok, ok.  I am writing this blog post also because the epal and papansin (calling attention to oneself) remarks of a member of the Commission on Appointments.  While the whole nation was in grief and praising Robredo, this person (who is better not named) quipped:  We have been deprived of the honor of confirming his appointment.  He then raised the possibility that Robredo’s confirmation be done posthumously.

The response of many: why wait until he dies before Robredo gets confirmed?  Why was he not confirmed in the first place?  After all, he has been in office for two years.

The short answer to these questions: LRV.  A member of the Commission on Appointments has veto power.  By himself, he can block the confirmation of a Cabinet member.

LRV is the uncle of Jesse.  According to Juan Escandor Jr. of the Philippine Daily Inquirer  Southern Luzon Bureau, LRV worked for the appointment of Jesse as chief of the Asian Development Bank-funded Bicol River Basin Development Project (BRBDP) and prepared him for Naga’s mayoral post.  In 1988, Jesse was elected the youngest ever Naga City mayor.

Escandor continues: Both parted ways in 1992 elections with Villafuerte fielding his sister Pura Luisa Villafuerte-Magtuto against Robredo.  Robredo made such a mark in Naga City politics making him the only political leader here whose handpicked local candidates all won in the elections without let-up since 1992, including the local elections in 2010, for seven consecutive elections.  The cause of the quarrel between uncle and nephew?  Robredo supported Fidel Ramos in his presidential bid against Ramon Mitra whom Villafuerte supported.

 

TO THE MEMBERS OF THE COMMISSION ON APPOINTMENTS: SPARE US YOUR ATTENTION-GRABBING ANTICS!

JESSE MANALASTAS ROBREDO DOES NOT NEED YOUR CONFIRMATION.

HE IS IN A BETTER PLACE NOW.

HE IS NOW FULLY CONFIRMED IN OUR HEARTS!

HIS PLACE IN PHILIPPINE HISTORY IS SECURE AND CONFIRMED.


August 21 is a most significant day in Philippine political history.

Exactly forty one years ago, the proclamation rally (otherwise called miting de abanse) of the opposition Liberal Party in Plaza Miranda in the center of Manila was bombed with two grenades.  Fortunately, one of the grenades was a dud and nine people including a girl and Manila Times photographer Ben Roxas died and 95 were injured.  I remember a photo of the dying Roxas published the day after staring right into the camera–dazed but seemingly not in pain.  Almost all the Liberal Party’s candidates for senator and local posts in Manila were severely wounded.

Photo-montage of Plaza Miranda bombing

President Ferdinand Marcos responded to the bombing by suspending the writ of habeas corpus through Proclamation No. 889, later amended by Proclamation No. 889-A  supposedly to align the suspension with the bill of rights provision of the Constitution.  He promptly blamed the communists for the bombing and justified the writ suspension as necessary to restore peace and order.

While Marcos was the usual suspect for the Plaza Miranda bombing, several personalities including former Senator Jovito Salonga (who was seriously injured during the rally) began to believe that the communists were responsible.  Victor Corpus, the army lieutenant who carted arms from the Philippine Military Academy (PMA) and joined the communist-led New People’s Army (NPA) in 1970, wrote in his book Silent War he was present when top communist leaders including Jose Ma. Sison, plotted the bombing.  Sison argued the bombing will be a win-win for the communists: Marcos will be put on the defensive, the ruling class will be split, and the revolutionary cause could thus advance.   Corpus will repeat this same allegation in an interview with veteran Filipino journalist Max Soliven. Sison and his followers have repeatedly denied these allegations.

Aquino in white being carried by soldiers on the airport tarmac; the other body is that of alleged gunman Rolando Galman (from Times Journal)

Ninoy Aquino in his prime

Exactly twenty nine years ago–Benigno Aquino Jr–the man believed by many to most likely have been the President of the Philippines if Marcos did not declare martial law in September 1972 was assassinated in the Manila International Airport minutes after his plane landed.  The alleged gunman, Rolando Galman, was killed by government troops supposedly after he killed Ninoy Aquino.  Marcos again blamed the communists for Aquino’s murder and alleged that Galman was acting under their orders.

In both occasions, Marcos’ accusations against the communists were not believed.  Most thought that he ordered both the bombing of the Liberal Party proclamation rally and the assassination of Ninoy Aquino.  The logic behind the belief?  The physical elimination of the Liberal Party leadership would redound to his ruling party’s benefit.  The writ’s suspension was seen as a cover-up for the Plaza Miranda bombing.  The death of Ninoy removes the strongest opposition figure that could threaten Marcos’ lifetime rule.

Marcos and Ninoy, fraternity brothers, in happier times (from MLQ3)

The ebullient Ninoy chatting with fellow passengers in that fateful China Airlines flight

Everybody from the US Central Intelligence Agency (CIA) to the communists were being blamed for Ninoy’s death.  His death likewise spawned a fever of jokes.  One of the most popular run like this:

Ninoy: Hindi ka nag-iisa (Ninoy, you’re not alone!)

Marcos: Naka-isa ka! (Marcos, you put one over all of us!)

Galman:  Naisahan ka! (Galman, you’ve been had!)

Still another:  Use Galman briefs! It will bring out the killer in you.

Ninoy’s body loaded into a military van

Ninoy led by soldier out of plane (from Facebook account of Boom Enriquez)

Kidding aside, Ninoy’s assassination was the game-changer in the political struggle against the Marcos dictatorship.  Prior to August 21, 1983, the opposition to the regime was born  by armed rebels–communists and Muslim secessionists.  The legal opposition got scattered when Marcos closed the legislature, arrested and imprisoned many, and sent scores to exile.  Some of them dabbled in violence through the Light-a-Fire and April 6 Liberation movements.

However, Ninoy’s death emboldened hitherto inert social forces such as the middle class, businessmen, professionals, clergy and like  to express their strong opposition to the authoritarian regime.   On a sustained basis.  Until February 1986 when Marcos and his immediate coterie left for Hawaii.

The armed opposition did not figure well in this end game against Marcos.  They lost what business theorists and military strategists call the ‘first mover advantage’.  The Moro National Liberation Front (MNLF) absorbed the brunt of Marcos’ military offensives as it fought conventional warfare in the early going.  In 1977, it signed a peace agreement with Marcos only to be outwitted by the latter in the agreement’s (non)implementation.  The MNLF resumed its military struggle but was soon weakened by a split that produced the Moro Islamic Liberation Front (MILF).  The communists were sidelined when they decided to boycott the ‘snap elections’ that pitted Marcos against Ninoy’s widow, Cory Cojuangco Aquino.  EDSA 1986 was a sea of yellow–the color associated with Cory and the moderate political forces.  A lot of communists and radicals were also there; however, they could not unfurl their red banners.

Of course, the picture was not a black-and-white one.  The radicals joined the newly enervated political forces from the middle class in regular protests against Marcos.  The rallying cry was: Justice for (Ninoy) Aquino, Justice for All!  They parted ways in the 1984 parliamentary elections: Cory and her allies decided to participate and won a significant number of seats while the radicals predictably boycotted.

By 1985, the trajectory was quite clear.  The strength of the moderates had grown so much.  As a result, they spurned a coalition, BAYAN, with the radicals.  They formed their own group, BANDILA.

EDSA 1986 actually started with a failed military coup led by the Reform the Armed Forces Movement (RAM) led by Defense Minister Juan Ponce Enrile and his protege, Colonel Gregorio Honasan.  It soon morphed into a peaceful uprising as Jaime Cardinal Sin called on the faithful to gather en masse to protect the rebel soldiers from the loyalists.  The failure of the military coup contemplated for early 1986 and the communist boycott of the snap elections allowed non-violent forces to claim victory against Marcos in February 1986. The key figure here was the martyred Aquino – likened to the national hero, José Rizal (1861-96), or even to Jesus Christ. Neither the dictatorship nor the insurgents and the military rebels had any equivalent.

Unmadeup Ninoy in his coffin

Ninoy’s bloodied and bruised remains in an open coffin were visited by hundreds of thousands at the Santo Domingo Church.  When he was finally laid to rest in Paranaque City, the funeral march took some 11 hours to reach its final destination.  The historic event was practically ignored by the regime-controlled mass media.  I remember that the Philippine Daily Express (derisively called the Daily Suppress) chose to report the death by lightning of a person who was watching the funeral procession.

Elsewhere in Luzon, the other victim–Rolando Galman–was mourned and buried without much ado by his relatives and friends.

C’est la vie?

C’est la guerre?

Secretary Jesse Robredo

Meanwhile, this morning today, the death of Interior Secretary and Ramon Magsaysay Awardee for Good Governance Jesse Robredo was announced after his body was recovered in the waters off Masbate island.  The reader is enjoined to a say a prayer for this quiet and good man and public servant.

The big question