Posts Tagged ‘Philippine politics’




Amado M. Mendoza, Jr.

Department of Political Science

University of the Philippines (Diliman)



PRRD gesturing with hands




Democracy is the most difficult socio-political regime. It requires a critical mass of economically-independent citizens imbued with adequate intelligence and a healthy civic spirit to get engaged in public matters. Democracy demands a lot both from the governors and the governed. Authoritarianism does not. Democracy offers the possibility of a progressive empowerment of citizens. However, the process is not automatic or natural. The true sovereigns, the people, citizens and all in the body politic, must empower itself even as it is mindful of its public duties and responsibilities. After all, the default behavior of all if not most political leaders in any political regime is to fear and prevent the growth of an empowered citizenry.





The health and quality of a democracy depends on its capacity to unify a people divided regularly by elections. That used to be the strength of the US. No longer true since the election of Obama. Now, Donald J. Trump is president only of his political base like Rodrigo R. Duterte in the Philippines.

Unification after elections is achieved if the ruling government, together with its partisans, respects, defends, and promotes the legitimate interests of electoral minorities and political opposition. The primary obligation of all is to pay taxes and uphold the law.  Both chief executives revel at savaging political opponents and tilting against enemies and social ills (real and imagined), to catcalls, cheers and the great delight of their partisans.  Trump seems to be at war with his own Republican party. 



Kim Trump summit photo

US President Donald Trump enjoying a media moment with North Korean leader Kim Jung-un in Sigapore

Duterte did Trump one better recently and has upped the ante by repeatedly attacking the Catholic Church, its clergy, and even Jesus Christ and His teachings.  Earlier, he declared that the Philippine Constitution is just a piece of paper and that he is not bound by it.  In fact, he argued that the basic law of the land was being used by his political enemies to frustrate his ‘Change is Coming’ programme—a mishmash of promises and motherhood statements.  Instead of being appalled by an apparent volte-face from his oath of office, Duterte is cheered on by his followers who seems amenable to the establishment of a nebulous ‘RevGov’ or revolutionary government.   Instead of being impeached for culpable violation of the Constitution, a pliant legislature initiated impeachment proceedings against one of his most prominent critics instead.  Instead of arresting him, the Philippine National Police (PNP) recently declared that his will is the law.


On the whole, both presidents are the latest exemplars of uncivil demagoguery and uncouth thuggery, though Trump seem to be copying from Duterte’s playbook.  Notwithstanding their departures from usual norms of civility and public conduct, both conduct themselves with great confidence buoyed by the support of subservient political lieutenants, legislators, judges, bureaucrats, and their defined political bases.



A number of my colleagues at the University of the Philippines Department of Political Science and College of Social Science and Philosophy had strongly suggested that it would be better for all if we stopped calling the socio-political system in the Philippines a democracy but label it instead as an electoral oligarchy–a political system ruled by a faction of the political-economic elites by voters in regular elections both at the local and national levels.


They make a very strong case. While indeed elections had been and being are mounted regularly (at least, after 1986 to present day; and between 1946 and 1972), the first test of being fair and fraud-free has not been met repeatedly. For this reason, losing candidates almost always claim that they had been cheated rather than bested in a fair electoral contest.  In many parts of the country, dependent voters either sell their votes or are cowed to vote according to the preferences of local strong men.  Anecdotal evidence suggest that in Muslim Mindanao, ballots are pre-accomplished and pre-counted inside municipal halls and police/military camps while voters innocently cast their votes in full-view and duly recorded by national mass media.  Entry into the candidates’ pool is restricted by laws banning supposedly nuisance candidates—laws which effectively bar less prosperous and less-connected citizens from running for public office.


Philippine congress

Philippine Congress hears President Aquino’s SONA

Secondly, virtually the same political families and clans have dominated Philippine politics since elections had been instituted by the American colonial authorities at the beginning of the 20th century as an anti-insurgency and anti-revolutionary strategy–that is to divide the Filipinos who wanted to complete the Philippine Revolution and establish an independent Philippine nation-state.  When outsiders from the under-classes managed to win electoral posts, the ruling oligarchy decided to kick them out of office by branding them as subversives.  If there were new entrants into the ruling circles at both the local and national levels, they are immediately socialized into the dominant political culture, the elements of which include these truisms: the public treasury is a private trough for politicians and other public servants!  And that one must be smart and fast enough to figure out how to get the most of it while in power.  It is never too early to prepare for re-election so good times will never end!  Political support is gained through the grant of special and divisible favors and goodies to supporters, backers, and financiers.  After all, we are above the law.  We are in fact the law.  We execute what we declare is law; we legislate; we interpret what is lawful; and we enforce the law!

Lastly, the country’s political system is hobbled by a flawed system design.  Marrying a multi-party system (which the political science literature finds to be best paired with a parliamentary system) with a presidential system, all chief executives since President Corazon C. Aquino (1986-1992) are minority presidents.  Notwithstanding the wisdom of having second round run-off elections, the country’s political leaders argued against the exercise deeming it to be too expensive and divisive (!).  Furthermore, the single presidential term limit had the unintended consequence of weakening already feeble political parties.  The outgoing president, nominally the leader of a ruling party, is reduced to being a lame-duck and cannot impose discipline.  In many instances, ambitious politicians who were unable to win their political parties’ nod found it easy to bolt and form new parties behind their candidacies.  In this respect, political parties remain candidate- centered rather than programmatic and served mainly as vehicles for the political ambitions of clan-supported politicians who, once in office, will rewards family, friends, supporters and financiers with political posts, juicy government contracts, and/or policy favors and preferential treatment.


To be continued…


Political contenders in martial law Philippines


The corpse of Benigno Aquino Jr being loaded into a military wagon after his assassination at the Manila International Airport on 21 August 1983


As we did in the earlier parts of this blog series, we now specify the political contenders in martial law Philippines (1972-1986) and the political games they play.  We pay special attention to the political contests during the 1980s that ultimately led to the ouster of the dictator Ferdinand Marcos in February 1986 through the unprecedented EDSA People Power Revolution.

Ferdinand Marcos and his cousin, AFP COS General Fabian Ver during the EDSA People Power Revolution

Similar to the Soviet political scene during the Mikhail Gorbachev leadership, there are three key players in martial law Philippines.  The regime is personified by the dictator, President Ferdinand Marcos, and is generally considered to be strongest political actor at the time.  Arrayed against the Marcos dictatorship were the radical armed insurgents led by the Communist Party of the Philippines (personified by CPP founding chairman Jose Ma. Sison) and the moderate opposition led by the widow Corazon C. Aquino (affectionately called Tita Cory).  Tita Cory was the widow of former Senator Benigno Aquino Jr. (affectionately called Ninoy),  one of the leaders of the moderate opposition, who was murdered immediately after he deplaned from a flight at the Manila International Airport on 21 August 1983. 


Cory Aquino

Corazon Cojuangco Aquino


The outrage generated by the blatant assassination of Ninoy while under the custody of Marcos’s troops in fact was the impetus that revived the political strength of the moderate opposition.  Prior to Ninoy’s murder, the political situation got so polarized between the Marcos dictatorship and the armed communists.  It was generally believed that if the dictatorship fell, it will be through a military victory of the communist forces.  In fact, many observed that the dictatorship itself was the main recruiter, by way of its abuses, for communist guerillas.  Prior to August 1983, therefore, the moderate opposition was a minor political actor and had to be content with a junior partnership with the more muscular left through the latter’s legal mass organizations and alliances. 


npa fighters in isabela

NPA guerillas in Isabela, Northern Luzon


To be sure, there are other political players in the Philippines during that period like the Catholic Church, business groups, professional associations, trade union federations, and the like.  We should never forget to include the US government, represented by its Ambassador and his embassy staff, as a key player.  However, each of these forces will inevitably align themselves with each of the three key political contenders in the August 1983-February 1986 end-games. 


What were the political objectives of the major political contenders?  The obvious political objective of the Marcos dictatorship (and the dictator himself) was to stay in power and stave off the challenges from the two other players.  Ferdinand Marcos was believed to be ill since 1982 and had prepared for a successor regime in case of his demise or incapacitation.  The armed communists meanwhile hoped to seize state power through armed revolution aka protracted people’s war (PPW).  They in fact believed that they are making progress and had reached, by the early 1980s (prior to Ninoy’s assassination) a new stage in their armed struggle: that of an advanced sub-stage in the strategic defensive poised to a strategic stalemate with the dictatorship’s military forces.[1]  Prior to Ninoy’s murder, the moderate opposition simply wanted to survive given that much of their ranks were reduced through cooptation, murder, exile, imprisonment and cowardice.  However, given the tremendous political stimulus generated by Ninoy assassination, it began to entertain thoughts that it could replace the regime in power through non-armed means.


In the few months after Ninoy’s assassination, the moderate opposition was content to continue playing junior partner to the revolutionary Left in a now more energized anti-dictatorship movement.  They joined the communists and their allies in the broad alliance called Justice for Aquino, Justice for All (JAJA).  Nonetheless, they began organizing their own forces through such vehicles as the August Twenty One Movement (ATOM), spearheaded by Ninoy’s brother, Agapito ‘Butch’ Aquino.  Both political forces were able to mount regular protest actions against the dictatorship for the remainder of 1983.


The dictatorship found itself on the defensive after the Aquino assassination and sought to douse the opposition.  It first set up a fact-finding commission headed by the sitting Supreme Court Chief Justice Enrique Fernando.  However, the members of this commission resigned after legal challenges to its composition.  On October 14, 1983, President Marcos issued Presidential Decree No. 1886, creating an independent board of inquiry, called the “Agrava Commission” or “Agrava Board”. The board was composed of former Court of Appeals Justice Corazon J. Agrava as chairwoman, with lawyer Luciano E. Salazar, businessman Dante G. Santos, labor leader Ernesto F. Herrera, and educator Amado C. Dizon as members.


The Agrava Fact-Finding Board convened on November 3, 1983.  Before it could start its work President Marcos accused the communists of the killing of Senator Aquino: The decision to eliminate the former Senator, Marcos claimed, was made by none other than the general-secretary of the Communist Party of the Philippines, Rodolfo Salas. He was referring to an earlier claim that Aquino had befriended and subsequently betrayed his communist comrades.


The Agrava Board conducted public hearings and requested testimony from several persons who might shed light on the crimes, including the First Lady, Imelda Marcos, and General Fabian Ver, AFP chief of staff.  After a year of investigation – with 20,000 pages of testimony given by 193 witnesses, the Agrava Board submitted two reports to President Marcos – the Majority and Minority Reports. The Minority Report, submitted by Chairman Agrava alone, was submitted on October 23, 1984. It confirmed that the Aquino assassination was a military conspiracy, but it cleared General Ver. Many believed that President Marcos intimidated and pressured the members of the Board to persuade them not to indict Ver, his first cousin and most trusted general. Excluding Chairman Agrava, the majority of the board submitted a separate report – the Majority Report – indicting several members of the AFP including Ver, General Luther Custodio, and General Prospero Olivas, head of Aviation Security Commands (AVSECOM).


Marcos lost so much credibility even prior to the assassination and the Agrava Commission’ reports did not help in any way.  In 1985, 25 military personnel, including several generals and colonels, and one civilian were charged for the murders of Benigno Aquino Jr. and Rolando Galman (the alleged assassin who was immediately killed by soldiers also on the international airport tarmac. President Marcos relieved Ver as AFP Chief and appointed his second cousin, General Fidel V. Ramos as acting AFP Chief. The accused were tried by the Sandiganbayan (a special court). After a brief trial, the Sandiganbayan acquitted all the accused on December 2, 1985.  Immediately after the decision, Marcos re-instated Ver. The Sandiganbayan ruling and the reinstatement of Ver were widely denounced as a mockery of justice.

The assassination of Ninoy helped caused the Philippine economy to deteriorate even further, and the government plunged further into debt. By the end of 1983, the Philippines was in an economic recession, with the economy contracting by 6.8 percent.  The downturn continued in 1984-85 precipitating the worst economic crisis for the Philippines since the Second World War.  His assassination shocked and outraged many Filipinos, most of whom had lost confidence in the Marcos administration. The event led to more suspicions about the government, triggering non-cooperation among Filipinos that eventually led to outright civil disobedience that eventually climaxed in the 1986 people power revolution,  It also shook the Marcos government, which was by then deteriorating due, in part, to Marcos’ worsening health.  

By the end of 1985, the Marcos dictatorship had to contend with a worsening twin political-economic crisis.  Marcos took an unprovoked gamble and announced a snap elections scheduled for 7 February 1986 during a televised interview with an American host.  The stage was set for an electoral battle between himself and Tita Cory.  With their decision to boycott the 1986 snap elections, the communists eliminated themselves from the Philippine political center-stage.  


The moderate opposition made further gains during the May 1984 elections to the Batasang Pambansa, the unicameral legislative body formed after the cosmetic lifting of martial law in 1981.  Through this electoral process, they were able to rebuild their national organizations in time for the great contest in the 1986 snap elections.


It was indeed wise for the moderate opposition to unite behind a single presidential candidate, Tita Cory, against President Marcos.  The veteran, Salvador Laurel, agreed to be Cory’s running mate as the moderate opposition’s candidate for vice president.  The communists boycotted the 1984 elections and decided to boycott the 1986 snap elections anew.  However, many CPP members especially those deployed in the Greater Manila area and other urban centers of the country felt that boycotting the snap elections was a mistake and that the communists will be seen as being aligned with Marcos.  A boycott they opined will only help Marcos stay in power.  This disagreement, among others, will trigger the splits within the CPP in the early 1990s.


By boycotting the 1986 snap elections, the communists and their allies eliminated themselves as a key political player.  The key political exercise was the 1986 snap presidential elections and the communist-led NPA had no potency whatsoever in affecting the outcome of said election.  For a quarter (December 1985-February 1986) therefore, the three-player contest morphed into a polarized two-player game.  It was an electoral game, a political process that the communists boycotted.  I will argue that even if the communists did not boycott the elections and supported Cory, it would not have been able to play a significant role in the Cory government formed after the ouster of Marcos.  The other political actors that aligned eventually behind Cory—the Catholic Church, big business, the US Embassy, and the military rebels–were staunchly anti-communist and will not countenance any CPP participation in her government.


A polarized two-person game produces clearer results in that a winner eventually emerges.  This is especially true if the game is an electoral game.  Nonetheless, the change wrought in February 1986 did not represent a regular transition from an outgoing government to an incoming government that newly obtained an electoral mandate.  Though fraud and massive vote buying, Marcos sought victory at all costs even in the full view of an army of international journalists and foreign government observers.  The subservient parliament proceeded to declare him the winner of the February 1986 snap elections.  The electoral fraud was so blatant that Tita Cory and her lieutenants in the moderate opposition was able to whip up a substantial civil disobedience campaign after she announced her own victory in the Luneta Park.  The dictatorial regime’s weakness will be further revealed by the military mutiny led by Defense Minister Juan Ponce Enrile and his own cousin, General Fidel Ramos.[2]


When the few military mutineers were slowly being cocooned by hundreds of thousands of peaceful anti-Marcos civilians (jointly mobilized by the Catholic Church through the controversial Cardinal Sin, other Christian churches and religious groups, moderate opposition political parties, civic clubs , professional associations as well as by dissenting CPP cadres),  the character of the political contest changed overnight.  Over a few days, the balance of forces tilted against Marcos until finally he was persuaded by Republican Senator Richard Lugar, a key representative of President Ronald Reagan to give up.  Marcos finally left the Palace in the evening of February 25, 1986 aboard USAF helicopters to Clark Air Base in Central Luzon.  From thence, he and his entourage (and ill-gotten material assets) were flown to Hickam Air Base, Hawaii.  In this unprecedented manner, the Marcos dictatorship passed into the pages of history. [(For a fuller account, please read Mendoza (2009/2011),  This book chapter can be downloaded from].





[1] Influenced by Mao Ze-dong’s military writings, the CPP argued that their protracted people’s war [prosecuted mainly through its New People’s Army (NPA)], had reached a new stage—the advanced sub-stage of the strategic defensive stage—because of its capacity to deploy regular mobile forces of up to battalion-size (300-500 fighters equipped with assault rifles) in so-called tactical offensives (TOs) together with guerilla fighters in many parts of the Philippines, especially in Mindanao.  The communists also noted a newly-developed capability to launch crippling people’s strikes (welgang bayan) as additional evidence for reaching that new stage.  In Mao’s military theory, a protracted people’s war has three major stages: strategic defensive, strategic stalemate, and strategic offensive.  The CPP believed that a few years in advanced sub-stage will enable them to achieve strategic parity with the dictatorship’s military forces.

[2] Ponce Enrile reportedly broke from Marcos since he was competing with the Imelda Marcos-Fabian Ver faction.  When he supposedly learned of the Marcosian decree designating Imelda as chair of the successor ruling committee, Ponce Enrile started forming a military faction of his own headed by his protégé, Colonel Gregorio ‘Gringo’ Honasan.  This faction was officially camouflaged under the name Reform the Armed Forces Movement (RAM).  The military mutiny was sparked by the discovery by Marcos of a RAM plot to attack the Presidential Palace.  Fearing arrest and even death, Ponce Enrile, Fidel Ramos, Honasan, and a few hundred RAM military rebels holed themselves in a a military camp and announced withdrawing their loyalty from Marcos and eventual support for President Cory. 




Mendoza, Amado Jr. (2009/2011). “’People Power’ in the Philippines, 1983-86”. In Civil resistance & power politics: The experience of non-violent action from Gandhi to the present, pp. 179-196. Eds. Adam Roberts and Timothy Garton Ash. Oxford University Press.

written with Professor Joseph Capuno of the UP School of Economics




Bonifacio and Katipunan



It is the common belief among Filipinos that we are freedom-loving and that we prefer democracy over all other political arrangements.  This belief supposedly stems from a long history of rebelliousness against centuries of Spanish, American and Japanese colonialism.  In recent years, the preference for democracy and freedom was supposedly affirmed by the struggle against the dictatorship of Ferdinand Marcos from 1972 to 1986 and was consolidated in the national psyche by the EDSA I people power phenomenon.  This narrative has been the staple of Filipino pop culture–movies, television serials, radio drama, literature and the like.


Bud Bajo massacre

American soldiers posing with killed Moro insurgents in the Bud Bajo massacre (Source:


Filipino anti-Japanese guerillas in Mindanao

Filipino anti-Japanese guerillas in Mindanao.  See

However, scholarly opinion differs from this popular perception.  Apparently, Filipinos depend on their betters, bow to power, and prefer to be led by a strong and forceful leader, one even willing to brush aside the legal niceties to get things done, and quickly.  

There is a strong literature on a ‘big men’ tradition in Southeast Asia and elsewhere (Abinales 2000, Alagappa 1995, Bayart 1993, Bratorry and van de Walle, Brown 1990, Clapham 1982, Ellen 2011, Ileto 2007, Hagesteijn and van de Velde 1996, Kathirithamby-Wells 1986, Kulke 1986, Sahlins 1963, Soenarno 1960, and Wolters 1999).  Native terms—orang besar (big men) and orang kaya (rich men) were developed.  The American Southeast Asianoligist, Wolters (1999) offered the term ‘men of prowess’.  The pioneering Filipino political scientist Remigio Agpalo (1973) asserted that Filipinos respect and fear authority and subscribe to a leader who called the shots.  Agpalo indigenized the Platonic ‘medicinal lie’ and formulated his so-called organic-hierarchical paradigm. In Plato’s writings on the role of different men in society, he likened merchants and farmers to the stomach of a person and the soldiers to the arms.  For Plato, the rulers of a society correspond to the head or brains.  Later, Agpalo will call his paradigm the Pangulo regime (with ulo referring to the head).  Even if Agpalo was obviously responding to the strength and charisma of the then newly-installed dictator Marcos, he may not be blamed since some 30 million Filipinos (given a few exceptions such as the Communists and Bangsa Moro insurgents) docilely accepted the Marcosian New Society under the joint leadership and reign of Malakas II (Ferdinand) and Maganda II (Imelda).


Remigio Agpalo

Prof. Remigio Agpalo


The play “Fake” by Floy Quintos (directed by Tony Mabesa) reminded one of William Henry Scott’s demolition of the efforts of the antiquarian Juan Marco of Pontevedra, Negros–not far from Bacolod City, not far from the fabled convent of Frayle Pavon–whose manuscripts that referred to the now-discredited Code of Kalantiaw, were earlier considered evidence of ancient pre-colonial civilizations complete with strong leaders and penal codes.


Fake by Floy Quintos




Earlier, Lande (1964) recast the ‘big men’ as the patrons in a super-ordinate relationship with subordinate clients.

Carl Lande

Professor Carl Herman Lande

The classic patron-client relationship is that between the landlord and his landless tenant.  Related to the ‘big men’ literature is an equally rich one on the role of prominent families and clans in Philippine politics best exemplified by McCoy (1999) and Simbulan (2005).  Sidel (1999) meanwhile, highlighted the ubiquity of threats, armed violence, and fraud in the rise and demise of local strong men in Philippine politics.

Immediately after the EDSA 1986 People Power Revolution, an American journalist,  James Fallows, (writing in The Atlantic Monthly) referred to the Filipinos’ damaged culture, a play on the lethal mix of almost-400 years in a “Spanish convent” and 40 years in an “American whorehouse or bordello”  (For this, please click…/11/a-damaged-culture/505178/ ).  He noted the divergence from formal institutions and de facto  behavior.  Fallows argued that Filipinos from all walks of life are not nationalistic and do not have national pride, unlike its Asian neighbors.  he went on to say that this cultural flaw is the main reason why Philippine society will remain in a muddle and economic growth will continue to be middling.

De Dios (2008) revisits the question in his inquiry into the institutional constraints to Philippine economic growth. Among other factors, he also draws attention to the same phenomenon, this time called cognitive dissonance, the divergence between formal institutions and actual practice and that this divergence from rules creates ‘pathologies’ such as corruption, boom-and-bust economic cycles, and political instability, among others.  De Dios goes further and explains why the divergence exists: coexistence of foreign and indigenous institutions and corresponding world-views, which look at the same practice differently. For instance, Westerners may call it corruption while Filipinos and other Asians would simply consider it gift-giving or grease (padulas) to facilitate transactions especially between strangers. Westerners insist on impersonal, arms-length relationships while Filipinos are socialized to valorize the family.  Former UPSE Dean Prof. Raul Fabella weighed in and talked about the contagion effect: when leaders do not walk their talk, those below them will follow suit and dissonance becomes society-wide; except in Subic and other few places where rules are implemented.

Where lies the truth?  With the experts and academics?  Or with popular perceptions?  This question is interesting and gains traction given the rise of another ‘strong man’ in the person of Rodrigo Roa Duterte as the country’s president (Curato 2017 and Heydarian 2018).  Duterte apparently models himself after Ferdinand Marcos, not hiding his admiration for the deceased dictator by having his remains buried in the Libingan ng mga Bayani almost immediately after he was sworn into office in July 2016.


PRRD gesturing with hands

President Rodrigo Duterte (VOA photo)


Or perhaps, it is erroneous to generalize on the political values and attitudes of Filipinos.  After all, we are such a diverse lotIt would be interesting to find out if variables which differentiate Filipinos from each other (such as ethnic origin, educational attainment, employment and income status, religious affiliation, etc.) would be associated with differences in views regarding democracy (and related phenomena such as leadership and the role of the military in our political system) and social capital and trust; or whether Filipinos hold common values regardless of the aforementioned differences. 

It may be an opportune time to examine the relevant survey data.


FM in his 1986 inauguration

A defiant President Ferdinand Marcos in the morning of February 25, 1986, hours before he was spirited away from the Presidential Palace by USAF helicopters


To be continued…



Abinales, Patricio. 2000. “From orang besar to colonial big man: Datu Piang of Cotabato and the American colonial state. In Lives at the margin: Biography of Filipinos obscure, ordinary and heroic. Ed. Alfred McCoy. Quezon City: Ateneo de Manila University Press.

Agpalo, Remigio. 1973. The organic-hierarchical paradigm and politics in the Philippines. Quezon City: University of the Philippines Press.

Alagappa, Muhtiah. 1995. Political legitimacy in Southeast Asia: The quest for moral authority. Palo Alto: Stanford University Press.

Bayart, Jean-Francois. 1993. The state in Africa: The politics of the belly. London: Longman.

Bratorry, M. and N. Van de Walle. 1994. “Neopatrimonial regimes and political transition in Africa.” World Politics 46(4): 453-489.

Brown, Paula. 1990. “Big Man, Past and Present: Model, Person, Hero, Legend.” Ethnology 29(2): 97-115.

Clapham, Christopher. 1982. Patronage and Political Power. New York: St. Martin’s Press.

Curato, Nicole, ed. 2017. A Duterte Reader: Critical Essays on the Early Rodrigo Duterte Presidency. Quezon City: Ateneo de Manila University Press.

De Dios, Noel. 2008. Institutional Constraints on Philippine Growth. UP School of Economics Discussion Paper No. 0806.

Ellen, Roy. Ed. 2011. Modern Crisis and Traditional Strategies: Local Ecological Knowledge in Island Southeast Asia. Oxford and New York: Berghahn Books.

Hagesteijn, Renee and Piet van de Velde. 1996. Private politics: A multi-disciplinary approach to “Big-Man” systems. Leyden: Brill.

Heydarian, Richard. 2018. The Rise of Duterte: A Populist Revolt against Elite Democracy. London: Palgrave Pivot.

Ileto, Rey C. 2007. Magindanao, 1860-1888: The career of Datu Utto of Buayan. Manila: Anvil Books.

Kathirithamby-Wells, J. 1986. “Royal Authority and the “Orang Kaya” in the Western Archipelago, circa 1500-1800.” Journal of Southeast Asian Studies 17(2): 256-267.

Kulke, Hermann. 1986. “The Early and the Imperial Kingdom in Southeast Asian History.” In Southeast Asia in the 9th to the 14th centuries. Ed. David Marr and Anthony Milner. Singapore: Institute for Southeast Asian Studies, pp. 1-22.

Lande, Carl. 1964. Leaders, Factions, and Parties: the Structure of Philippine Politics. Monograph No. 6. New Haven: Yale University — Southeast Asia Studies.

McCoy, Alfred. 1999. An Anarchy of Families: Family and State in the Philippines. Quezon City: Ateneo de Manila University Press.

Sahlins, Marshall. 1963. “Poor Man, Rich Man, Big-Man, Chief: Political Types in Melanesia and Polynesia.” Comparative Studies in Society and History 10(3): 285-303.

Sidel, John. 1999. Capital, Coercion and Crime: Bossism in the Philippines. Stanford University Press.

Simbulan, Dante. 2005. The Modern Principalia: The Historical Evolution of the Philippine Ruling Oligarchy. Quezon City: UP Press.

Soenarno, Radin. 1960. “Malay Nationalism, 1896-1941.” Journal of Southeast Asian History 1(1): 1-28.

Strathern, Andrew. 1980. The rope of moka: Big-men and ceremonial exchange in Mount Hagen, New Guinea. Cambridge University Press.

Windybank, Susan and Mike Manning. 2003. “Papua New Guinea on the Brink.” Issue Analysis No. 30 <> March 30, 2011.

Wolters, O. W. 1999. History, Culture and Region in Southeast Asian Perspectives, rev. ed. Ithaca, New York: Cornell Southeast Asia Program Publications in cooperation with Institute of Southeast Asian Studies, Singapore.

Author’s note:

I have rummaged through my external hard disks and came across this old paper on the Banking Liberalization Law of 1994.  I thought I could share it with my readers for whatever its worth.





In a survey of financial systems and economic policy in several developing economies, the Philippine financial system was said to be “a case where a small group of powerful players in the private sector has maximized its share of rents at the expense of the rest of the country” (Lee and Haggard 1995: 20). It was contrasted with the financial system in South Korea, which was controlled by the state that in turn assigned credits and other rents to export champions—the big industrial conglomerates known as the chaebols.

Preferential finance to export-oriented firms, administered by a strong state and a competent bureaucracy, contributed immensely to the country’s economic miracle.  South Korea graduated to developed economy status (as the newest member of the Organization for Economic Cooperation and Development) before the onset of the Asian financial crisis in 1997 (Mendoza 1995 & 1996).  In both countries, there appears to be very strong links between the state and the private business sector, forming what could be called a ‘quasi-internal organization’ (QIO) in South Korea (Nam and Lee 1995) or a “quasi-public network” in the Philippines (Montes and Ravalo 1995).

The basic difference is the senior element in the partnership.  In the South Korean sword-won alliance, the state was clearly dominant; in the Philippines, the private business sector dominates a weak state and extracts substantial rents from it.  According to Montes and Ravalo (1995), private business and the state leaders and bureaucrats in the Philippines have formed a “quasi-public network” whose objective is the protection of the economic position of its members. Filipino politicians and bureaucrats have adopted this behavior in the light of their relative weakness vis-à-vis private interests.

Selective credit allocation has been used by the Philippine financial authorities to support the country’s traditional (cash-crop, timber, and mineral) exports and import-substituting industries.  Though there had been many attempts to change, the economy maintained an inward-looking foreign trade regime, with bank credit going to heavily protected industries. This situation is not surprising given the control of these industries by powerful family groups and, in effect, their control of credit allocation, both through their influence over government banks and through their ownership of banking institutions.  For a few examples:

  • the Lopez family was a major landowner and controlled the Manila Electric Company (MERALCO), the ABS-CBN radio-television network, the Manila Chronicle and the Philippine Commercial and Industrial Bank;
  • the Puyat family was into light manufacturing, agri-business, real estate, and controlled the Manila Banking Corporation;
  • the Aboitiz family was a major landowner in the Visayas, a major player in the grains trade and grains processing sector, and it teamed up with the Kalaw family to form the Insular Bank of Asia and America together with Bank of America and Daichi-Kangyo Bank of Japan;
  • the Laurel family was also a major landowner, owner of schools (e.g., the Lyceum of the Philippines), and controlled the Philippine Banking Corporation; and
  • the Madrigal family had a major stake in the Consolidated Banking Corporation and in inter-island shipping (Madrigal Lines) apart from being a major landowner.

Some of these families thought it necessary to have some of their family members elected to the highest reaches of Philippine officialdom. For example, Fernando Lopez, Jr. was elected Vice President of the Republic in 1965 and was re-elected in 1969 as part of the Ferdinand Marcos-Fernando Lopez tandem; Gil Puyat became Senate President; Jose B. Laurel, Jr. became Speaker of the House of Representatives; and Maria Kalaw-Katigbak served as senator–all before martial law was declared in 1972.

In such a situation, the type of financial system—whether liberal or repressed (the latter meaning, with heavy state intervention)—matters little to credit allocation. The financial system will allocate credit to the same enterprises, even where and when the financial system was liberalized.

In the literature of money, finance, and economic development, a liberal financial system is one where savings are mobilized and credit is allocated based on market-determined interest rates.  As with product and labor markets, the money market in such a financial system will reflect the scarcity values of money. In a repressed financial system, the government maintains lower-than-market interest rates and thus plays a definite role in credit allocation.

The question of the appropriate financial policy is clearly linked to the larger question about the suitable role of the state in economic development.  The literature makes clear distinction between ‘commercial finance’ and ‘development finance.’  The first type of finance is supposedly the finance supplied and demanded in a liberal economic system.  Authorities in developing economies have justified financial repression and state intervention in financial markets for the purpose of providing ‘development finance’—in other words, cheap credit to supposedly spur economic development and alleviate poverty.  The government was supposed to establish public financial institutions to provide ‘development finance’ to fund big development projects with long gestation periods[2] while private bankers will provide shorter-term and more expensive ‘commercial finance’ to private business.

Neoclassical economic theory frowns on state intervention and financial repression, arguing that it will lead to an inefficient allocation of resources, financial or otherwise.  The case of South Korea, however, is a puzzle to the neoclassical economist who is taught that financial repression leads to poor economic growth.  The theory of ‘quasi-internal organization’ (QIO) alluded to earlier was an attempt to solve this theoretical and practical conundrum.  Purportedly, decisions to allocate credit will be in the hands of government bureaucrats and bankers who lack both the information and the incentive (since government banks are more development-oriented than profit-oriented) to allocate credit efficiently.  Government officials are also more likely to be influenced by non-economic (read as: political) considerations, including distributive pressures from rent-seeking groups.  Furthermore, since cheap credit lowers the relative cost of capital, it leads to the adoption of overly capital-intensive production technologies.  In sum, therefore, preferential credit will reinforce other biases in the system of incentives—such as the emphasis on import substitution in manufacturing over export-oriented manufacturing and agriculture (Lee and Haggard 1995).  In this case, preferential credit is actually anti-poor since capital-intensive industries do not employ a lot and will not employ unskilled poor rural laborers.

What interests would prosper and benefit from a more liberal and internationalized financial system?  What interests are going to be harmed by financial liberalization?  Haggard and Maxfield (1996) offer interesting arguments to explain even the puzzling situation where sectoral interests favored by a prevailing repressive financial regime would concede to a change of policy.

All over the developing world, governments have traditionally controlled capital movements, the foreign exchange transactions of domestic banks, and the entry of foreign financial institutions.  In fact, several studies have shown that developed economies have completed the internationalization of their money markets (Goodman and Pauly 1993; Pauly 1988; and Rosenbluth 1989).

Governments may also be wary of financial openness because “increased financial integration holds governments hostage to foreign exchange and capital markets, forcing greater fiscal and monetary discipline than they might otherwise choose” (Haggard and Maxfield 1996: 210; see also Andrews 1994; Frieden 1991; Kurzer 1991 and 1993; and Winters 1994).  To the extent that financial openness undermines domestic financial controls, it eliminates a tool of both industrial policy and patronage and reduces the opportunity for governments to raise funds through the sale of public instruments at lower-than-world borrowing rates (Haggard and Maxfield 1996; Alesina and Tabellini 1989).

Many analysts opined that increasing economic integration of many developing countries with the global economy has increased pressures to liberalize domestic financial markets.  Frieden and Rogowski  (1996) both argued that increasing economic integration and, consequently, economic interdependence increases the political clout of domestic actors with foreign ties, expands the matrices of interests likely to benefit from, and demand, greater economic openness, and thus tilts the balance of political forces toward a liberal and more internationalist bent.  Furthermore, interdependence also expands the political weight of foreign capital in domestic politics.  Foreign banks and financial firms from the developed economies have become active lobbyists for financial liberalization in developing economies and have enlisted their respective governments to apply pressure for economic/financial liberalization.  Lastly, the increasing magnitude and complexity of goods and capital flows make financial controls extremely difficult to enforce anyway.

Others, however, maintain that balance of payments crises have been a more important source of pressure for financial liberalization in the developing world (Haggard and Maxfield 1996).  This makes sense: economies facing balance-of-payments (BOP) difficulties can better court foreign exchange from external sources if the domestic financial regime was liberal rather than repressed or heavily controlled.  Foreign fund-placers are assured that they will be able to immediately liquidate their placements in a domestic jurisdiction with such a financial policy.  For this reason alone, a foreign-exchange strapped economy with a liberal economic regime will enjoy greater capital flows than a similarly-situated but more repressive one. Using both arguments, this paper will be able to identify the interests involved in the banking liberalization debate in the Philippines and attempt to explain their stances and behavior.


To be continued….


[1] A great deal of the discussion in this section is informed by the author’s extensive exposure to the Philippine financial system in various capacities: as instructor in the economics of money and banking and economic development at UP College of Arts and Sciences, Manila from 1978 to 1992; as financial reporter for the Business Day from 1977 to 1979 and again in 1985-86; as senior researcher of the Bancom Development Corporation from 1980 to 1981; and as researcher of the Bancom Group Inc. and the Bancom Health Care Corporation from 1976 to 1977.  The Bancom Development Corporation (BDC), under its president, Sixto Kalaw-Roxas, started quasi-banking in the country.

[2] Domestic private bankers in developing countries will, according to the literature, avoid providing finance for these projects since they are capital-intensive and have long gestation periods.  Examples of these projects may include a petro-chemical plant, hydroelectric dams, steel and aluminum smelting plants, and public infrastructure such as harbors, ports, and telecommunication systems.

A number of theoretical approaches had been proposed by scholars since the 1950s aimed at understanding Philippine politics.

Particularly, these approaches seek to illuminate the apparent disconnect between modern democratic practices and pre-modern political behavior of leaders and followers alike.

Lande on Cory

Professor Carl Herman Lande

Professor Carl Herman Lande

Some of these approaches–patron-client framework and factional politics (Carl Herman Lande of Yale University; 1924-2005), and weak state-strong social groups (Paul Hutchcroft of the University of Wisconsin-Madison)–retained their appeal specially given recurrent scandals over the alleged misuse of public funds by legislators and other public officials.

Professor Paul Hutchcroft

Professor Paul Hutchcroft

On the other hand, the “machine politics” (Kit Machado of the California State University-Northridge; deceased) and bossism/warlordism (John Sidel of the London School of Economics) frameworks had lost part of their theoretical allure largely because of their limited scope.  Nonetheless, Sidel’s framework is apropos for the Ampatuan goons (involved in the infamous Maguindanao massacre) masquerading as LGU CEOs in Muslim Mindanao.

Professor John Sidel

Professor John Sidel

All of these approaches however suffer from an apparent shortcoming. They are too self-contained since they analyze Philippine politics in isolation from international currents and developments.

For example, none of these frameworks take the role of the United States into account notwithstanding the prominent role that the global power plays in determining Philippine local politics and foreign policy.

American imperialism in PH

In addition, none of these approaches take institutions like the branches of government seriously given the default “weak state” perspective.

Sealing the Enhanced Defense Cooperation Agreement (EDCA) in 2014

Sealing the Enhanced Defense Cooperation Agreement (EDCA) in 2014

They also do not make explicit references to the Philippine economy’s increasing insertion into the global capitalist division of labor. If there is a semblance of such a framework, it is articulated outside the academe by leftist circles under the rubrics “imperialism” and “neoliberalism” albeit to an extreme.

Asian EPZs

Examining the possibility of formulating a robust and more comprehensive theoretical approach and the implications for political analysis (and perhaps policy making) is thus a worthwhile undertaking.

Strong firewall?.

There seems to be a firewall between the Philippine economy and the political sphere such that the economy can still grow (GNP- and GDP-wise) even if the political situation is messy.

This may mean two things: there is a learning process in earnest and that previous key economic reforms have born fruit.

Despite the current non-achieving and blame-duck presidency, despite the thieving GMA and Erap administrations, our economy has grown nonetheless. Of course, OFW remittances played a great role in this spurt.

Nonetheless, pace Lord John Maynard Keynes, so-called ‘animal spirits’ also got into play.

Perceptions become material force. The impression that this non-achieving administration is seriously fighting corruption (Exhibits A–: SC Court Justice Renato Corona, hospital-arrested PGMA, Tanda, Sexy and Pogi) had induced vigorous bourse activity. After all, portfolio managers will not shun any profit possibility.

Note too that this TUWID administration is trigger-happy to clear its own ilk starting with DILG USec R Puno to ExecSec Ochoa to SecDILG and Liberal Party SecGen Joseph Abaya, SecDA Alcala, SecDoE Petilla, and last but not least, SecDBM Butch Abad) of all hints of corruption.

Perhaps this President and his rah-rah boys (Coloma, Lacierda, and Valte) must be reminded of the separation of powers; that the executive is not the judiciary.

Credit must be given to where credit is due. The Ramos-Almonte duo locked the country into difficult and relatively-unpopular economic reforms (at a conjunctural moment) in the 1992-1998 span. Key reforms were the WTO treaty accession and related trade reforms. Another is the decontamination of the new Bangko Sentral from the toxic Central Bank of the Philippines.

The GMA and Pnoy administrations should acknowledge their debts to the Ramos reforms.

Of course, no presidential administration is not without its own achievements, weakness, shortcomings, lapses, etc. Every administration after Ferdinand Marcos is hobbled not only with human weakness, foibles, and imperfections but also by the constitutionally-mandated single term.

For this reason, almost all post-Marcos administrations, save for the Ramos presidency, simply had short-term, rather than strategic, planning horizons.

Legitimacy problems prevented PGMA from making full use of an unprecedented extended term (2001-2010).

I will not say much about the short-lived Erap presidency except to assert that Erap is obviously in his element as LGU chief executive.

The current presidency has yet to step down on June 30, 2016 and it’s too early to come up with a definitive judgment of its true worth. My own words about it now and in the past are at best mere impressions, or, simply my educated personal opinion.

I promise to continue studying this administration in a comparative perspective not only with previous Philippine presidencies (Ferdinand Marcos’ included) but with those of our neighbors in Southeast Asia and East Asia (China specially).

Beyond analysis, I will also essay or propose reforms for our political economy. In this regard, the interests of our people and nation will be held paramount, superior to any political administration, party, group, personality, and vested interest.

These praxiological pieces will find their way into my several outlets (FB, Tweeter, Tumblr, LinkedIn, Pinterest, Instagram, Skype, Mixx, StumbleUpon, my WordPress blogs, speaking engagements and academic interventions, among others).

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