First of 3 parts
MY columns last month centered on the Philippine oligarchy and political dynasties. This week opens with the “Taipans,” a complimentary term referring to the powerful billionaire-founders of Chinese Filipino business empires. Originally, the appellation referred to foreign entrepreneurs and carpetbaggers operating in 18th and 19th century China and Hong Kong. For this column’s purposes, the term “taipan” is broadened to include the local Chinese Filipinos in the Forbes magazine list of 50 wealthiest Filipino entrepreneurs. (www.forbes.com/philippines-billionaires/list/#tab:overall)
It is worth noting that when President Rodrigo “Deegong” Roa Duterte (PRRD) boasted that he had dismantled the oligarchy, he mentioned only the Lopez family and in passing, the Zobel de Ayalas, the Rufino-Prietos and Roberto Ongpin. One wonders why not one taipan was mentioned. The first 10 names in the Forbes list include six taipans with total net worth of $34.25 billion (P1.665 trillion); two of Filipino-Spanish/American bloodlines, $8.8 billion (P428 billion); and two, I expediently term ethnic Pinoys — non-Chinese/Spanish/American lineages, $9.40 billion (P457 billion).
“Chinese Filipinos dominate the Philippine economy. Different reports estimate their share of local business at more than 50 percent, or even as high as 90 percent. Their major investments cover a wide range of activities, like retail, light manufacturing, banking, food, consumer products, electronics, and real estate… they own more than 30 percent of the country’s top 1000 corporations controlling more than half of the publicly listed companies.” This, according to former senator Manny Villar (Business Mirror, Nov. 22, 2016), an oligarch himself, married to incumbent Senator Cynthia, father of Public Works Secretary Mark and Representative Camille.
Philippine brands that have gained international recognition are the Emperador brandy (Andrew Tan); and Jollibee Foods (Tony Tan Caktiong), popular among the Filipino communities abroad. It has eclipsed the McDonald’s franchise in the Philippines.
The SM Prime Holdings of the late Henry Sy holds the top spot and owns some of the biggest real-estate projects and large shopping malls in the country with an estimated 9.24 million gross floor area (GFA) with 17,230 tenants and seven malls in mainland China with 1,867 tenants, as of end 2019. It is the Philippines’ biggest employer (ref. “SM through the Years,” SM Prime Holdings, Inc. annual report).
Mainland Chinese connection
But the Forbes list does not tell the whole story. There is a sinister reality unfolding, of infiltration by mainland Chinese companies encroaching into legitimate businesses in collusion with the taipans. This, by the sufferance of the complacent and fawning attitude of the government itself. We all know by now the entry of the Chinese Philippine offshore gaming operations, or POGOs, the online platform that caters mainly to mainland Chinese — satisfying their compulsive craving for gambling. The downside to this is the influx of criminality, corruption, and prostitution. This is similarly being replicated on a massive scale but surreptitiously creeping into the country.
Belt and Road Initiative
On the macro level no less than the President, enamored with China as his Build, Build, Build (BBB) initiative relies on Chinese capital goods, grant, and loans, is being drawn into Xi Jingping’s deadly embrace. China’s aggressive use of concessionary loans and bribes to gain influence is its main tool. When the country can’t pay, China takes over the project. This formula was used to chilling effect over the Port of Hambantota in Sri Lanka. China’s Belt and Road (BRI) global investment and lending program amounts to a debt trap for vulnerable countries around the world, fueling corruption and autocratic behavior in struggling democracies.
This is also happening now in Laos. Vientiane has been borrowing heavily from China to build its first hydropower dam to sell electricity to neighboring countries. As usual, big kickbacks were paid to politicians for the government to sign off on the project. Now Laos can’t pay its debt to China. The state-owned Electricite du Laos is about to cede control of its electricity grid to China Southern Power Grid Co.
Which brings to mind that in the Philippines, the transmission of electricity across the Philippines is now in the hands of taipans (Sy/Coyiuto), the National Grid Corp. of the Philippines (NGCP) in partnership with the State Grid Corp. of China. The latter’s 40 percent stake in the NGCP is a controversial issue in the country today as the 19,490 kilometers of power transmission lines can be held hostage to Chinese interference. This paranoia is not entirely without basis as four-fifths of all households and practically all industries draw electricity from several power generation and distribution companies but relying solely on the NGCP transmission system.
Blacklisted notorious Chinese behemoths
But what could be unconscionable are that Chinese companies blacklisted by the United States and World Bank are welcomed by PRRD to bid for the BBB projects, with the taipans as the main proponents. A case in point is the notorious China Communications Construction Co. and its subsidiary, China Road and Bridge Corp. involved “in the anomalous awarding of a contract under phase one of the Philippines’ National Roads Improvement and Management Project.” The World Bank in 2011 barred these companies from participating in projects financed by the institution. True, as Duterte’s bromance with China bloomed, financing came easily from China. But just the same, why deal with companies already internationally banned?
And these are the same notorious companies that were also blacklisted by the US Department of Commerce “for their roles in constructing artificial islands in the disputed South China Sea that infringed on other nations’ claims,” including the Philippines’ Kalayaan island group in the Spratlys and Pag-asa (Scarborough Shoal). PRRD has allowed those companies, complicit in China’s usurpation of Philippine-owned islands in the West Philippine Sea to bid projects even on Clark and Subic Bay and Sangley International Airport. This is verging on the criminal if not immoral!
China State Construction Engineering Corp. and China Geo Engineering Corp. were barred by the World Bank from participating in projects financed by the bank for colluding with local companies in the Philippines to rig the bidding of road projects in 2009. In 2004, our very own Department of Public Works and Highways blacklisted these companies for violations of the procurement law. “The two companies are now part of the Bangon Marawi Consortium, a group of Chinese and Filipino companies handpicked by the government to rebuild areas [in Marawi].…”
Now they are out to screw our Muslim brothers!
And our government is shamelessly nonchalant about it all.
The presidential spokesperson made clear the Philippine position: “The US government can enforce its blacklists of Chinese companies in American territory, but he (PRRD) will not follow the directives of the Americans because we are a free and independent nation and we need investors from China.”
This is of course understandable as PRRD has already declared long ago his fealty to Xi Jinping even laying aside our advantage at the arbitral court. It is unfortunate though that the President chooses to take sides with the taipans — Chinese-Filipino oligarchs — against the Filipino people. And the method used here is the world’s oldest quid pro quo. This type of transactions is locally known as prostitution — and the Deegong is the éminence grise — the “bugaw.”
To be continued next week
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