Oligarchy in the PH: A tale of political and economic entrenchment

The term oligarchy is arguably inseparable from Philippine politics. President Rodrigo Duterte made calls earlier this year to dismantle “oligarchs”, who he claimed “controlled the economy of the Filipino people”, including the Lopez family, owners of the ABS-CBN media network. Duterte himself has been hounded by allegations of supporting oligarchs with his close ties to rising tycoons.

Former Dean of the Ateneo School of Government Atty. Tony La Viña, whose expertise includes political leadership and local governance, defines an oligarch as “a rich person or family who uses his wealth to secure and maintain power, which in turn, he uses to retain and increase his wealth.” But the seemingly simple definition belies the country’s deep entanglement with oligarchy, whose origins predate even the founding of the nation.

Colonial origins

The foundations of would-be oligarchs in the Philippines extend back to the country’s colonial past. DLSU History Department Full Professor Dr. Jose Torres and Assistant Prof. Lecturer Xiao Chua trace the origins of oligarchs to families who amassed wealth and power under Spanish colonial rule in the 19th century. Filipinos, Spanish mestizos, and Chinese mestizos populated this wealthy bloc.

The earliest oligarchs found their roots after the Spanish first claimed the country in the 16th century. To help administer colonial domains, Spanish authorities appointed former datus and local nobility as local officials. Known as the principalia, this privileged class performed important duties such as tax collection that gave them political power over their fellow natives at the time. As the principalia became entrenched in local offices over generations, they established themselves as political families.

Chinese-Filipino clans, meanwhile, were confronted by intense anti-Chinese sentiment that was officially sanctioned by the colonial government; Chinese residents during that time faced restrictive legislation, expulsions, or even massacres .

Nevertheless, Chinese merchants eventually found ways to climb the ranks of colonial society, Torres says. One was by marrying Filipino women, as it “protected the business from any kind of retaliation by authorities kasi they suddenly became legitimate,” he adds.

Filipino-born Spaniards or “insulares” also contributed to the burgeoning power of the budding oligarch families. Chua narrates that early Spanish-Filipino industrialists were able to marry into politically-influential principalia families, forming a base of support for their conglomerates.

After the country gained independence in 1946, prominent families positioned themselves closely to government figures. “The colonial past actually had an effect because…both Spanish and Americans were able to favor these big families, [politically] or otherwise,” says Chua.

To stand the test of time, however, oligarchs must maintain political influence, which they accomplished by supporting political candidates or fielding their own bets. “Politicians need money to win elections. And businessmen need [a] favorable position in the country…If [the candidate] wins, that politician will have to [give favors] to these oligarchs,” Chua describes.

A clan that loses its political influence risks falling into obscurity. La Viña notes that while some of the contemporary Filipino elite can still trace back their origins to the colonial period, the new breed of political oligarchs—whose power rests on holding office—“do not not necessarily have roots” from the same era.

Wealth and power

“There are some families who would become wealthy and realize that wealth holds power [and] would start entering the realm of not only politics, but of course businesses,” Torres discusses. “These families are not necessarily becoming politicians, but they are mostly the power behind politicians.”

Dr. Philip Tuano, chairperson of Ateneo de Manila University’s Economics Department, ascribes the power of oligarchs to “3Gs”: guns, goons, and gold. “Guns and goons” allow political clans to subdue their opponents, while “gold” enables them to buy votes, entrenching themselves further in the political arena.

Tuano suggests, however, that a capitalist system with minimal government control has contributed to the rise of “economic oligarchs”. In contrast to political oligarchs, economic oligarchs base themselves in major private industries rather than public office, he elaborates, citing how they dominate large corporations in sectors like retail and telecommunications where there is “little government control”.

Ideally, economic oligarchs are at the best position to invest in economic development projects as they would have immensely pooled resources. However, Tuano points out that these same individuals “are risk-averse…and if you don’t have a government that pushes them to make very risky investments—[even if] these investments are really good for the country—then it might be difficult for the country to grow.”

“We can have more people employed and to use all of their physical strength [and] intellectual strength to improve the productivity of the country, but the problem is that they don’t have these opportunities,” he says. “You will not be able to harness the full capacities of people [to] contribute significantly to economic and political development.”

Keeping power in check

Political scientist and author Dante Simbulan once described Philippine democracy as one “devoid of substance, a facade conveniently used by the elite to camouflage their monopoly of power”.

As such, Chua and Torres affirm that governments must keep powerful clans in check through regulation. Moves to privatize utilities are a mistake on the part of the government, according to Torres, as it gave influential persons and families the chance to acquire key stakes in the economy.

Although the President has made tirades against supposed oligarchs, such as the Lopezes, the Ayalas, Pangilinan, and Ongpin, Duterte himself faces questions over his personal connections, such as Dennis Uy. The Davao-based business magnate had previously donated P30-million to Duterte’s presidential campaign. Since Duterte’s electoral victory, Uy had swiftly expanded his business empire, buying 36 companies from 2016 to 2018.

For La Viña , Duterte’s claims to dismantle oligarchs “is just gaslighting” to divert attention away from “the failures of this administration”. An anti-dynasty bill is the best solution, he maintains, even though a push for one under the current administration may not be feasible.

Though Article II, Section XXVI of the 1987 Constitution suggests the need for one, Tuano notes that it still lacks an “enabling law”.

On the other hand, Chua believes that dismantling the oligarchy without economic consequences will prove difficult, and both he and Torres vouch for reining in oligarchic influence. “To use Former President [Fidel Ramos’] words, you should have a win-win situation on both sides,” Torres furthers.

Whatever the solution may be, increasing economic opportunities, providing mechanisms for local political participation, and, as Tuano explains, “inculcating a sense of democracy [and] participation in our citizenry” will be needed to combat the rise of other oligarchs in the country.

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