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Dismantling Oligarchy, as key to Equitable Economic Progress

Ped Salvador

February 11, 2017

An oligarchy is a condition in which political and economic power is concentrated in a small


elite group. The Philippines became an oligarchy from a historical experience of colonialism.
Instituting a national state government was inadequate to detract from the power of landowning
families who had governed during colonial rule. Under Spanish colonial rule, the Philippines was
characterized by a type of feudalism where aristocrats of Spanish lineage (mestizos) controlled
large sections of land (haciendas) with indigenous people as laborers. Under American rule, the
Philippines first established democratic representational institutions. However, there was no
alteration of existing power structures.

Like in many other instances of colonialism, the already powerful people were chosen to
function as go-betweens for the colonizer and the colonized area. Despite these early democratic
institutions, a feudalist structure remained in which mestizo legislators (backed by the
Americans) controlled the employment and economic prospects of civilians. Thus, the benefits of
growth and the state were seen by only few while much of the population remains in poverty.

Up until today the nature of the Philippiness political system is such that vested interests have
guided policy favorable to a minority of wealthy families. As a result of political and economic
exclusion of the majority of the population, there is great wealth inequality and minimal
economic growth.

In the book Why Nations Fail Daron Acemuglo and James Robinson has something to say
about the oligarchic cancer existing in the Philippine society; In our discussion so far on the
Philippines we have seen how the political system was captured by an oligarchy whose
consolidation was greatly facilitated by the way the US set up their colony. Marcos tried to break
the oligarchy, but he failed and indeed if anything, as Benedict Anderson pointed out, the
oligarchy surfaced after 1986 even more powerful than ever.

Former Chief Justice Reynato Puno warned us of the darkness threatening the democratic
foundations of the country. A government run only by a few is a democratic failure as there is
the exclusivity of the elite to govern the country. There is an unprecedented income inequality
in the country where, of 17 million families, only 100 families control and rule the countrys
politics and economy. The economy is served by 36 commercial banks but only four families
control more than 60 percent of the P7-trillion resources of the entire commercial banking
industry. He also noted that10 families own 60 percent of the P10-trillion combined
capitalization of some 300 business companies in the country,
Moreover the former Chief Justice said that such a business environment fosters a state of
despotism that aims to preserve the monopoly of the few, thus following a theory of
government of the few, by the few and for the few. He also noted how the present electoral
system becomes vulnerable to force and fraud from political leaders who seek power by
establishing political dynasties. We cant live a full democracy with this kind of system,
where governments have failed to put a stop to political dynasties. Such a system relentlessly
amasses resources from the peoples coffers to benefit members of the family and loyal political
allies.

Today the total wealth of the Top 10 billionaires is approximately more than double what the
entire Filipinos combined have in their pockets at $39.1 billion. This estimated equivalent to
P1,720 billion or P1.7 trillion which is more than double the approximate total Philippine money
in circulation of about P600 billion! This is not to mention other personalities in the mainstream
who are also making waves in the field of business and entrepreneurship.

Henry Sy alone has about $11 billion of fortune in his portfolio. That in itself is equivalent to
about 73 percent of the local money in circulation. Sys total accumulated fortune approximately
doubles what the distant second richest Lucio Tan has in his arsenal of wealth of about $6
billion. Henry Sys fortune of $11 billion is more than the combined wealth of Lucio Tan ($6.1
billion) and Andrew Tan ($4.7 billion), the second and third richest locally.

Amidst this reality according to Philippine Statistics Authority by 2045, the Philippine
population is projected to increase from its 2010 Census Count of 93 million to 142 million.
With the continuous growth in the population the demand for social services would be enormous.
The money needed to finance these social services would be coming from the meager income of
employed working Filipinos which would not be enough. If majority of the capital would only be
on the hands of the few elites, and taxation from them would still be inefficient then money in
the government coffers would be limited resulting to more social unrest both in the rural and
urban areas.

Unless a genuine Philippine government authorities would dismantles this oligarchic system, the
money in circulation would never be equitable. When the economy is leveled, and opportunities
are given to everyone, the probability of production expansion is very high. When public utilities
rates specifically the power sector is reduced to an acceptable level, investments and
entrepreneurships would go up. When there are more investments, employment percentage
would rise up increasing our tax base and maximize government tax revenue. The continuous
increase in tax revenue would pay our remaining financial obligations from International
Banking Institutions. We will be debt free and better social services would be fulfilled.
President Rodrigo Duterte has already closed Roberto V. Ongpins Philweb on line gaming, and
he can do more, in electricity, water, communication, petroleum, food, real estate, and
transportation. He need though our complete support.