Philippines: Back To The Future

1999

Richard Broinowski

Three trends that will operate in 1999 are discernible in the Philippines. The first relates to the characteristics of domestic politics, and whether President Estrada and his Cabinet are sliding back to the bad old days of Marcos-type crony capitalism and graft. The second is about current and potential economic performance. A third concerns the regional standing of the country under Estrada, and whether it is improving or deteriorating, especially from the perspective of the Philippines' ASEAN colleagues.

There are some disturbing indicators of the first trend. Estrada has appointed a few Marcos associates to his administration, including Ramon Cardenas, formerly a close aide to Marcos at Malacanang, who is now working in a more senior position for Estrada. Other Marcos associates have regained financial power, including the Romualdez brothers, Eduardo 'Danding' Cojuangco, and Lucio Tan, the controversial owner of Philippine Airlines and a major financial supporter of the Estrada political campaign. Corruption charges against many of these and, more notably, against Imelda Marcos, have recently been dropped by Philippine courts.

Meanwhile in typically extravagant fashion, Imelda, encouraged no doubt by her newly-acquired freedom from legal harassment, is making headlines by claiming that her late husband accumulated huge quantities of gold with which he acquired 'practically everything in the Philippines'. She said she would give it all to the poor if she could recover it from the cronies. 'If you know how rich you are, you are not rich', she declared recently. 'But me, I am not aware of the extent of my wealth. That's how rich we are'.

Hyperbole aside, as a Manila corporate trial lawyer recently and correctly observed, 'To say cronyism is back is to assume it left. Cory Aquino had her own. Ramos had his own. Under Cory it was more subtle, more in the background. Now it's more in the open'.

More in the open it may be, but it has not yet frightened off international investors, which brings us to the second trend. Indicators show the country is performing better than its previously more economically successful ASEAN neighbours Malaysia, Thailand and Indonesia. Unemployment figures are meaningless, but there is plenty of money around, and Makati is packed with shoppers, only a minority of whom are the wealthy denizens of Forbes Park and Dasmarinas. Australian construction companies John Holland and Leightons have plans for road development and office building projects in 1999, and their Manila-based CEOs are optimistic that the economy will remain strong, and will improve further as those of its ASEAN neighbours arrest their decline and begin to recover.

Thirdly, the regional standing of the Philippines has remained strong under Joseph Estrada. He takes a moral position on the arrest of Anwar Ibrahim, insisting that Mahathir's former deputy be given a fair trial. And with two other ASEAN countries, he is taking a carefully principled position on the admission of Cambodia as a full member of ASEAN. He wants further proof of Hun Sen's legitimacy and popular support before the tenth member is admitted.

The Philippines has come a long way in regional acceptance and standing since the formation of ASEAN, and is no longer the slightly risible odd man out. Joseph Estrada's background as a film star was hardly a guarantee that he had the intellectual rigour of a President, but he has appointed to help him some people who have. Judgment must be suspended for some time yet.

WATCHPOINT: Estrada may yet fulfil his pre-election claims that he has common origins and is a man of the people.

 

About our company:

AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.

Go to top