The war against the oligarchs

One has a sprawling mansion in a posh district in the hilly San Francisco Bay area, one of his many homes all over the world. Another has his own sun-kissed vineyard somewhere in Italy, source of some of his finest bottles of wine and olive oil. Others roam the world as they please – whether it’s kite boarding or wind surfing in the Baltic Sea, zooming through motorcycle trails in the Scandinavian countryside or watching their race-car driver sons race in the Monaco Grand Prix.

Some of the country’s oligarchs are clearly among the world’s richest, no doubt our own versions of crazy rich Asians. 

But for some of them, the future has become so bleak these days. If President Duterte has his way, these billionaires’ happy days may soon be over. 

Duterte and the oligarchs

Destroying the oligarchs has clearly become the President’s obsession – or at least that’s what the public is made to believe. 

The anti-elite narrative is no doubt a popular one, and this administration knows it. It has been exploited every campaign season and has made politicians out of movie stars. Candidates promised to be folk heroes and they all vowed to destroy the rich so the masses can finally rule. 

The President is no exception. True to his vow of destroying the oligarchs, he has been on a relentless rampage against big businesses since he took office. Duterte has been on overdrive since last year, lambasting billionaires almost everyday for being so greedy. 

Threats range from nullifying the “onerous” 1997 water concession contracts of the Ayala-owned Manila Water and Pangilinan-led Maynilad Water Services Inc. to shutting down the Lopezes’ media giant ABS-CBN. 

He is fuming mad and has vowed to put a billionaire to jail.

The oligarchs – as Duterte likes to call them –  are having sleepless nights. They are working double time these days consulting their lawyers, advisers and aide-de-camps on what to do.

They are all walking on eggshells. A comment, a frown or a smile may draw another round of criticisms and threats. 

Their companies’ share prices now depend on the President’s mood. 

“It’s very challenging,” one tycoon sighed in frustration.

Collateral damage

It’s not surprising. Nothing irks tycoons more than threats to their businesses.

But here lies the danger of this war against the oligarchs. It could also very well destroy -- if it hasn’t already yet - the country’s business environment. 

At least one brokerage company, Philstocks Financials already considers these regulatory risks to businesses as the biggest threat facing the stock market this year. Fitch added that the government’s move to revoke the extension of its agreement with the two water concessionaires reflects high regulatory risk faced by businesses.

These risks come at a time when the Philippines is trying to attract local and foreign investors for its ambitious infrastructure program. 

Patronage politics

The President is right in calling the attention of businesses. Some of them have become so shamelessly greedy.

But to force them to their knees by attacking them and threatening their businesses like a gangster in the wild, wild West makes the government no better than the shrewd “elites” it abhors. 

Destroying the rich people will not necessarily bring the poor out of poverty. In fact, shutting down businesses would immediately result in job losses. 

If the intention, therefore, is to make the economy more inclusive, what this administration needs to destroy is an intertwined web of corruption, red tape and patronage politics that limit our economy’s full growth potential. 

What we need are tough regulators who will crack the whip on abusive businesses. What we don’t need are politicians and lawmakers who will endorse a company to regulators just so it can ease its way into the market. 

To spread wealth away from the hands of only a few big businesses, the government needs to create a more competitive environment. Having an anti-trust agency that will destroy monopolies which abuse market dominance is a step in the right direction.

If we want inclusive growth, let us instead destroy an environment and a culture that allow businesses to be greedy and shamelessly shrewd, and an environment where lawmakers and regulators skew policies in favor of these big businesses. 

In Ancient Greece where the term oligarchy was coined, the oligarchs stayed in power through campaign financing. They were able to influence policy.

Due process

Destroying the oligarchs sounds good and great but doing this without destroying the environment that breeds their greed would only give birth to new oligarchs and cronies.  Sure, some Manila-based oligarchs may fade into oblivion but Davao-based businessmen will just happily take their place. 

More importantly, changes need to be in accordance with the law. 

Doing these changes mob style and without due process is wrong and unconstitutional and no Filipino should ever have to go through anything like it -- whether one is a poor helpless devotee of the Black Nazarene or a filthy rich businessman. 

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com