Last of 3 parts
SEN. Panfilo Lacson recently disclosed that close to 3,000 Chinese linked to the People’s Liberation Army (PLA) are now in the country for an “immersion mission.” They came in through the Philippine offshore gaming operators program. He compared this to the Japanese Imperial Army’s fifth column that infiltrated the country many years before World War 2. Mingling with the Japanese abaca traders and agricultural workers, particularly in Davao, many intermarried with the locals. This strategy proved to be appropriate. When war erupted, the Japanese forces had an easy time taking over. These days could be a semblance of yesteryears.
China’s usurpation of our islands has transformed the West Philippine Sea into an exclusive Chinese lake. We are being drawn inexorably into China’s embrace — a potential Chinese province — in all but in name. Our pivot away from America and near-abrogation of our defense treaties leave us singularly vulnerable. And the Deegong’s preference for Xi Jinping could not be more articulated in his delusional declaration of “the Philippines, China and Russia against the world.” If Lacson’s assertions prove to be correct, things could fall in place to China’s benefit. And unlike the Japanese infiltration, we may already have in place a fifth column – the taipans!
Fifth column
This is by no means an indictment or denigration of the patriotism of the taipans and the Tsinoy community. But taken in context in the light of the Deegong’s biases, particularly his preferential treatment for blacklisted Chinese companies partnering with the taipans (“The Chinese taipans,” TMT, September 16), and their unmitigated acquiescence, this is a logical conjecture. From the very start of DU30’s regime, the Pinoy oligarchy — a phrase used simply to distinguish it from the Tsinoy oligarchy — was his bete noire, not the latter.
The Deegong never did confront the taipans the same way he did the Pinoy oligarchy. He was curiously taciturn, except for the intermittent threats to Lucio Tan to pay up on PAL’s debts. The taipan’s forking over P6 billion for his tax liabilities erased the tax cases against him going back to the Marcos regime amounting to many billions more. And the President declared another off-the-cuff doctrine in absolving Tan — “I will allow compromises even those with evasion of taxes cases.” The implication is toxic. Evade taxes for as long as you can; bribe the bureaucracy and compromise fora lesser amount.
Myths, falsehoods, factoids
This brings us to the tales propagated by both Tsinoys and Pinoys, particularly on the way business is conducted. Many of these are racially motivated, no doubt, spanning centuries since the Chinese came to these shores.
It is almost impossible in this day and age to differentiate between the original Pinoys and Chinese. With generations of intermarriages, one seldom finds authentic Pinoys and Chinese. But the disparities linger ingrained in historical distrust, linguistic disconnection, and ethos. But in fact, many of the Pinoys have Chinese blood running through their veins; similarly many Tsinoys have some Pinoy blood. But the contemporary use of the appellation Pinoy and Tsinoy persists reflecting the prejudices of both which must be confronted, the better to understand each other and lessen conflicts.
Current evaluation of this relationship must rely on both anecdotal acuities and empirical data. From the Forbes list of the wealthiest Filipinos, more than 60 percentof the wealth are in the hands of the Tsinoys. This could be extrapolated for the economy. But in terms of population density, this could easily translate dangerously to a growing gap between the rich and poor — the proverbial seething economic and social cauldron.
The anecdotal perception reinforcing this contention is that one seldom sees poor and homeless Tsinoys in the country – not even in Binondo. A controversial notion too is the proverbial lazy Pinoy depicted in the apocryphal tale of Juan Tamad as contrasted with the hardworking and penny-pinching Chinese “magbobote” and “magtataho.”And the polemical: Pinoys are ingrained with crab mentality, Tsinoys are not.
Assimilation vs integration
Another subjective observation is the refusal of a segment of the Tsinoys to assimilate over the centuries. Assimilation presupposes adopting cultural values and practices of the dominant ethnic group, eventually becoming part of that society. By contrast, many tended to take a different path, that of integration; not adopting but instead preserving the original culture, language and traditional practices erroneously perceived as superior traits.
The Tsinoys’ insistence on marrying off their sons and daughters with clansmen and fellow Tsinoys has persisted for a millennium. A common belief is that this is the Tsinoys’ way of preserving wealth within the clanship passing on the privileges of the rich to exclusive progeny. This drive for integration in lieu of assimilation suggests boundaries between races which from the very beginning perhaps reflect the need to pass on Confucian virtues of filial piety and ancestor worship to one’s own. Thus, the subtle divide that persists up to the present.
Tsinoys and governance
The Tsinoys are perceived to be outside or above the purview of governance. Business is their métier and must be pursued relentlessly. Government is almost anathema to the conduct of business. Taxes are an inconvenience and short of evasion, must be avoided. It was the Tsinoy businessmen who introduced the “two sets of books” system; one fraudulently as a basis for paying taxes, if they must, and the other reflecting real transactions. Tsinoys lose face if they go insolvent; better to burn down their businesses and collect insurance. No doubt, the Tsinoy successes in running businesses elicit jealousy among the competitors on both sides of the racial divide. All these sentiments are either myths or veracities driven by whatever collective inner demons both races possess to begin with.
But it is in politics and governance that their creative practices lay them vulnerable to government leeches. On the other hand, corruption was endemic in the ancient Middle Kingdom dynastic bureaucracy and the proficiency to convert systemic governmental rot to their advantage has been culturally honed to perfection. They invariably take the long view, while most governments have much shorter horizons. A case in point is that the taipans seldom run for any elective posts, preferring instead to finance candidates — betting on both sides, invariably playing the odds. In the end, they win. Thus, enforcing the almost universal belief that the Chinese are the most profligate gamblers on earth.
Be that as it may, the country today is faced with ambiguities impelled by the Deegong’s singular attraction towards China like the proverbial moth to the flame. But DU30’s recent address to the United Nations General Assembly maybe a game changer. It is not only welcome but gives the Filipino hope that he is beginning to find his footing. He has at last affirmed the 2016 arbitral award he once discarded. “The award is now part of international law, beyond compromise and beyond the reach of passing governments to dilute, diminish or abandon. We firmly reject attempts to undermine it.” Coming now to the twilight of his regime, he can reconstruct his legacy. And he could still be a great president.
And so, the questions arise: Are our taipans in the same page? Are their primordial interests aligned with that of their country – the Philippines? Or with the “motherland”?
Second of 3 parts
PRIOR to Spain’s arrival in what is now the Philippines, trade with China was flourishing in the 10th century or even as early as the 2nd century. Artifacts date the presence of Chinese for 2,000 years during the Song and Ming dynasties. It was perhaps to the credit of both ethnic groups, the pre-Hispanic Filipinos and the Chinese, that relations were protected by diplomacy where its abundant natural resources were never subject to conflicts — except perhaps internecine clashes among local tribes. Historical records also show that tribal leaders regularly visited the Chinese capital; perhaps to pay homage to the Chinese emperors.
Not until after we were colonized were the social structures demarcated along racial lines. Natives were classified into indios, indigenous Filipinos, a somewhat derogatory appellation; mestizos, Filipinos of mixed blood; insulares, Spaniards born in the islands; and peninsulares, Spaniards born in Spain. The Chinese were in a class of their own, referred to as Sangley (businessmen or migrants) or Intsik (venerable uncle) and those that intermarried as mestizo de Sangley, not pejorative at first though it assumed racial undertones over time.
Parian 1500s
The first true overt act of racism was in the 1580s when the Sangleys were forcibly relocated outside Intramuros and assigned to Parians — ghetto-like quarters. These in time became the thriving Sangley markets, precursor to the present Binondo, Tondo and Baybay areas. Residents were not allowed within the gates after dark except for those domestic staff of Spanish households and other exceptional professions (cooks, bakers, etc.). The intent was not to assimilate the Sangleys.
Historical records show the Sangley shops growing to around 1,000 in less than two decades. And even in the labor sector, they provided important services “as gardeners, carpenters, bakers, butchers, painters, smiths and goldsmiths, or produced bricks and lime,” working for the “encomenderos, landowners, merchants, bureaucrats or ecclesiastical authorities.”(www.opinion.inquirer.net/119247/the-chinese-of-spanish-era-manila); https://en.wikipedia.org/wiki/Binondo)
But more importantly, having earlier involved themselves in silver trading, they segued into moneylending, virtually capitalizing merchants investing in the Galleon trade, the yearlong route to and from Mexico.
In retrospect the Sangleys/Intsik were hardened by the underlying discrimination imposed by the Spanish colonials and planted the seeds of what would later morph into the typical segregated Chinese business mores of hardworking people keeping to themselves and their tightly knit clans. It is also a sad episode in our history that during these decades “23,000 Sangleys were massacred by the Spanish colonials as they were becoming too numerous and too rich.”
This was only eclipsed by the Chinese pogrom in Indonesia in 1965-1966 which killed an estimated 500,000 Chinese supporters of the Indonesian Communist Party (PKI) during an attempt at a coup similar to a “RevGov” encouraged by President Sukarno himself. Indonesian intellectuals and political scientists also attributed this to a widespread distrust and racism fueled by the successes of the Indonesian Chinese.
Rise of mestizo de Sangley, sari-sari stores
It has always been a misconception that the humble sari-sari was a native original invention. Historians point out that even at the start of the Spanish colonial period, the Sangleys were already thriving in the local business scene. Their relocation to the Parians stripped them of their lands forcing the enterprising Intsik to set up roadside stalls hawking their wares even within Intramuros during the day when they were allowed inside walls. But the phenomenon that helped propel business to thrive in the islands is the later emergence of the mestizo de Sangley through intermarriage. It is noted that Sangleys were not allowed to own land, but their native wives could. Playing a crucial role, they shaped the economy from an agrarian to a light industrial one. Richer than most of the natives, they had access to education and travel overseas, broadening their perspectives and helping to frame the concept of Filipino nationhood and emerging self-identity. Our revolutionary pantheon of heroes had Chinese blood or were mestizo de Sangley — Rizal, Bonifacio, Mabini and del Pilar, among others.
Despite their contribution to enrich our society, racism was always seething underneath. And this is replicated in Southeast Asia where Chinese came in droves, settled and became more successful than the natives.
The American century brought with it the cultural baggage of racism toward the Chinese. These were their experiences too in California gold-rush mines and the great opening of the west when Chinese emigrants were needed to do the menial jobs in the railroad constructions.
As the mestizo de Sangley were reluctantly slowly assimilated, the waves of emigrants from Fujian and adjoining provinces in China due to China’s civil wars, were not. The inability to distinguish these migrants from the Tsinoys — Chinese Filipinos — who were becoming dominant in business persuaded the government to pass a “Nationalization of the Retail Trade Law” which forbade Chinese sari-sari store owners from passing their businesses on to their children, driving many to abandon the sari-sari stores, impelling fixed intermarriages and perhaps the birth of the system of front men and dummies. Thus, acquisition of Filipino citizenship by naturalization or otherwise became imperative, causing bureaucratic corruption and scandals in government particularly in the 1950s to the 1970s.
PH industrialization
This proved to be a blessing in disguise. Curtailment of merchant activities, breaking their affiliation to the sari-sari store, hawking wares, and agricultural goods, etc. spurred Tsinoys and the other Chinese merchants to take risks and move to alternative livelihood to survive, outside of the traditional sugar and tobacco processing into manufacturing, agribusiness, and exports.
Raising capital from the predominantly Spanish and European banks was restrictive. Access to credit for the Tsinoys were made possible by their age-old clanship network where trust and traditional family ties were more important than formal written contracts. This Confucian ethos in fact gave the Tsinoys their biggest advantage. Their word were their bond and reputation, their collateral. And the critical fact that profits were frugally plowed back into the local economy rather than stashed abroad.
Thus, the advent of the original taipans, borne out of the crucible of adversity, deprivation and latent racism but fortified by their Confucian values. Henry Sy from Xiamen who started with his father a sari-sari store transforming this into the biggest conglomerate in the country. John Gokongwei Jr., born rich of a family from Fujian but later became destitute but fought his way up as a trader from Cebu and formed a business empire, the JG Summit Holdings. And Lucio Tan, also from Xiamen, was a factory worker who built a tobacco company parlaying this into a “liquor, tobacco, aviation, banking and real estate” empire. Other taipans no less extraordinary came into their own, George Ty, Ramon Ang, Andrew Tan and Tony Tan Caktiong completing the list of the wealthiest Tsinoys.
These are the taipans — the core of the Tsinoy oligarchy who dominate business, perforce the economy. By definition those who control the economy control the levers of political power. Do they? And are they instruments for the country’s good or only of their family and clans. And in this regime where the political leadership has shamelessly flirted with, and is now dangerously in the arms of, Xi Jinping, where will we find ourselves in the coming years. In the vernacular, “Saan tayo pupulutin!”
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