Second of a series

PART 1 of this series sought to enlighten BBM on the fallacies of his contention that only the economic provisions in the 1987 Constitution are defective that need fixing, directed toward enticing foreign direct investments (FDI). It is our thesis that bad governance hinders the inflow of investments — trumping all economic provisions. We further argued that these defects are simply symptoms, not the root causes. A cursory historical review should give BBM a glimpse of political patronage as central to what ails our system of governance.

Additionally, the late professor Jose "Pepe" Abueva citing Gunnar Myrdal's book, Asian Drama, depicts the Philippines as a "soft state" and a "weak nation," arguing that it is unable to apply the law equally to all its citizens. Our institutions are captives of the oligarchy, and they serve mostly their own interest, the few rich allies and powerful politicians. Our leaders failed to unite and inspire our diverse peoples as a nation.

Another eminent Filipino constitutionalist, former chief justice Renato Puno, viewing political patronage from another angle, refers to dysfunctional democracy as its progeny: "I like to stress the failure of our electoral system to excise the virus of the politics of patronage that has infected our so-called elections ... xxx ... This vicious politics of patronage has allowed few oligarchs and bosses to rule us from colonial times to post-colonial times and their rule has brought us nothing but a facade of democracy, its mirage but not its miracle."

Parts 2 to 4 of this series will draw excerpts from this columnist and various literature by many progressives and even the conservatives in this country, disclosing the systemic defects of the 1987 Constitution that prevent our political leadership from emancipating us from the clutches of poverty, impunity, moral decay, contempt for law and authority, etc., leaving our country in the dust behind our progressive neighbors. It is often touted that shortly after World War 2 the Philippines was economically second only to Japan (after America rehabilitated the former enemy). Today, we find ourselves behind the leading tiger economies of South Korea, Malaysia, Indonesia, Singapore and even Vietnam — that was itself devastated in an internecine war in the late 1960s. We aren't in a pissing contest with our neighbors. It is simply a demonstration that our constitution is the main hindrance to our achieving what others have done these past eight decades.

Political dynasties

Excerpts from my column ("Political dynasty handmaiden to oligarchy," The Manila Times, Aug. 5, 2020) could be relevant for BMM's discernment on political patronage as the root cause from which political dynasties sprung forth.

"Prior to the arrival of Spain, the islands of the Philippines were composed of settlements and villages called barangay with no central government. The barangay, the autonomous component for basic governance, was headed by a datu with a few hundred kindred individuals composing a stable sociopolitical unit.

The 300 years of Spanish colonization, introduction of a bureaucracy and influx of the Catholic Church hierarchy evolved a semblance of centralized government eroding the preeminence of the datu — the equivalency of rajah, hari or lakan of the ruling class — on top of the social order.

Antecedents

The Spanish colonial regime eventually converted the polity into its instrument for governing the territory, collecting taxes, keeping the peace — now all in the name of the Spanish crown. The bond between social classes maharlika and maginoo (the nobles) to the freemen and slaves were balanced on the padrino or patronage system, primitively feudal but a perfectly working arrangement before its nature was transformed over the centuries by Spanish and later, by American influence.

It was the imposition of another system of governance piggy-backed on this traditional bond that began to alter the character of the rulers and the ruled. The Philippines was America's first colony ever, and this baby step at colonization was a trial-and-error stage. For instance, America, whose people pride themselves on their individual freedoms, injected "Western concepts" of democracy and republicanism, particularly the idea of representative government, bypassing the cultural, political practices and roles of the datu and maharlika.

American tutelage

The concept of a "Filipino aristocracy" never was subscribed to by the Spanish colonialists nor by the Americans, effectively dismantling the concept. But the cultural imprint of centuries of clan interrelationship was indelible, where the clan heads/patriarchs/patrons were expected to perform their old traditional roles. Thus, they had to provide protection and even livelihood to their clansmen. The patrons therefore had to accumulate the wherewithal, wealth and political power to perform these obligations and tasks. And thus is a clan/family simply driven to preserve its prerogatives, its wealth and power — patronage politics at its barest.

America introduced alien institutions like the three co-equal branches of government, further complicating traditional governance. Yet, what was structurally imposed was a far cry from the American system itself. Instead of a federal structure, suitable to diverse clans proliferating in the islands, a unitary system of government headed by a president was instituted. But the most glaring defect of the presidential system is that this became the embryo upon which patronage politics was centralized, nurtured and dispensed from.

When we claimed full sovereignty from America after the Commonwealth period, the traditional patronage system was structurally ingrained as a systemic anomaly buttressed by the Constitution of 1935. Thus was bequeathed to our Philippine presidents the role of the top patron reaching its apex during the Marcos years. Marcos Sr. elevated patronage politics, practiced to perfection during the martial law years where "crony capitalism" came into our political lexicon. To hold on to power, patrons and padrino could dip their dirty fingers into the public coffers — thus a new subspecies of the oligarchy appeared in the glossary, "kleptocracy."

And in our presidential system, where the president — the most powerful position in government is elected at large — is expected to provide the resources for an expensive election campaign. This opens an aperture for the oligarchy and the moneyed elite, which was coming into its own, to influence the outcome. And we can only speculate at the quid pro quo this capture of political power entails.

And this goes down to all levels of elective positions. Today, political patronage has become more pervasive fomenting corruption. Our electoral processes for instance are the overarching environment upon which political patronage incubates. Paradoxically, democracy cannot exist without elections; except that in our culture, we managed to debauch the same.

With the constitutionally mandated term limits of elective officials, the desire for continuity in office easily morphs into a deviant model of "public service as a private business," becoming a strong impetus toward the perpetuation of this power base — thus the need for the patron/clan head to pass this on to wife, husband, children, or relatives. This assures the family control over its portion of the local government unit, seeding public elective or appointive positions of power with blood kin. Thus, the flowering of "political dynasties." ("Presidential system, patronage politics and political dynasties," The Manila Times, March 28, 2018.)

Next week, March 8, 2023: Political dynasty, party-list and oligarchy intertwine

First of a series

THIS is not meant to disparage BBM but his latest statements may not have been thought out well, reflecting a lack of discernment on his part at best, or at worst, just simply mouthing the advice and opinion of his sycophants who benefit from the status quo.

I refer to his assertions that Charter change is not a priority. His administration's economic agenda can be pursued without amending the Constitution. Accordingly, the sentiments for pursuing Charter change stem largely from the perceived need to amend only the economic provisions of the Constitution — and nothing else!

This reflects largely the dissonance among his allies in the legislative branch. Rep. Rufus Rodriguez, of the House Committee on Constitutional Revisions, is now conducting public hearings, while his counterpart in the Senate, Sen. Robinhood Padilla, asserting his prerogatives, declared: "...I will pursue my own advocacies, with or without the President's support..."

This is an erroneous shortsighted notion that only the economic provisions preventing the free flow of foreign direct investments (FDIs) is what is wrong with the Constitution. Ergo, the rest of the Constitution is fine. And by extension, the political patronage that is the core of our systemic anomalies in governance is fine. Political dynasties protected by the Constitution are fine. The election system defined by "goons, guns and gold" is fine. That government institutions are captives of the oligarchy is fine. BBM fails to see the umbilical cord tying the country's economy with its political structures. BBM needs to go deep into how the economy, politics and political structures intertwine.

Thus, this multipart series on political economy, an abridged compilation of my articles over the years similarly written for past presidents — GMA, PNoy and the Deegong. FVR wrote seminal positions in his countless books. Perhaps BBM can step back and kindly look at the ideological and historical perspectives that the Centrist Democrats (CD) have been advocating over the decades — and give him a point of reference. BBM is our president and deserves to look at the various ideas and concepts that he may agree or better yet, that clash with his own — the better for him to arrive at a working synthesis.

Historical perspective

Mr. President, if you study your immediate history well, you might get a glimpse of the nuances behind the crafting of the 1973 and 1987 Constitutions. Your father fashioned the 1973 martial law Constitution revising the 1935 Commonwealth Constitution. This 38-year-old document featured a unitary-presidential system establishing a "political order based on democratic principles of representation, accountability and the rule of law" — cherished American ideals transplanted into our Constitution. Many provisions were identical to the 1789 American Constitution notwithstanding the glaring fact that the US is a federal system. What was imposed by our American colonials is a mongrelized version of theirs — one with inherent political structural infirmities: presidential-federal form with our president and vice president possibly coming from different political parties; and senators elected nationwide similar to the president, creating a possible area of ego-conflict. And a highly centralized authority based in the capital region with provinces and local government units subservient to the center; among others.

Ferdie Macoy understood only too well these systemic perversions and opted for a parliamentary system of government but with a bizarre twist — installing himself as the premier/president and Cesar Virata as prime minister, with a subservient parliament quaintly named the Interim Batasang Pambansa.

When his nemesis booted him out along with the 1973 Constitution, Cory came out with a half-baked 1987 Constitution which almost put in place a parliamentary system — similar to your father's. But for one vote, it retained the presidential form. In her desire to expunge any vestige of the martial rule, she came up with a constitution which is more anti-martial law than pro-Filipino.

In haste, the framers irresponsibly allowed a proliferation of political parties neglecting to delete the provisions on the "party list," a concept that should have been an appropriate adjunct to a parliamentary system but not to a unitary-presidential one. This encouraged the proliferation of hundreds of single-issue political parties, a cacophony of petty interests led by petty despots, a bane for good governance. Complications of politics and the political structures dominated both Ferdie Macoy's and Cory's constitution — not simply the economic provisions.

Political patronage — the basic evil

Mr. President, the economic provisions in our Constitution stem from the type of systemic structure that remained unreformed since the 1935 Commonwealth Constitution. The unitary-presidential system jealously guarded by these constitutions is the embryo upon which patronage politics is nurtured. For almost 100 years the system flourished feeding upon the least desired facet of Filipino culture, the desire for and dependence on a benefactor from the datu and sultan, heading a clan, to the Spanish patron looking over the indios, to the American "big brother," morphing into the Philippine president, the "father" of the people...

The 1973 martial law Constitution simply validated patronage politics during his earlier administration and practiced this to perfection during the martial law years where "crony capitalism" entered our political lexicon. To hold on to power, "patrons and padrinos" were allowed to dip their dirty fingers into the public coffers and dispensed them to the chosen electors — thus a new subspecies of the oligarchy was born, and another word appeared in the glossary, "kleptocracy."

Subsequent practitioners of this sordid art of political patronage, chiefly Presidents Erap and Gloria paled in comparison to the masters — the "conjugal dictatorship" of the Marcoses — but the two former presidents did a good job as acolytes, honing the practices further.

Today, political patronage has become more pervasive and has fomented corruption. Our electoral processes for instance are the overarching environment upon which political patronage incubates. Paradoxically, democracy can't exist without elections; except that in our culture, we managed to debauch the same.

Politicians, whether "wannabes" or incumbents, spend millions of pesos to gain the support of their constituents. As a result, a major consideration of the elected public servant is to recoup their investments through all sorts of "rent-seeking activities," leakages in public funds and outright corruption — to the detriment of society's development and public good.

And in our presidential system, where the president is elected at large, he is expected to provide the wherewithal for an expensive election campaign. This opens an aperture for the oligarchy and the moneyed elite to influence the outcome. And we can only speculate at the quid pro quo.

With the constitutional mandated term limits of elective officials, this deviant model of "public service as a private business" becomes a strong impetus toward the perpetuation of this power base — thus the birth of powerful political dynasties.

To assuage the progressive allies of Cory, her Constitution allowed the passing of a provision, a constitutional ban on "political dynasties" but with a killer adjunct — "as may be defined by law" — allowing Congress to refuse to follow through with implementing provisions — simply because this provision is against Congress' interest. Congress is 80 percent chock full of dynasts.

Next Wednesday, March 1, 2023: Political dynasties

THIS is a cautionary tale of corruption in the highest levels of government spanning two administrations, BBM's and the Deegong's. The dramatis personae are two actors, possibly unrelated, strangers to each other but operate here in the Philippines with dubious credentials but well connected. Both are Chinese nationals with tentacles encompassing the bureaucracy, members of Congress, the Senate and key LGUs and men in uniform. They employ similar modus operandi, working with not-so-obscure Filipinos with sterling contacts, with skills to hobnob with branded names, shunning the limelight except for the customary photo-ops with decision makers, the right politicians and more importantly the relatives of those at the seat of power — Malacañang. These public snapshots are critical, perhaps as evidence of a sort of intimate relationship for the benefit of their principals in China, useful tools for extortion. The two Michaels, Yang and Ma, are both experts at leveraging these optics.

This column resuscitates one of the biggest anomalies in the past administration that entangled powerful people at the time of the country's biggest tragedy — the pandemic. Now, corruption has again reared its ugly head threatening this regime unless cut off.

Michael Yang

When Covid-19 struck in early 2020, government rushed in to introduce grandiose-sounding laws — the Bayanihan to Heal As One (and Two) — by granting the president emergency powers. These laws were altogether an appropriate and worthy response. But as always, the devil is in the details. It allowed the primary tools for corruption: negotiated bids on contrived tender failures and sleight-of-hand funds transfers — with leakages somewhere in between; employing obscure patsies "backed by the powerful."

The Senate saw its role and Sen. Richard "Dick" Gordon, chairman of the Senate blue ribbon committee, latched into this gold mine of corruption issues that could sink the Duterte regime, and propelling him to reelection. Whatever the motivations, the Senate hearings ran on for months on end exposing the sordid side of the Deegong's watch. It did no good for his reelection, but Gordon did the right thing. As reported in my columns, the hearings disclosed instances of incompetence and criminal acts. To be fair, the Deegong has not been implicated directly, but it was unfortunate that Duterte in his naïveté elected to fight the Senate on its constitutionally mandated role. He admonished his cabinet against appearing before the blue ribbon, to refuse to cooperate and, if held in contempt and incarcerated, assured them of "ways to get them out." The Deegong bit more than he could chew. The Constitution is unequivocal on the Senate's prerogatives.

What came out of these hearings were a series of shocking testimonies proving that the undercapitalized (P625,000 paid-up) Pharmally Pharmaceutical Corp. (Pharmally) bagged P8.68 billion in government contracts with a zero track record. The paper trail led to financial transactions that indicated the Chinese perpetrators, along with their local business partners and bureaucrats, may also have been conduits of drug money laundered through these transactions. Heading this cabal was Duterte's "economic adviser" Michael Yang, a shadowy mainland Chinese figure known by many labels — consultant, facilitator, bagman, pagador, or locally, bugaw (pimp), depending on the package offered and bought.

Timeline and rogues' gallery

– August 2019 — Christopher Lao, an obscure lawyer, allegedly Sen. Bong Go's stooge (SBG denied this vehemently) was appointed undersecretary at the Department of Budget and Management (DBM).

– Jan. 2, 2020 — Undersecretary Lao is transferred to the DBM Procurement Service (PS-DBM). (Secretary Windel Avisado, castrated, resigned as DBM head.)

– March 16, 2020 — The Government Procurement Policy Board released a resolution incorporating face masks and PPE into common use supplies.

– March 27, 2020 — The Department of Health started transferring funds to the PS-DBM, presumably illegally.

– April 16 and 20, 2020 — PS-DBM under Lao, bought overpriced surgical masks from various suppliers.

– April 2020 to June 2020 — Lao awarded to undercapitalized Pharmally Pharmaceutical Corp. contracts worth P6 billion plus; the contracts that PS-BDM awarded to Pharmally reached more than P8.7 billion as a result.

– June 2021 — Lao resigns. Offices of favored companies closed — addresses unknown.

Michael Yang got away scot-free. He is probably back in China, enjoying his millions.

Michael Ma

Last January 23, the House Committee on Ways and Means started a hearing on the anomalous skyrocketing prices of onions which was blamed, among other things, on the smuggling of the same from China. Rep. Horacio Suansing, Jr. of the second district of Sultan Kudarat, summoned Bureau of Customs personnel and a couple of people to this hearing. What is noteworthy is the participation of another Chinese, a certain Michael Ma. Apparently, his company First Tech Machinery Philippines has been importing equipment for farmers' use since 2016. What is particularly curious is that this seemingly obscure Chinese man has for his business partner and company vice president, Martin Araneta — the first lady's younger brother. Nothing wrong with that. But it seems that the company now known as China Philippine Unified Enterprise Inc. (CPUE) has its former executive, a certain Franz Imperial, now an appointed undersecretary in the Office of President. Again, there is nothing wrong with that!

In the website of the CPUE are dozens of photos depicting Michael Ma in the company of BBM, the first lady and other dignitaries at Davos. Again, nothing wrong with that! Because of these photographs and the names of these important people coming out in the House committee investigation on smuggling and various nefarious acts, the first lady's name has been unfairly dragged in the muck. These innuendos are par for the course with the Marites in social media. But the continuation of the hearings scheduled for January 30 were suddenly canceled, with the acquiescence of the House Speaker, Martin Romualdez — the first cousin of BBM. Now, there is something wrong with that! How can one get at the truth without this hearing? A pall of suspicion in effect will be hanging over the heads of these powerful personalities, not least the sibling-in-law of BBM — and by inference his wife.

And a corollary to this which complicates matters is a newspaper report that a popular Philstar columnist, Ramon Tulfo, may have been sacked "...after posting on Facebook that Martin Araneta, LAM's younger brother, was allegedly involved in "smuggling onions in the piers." (Kit Tatad, The Manila Times, Feb. 3, 2023)

These insinuations of the first lady's involvement in any of these is not the raison d'etre of this article. I don't think she herself is corrupt. I have never met the first couple, and I'm sure they don't know me from Adam.

But the issue here is BBM's stand. "Now that I am the one in command, there should be no more corrupt practices. We will run after them (corrupt officials) ... Instead of directing themselves against the Marcoses only, I mean kung meron akong corrupt na kamag-anak, eh di lalabas ang pangalan niya, but not only us. Lahat," he said.

Fair enough! And this will redound ultimately to good governance and the rule of law that is supposed to differentiate him from his father, the Deegong and past presidents?

I believe you, Mr. President! Now the ball is in your court.

IN 1945, World War 2 ended and another war began. This was not a shooting war — it was the Cold War, a period of geopolitical tension involving erstwhile allies, the United States and the Soviet Union, now competing for hegemony. This rivalry divided the world roughly between the Western and Eastern blocs, classified by their ideological and political moorings; the former championing the capitalist free market economies and the latter, the socialist-communist planned economies.

This rivalry became more intense impelled by two approaches. The first was the nuclear arms race resulting in each accumulating enough weaponry to annihilate each other and the planet several times over. This gave rise to the doctrine of mutually assured destruction (MAD) which posits that "...any use of the nuclear arsenal by any attacker against a nuclear-armed defender with second-strike capabilities, would cause the complete annihilation of both the attacker and the defender." Except as a threat, this took the nuclear option off the table in pursuit of world hegemony,

There were no actual battles between the two protagonists; nevertheless proxy wars were conducted by their respective allies — the Korean War in 1950-1953 and the Vietnam War in 1959-1975. But these engagements threatened to escalate transforming the Cold War into one reprising the past two world conflicts. With uneasy trigger fingers, any miscalculation could result in the unthinkable. This was demonstrated by the 1962 Cuban Missile Crisis edging the world to the brink of nuclear war and the still classified Able Archer War Scare of 1983 — described as "the last paroxysm of the Cold War."

The second overarching approach was subsidiary to the MAD doctrine. This was verbalized by American strategists with the conundrum: How can America and the Western bloc's ideological-political interests be advanced without causing armed conflicts and mass casualties?

Thus, Cold War confrontations shifted to the clash of economies employing methods less deadly than the nuclear option, though nonetheless as disruptive to the world's equanimity.

CIA and the secret wars

Originally the pursuit of American interests in other countries were crude schemes of employing spies and secret agents to foment instability in unfriendly countries. In some instances, they would instigate coups, followed by elections rigged to ensure a more agreeable regime. They made use of extortion, threats and whatever else was necessary to advance America's aims. But being representatives of the US government, these clandestine operations to destabilize governments would be deleterious to America's image once exposed.

A case in point was in 1953. CIA operative Kermit Roosevelt Jr., grandson of the 26th US president Theodore Roosevelt, organized a successful coup in Iran that toppled the government of Prime Minister Mohammad Mosaddegh. The goal was to regain unrestricted access to Iran's oil reserves. The CIA was exposed as the instigator.

US foreign policy

To distance the US government from these nefarious acts of regime change, a paradigm shift was necessary. They changed tactics (or did they?). The US and its Western allies thus started to apply their economic clout as a blunt instrument of foreign policy. The weapons of choice this time was the use of massive debt as leverage to promote US interests around the world, aligning countries with the US and the West.

Third World countries, particularly those in Asia, South America and Africa were just too eager to develop their economies preconditioned on free trade agreements with America and the West; the transfer of technologies and more importantly the injection of capital for investments, some of which were used to line the pockets of despots, politicians and the bureaucracy. Countries were enticed to accept more and more economic aid/capital/debt, beyond their capacity to absorb and repay from complicit multilateral organizations like the World Bank.

This weaponization of debt necessitated the participation of financial institutions, lobbyists, business conglomerates and multilaterals under the aegis of what was to be called the American corporatocracy (AmCorp). An adjunct to this amorphous entity are the "economic hit men" (EHM) — the more sophisticated substitutes for the old CIA spies and secret agents. These were the new "James Bonds," private contractors, employees, consultants and corporate representatives of AmCorp who are sent abroad to deal with governments, local politicians and the local oligarchy.

I quote from one of the celebrated EHM, John Perkins, a former American Peace Corps volunteer, who wrote a book The Confessions of an Economic Hitman a 2004 New York Times bestseller (now on its 2016th edition). The EHM was to respond to a corollary question — "How do you get rid of uncooperative rulers while keeping their countries and their resources under your control — without sending in the Marines?"

The EHM is dispatched to the developing economies to deal with political leaders and the decision makers for the sole purpose of achieving America's political, economic and military goals. "His job was to make massive loans seem like a good idea — loans that would leave countries deep in debt and vulnerable to US influence."

As these private companies are not paid directly by the US government, the terms of the loans granted the developing countries guaranteed the private companies would get rich — with the EHM getting their share of the loot. This AmCorp networks connect corporations, banks, lobbyists, etc. proving to be a powerful vehicle for corruption targeting like-minded politicians and businesses owned by the local oligarchy. The EHM's repertoire include bribery and money laundering, attractive to Third World corruption culture.

An important feature of the dealings of the corporatocracy is that they are mostly transacted in the higher levels of government and remain largely in the shadows.

These massive debts, mostly with onerous conditions, in effect tie down these emerging economies to the apron strings of US and Western businesses making them richer and the rest of the world poorer. The World Bank and other multilaterals' studies show that 70 percent of the world's population now live in countries where economic inequality has increased over the previous 30 years.

Rise of the Eastern hegemon

China, while nominally part of the Eastern bloc, charted a different course for itself. After Deng Xiaoping released the backward country from its ideological prison and opened its markets to the West, its economy flourished, rivaling the US, with its trajectory towards parity achievable in the 2030s. Upon the collapse of the Soviet Union in 1989, presaging the end of the Cold War and creating a vacuum, China emerged as the Eastern hegemon. And it has developed its own method of economic influence and foreign policy — its Belt and Road Initiative (BRI) has already entombed into its web many countries in Asia. BRI is the Chinese version of pressing massive debts on developing countries needing capital with onerous terms (see TMT article of Feb. 1, 2023, "BBM's travels and new bromance with China"). And no doubt, it has its own version of the EHM through its own Chinese corporatocracy — using tools of corruption as an extension of Xi Jinping's foreign policy.

These initiatives merely reflect how US and Chinese foreign policies enable corruption in client countries in a modern concept of imperialism. And this is what BBM faces today. We want him to succeed badly but — Cuidado!