Business groups, who foresee the election of Ferdinand Marcos Jr. in the May 2022 presidential contest, are anxiously asking what kind of president he might be, especially on economic matters. Would he be like Marcos Sr. who, from the start, sought not only to restructure the Philippine economy but also to intervene directly in the markets? Would he favor some business players and go after others he perceives to be inimical to the nation’s interest and the common good?
In contrast to candidate Marcos Jr., who has not bothered to spell out his economic program, Marcos Sr. had ambitious economic plans that he sought to accomplish in a volatile global economic environment. He was not unfriendly to foreign capital; in fact, he sought to encourage more investments from abroad. But he also talked of developing a Filipino industrial class that was not merely a junior partner or dummy to foreign interests. His model was South Korea under Park Chung-hee. To achieve this, he argued that massive government support was needed to support Filipino entrepreneurs: behest loans, import privileges, tax exemptions, sovereign guarantees, etc.
The businessmen he showered with these favors came to be known as Marcos “cronies.” Unlike the Korean “chaebols” that Park nurtured to become today’s successful gigantic conglomerates, the Marcos cronies lacked accountability; they were not penalized when they misused the state support given to them. As documents would later show, they reciprocated the favors Marcos extended to them by making him part-owner of their businesses.
These state-sponsored businessmen became very rich indeed. Apart from naming them, the late researcher Ricardo Manapat listed their businesses in his path-breaking work “Some Are Smarter Than Others.” They were supposed to be the antithesis to the traditional rich that Marcos singled out as the enemies of progress, but they were actually worse.
Marcos wasted no time going after the old rich like the Lopez family, whom he identified as the owners of big media, public utilities, mineral concessions, and vast tracts of land. He accused them of joining forces with the communists to sow disorder. In his speech announcing martial law in 1972, he justified his assumption of emergency powers as the state’s legitimate response to a “Left-Right conspiracy” to subvert the duly established government.
The confiscation of their properties, which Marcos claimed was the fruit of their immense political clout in successive administrations, formed the populist element in Marcos’ authoritarian agenda. He threatened them with imprisonment if they resisted, thus forcing them to flee abroad.
If any of this sounds familiar, it is because, decades later, Rodrigo Duterte would use the same template, echoing the same populist theme of defending the public interest against “greedy oligarchs” who used their considerable political influence to multiply their wealth under the post-Edsa governments. Like Marcos, he publicly denounced these “oligarchs” even as he created his own cronies, threatening to jail them if they did not agree to give up the advantages they had secured under previous administrations.
I have put the term “oligarch” between quotation marks to indicate its shifting meanings in the light of more recent usage. Think of “Russian oligarch”—a phrase that explicitly refers to a breed of overnight billionaires who emerged in the 1990s, notably in Russia and Ukraine, from the economic chaos that ensued after the dissolution of the Soviet Union. These were young upstarts, who capitalized on their connections to former officials of the USSR to acquire state assets and earn huge profits from arbitrage. Corruption of state officials remains an integral element of their way of doing business.
The system in which Russian oligarchs thrive has more in common with “cronyism” under Marcos than with venture capitalism as we understand it. Ever conscious of their vulnerability to political interference, they are known to park the bulk of their wealth abroad, rather than reinvest it in Russia.
This is not to say that old business groups in our own country are above using political connections to obtain the best possible deals for their businesses. Indeed, I do not know of a time in our nation’s history when special closeness to political power has not been put to advantage by the propertied class—even if it is only to protect them from extortionists who prey on business, or to facilitate securing clearances from regulatory bodies. Rare is the successful businessman in our country who could afford to be aloof from politics and not make even a token contribution to a strong candidate for political office.
The difference between Russian-type oligarchs and cronies and legitimate entrepreneurs is to be found, I guess, in the capacity of a business, regardless of its origins, to continue to operate without any special treatment from those that are charged with promulgating collectively binding decisions. This is what autonomy from the vagaries of politics means.
While it is difficult to say what Marcos Jr.’s economic agenda is, one thing is certain. Judging from his family’s longstanding claim that a good part of the Marcos estate consists of shares in companies owned by former cronies, a Marcos presidency won’t be shy in using the powers of the office to hasten the retrieval of properties the family believes belong to them.
I submit this is the billion-peso reason Marcos Jr. wants the presidency so badly.