$30 Million MRT Extort Reveals the Evils of RP’s Protectionism and Corporatism


Welcome to CORPORATIST/ FASCIST Philippines. Corporatism or fascism is just a stone’s throw away from Socialism.

Czech railway firm reveals $30 MILLION MRT extort attempt.

Here’s an excerpt from Inekon board chairman and chief executive officer Josef Husek’s affidavit:

“While talking about the tender, Mr. Wilson de Vera suggested that we would be selected as (the) supplier of the tram vehicles and related services, provided that we (pay) to an unknown entity a certain amount of money. Mr. Wilson de Vera indicated such payment should amount to USD 30 million.”

“This suggestion shocked us, as we did not expect this way of doing business. We tried to explain that any paid sum would inevitably increase the final price of our products and services, because the prices (were) carefully calculated with regard to process of our subcontractors and value of the technology to be used in the project.”

Obviously that’s how corrupt corporatists and government agents do ‘business’ in the country. 

Thanfully Inekon rejected the extort attempt as well as the deal, which made corrupt government agents of the MRT “upset” and furious”.

From Mr. Husek’s affidavit:

Inekon CEO Josef Husek
Inekon CEO Josef Husek

“On our way back to the hotel, Ambassador Rychtar informed us that he just received via mobile phone a text message from Mr. Maralit. In the message, Mr. Maralit informed Ambassador Rychtar that Mr. Vitangcol and Mr. Wilson de Vera were furious, because we refused to accept their suggestions. According to the message, MRT would never do any business with Inekon Group in the future,” Husek stated.

The question is: WHO NEEDS WHO? It’s definitely US Filipinos who need them. That’s why Mr. Husek did the right thing when he rejected our government agents’ “proposals”.

We need the expertise and technology of these foreign contractors. Without their knowledge, expertise and technology, there’s would have been no improved railway system and services in the Failippines.

  • From the MRT website: “The loans are backed by the government through a sovereign undertaking, as agreed with the Department of Finance, to cushion risks to investors and creditors.” Why should Filipino taxpayers back or guarantee loans taken by the country’s corporatists? The only reason is– it’s because the Philippines is a protectionist/corporatist state. As stated in a previous blog: “by means of economic protection, subsidies, grants, behest loans, etc., the State creates the very economic monsters (oligarchs and cronies) against which the poor and the people at large are to be protected. That our country is currently being ruled by both political and economic elites is no coincidence. Whether the country’s elite engineered our protectionist, Corporatist Welfare State  to serve and guarantee their political interests is no longer the question. The people helped build it– and continue to support it– either through their active support or inaction. This is not a conspiracy theory; this is reality. The reality we live in is our own construction.”

We are a Fascist/Corporatist State!

In the Philippines, most politicians are Corporatists. Observe that the Fascists and the Communists agree with each other when it comes to the provision of welfare programs (e.g., Conditional Cash  Transfer, Universal Health Care, Population Control programs, etc.) or enactment of welfare laws like the Reproductive Health law. The fight between the Fascists and Socialists is mainly focused on the role/function of the State. The Fascists simply want to establish a syndicate of industries and private and semi-private sectors to be able to finance its political programs according to the political program of the Duce, whereas the Socialists want absolute control of the mode of production to allegedly empower the proletarian class according to the political program of the dictator or ruling one-party elite.

That Protectionist Winnie Monsod!

In the Philippines, the strongest advocates of protectionism and economic regulations are the country’s so-called intellectuals and oligarchs/cronies. The oligarchs and cronies (these terms should not be used interchangeably, I believe) strongly support protectionism because they are its economic beneficiaries. On the other hand, the so-called intellectuals, who are mostly leftists and statists, provide strong pseudo-intellectual ammunition to the protectionist movement. Ironically, most of these intellectuals denounce the “rich” for dominating the land’s economic battlefield. The rich, according to these protectionist intellectuals, benefit from our political system, which is true. They believe that the rich should be taxed more to serve what they call social justice and the greater good. Social inequality, they argue, widens because the rich become richer while the poor become poorer. This is the reason why they want more regulations to  moderate the rich’s insatiable ‘greed’.

But who is/are the ‘rich’ they’re talking about? Certainly not all Filipino rich achieved their success through dishonest means and political machination. Certainly they’re referring to the country’s cronies and oligarchs. But did it ever occur to these intellectual MORONS that it is their pseudo-intellectual ammunition that helps these oligarchs and cronies maintain their corporate power/dominance? In reality, they are what Vladimir Lenin called “the USEFUL IDIOTS”.

For instance, so-called economist Winnie Monsod passionately denounced the Philippine Airlines (PAL) corporate abuses calling it “the exploiter of labor”. If this UP-educated statistician (not economist) would only try to understand that the most effective way to stop this so-called corporate abuse or “exploiting of labor” is to allow free market competition to flourish in the country. One needs to understand that it is our political system– our Constitution– that causes market monopoly or cartelization. All of our industries are monopolized by the dominant corporate few because of our protectionism. But first, the biggest monopolist is the Philippine government, which owns all GOCCs, government hospitals, more than 100 tertiary institutions, hundreds or even thousands of basic educational institutions, gambling facilities, public utilities, among others. Monsod should only try to compare the Philippines with Hong Kong or Singapore to see the difference.

How Protectionism and Oligarchic System Cause Artificial Water Crisis in the Philippines

Public utility sectors in the country (e.g., water sector, power sector, telecommunication sectors, among others) are semi-off-limits to foreign investors (except mass media wherein foreigners are totally not allowed to invest). The 1987 Constitution specifically mandates that the government and Filipinos should own at least 60 percent of a company or business).

This constitutional restriction on foreign participation led to Filipino cronies and oligarchs monopolizing nearly all public utility sectors and industries.

For example, the Lopez Group currently dominates several key sectors, namely, mass media (e.g., ABS-CBN Corporation and Sky Vision Corp.), telecommunications (e.g., Bayan Telecommunications Holdings Corporation), power sector (e.g., First Philippine Holding Corp., First Gen Corporation, First Gas Holdings Corporation, FGP Corp, FG Hydro Power Corporation, FG Bukidnon Power Corp., Meralco, PECO or Panay Electric Company, Energy Development Corporation), real estate sector (e.g, Rockwell Land Corporation, First Philippine Industrial Park, First Philippine Realty Corp., TerraPrime Inc.), infrastructure sector (e.g., First Balfour, Inc. and First Philippine Industrial Corp.), and manufacturing sector (e.g., First Philippine Electric Corp., Philippine Electric Corporation, First Electro Dynamics Corporation, among others).

The powerful Lopez family, which is notorious for supporting and campaigning protectionism and Filipino First policies in the past, also previously owned Maynilad Water Services through Benpres Holdings Corporation. Benpres left its joint-venture with Ondeo Water Services, Inc. in 2006 in order to settle a debt of US$150 million.

Philippine Star reports:

The top executive of Czech railway firm Inekon Group has submitted an affidavit to the National Bureau of Investigation (NBI), detailing an alleged $30-million extortion attempt involving officials of the Metro Rail Transit (MRT).

In a five-page affidavit, Inekon board chairman and chief executive officer Josef Husek said MRT officials led by its general manager Al Vitangcol III invited the company’s officials to an informal dinner in a Makati restaurant on July 9, 2012.

Husek stated that the dinner was attended by Vitangcol, Manolo Maralit who was introduced as a “liaison,” Wilson de Vera, and Czech Ambassador Josef Rychtar.

Previous news reports said Maralit and De Vera later became part of the consortium PH Trams-CB&T JV, which replaced Japan’s Sumitomo Corp. as MRT-3 maintenance provider in October last year. The maintenance contract was extended by a month last July.

In this Interaksyon report, Malacanang palace challenges Czech Ambassador Josef Rychtar to prove bribery claim:

Malacanang told Czech Ambassador Josef Rychtar on Friday to prove claims officials of the Department of Transportation and Communications asked executives of the Inekon Group for $30 million to bag a contract to supply trains for the Metro Rail Transit 3.

“Give us the evidence and we will investigate …We are asking the Czech ambassador, as in any allegation, to give us the evidence,” Palace spokesman Edwin Lacierda said in a briefing aired over Radyo ng Bayan.

At the same time, Lacierda cast doubs on the statement of Rychtar noting, among others, that the envoy’s claim, which came out in a report in the Philippine Star, that Inekon had been blacklisted for refusing to give in to the bribe demand in July last year was not true.

“It is not true that Inekon was blacklisted. The ambassador met with (Transportation) Secretary Jun (Joseph Emilio) Abaya April this year … and he (Abaya) encouraged Inekon to participate,” Lacierda said.

Kapal muks!Daang Matuwid‘ is the biggest joke pulled on us by this administration.



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