- NOTE: I first posted this on my Facebook site.
A Facebook friend posted a link to Mr. Rigoberto Tiglao’s Manila Times column yesterday. I did desultory reading and I didn’t exactly know what to say.
It’s very typical of Filipino statist intellectuals and academics to blame outsiders for our economic woes. Some theoreticians describe this (irrational) attitude as “externalism” or “externalist view”.
Tiglao is blaming, or chastising, the Salim family for controlling Meralco.
Tiglao wrote: “I have heard a conspiracy theory that with the weak legal basis for Salim’s control of utility and mining firms in the country, the solution would be to lobby for amending the constitution so that its existing restrictions on foreign ownership in these industries would be lifted, and the issue becomes moot.”
That’s indeed a conspiracy theory. I don’t think the Salim family, which has been jealously guarding their industrial monopoly in the Philippines against foreign competition, is too stupid to lobby for amending the Charter so to get rid of restrictions on foreign ownership of business.
The Salim patriarch did not achieve his corporate-economic status by being too stupid about money.
Why would they do that when their Filipino dummy, er, top Filipino employee, Manny V. Pangilinan, who is one of the biggest individual beneficiaries of our protectionism, is doing an excellent job protecting their economic interests here? Why would they support liberal economic reforms when there are loopholes in our system that they can exploit and circumvent?
Have you ever wondered why Mr. Pangilinan still remains so silent about his economic views or philosophy, or whether he’s in favor of economic liberalism or of protectionism?
Then Tigalo finds it so ironic that “our restrictions on foreign investments have turned off global investors so much… [y]et an Indonesian magnate of Chinese ethnicity—reputed to have ties with certain leaders of China has businesses in the mainland—controls our strategic industries.”
There is no irony there, Mr. Tiglao.
Did you ever ask your self this question, Mr. Tiglao– What kind of foreign investors does our country attract?
The answer is as follows (I gave this answer to one member of an FB group called “Government and Taxes, Liberty and Responsibility“):
Since we protect our industries from foreigners thru our 60-40 law, foreign investors can only enter our economy thru:
- Joint venture with the government (e.g., the defunct and corruption-riddled National Broadband deal).
- partnership with Filipinos or Filipino companies who must own at least 60% of the company.
- Financing and technical schemes (e.g., oil industry)
So, the question is: What kind of investors does RP attract?
the Chinese government (NBN)
the Chinese oligarchs who are willing to bribe politicians (the gambling tycoons from HK and China)
foreign investors who are willing to bribe politicians (Piatco deal and the recent $30 million MRT extort under Aquino’s term)
foreign investors who are willing to use dummies and exploit our foreign investment laws
Yes, we attract foreign investors who are bold and crazy enough to use dummies and exploit our protectionist laws.
Ergo, we don’t attract the best and most compassionate foreign corporations. Instead, we attract corrupt, stingy corporations who are willing to circumvent our laws and to bribe our politicians.
Why blame or chastise Indonesia’s Salim family when they’re merely one of the creations or beneficiaries of our protectionist laws, Mr. Tiglao?
Here’s one practical advice for Mr. Tiglao and others who share his views: DO NOT REVERSE THE LAW OF CAUSE AND EFFECT. Who created who?
Anthoni Salim did not help create or endorse our protectionist system! I bet Mr. Tiglao is an ardent advocate of our protectionism. Or: I think he’s in favor of more protectionist rules as suggested by his previous op-eds.
My honest opinion is as follows: The Salim family supports our protectionism, and this is evidenced by Mr. Pangilinan’s silence on the issue of fully opening our economy to foreign investment. Both Pangilinan and his employers are direct, big beneficiaries of our protectionist, egalitarian, corporatist system.
Now who unwittingly gave the Salim empire control of Meralco?
The only politically incorrect, honest answer I can give is: It’s people like Tiglao and other Filipino protectionists who advocated, and still support, our protectionism.
Next time Mr. Tiglao should be more honest about what he really wants. Is he for complete nationalization of the power sector, or he’s just in favor of more restrictions and regulations? Probably our 60-40 restrictions on foreign investment is not that strict and good enough for him.
- List of companies being managed by Manny V. Pangilinan. Now do you think MVP is too stupid to risk privileged ‘status’ by campaigning for and supporting economic liberalization or openness for the Philippines? I don’t think so.
Metro Pacific Investments Corp.
Makati Medical Center
Manila North Tollways Corp.
MVP Sports Foundation