"Is there no one else?"
(Following is the first part of my Rotary Club of Manila speech on Nov. 15, 2018):
I would like to thank the Rotary Club of Manila, Asia’s first, best and largest Rotary Club, for the honor of being invited as your speaker.
Today, I am going to discuss four main topics:
One, income inequality in this world, including the Philippines; Two, the ease of doing business in the Philippines; Three, family values and why they are important to launch and sustain a business; and Four, emerging media trends.
According to Credit Suisse, the bottom half of the global population own less than 1 percent of the world’s total wealth. The richest 10 percent own 85 percent of global wealth. The richest 1 percent owns half of global assets.
The same is true in the Philippines. The richest 1 percent own more than half of the country’s wealth. The richest 100 families own the politics and business of this country.
According to Credit Suisse, there are only 24 Filipinos with wealth of $500 million or more, the so-called ultra high net worth individuals.
And that the Philippines has 32,354 US dollar millionaires (or high net worth individuals) whose combined wealth is $518 billion, an amount 1.67 times the country’s Gross Domestic Product of $310 billion.
The Philippines is a country of 24-million families and a population of 106-million people, of which 62,043,000 (62.043 million) are adults.
On average, each adult Filipino (19 or older) has wealth of $8,335 (debts included), according to Credit Suisse.
Credit Suisse defines net worth as the value of financial assets, plus non-financial assets—principally housing and land, less debts.
Of the 32,354 Filipino millionaires, 27,369 (84.59 percent) have wealth of between $1 million and $5 million; 2,757 (8.5 percent) have wealth of between $5 million and $10 million; 190 (.587 percent) have wealth of $50 million to $100 million; 130 (.4) have wealth of $100 million to $500 million; and 24 individuals (.074 percent) have wealth of $500 million or more.
Credit Suisse’s “Global Wealth Databook 2018” indicates the world has 42 million dollar millionaires. Of that number, 17.349 million individuals are in the United States; 3.479 million in China; 2.8 million in Japan; 183,736 in Singapore; 88,845 in Indonesia; 39,814 in Thailand; and 4,943 in Vietnam.
Our politics is monopolized by only a few families—100 families.
Thus you have two brothers running for senator at the same time; a family running for senator, governor, and congressman at the same time; a candidate running for mayor and a sibling running for vice mayor, with still another sibling running for congressman—and all three are unopposed. Two siblings are battling for the mayorship of Makati.
In Taguig-Pateros district, one family, the Cayetanos, will have a stranglehold. A husband and wife Cayetano are running for Taguig’s two congressional seats. The sister of the husband is running for senator. Their brother and this brother’s wife are running for mayor and vice mayor of Taguig.
Is there no one else?
In the movie “Troy,” Brat Pitt, playing Achilles, asked after defeating a monster warrior: “Is there no one else?”
For these families, monopolies are a source of family or clan pride (“public service is a tradition”), a badge of honor (“the people love us, you know,” as if the people had any choice), and revolting of all, legal and constitutional.
The dynastic monopolies have morphed into political monarchies ruling large cities, large provinces, major regions, and indeed, the entire archipelago. This is democratic inclusion in reverse—a rule by no more than 100 families over the world’s second-largest archipelago, 12th largest consumer market, and one of the most dynamic economies in Asia.
What has been the impact of dynastic rule by these 100 political families?
Is it a coincidence that the Philippines has one of the worst income equality ratios in the world, that it is the only major country that failed to solve its poverty after the entire world solved its poverty in 2015, that in Asean, it has the highest poverty incidence, the highest unemployment rate, the highest inflation rate, the highest interest rates, and the lowest level of foreign investments?
In this year’s World Bank study on Ease of Doing Business in 190 countries, the Philippines ranks a disappointing 124th, down a crucial 11 rungs from its already disappointing 113th for 2018. When President Duterte became president, the Philippines was ranked 99th.
In two years, the country went down 25 places. Or 25 other countries improved their business rules, procedures, and costs, and the Philippines did not.
Yet, 99th was already a bad ranking. A total of 190 countries are studied. One half of that is 95. At 99th, the Philippines was below the global average as an easy place for doing business. Since 2016, our ranking has kept getting worse, which means as the years go on, it keeps getting more difficult to do business in the Philippines.
For the Philippine ranking, among 10 factors, the World Bank surveyed how business is started in Quezon City and how many percent of adult Filipinos have access to credit or loans. The Philippines fared badly in both.
For starting a business, Quezon City ranked 166th among 190 cities of the world. As a place to get credit, the Philippines ranked 184th, out of 190. This means we are one of the worst places on earth to start a business (in the lowest 15 percent) and to obtain a loan (in the lowest 5 percent).
You want to get a loan? You won’t get it. Only 2.7 percent of potential borrowers are covered by the credit bureau, which means only three of every 100 could borrow from their bank. In depth of credit information, the Philippines has a grade of 0 (the worst) out of 8 (the best). The best in depth of credit information—UK and Ecuador.
To get electricity, a Filipino takes four steps, 37 days, and 21.7 percent of his income per capita. It takes 18 days to get electricity in Korea and UAE (the global best). It costs zero in China, Japan, and UAE.
To register property, the Filipino must endure nine steps and 35 days and pay 4.3 percent of the value of the property. The global best for registering property: one step (Norway, Portugal, Sweden), one day (New Zealand); and zero cost (Saudi Arabia).
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