Victory against the oligarchs

Victory against the oligarchs"The President was angry—and proud."



Visiting elite army troops in troubled Jolo, capital of the Sulu archipelago, 1,544 kilometers southwest of Manila on Monday, July 13, President Rodrigo Duterte was visibly angry—and proud.

The commander-in-chief was angry, not because Jolo policemen murdered four elite Army intelligence soldiers, including two officers, on Monday, June 29 at a police checkpoint in the Sulu capital. The slain troopers were on the trail of terrorists apparently belonging to the warrior Tausog tribe of Sulu. Duterte promised justice to the victims.

“It is not that I am inordinately proud of it,” Duterte suddenly blurted in the course of his speech, partly written and delivered partly extemporaneously. “But that was actually a part of my campaign.”

Then No. 4 in pre-poll surveys, presidential candidate Duterte recalled his 2016 campaign promise to stamp out corruption. He was not talking of small-scale corruption, like the culture that prevails at the Customs and Internal Revenue. “That is small change,” he sneered, and quickly added, “high-level corruption (“sa itaas”) is in the billions.” ”Itong mga mayaman na ginagatasan ang gobyerno, pati na ang tao.” (These rich people who milked the government, including the people).

Duterte was referring to wealth amassed over the years by the country’s entrenched oligarchy which consists of just a few families. Five is Duterte’s count.

“Without declaring martial law, sinira ko ‘yung mga tao na humahawak sa ekonomiya at umiipit at hindi nagbabayad,” the President said. “They take advantage of their political power.” “If I die. (And) my plane falls (from the skies), son of a bitch, I am very happy,” the President exulted for having kept one of his key campaign promises.

Duterte repeated his singular achievement in plain English: “Without declaring martial law, I dismantled the oligarchy that controlled the economy of the Filipino people.”

The small crowd of army soldiers did not react. The subject was probably abstruse to them. But the speech, aired the following day, was the hottest Viber topic among the country’s big businessmen the following day.

In the first three years of his six-year presidency, Duterte had lashed out at so-called oligarchs, among them self-made property tycoon Roberto V. Ongpin (who is actually related to Duterte on his mother side, Roa), Manuel V. Pangilinan of the telco behemoth PLDT and its Indonesian First Pacific companies, and the Ayala family, owners of the Philippines’ oldest conglomerate. The President laced his anti-oligarch diatribes with expletives and even promised to slap Pangilinan and the Ayalas if he encountered them in a hotel lobby. Later, in the wake of the pandemic, Duterte apologized to Pangilinan and the Ayala family for the hurting words.

Ongpin divested from one of his listed companies and was not bothered by Duterte ever since. Pangilinan’s Maynilad Water and the Ayala family’s Manila Water waived claims to arbitral award of more than P11 billion in water fees due from the government and promised to remedy allegedly “onerous” provisions in their long-term concession contracts. Relatedly, the government managed to collect P6 billion in overdue aviation fees from Philippine Airlines owned by Lucio Tan, once reckoned as the country’s second richest Filipino.

But the crown jewel of Duterte’s anti-oligarch campaign is ABS-CBN Corp., the country’s largest broadcast network, in revenues, and owner of the television station Channel 2 and the radio AM bandwidth 630 or DZMM.

On July 10, 2020, after 12 hearings that exposed ABS-CBN’s innards and practices to the public, the House Committee on Legislative Franchises rejected by an overwhelming vote of 70 to 11, the bid of ABS-CBN to renew for another 25 years its broadcast franchise, ending a 53-year business that had given the Lopez family enormous wealth and formidable political clout in more than half a century.

The Franchises Committee backed its decision with a 27-page, 15,264-word report retailing the alleged franchise abuses and violations by ABS-CBN over the years.

The main issues against ABS-CBN:

  • The Lopez scion that heads ABS-CBN management, Eugenio “Gabby” Lopez III is an American and a Filipino citizen at the same time. He was born in Boston on August 13, 1952 to Filipino parents. The 1987 Constitution prohibits non-Filipinos from owning and managing media. “There is a cloud of doubt on Mr. Lopez’ Filipino citizenship and allegiance to the Philippines,” said the committee.

  • ABS-CBN issued Philippine Depositary Receipts, virtual shares of stocks to foreigners, valued at P8.6 billion (62.6 percent), against P5 billion (37.4 percent) issued to Filipinos. “The PDRs of ABS-CBN contain limitations on its ownership rights in favor of foreigners,” noted the committee. ABS-CBN “allowed foreigners a measure of control in the company”.

  • There is a 50-year limit on legislative franchises. Section 11, Article XII of the Constitution says no franchise shall be exclusive “for a longer period than 50 years.”

  • The Lopez family did not follow the procedure in 1987 in re-acquiring ABS-CBN, sequestered by the government under martial law in 1972. No definitive arbitration decision was made by the government. ABS-CBN does not seem to have a clear title to its broadcast property in Quezon City. “This Committee is … perplexed why, despite the supposed conduct of said arbitration proceedings, there was no records of said proceedings submitted to the Committee despite request by its members,” said the House report.

  • ABS-CBN sold TVPlus Boxes to access its encrypted multiple channels and charged the public to access its KBO pay-per-view channel. Those businesses were not permitted by the government. TVPlus is akin to a cable TV which requires a separate franchise.

  • ABS-CBN had a block time agreement for 23 hours a day (almost the whole day) with AMCARA Broadcasting Network (Studio 23) which has a separate tv franchise. In effect, ABS-CBN had two tv legislative franchises. It owns 49 percent of AMCARA which was actually broadcasting from the ABS-CBN compound in Quezon City, indicating full control by ABS-CBN.

  • Failure to regularize its employees. Its labor practices were less than exemplary.

  • Tax avoidance. ABS-CBN paid taxes averaging only ten percent of what GMA Network was paying over the years, despite having bigger revenues.

“The continuous practice of ABS-CBN in navigating through the loopholes of the system and our tax laws appeared to have reached the extent of depriving the government of the taxes due. The integrity of ABS-CBN as a whole is thrown into question when we now compare its payment of taxes to other broadcast companies,” said the House franchises committee report.

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Topics: Rodrigo Duterte , ABS-CBN , Eugenio “Gabby” Lopez III , franchise
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