Open For Business

Land as a source of wealth and power is waning; instead the business interests of the members of the House of Representatives are more varied, a sign of the modernization, if not the democratization, of the Philippine elite.
by Sheila S. Coronel


THOSE WERE the days. In July 1988, in the first-ever State of the Nation of Address made by a post-Marcos president in Congress, sugar planter and Negros Occidental Rep. Hortensia Starke marched triumphantly into the session hall attired in a swirling ball gown and twirling a frilly parasol.

Just a month before, the House of Representatives had passed an emasculated land reform bill, with 118 voting for and only 49 against it. Starke was one of the most eloquent defenders of landlord interests in the legislature. "Your land is like your favorite dress," she said at one point. "If it is taken away from you, it is as if you have been stripped." When Starke, clad in all her finery, strode into Congress that day, the symbolism was too much to bear: It was seen as the clearest signal of the victory of the landed aristocracy.

Since then, the image of the House of Representatives as a "landlord-dominated House" was etched in the public mind. Up to now, nearly 40 percent of congressmen still own agricultural land, but this is down from 58 percent a decade ago. Despite this decline, the ranks of Congress still include members of the biggest landowning families in the country: Rep. Benigno 'Noynoy' Aquino III is part of the Cojuangco clan, which owns the 6,000-hectare Hacienda Luisita in Tarlac; his cousins Mark and Carlos Cojuangco are heirs of their father's estates, which include at least 3,000 hectares in Negros Occidental; and Antonio 'Tonyboy' Floirendo Jr. stands to inherit control of a 5,000-hectare banana plantation in Davao del Sur.

Yet the days of Hortensia Starke are over. For sure, Congress remains a house of privilege, where the landed and wealthy dominate. But agricultural land as the foundation of power has been eclipsed by other sources of wealth, including manufacturing, services (construction, restaurants, schools, labor contracting, among others), and trade. This trend was already evident in the 1980s, but the image of the likes of Starke was so compelling, it hid the reality that the hacienderos, for all their flair, are a dying class.

Although Philippine politics often seems backward and feudal, the country has come a long way from 1898, when the short-lived Malolos Congress, composed largely of members of the landed ilustrado class, convened amid much pomp and pageantry in Barasoain Church. Neither is the country mired in 1907, when the first Philippine Assembly, again made up of members of the landed aristocracy ((including Melecio Cojuangco, the great grandfather of Noynoy Aquino and his two cousins), took office under U.S. tutelage. Nor is it the 1960s all over again, when powerful sugarcane planters dominated the legislature and dictated to presidents.

It is true that in some districts, the descendants of caciques still rule. The most notable example is Tarlac, whose representatives to Congress in the last 100 years have largely been drawn from just two families, the Aquinos and the Cojuangcos. But in the last half-century, these families have also diversified their holdings so that it becomes difficult to call them simply as landlords.

Eduardo 'Danding' Cojuangco Jr., whose two sons and a nephew are members of the 12th House, may be a major landowner but he is also chairman of San Miguel Corp., a multibillion-peso food and beverage manufacturing giant. His cousins in the other branch of the Cojuangco family still own Hacienda Luisita, having managed to skirt land reform by using loopholes in the law shepherded through the House by then Speaker Jose 'Peping' Cojuangco Jr.

Luisita, though, is not primarily an hacienda anymore, but a bustling commercial, industrial, and tourist hub. Similarly, up to now, the Floirendos control vast tracts of land in Davao. But they also have car distributorships, resorts, and even a television production outfit. The Zubiris of Bukidnon, who own a sugarcane plantation and a sugar mill in the province, are known in Manila as savvy entrepreneurs who run a chain of popular bars and restaurants.

This diversity of businesses makes it difficult to speak of a landlord or comprador bloc with a cohesive set of interests, such as the protection of export quotas and farm subsidies or the provision of incentives for the export of agricultural commodities. Neither can the Philippines still be accurately described as a cacique democracy in the sense of the pre-eminence of land-based wealth and power. As the table on this page shows, a multiplicity of proprietary interests is represented in the legislature.

These interests are so diverse, congressmen say there is really no dominant economic bloc that determines the direction of Congress. While there are many landowners in the House, for example, they do not get together to draft a legislative agenda. This ensures that no single business interest is able to capture the legislative process; it also means that legislation can go any way, without following a consistent path. "We can't put together a coherent economic program because everyone is pulling toward the interests of their own clan, business or geographical area," says Batanes Rep. Florencio 'Butch' Abad, a former activist who has been in the House for three terms.

Together, the changing business interests of cacique families and the entry of new entrepreneurs and professionals who do not come from land-based wealth are transforming the House of Representatives. While the House may not have been radically democratized, it has at least been modernized.

LOOKING BACK, Abad says that it was not so much feudal interests that blocked land reform, and not so much the desire to keep the hacienda way of life that rallied congressmen against radical land redistribution.

Abad was one of the few legislators who walked out in 1988 to protest the efforts of the landlords in Congress to block genuine land reform. In 1990, President Corazon Aquino named him secretary of agrarian reform amid stiff opposition from legislators who thought his vision of land redistribution was too radical.

"The power of agricultural land as a source of wealth is seeing its end," he says. "Landowners are moving into commercial, real estate, or industrial enterprises. When I was secretary, I didn't realize that I was being hit more by politicians identified with realty, rather than agricultural, interests. At one point, especially in semi-urban areas, there was a lot of speculation on land and the problem of land conversion became very serious. This was the time of the real-estate bubble, when real money could be made by converting farm land to commercial enclaves, housing estates, etc."

Throughout the country, the decline of agriculture's share of the national wealth (it now accounts for some 20 percent of the country's gross national product) has also seen the decline in power of landowners in the legislature. Today, the sugar planters in Congress are a poor shadow of their former selves: factionalized, demoralized, and no longer as fabulously wealthy as they used to be, they have not even succeeded in legislating measures that would protect the ailing sugar industry, such as farm subsidies for planters or high tariffs for imported sugar.

"There is no effective sugar bloc," says Negros Occidental Rep. Apolinario 'Jun' Lozada, a former diplomat who, together with Rep. Juan Orola Jr., a lawyer and former tourism official, are the first representatives from that most feudal of Philippine provinces who are not sugarcane planters. "We have no agreement on what the problems of the sugar industry are and how to get the support of government for it."

Lozada, the Manila-educated son of a hacienda encargado (overseer), says he was elected to represent the fifth district of Negros Occidental because of the support of the Church, NGOs, middle-class professionals, and even the New People's Army (NPA). Now on his second term, he is also the only congressman in the province who is not allied with Danding Cojuangco.

For the last 100 years, the legislators representing Negros have been for the most part heads of major planters associations and members of the old haciendero families. But the election of the likes of Lozada and Orola indicate real cracks in planter hegemony. Moreover, the sugar planter-representatives themselves now have multiple interests and now draw influence and legitimacy not solely — and in some cases, not mainly — from landed wealth.

Monico Puentevella, a first-termer who is the current representative of Bacolod City, may be a planter but is better known as an athlete, TV host, and developer of memorial parks.

Edith Yotoko-Villanueva, who represented the third district in the 11th House, is a planter's wife but she has also been deeply involved in NGO work and social development projects, thus representing the younger generation of small-scale sugar planters who feel the urgency of introducing social equity and progressive politics to feudal Negros.

In contrast, Julio 'Jules' Ledesma IV, the three-term representative of the first district, is a descendant of some of the wealthiest Negrense haciendero clans. He is also the nephew of Hortensia Starke; but unlike his aunt, he does not behave like he had just fallen off the set of Gone with the Wind. A relative unknown in Congress until his marriage in 2002 to the young and stunning movie star Assunta de Rossi, Ledesma comes from a landowning clan that is also into shipping and fisheries. Yet while the Ledesmas are still filthy rich, their holdings are nowhere near that of the Chinese-Filipino taipans who are now the real captains of Philippine industry. Instead, Jules Ledesma is carving out a niche for himself through a combination of reflected showbiz glamour and a display of expertise in the House ways and means committee that he chairs.

It can be said that the most successful of the cacique descendants are those that have diversified from landed wealth into industry and services, using their cash, their connections, and their property to invest in the more dynamic sectors of the economy. That has necessitated a shift from a feudal to a more modern worldview, a transition from the renter mentality of the hacienda economy to the more entrepreneurial and competitive mindset required in modern business. While Philippine business is not exactly an even playing field, it is more open to competition and to new entrants than hacienda agriculture ever was. The rise of once-pariah Chinese-Filipino businessmen to the heights of the Philippine economy provides the most dramatic proof of this.

In some cases, the influence of cacique families has been enhanced by the magic of movies and the media. Thus, the celebrity marriages of Ledesma and de Rossi; of third-generation legislator Ralph Recto and movie star Vilma Santos; of Charlie Cojuangco to actress Rio Diaz; and of Tonyboy Floirendo to former Miss Universe Margie Moran. In the past, cacique families made sure they had a member in politics and another in business. Recognizing the power of celebrity, they now see that it is important to have a representative in the media or the movies as well.

These families endure, not only because of inherited wealth and privilege, but also because of their ability to sense and take advantage of new business opportunities, to constantly reinvent themselves, and to tap into fresh sources of popular legitimacy.

A SEAT IN the House of Representatives has always been a ticket to the charmed circle of the Philippine political and economic elite. Representation in Congress has provided for political families protection for their businesses and access to a wealth of privileges (tax exemptions, bank loans, state subsidies, franchises, concessions, licenses) for their various interests. For newer players, a seat in the House can provide opportunities for deal and money making and the seed capital for expansion into legitimate business. For these reasons, seats in Congress are so fiercely contested.

Over the years, the power to make laws has been used by representatives for their personal or family gain. The enactment of the loophole- and exemption-rich Comprehensive Agrarian Reform Law (CARL) in 1988 is a prime example of how landlords used their legislative powers to protect their landholdings. Soon afterward, another law exempting prawn and fish farms from redistribution was enacted, providing more proof of how the business interests of representatives influenced legislation. But since then, there have been no concerted attempts to further erode land reform.

"The unwritten law now," says Abad, "is that the landowners won't pass a law diminishing CARL and we won't pass a law strengthening it. It's a stalemate. But the farmers lose out in the end, because the implementation of the law is weak and the courts have tended to decide in favor of the landowners."

The power of one of the most important business interests in Congress — the property developers like former House Speaker and now Senator Manuel Villar Jr. — was seen with the passage in the Ninth Congress of the Comprehensive and Integrated Shelter Financing Act, which increased the funds for the National Home Mortgage Finance Corporation, the state agency that grants generous financing and loan guarantees to housing firms. It is perhaps no coincidence that about half of all legislators have interests in real estate. Abad thinks that because of this, the House has stalled the enactment of a land-use law that will delineate which lands should remain agricultural and which can be converted to other uses. "The status quo," he asserts, "is better for those in the realty business."

Congress also has the power of the purse, meaning it scrutinizes the annual national budget prepared by the executive branch. The budget hearings have traditionally been the venue for congressmen to wangle concessions, including appointments and projects, from departments and agencies eager to have their budgets approved.

Construction is another major interest in Congress. One of every 10 congressmen declared interests in construction firms in their statements of assets, but some representatives and congressional staff say many more legislators — perhaps as many as seven in 10 — are involved in construction through nominees or dummy companies. They say that such interests become evident during budget hearings when congressmen who have shares in construction firms openly ask for projects from government agencies in exchange for approving their budgets. The same holds true during appointment hearings, when legislators promise to approve the appointment of Cabinet secretaries in exchange for favors or contracts from their agencies.

Last year, the League of Municipalities of the Philippines filed a complaint in the House ethics committee accusing Palawan Rep. Vicente Sandoval, the chair of the House contingent in the Commission on Appointments, for supposedly stalling the confirmation of Heherson Alvarez as secretary of the Department of Environment and Natural Resources (DENR). They said Sandoval opposed Alvarez because the DENR secretary had issued an order banning commercial fishing in waters 15 kilometers or less from the shore. Sandoval, the complainants said, owned a fishing fleet that was bound to suffer from the order.

The congressman subsequently clarified that his family had already gotten out of fishing, although his niece is owner of a big fishing and cannery firm. But while Sandovals' primary business interests are now in cargo shipping, they are also engaged in the repair of commercial fishing vessels.

Fishing interests became evident as well during the deliberations on the Fisheries Code in 1997 and 1998, when legislators involved in fisheries such as Iloilo Rep. Narciso Monfort and Mindoro Occidental Rep. Jose T. Villarosa stood up in defense of commercial fishing. Despite these, however, a Fisheries Code that protected the rights of small fishers was enacted, largely because of pressure from local officials who wanted control over municipal waters for their fishing communities.

As the deliberations on the Code were taking place close to the elections, congressmen led by House Speaker Jose de Venecia, who was then planning to seek the presidency, gave in to the demands of the mayors, much to the disappointment of the commercial fishing lobby. The Code is a good example of how legislators' business interests don't always prevail. The legislative process, while generally skewed in favor of the powerful, can under a combination of circumstances also protect the rights of the less privileged.

It would be inaccurate, therefore, to look at Congress in a one-dimensional way: as an institution designed solely to protect and promote the interests of the rich. The legislative arena is not completely impervious to the demands of the greater society, and it has been able to produce progressive laws such as the Indigenous People's Rights Act (which recognized the right of indigenous peoples to their ancestral land), the Clean Air Act (which banned incinerators and provided measures to alleviate air pollution), and the Urban Housing and Development Act (which provided housing support and some security of tenure to "squatters").


OF COURSE, other legislative prerogatives, such as the power to initiate investigations, have been used to further the business interests of some congressmen. One of the most memorable examples was three-term Quezon Rep. Danilo Suarez, a defense contractor and entrepreneur who also has considerable interests in trading and agribusiness. Suarez stirred a hornet's nest in the 10th and 11th House when his colleagues accused him of using his position to wangle contracts for his firms.

In the 10th House, Suarez called for an investigation of the purchase of radar systems by the Subic Bay Metropolitan Authority (SBMA). Suarez's company supplies radar systems, and during the investigation, the irked SBMA chief, Richard Gordon, pointed out that this could be the reason the inquiry was taking place at all. Congressmen also accused him of requesting the Department of Transportation and Communication (DOTC) to reopen the bidding for the P600-million Nationwide Airport Navigation Facilities Modernization program so that his company could make a bid for airport radar.

Another Suarez company has the contract to operating three parking lots at the Ninoy Aquino International Airport (NAIA). The congressman also owns the Kayumanggi Restaurant at the airport. In 1998, he filed a resolution asking the House to investigate the awarding of a contract to a single corporation to run all the concession areas at the NAIA Terminal II, allegedly because his company was eying some of the concession areas at the terminal.

Suarez was banned from running for a fourth term in 2001 so his wife Aleta took his place in the House. Meanwhile, the former congressman, who was a staunch supporter of ousted President Joseph Estrada, was named by President Gloria Macapagal Arroyo as the vice chair of the National Road Board, which looks into how the tax imposed on motor vehicles is spent.

As chair of the ways and means committee in the 11th Congress, Suarez was instrumental in the drafting of a law, passed in 2000, that imposed the same tax. It is not surprising that he has interests in road construction and road-safety businesses as well.

Such foresight was similarly evident in the way Davao del Norte Rep. Pantaleon Alvarez, who later became President Arroyo's DOTC secretary, was alleged to have gotten favorable treatment for his company, Wintrack Builders Inc.. Before his election to Congress, Alvarez was assistant general manager of the Manila International Airport Authority. While he was in that post, the proposal to match that of the Asian Emerging Dragons (AEDC) for a new airport was submitted by PIATCO. Alvarez headed the technical committee that examined the PIATCO proposal. Thus, he had a good working knowledge of the project and the subcontracts it would require.

Elected to Congress in 1998, Alvarez filed a resolution asking for the investigation of PIATCO, whose proposal had been given the nod over that of the AEDC. Subsequently, Wintrack, a company formed only in 1999 and where Alvarez's wife was listed as a major shareholder, was given by PIATCO (and its subcontractor Takenaka) the contract to do site development work and demolish subterranean structures for the new terminal. In an opposition filed in the Commission of Appointments against the confirmation of Alvarez's appointment as DOTC secretary, one of Wintrack's engineers alleged that Alvarez used his position in the House to bag these contracts.

The engineer also accused Alvarez, then vice chair of the House committee on transportation and communication, of correcting the draft of the committee report that eventually recommended that PIATCO should continue implementing the controversial concession agreement for the new terminal.

Unfortunately for Alvarez, the deal unraveled when the scandal-wracked PIATCO contract came under congressional scrutiny and he was already back in the executive branch as DOTC secretary. It didn't help him any that the loser in the PIATCO deal was a consortium composed of the biggest taipans in the country, led by tobacco magnate Lucio Tan, who has considerable influence in the legislature. (Ethnic Chinese businessmen have traditionally been shy about running for public office but exert influence on policy and lawmaking through their political allies in government.) His business dealings exposed, Alvarez's nomination was bypassed several times by Congress and he had to give up being DOTC chief.

IN THE END, there are ways to limit the wanton use of congressional prerogatives. Public exposure is one, as shown in the widely publicized case of Alvarez, whose ambitions had to be reined in when the controversies surrounding his actions became too intense. Another is the entry of more progressive-minded legislators who have no business interests to protect, and therefore ensure greater check and balance within the House itself. A congressional leadership that encourages ethical conduct and provides sanctions for abuse will also go a long way. In addition, if Congress and the Office of the Ombudsman push legislators to declare their assets more accurately and make a full disclosure of what their own, the legislative process would be more transparent and accountable. Greater vigilance by the media and the larger society would help greatly, too.

Ultimately, though, political, electoral, and campaign finance reforms that will ensure a more even political playing field will make the House of Representatives a more egalitarian body that will accommodate not mainly the interests of the rich. As of now, there is still some way to go before the House becomes truly representative.


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