Is local business wary of Duterte?

- Boo Chanco (The Philippine Star) - May 3, 2016 - 10:00am

Foreign analysts writing country risk assessments in recent weeks are adopting a wait and see attitude on the Philippines until after next Monday’s election. They are worried about Rodrigo Duterte and how he will lead the country in the next six years.

But what do foreign analysts really know? Up to now they are hailing P-Noy’s anti-corruption drive as if it actually got off the ground.

How do you explain P-Noy’s supposed commitment to fighting corruption when he fired a dedicated and squeaky clean Customs commissioner? Worse, he replaced him with someone with a serious conflict of interest problem as owner of customs brokerage companies.

Foreign and local analysts are also wrong to blame the ascent in the polls for the flight of hot money from the stock market. The anticipation of a Fed rate hike is also making investors do that to position themselves.

But it is true. Some of my friends in the business sector are worried we may be jumping from the frying pan to the fire. They are worried the candidate most likely to replace P-Noy seems too volatile, too much the bull in the China shop to nurture our economy towards sustained growth.

Many of my business friends who anxiously awaited Duterte spell out his economic plans last week at a forum in Makati came away disappointed. The Davao mayor said nothing they could use and even managed to offend some of the women business leaders when he talked about his penis.

I noticed some of the biggest guns in local business were there trying to strike up a conversation with Mayor Duterte. Some of them were all smiles too, and I wondered if they were smiling to cover up the nervous tension building up inside of them.

Sources deep inside Duterte’s camp told me the mayor rejected an offered contribution for his campaign coming from one of the country’s leading conglomerates. I am told the mayor does not like big contributions specially from companies that are heavily regulated by government.

I don’t know if this story from the Duterte camp is just press release to support the candidate’s anti-establishment stance. No one among the holier than thou business leaders will admit even trying to make a political contribution, a practice we take for granted.

But there is no denying the movers and shakers of big business based in Metro Manila are nervous about Duterte’s increasingly commanding lead. They don’t know him that well. And the mayor had been saying a lot of worrisome things like ending contractualization and going after the telecom duopoly.

One thing I am almost certain will happen after June 30, if Duterte prevails --- there will be a new power elite from Davao calling the shots from behind the scenes. Former Agriculture Secretary Sonny Dominguez is supposedly on top of the mayor’s possible economic advisers.

I don’t know if Dominguez cares to serve in government again. My guess is he will prefer to advise from the sidelines, a role that does not diminish his influence in government decision making. I suppose Sonny is one of the few big contributors to Duterte’s campaign kitty.

The Alcantara and Aboitiz families, with their Davao links, will have their pipeline to the mayor specially on energy matters. A former Napocor official, who was involved in controversial contracts that resulted in rate hikes due to take or pay deals during the Ramos administration, will also be able to use his Davao connection to advantage.

On the other hand, Sen Alan Peter Cayetano expects to win even if he loses. I am told he will be the de facto economic czar as all business proposals (like PPP) will pass through him.

Among the Manila-based elites, I am told that it is likely there will only be one common station near SM North Edsa rather than two as the Abaya DOTC had been trying hard to force through. I imagine the SM folks will be able to use their connection with the Cayetanos who helped them build SM Aura in BGC to the dismay of Ayala.

But even the Ayalas are in a reconciliatory mood. They have re-opened that road that allows vehicles from McKinley-Forbes area to go straight to SM Aura. And that is also good for traffic flow in my personal experience. The traffic on 5th Avenue is better too. It proves their earlier contention that closing the road was good for traffic is wrong.

Manny Pangilinan has told a stockholders meeting that “A change in government leadership by the middle of 2016 could alter this rather unhelpful regulatory environment.” No one in Duterte’s camp could tell me if MPIC will find a better climate that will deliver them from six years in P-Noy’s purgatory.

San Miguel may have problems, I am told, because of some old contentious projects in Davao. It doesn’t help that they have been identified as staunch supporters of Grace Poe.

The Chinoy taipans are as usual playing their games as skillfully as ever. But Duterte’s order to reject offers that are larger than P15,000 daw is making them nervous. In the past they were able to buy influence rather easily as their contributions were sought. Now, their offers are rejected, daw.

We hear a lot of talk about a changing of the guards, if Duterte converts his lead in the polls to an outright election victory. The guards will change alright, but I am still skeptical it will mark real change. The new guards are hungry and can turn out to be even more rapacious than the old.

It is just a war among the elites, La Salle Political Science Professor Julio Teehankee observed by way of explaining Duterte’s strong showing.

“The Duterte phenomenon is elite-driven. It is not the revolt of the poor. It is the angry protest of the new middle class: BPO workers, Uber drivers, and OFWs.”

Teehankee noted this is the elite that have been left out.

‘’They are the ones who are taxed the most and financing Daang Matuwid. They are working hard for their families and the country and yet they are the ones who suffer from lack of public service, land and air traffic, breakdown of peace and order, corruption, laglag-bala. The poor have their conditional cash transfer fund. The rich have their PPPs. What’s there for the middle class? They’ve been short changed!”

Actually, there is a problem of definition here. The middle class is not the elite. The real elite are less than a hundred families, not even everyone who lives in Forbes or Dasma are. Many of whom are just pretenders.

But country statistics suggest that just because one earns half a million pesos a year and taxed 32 percent already makes him part of the elite. BPO workers joke they give government a brand new flat screen television every month and they don’t feel they are getting anything out of it.

As retired investment banker Leo Alejandrino puts it, “our six percent annual GDP growth accrued only to the rich. Specifically, by one account our economic growth went to 40 families.”

For change to be real, we need to see more than a game of musical chairs of rich people with different loyalties. Is Duterte up to that challenge? If he wins next week, we will know the hard way.

Knowing what’s in store the hard way is what’s keeping big business folks nervous. If that makes them deliver better services, be less greedy, it will probably be good for the country, if Duterte keeps them nervous for the next six years.

Boo Chanco’s e-mail address: bchanco@gmail.com. Follow him on Twitter @boochanco.

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