Master communicator

DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - January 15, 2020 - 12:00am

The business elite is losing badly in the war for public support to a master communicator: President Duterte. All they can muster is whining and more whining.

The President is clearly winning the war of words in the case of the water concessionaires and lately, of DMCI’s collapsed condos in Davao. In both instances, there is a failure to communicate in a timely manner.

Maybe their highly paid communicators are not that creative in their approach to the crisis situations. Or maybe, they are not credible enough for their principals to accept their recommendations.

Or maybe, the lawyers prevailed. Lawyers think they earn their keep by playing tough. In the end, as in this DMCI case, lawyers are causing their clients more damage in terms of reputation and actual costs. It happened to me in one crisis case I handled except that my CEO backed me up instead of them.

Those condo buildings in Davao collapsed after an earthquake weeks ago. But we heard nothing from DMCI until the President threatened them.

Then DMCI comes out with a story that they are ready to pay 150 percent of the purchase price paid by the buyers of the units. Too late. That bit of good news became public only after the Duterte threat.

Here is how Ronald U. Mendoza of the Ateneo School of Government viewed the case: “We all know those homeowners will likely get nothing if we simply rely on the judicial system, such as it is. Now here’s a President who just got them 150 percent of their acquisition cost during the time they need it most.

“I don’t agree with his approach — particularly when it comes to fixing long term problems — but you have to see why people like him. And if you refuse to see that, then prospering the alternative reform message of building strong institutions for lasting solutions will be difficult.

“In truth, weak and unfair institutions produce strongmen. And strongmen tend to keep those institutions that way.”

So the President is getting credit for standing up for the common folks against a big and powerful business conglomerate. DMCI is now saying they were in negotiation during the interim, keeping quiet while it happened.

If DMCI was ready to pay anyway, and they should to protect their brand, they should have said so early on even while negotiating the final amount. They must have known the victims who are from Davao, have access to Duterte. That made the damage payment more urgent.

Susan Ople’s reaction is typical of the public reactions I have seen on social media: “Bakit kasi naghintay pa sila na mapansin ng Pangulo bago gawin ang tama? Kaya naman palang gawin eh. Kaya nga may konsensya.”

This is what I have been writing about in recent columns. Corporations must think of the impact to the public of all corporate decisions. In case of doubt, decide in favor of the public.

I am sure there were internal discussions on how to handle that Davao DMCI problem. It is really a small problem for the likes of DMCI. Maybe it didn’t get top level attention until too late. Or if it did, they may have thought the story will die down.

The thing with crisis situations is that a decisive response is necessary within 24 hours. Beyond that timeframe, the crisis takes its own life and taming it becomes harder for those concerned.

What happened to the water concessionaires is as bad. They aggressively sought arbitration, won it, but just as easily gave up their award in the face of an angry president.

They should have anticipated what reaction an arbitration victory would get from Duterte. After all, this happened on the third year of the Duterte presidency. They thought they had an iron-clad contract, but Duterte has established a record of disregarding such legal niceties if it suits his populist objectives.

Haven’t they seen what happened to all the EJKs? None of the victims got due legal process. What makes the business elites running the water concessions think they are special?

Someone who disregards human rights can easily disregard contractual obligations. I guess they are luckier because the DOJ is ready to negotiate a new contract. EJK victims just got killed.

For all the highly paid consultants on their payroll, no one is making a good political risk assessment so that they would not be in this mess. There should be someone in every business organization assigned to figure out how Duterte will react if they did one thing or another.

Right now, the business sector’s response amounts to nothing more than whining. Oh, the banks will not like what Duterte is doing to the water guys. Investors will avoid the country and so forth.

The banks, specially the international ones, may not like what’s happening but they have said nothing in public. Too much to lose displeasing DOF.

Only Fitch Solutions, an affiliate of the credit rating agency, warned of “the high regulatory risk which contracts between the government and private organizations are subjected to.”

Even then, it went on to say that “Overall, we expect investor confidence to take a hit in the short term, but to gradually improve over the long term…”

The problem with the water companies and their owners is that they do not have a good strategy to survive Duterte. Giving in as a strategy is not appeasing the President. It is making him bolder, like a fighter trying to finish off an opponent who has shown weakness.

If the international banks are indeed worried, the water companies should encourage the banks to publicly say so. They should work on the rating agencies to downgrade our next credit rating due to increased political risk.

Then, maybe the economic managers will be bold enough to tell Duterte how badly he is ruining the economy.  

But most of all, private business must think like Duterte or they are finished.

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

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