Courting strongman rule

The BSP books I wrote about last Monday got me thinking about how our democratic system has survived 80 years of bad economic policies and governance. Some will call that resiliency, as one of the books did.

I think the continuing crisis will eventually bring our people to enough despair to rally behind a strongman who promises to make things right. Duterte tried that but he wasn’t cunning enough and the time was not ripe.

But the next one could be more intelligent and more astute with even less moral or ethical concerns to succeed where Duterte failed. This next one will ride on the masa’swillingness to accept strongman rule to crash the elite.

Sheila Coronel, writing about “The Philippines’ Strongman Problem” in Foreign Affairs, observed that the country failed to transition to democracy after Marcos’s fall during EDSA 1.

“The nascent democratic system that formed after 1986 had all the features of a real democracy — a liberal constitution, competitive elections, a free press and vibrant civil society — but it concentrated wealth and power in the hands of a few families and mired millions of others in misery.

“Once ensconced in office, rent-seeking families blocked reform and reduced democratic politics to a contest among clans. Corruption, rising inequality and intractable poverty fueled frustration with democratic gridlock. Today, political dynasties dominate local government posts and make up two-thirds of the Philippine Congress.”

Many political scientists have pointed out that modern democratic failure rarely involves tanks in the streets. Instead, it happens through stealth authoritarianism and institutional capture.

We have seen how our political parties have been co-opted by our rent-seeking economic elite. Indeed, a taipan, whose businesses require government franchises, has formed his own political party that has elected a decent number of congressmen.

The façade of democracy is still there. Elections are still held, but the financial playing field has become so uneven that independent, non-aligned candidates have no realistic chance of winning. Democracy becomes a hollow shell — democratic in form, but oligarchic in substance.

This structural vulnerability has deep roots in the Philippines. Analysts often describe our political system as a “cacique democracy” or a cartelized party system, where loose political coalitions are built on patronage rather than policy platforms.

When corporate empires form their own formal political machineries, the separation between private capital and public policy evaporates.

The combination of populist politics and a captured state is exactly how modern democracies erode. Democracies like ours decay through a gradual, legalistic process known as democratic backsliding.

When the wealthy elite — such as a prominent taipan or business conglomerate — captures political parties to directly advance corporate interests, it accelerates this decay.

The primary concern of politicians shifts from serving constituents to securing state favors for their business patrons. This is oligarchic rent-seeking.

Oligarchic leaders often fund and deploy populist politicians who promise simple fixes to the poor (like price caps or cash handouts). While the public focuses on the immediate, visible handouts, the rent-seeking elite secures massive structural advantages behind the scenes.

What can a sincere and knowledgeable leader do under the circumstances? As the BSP books point out, there must be a serious effort to clear the systemic bottlenecks that keep the Philippines trapped in low-productivity growth and elite capture.

Instead of pursuing popular but superficial projects, a reform strategy must focus on breaking the structural barriers that protect the rent-seeking elite and stunt public capability. We have been writing about these reforms in this column for the longest time.

The most immediate way to weaken the rent-seeking elite is to subject them to international and domestic competition. This lowers the cost of living for ordinary citizens without using destructive price caps.

The Philippine Competition Commission must be more aggressive, fully empowered and properly funded to break up cartels in domestic shipping, energy and agriculture distribution.

Next, we must liberalize agricultural imports permanently. Replace restrictive import quotas and discretionary licensing — which trading cartels manipulate to create artificial scarcity — with flat, predictable tariffs.

Slash bureaucratic red tape for new market entrants. Automate and centralize business permitting to strip local bureaucrats and entrenched monopolies of their power to block new, innovative competitors.

Prioritize logistical links over prestige projects. Focus state funding on farm-to-market roads, cold-storage networks and efficient roll-on/roll-off (RoRo) shipping ports to eliminate the middleman cartels that inflate food prices.

Enforce strict performance-based regulatory standards. Penalize or revoke the franchises of utility and transport providers that fail to meet clear efficiency, reliability and cost benchmarks.

Establish an independent, career civil service. Undersecretaries down to bureau directors and below must be career officials. The only political appointee is the Secretary.

A merit-based bureaucratic system, like Singapore’s, will have a longer time horizon than current short election cycles. The bureaucracy must be insulated from both populist whims and oligarchic funding to prevent our government from being captured.

Protect agencies like the Bureau of Customs and the Bureau of Internal Revenue from political appointments. High-level technocrats should be selected strictly through competitive, merit-based examinations and given long, fixed terms.

Decentralize economic hubs. Use tax incentives and infrastructure spending to build self-sustaining economic zones outside of Metro Manila (such as in Central Luzon, Clark, Iloilo and Davao) to dilute the concentration of political and economic power held by the Manila-based elite.

Reject the demand of property developers and PEZA to lift the ban on new PEZA-certified buildings in Metro Manila. Spread the benefits of economic opportunity to the countryside.

We have to reduce the financial dependency of candidates on tycoon contributions during election cycles by considering some level of public funding.

I know these reforms seem impossible to implement in our country. But we must at least discuss (as my Viber group did) and try instituting such reforms. The alternative is a failed state that makes a brutal strongman regime a distinct possibility in our future.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco