The billionaires who died

On the road 86 kilometers away from Manila, I was slumped comfortably in a van’s captain chair. My head was buried in my bedtime pillow and I was trying to get some sleep. Or I might have dozed off already, but then my phone started buzzing. 

Henry Sy, the country’s richest man, died in his sleep, people close to the taipan told me. Now, I was wide awake. I knew at that moment that I had to write the story. It didn’t matter that I was on my way out of town.

As a journalist assigned to cover conglomerates and other listed companies, that was part of my job — writing the obituaries of the billionaires who died. 

With Sy’s passing, it was inevitable to look back at the other billionaires who have gone ahead of him in recent years — Filinvest Group founder Andrew Gotianun Sr. who died in 2016 at the age of 88; construction magnate David Consunji who died in 2017 at the age of 95; taipan and former ambassador Alfonso Yuchengco who also died in 2017 at the age of 94, and banking tycoon George Ty who died last year at the age of 86. And now, it was Henry Sy’s turn.

The passing of an era

These billionaires, the empires they’ve built and the legacies they left definitely make for extra ordinary obituaries — the ones you see filling up pages and pages of newspaper space for several days after their deaths. 

They are no doubt larger than life itself including — inevitably — the controversies that marked their life and times.

Now that they’re gone, what does it really mean for their businesses or for this country?

For sure, their deaths mark the passing of an era. The empires they’ve built from scratch are now in the hands of their children who have all risen to the challenge of continuing their fathers’ legacies. For sure, there will be changes.

We all know their different businesses and one way or another, we have patronized what they had to offer.

It is without doubt that the empires they built have employed and will continue to employ generations and generations of Filipinos. Their businesses have enabled Filipinos to access certain things. We bank in their banks, we buy the cars they sell, we live in their condominiums and yes, we catch the latest Hollywood movies in their malls.

Are billionaires good for the country?

Their deaths got me thinking about the role of billionaires in a country. Is a country with a lot of billionaires better than a country with none? Is having billionaires good for economic growth? Or is it their fault that income inequality in the Philippines is as wide as it is now?

According to a report by Credit Suisse, only 0.1 percent of the Philippines’ adult population have fortunes amounting to over $1 million as of end-2017. On the other hand, 86.6 percent of Filipino adults have wealth worth below $10,000.

This translates to a Gini percentage for the country of 83.9 percent, higher than 2016’s 83.4 percent. The Gini percentage is a measure of wealth inequality expressed as a number from zero to 100. The higher the number, the wider the inequality gap. 

I don’t know for sure if having billionaires is actually good for the Philippines or not. For sure, their businesses have provided and will continue to provide employment to many Filipinos. They have charities, their names are in the school buildings they donated and they pay their taxes. 

Perhaps, the question that should be asked is this — is the concentration of wealth in the country good or bad for the rest of the population?

A 2015 study that has been accepted by the Journal of Comparative Economics helps answer this question. 

Authors Sutirtha Bagchi of Villanova University and Jan Svejnar of Columbia University said it’s not the level of inequality that matters for growth so much as the reason that inequality happened in the first place.

Billionaires, they said in an article in The Independent, come in two types — those who made it because of political connections and those who became billionaires because of their ingenuity, ability to innovate, and willingness to take risks. 

The first type are the political cronies, such as those that emerged in Boris Yeltsin’s Russia from 1991 to 1999 or in the country during the time of the late dictator Ferdinand Marcos.

The researchers suggest that billionaires become detrimental to the economy when they influence government policy in a way that hurts the broader interest.

The result is a wide inequality that can be economically damaging. 

In the Philippine context, we certainly have both types of billionaires — those who made it because of political connections and those who made it because of hard work. 

But because of the complicated and, in many ways, rotten political system in our country, we also have billionaires that are hybrids of the two types. Sometimes even the most hard working billionaires have no choice but to find their connections to politicians who refuse to act if they don’t get anything in return. The result, of course, are policies that sometimes hurt the broader interest. 

To put it simply, there will always be the good, the bad, and the greedy here in our country. Caught in between are the rest of the Filipinos.

This is the billion dollar reality in the Philippines and unless the system changes, there will always be income inequality and the gap will remain stark and telling. 

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales.