Sunday, August 16, 2015

GamePlay 2016---Lopsided Business environment controlled by Haciendero-backed LP

You know why these big time hacienderos are now actively involved in this game called politics? Two things: stiff competition from regional and global business players who are now entering the domestic market and the creation of other places of business which are not under their control.

Why, do you think the Ayalas are supporting their own kind, the Roxas-Aranetas? Everyone knows that the Ayalas are behind Mar Roxas presidential bid, and for obvious reasons—they want nothing more than the control of the presidency. Control of this office, which is the most powerful position in the land, is control also of the economy. In an era of globalization, the only weapon available for the traditional rich against new entrants is control or influence of government regulations. It is the regulation that dictates the rules of the game. Regulations say if you’re in or not.

For centuries, these traditionally rich families have government by their very hands. Government serves the big business interests of these families.  Look at the domestic landscape and you’ll agree with me here. As they say, these families are not your usual capitalists, for capitalists are actually monopolists hiding behind sheep’s clothing. Or the devil acting cosplay in a suit or barong.

The buzz word now is asset consolidation. How do you consolidate your assets and maximize profit from it? Simple, in the minds of these hacienderos—centralize power in their hands and use government to further their monopolistic ambitions.

How do you seize a raging bull by the horns? Taming it by putting your own man in the reins of power. Not since the time of the Strong Man where government became the biggest competitor of these rich traditional families, did this very proposition came into the picture once more. The converse, of course, is to be undertaken. Instead of putting power into one bull, slaughter the bull and divide the spoils amongst the butchers.

A Roxas or a Poe win will surely be beneficial to these traditional families. Why do I say so? Look at the Big businessmen backing these candidates up?

Poe is just a willing puppet by the group of Chiz Escudero, which we all know is being backed by not just the Cojuangcos but even by the Zamoras and Ramon Ang. This group want a modified “Tuwid na Daan.” Mining interests is in their minds. They want to free the mining industry up from government regulation so that they can operate environmentally destructive machines without fear.

How about a Roxas? Mar’s family is obviously a very rich and landed one. The land is their asset. You either transform these lands into productive haciendas or lease it to businesses.

The main problem and is the core discussion right now of numerous business groups is the scarcity of real estate. Makati is filled to the brim. Bonifacio Global City is not attracting big-ticket names right now due to numerous problems, like traffic and lack of adequate car parking.

You know why it is very crucial for the Ayalas to see their own man as President? Well, two things: first, there is a plan to create a new business hub somewhere southwest, meaning in the Pasay-Paranaque areas and two, the intense competition being encountered by the Ayalas lately.

The Ayala family’s dominance in the real estate sector is being aggressively challenged by Chinese taipans, especially the Sys of SM. SM is very aggressive in developing other areas where businesses of all sorts could actually own their own property and not lease it. Makati, as we know, is more of a lease or rental place than a place where businesses can own their own property. This is pretty much the problem also of BGC. These lands are owned by government thru a corporation (BGC), while Makati’s business district is owned by the Ayalas generally.

Many businesses are looking for other areas where they can surely call their own. And the only way they can do that is buy property outside Makati or BGC or Ortigas. Some business groups like SM thought of an ingenious way of solving the problem—undertake reclamation projects near or along Manila bay. Manila bay is a perfect place. SM is thinking of transforming the place like how Taiwan did it in their business district. Unlike the drab and greyish looking Makati, a central business district fronting the world’s most famous sunset is a very attractive proposition that global companies looking for either a regional or global headquarters would find extremely difficult to ignore.

Hence, the development right now is not at all being dictated by the Spanish-American elites but moreso by market demands as seen by Chinese taipans.  A decade or so ago, the Ayalas are trying to lure business down South, because they still have huge tracts of land there. The proposition failed for many reasons, one the area is far from the ports and two, the price of land is exorbitant. Support structures like bridges and more spacious roads are inexistent. The only way for the Ayalas and their amigas to fully recover from this is to absorb short-term losses and pray for profit along the road.

Yet the road, as I say, is finding it extremely difficult to go South. A sure-fire way to force business to go South is for government to dictate and change the rules of the game. A Chief Executive who understands the game and is obviously siding with the Ayalas is one solution that actually, is the only one.

Ask any top executive around and they say that the business environment in the Philippines is not as fair and as open as others. Credit that to the strong hold of local business of government regulators. That’s the thing. Instead of local businesses improving their services for them to maintain market dominance, they resort to the easiest means of perpetuating dominance—influence policy in their favor and eventually kill or force competitor out of the game.

In brief, these hacienderos are fearful that a fairer business environment is to be expected if a Binay ascends the Chief Executive post.  Hey, don’t fool me with such arguments that these businessmen fear or hate corruption. They became big being carpet-baggers. They are just using the corruption card ot hide their own fear of losing hold of government and using government in furtherance of their monopoly plans. Monopolising the market and using government to evade giving the Filipino People their just deserts thru more reliable service worth their every cent are more vicious forms of corruption that these men commit, yet, of course, will never really be revealed by their civil society propagandists, for obvious reasons.