The Elusive Candidate: Part II

(In this segment BBM expounds on the other candidates, Duterte & Co.; and his Administration.)

Q: Sir, your quick thoughts on the following: Leni?

A: Mrs. Robredo is a nice enough lady who hates my family and the Dutertes I think in that order. Anger does not suit her. When her people stole the Vice-Presidency from me in 2016, I could have gotten angry but I moved on and here I am. She should do the same.

Q: Isko?

A: A terrific (second hand car) salesman. I admire his journey from poverty even if I cannot relate to it.

Q: Manny Pacquiao?

A: He really cares, a wonderful representative of our country. Sharp dresser. I will offer him Ambassador to the U.N.

Q: Ping?

A: Sober and sensible. We were together in the Senate. He should call me sometime.

Q: Your message to the “yellows”?

A: If you agree with democracy do not get mad if democracy disagrees with you.

Q: President Duterte?

A: Love the man. Sara talks fondly of him. I am sorry to see him go. (Hmmm, not really).

Q: Even after he seemingly accused you of incompetence and cocaine use?

A: I did not feel alluded to. (Actually I did).

Q: Cocaine?

A: My doctor cleared me.

Q: The International Court of the Hague and PPRD?

A: The President said he would like to talk to me. (Wonder what about?)

Q: Has the President forgiven you for the Sara business?

A: It is all good. It was just a family misunderstanding but ultimately PPRD wants Sara to succeed. I assured the President I will take care of his daughter like a sister, never put her in harm’s way and help her become the best version of herself.

Q: Including becoming President?

A: Sure (if nobody in my family wants it.)

Q: The President’s Men: Bong Go, Cusi, Duque?

A: I need to consult Sara. She goes ballistic whenever the subject comes up.

Q: Corruption?

A: Corruption is the bane of every Administration. My family should know. 

Q: How to fix it?

A: Make sure everybody is happy. 

Q: President Duterte said he will reveal “the most corrupt Presidential candidate” in a few months: Who might that be?

A: Hahaha. PPRD loves to be the life of the party.( Pa drama. Nobody will care what he has to say in a few months.).

Q: Cronies?

A: Past or future?

Q: Both.

A: Past, need to check the records, maybe give them a call. Future, we have been out of power for a while so businessmen have ignored us. (I imagine that will change.)

Q: Will you try to recover what you believe is yours?

A: (Dude, is the Pope Catholic?) Ask Imee, it is her department.

Q: This Government’s performance? 

A: (Terrible.) Hard to tell, we were hit by the pandemic.

Q. Handling of the pandemic?

A: (Even worse.) COVID was a black swan. Nobody knew how to handle it.

Q: What would you have done differently?

A: Fire DOH Sec. Duque. The man is a weapon of mass destruction.

Q: China relations?

A: China took what is ours. But the Bible says sometimes you have to give in order to receive.

Q: U.S. relations?

 A: I believe in friending everybody. I got word Washington wants to reach out to me. (The U.S. abandoned my family in our darkest hour. Let them stew for a while.)

Q: Income inequality?

A: I cannot relate to it but I understand it sucks.

Q. Global warming?

A: I own a TESLA.

Q. ABS-CBN?

A: Our families were never close but not even the Lopez’s deserve to be treated shabbily.(They suffered enough in jail.)

Q. Liza Araneta Marcos?

A: Super competent. She could run this country (and will).

Q. GMA?

A: We are on the same page.

Q. Your cabinet? Any names?

A: Like my Dad we are looking for the best and the brightest. We want honest, hard working and competent technocrats (who will follow orders).

Q: With many corporate executives against you, how will you attract top talent?

A: We offer great working conditions.

Q: Your message to the Makati Business Club and the likes?

A: (Come to Mama, baby.) They can either jump on board or remain but this train is leaving the station. Bahala sila.

Q: President Ferdinand Marcos?

He is my Dad so don’t ask me. People either love him or hate him but after 36 years the polls say Filipinos love our family and that is all that matters.

Q: Lessons from your father’s experience? What will you do different?

A: Never kill the goose that lays the golden egg. Increase the pie so there is more to go around. Share. Think long term. A dynasty is a generational enterprise.

Q: People Power?

A: Hegel’s dialectical materialism postulates that when the pendulum of history swings too far one way it must return the other way. Martial law-People Power; Aquino Liberalism-Duterte Militarism.

Q: Wow, you studied the philosopher Friedrich Hegel?

A: I am not just a pretty face.

Q: Where is BBM in the pendulum of history?

A: Talk to me in six years.

Q: Your priorities in office?

A: Jobs, agriculture, health, infrastructure, health, housing, corruption, foreign investments, inflation, education, tourism, energy, the environment, wages, drugs, peace and order, traffic, water, better internet, the stock market. (Did I forget anything?) 

Q: Your first 100 days?

A: We will hit the ground running, launch into orbit asap. It will be all hands on deck, all cylinders firing, all action, no talk. Zero to hero, an economy on steroids, vamonos. 

Q: What could go wrong?

A: A SC disqualification after I am elected, an assassination, an act of God, the end of the world.

Q: Returning “home” to Malacanang?

A: We left Malacanang on Feb. 25 1986. I was 29 years old, today I am 64. It will be nice to be back. Mom is super excited, this one is for her.

Q: Lastly, who is BBM?

A: BBM is just a guy who showed up when the nation wanted him to show up.

Q: Your message to the Filipino people?

A: I love you guys. Stay positive, stay strong. Believe. We are a family. Let’s hang together in peace, harmony and prosperity. 

Q: Thanks for talking to us.

A: No problem, anything to promote public discourse.

(Disclaimer: The writer sadly was not paid P120 million for this interview.)

The Elusive Candidate: Part I

He has come to be known as Mr. Mum. He has refused interviews with Jessica Soho and to participate in the Presidential debates. He did talk with Toni Gonzaga who is reportedly being paid P120 million to support his candidacy.

I refer to BBM, the leading contender for the Presidency. In the interest of voter education, I pieced a fictional conversation with Bong Bong where he talks of what I imagine are his public and private (in parentheses) views. Any similarities with what I say he says and what he would actually say if asked is purely coincidental.

Q: Sir, thanks for this interview.

A: Sure. I hope neither of us gets into trouble. Haha.

Q (Nervous laughter): Yes, haha. Let’s dive in: The public deserves to know more of their leaders, so why the radio silence?

A: I want to talk directly to the nation which I am doing in my sorties, my ads, and my unfiltered interviews with Toni. I will not speak through debates or paid hacks. (No talk, no mistake. If it works why fix it?)

Q: Why did you decline to speak to Jessica?

A: Jessica has personal issues for which she needs help. (She needed my interview for her ratings. Why would I give her that?)

Q: In 2016 you joined the VP debates but will not the 2021 presidential debates, why?

A: In 2016 I participated, won the election but was cheated. This time I am taking my case directly to the people. Voters do not want to watch a bunch of crazies screaming at each other on national TV. They no longer want to listen, they want to be listened to. My mission is to have their voices heard. (My opponents are snorting coke if they think I will join their mud slinging contest. They need the debates to win, I don’t.)

Q: You have a limited track record and a controversial name: Why are you so popular?

A: It is not about me, it is about us, about a common purpose. Like Christ’s, the BBM/Sara message is uncomplicated: Let us unite, not divide, let us love, not hate. The Filipino is looking for firmness, action and vision, a leader who can execute on a national scale. They are tired of talk and talk on issues they do not understand or relate to. (Memo to myself: Do not again use “execute” in a sentence.)

Q: The Second and First Divisions of the COMELEC have dismissed the petitions to disqualify you. Comments?

A: I thank them for following the law. There is still the “en bank” but I expect to be upheld there as well. The matter will probably go to the Supreme Court. (Memo to myself: Ask Sara’s Dad to put in a good word for me.)

Q:  Some background: How was growing up in Malacanang?

A: It was a normal childhood: Lots of toys and rooms to play, everybody was always nice to me. Got to meet celebrities like George Hamilton. My Mom invited the Beatles but they never showed up (so we ran them out of town).

Q: And the Martial Law years?

A: Never noticed the difference.

Q: What do you say to people who are angry with your family?

A: (Eat your heart out.) Everybody is entitled to their opinion. That is the essence of our democracy. Freedom of speech and human rights is what makes this country great.

Q: Do the Marcos’ worry about their reputation?

A: People see others through the prism of their prejudices. Reputation is what people think of you, character is who you are. We are going with character, we know who we are.

Q: Wow, there is more to you than people realize. Should this be a cause for joy or concern?

A: It depends on whether you are naughty or nice.

Q: What about the hidden wealth? How did your family become so rich on a modest  Presidential salary?

A: First, we Ilocanos are thrifty. If you save pennies, they eventually become billions. You should try it. Second, we had free board and lodging for a long time. It all adds up.

Q: Seriously?

A: We also had some excellent Swiss financial advisors: We bought dollars just before our debt moratorium, accumulated gold, invested early in NY property and art, shorted the dot.com bubble in 2000 and the mortgage market in 2008, and bought the rally since. We are now considering cryptos.

Q: Good for you. But the courts decided the wealth was ill-gotten and ordered you to return it. 

A: I have the highest respect for the justice system. But sometimes even the best referees make wrong calls. Rather than challenge and get a technical, we decided to suck it up. No point getting thrown out of the game.

Q. What about the pending PCGG claims of some alleged $100 billion?

A: If I had $100 billion would I be running for President? I would be in the beach sipping vodka martinis. (Memo to myself: Check my latest net worth.)

Q: And the Martial Law victims? Were they ever paid?

A: Oh, were there Martial Law victims? That is so sad. Ask my accountant.

Q: Will you extend the term of the PCGG?

A: I will give you two guesses.

Q: Moving on: How did you get Sara to be your VP?

A: We love Sara and she loves us. She is blooming, looking hot, eating healthy, she is smiling for the first time. I guess she liked what she saw in my family, the compassion, the vision, the commitment. I am so excited we will be together for 6 years, maybe more.

Q: Will you offer her a Cabinet position?

A: Sara is honest, competent and caring. She can have any position she wants (except mine). Some say she would like Defense, she is an army officer, so why not? A man has always held that post but she is tougher than most men.

Q: Did you promise to support her Presidential bid in 2028?

A: Siyempre naman. (Liza, Ate, tama ba?)

Q: Won’t this affect your family dynasty?

A: (Silly question) I believe in being inclusive. There is enough room for everybody. And Sara now is almost family.

Q: How in fact is the family dynasty coming along?

A: It is everybody’s dream to build a family business. Look at the Kennedy’s. My son Sandro is running for the first time in Congress. Imee’s son Matthew is Governor of Ilocos Norte. Ate is a Senator (and next Senate President). My cousin Martin could be Speaker. Yeah, we are getting there. We are waiting for the third generation to come of age so by 2028 we will have a full roster. Then there is Liza but I am deathly scared to speak for her.

(To be continued: In the next episode we will talk about the other candidates, Duterte & Co., and Marcos’ first 100 days.)

The Public Service Act

Congress just passed the Public Service Act. The law redefined “public utilities” such that, among others, telecommunications, aviation and shipping industries can now be 100% foreign owned (from 40%). Opening such sectors would hopefully attract foreign direct investments (FDIs), increase competitiveness, create jobs and enhance the economy. The passage of PSA was widely hailed by the foreign chambers of commerce.

Anything that promotes the objectives cited is wonderful. Indeed, Philippine business has been guilty in the past of hiding behind Constitutional  protection, tariff walls and political cronyism to under invest, cartelize, and exploit the undiscerning consumer rather than compete internationally; for oligopoly profits.

The PSA is said to be the dawning of an era, a game changer, a silver bullet. However one must sometimes be careful of what one wishes for, be aware the PSA is not the be all of an economic miracle. There is the danger of unintended consequences.

What are possible concerns?

The PSA will promote FDIs. Yet not all FDIs are created equal or even always good for the country. First, understand that FDIs are not permanent capital. The principal and profits thereof are eventually repatriated to their host country.

Two, FDIs do not per se always create new jobs or economic opportunities. If a foreign entity was to buy say Globe or PLDT, the only beneficiaries would be the already wealthy owners of these two companies not its employees nor the Filipino. What we need instead are FDIs that add value and that do not simply replace existing investment. Sure the shareholders of Globe and PLDT can then reinvest back in the country but there is no assurance or requirement for this (In PLDT’s case some of it will just revert to its Indonesian shareholder).

Three, certain FDIs can be harmful to our security interest. All developed nations have laws that restrict foreign ownership in strategic industries or companies with valuable intellectual properties. The PSA is said to provide for this by disallowing investment from so called foreign State Owned Enterprises (SOEs). Now we know that Governments like China have undue influence even over private enterprises. There is no such thing as a Chinese non-SOE as Alibaba and Tencent have discovered to their chagrin. The U.S. disallowed Huawei, a private Mainland company, from selling its telecom equipment in America because of national security concerns. The U.S. and European countries have prohibited Chinese and Russian corporates from buying some of their tech companies because of the loss of valuable technology.

There are many ways to hide investments by SOEs be it via shell companies in tax haven jurisdictions, multi-layer holding companies or dummies. To believe that we will always be able to detect a SOE investment is naive. Having said that there are also good SOEs. I refer in particular to sovereign wealth funds like Singapore’s Temasek or the Norwegian Pension Fund which technically have Government oversight but are politically neutral and worthwhile. To ban them would be a mistake.

Four, many foreign companies like the Middle Eastern and Chinese airlines are heavily subsidized economically by their host countries and have huge excess capacity allowing them to “dump” their services in the Philippines at lower than fair market prices putting local companies like PAL and Cebu Pacific at a competitive disadvantage. This will result in massive disruption, bankruptcies and loss of Philippine jobs. Once their local competitors are destroyed in a ruinous price war, these foreign players will have a monopoly and raise their prices to the detriment of the Filipino consumer.

The PSA requires reciprocity in allowing certain foreign investments i.e. foreigners can invest in the Philippines as long as we can invest in their host countries. This is an illusion. Local companies are not big enough nor dumb enough to invest in say a strategically important industry in China.

There are certain grey areas in the PSA where the sitting President can say who gets to invest in some of our key industries. Executive discretion is the mother of corruption. With our record of malfeasance this loophole means our patrimony could be sold to unfriendly foreign players without our knowledge or consent.

We need laws that will introduce good FDIs. These laws should attract investment into new areas and not simply replace existing ones; investments that create new jobs at fair wages in important sectors like agriculture and infrastructure; investments that transfer technology and skills and instill a culture of hard work, meritocracy and discipline in our managers and workforce. We need FDIs that create scaleable employment. The number of new jobs in the now “open” industries like telecom or transportation are minuscule compared to the needed employment in already allowed sectors like tourism, agriculture, knowledge industries and manufacturing; that is where our attention should be. We need FDIs that will leave a legacy in physical capacity and culture long after they are gone.

We do not need FDIs that will bribe their way into town. We do not need FDIs that will rape our natural resources and abscond with the profits. We do not need FDIs who are bad corporate citizens, mistreat their workers and not pay their taxes. We do not need FDIs that in a geo-political  crunch will hold us hostage to the dictates of their masters, SOEs or not. We do not need FDIs that will leverage their investment from local banks and crowd out our struggling SMEs from much needed financing. We do not need FDIs who will get our valuable telecom frequencies and sovereign air rights for free. We do not need FDIs who will use their muscle to ruin their Filipino owned counterparts through unfair competition.

On their side, good foreign investors want a level playing field; no corruption; simplification and speed of processes; protection from political interference; and consistency in the design and application of rules and policies. These are the concerns that ultimately will have a bigger impact on our economy. 

The law is passed but the Implementing Rules and Regulations have still to be crafted by the NEDA. The details and safeguards are where we need to focus while recognizing that in this country IRRs are there to be amended, re-interpreted or misinterpreted for the right price and influence.

The legislators and their advisers who crafted the PSA have their hearts in the right place. Thank you, Rep. Sharon Garin and Sen. Grace Poe for your leadership and the work you put into it. The most important take-away is we are open for more business with foreign investors. However in our effort to help the country we should be mindful of not throwing out the baby with the bath water.

Last Two Minutes

“Executive discretion is the flip side to corruption.”

With the clock running down on this Administration there has been and will be a rush to sign midnight deals and appoint midnight persons who will have tenure beyond May 2022. In the COMELEC three seats just opened up with the the retirement of Commissioners Abas, Guanzon and Kho on Feb. 2 making all seven in the new Commission appointees of the President.

On the deal side we witnessed the recent award by the National Telecommunications Commission of the frequencies previously owned by ABS-CBN to the Manny Villar group. The NTC did not disclose what the Filipino would make from it but the answer is nothing. Communications frequencies are a scarce natural resource of a country and elsewhere are publicly auctioned for billions of dollars which money goes to the Treasury for social and economic relief. It is therefore sickening that we hand out our patrimony to businessmen for free when we do not have P5,000 to give in “ayuda” to the starving Filipino.

This is not a judgment necessarily on the Villar Group who is on the face of it just playing by the rules. Why pay the bill if the Government does not present an invoice? In the past the San Miguel group and its subsidiary Liberty Telecoms sold extremely valuable telecom frequencies to Globe and PLDT for I believe P70 billion which frequencies were originally awarded for free. That money should have gone instead to the national coffers but the Administration did nothing about it. In the meantime our country has racked up P11.8 trillion in debt and will run a budget deficit of P1.7 trillion this year. What can I say.

Another deal pending is the sale of Shell’s interest in the Malampaya gas field. That field was originally owned 45% by Chevron, 45% by operator Shell with a carried interest of 10% by the Philippine National Oil Company- EC, a Government agency. Two years ago, Dennis Uy,  a business ally of the President, bought the minority interest of Chevron through his company Malampaya Energy for a reported $565 million after Shell and PNOC waived their rights of first refusal to acquire the shares. A short time later Shell offered to sell its stake in Malampaya for allegedly $460 million. Shell had since 2019 been requesting for a 10-15 year extension of its Service Contract to develop the field beyond its expiry in 2024 but Government has sat on that request for reasons that were never disclosed. It takes at least 5 years and billions of pesos to develop a field. With only a few years left on the current contract Shell must have decided to unload its stake before it lost its value when the contract expires.

There are many unanswered questions surrounding Dennis’ initial purchase of the Chevron stake some of which were unearthed in the Senate hearings led by Sen. Sherwin Gatchallian. For one why did PNOC not buy the stake, finance it like Dennis with loans, extend the service contract and recoup the investment in an Initial Public Offering? With natural oil gas prices now some 7 times higher than what they were then, Government would have hit a jack pot. 

I imagine the Modus Operandi is to buy Shell’s interest at a fire-sale price (note Shell’s price is $100 million below Chevron’s) and then use one’s influence to extend the contract with Government which would add significant value to the investment. That sale looked to close until it hit a snag with the Senate calling out what was a suspicious transaction that endangered the national security of this nation. Dennis Uy has no experience in operating a gas field. He would have had to bring in an international operator most likely from China with whom Dennis is said to be closely associated. Dennis is allegedly tied up with the Mainland for Dito, his new telecoms company.

Malampaya supplies 40% of the energy needs of Luzon so for this cog of our economy to be ceded to a consortium with ties to China is existential. In case nobody noticed China invaded our Pacific islands and already controls a significant part of our national finances, our electrical transmission facilities, our communications spectrum and our politicians. Concerned citizens have reportedly sued DOE Sec. Cusi, Dennis Uy et al. to reverse the deal citing it will result in annual revenue loss of $42 million.

The approval of Government is necessary for the Malampaya deal to close. Many such contracts have “change of control” provisions which can be invoked if the national interest is at risk. Perhaps under pressure from the Senate hearings, the PNOC Board nixed the transaction but like all things in our beloved country anything denied can be restored with the right number and the right phone call. 

(Shell has lately had a run of mishaps. Its subsidiary, Pilipinas Shell, just paid under protest over P3 billion in “back taxes” that it claims was a double assessment. That is what happens when you are unwilling to grease the skids.)

Under Art. XXII of the Election Code, Government agencies are prohibited from releasing monies for public works, etc. within 45 days from Election Day since this could influence votes. It is unclear whether there is a similar prohibition against the award of special concessions be it a franchise or special rights similar to what the Malampaya deal requires. If so Dennis will have to shop his Malampaya stake in the next Administration but without political support he should be ready to take a hair cut. The natural buyers would be the existing energy players – AC Energy of the Ayalas, Aboitiz Power and SMC Power – and MVP who had previously reportedly expressed an interest in the project. The key is the extension of the Service Contract but that needs a Palace connection. In a BBM Presidency I can surmise who that person might be.

Dennis whom say say is highly levered has not had much fun lately. In the last minute he had to abort a multi-billion rights offer for Dito, his telecoms company, perhaps because there was little interest in it and the underwriters got cold feet. The shine has come off.

Our legislators just passed the Public Service Act which liberalizes foreign ownership in previously restricted areas. Everybody is agog this will herald a flood of foreign investments. I would not get overly excited. As reported by Infrawatch, a foreign think tank, the deterrent to FDIs is not ownership restriction but corruption. The PSA gives the President (not just this one) the liberty to identify inclusions or exclusions to foreign ownership. There is now a new cookie jar to be raided.

What else is out there to plunder in the last two minutes? There must be a whole host of smaller deals that are being signed below the radar. On a bigger scale, the natural suspects will be in the infrastructure side – NAIA, water concessions, road contracts, special licenses. 

Let me know if you can think of any.