A colossal deception

A case study of corruption, cronyism and regulatory capture…

WRITTEN by veteran investigative journalist Rigoberto D. Tiglao, “this book exposes one of the biggest deceptions ever foisted on the nation, which has hidden from it foreigners’ complete domination of our telecommunication industry and certain other public utilities, a blatant violation of the Philippine Constitution. Former President Benigno S. Aquino III defied in 2012 a Supreme Court ruling ordering a stop to the foreign control of such strategic public utility.”

According to Tiglao, “Foreign ownership in Philippine Long Distance Telephone Co. [PLDT] and Globe Telecom [Globe]—the duopoly in the lucrative telecom industry—are 76 percent and 73 percent, respectively, way above the 40-percent limit set by the Constitution on public-utility firms. The Constitution’s Section 11, Article XII indeed is quite categorical: ‘No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens.’”

In his well-researched book, Colossal Deception, in 171 pages published in 2016 by Strong Republic Books and The Manila Times Publishing Corp., Tiglao said: “To skirt this constitutional limit, these foreign-controlled firms have claimed and widely propagated the falsehood, that they are majority Filipino-owned: PLDT claims its foreign ownership is just 18 percent, while Globe, 27 percent.”

“With such fabrications,” he explained, “foreigners have been able to control, mostly own, and profit from the country’s telecoms industry, a strategic sector of the economy that exploits sovereign natural resources and the radio spectrum, mobile telephony’s medium. This fact has been concealed from the Filipino nation since 2000.”

He explained: “In just about 15 years, an Indonesian magnate, Anthoni Salim, the biggest, controlling stockholder of PLDT through his Hong Kong-based firm First Pacific Co. Ltd. and its subsidiaries used the telco as his launching pad to establish and expand in the country a conglomerate even bigger than those built over so many decades by the old Spanish and Chinese-Filipino elites.”

“Salim, through First Pacific, now controls and mostly owns the biggest conglomerate of public-utility companies in the Philippines. Its 26-percent shares in PLDT make it the controlling stockholder in the country’s biggest telecommunications firm that has 70 percent of the telecom market. Its two other huge public-utility firms are Manila Electric Co., which has monopoly of power distribution in Metropolitan Manila and six adjacent provinces, and Maynilad Water, the water-distribution monopoly for the western part of the metropolis. It also has a major mining company, Philex Mining and Exploration, with its four oil and gas exploration subsidiaries, one of which has as its area of exploration in a disputed area in the Spratlys islands,” Tiglao said.

He further explained in the overview of the book in Chapter 1, thus:

“Through his holding firm MPIC [Metro Pacific Investments Corp.], Salim controls Metro Pacific Tollways Corp., now the biggest toll and expressway operation in the country managing the North Luzon Expressway, the Subic-Clark-Tarlac Expressway and the Manila-Cavite Expressway.

“Under President Aquino III’s administration, First Pacific has expanded rapidly and bagged the contracts for the country’s biggest infrastructure projects.

“In 2013 55-percent controlled Salim consortium was chosen to build the P65-billion Light Rail Transit [LRT] Line 1 Cavite Extension, the biggest infrastructure project awarded under the Aquino regime. In 2015 Salim led the consortium that won the bidding for the Cavite-Laguna Expressway project with its offer of P27 billion, P5 billion more than the next highest bidder, a group led by San Miguel Corp.

“Either because of Salim and his partner, the Ayalas’s persuasive genius or, allegedly, their strong influence with President Aquino, thrown in into this project was the award of the construction of the LRT-MRT [Metro Rail Transit] common station in Quezon City to the consortium, which moved its location from its original SM North Mall site to the nearby Trinoma mall of the Ayalas—who are Salim’s partners with a 35-percent stake. This government decision was so irregular that the owner of the SM group, the Henry Sy family who were originally members of the consortium, has sued government, even elevating the case to the Supreme Court.

“In partnership with the Ayala group [who were big supporters of the Aquino family], the Salim conglomerate also won the P1 billion worth of projects to operate an automated fare-collection system for the mass- transit lines. Other infrastructure projects awarded to Salim’s group by the Aquino Administration are the P11-billion North Luzon Expressway (Nlex) Harbor Link, the P7-billion Nlex Citi Link and the P12.4-billion Connector Road/Metro Expressway Link. The group has diversified into bridge construction, as well, with its P18-billion project to build the Cebu-Cordova Bridge.”

Tiglao added: “The last time in Philippine post-war history that a foreigner wielded such economic power in the country was in the 1950s, when a US army lieutenant who fought here during World War II and stayed on, Harry Stonehill, built a conglomerate of cigarette, glass and cement manufacturers. His net worth was estimated at $50 million at the time, equivalent to $400 million today—peanuts compared with Salim’s estimated assets in the country of $6 billion, based on the worth of his shares in PLDT, his infrastructure-holding firm Metro Pacific Investments Corp. and Philex Mining.”

 

To reach the writer, e-mail cecilio.arillo@gmail.com.

 

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3 comments

  1. Ow how about President Duterte has opened the doors for China telecom to operate in PH? I think Globe and PLDT is more Filipino company than these risky new comer.

    1. Risky?…. how come you are buying those fakes, plastics and other junks, perhaps even double dead meat from Tsekwa. What’s wrong when the entry of another telecom will reduce rates and good for the consuming public.These Yellow Oligarchs are the ones devouring the Pinoys alive and only Digong are making lots of changes.How do U define the legacy of Panot and her equally incompetent Corykong ?

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