TSINOY BUSINESSMEN AND PHILIPPINE POLITICS
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A Term PaperPresented to
Prof. Jose Rene PadroDepratment of Political Science
College of Arts and Social SciencesMSU-Iligan Institute of Technology
Iligan City
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In Partial FulfillmentOf the course Requirement
In Political Science 80Society, Politics and Government
Janu – Lee C. Tarnate
Septemebr 5, 2009
I. INTRODUCTION
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Nowadays, it is practically impossible to separate business and politics.
Business plays an important role in manifold ways in modern politics. Firms
and interest associations have established direct links to governments and
associations (Schneider and Tenbuecken, 2002). The two areas of society are
strongly interlinked in order to build communities and people’s lives. In fact,
“for good governance to be sustainable, it requires partnerships between
government and civil society1.” Atencio (2007) recalls President Gloria
Arroyo saying, “it would take the private sector working together with
government to create the jobs needed to build a strong middle class and a
modern, first world nation2.”
Moreover, Business and politics may seem to exist separately:
Businesses primarily focus on strategies and policies to improve operations
and increase the profitability of companies. Politics, on the other hand, play
in a different arena, delving into the creation of public policies for the
advancement of constituents and the country.3
However, upon close examination of how businesses and politics truly
work, a connection between both becomes apparent. The two influence each
other.
1 World Bank. http://www.worldbank.org/2 http://businessmirror.com.ph/home/economy/html.
3 http://www.businesspolitics.org/
2
A study done by World Bank4 determined that “governance includes
the State, but also transcends it - by including civil society. The State, in
order to create an encouraging political and legal environment, needs the
support of civil society (businesses) to facilitate political and social
interactions, such as mobilizing groups to participate in economic, social and
political activities.
As stated in Article 10 Section 20 of the 1987 constitution of the
Philippines that “The State recognizes the indispensable role of the private
sector, encourages private enterprise, and provides incentives to needed
investments5.” The State also needs the private sector to activate the market
and generate jobs and income.
With this conjecture, the researcher comes up of the idea to study the
effect of the business sector to the government. Specifically, the main
objective of this paper is to study the role of Chinese businessmen in
Philippine economy and its effect to Philippine politics. Moreover, this paper
will discuss how Chinese influence the political landscape in the Philippines
and their role in the economic establishment in the country. The study will
showcase how Chinese gained economic power in the Philippines and how
they influenced politician giving advantaged to their business.
4 World Bank. http:// www.worldbank.org/governance5 http://www.congress.gov.ph/members/
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This study will also present why Filipino-Chinese has entered into the
political arena. Is it to protect their businesses? Or, is it to advanced more
their political interest? In addition, this paper will examine the root of
Chinese in the Philippine archipelago, the reason of their migration and
settlement.
Further, this study will discuss the establishment of Chinese
organization in the Philippines. What made them, the Chinese, organized
themselves into a chamber and the challenges they’d face.
To justify the notions and arguments presented, the researcher has
added tables and figures of relevant data from reliable sources.
II. CHINESE IN THE PHILIPPINE ARCHIPELAGO
The Chinese Filipinos has always been one of the largest ethnic Filipino
groups in the country with Chinese immigrants comprising the largest group
of immigrant settlers in the Philippines. They are one of the three major
ethnic groupings in the Philippines, namely: Christian Filipinos (73% of the
population-including indigenous ethnic minorities), Muslim Filipinos (5% of
the population) and Chinese Filipinos (22% of the population-including
Chinese Mestizos)6.
6 http://www.census.gov.ph/data/census2007/index.html).
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Today, most Chinese Filipinos are locally born. The rate of
intermarriage between Chinese settlers and indigenous Filipinos is among
the highest in Southeast Asia, exceeded only by Thailand (Cariño, 1985).
However, intermarriages occurred mostly during the Spanish colonial
period because Chinese immigrants to the Philippines up to the 19th century
were predominantly male (See, 1997). It was only in the 20th century that
Chinese women and children came in comparable numbers.
Today, Chinese Filipino male and female populations are practically
equal in numbers. These Chinese mestizos, products of intermarriages
during the Spanish colonial period, then often opted to marry other
Chinese/Chinese mestizos (as was the case with the ancestors of national
hero Dr. Jose Rizal) (Alfonso, 1996). Generally, Chinese mestizo is a term
referring to people with a partial Chinese ancestry (Steinberg, 2005).
By this definition, the ethnically Chinese Filipinos comprise 1.3% (1.1
million) of the population. This figure however does not include the Chinese
mestizos who since Spanish times have formed the middle class in Philippine
society nor does it include Chinese immigrants from the People's Republic of
China since 1949 (Wong, 1999).
A. Early Chinese Merchants
During the Spanish period and the era before World War II, land was
the primary symbol of wealth. Economic control was in the hands of the
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landowners, who were expected to provide for the needs of the community
dependent on their survival.
Manila played an important role as a port for the Manila galleons, huge
Spanish trading ships that voyaged between Manila and Acapulco, on the
west coast of New Spain. The galleons sailed from Manila with Chinese
goods, mainly silk textiles and porcelain, and returned from Acapulco with
silver bullion and minted coins, which purchased more Chinese goods
(Steinberg, 2005)
The galleon trade presented new opportunities for Chinese merchants,
who formed an economically important community in Manila by the 1590s
(Wickberg, 1982).
In the 19th century the Industrial Revolution transformed the world.
Chinese merchants in Manila helped to finance and shape the new export
opportunities, often acting as intermediaries between foreign traders and
local producers (Ang, 1996). In 1839 the colonial government issued a
decree granting Chinese freedom of occupation and residence.
Armstrong, et al (2001) noted that during 1851-1864 many Chinese
immigrated to the Philippines after the Taiping Rebellion in China.
Furthermore, aware of the political and social advantages enjoyed by Roman
Catholics in the colony, many Chinese converted to Catholicism and married
Filipina women, and their descendants is called mestizos (Alfonso, 1996).
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Through the acquisition of land, they became an economically
privileged class in the new cash-crop economy. These mestizos formed the
major component of new Filipino elite of planters, merchants, and civil
servants.
Chinese, during American government in the Philippines, become the
middle men of America’s importers and traders. In 1939, the total Chinese
investments in the Philippines reached $ 100 million and that is second to US
investments of $ 331 million (Wong, 1999).That same year, the Chinese
government opened a branch of the Bank of Communications in Manila. The
bank financed many of Chinese mercantile and industrial activities in Manila
as well as in the remotest places in the Philippines.
Filipino-Chinese businessmen used two strategies to exploit the
economic opportunities in the Philippines. The first was to claim a major
market share by expanding business lines in which they were already key
players, the focused mainly on commercial sector, in the distribution and
sale. To broaden their market base by venturing into new growth areas is
their second strategy. This involved related manufacturing activities like rice
milling, logging and sawmilling (Wong, 1999).
With this conviction, we can see that Chinese has already penetrated
the Philippines even during before World War II. The galleon trade is a great
manifestation of their business presence. Hence, they had established the
economic landscape of the Philippines with this trading. Moreover, we can
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see how they struggle for survival in the Philippines, the strategies they had
made in order to gain access to the Philippines and to maintain their post in
the country.
We can evidently say, with this data, that Chinese play an
important/dominant role in Philippine business activities centuries ago.
III. CHINESE BUSINESS ORGANIZATION
A number of business organizations represented the interest of
Filipino-Chinese merchants, especially in Manila. Some had been formed
during the late Spanish period, others more recently.
In 1902, the first general chamber of commerce association was
formed in Manila, known as the Chinese Chamber of Commerce. This
chamber was formed out in against to a new colonial regime that is
oppressive and discriminatory to the Chinese People (Wong, 1999).
Wong (1999) added, through the efforts of some Filipino-Chinese
merchants in Manila, Manila Chinese Commercial Council was established
and further their population increases due to some recruitment. At the end of
1908, the name of the association was changed and it was formally
registered to the Philippine government as Philippine Chinese General
Chamber of Commerce (PCGCC).
After half a century of dominance of this Chamber in the affairs of
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Chinese in the Philippines, the consequences of World War II and subsequent
independence of the Philippines from American colonial rule led to the
Chamber’s eventual displacement by the Federation, which known today as
the Federation of Chinese Chamber of Commerce and Industry (FCCCI)
(Carino, 1985).
Carino (1985) added, the Federation derived great legitimacy from the
support of the government of Taiwan, and eventually emerged victor over
the Chamber in a power struggle to be the primary voice of the Chinese in
the Philippines.
Today, FCCCI members are the country’s biggest/ richest businessmen
whose holdings and stocks shares big percentage in the Philippine Gross
National Product (GNP) and Gross Domestic Product (GDP). The current
President of the Federation is John K. Tan7.
IV. CHINESE BUSINESSMEN IN THE 21TH CENTURY
Chinese are known for their knowledge and ability to make good
business while Filipinos are known for being hardworking and passionate, if
we mixed them together it will come to a conclusion that Filipino-Chinese are
meant to have success and wealth.
Today, in the business community, we often hear the names of Sy,
Tan, Ang and Dy and a lot of Chinese names. They are among the wealthiest 7 Filipino-Chinese Chamber of Commerce and Industry. www.fccci.com
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individual in the Philippines. They owned several multi-national companies.
In fact, almost all major holding firms and banking institutions in the
Philippines are owned and managed by them. The biggest and largest
businesses in the country are also managed by them.
Thus, Henry Sy, among the richest of them owned SM Prime Holdings,
Banco De Oro, own shares in multiple companies in the country with a
networth of $3.1 billion. Lucio Tan, another prominent Filipino-Chinese,
owned the Philippine air line flag carrier – Philippine Air Line (PAL)-, Fortune
Tobacco, Asia Brewery, and other big businesses in Mining and with a net
worth of $1.5 billion. Thus, he ranked 2nd of the Philippines richest people
according to Forbes (See Appendix B)8.
In the total GDP and GNP of the country, they’d shared a significant
percentage of shares. Philippine business sector is dominated by this Filipino-
Chinese. The biggest and famous establishment is owned by them. Jollibee
Corporation, owned by Tony Tan Caktiong, the famous fast food in the
Philippines has gained its economic significant in the Philippine economy.
Further, SM holdings, Robinsons’s Mall, Universal Robina Corp., the franchise
of Mc Donalds’ Philippines, San Miguel Corp., etc (See Appendix B).
This is a great manifestation how powerful the Filipino-Chinese in
business community. They had generated so much business in the country
and produced a number of jobs. Thus, Filipino-Chinese plays an important
8 2008 Forbes List. http:// www.forbesrichestfilipino_2008.com./htm
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role in the Philippine economy. Atencio (2008) recalls President Arroyo says,
“…we are all thankful for the indelible contribution the Chinese have made to
Philippine economic and cultural life.” “Chinese have played and continue to
play a very valuable role in Philippine development,” the President added.
With the economic power Filipino-Chinese gained, they’d also gained
access to political setting of the country and influenced politician in policy
making in order to protect their businesses and advanced their interest.
For instance, the Anti-money laundering law passed by the congresses.
Sergio 'Serge' Osmeña, one of the law's original sponsors, is not in a
celebratory mood when the bill was passed. Pesayco quoted Sen. Osmeña,
“There are hidden agendas here," he said. "We had a marvelous opportunity
to collect P100 billion more in taxes but now we have a situation where we're
signaling we are even condoning tax evasion,” he added.
Tax evasion was not counted as one of the 14 crimes covered by the
anti-money laundering law. This omission was not surprising. After all, even
the government version of the bill submitted to Congress did not include tax
evasion. This was because of the objections raised in a meeting between
government representatives and the influential Federation of Filipino-Chinese
Chamber of Commerce and Industries.
The group, which until recently was identified with tobacco tycoon
Lucio Tan, thumbed down the inclusion of tax evasion in the list of predicate
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offenses for fear the law would be used to harass them. The Ramos
government had slapped a P26-billion tax evasion case against Tan.9
Moreover, at the Sept. 11 joint hearing of three House committees,
Dante Go, president of the Chinese-Filipino Business Club, endorsed the anti-
money laundering bill but only if tax evasion as an offense were to be
removed. During the hearing, several congressmen assured Go that his
sentiments would be considered (Pesayco, 2007).
According to a 2004 study of Congressional representation made by
Larry M. Bartels, a political scientist from Princeton University, senators and
congressmen were more receptive to standpoints of wealthy constituents
rather than to those belonging to the middle or lower tier of income
distribution.
Moreover, the funding of electoral campaigns depend largely on
corporate funding, thus giving the business sector the power to set the terms
of politics. Politicians need the financing from businesses, while businesses
depend on these public officials as they need their backing to obtain certain
government projects and licenses10.
To further advance their interest, the Filipino-Chinese businessmen,
some have entered to politics. In this course of action, we can evidently say
9 PHILIPPINE CENTER FOR INVESTIGATIVE JOURNALISM. http://www.pcij.org/
10 http://www.businesspolitics.org/
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that in order for them to strongly defend their businesses and carried it out
to the legislation their interest some have run and took a post in the
governmental position. Throughout the country, their population in the
governmental position is salient. In the house of representative alone, a
number of Filipino-Chinese took the sits (see Appendix A).
Furthermore, they even influence the highest executive in the land, the
President. To argue with my notion, Arroyo taps Chinese-Filipino traders vs.
the political noise regarding corruption allegations. In fact, Avedaño writes,
the President on Saturday called on Chinese-Filipino businessmen to try and
convince their politician-friends to buckle down to work rather than engage
in politicking. Moreover, the President said, "I ask you to tell the politicians
that support you to get on with the people’s work … I ask you to call on the
legislators you support in the elections to stop partisan wrangling and start
legislating," during the induction of the Philippine-Chinese Chamber of
Commerce and Industry.
Further, With Arroyo’s tapping the Filipino-Chinese community to
support her; it is an important indication that indeed Filipino-Chinese
businessmen influenced political activity, In the first place, why you have to
seek for help in an organization if it is not influential and you can’t gain any
benefits from them to advance your political interest.
V. Conclusion
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“Because Chinese businessman has a great impact in the Philippine
economy, they had gained access in the Philippine politics in such a way
they’d influenced the Philippine legislature”. Based on the information and
data gathered by the researcher, indeed Chinese businessmen accumulated
their political power from their economic domination.
Politicians need businessmen and businessmen need Politician to
advanced both political and economic interest. Politicians need the
financing/funding, mostly depend on corporate funding, in their political
campaign during election and the businessmen needed the Politicians in
order to enact/pass laws and restriction to advanced and protect their
business movement.
Thus, Arroyo’s administration has a close connection from the FCCI
(Filipino-Chinese Chamber of Commerce and Industry). This was manifested
how she seek help from the federation and how she defend the association
from any political movement against it.
Indeed, business and politics cannot be separated. The two is
interconnected. Thus, the two areas of society are strongly interlinked in
order to build communities and people’s lives. In fact, “for good governance
to be sustainable, it requires partnerships between government and civil
society.”
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