This Sankey diagram depicts data from Ayala Corporation’s 2015 Annual Report: cash flows, both into and out of the company, from and to investing, operating, and financial activities, and total assets. Urban land and infrastructure activities emphasized.
This article, co-written with Maria Khristine Alvarez, appeared as part of a symposium on the politics of flooding in Asian megacities on the International Journal of Urban and Regional Research.
A version of this graphic saw use in Cardenas, K. and Kelly, P.F. “Shifting Urban Contours: Understanding a World of Growing and Shrinking Cities.” in A. Bain and L. Peake (eds.) (2017). Urbanization in a Global Context: Canadian Perspectives. Oxford: Oxford University Press.
As part of Philippine Center for Investigative Journalism’s special report on Duterte’s China romance, I conducted research into the firms that signed deals during his state visit. What I found was that, among the Philippine parties to these deals include:
• firms with no track record in major infrastructure projects, no recent operating profit, and alarmingly small asset bases;
• firms and personalities that have been implicated in anomalous deals, including Arroyo-era “bridges to nowhere” and the Smokey Mountain Rehabilitation Project; and
• two firms involved in the nickel ore trade with China, one of which had been implicated in smuggling cases at Subic.
“How did virtually unknown firms with no track record in bidding for—much less completing—major infrastructure projects, rise to billion-dollar prominence with the change of the administration?
“For the firms that have no records with the SEC: if they aren’t registered to do business in the Philippines, how could they be party to billion-dollar deals on our behalf? For freshly-registered firms how were their directors able to both anticipate Duterte’s turn to China, and secure influence with the new government so quickly?
“Given the ambitious scope of these projects, can the smaller firms, some of which appear to be seriously undercapitalized, be trusted to deliver on time and within budget? Would any sensible lender take the risk of extending credit to these firms—or will their access to capital depend on intercession from on high?”
Read the full story: Duterte’s China deals, dissected.
Other stories in this series, “Romancing China under DU30”:
Karol Ilagan and Malou Mangahas: Beijing and Manila dating again (part II)
Data Annex: The Philippine parties to Duterte’s China deals
This material originally appeared as a chapter in W. Bello and J. Chavez (eds.) State of Fragmentation: The Philippines in Transition. Bangkok: Focus on the Global South.
This entry is the first in a four-part serialization.
The past decade had been incredibly good for Filipino capitalism. In 2000, the combined profit of the thirty companies comprising the PSE composite index stood at PHP 26.1 billion. By 2010, it grew to 304.23 billion, or an increase of 635 percent in real terms. Within the same ten years, the Philippines’s gross domestic product grew by only 59 percent (see Table 1). In 2006, when Forbes began publishing an annual list of the richest Filipinos, the combined net worth of the forty wealthiest Filipinos was US$16 billion. By 2010, their fortunes were collectively worth 22.8 billion dollars, an increase of 32.3 percent in real terms. In comparison, GDP per capita increased by a mere 13 percent within the same period. Far from depending exclusively on the Philippine market, several of their conglomerates are presently embarking on ambitious foreign expansion plans. Henry Sy’s SM Prime is presently planning to open five more malls in China within the next three years; the Gokongweis’ Universal Robina is eyeing a factory in Burma, which would follow successful investments into manufacturing in Thailand, Vietnam, Malaysia, Indonesia, and China; and San Miguel Corporation, as part of its plan to bring total sales to one trillion pesos by 2013, is planning to put up plants in Burma, Cambodia, and Laos.
TABLE 1. The Philippine economy versus PSE Composite Index company net incomes, 2000 and 2010.
This was by no means an expected outcome. The 2000s was a very turbulent decade for business: it began with Philippine capitalism in serious crisis, with the economy still reeling from the Asian financial crisis of 1997-8. The initial contraction, at half a percent, was mild compared to the severe drops seen in the rest of middle-income Southeast Asia. But an anemic recovery, coupled with a hollowed-out neoliberal state unwilling and unable to either stem the outward flow of portfolio investments or to spend its way out of the crisis, prolonged the economy’s stay in the doldrums, culminating in a fiscal crisis in 2005. For much of the decade, the country was also in the grips of a political crisis. The impeachment trial of Joseph Estrada, the subsequent revolt of middle Manila, and the installation of Gloria Macapagal-Arroyo in 2001 proved to be only the beginning: as the decade wore on, Arroyo’s questionable mandate increasingly became illegitimate, and would echo throughout the decade as a rigged election, mass mobilizations, and the reanimation of an adventurist, impune military. Finally, its closing years saw the global capitalism erupt in a systemic crisis that it has yet to emerge from.