The mobility-oligopoly nexus in Philippine property development

This book chapter appears in Aulakh, P.S. and Kelly, P.F. (2019). Mobilities of Labour and Capital in Asia: Spatialities, Institutions, and Cultures. Cambridge: Cambridge University Press.

What kinds of places do contemporary mobilities of capital and labour create, and what kinds of place-specific capitalisms do they enable? This chapter addresses this question through an examination of the restructuring and rise of the largest Philippine-nationality conglomerates (PNCs) from 2001 to 2015, a period which saw the emergence of property development businesses as a core interest among these companies. It situates this development within two place- and period-specific sets of labour and capital mobilities: the continued growth of the overseas Filipino workforce and their inbound remittances; and the emergence of a foreign direct investment-driven, information technology-enabled business process offshoring industry in the country’s major urban centres, and a concomitant strengthening of domestic rural-urban migration flows. While PNCs had played only minor and indirect roles in facilitating these two developments, they have been the primary beneficiaries of demand for residential, office, and retail property which these movements of labour and capital have created.

This chapter argues that meeting this demand was a matter of staying in place, in two senses of the term: Firstly, the foremost advantage of PNCs over both foreign firms and smaller domestic firms was in the acquisition and development of newly-privatized and brownfield tracts of urban land, which is restricted to juridical Philippine nationals—an advantage which also extends to the power, water, communications, and transportation infrastructure that undergird these developments. By diversifying into these sectors, PNCs thus became vertically-integrated rentiers, able to capture substantial portions of capital flows through the built environment without any direct involvement in either the deployment of Filipino labour overseas, or in the operation of BPO firms. In its purest form, this is expressed as mixed-use development ‘townships’ that carry echoes of cash-crop latifundism: the sources of demand are ultimately global, and the value is created through labour, but the basis of the key surpluses are rents on land and other inputs to production and reproduction.

Secondly, the place-based and place-specific opportunity presented by demand for urban property in the Philippines allowed PNCs to obviate the need to seek new markets for their former core interests elsewhere, or to invest in new businesses that could plug into global production networks. With a few exceptions, the surpluses that were extracted from urban property have not been invested in value-adding sectors. Instead, they had been reinvested in new land-like businesses, i.e. infrastructure, and to new sites of activity for the same rentier-type activities, both in second-tier and urbanizing areas of the Philippines and in other developing markets overseas.  

Through the Philippine case, this chapter seeks to illustrate two crucial gaps in how labour and capital mobilities relate to each other, and their implications for place as a dimension to political economy. Firstly, the Philippines presents a clear case in which the mobilities of labour and capital cannot be considered in isolation from each other, as labour mobility has been a key driver for the investment patterns that Philippine capital have taken with respect to sectoral and geographical diversification. Secondly, the Philippine case shows how labour and capital mobility, as transacted through inherently immobile land and land-like assets, can reinforce the importance of place-based rentierism as an accumulation strategy. In contrast to the view of property development as a financialized, highly-speculative, and placeless sector under “advanced” capitalism, the advantages of Philippine capital in these sectors are inherently place-specific.