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.
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.