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.

Continue reading “The mobility-oligopoly nexus in Philippine property development”

Critical cashflow analysis: Ayala Corporation, 2015

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.

Urban Property Development and the Creative Destruction of Filipino Capitalism

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.

Part II: The new rules of the game
Part III: Back to the land
Part IV: The city and the restoration of class power

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.[1] 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;[2] the Gokongweis’ Universal Robina is eyeing a factory in Burma, which would follow successful investments into manufacturing in Thailand, Vietnam, Malaysia, Indonesia, and China;[3] 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.[4]

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.

Continue reading “Urban Property Development and the Creative Destruction of Filipino Capitalism”

The new rules of the game

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 second of a four-part serialization.

Part I
Part III: Back to the land
Part IV: The creative destruction of Filipino capitalists

From the early 1980s to the present, the structure of the Philippine economy, its position astride global circuits of labor, commodities, and capital, and the opportunities for accumulation available to its capitalist classes have been defined by three sets of processes. First among these was neoliberalization. At first glance, the Philippines was perhaps one of the countries where neoliberalism saw an unqualified ideological triumph. It was among the first countries in the world to participate in structural adjustment program in 1980, and has since been the recipient of a total of nine structural adjustment loans from the World Bank and a participant in three IMF programs.[1] The momentum of neoliberal reform has been sustained from within by state economic planning agencies, the academe, and private-sector think tanks.[2] As a consequence, the Philippines has consistently gone above and beyond the prescriptions of the Washington Consensus: it had unilaterally adopted among the lowest average tariff rates in the world, innovated the privatization of economic zones, and embarked on some of the biggest privatizations in the world.

Far from being a completely ideological project, however, neoliberalization in the Philippines has been implemented in a specific, locally-contingent, and highly-uneven manner, and the resultant contours were crucial to the recent successes of domestic capitalists. This is perhaps most evident in the Philippine privatization program. Beyond the crown jewel corporations, such as Philippine Airlines, Petron, National Steel, and Napocor, public land and infrastructure have been the most consistent targets for privatization by successive post-EDSA governments. In Manila, the privatization of military-owned land, such as Fort Bonifacio and Camp Bago Bantay, of national government centers in Quezon City, and of reclaimed land on Manila Bay have in recent years been a defining feature of urban development in the city. Through the Bases Conversion and Development Authority alone, a total of 267 hectares in the city have been privatized in this manner, creating some PhP46.697 billion in revenues.[3]

Two particular features of the privatization program deserve closer scrutiny. Continue reading “The new rules of the game”