Billionaires never had it so good
Credit to Author: Marlen V. Ronquillo| Date: Sat, 07 Dec 2019 16:46:12 +0000
A furious Mr. Rodrigo Duterte is now a staple of the public sphere. It is an across-the-board venting of fury, sparing no one, not even the billionaires. The first billionaire to get verbally flogged in public was Roberto Ongpin, the trade and industry minister of Mr. Marcos. After that public lashing, Mr. Ongpin opted for a civil way out, which was to keep silent, then went on with his business of making more money, albeit on a very low-key basis.
He remains one of the country’s richest men.
Recently, the two metropolitan water concessionaires , the Ayalas and the group professionally run by Mr. Manny Pangilinan were at the receiving end of Mr. Duterte’s flogging. There was even mention of “bloodshed“ and a few other scary words, which are hardly the staple even when the State is displeased over the performances of those given choice concessions to run critical — and very profitable — utilities. Based on Mr. Duterte’s words, the expectation was this. The concessionaires had hell to pay and their franchises would probably scrapped — via executive fiat — today, if not tomorrow.
Nothing drastic such as franchise voiding will take place. No radical executive fiat will be carried out. As sure as the sun rises on the east, the only change that will take place will be some minor amendment of the concession terms — cosmetics and consuelo de bobo. If they do not get paid the amount of P11 billion, that is just a rounding figure for the two water distribution giants.
After the fury shall have died down, it will be back to the ideal status quo.
For the truth and the only truth is this. For the billionaires, the government of Mr. Duterte is a virtual springtime, the regime most ideal to do business. The billionaires, they just keep this sense to themselves, love the government of Mr. Duterte. Despite the occasional harsh words trained on some of them, the billionaires never had it so good.
Just look at the main thrust of the second tax reform package.
The second tax reform package, the Tax Reform for Attracting Better and High-quality Opportunities or Trabaho Bill, obscures the most important provision of the draft law. This is to reduce the corporate income tax (CIT) — to be done in phases — from 30 percent to 20 percent. There is overwhelming consensus to do this and this is not even a controversial, contentious issue.
No one seems to point out this harsh reality. More than 60 percent of national income gains is sucked up by the Top 1 percent and these are the billionaire owners/major shareholders of the corporations that would benefit from the CIT reduction. The CIT reduction will pass on the tax cut windfall to the… billionaires.
After the CIT settles down to the targeted 20 percent, the taxation burden will look like this — wage earners will have a higher tax rate than the corporate fat cats. In a sense, the second phase of the tax “reform” package will provide a windfall for the billionaires. Just at the impact of the Trump tax cut. The biggest gainers have been the top 1 percent.
What about the ambitious P8-trillion Build, Build,Build program of the Duterte administration?
If you read the name of the players that will participate in the big-ticket projects — be they seaports, airports, roads, bridges, power facilities or other major infra projects — one fact stands out. The corporate names are few and these corporate players are owned and controlled by the few dollar billionaire families we are familiar with. The same families that occasionally get lashed at publicly by Mr. Duterte.
After the completion of some of the projects, like roads, they will be operated by toll operators on a 25-year basis, renewable for another 25, which practically means a lifetime. Users will pay toll and the toll fees will accrue to the private concessionaire.
The concessionaire, just like the case of the two water firms, will charge rates that are lopsided and onerous and peppered with the usual “escalation“ clauses that grants the concessionaires the right to hike toll fees indiscriminately — with little opposition, rather — abetted by — the Toll Regulatory Board.
Outside players are not welcome and are not encouraged. The government does not even encourage the contractors from the provinces to pool their resources and compete with the usual corporate suspects.
Simply put, the P8 trillion fund for Build, Build, Build is specifically designed for the major corporate players, owned and controlled by a few dollar billionaires.
Despite the occasional harsh words from President Duterte, the reality is this — the country’s billionaires never had it so good.
Plus, the economic team of Mr. Duterte is composed, 100 percent, of conservative economic minds who love market-based policies and the private sector. In the GDP-obsessed government of Mr. Aquino, the present economic team of Mr. Duterte would fit right in — with no disruptions in economic and fiscal policies.
Cast off by this unequivocal neoliberalism are the voiceless like us, farmers and workers.
Do you remember the time Mr. Duterte was about to fulfill his campaign promise to end labor contracting to give a break to the country’s starvation-wage workers?
He was cautioned by his economic team and Big Business. The result? He called for a “compromise,“ which actually meant a surrender to the whimsy of Big Business.
Do you remember what happened after the Rice Tariffication Law, which was a virtual death sentence on 3 million small rice farmers?
Mr. Duterte planned to support an amendment to the law. He was cautioned by his economic team and the conservative economic think tanks. Mr. Duterte caved in and dropped the planned support for an amendment.
Even with the harsh words, nothing has changed. The masters of the universe then are still the masters of the universe now.