The Long View: Errors in judgment

The Long View
Errors in judgment
By Manuel L. Quezon III
Philippine Daily Inquirer
First Posted 05:05:00 03/18/2010

Gilbert Teodoro Jr.’s campaign slogan, “Galing at Talino,” points to his perceived strength as a candidate. This is supported by the reasons given by those who say they will vote for him.

From February 20-26, the Manila Standard Today conducted its most recent survey on presidential preferences, a survey viewed as quite credible within political circles. Among those who identified themselves as Teodoro voters, his most likeable characteristic was his being “Smart/Capable” (35 percent). When supporters were asked how likely it was that their current preference might change, the results were interesting: 10 percent of his supporters said their choice “Will definitely still change,” while 42 percent said it “Possibly [could] still change,” 13 percent said it would “Possibly no longer change” and 34 percent said it “Will definitely no longer change.”

This is the opinion of the already committed. But what about the broader electorate?

In the same survey, those surveyed as a whole (composed of registered voters) were asked the most disliked characteristics of Teodoro. First came “I don’t know him” (17 percent), followed by “A lackey of the current administration” (14 percent). These are shortcomings that could potentially be addressed if the President’s party committed respectable resources to her candidate: the campaign itself is almost two-thirds of the way through.

Journalist Ricky Carandang has been doing research on this and decided to compare the advertising President Gloria Macapagal-Arroyo bought during her 2004 presidential campaign, with Teodoro’s. Carandang was informed by Nielsen that Ms Arroyo had 914 minutes of commercials in the 2004 campaign (her primary rival the late Fernando Poe Jr. took out 1,924 minutes of ads).

Pera’t Pulitika, the NGO which is monitoring election-related expenses by all the candidates, informed Carandang of the TV ad placements and spending of the candidates both prior to, and since the campaign began on Feb. 9, as of March 8.

Prior to the official campaign period, when the sky was the limit on advertising expenses, Manuel Villar Jr. took out 2,054 minutes of TV ads: 845.75 minutes on ABS, 876.25 minutes on GMA. He took out an additional 332 minutes of ads in other stations and 6,677 minutes of ads on radio.

Teodoro, in contrast, had 776 minutes of ads (342 on ABS, 305 on GMA, 232 in other networks) and 2,111 minutes of ads on radio. This was a respectable allocation of resources, exceeding Noynoy Aquino’s, for example, by 350 minutes on TV and by 1,100 minutes on radio, though not much ahead of Gordon, whom he exceeded by only about 100 minutes on TV.

But the result of that effort was negligible. This suggests that an even bigger push should be taking place to further advertise Teodoro, but he is wedded to the same old-fashioned stumping as his cousin Aquino, overlooking the fact that we have an electorate grown so large, one can never hope to shake enough hands and make that personal connection within the three months allotted to campaigning.

Pera’t Pulitika says current laws allow each presidential candidate to spend P500 million during the official campaign period (calculated at P10 per registered voter and with 50 million registered voters). Villar is estimated to have already spent 21 percent of his total allowable budget on media placements, and Aquino 16 percent.

In contrast to the two leading candidates, Teodoro has allocated only 0.5 percent of his allowable campaign budget specifically for media placements. In its communication to Carandang, Pera’t Pulitika noted that regulations permit 120 minutes of ads per network: Villar has already used up 66.25 percent of his allocation in ABS-CBN and 66.25 percent in GMA; Aquino has used up 63.33 percent in ABS-CBN and 55 percent in GMA. Teodoro has used up none of his quota in ABS-CBN and only 1.25 percent in GMA.

Another measure, in simple peso terms, says it all: Villar has spent P98 million on TV ads in the first month of the official, three-month campaign period; Aquino, P77 million; and Teodoro, the candidate of the presumably cash-rich administration, P31 million.

Would Teodoro, in any other election, be a formidable candidate? Maybe. But if timing is everything, his timing says something of his judgment, and his taking on handicaps to a serious candidacy.

The first is one of sheer demographics. In a sense he is haunted by the economic performance of the President he served so loyally. Pulse Asia reported he has 17 percent of the class ABC vote but only 7 percent of class D and a mere 4 percent of class E, the two overwhelmingly largest classes. The problem is that while the upper class has profited rather handsomely from the President’s policies, the middle class has, itself, shrunk. The D and E classes generally despise the administration.

Teodoro’s identification with the administration negates his personal strengths. At best he is an eloquent Cesar Virata to our latter-day Ferdinand Marcos in a skirt. Ramon Magsaysay, after all, bolted the unpopular Quirino administration as he set out to make the transition from defense secretary to president. This flaw in judgment is compounded by Teodoro’s belief in machinery above all. Lakas-Kampi-CMD leader Prospero Pichay Jr. continues to maintain that the administration will deliver 33 percent of the votes in May. The other veterans of the KBL running for the presidency all seem biased in favor of machinery, official or not, too. But to whom will the local machines deliver?

I have heard it said that Teodoro himself is peeved over the way the administration is hedging its bets, with him as the minor candidate among the President’s official and unofficial horses in the presidential race. That he has publicly kept mum about this galling state of affairs is what deprives him of even the benefit of the doubt. With every intention of sticking it out with the administration, he seems content to be a patsy.

Manuel L. Quezon III.

59 thoughts on “The Long View: Errors in judgment


    I would like to respond to the article of Manuel L. Quezon III, Errors in Judgement regarding the candidacy of Gilbert Teodoro Jr. for President of our Republic.
    Teodoro has attracted a large number of supporters, myself included, due to the positive message of his campaign which is based on platforms and programs. He has clearly articulated this in numerous forums and his visits all around the country. He has a clear vision of how and where he would lead our nation. And more importantly we feel he has the most realistic platform that all the other candidates. He has inspired a new generation of leaders who are tired of the same old sound bites and motherhood statements.

    His positive campaign has inspired many young Filipino’s, and even old ones that there is no need to mudsling or throw dirt at opponents to gain popular support amongst our general public. Because of this, our volunteers have gone out of their way, and shared their precious time to go out and campaign for him in the streets, in the marketplace to support our candidate’s advocacies, with their own money and all of their passion.

    Political junkies like to shift the focus of the campaign to analyzing statistics and surveys to try to sway voters to one direction or another and I guess that is par for the course. However an election in a democracy should be about platforms and programs. This is where Teodoro stands out and this is why we support him. He is the true candidate of change.

    I am not supporter of the current administration and I do not support the fragmented opposition either. I support Teodoro. He has a better sense of what governance is all about, its limitations and capabilities. And he has the most important quality that is sorely needed in our country today, and that’s LEADERSHIP.

    The Teodoro campaign is a healthy addition to our political maturity. We do not view it as an error in judgment in the same way that we did not view the failure of the Black and White Movement to install a new government via people power as bad timing. It’s all part of democracy. If he did not run, the patsy would have been the Philippine people who would have been reduced to a shallow choice of a campaign based of good vs. evil and rich vs. poor. We want genuine change, and Sec. Teodoro is the one who puts forth a plan, a clean name and a competence unequalled by any Presidential candidate running for the 2010 elections.

    Aaron Benedict De Leon- GREEN TEAM

  2. As a bar topnotcher with a reputation for brilliance, Gibo should have known from day one that his candidacy was only a token one. Early surveys showed that only a miracle of epic proportions could make him win. He had to claw out of a grave buried 10 feet deep and encased in 18 inches of solid concrete. Following the maxim, “don’t throw good money after bad”, it would have been folly to think that there would be more than a half-hearted effort to get him elected. I still believe that, in his heart of hearts, Gibo knows this.

    Having said that, Gibo’s is not a lost cause. This is only the beginning of a promising journey into national politics. The national exposure won’t hurt him. And, despite the “kiss of death” from the administration, he is proving to be a very attractive and viable candidate. A run for the senate in 2013 will be the next step. His performance in this election will determine his chances for the next senatorial elections. After that, who knows? The Presidency in 2016? He is still a young man. He knows that time is on his side. Gibo should make patience and perseverance his guiding principles over the next 6 years.

  3. Clear vision, yes of course, kaya napaka-fluent nya ano, dahil may vision sya. Kaya napakatalino nya dahil glib sya. Kaya maasahan mo dahil mukhang confident at magaling manamit.

  4. Frankly, Teodoro supporters insult me. I don’t see any sense in his campaign. Only platitudes and cliches. Type nyo lang English accent nya siguro.

    Aaron, try this simple question. Where do you see insurgencies in Teodoro’s platform.

    How can he serve the OFWs and our burgeoning population of college graduates looking to be gainfully employed?

    His answers to these problems are like promises from heaven littered with words like “synergy” and “correlative.”

    His economic plan is to liberalize. But he’s a haciendero! and no one sees the irony.

    He strikes me as a leader that could effectively operate in a tabula rasa country or a vacuum.

  5. All that eloquence and demeanor didn’t do squat during Ondoy.

    Give me a boorish, ineloquent, results-oriented leader any given day.

  6. Gibo probably didn’t make any judgment errors. True to his nature, he just follows Gloria’s script to the letter…nothing brilliant in that…he doesn’t have his own vision, he’s too bookish, he mastered the educational system thats all – he belongs in school…and some people are easily swayed by eloquence, never mind if he’s talking about nothing of consequence “basta magaling sa ingglis” talaga naman…

  7. For someone touting himself as magaling at matalino, he’s looking more like the palace fool…

  8. It’s funny that in stating why he has chosen to prioritise the national interest above his filial relationship with his uncle and former patron, Danding Cojuangco, he does not apply the same standard to his new patron, Mrs Arroyo.

  9. Gibo was just being realistic vis-a-vis Danding. There was no future in NPC because the party had already fulfilled its objectives. The NPC’s raison d’être was to provide Danding a vehicle which would enable him to have the political muscle he needed to engage, and keep at bay, any administration. Danding needed the political clout in order to protect his ill-acquired holdings in San Miguel Corporation. And he did so with great success, throughout the Cory, FVR, Erap and GMA administrations.

    Danding’s relationship with NPC was a symbiotic agreement between thieves to scratch each others’ backs. Danding would provide the fuel for the machinery, while the politicians would provide the political noise and the backroom clout for Danding. Thus Danding was known as a “king-maker”.

    However, with the Supreme Court rulings in recent years that favored Danding over the poor coconut farmers (who have no political clout whatsoever), and the connivance of PCGG and the Sandiganbayan, which emasculated the government’s participation in the management of San Miguel by allowing its shares to be converted into non-voting preferred shares, Danding had no more reason to humor or to please any administration. Danding had finally muscled his way to almost complete control of San Miguel. He could, and can, run and manage San Miguel any way he wants to. No more interference from any administration.

    So why would Danding want to spend and maintain a whole political party when he now can buy politicians by the kilo? He now has the luxury of being able to cherry-pick his choices, instead of supporting a large crowd of trapos and charlatans.

    Gibo saw the handwriting on the wall. He knew that he had no future in NPC. Some may doubt the wisdom of precipitously jumping into the administration party. But, looking at the fate of Chiz Escudero, who was foolish and naïve enough to believe that Danding would continue his political largesse despite there being no more reason to do so, Gibo still comes out faring better. Gibo and Chiz, once the bright shining stars of the NPC, were orphaned when Danding cut his deal and had San Miguel in the bag. Danding no longer had any reason to nurture them politically. Gibo had to cut himself from Danding’s apron strings and strike out on his own. While he may not have made the ideal choice, he can still bank on it to make a name for himself. Which, to some degree, he has succeeded in doing. It’s not about 2010. It’s about preparing for future political battles.

    It is obvious that Danding has no more interest in getting in too deep into politics. He will just hedge his bets, making casual bets here and there and collecting IOU’s at his leisure. This is evident in Danding’s rather hand-offish attitude in the present elections. He’s not spending money on a wholesale basis. He can afford to go retail. Noynoy Aquino is assiduously courting him. The clever and experienced old fox that he is, Danding simply bides his time. If he sees that Noynoy has the better chance to win, he will back Noynoy. And collect his IOU’s at the proper time.

    Walang personalan dito. Politika lang ito.

  10. Carl, I agree with your assessment about Danding’s motivation in dabbling in politics in so far as it is driven by his business interests and legal cases.

    The strongest motivation for backing a national candidate at this point would be kinship, which I believe is why Gilbert’s severing of ties with him and the NPC grated the Chairman so much.

    I believe in the future, after settling his claim over SMC, Danding will behave like a mature elite rent-seeker who has blanketed his wealth with legality and will now be demanding more secure property rights and rule of law to prevent other up and coming booty capitalists from taking his advantages away.


    Peace and order is a pre-requisite to any attempt at economic and socio-cultural development in any society. We need to instill a culture of peace among our people. The Lakas Kampi CMD is set pursue peace and order founded on the primacy of the Philippine constitution, which the Philippine government must uphold at all times. There must always be government presence in the various conflict areas not only to our protect villages but as a deterrent to any potential aggression on the part of insurgents and separatists.

    Of course, dialogue is still important, but once there are armed groups in the area, this will only hamper the development of negotiations between two conflicting parties. It is very easy to throw mud at our candidate,

    On OFW’s and Protection of Migrant workers:

    Protection of Migrant Workers – The protection of our migrant workers actually begins with protecting them at the point of recruitment. Its but natural for our other fellow men to have that mindset, so we have no complete control of that. We need a balanced approach, one of which is to provide adequate opportunities in the country. We must also continuously promote technical education because the demands of these jobs are also great. We must also tap into the entrepreneurial power of the people in the country. We must install more safeguards so that recruiters can provide more assurances of safety for our OFW’s. There should be a more active network of support systems to monitor the conditions of each and every Filipino worker abroad. Government must help establish a system of mutual assistance in every country where Filipino communities are present, to help them cope with emergency problems such as illness, legal issues and repatriation support.

    I think you should read the platform on this site:

    Haciendero? You’re talking about Hacienda Luisita? His family doesn’t own any part of it. You can see through the shares in the Luisita profits.

    I don’t appreciate it when people give out opinions without the backbone of research. Don’t expect information to be handed out on a silver platter straight to your home without the attempt of finding it out yourself.

  12. “I believe in the future, after settling his claim over SMC, Danding will behave like a mature elite rent-seeker who has blanketed his wealth with legality and will now be demanding more secure property rights and rule of law to prevent other up and coming booty capitalists from taking his advantages away.” – thecusponline

    I agree. Looks very much like Michael Corleone in “The Godfather”, doesn’t it? There’s a very thin line between gangsterism and booty capitalism. Between “Cosa Nostra” and “Tayo-tayo”.

    I must also add that, having said that Gibo had to make the most of his limited options after seeing that Danding was going to focus more on legitimizing his ill-acquired wealth rather than bankrolling politicos, it does not mean that I personally approve of him. I still view him as an elitist cacique, albeit with a better academic record than the other cacique. I also agree that Gibo has more to prove by way of accomplishments.

    As for Danding’s family ties, Danding has a tendency to overwhelm his immediate family. Note that none of Danding’s brothers, Manolo and Henry among them, have been able to shine on their own. Only one of Danding’s sisters, Ditas Teodoro (Gibo’s mother), had enough character to stand on her own. Not that Danding doesn’t take care of his own. It’s just that he sucks out all the energy from everyone else. Even Danding’s own children are emasculated. They are well-taken care of, but they don’t really have any say. Gibo didn’t want to suffer the same fate as Danding’s children, Mark and Charlie. He had to leave the smothering, overwhelming presence of his uncle in order to shine on his own. Only Ramon Ang stands tall in Danding’s eyes. Only Ramon Ang can stand up to Danding. He is more like the son Danding would have wanted. Ironically, this mirrors the very situation that Ferdinand Marcos found himself in with Danding. Danding was the true heir of Marcos, the son Marcos would have wanted. Had Marcos had his way, Danding would have succeeded him. Of course, Imelda, her children and her coterie of advisers would have none of that. That is why, to this day, Imelda and Danding are like oil and water.

  13. cusp, let me add that the efforts to “blanket” Danding’s wealth with legality have been going on for the past 2 or 3 years. The diversification of San Miguel into energy, telecommunications and even toll road projects is a way to muddle the tracks, so to speak. By creating a tangled web of holdings in different corporations that are involved in so many different projects, it will be much more difficult now to zero in on Danding’s ill-gotten wealth.

    Furthermore, by selling chunks of San Miguel to different investors (Nestle, Coca Cola Intl.) he not only amassed a huge war chest of cash for diversification, but has managed to “launder” the money, inoculating himself from any moves by future administrations to recover his hidden wealth.

    And by taking on Japan’s Kirin as a partner, he dilutes his holdings, gaining cash and a formidable ally, in case of hostile moves by future administrations. Would the Philippine government dare to tangle with one of the corporate giants of a mighty industrial country like Japan?

  14. Aaron Benedict De Leon on Fri, 19th Mar 2010 9:17 am

    Do you know Gibo’s solution to the peace and order in Mindanao?
    He has none! He would have more troops and policemen in the area, yet he admits that there’s no money for it. Also, training takes time. So he justifies the value of Ampatuans. He said we should go easy with disarming them. They are needed to limit, somehow, the movements of the milf. In the same breath though, he says he is against arming private armies.

    I too was for him, before he made this statement. If what he says do not match his credentials how can we rely on his platform? Now, I think that there’s been too much ado about a dead horse… Assuming of course that there’s going to be an honest and credible election. Or that there will be no failure…

    So why not Gordon instead? His only fault is that he believes that nobody is perfect except himself, so he wants to indict the whistle blowers as well.

  15. Yep. Gibo is very promising…unfortunately, thats all he’s good at…he should be under investigation for the maguindanao massacre instead of running for president…

  16. I will not be one to argue with MLQIII as I am admittedly not equipped with the debating powers to do so.

    I don’t agree though that one candidate who does not seem to have a big campaign fund should be criticized for it.

    But I just notice the ignorance and lack of research here of Brian Botarlo, SoP, Ramrod, thecusponline, taxj. I have researched on all the candidates, watched all the forums, and I have found Gibo Teodoro to have best knowledge and most well-studied of many of the country’s problems, issues and solutions the most. And no it is not empty rhetoric or just eloquence. People who don’t understand the content can only see the great delivery.

    No solution to Mindanao? Your candidate has a better one? The frontrunner’s solution is dismal in Probe Profiles. Gordon said in a forum he can bring peace to Mindanao by transporting their goods to Manila. Huh? Gibo said the solution has to be borne of consultation. And this is not an excuse for a lack of knowledge because he has shown a deep grasp of the situation of several parts of Mindanao.

    Ondoy was his fault? This is really ignorance or blindness. Even the UN lauded the govt efforts during the disaster. Chinese Chamber who worked with Gibo on this praised him.

    GMA’s stooge? He has disagreed with the admin on the Morong 43, party’s decision on the Ampatuans, SC CJ appointment.

    I have encountered many anti-Gibo, and found them to be so because they are mostly pro-Noynoy, a few pro-Gordon. I will not aim to convince you because many I encountered are just blind and refuse for their eyes to be open. I don’t want to be blind when I vote. Do you?

    FVR, Ting Paterno and colleagues Roxas, Recto, Cynthia Villar, Miriam, Lacson, Tamano have praises for him. Anybody who can see objectively–Peter Wallace, Wall Street and even the pro-Noynoy Makati Business Club have agreed he has the most impressive plan and detailed platform. On this alone: Is your candidate better than Gibo?

  17. The impact of GT’s candidacy I believe is in determining the final winner between the top two candidates. As the Manila Standard survey of second preferences shows. Voters who go for him actually favour Villar more than Aquino as second choice. Erap’s supporters on the other hand are evenly split between the two.

    If the elections were based on a preferential voting system as opposed to the present one, Villar would win a majority on the basis of preference distribution. If voter preferences remain as they are, Aquino will probably win with a narrow plurality thanks to his cousin.

    This could be a reason for the administration’s ambivalence in providing maximum support to his campaign. He in effect is receiving the same treatment that Chiz received from the NPC probably more so as we reach the homestretch. All the more reason for Aquino supporters to cheer him on.

  18. Aaron and taxj, I have more respect for Gibo on his glibness on Mindanao security. He’s not spinning it, and he’s not telling it as it is either to justify the status quo/Gloria’s track record on Mindanao.

    In light of the Maguindanao massacre, of course candidates will drum up other plans for the security of Mindanao that is different from our current strategy. To get votes. But believe me, once Noy or Villar gets elected, they’ll fall back to the current strategy. And except for the “we don’t have money for it” bit, I’m in full support of this strategy. Mindanaoans need security.

    I just don’t know how to pay for it. Borrow more money I guess.

  19. I’ve been an admirer of Gibo, but there were two statements made this week that I found clearly puzzling.

    First, saying during the Wallace Business Forum (at least this was how it was reported) that the military is not trained to handle counter-insurgencies and that should be left to the police. I hope there was additional qualification to this remark. But, if this was truly what he said it indicates a confusion over the mandate of a military and the mandate of a police force.

    Second, vis-a-vis rebuilding Maguindanao, calling for the implementation of the Marshall Plan since (as he put it) it has been successful in ending generations of fighting where implemented. I am not sure what Marshall Plan he is referring to (the only one I am familiar with is post-WWII Europe) but if that is the Plan he talking about I have to question if he truly understands the structure and implementation of the Marshall Plan.

    The reality is, instituting a MP-like solution to Maguindanao is not a reverse of an old policy, but the continuation of the existing dole-out policies of the past. It sounds more like buzz-worthy catch-phrasing (especially in light of Gore calling for a Global Marshall Plan) than anything else.

    By the way, with regards to the proposed African MP and Gore’s Global MP, they are referring to creating a broad and large plan to accelerate economic and social building. Not actually copying the post-WWII MP in Europe. I hope Mr. Teodoro is aware of the difference.

  20. this assumes ECJ is still fully in charge; that beyond his own lifetime he has a succession plan for his family in place; what about news that Ramon Ang is really not just the man in charge of daily operations but that a succession is taking place, and the activity in the market now, with the consortium of Zobel, Ongpin, etc? These are interesting developments too about the future of SMC.

  21. ECJ, also known as BOSS (Bawa’t Oras Sama Sama) or Amerikano to his entourage and admirers, has delegated most day-to-day responsibilities to Ramon Ang. ECJ’s family is well-taken care of, but they do not have an active role in running the businesses. Should ECJ pass away, his family will be rent-seeking, passive stockholders in ECJ’s companies, although they will exercise some form of control. To the surprise of many, ECJ’s immediate family has meekly accepted the primacy of Ramon Ang in matters related to the family businesses. Some surmise that Ramon Ang must have a hold on Danding somewhere, somehow because Danding’s family has been completely shut out of the wheeling and dealing.

    This is also something to consider vis-a-vis Gibo’s relationship with ECJ. Had Gibo hang on to Danding, what role would he play? Being a lawyer and lawmaker, he could play the role of “consigliere” for the family. But would he be comfortable in the role of a mere adviser? Would that not put him in an uncomfortable position between the dealmaking of Ramon Ang and family loyalties? If he tried to blow the whistle on Ramon Ang, would it put him at loggerheads with ECJ? Would it be worth the trouble?

    I really believe that Gibo wants to be his own man and has his own plans. And he had to seek greener pastures to do that. Whether casting his lot with the administration was the correct choice, I don’t believe we will see validation of that in this election. What we can see, though, is that he has managed to make the most out of a bad situation. He has made an impression with a good part of the electorate and he has managed to package himself as a smart and attractive leader for consideration in the future. It is not an endorsement of Gibo, but those are the facts. Compared to Chiz Escudero, who now languishes in some kind of suspended animation, I think Gibo has fared better.

  22. SMC has become some sort of shell corporation, lost its focus on core competencies and has become a tool for trading…a lot of investors are wary of the “new” SMC, its become a shadow of its former self…

  23. Gibo will forever be seen as a heel, he had his opportunities with Ondoy and doing something about the Ampatuans before the massacre but he just choked, or maybe was just himself, just followed instructions perfectly to get a perfect score.
    I believe the people will remember him as an “also ran” flaunting competence and brains but cannot deliver the goods…not only that he “chokes” under pressure…what a waste of gray matter…his wife is pretty though…

  24. I think Gibo is truly attracted to the GMA/Marcos way, which is why he stuck by and will stick by her, principally at least. The GMA way is the consolidated government power via martial law way. It doesn’t matter that the plan will take long. They are patient and they see themselves succeeding in the long run.

    These two are end justifies the means types. They see tens of millions of poor people on one end who can blow up in a mass of looting and riots and a pesky middle class on the other criticizing every move of the government, and they hate it. They know the only way to secure the republic is to uplift the poor, but couldn’t do it by democratic means. So they bide their time, move the chess pieces, and await an opening to do an attack on judiciary and congressional weak spots.

    In a sense they already have a hold on crucial pieces. The only problem getting in the way is the public pulse which does not have a tolerance for martial rule. They think these people are idiots.

    Thing is, if you cannot solve our problems by democratic means, you’ll never be able to solve them by dictatorial means. They don’t realize this yet. When it’s too late in the game when they realize this fact, they’ll make the most out of their presidential failures, by having fun with their newfound powers. Killing enemies, real or imagined, is fun. Torturing pro-democracy advocates is fun. Stashing billions of money in off-shore accounts is fun.

    As you can see, this Gibo guy is easy to figure out.

  25. “SMC has become some sort of shell corporation, lost its focus on core competencies and has become a tool for trading…a lot of investors are wary of the “new” SMC, its become a shadow of its former self…” – ramrod

    Lots of people feel that way. The norm among large multinational enterprises is to stick to your core strengths. Instead, San Miguel has been to converted to something resembling a sari-sari store. A little of something here, and a little of something there. As if it lost its focus.

    But, is there method in that kind of madness? Of course there is. And the purpose of it all is to create a huge maze of interlocking corporations so that real ownership of San Miguel and its myriad enterprises will be extremely difficult to track down. At the same time, chunks of San Miguel have already been sold off and the proceeds have, in fact, gone through a laundering process. Danding and Ramon Ang took it upon themselves to sell off parts of San Miguel and decide, mostly on their own, where to invest the money. There is no doubt that San Miguel, as a food conglomerate and an industrial company, is a mere shadow of itself. But that has been done on purpose. And, in the meantime, ECJ and Ramon Ang have looted SMC’s crown jewels, with nary a whimper from the public and the government. They have taken SMC’s best parts and left a shell. And they control the investments that have resulted from looting those crown jewels. This is scandalous, but nobody has protested the systematic chopping up and plundering of one of the country’s most brilliant assets. Not a peep from any of the presidential contenders.

    Manolo wonders about activities related to Bobby Ongpin and Inigo Zobel. Well, those are strategic partners, and they are in there for two reasons. First, there’s money in it for them because the combined synergies of Ongpin, Zobel, Ramon Ang and ECJ will open many doors and opportunities to make money. Secondly, Ongpin and Zobel bring in other strategic partners and the interlocking ownership of these corporations becomes even more convoluted. This will certainly complicate any future government’s efforts in trying to track down the San Miguel loot. It will need lots and lots of painstaking sleuthing and will easily be tied down in court for many, many years.

    For ECJ, there is a comfort zone in dealing with Ongpin and Zobel. He is intimate with Bobby Ongpin from way back during the Marcos days. He also became close to Enrique Zobel after EZ sold the Ayalas’ SMC shares to Danding during the Marcos years. As a matter of fact, the Ayalas never forgave EZ for what they viewed as an unfortunate and capricious decision, hastily carried out in a fit of pique with the Sorianos. But Danding and EZ became tight. So, despite Ramon Ang seemingly doing all the negotiating and dealing, this seems to carry the support of ECJ. The cast of characters falls very much within ECJ’s comfort zone. To him, they are known entities.

  26. I disagree with this. It’s typical for Asian conglomerates to diversify. I don’t buy into this whole conspiracy that SMCs diversifying to complicate the corporate web for ECJs benefit. That may be the icing, but it ain’t the cake.

  27. Even the Ayala’s are diversifying into energy and call centre businesses, ventures that are far from their core banking and real estate competencies.

    SMC is just trying to grow. The food side of this business is maturing. They have to go into into growth sectors if they want to keep that stock price rising.

  28. And I don’t think it’s that hard to detangle the corporate web if the government decides to take that route. It can always outsource the detangling to one of the big four accounting firms out there.

  29. If there’s a will, there’s a way. We know what’s going on. We know what to do. At least, so it seems. But who’s going to do it? Who will bell the cat?

    An unqualified and incompetent GM runs our water district. I got an order from CSC invalidating his appointment on May 9, 2008. Yet he is still here.

    Meanwhile we pay the highest rate in the land at P225 minimum. A nearby town charges only P71.09. It’s water is properly treated and is drinkable. Ours isn’t, so we have to buy drinking water despite the presence of water in our faucets.

    Out of topic? Maybe. But I just want to show that righting a wrong isn’t easy even when lines are clearly drawn. And even when an epidemic looms! I’m just a concerned citizen in a town where ignorance is bliss. I wish I have that luxury.

  30. PCGG knew about the interlocking corporations that were used to hide the money that was collected from the coconut levy. Yet, they never could get to the bottom of the Coconut Industry Investment Fund (CIIF), which was used to hide Danding’s illegally acquired wealth to buy San Miguel and several coconut oil mills. Jovito Salonga was supposed to be a brilliant lawyer, yet he was no match to the ACCRA law firm which devised the complex maze of corporations that Danding used to hide his plundered wealth.

    Only an ignoramus, who doesn’t know what he’s talking about, would argue that this is a simple task. Past experience has shown that cronies and crooks are always several steps ahead of government investigators. And ECJ and his legal advisers always make sure that they are several steps ahead. They have been doing it successfully for several years and through several administrations. This is no conspiracy theory. It is a fact borne by empirical and judicial evidence.

    Now, if the stock market were to be a gauge of ECJ and Ramon Ang’s management of San Miguel, it would be a negative. SMC stock, compared to other bluechips like PLDT, Meralco, Ayala or Aboitiz, has not appreciated in the same proportion, neither in the past nor in the present. This tells us that SMC is not trusted by investors. Something smells fishy here. As Shakespeare said: “Something’s rotten in Denmark”. And the market agrees.

  31. Carl Cid Inting, I have been thinking along this line too. Is there anything we can do about the situation?

  32. In effect, Gibo is saying that we can’t do anything about the peace and order situation in Mindanao because we don’t have the money for the needed armed enforcers. SOP proposes a simple solution, borrow. Still, we have people who admire Gibo’s view on the subject.

    How would I deal with a problem like Mindanao? I would apply a basic principle of community development: all aspects of development shall be dealt with simultaneously. This is not really difficult because it’s just a matter of mobilizing existing government agencies and resources.

    We do not need the peace of a garrison state. Let our armed forces keep watch over vibrant and self sustaining communities, not over a bunch of hungry and idle refugees. Out with chop-chopped lands by our so-called agrarian reform. Promote cooperative and mechanized farming. Also cooperative security concerns in support of formal watchdogs. We really should not be importing food because we have so much reliable labor force and fertile lands.

    The Mindanao conflict was nurtured by the government’s inability to address the worsening economic and educational problems of Muslims and Christians alike. It is never to late to make amends. Nor is it beyond reach.

    I place more premium on the leadership capabilities of a presidential candidate more than on any other consideration. The president is supposed to be the CEO if the land, isn’t he? The choice of lawmakers is also very important. No old-timers for me. They are all responsible for the bind we are in.

  33. Stock Exchange would gauge San Mig Corp negative? You mean Carl Cid Inting would gauge San Mig Corp as a negative.

    Let’s see what the real stock market thinks about San Miguel and other corporations. And this is a perfect time to view a one year trend as the market bottomed out a year ago. Note figures below are not computed to take into account stock splits and the like, but are still pretty indicative.

    San Miguel is up 75% from a year ago. From 5 years ago it’s up 25%.

    Ayala Corp is up 54% from a year ago. From 5 years ago it’s up 30%.

    PLDT is up 19% from a year ago. From 5 years ago it’s up 30%.

    Meralco is up 87% from a year ago. From 5 years ago it’s up to around 700-800%. Meralco is partly owned by SMC.

    First Philippine Holdings Corp is up 100% from a year ago. From 5 years ago it’s up to around 70%.

    Aboitiz Equity is up 136% from a year ago. From 5 years ago it’s up to around 400%.

    As you can see, companies with extensive holdings in Energy like the Lopez’s and Aboitiz are having astronomical growth in the stock price. This is why the Ayalas and SMC are getting into the energy game as well. It would be stupid for the not to “diversify” into this growth sector.

    Back to Gibo, him being a consigliere to Danding is just not possible as he didn’t specialize in corporate side of things in his studies or professional life.

  34. And PCGG and Salonga should have outsourced to one of the big four to detangle the corporate maze. Lawyer don’t necessarily make good accountants and vice versa. Lawyer accountants however are the shit. They have lots of them at the big four accounting firms.

  35. taxj, your simultaneous development strategy would still need money. All the while bullets are flying all over from little Moro manboys with too much testosterone and too much time on their hands. Mindanao needs security from these assholes. Ignoring the security aspect won’t get economic development far.

  36. Re: SMC and the Ayalas getting into the energy game, I just would like to qualify that this may not be a good strategy. They may have entered or are entering at the peak of the market, jealous at the gains of the Lopez’s and Aboitiz’s in recent years. We’ll know in a few years if there is still growth space in Philippine energy and if SMC and Ayalas haven’t gotten into it too late when we see the stock trends.

  37. Which amongst the aristocracy will prevail?

    Which aristocratic family will be the dominant force?

    The anarchy of families continues in Philippine society..

    It is still plainly a landlord/commercial class and the political scene is about newbies wanting to become aristocrats.

    We need a progressive aristocrat to break the mold and change society. Maybe Villar the aristocrat wannabe could break this culture of entitlement…..

  38. Well, considering we’ve been having a bull run in the market the past year, SMC’s stock market performance is hardly exhilarating, as one can see. And, if Meralco would be cited as a feather in SMC’s cap, one has to remember that SMC paid a premium for Meralco. It paid near the top of the curve. And it doesn’t even exercise management over the firm. It is a minority stockholder and could be eased out of decision-making by the majority. So the jury’s still out on whether this is really such a fantastic investment.

    What is clear, however, is that SMC’s other stockholders (of which the government should have had the biggest say) have been left out from deciding where SMC’s huge cash proceeds will be invested. The massive bonanza derived from the sale of its softdrinks business, its dairy and ice cream business, other food-related businesses and almost half of its core beer business. Because it dismembered itself, SMC is no longer the sum of its parts. At least it no longer adds up as a landmark industrial enterprise which was the pride of the Philippines. With the tremendous bonanza from selling off its parts, amounting to billions of U.S. Dollars, SMC stock should have soared, outperforming every single stock in the market. Yet, it moved only at par for the course. Doesn’t that indicate a lack of trust in management?

    Surely, something seems to be wrong somewhere. “Something rotten in Denmark”, as Shakespeare would say.

    On the other hand, the Lopezes and the Aboitizes stuck to their core businesses. And were rewarded handsomely for concentrating on what they were good at doing. A basic dictum in business. Unlike, as I mentioned, the sari-sari mentality of the present SMC. But then, we can only surmise that there is method to this seeming madness. And laundering the huge bonanza from dismembering SMC comes foremost to mind. It’s a classic Mafioso tactic, much like Michael Corleone laundering money from the family’s illicit businesses and investing them in several legitimate businesses, trying to buy his way into acceptability and legitimacy.

  39. Jury’s still out on the Meralco deal. We’ll see in a couple of years if they indeed overpaid.

    Regarding SMC divesting their food and beverage businesses, I wouldn’t call it a bad business move. I’m no business expert, just a guy with lots of free time googling shit, but the way I see it, the recent economic trend of commodity prices peaking in the past few years, meaning that barley used to make the beer and a whole host of ingredients in foods and beverage is nipping at profit margins, contributed to divestment. SMC could only raise food and beverage prices to a degree, so they’re taking a hit on profits. Couple that with double digit inflation and people start pinching their pennis. Suddenly, people who buy ice cream and beer on weekends stop buying to focus on necessities, and you can see why it’s not a good idea to be bullish on the food and bev biz.

    The energy sector on the other hand is a critical sector that has experienced shortages and will continue to experience megawatt capacity shortages. The sweetener is that the government is willing to guarantee it will buy whatever generating capacities supplier create, which is why it’s a good idea to get into the energy business.

  40. The dictum is to stick to your core strengths. Business cycles come and go. But when one is good at doing what he does, it pays off in the long run. Only a fool or a dilettante, perhaps with too much time in his hands, would try to play the cycles. As everyone knows, it can be a crap shoot. No one can precisely predict how the business cycles go. However, it is a fact of life that what goes up will eventually go down. And vice-versa. So when one is good at what he does, even if the business cycle goes down, one knows there will eventually be an upside. It has always been a matter of patience and waiting things out. Why, for example would Coca-Cola want to buy out San Miguel for the entire softdrinks business? They have better sense of the market and the business than Ramon Ang would ever have. They are pros and have been at it for a century or more. Why would Nestle want to consolidate the dairy business, even during down cycles? There is another dictum: “Buy when there is blood in the streets”. One cannot be skittish or trendy when it comes to business. One has to be hard-nosed, cold-blooded and yes, focused. Prudence dictates that one does not try to play God and try to influence or get ahead of the cyclical patterns. One just plods along and, history will show, it eventually pays off when things get better.

    It is reckless, irresponsible and foolish to try to get ahead of the curve. Of course, fools sometimes can get lucky. After all, some people win the sweepstakes, the lotto or the powerball. But that always goes against the odds. It does not make good business sense to try and beat the odds. Unless one had a different angle for doing it, such as laundering stolen wealth.

    On the other hand, even if a cyclical downturn in the energy business occurs, the Aboitizes and Meralco are better poised to survive and flourish. They have seen several ups and downs before, so it isn’t anything new to them. It isn’t about hitting the jackpot or going after the trendy new business that everyone is pursuing. It’s nurturing your core expertise and profiting from it in the long run, whether in good times or bad.

  41. What core expertise are you talking about? These holding companies by the Lopez’s, Ayala’s, Aboitiz’s have their fingers on real estate, construction, transportation, energy, food, banking, the whole gamut. There are no core competencies.

    If you laud these conglomerates for diversifying and having good stock growth, why drum up conspiracy theories of money laundering as the primary motive for SMC diversifying when it is obvious that it is good growth strategy to put your eggs on growth sectors and pull back on unprofitable ones?

    The simple economics is that commodity prices, from rice to sugar to grains, almost everything needed to create food, are increasing. That will be the trend in the coming years as we compete with China for these commodities. Because these commodities are increasing, it is now more expensive to manufacture food and beverage products, thus the profit margins will be low. There’s also the dictum “sell when the lowly taxi driver is buying up stocks”, meaning sell up when prices for stocks are high.

  42. SoP, a holistic approach starts where the people are. If the felt-need is peace and order, so be it. But it should not stop there. We cannot buy lasting peace with a gun. We should attack the root cause of the problem. It’s neither religious nor tribal. It’s economic, mainly. Who would want a country that cannot take care of its own people?

    As to the money part, it’s there. It has always been there. Maybe it just went to the Ampatuans, instead of the program. Has this ever crossed Gibo’s galing at talino? For a civilian, his gun powder bias is galling. Imagine a President saying that rebellion thrives because we do not have sufficient force to meet it!

  43. The core expertise of the Aboitiz group, for several decades now, has been primarily energy and banking. Dabbling in real estate or food happens to only be incidental and are minor parts of the business. In the Ayala’s case, it is primarily real estate and banking. They went into the water business, through Manila Water, because they learned of the importance of water distribution from their real estate ventures. No core competencies? Absolutely untrue. The core competencies created opportunities in other fields, which have some synergies with the core businesses. These so-called conglomerates did not diversify for diversification’s sake. Or go into these businesses because it was the trendy or the “in” thing to do. Those moves came about because they observed them and dealt with them in the course of their businesses.

    And food, unlike commodities which can gyrate wildly in prices and are subject to speculative manipulations, will always be in demand. Human beings have to eat. Why are companies like Kraft, Nestle, Inbev, Coca Cola still expanding and buying up other companies, despite the economic downturn? On the other hand, commodities have been surging because of the extremely low interest rate regime, which has prevailed for the past decade, and is now creating what many fear are early signs of inflation and excessive amounts of liquidity. China may be consuming a lot of the excess commodities in the world due to its frenetic pace of growth over the past few years. However, even China has signaled that it may slowly put the brakes to this frenzied rate of growth in order to forestall inflation. It has shown signs that it may hike interest rates to dampen growth and slow down inflation. Should interest rates rise and liquidity be tightened, watch commodities take a tumble. It will be the next great bubble. It has happened before, in the 1960’s and the ’70’s, when the Vietnam War and accommodating fiscal policies caused inflation and liquidity to rocket sky high. Fortunes were made in those days. But, after measures to arrest inflation were taken in the 1980’s, commodities took a steep tumble and never recovered until a few years ago. A wait of more than 20 years.

    When oil hit $150 per barrel almost 2 years ago, it looked like the next sure thing. The next “growth” investment. When the financial crisis struck, oil dove to $35 per barrel. A lot of people who switched to “grow” their investments lost a bundle. Meanwhile, what companies did the best during the Great Recession of 2008-2009? McDonald’s, Coca-Cola, Walmart and Kraft. Stick to the basics, baby!

    So when some simplistic fool in a blog starts blabbing about the economics of investing in commodities, watch out! 🙂

  44. The Ayala’s move into the semi-conductor business was less about strategic investments on this side of the pond, and more of a reflection of the Halls and Joe McMicking’s VC activities in California.

    For the Ayala’s as well, expanding into the call center business is complementary to their real estate business: same as having malls, residential or commercial developments. It is another service offering. Banking and real estate are complementary businesses. Ayala also dabbled in food with the Purefood acquisition, but that was eventually sold. SM has also been very good at focusing primarily on core competencies in banking and malls.

    A prominent case study of focusing on core competencies to drive business would be when Steve Jobs took over Apple. He slashed unnecessary products and refocused the company on user experience and software/hardware integration.

  45. It certainly was puzzling to hear in the news a while back that SMC was divesting of its ownership in the number 1 dairy and juice brand in Australia and New Zealand and to learn later about their Meralco purchase. It tells me that the opportunity costs were too big to ignore.

    And while it definitely is an unresolved empirical question whether a conglomerate strategy is superior to that of a concentration one in the long run, all I know is that I am paying a lot less for my electricity in Australia compared to what I had to in the Philippines. It really makes you wonder why power is so expensive there and what type of market structure or competition policies are needed to bring the costs down.

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