Look back: Duterte's tussles with big business

MANILA, Philippines – President Rodrigo Duterte’s “war” against those he calls “oligarchs” has escalated with his latest threats against 3 big names in Philippine business – the Ayala family, tycoon Manny Pangilinan, and the Lopezes – all in the same curse-laden speech.

He’s been targeting certain businessmen early on, starting with property and mining magnate Roberto Ongpin in August 2016, a little over a month after he took his oath in Malacañang. 

The presidential threats are ignited by any “injustice” Duterte perceives is done to the government – something he always takes very personally. 

People close to him say that, even as mayor, and as early as his youth, Duterte had always exploded whenever he felt “cheated” or tricked.

When it’s an “injustice” done by big business, Duterte takes on the tone of a populist champion, pitting the firm and its owners as the enemy of the people and abusers of privilege.

Pakita ko sa Pilipino paano mag-sampal ng mga milyonaryo, bilyonaryo,” he boasted on Tuesday, December 3, before promising to give tycoons “a taste of prison life.” (I’ll show the Filipino how to slap a millionaire, billionaire.)

More than halfway into his presidency, Duterte has proven fully capable of pushing every button in his presidential arsenal to pressure businesses into giving in to government.

But for every magnate Duterte has threatened, there’s a tycoon he’s embraced. This has led observers to conclude that Duterte is not threatening the oligarchy but only introducing new faces, people loyal to him.

Weeks before his latest threats, Duterte visited the wakes of taipans John Gokongwei and Bong Tan.

Here’s a look back at the big businessmen he’s punished, and what became of them after the presidential tantrum.

Roberto Ongpin 

Roberto Ongpin file photo by Rappler

Ongpin, Ferdinand Marcos’ former trade minister and among the richest Filipinos, was the first major business personality Duterte publicly condemned. 

“The plan really is, destroy the oligarchs that are embedded in government. I'll give you an example, publicly – Ongpin, Roberto,” said Duterte in August 2016. 

Ongpin’s PhilWeb Corporation was then days away from the expiration of its license agreement with the Philippine Amusement and Gaming Corporation (Pagcor). A day after Duterte’s remarks, its shares plunged by 36.88% to end at P8.95 each, their lowest level on the local bourse. 

Ongpin resigned as PhilWeb chairman and sold his entire 53.76% stake in the firm to businessman Gregorio Araneta III, another Marcos crony. PhilWeb’s Pagcor accreditation was eventually renewed a year after. 

Despite everything, Ongpin remains among the Philippines’ richest, ranking 15th in the Forbes 2019 list, with a net worth of $1.75 billion.

Wongchukings of Mighty Corporation

File photo of Alex Wongchuking by Ben Nabong/Rappler

Less than a year later, in March 2017, Duterte’s ire had shifted to a cigarette manufacturer, Mighty Corporation, led by the brothers Alexander and Caesar Wongchuking. The government accused the firm of evading taxes by, among others, using fake tax stamps on their products.

The Bureau of Customs already planned to file a P1-billion tax evasion case against the company, but things moved much faster after Duterte’s public threat to arrest the brothers.

The firm eventually paid a P30-billion tax settlement case which Finance Secretary Carlos Dominguez III crowed was the “largest tax settlement in history.” Mighty Corporation had to sell its assets to Japan Tobacco International to come up with the settlement.

The billions from Mighty were used to fund the government’s Build, Build, Build infrastructure program, Malacañang said later on. Duterte’s spokesmen have since never wasted an opportunity to say such big money would never have landed in the government’s lap were it not for the President’s political will.

Lopezes and Prietos

MEDIA MOGUL. President Duterte meets with ABS-CBN chairman emeritus Gabby Lopez in Malacau00f1ang. Malacau00f1ang file photo

MEDIA MOGUL. President Duterte meets with ABS-CBN chairman emeritus Gabby Lopez in Malacau00f1ang.

Malacau00f1ang file photo

Less than a month later, Duterte made his first serious threat against two influential clans who own media companies he accused of unfair reporting about his government – the Lopezes of ABS-CBN and the Prietos of the Inquirer Group of Companies.

What began as threats of impending “karma” against the television-radio network and broadsheet ripened into a vow to block ABS-CBN’s franchise renewal and to file charges against the Prietos over various business deals.

After Duterte’s latest repetition of his threat against ABS-CBN, the network’s shares dipped. The House of Representatives, in charge of deliberating over the franchise renewal bill, said it would tackle the measure in 2020 instead of in 2019 as it earlier promised. The franchise expires on March 30, 2020. All bills end up on Duterte’s desk for final approval. 

Lucio Tan

NEW FRIEND. President Rodrigo Duterte poses for a photo with businessmen Lucio Tan (to the right of Duterte), Lance Gokongwei, and Trade Secretary Ramon Lopez. Malacau00f1ang file photo

NEW FRIEND. President Rodrigo Duterte poses for a photo with businessmen Lucio Tan (to the right of Duterte), Lance Gokongwei, and Trade Secretary Ramon Lopez.

Malacau00f1ang file photo

Two weeks after railing against the Lopezes and Prietos, Duterte went after an even bigger taipan, billionaire Lucio Tan.  

“Lucio Tan has almost billion, P30 billion [in unpaid taxes]. He has to pay,” said Duterte on April 15, 2017, in front of Filipino migrants in the Middle East.

Since 2016, the transportation department had been breathing down the neck of Tan’s Philippine Airlines for unpaid taxes. In September, months after Duterte’s outburst, it asked PAL to settle some P7 billion in tax liabilities in 30 days.

Duterte publicly backed the department, with a threat to close down the Ninoy Aquino International Airport Terminal 2, exclusively used by PAL, if it did not pay up. PAL coughed up the funds over a month later. 

Since then, there has been a marked shift in Duterte’s public statements about Tan.

In 2018, after PAL flew home stranded overseas Filipino workers for free and made various donations to Marawi rehabilitation and other projects, Duterte declared Tan his new friend.

"Because of this incident, Mr Lucio Tan, I am going to shut up forever. Okay na sa akin, tapos na (It's okay with me, it's over)," said the President in February 2018. 

Duterte now often graces events hosted by Tan and business groups he leads. 

Evidently, helping government programs is one way into Duterte’s good graces. Conversely, Duterte could be using his threats to get big business to do what he wants.

Manny Pangilinan

File photo of Filipino tycoon Manny Pangilinan (center, in black) by KD Madrilejos/Rappler

Duterte’s beef with Maynilad Water Services is not the only issue he has with billionaire Manny Pangilinan, whose Metro Pacific Investments Corp holds a controlling stake in the water concessionaire.

The President had also fumed after hearing that Pangilinan expected his company, PLDT Incorporated, to be paid some P3 billion for frequencies it surrendered to the government and which Duterte wanted to give to a 3rd telco player. 

Back in 2011, PLDT and the National Telecommunications Commission (NTC) agreed that PLDT would get monetary compensation for the frequencies of Cure (Connectivity Unlimited Resource Enterprises). Duterte didn’t want to give this compensation, saying that Cure’s frequencies were provided by the government for free and thus should not cost the government when it wanted them back. 

A month later, Duterte got what he wanted. Pangilinan formally gave up the frequencies, at no cost to the government, paving the way for a 3rd telco. This new telco is now Dito Telecommunity, owned by Duterte’s longtime friend, Davao-based businessman Dennis Uy. 

Ayalas

File photo of Ayala Corporation Chairman and CEO, Jaime Augusto Zobel de Ayala by Roy Cordova Gay

The Ayalas had so far managed to avoid any public tussle with Duterte, until March this year when one of Ayala Corporation’s subsidiaries, Manila Water, got a tongue-lashing from the President over the water crisis.

Even then, Duterte didn’t mention their family publicly. That all changed last Tuesday.

“I can assume that money really talks. Sabihin ni Ayala, “Wala.” Huwag mo akong bolahin. Don’t fuck with me. I know you. Nilaro ninyo ‘yung Pilipino sa pera,” said Duterte on Thursday, two days after his first outburst.

(I can assume that money really talks. Ayala will say, "Nothing." Don’t lie to me. Don’t fuck with me. I know you. You’re playing with the Filipino’s money.)

Duterte is ready to defy an arbitration award won by Manila Water against the government. He’s refusing to pay the P7.4 billion which the Permanent Court of Arbitration in Singapore says the government owes the Ayala-led firm.

Apple of Duterte's eye

If it’s “trickery” by corporations that pisses Duterte off, flattery and loyalty can win him over. 

The businessmen who’ve won public accolades from Duterte are either longtime friends from Davao or political allies.

There’s Dennis Uy, the young Davao-based businessman now on a dizzying acquisition spree and whose firm was recently named by the government as the 3rd telco player. Uy has easy access to Malacañang and was even named Duterte’s presidential adviser on sports. The year 2019 saw Uy debut in Forbes' list of the country's richest.

There’s Manny Villar, declared the country’s richest man in 2019 by Forbes, whose political party, the Nacionalista Party, is allied with Duterte’s. The President sang Villar praises in the same speech he made threats to the Ayalas and Pangilinan. The businessman’s son Mark is Duterte’s public works secretary, despite conflict of interest arising from the Villar family’s real estate business.

Duterte has effusively lauded Ramon Ang, chief of San Miguel Corporation and yet another of the country’s wealthiest, for his “guts” as a businessman and for his philanthropy. (READ: Meet Ramon Ang, Filipino billionaire and Duterte's friend)

Ang has donated several times to government efforts and is the major benefactor of the Pilipinong May Puso Foundation, a charity created in honor of Duterte’s mother. Duterte claimed Ang helped his 2016 presidential campaign though the businessman’s name is not in the list of campaign donors Duterte submitted to the Commission on Elections.

Like any other politician, Duterte owes a debt of gratitude to businessmen, mostly from Davao and Manila, who donated to his presidential bid.  (READ: Who's who in Duterte's poll contributors list)

Despite his spats with some of the country's richest, Duterte has consistently scored high approval ratings among the upperclass.

Businessmen avoid criticizing Duterte in public and most business chambers and groups generally say they support his governance. Will this last until the end of his presidency or will tensions between him and powerful conglomerates escalate to breaking point? – Rappler.com

Pia Ranada

Pia Ranada covers the Office of the President and Bangsamoro regional issues for Rappler. While helping out with desk duties, she also watches the environment sector and the local government of Quezon City. For tips or story suggestions, you can reach her at pia.ranada@rappler.com.

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