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In The Spectre of Comparisons, Benedict Anderson refers to the years 1954 â€“ 1972 as â€œthe heyday of the oligarchyâ€. They had complete access to the stateâ€™s financial instrumentalities. â€œUnder the guise of promoting economic independence and import-substitution industrialization, exchange rates were manipulated, monopolistic licenses parcelled out, huge, cheap, often unrepaid bank loans passed around, and the national budget frittered away in pork-barrel legislation. Some of the more enterprising dynasties diversified into urban real estate, hotels, utilities, insurance, the mass media, and so forth. The press, owned by rival cacique families, was famously free.â€ The newspapers published damning exposÃ©s on the abuse of power, but the author points out that no one was ever convicted for graft and corruption. At least, no one from the right family.
When pundits wish to beat their breasts over the state of the Philippine economy, they remind us that in the 1950s and 60s, the Philippine economy was the strongest in Asia, second only to Japan. Anderson notes that â€œuncontrolled and parasitic plundering of state and private resources tilted the Philippines on its long plunge from being the most â€œadvancedâ€ capitalist society in Southeast Asia in the 1950s to being the most depressed and indigent in the 1980s. By the end of the golden era, 5 percent of the countryâ€™s income earners received, probably, about 50 percent of total income. At the same time, over 70 percent of state revenues came from regressive sales and excise taxes, and a mere 27.5 percent from income taxesâ€”largely paid by foreign corporations.â€
When the dictator Ferdinand Marcos declared martial law in 1972, he promised to wage war on the oligarchs. True, the less cooperative political families fell out of the loop and were replaced by Marcos relatives and cronies. But when Marcos was overthrown in the People Power Revolution at Edsa in 1986, and Corazon Cojuangco Aquino ascended to the presidency, the oligarchs came back in a big way. Representatives of traditional political families dominated Senate and Congressional elections. They still do, despite recent electoral successes by show business personalities.
The World Bank has noted that income distribution in the Philippines is substantially less equal that in most low and middle income countries in Asia. The income gap between the rich and the poor is still widening. The inequitable distribution of incomes and assets feeds the unending cycle of poverty.