Goodfellas, with Tagalog subtitles

EDITORIAL Philippines: More pain, no gain PART 1 The sick man of Asia Gallery 1 Gallery 2

MANILA - Don't show up at the gate in Greenhills without an invitation. There's a chance you might get shot.

Welcome to the 21st-century face of social apartheid - in the Philippines and all over the developing world. Greenhills - as well as Forbes Park - is where the few Filipino "haves" and "haves more" live. Asia Times Online, tipped by a local businessman with a sense of humor, showed up there without an invitation. The visibly nervous guard working for private security agency Padpco, caressing his shotgun, wouldn't let us in without a sticker in our car. Could we take pictures? No way: we would have to write a letter to one Sy Crisanto, the president of Greenhills Association. It was also impossible to reach Pablo David, the barangay (district) chairman. "But if you have a relative living inside, he might sponsor your visit," the guard said.

Before the incident degenerated into checkpoint-in-Fallujah mode, we were allowed in for a quick drive, with an official in our car, and after we'd agreed to no pictures. The guy with the shotgun was edgy: "Open the trunk. Do you have a bomb?" Sy Crisanto and the other 300 residents of Greenhills have every reason to be cautious. If the average Filipino takes a peep at Greenhills, he might start entertaining funny notions.

Greenhills is no different from any affluent gated community in the developing world: sprawling houses, Mercedes-Benz and sport-utility vehicles in the driveways, 26 armed security guards, security cameras. But there are two significant differences, as far as

Southeast Asia is concerned: the green signposts sport names of US presidents - Taft, Roosevelt, Adams; and a disproportionate amount of residents are Chinese-Filipino.

Dudek is a little out of place in Greenhills. He's working on the construction site of a new Chinese-Filipino mansion. Dudek needs three hours by bus to go from his home to work, and another three hours to go back. That's P60 (a little over US$1) a day. His salary is P200 a day. So most days he is forced to sleep in barracks on site, and he seldom sees his family. He complains about the low pay, but it's better than nothing: it took him months just to find this job.

To check out the perfect microcosm of the country, many Filipinos recommend a visit to the sprawling, 6,000-hectare Hacienda Luisita, bought in 1957 by the filthy-rich Cojuangco landowning family from the original Spanish owners. Haciendas are all the same - in Latin America or in Southeast Asia. Greenhills is certainly more relevant. Here, 300 residents - on a small piece of land in the heart of Manila - make their own rules. And the rules absolutely exclude the rest of the city, not to mention the rest of the country's 84 million Filipinos.

It's a family affair

Almost everything one needs to know about who's in charge in the Philippines is included in The Rulemakers, a recent publication by the Philippine Center for Investigative Journalism and written by Sheila Coronel, Yvonne Chua, Luz Rimban and Booma Cruz.

As the dynamic Coronel, the center's executive director, puts it, the key to the whole equation is in the Philippine Congress. "The typical Filipino legislator is male, middle-aged, and college-educated, most likely with a degree in law. He has previously held a local government post and is a member of a political family ... There is one chance in two that he is related to a former legislator. He is also into business and has multiple income sources ... He is well off, with a net worth (most likely understated in his statement of assets) in the P10 million range [almost $200,000]. The likelihood is that the longer he stays in Congress, the richer he becomes ... The typical representative or senator therefore is not the typical Filipino, who is likely to be 35, with a few years of high-school education and an annual family income of about P150,000 in 2000 [less than $3,000]".

Philippine politics is the ultimate family affair. In Landlords and Capitalists, political scientist Temario Rivera revealed that 87 families controlled the top 120 Philippine manufacturing companies from 1964 to 1986. Sixteen of these families were involved in politics, and most were part of the landowning elite. According toThe Rulemakers, most of the representatives in the Philippine Congress over the past century have come from only 134 families. The names are recurrent: Aquino, Duran, Ramos, Cojuangco, Dimaporo, Enrile, Espinosa/Martinez, Garcia, Imperial, Laurel, Lopez, Marcos/Romualdez, Osmena, Roxas, Veloso.

In the mid-1960s, political scientist Dante Simbulan came up with the concept of "modern principalia", referring to the educated, landed Filipino aristocracy, who behaved like agents of the Spanish colonizers and of course monopolized local office. The modern principalia is still in Congress - and just like before they monopolize political office as well as economic power.

This land is my land

The motto shared by this modern principalia seems to be "shop till you drop" - an inflation of Gucci, Prada and Ferragamo bought at Makati's top mall, Greenbelt, coupled with the usual torrent of Mercedes and Lexus. Conspicuous consumption is the norm. Congresswoman Emily Lopez, a former model and second wife of the scion of the Lopez clan that owns the ABS-CBN television network, boasts her proud ownership of millions in jewels and

paintings. Danilo Suarez was famous for driving to Congress with a different car for each day of the week. Bobby Tuazon, executive editor of the independent website Bulatlat, says there are currently only six progressive members in Congress. Coronel sums it all up: this is "a Congress of millionaires that makes laws for a poor country".

The Philippine Congress used to be landlord territory. Nowadays, still 40% of its members own agricultural land. But they used to be 58% in the early 1990s.

The Cojuangco landowning family - which has wisely branched out into manufacturing, real estate and services - has been in Congress for four generations. But power based on landowning has now dwindled, to the benefit of manufacturing, services and trade (agriculture still accounts for roughly 20% of the Philippines' gross national product). True, in many provinces the descendants of the caciques still rule. Coronel says they are now "a mongrel class - landlord-comprador turned capitalists, real-estate developers, and bankers".

Eduardo "Danding" Cojuangco Jr may be the ultimate haciendero mega-capitalist - "and notorious anti-labor", adds Bulatlat's Tuazon. A former congressman himself, Cojuangco has concocted a formidable political network, all the more impressive because he fled the country to Hawaii with former president Ferdinand Marcos in 1986 and only returned home in 1989 - as a political pariah, but a very flush one anyway. Cojuangco, who has only Marcos as a serious rival among the top 10 all-time looters of the Philippine state, amassed at least $1.5 billion in corporate assets during the Marcos dictatorship, diversifying from coconut and sugar to agri-business and banking.

When Joseph Estrada was ousted from power in 2001, Cojuangco preferred not to flee. After all, one week after Estrada's inauguration, he had taken possession again of his beloved San Miguel Corp, the giant food and beverage conglomerate and the largest corporation in the country - which he allegedly bought using coconut farmers' money. And thanks to Estrada, Cojuangco had eluded land reform with dodgy schemes, a feat that earned him the qualification - by Estrada - "godfather of land reform".

His cousins in the other branch of the Cojuangco family are the owners of the famous Hacienda Luisita - where some workers earn the fabulous salary of P90 (a little more than $1.50) a day: the law says the minimum wage is P200 a day. Their answer to land reform was to make a mockery of the law at a time when the House Speaker was none other than a family member, Jose "Peping" Cojuangco Jr. Close to Hacienda Luisita is the sprawling Hacienda Tinang, a sugar estate once owned by the Aquino clan, sold to the De Leon family, and then partitioned among dozens of members of mostly the De Leon family (who else?), plus a few investment bankers, socialites, businessmen and friends and relatives of politicians, all belonging to wealthy families, as the Philippine Center for Investigative Journalism has shown. This privileged bunch paid an average P450,000 (little more than $8,000 by the current

exchange rate) for the estate, an absolute bargain for plots of land that should have been awarded to people who were really entitled to them: landless tenants, farm workers or tillers. This is a graphic example of how "land reform" in the Philippines really works.

The Philippines does have a Comprehensive Agrarian Reform Program (CARP), established under former president Cory Aquino (she's also a Cojuangco by birth). The government of current President Gloria Macapagal-Arroyo claims that 5.8 million hectares have been distributed to 2.7 million beneficiaries, or 72% of the forecast total. For starters, no one seriously believes in this 72% - and people are very much aware of Hacienda Tinang-style schemes. Moreover, the program should have been completed in 1999. And accusations of shady deals have been flying non-stop for 15 years. Arroyo, in the inaugural speech for her six-year term starting in 2004, didn't utter a single word about land reform or rural poverty. The Philippines Center for Investigative Journalism stresses that "ideally, CARP would correct centuries-old injustices by giving land to the landless. In the Hacienda Luisita case, however, land remained in the hands of the landowner: in this case, in the hands of the president's family" - a reference to the Aquino-Cojuangco clans.

The Rulemakers also shows how a mix of the Aquino-Cojuangco clans has generated a disproportionate amount of legislators dating back to 1890. And since Philippine politics is family politics, there is no room for trophy wives. Like shoe-fetishist Imelda, the wife of Marcos, and wife-turned-president Cory Aquino, politician's wives work as political confidantes, collect campaign contributions, manage political networks and, in the case of Aquino, even become president. The public face of the Aquino family is now the ubiquitous TV host, skin-whitening endorser and self-proclaimed actress Kris Aquino, currently gracing Philippine cinemas in a ghastly thriller,Feng Shui. She wants to become - what else - a senator.

The chop suey gang

As for the ultra-wealthy - and very discreet - Chinese-Filipino tycoons, they have always preferred to remain in the shade and fund their own congressmen. But post-Marcos some taipans have sprung up, such as Sherwin Gatchalian, the son of the Filipino king of plastics, and stockbroker Harry Angping. But no Chinese-Filipino taipan comes close to matching Lucio Tan, the ultimate embodiment of the Filipino dream: from janitor to the nation's wealthiest man - and one of Asia's Top 50. He made his fortune with tobacco, built a diversified empire, merged from being the ultimate Marcos crony to a supreme in-the-shade arm-twister of the House and the Supreme Court, and practically made president

Estrada. Tan, additionally, has excellent relations with Beijing - something that largely explains the $1 billion in investment and soft loans that Arroyo brought from her recent trip to China.

Another invaluable volume by the Philippine Center for Investigative Journalism, Investigating Estrada: Millions, Mansions and Mistresses, published in 2000, before Estrada was ousted from power, documents in minute detail the many facets of Estrada-Tan cronyism. Economist Solita Monsod paints Tan as "the role model for the worst kind of conduct as far as our national economic objectives are concerned. He signals that you can evade taxes and get away with it, pay the courts and get the judges to decide in your favor, get good lawyers and delay your cases. The messages that are given by the kind of treatment he gets from the government are the antithesis of what we need for sustainable development."

Martin Scorsese would have loved this larger-than-life version ofGoodfellas with Tagalog subtitles. Lucio Tan bet heavily on Joseph Estrada in the 1998 presidential election: at least $37 million, plus total cooperation by his nationwide business network. And he won - big. With his pal Joey running the country, the biggest tax-evasion case in recent Philippine history, slapped on him by former president Fidel Ramos, simply disappeared. Tan's deep-in-trouble Philippine Airlines was protected from competition by Estrada. And on top of it, he was handed the Philippines National Bank by Estrada on a silver platter.

Manila's coterie of resident Sinologists cannot list enough reasons for a Filipino politician to seek a Chinese connection - as Estrada did. Chinese businessmen "swim between the rivers". They are not a political threat. They ask - or feign to ask - nothing in return for their largesse. They quickly share their fortunes with close friends and godfathers. They spend fortunes on the campaign trail. They keep their word - even when it's not on paper. And most of all they keep their mouths shut.

Dressed for success

A certified member of a Filipino political family needs, for starters, loads of money. Elections are a costly affair - for local standards. A Congressional campaign in Metro Manila cost as much as $500,000 in 2004. In rural provinces, it's much cheaper - less than $200,000. Once in Congress, however, families are impeccably positioned to expand their business empires, manipulating the state as a cash cow: they can get loans, franchises, monopolies, tax exemptions, subsidies, cheap foreign exchange, the works. And as they get wealthier, they become formidable election machines.

If you start as a movie star, then you've really got it made. Ramon Revilla was a lousy actor, but he got three Senate terms just because of his pop icon status. Sultry talk-show host Imee Marcos, Ferdinand's daughter, is also in Congress. In 2002, Congressman "Jules" Ledesma IV - a descendant of a wealthy sugar-planter clan also related to the Lopez family, owner of the ABS-CBN network - married knockout movie star Assunta de Rossi in his hacienda on live TV.

Which leads us to marriage, another surefire way to improve your capital. When, in 1954, Benigno Aquino Jr married Corazon Cojuangco, the most powerful political clans in the Tarlac region were united. Also in 1954, when ambitious congressman Ferdinand Marcos married Imelda Romualdez, a powerful clan in Ilocos united with a powerful clan in the Visayas. It was a great Marcos coup: Imelda's cousin Daniel at the time was House Speaker and her uncle Norberto was a former Speaker.

As for the eternal House Speaker Jose de Venecia (1992-98, then 2001-04, and now 2004-10) he also has to thank the Lord for his marriage: it was his first wife - the daughter of political godfather Eugenio Perez - who kick-started his political career.

It also helps to drape yourself in popular myth - as Marcos did, casting himself as a World War II hero who won 32 medals. In the mid-1980s it was discovered all the medals were fake. So what? Shoe fetishist Imelda still shows them off. Disgraced president Joseph Estrada got the job selling the myth of a man of the masses. It took millions of Filipinos a corruption scandal and an impeachment for them to start measuring the gap between Estrada's public Robin Hood image and his private life of sleaze, thuggery and extra-dirty politics.

Being in the Philippine Congress also means golden showers of "free money" - which everyone can spend at will (and without paying taxes). Congressmen as a rule make as much - if not more - than business executives.

The majority of bills approved in the House are of only local interest. The result, as The Rulemakers points out, is "a chain of perverse behavior". Virtually no one gives a damn about the common good of the country: "Broader development and reform goals are forgotten, further entrenching a system that mires the people in poverty and traps legislators in the role of fighting for spoils." It's unlikely Arroyo's government will muster enough Nietzschean will power to change the story.

As to where the elites stand at the moment, analysts broadly agree they now are congregated into roughly four groups: 1) The traditional elite - the Ayalas, Aquinos, Lopezes, De Leons, Osmenas and a few other families that were snubbed by Marcos; 2) The "sons of Marcos" who blossomed handsomely during the dictatorship - tycoons Lucio Tan, Danding Cojuangco and former president Estrada, for instance; 3) The anti-Marcos camp, which includes former president Fidel Ramos and ultimately his protege Arroyo; and 4) A group of gung-ho parvenus that includes shady businessmen Dante Tan and Mark Jimenez. These are the people who actually rule the country.

Got pork, will travel

Senator Panfilo Lacson - who did a study of the pork-barrel system - may be one of the few Philippine legislators publicly to describe pork-barrel funds as "a very corrupt and corrupting system in our political institutions". In 2003, Lacson announced he would give up his "pork" allocation for the year - almost $4 million. He urged other senators to do the same. Nobody paid attention. Now, because of the country's alarming fiscal and budgetary crisis, finally there's a House and Senate drive to scrap pork altogether in 2005.

Still, there's a crucial problem. Even if money is not used, according to budget secretary Emilia Boncodin, it does not revert to

the bleeding national treasury: it stays with the relevant government agency, which then identifies projects it wants to fund. This legislation also has to go.

According to Lacson, less than half of Filipino taxpayer money goes to actual projects. He even figured a complete breakdown of the kickbacks: 20% goes to the legislator who comes up with the idea; 14% goes to the contractor; 10% goes to the district engineer and other officials at the nefarious Department of Public Works and Highways (DPWH); 5-10% goes to the governor or mayor; 2% goes to thebarangay captain; and 2% goes to the government bureaucrat supposedly in charge of these public funds. Lacson says even the billboards all over Manila that advertise a given project are overpriced. One of these billboards, by the way, reveals the face of Arroyo the real-estate developer: she is promoting Residencias de Manila - still one more Greenfields-style gated community. Lacson is one of the few legislators denouncing corruption on a monumental scale as one of the key reasons that explain the appalling state of infrastructure in the Philippines. All over Manila it's easy to see unfinished or extra-shoddy construction projects. No wonder, most of the money disappeared in bribes.

Where's my cut?

When he became president, Estrada had an ambitious Caring for the Poor program. He wanted to reduce the number of Filipino poor from 24 million in 1997 to 17 million by 2004. The problem is that two-thirds of the funds were under the control of the House. The whole thing turned into a mess. According to a World Bank study, the program even invented a new class of poor: "the political poor, who are chosen by the political establishment".

Why did that happen? Because the really poor were not well connected enough. Only a few knew a congressman or senator who could recommend their household to be included in the government program. And of all this mass of non-connected, many thought they could only advance their interests if they paid a few bribes. This means only the well-connected Filipino poor in Congress get to see the fruits of pork acting to the benefit of their communities.

In the absence of all hope, the poor gamble. Jueteng is the biggest and most public racket in the Philippines. Jueteng is a variation of a Chinese numbers game in which you have to pick two numbers between 1 and 37. Once the lucky pair is drawn, the winnings vary wildly, depending on the bets. It's a complex network of cobradores(collectors), cabos (headmen) and operators, protected by another network of civilian, military and police officials, even judges, from the local level to the national level. The whole thing is illegal, but everybody and his neighbor seem to be involved. Once again, Estrada went where no one's ever been before: he invented jueteng room service, centralizing the collection in the presidential office. He may have pocketed as much as $10 million in gambling payoffs.

How could such a gangrenous system change? Coronel of the Philippine Center for Investigative Journalism welcomes the current crisis: "We need a national trauma. It's the only way to forge ahead." There's hope from people like the party list group Bayan Muna - which has spun off into Gabriela, a woman's group; Anakpawis, a workers' party; and Migrante, a migrant workers' organization. Bayan Muna fights for human, labor and peasants' rights. One of its leaders, Satur Ocampo, a former reporter of the Manila Times and one of the few progressives in the House, now rubs elbows with sultry Imee Marcos: Ocampo bitterly fought her dictator father in the 1970s and '80s.

Ocampo says his party has no secret agenda: "Our program is to empower - in a real, not rhetorical sense - the workers, peasants, fishermen, indigenous peoples, urban poor and other oppressed sectors, as well as women, youth, students, professionals and small entrepreneurs." Whether he and a few others make a difference may pave the way for a Philippines that will cease to be a vast collection of dirt-poor islanders ruled by a gang of Goodfellas.