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17 January 2000

The Marcos cronies are back on top

The Philippines poor thought they had a friend for president. Wrong, finds John Elliott

By John Elliott

It used to take several years for unpopular and self-serving political dictators, such as former presidents Suharto of Indonesia and Marcos of the Philippines, to see the writing of their demise on the wall. The Internet is changing all that, as Philippines president Joseph “Erap” Estrada has recently discovered.

On 22 November, a Texas-based political-risk consultancy called Stratfor put an article on its website headed “Philippines president’s days are numbered”. In Manila, the capital, it immediately sparked rumours of an imminent military coup, and people thought the moment had come the following month when the city was hit by a four-hour blackout – caused, it turned out, not by the military, but by jellyfish that had got into the power station water intakes.

Notwithstanding, Estrada recognises that his presidency – though less than two years old – is under threat. The former film star was elected in 1998 with the biggest mandate ever given to a Filipino president. He won huge support from the poor, who hoped he would serve them better than his presidential predecessors, Ferdinand Marcos (thrown out of power in 1986), Cory Aquino and Fidel Ramos.

But Estrada, a former Marcos crony, has failed the poor. At the same time he has also failed to win over the Manila elite, who regard him as a joker and an upstart. Only last March, his net satisfaction rating (the percentage polling “satisfied” minus those “dissatisfied”) was as high as +67; even last October it was +28. This month, it is down to +5. “The people brought President Estrada to power – particularly the poor who make up over 90 per cent of the population – and now they are correcting their mistake,” says General Jose Almonte, a veteran public servant who was national security adviser to Ramos.

He dismisses the chances of a military coup, but thinks that Estrada could be ousted by a mass movement like the “people power” revolution that brought down Marcos, or by the Congress declaring, after elections in 2001, that he is “unfit for office”.

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Estrada has failed on two fronts. First, he has not introduced promised pro-poor policies or urgently needed economic reforms. The Philippines is lagging seriously behind neighbouring countries that have bounced back from the Asian financial crisis; its economy is growing at only about 3.5 per cent a year, which is low by current regional standards. Three big aid donors – the World Bank, the Asian Development Bank and the Japanese government – warned last month that they might suspend donations if reforms are not implemented to tackle poverty, boost tax receipts and reverse a growing budget deficit.

But Estrada has also failed on the personal level. He has several “wives” and many illegitimate children; he is a compulsive gambler who frequents casinos; he constantly changes his decisions; and he often seems to be trying to re-enact his old film-star roles, instead of governing the country. All this the electorate will tolerate. But he has also proposed constitutional reforms that could be used to extend his term of office. And he has surrounded himself with cronies, many from the Marcos era, and has expanded this circle with new gambling and drinking friends who form a “midnight cabinet” which parties till 3am. Several of the cronies were among more than 70 advisers he appointed on his election.

This is nothing new in the Philippines, which has oligarchic traditions that date back to Spanish and American rule. But Estrada’s cronies benefited too quickly and too openly, and he favoured many of the people associated with the Marcos regime. For example, Eduardo Cojuangco, who fled the country with Marcos in 1986 and is now president of Estrada’s political party, seized the San Miguel brewery-based business that he used to own. Another ex-Marcos crony, Lucio Tan, who owns the ailing Philippine Airlines (PAL), and whose wealth is said to exceed $3 billion, has benefited from Estrada’s starting landing rights’ rows with foreign airlines. Estrada is also believed to be helping Tan to settle a long-standing tax fraud case and to gain control of the Philippine National Bank. Presumably it was this kind of thing that Edgardo Espiritu, the finance secretary, had in mind when he resigned last month, protesting, among other things, about a “culture of corruption” in the government service.

Estrada has declared his wish to boost foreign investment in the Philippines, but his only success – of which he is extremely proud – has been the arrival of Stanley Ho, Macau’s veteran casino king. He became chairman of a crony-owned gambling company (BW Resources) last year, just as Estrada was trying to deflect a securities’ commission inquiry into its share dealings.

Estrada’s misdemeanours are helping to revive a communist insurgency. An extreme left-wing group fired shots at Shell’s Manila headquarters last month, in protest at petrol price rises. Businessmen complain about increasing crime in Manila, and so Estrada has put 500 marines on the streets alongside police. The critics of this move include Cardinal Sin, who helped bring down Marcos.

Estrada began the New Year by sacking the 70-odd advisers, abandoning the constitutional reforms and reshuffling his cabinet. Jose Pardo, who was a well-regarded trade secretary, has been appointed finance secretary, prompting the Manila business community to warn that they expect results within 100 days, neatly coinciding with publication of the next quarterly opinion polls. That time-scale neatly coincides with publication of the next influential quarterly public opinion polls – so it looks as though Estrada has only that long to put his presidency back on track.