Asia Times: Philippines: B-movie drama



	March 11, 2000	atimes.com

Editorials

Philippines: B-movie drama

Philippines President Joseph Estrada used to be fond of pointing out that in his country he was a top-grade actor before entering politics while another movie-star president, Ronald Reagan, mainly made B-movies during his pre-Washington Hollywood career. That may be so. But the show ''Erap'' has put on since being elected president would qualify at best for B-movie status in special cult categories appreciated only by those who get a kick out of watching the certifiably worst.

Erap's predecessor, Fidel ''Eddy'' Ramos, was no genius. But he had the good knowledge and foresight to surround himself with some capable advisers and by the time he had served out his term had undone much of the economic damage ''people power'' president Cory Aquino had inflicted on the country. Thanks to Cory, the Philippines had had little part of the East Asian mid-1980s to mid-'90s boom that went up in flames in 1997. With some steady Ramos rebuilding of economic basics like electrical power, the Philippines appeared poised to take advantage of the misery of its neighbors and forge ahead relatively unencumbered by the aftermath of boom year bubble financing. But then came Erap and Philippines history repeated itself: touted in 1997/98 as in the mid-70s as a most promising of Asian economies, gross misgovernance and corruption undid the promise and then some. It's an uncanny tale of leisurely pursuit of what most likely is going to hit you the worst.

Erap, in his movies the champion of the poor and oppressed, the fighter for justice and equality and arch foe of criminal elements, was elected president because people somehow believed he would serve them in the spirit of his screen image. Sadly, he hasn't. ''Friends'' who had helped finance his electoral campaign became his closest advisers. Corrupt cronyism - though hardly eradicated by president ''Eddy'' but nonetheless fought and put to task - again became the order of the day and flavor of presidential palace Malacanang. The stock market ramping and insider trading scandal that is now rocking the Manila market and has driven it down to two-year lows typifies just exactly what's going wrong in the Philippines and with the Erap regime.

And it's got all the elements of that worst of B-movie categories so much appreciated by the aficionados of the low-down worst - so bad, it's great. A presidential ''friend'', Dante Tan, owns a gambling company - stock market listed. At the beginning of 1999, BW Resources traded at 1.98 pesos (4.9 US cents) a share and for months it didn't move much. Enter Macau gambling tycoon Stanley Ho, about to be facing harder times with the return of the Portuguese gambling den colony to China. Stanley strikes a deal with Dante and invests in BW; the BW stock rockets to 107 pesos in October for a rather hefty 54-fold gain. Then it collapses again just as precipitously UPON THE ANNOUNCEMENT OF THE STANLEY HO ENTRY (figure that!) and now trades at just over 6 pesos. Someone made a fortune in the meantime while plenty of small investors without insider information got burned.

But that's only part of the story. Enter another one of those man-of-the-people Filipino crime fighters and champions of the little guy, SEC chairman Perfecto Yasay Jr. Twenty years back, he had handed out out legal advice to Filipino immigrants on a radio talk show in New York. Now as SEC chairman he wasn't going to let a bunch of unscrupulous market manipulators srew small invstors out of their hard-earned funds. An investigation finds ample evidence that Tan, Ho and company (and several brokerages in cahoots with them) abused the market. But what does crime fighter Erap do? He intervenes in the investigation and impresses upon Perfecto (properly named) that Mr Tan is an honorable, straightforward businessman and a ''friend''.

Well, this week it all came to its farcical conclusion: Manila market regulators resigned en masse to protest interference in the BW investigation and Perfecto shut down the market - only for it to reopen the next day, with the SEC top dog threatened by Erap with prosecution for economic sabotage. Where will it end and to what effect? Well, quite frankly, we don't care. Stock market manipulation is hardly news in the Philippines and good old Perfecto probably isn't as perfect and innocent as he wants us to believe, either. He envisages a political career - as a crime fighter, we suppose.

What's to be learned from this whole pathetic farce? Two things: it will take a whole long time before the Philippines will become a country and an economy into which you want to invest your money; second, invest in some down and out Manila stocks now as the scandal is fresh and there are excellent plays to be had if you're of a gambling bent. As a former Philippines finance minister used to tell foreign investors, ''The best time to invest is when the blood isn't dry in the streets yet.'' He served at the time of and was talking about the bloodless people power revolution.