Indonesia’s Salim routs Filipino cronies

Indonesia’s Salim routs Filipino cronies

Last February 24, all media, no matter what their political persuasion, were in a chorus of praise reporting the following news: One Victorico Vargas beat Jose Cojuangco in an election for the presidency of the Philippine Olympic Committee, the body responsible for our nation’s performance in that global event. It was a heated contest, with Vargas having to ask a court two years ago to issue an order for the POC to undertake the election.

Yes, that Cojuangco was the brother of the late Cory Aquino and the uncle of her son, former President Noynoy Aquino 3rd, an exemplar of the Philippines’ old landed political elite.

This newspaper made it its banner story, the first time sports news was headlined in any newspaper, except of course for boxing champion Manny Pacquiao’s victories: “Vargas routs Cojuangco.” The article’s lead celebratory paragraph was that of nearly all media outlets, including the three biggest newspapers: “Finally change has come in Philippine sports.” “Cojuangco’s 13-year reign has ended.”

Not a single media outfit though bothered to explain who the hell this Vargas —whom they all referred to by his nickname “Ricky” rather than his official name “Victorico” – is, and how he could beat the patriarch of one of the country’s most powerful oligarch clans. They all merely reported that he was the head of the Association of Boxing Alliances of the Philippines. Nobody even reported what sport he played, and I was told it was solely bowling. Weren’t they even curious who this Vargas was?

Pangilinan surrogate

I am not exaggerating at all when I assert that Vargas wouldn’t win an election for chairman of his barangay’s sports committee. He won the POC presidency beating Cojuangco because of one thing, and one thing only:
He is the surrogate of PLDT chairman Manuel V. Pangilinan. MVP, as he is fondly called by a servile media, in turn is the surrogate in the Philippines of Anthoni Salim, whose family’s wealth grew during Indonesian President Suharto’s 31-year rule, mainly because the patriarch was the dictator’s biggest crony.

If surrogate is too obscure a word, Pangilinan and Vargas are merely executives—employees, minions and lackeys though are valid synonyms—in the companies that Salim tightly controls: PLDT and the Hong Kong-based First Pacific Co., Ltd., the latter being the holding company for the Metro Pacific conglomerate in the country.

Pangilinan is Salim’s top executive at PLDT, Metro Pacific, Meralco and over three dozen Philippine companies the Indonesian tycoon controls—a structure that evades the Constitution’s limit on foreign ownership of public utilities.

As I have written in so many columns and in my book Colossal Deception: How Foreigners Control Our Telecoms Sector, Salim is the single biggest stockholder, with 45 percent, of First Pacific, with the rest of the stocks held by American and European magnates. Through First Pacific’s subsidiaries, Salim is the biggest stockholder of PLDT, holding 26 percent of its shares. Pangilinan owns a minuscule 1.6 percent of First Pacific and 0.1 percent of PLDT.

Vargas was a Citibank Bangkok human resources executive—an expertise that very rarely takes one to the top posts in the corporate world—until Pangilinan recruited him into PLDT in 2007 as its personnel management head.

Not with the top

Vargas isn’t among Salim’s top executives which, other than Pangilinan, consist of strategist Edward Tortorici, finance man Robert Nicholson, and legal brain-trust (and chairman of Philippine Star, Business World and Salim’s other media outfits) Ray Espinosa.

The firm Vargas was assigned to handle, and where he stayed for five years, Maynilad Water, had not been a profit center that First Pacific has never reported any income from it – hardly a track record that would catapult him in 2016 to being one of only three Filipinos with the assistant-director rank in Salim’s holding and command-center firm.

(The other two assistant directors are Espinosa and Marilyn A. Victorio-Aquino – both from the Sycip Salazar Hernandez and Gatmaitan law offices which, I was told, thought up the legal way in which PLDT could skirt constitutional limits on foreign capital in public utilities and even in media. A long-time director of First Pacific, said to have guided Pangilinan through the maze of Philippine business and politics since the 1990s, is former President Aquino’s foreign affairs secretary, Albert del Rosario.)

The Philippine Daily Inquirer’s article on Vargas’ election as POC president read: “Vargas got a big morale boost from the presence of PLDT/Smart CEO Manny V. Pangilinan, who immediately pledged P20 million as seed money for the POC.” It reported nothing more though on Pangilinan’s role.

That report would be a classic example of stupid journalism: Even when facts and events are in front of a stupid reporter, he would not see what is really the news.

Pangilinan didn’t just give Vargas “a morale boost.” Vargas role in Philippine sports has been entirely Pangilinan’s creation: He was his cock in that cockfight over the presidency of the POC, the culmination of the Salim executive’s campaign in the past many years to be a patron – and a force – in Philippine sports.

Sports patron

Pangilinan was even awarded “Sports Patron of the Year” in 2010 by a sports writers’ association. In 2011, he set up his “Manuel V. Pangilinan Sports Foundation,” which he says supports basketball, boxing, cycling, taekwondo, badminton, tennis, running and football. At its launch, he gave a huge replica of a check for P80 million payable to the Philippine Football Federation, as the conglomerate’s 10-year funding commitment to it.

Pangilinan has also portrayed himself as a patron of the most popular sport in the country, basketball. Three First Pacific companies have teams in the professional league, the Philippine Basketball Association. He has bankrolled the basketball team of his college alma mater, the Ateneo de Manila, since 2005, that of San Beda, where he studied up to high school and most recently, that of the University of the Philippines.

Through PLDT subsidiary Smart Communications, Pangilinan has financed Gilas Pilipinas, the country’s national basketball team that competes in international competitions. Pangilinan also became a patron of boxing and got himself the position of chairman of the board of trustees of the Philippine Amateur Boxing Association, a post he later gave to Vargas, while retaining the chairman-emeritus title.

Vargas has been head of PLDT’s “Business Transformation Office” since 2016. The company‘s PR head Ramon Isberto has been unable to explain to me what it is exactly that the office does that it should be headed by a senior vice president, Vargas.

My sources claimed though that the overriding task that Pangilinan has given Vargas is to be his surrogate in Philippine sports, in tandem with Meralco’s senior vice president, Afredo Panlilio.

It is certainly to Pangilinan’s credit that he is now the country’s biggest patron of sports. You would be born yesterday though if you think such a hard-nosed executive of a monopoly capitalist is doing it out of patriotism.

Pangilinan’s being a patron of sports, his being a big financial donor to his alma mater, the Ateneo de Manila, and his control of more than 12 hospitals—all of course funded by the conglomerate Salim controls— has been one of the most successful PR operations I’ve seen in my career as a journalist.

Concealed from public

Through such contributions — which probably converts into some form of tax deductions — he has gained so much prestige that the fact is concealed from the public mind, or accepted by the elites, that an Indonesian tycoon has managed to be the owner of the country’s biggest public-utility conglomerate. The Constitution had wisely prohibited this, yet Philippine presidents since 1998, and our own elites, have closed their eyes to this huge anomaly.

Salim had wrested control of PLDT in 1998 from the Ramon Cojuangco clan that was a Marcos, and then a Cory, crony. He then bought in the late 2000s the electricity monopoly Meralco and water utility monopoly Maynilad Water from the pre-martial law oligarch Lopez clan that had been close to Cory Aquino. His purchase of the Lopezes’ First Philippine Infrastructure at that time was Salim’s base, funded partly also by the huge profits of PLDT, to get into infrastructure, that today his conglomerate is the biggest in that sector.

The kicking out of Jose Cojuangco from the POC is just another chapter in our country’s sad recent history of an Indonesian crony routing Filipino cronies.

At least the Filipino cronies had kept their profits—at least a big part of them—here, unlike the Indonesian who has pumped out of the country about $2 billion in profits since 2005. (See my column, “Foreign firms generating super-profits from PH telecom duopoly,” November 22, 2017.)

Vargas as well as Panlilio though seem not to be just Pangilinan’s surrogates in Philippine sports. Very surprisingly and strangely, the two are the top investors in certain companies that created the layers of corporations that Salim argues makes his conglomerate majority Filipino-owned, even as Vargas and Panlilio appear effectively to be dummying for Salim. I have discussed this in my book and in my columns two years ago: “The Indonesian billionaires behind the ‘MVP Group’; “Indonesian tycoon skirts Charter limits through corporate layers”; and “Closet billionaires . . . or corporate dummies?”

I have asked Vargas through PLDT’s PR man to comment again on these columns so I can give his side, that he isn’t one of Salim’s corporate dummies, in a column next Wednesday. I have been waiting for his comment for two weeks.

Rigoberto Tiglao