Bloomberg News

Boxing Champ Takes Aim at Philippine Dynasties: Southeast Asia

October 11, 2012

Manny Pacquiao

Photographer: Enrique Soriano/Bloomberg News

World boxing champion Manny “Pac- Man” Pacquiao is tapping his relatives in creating a political clan to rival families like those of President Benigno Aquino that have ruled the Philippines for decades.

Pacquiao and his wife Jinkee Pacquiao will run in May 2013 elections to represent Sarangani province in the southern Philippines, while brother Rogelio Pacquiao will compete in neighboring South Cotabato. The trio registered for the elections before an Oct. 5 deadline.

Aquino’s efforts to tackle corruption and rein in spending have bolstered the economy, lifted stocks and strengthened the currency. Those gains might be threatened by the power of political families, as an entrenched reliance on personalities over institutions raises the risk that administrations after Aquino will put clan before country, according to Edwin Gutierrez of Aberdeen Asset Management Plc in London.

“Thankfully the Aquino dynasty has been one of the better- intentioned dynasties,” Gutierrez, who helps oversee about $9 billion of emerging-market debt, said by e-mail. “We can see how things can easily go wrong when the presidency is entrusted to someone who is more concerned with serving those dynastic interests.”

The economy may grow 5.5 percent this year, the Asian Development Bank said last week, up from an earlier forecast of 4.8 percent. The Philippine Stock Exchange Index has gained 30 percent in the past year, third in Asia behind Thailand and Karachi, and reached a record last week. The peso has strengthened 4.5 percent, according to Tullett Prebon Plc prices, making it the third best performer in Asia in that time.

National Elections

The Philippines will hold elections for more than 18,000 local and national positions in May, including the entire House of Representatives and half of the Senate’s 24 seats. Aquino, the son of a former president and senator, has four years left in the term he won in 2010 and can’t stand for re-election.

Legislators with family links make up 40 percent of the total in the Philippines, compared with 6 percent in the U.S. and 10 percent in Argentina, according to a study to be released this month by Ronald Mendoza, an economics professor at the Manila-based Asian Institute of Management. Eight out of 10 Filipino lawmakers aged 25 to 40 are from political clans, he said.

“Consolidating power is a political reality in the Philippines and politicians seem to win allies through kinship and not because they have a common platform,” Mendoza said in a telephone interview. “To beat a dynasty, you must in fact build your own and eventually take over.”

Family Interests

The result can often be negative, with politicians promoting family interests instead of making investments in education and job growth to reduce poverty, he said. The Philippines has lagged behind neighbors Malaysia and Thailand in reducing poverty during the past two decades even as economic expansion kept pace, a Bloomberg chart in May showed.

Pacquiao, 33, claimed his first election victory in May 2010 after winning boxing world championships in eight weight classes. After fighting in the 1990s for purses as small as 150 pesos ($3.50), the high school dropout is now the richest Philippine congressman, with a net worth according to a report from the House of Representatives of $32.6 million, bolstered by television appearances and endorsement deals with Nike Inc., Hennessy Cognac and Hewlett-Packard Co.

Pacquiao is running unopposed for re-election, and his wife faces two opponents in the race for vice governor of Sarangani province, election officer Ercee Arrieta said yesterday. Rogelio Pacquiao is running for a congressional seat. Manny Pacquiao didn’t return repeated calls for comment.

‘Deserves Praise’

“For somebody who has everything in life, Manny Pacquiao deserves praise for choosing to serve the public,” Franklin Gacal, the Pacquiao family’s lawyer and chief of staff at the House of Representatives, said in a telephone interview on Oct. 9. “We should encourage and guide the family. Let’s criticize them when they end up not doing anything.”

Jinkee and Rogelio Pacquiao were persuaded to run by local officials of Sarangani and South Cotabato, Gacal said.

Pacquiao has filed and co-authored House bills on human trafficking, single-parent benefits, credit assistance for Filipino workers overseas and wage increases for school teachers. He also campaigned against a bill to provide poor families with access to birth control.

The Pacquiaos are the latest clan to emerge in the country of 98 million people where political success is often tied to surnames. While the 1987 constitution called for equal opportunity and the prohibition of political dynasties, no law banning them has been passed.

‘Everybody’s Related’

“Nothing has changed, everybody’s related,” Congressman Teddy Casino, whose Nation First party has introduced anti- dynasty legislation since 2001, said by phone. “It’s still the same political elite that have ruled the country in the past four decades.”

Aquino’s cousin Paolo Benigno “Bam” Aquino and his aunt Margarita “Tingting” Cojuanco are running for Senate seats. His father, Senator Benigno Aquino, was assassinated in 1983, while his mother, the late President Corazon Aquino, died three years ago. Aquino’s uncle, Eduardo “Danding” Cojuangco, was a congressman when late dictator Ferdinand Marcos declared military rule in 1972 and ran for president in 1992 and lost. He’s the chairman of San Miguel Corp. (SMC)

Imelda Marcos, Ferdinand’s widow, will seek a second term as a representative of Ilocos Norte in the country’s north. Her daughter Maria Imelda Josefa “Imee” Marcos is running for governor in the same province, while son Ferdinand Jr.’s six- year term as senator will end in 2016.

Can’t Choose

Ousted president Joseph Estrada will run for mayor of Manila and son Joseph Victor “JV” Ejercito, if elected next year, will join half-brother Jinggoy as a senator.

Three of Vice President Jejomar Binay’s children plan to run in next year’s elections.

“That should not be taken against them,” Joey Salgado, a spokesman for Binay, said by phone. “You cannot choose your relatives. What is important is that they are competent and they are chosen in free elections without coercion.”

Washington-based Freedom House ranked the Philippines as “partly free” in a report this year, citing weak rule of law as “a few dozen leading families continue to hold an outsized share of land, corporate wealth, and political power.” The International Monetary Fund estimates per capita gross domestic product at $2,329 in the Philippines, about half as much as Thailand and five times less than Malaysia.

“Dynasties thrive in the Philippines because our electoral system is based primarily on patronage,” Earl Parreno, an analyst at the Institute for Political and Electoral Reform in Manila, said in a phone interview. “We have an electorate with a low level of maturity that would rather see candidates sing and dance on stage than debate issues.”

To contact the reporters on this story: Norman P. Aquino in Manila at naquino1@bloomberg.net; Clarissa Batino in Manila at cbatino@bloomberg.net; Joel Guinto in Manila at jguinto1@bloomberg.net

To contact the editors responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net; Lars Klemming at lklemming@bloomberg.net


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