State capture

By Artchil B. Fernandez

An interesting and curious heated exchange on the Senate floor erupted lately between neophyte senator Raffy Tulfo and veteran senator Cynthia Villar. It was an unexpected tit-for-tat since the subject of the verbal tussle is the budget of the Department of Agriculture.

Sen. Cynthia Villar as chairperson of the Senate Committee on Agriculture was defending the department’s P163.7-billion budget for 2023. In the course of interpellation Sen, Tulfo brought up the matter of farm to market roads (FMRs). He lambasted the FMRs as sources of graft and corruption.

“This farm-to-market road program is riddled with corruption and used by influential politicians. Believe it or not, there are many incidents where towns which are not rice or vegetable-producing have so many farm-to-market projects. There are jokes about cockpit-to-market road, subdivision-to-market road, and even private resort-to-market road,” Tulfo thundered on the Senate floor.  “How does the DA determine that the FMR requested by an influential, rich politician would benefit farmers instead of serving the politician’s interest,” he added.

Then Tulfo delivered a bombshell involving the conversion of rice lands into subdivisions. “Our farmlands keep getting smaller, big developers buy them and convert them into commercial and residential land. What does the DA do about this?” he asked.

The question is a swipe to Sen. Cynthia Villar whose family’s business empire is anchored on real estate and property development. Vista Land, considered the largest homebuilder in the Philippines that operates Camella Homes, Lumina Homes and others, is owned the Villars.

“We buy lands only in the cities and capital towns,” retorted Sen. Cynthia Villar defensively. “Where will the people live if you don’t build subdivisions?” she asked.

Senate President Miguel Zubiri forestalled further heated exchange between Tulfo and Villar by suspending the session.

Whether intentional or not, Tulfo highlighted one vital truth in Philippine political scene – state capture. State capture refers to the manipulation or the use of the state to advance the private interests of individuals and corporations. In plain language it is the capture of the state by individuals, corporations, or families to promote, advance, and serve their self-interests.

The Villars claims that their business empire was built through “sipag” (hard work) and “tiyaga” (perseverance/persistence). This is far from the truth. They were on the brink of financial collapse in the aftermath of the 1997 Asian financial crisis. Two Villar companies – Capitol Development Bank (now Optimum Development Bank) and Manila Brickworks – defaulted on a P1.5 billion loan secured from BSP in April 1998.

Manny Villar, the husband of Cynthia Villar was Speaker of House in 1998 and in 2000 presided over the impeachment of former president Erap Estrada. Manny Villar gained enormous economic and political bonanza as Speaker and reaped more extravaganza under the new dispensation after Estrada’s ouster. It was only in the aftermath of the dramatic political change in 2000 where the husband Villar played a key role that saw the drastic and exponential expansion of the Villar business empire.

Without state backing, the Villars would have remained a minor real property developer today. It is not “hard work and “perseverance/persistence” that made the Villars one of the richest families in the country today. It is state capture that made the current enormous wealth of the Villars possible.

The political positions taken by the Villars under the previous Du30 administration illustrates the dynamics of state capture. Mark Villar, son of Sen. Cynthia Villar was the secretary of the Department of Public Works and Highways (DPWH) while the senator chaired the agriculture committee in the Senate. The exchange between Sen. Tulfo and Sen. Cynthia Villar highlighted the correlation of the two positions.

Responding to Tulfo’s query on how the DA determined the FMR requests by politicians, Villar said the DPWH uses drones. “While the budget comes from the DA, it is the DPWH that builds these farm-to-market roads,” she explained. To which Tulfo replied, “So, if the DPWH and the property developers are in cahoots with one another, that’s the end for the poor farmers who are supposed to benefit from these roads.” Bulls eye for Tulfo.

In fairness to the Villars, they are not the only ones who captured the state. The use of the state to advance private interests had been one of the ignominious hall marks of the Marcos dictatorship. It was then called crony capitalism or bureaucrat capitalism. The cronies of Marcos senior bankrupted the Philippine government. Cronyism is one major factor for the downfall of the Philippine economy at that time and a main indicator the rule of the dictator was not a “Golden Age.”

Then there is the saga of Dennis Uy under the Du30’s bloody and gory rule. His meteoric rise is a shining example of state capture. Uy would not have joined the billionaires’ club without state sponsor. Now that his patron is out of power, Uy’s business empire is crumbling.

The proliferation and enduring strength of political dynasties that are now so entrenched in the political landscape are the ultimate embodiment of state capture, from local to national politics.

Unless the Philippine state is freed from the capture of vested oligarchic or elite interests the country will remain poor and backward.