The joke is on us!

The Supreme Court ruling favoring former Marcos crony Eduardo “Danding” Cojuangco, Jr. demonstrates that kleptocracy is alive and well in the country.

As economist Cielito Habito will tell you, coconut farmers not rice farmers constitute the poorest of the poor in the Philippines. They also account for a larger bulk of the farming sector (whether you account for this on the basis of land area cultivated or number of individuals engaged in it). Improving their lot in life therefore should be on top of any poverty alleviation agenda.

Under Martial Law between 1972 and 1982, coconut farmers were burdened with a levy that was meant to be used for upgrading common facilities and infrastructure that would ultimately benefit the sector. The man in charge of what essentially could be regarded a monopoly was businessman Danding Cojuangco, an estranged cousin of the jailed opposition leader’s Benigno Aquino, Jr’s wife (mother of the current president who incidentally reconciled with his uncle prior to his election).

What did Mr Cojuangco do with the immense powers and resources entrusted to him? Well, he claims to have “borrowed” the funds from the United Coconut Planters Bank, an entity bought using the coco levy funds, to purchase a 20% stake in San Miguel Corporation, one of the biggest conglomerates in the country. So rather than going to the poorest of the poor, the funds were allocated to benefit the corporate and financial ambitions of the man whose responsibility it was to look out for their welfare.

Did he violate his duties not just as a public official in charge of the stewardship of their funds but as a corporate officer of the bank from where he had sourced his “loan”? The Supreme Court in a split decision seems to believe that he didn’t. This is despite the financial regulations that we have regarding banks lending a substantial amount of their funds to directors, officers, stakeholders and related interests.

Under normal circumstances, such an inequitable and imprudent decision by a public and corporate official would not have been condoned. Such a blatant disregard for the interests of those whose toil produced the resources would have only been possible under a dictatorship. It is that action that the Supreme Court has legitimized with its ruling.

Although the decision is still subject to a possible motion for reconsideration, if it were to stand, it would probably be one of the biggest transfers of wealth from the poorest and lowliest members of society to one of the wealthiest. It would be proof positive that kleptocracy is alive and well in a nation that has produced two among the top ten most corrupt leaders in modern history.

As Senior Associate Justice Conchita Carpio-Morales (who administered the oath of office to the current president) states in her dissenting opinion,

The argument that Cojuangco was not a subordinate or close associate of the Marcoses is the biggest joke to hit the century.

If that is so, then the joke is well and truly on us!

Doy Santos aka The Cusp

Doy Santos is an international development consultant who shuttles between Australia and the Philippines. He maintains a blog called The Cusp: A discussion of new thinking, new schools of thought and fresh ideas on public policy (www.thecusponline.org) and tweets as @thecusponline. He holds a Master in Development Economics from the University of the Philippines and an MS in Public Policy from Carnegie Mellon University.

  • GabbyD

    here’s what i dont get: if its a LOAN they should repay it.

    if they’d repaid it, the original funds would be back, with interest.

    did they repay? if not, why?

    • I believe they did repay the loan. the Lawyer of danding was commenting that the loan was paid, yet the people still want the shares.

      i don’t know if any interest was paid.

      I belive that their concerns here is more about whether he should have gotten the said loan in the first place.

      if the court ruled that the loan was illegal or that the money was ill-gotten. will the shares be distributed to the coconut planters?

      • UP nn grad

        “GUILTY because Danding is a Marcos BFF” seems to be the basis of Senior Associate Justice Conchita Carpio-Morales position. Vvrroooom-vvroooom!!

      • GabbyD

        OK. if the loan is repaid, that means they are after the proceeds of the loan.

        what is the legal justification for that?

        if they got their money back, whats the problem?

        • UP nn grad

          GabbyD: I sense that you express many of the items in this Supreme Court decision.

          The underpinning of the PCGG coco levy case — “Kaibigan ni Makoy na ubod na yumaman!”… conclusion – GUILTY!!!! BFF kasi daw. Remember the case was filed under Cory Aquino in 1986 in the great hunt for all of the Marcos wealth. Cory and “civil society of then” wanted all of the Marcos wealth…. then court cases said “… wait… Pilipinas can only go after all of the ILLEGALLY-gotten Marcos wealth”.

        • the politicians, demonizing the rich. should we expect the politicians to say that the poor coconut farmers doesn’t deserve to get the SMC shares because there is no legal basis for it? they don’t want to seem like they are anti-poor.
          and they want the president to choose a side

  • UP nn grad

    That — the latest Pilipinas Supreme Court decision — is a hard one to accept. It is probably good that this decision was reached and not when FVR or Erap were president because then innuendos would fly about “…lutong makaw”. My lawyer-father would tell me, though, that many cases really are won (and lost) by the amount of and the persuasiveness of “the facts” presented by both cases. “Lazy side loses!” is one of his reminders to his children to persevere and get the next 5% additional excellence. Maybe Noynoy should really think of another 4% to 15% increase in the investigative resources (money and equipment) that Gobyerno-lawyers have.

    At least this “Danding”/coco-levy-fund decision was not by default where the government case was thrown out because government lawyers missed deadlines by weeks or even months. “Lazy side loses!”