Coloma: Crony capitalism being addressed
MANILA, Philippines - Perceptions that crony capitalism has persisted in the country are being addressed by the Aquino administration, a Palace spokesman said Wednesday.
“Through good governance, we are consciously leveling the playing field and dismantling the remaining vestiges of cronyism,” Presidential Communications Operations Office Secretary Herminio Coloma Jr. said.
He issued the statement in reaction to the “Planet Plutocrat” article in The Economist, which ranked the Philippines sixth among countries where crony capitalism is still active.
“As we endeavor to attain inclusive growth, we would like to see that the benefits of economic development are tangibly enjoyed by more and more Filipinos,” Coloma said in a text message.
In its Crony Capitalism Index last week, the British magazine said the rich get richer in developing countries such as the Philippines as billionaires saw their wealth “doubling relative to the size of the economy.”
“Most countries in Southeast Asia, including Indonesia, Thailand and the Philippines, saw their scores get worse between 2007 and 2014, as tycoons active in real estate and natural resources got richer,” according to the study.
The Economist said these countries have “huge crony-sector wealth, created by rent-seeking practices of the wealthy.”
“In technical terms, an economic rent is the difference between what people are paid and what they would have to be paid for their labor, capital, land (or any other inputs into production) to remain in their current use,” The Economist’s print edition stated.
It also simplified the behavior of rent-seekers as “grabbing a bigger slice of the pie rather than making the pie bigger,” it added.
The study showed the Philippines rose to sixth from ninth since 2007 for a rising share of crony sectors in its Gross Domestic Product, currently at about 13 percent.
Presidential spokesman Edwin Lacierda said the article apparently only wanted to “stimulate discussion.”
“The article is meant to stimulate discussion on wealth creation and rent-seeking, as it focused on the ratio of billionaires in various countries to industries that rely on government permits or other approvals,” he said in a statement.
Lacierda also noted the magazine’s admission about “three big shortcomings” in its index. “This index is certainly an exercise to provoke discussion, given the self-admitted limitations of the article,” he said.