Larry Henares writes about Danding Cojuangco and the coconut levy. Henares is not a fan of Danding but in this piece, he details how Danding established the coconut monopoly to the the disadvantage of the Americans and to the advantage of himself and the country.
At its peak, the ECJ Group was into a variety of businesses with its flagship being San Miguel and Cocobank. Danding also heavily invested in agriculture by way of the plantations he bought in Mindanao, the largest of which was in Malita, Davao Del Sur.
He was the primus inter pares among the Marcos cronies as he was the closest to Apo Lakay. Marcos Sr. was the baptismal godfather of Mark Cojuangco, Danding’s eldest and so was he with Bongbong.
Danding had a penchant for monopolies but it can’t be said that these were established only to his advantage. If Marcos wasn’t ousted, Danding would’ve controlled the softdrinks production in the country since he had just bought the Pepsi franchise from the Escaler’s. He was also going into flour with PhilBake. The flour monopoly was under the control of Jose Soriano, Felix Maramba and Carlos Uy.
Most of the ilustrados from the Spanish times were located in provinces where coconut, sugar and rice were the dominant agricultural crops. Pampanga, Batangas, Quezon, the Bicol Region and Negros Island was where most of the Basque migrants from Spain settled.
Prior to 1986, the Philippines was the largest exporter of coconut-based products to the world. But with Cory’s land reform law not exempting land planted to coconuts, the sequestration of Unicom and Unichem an the absence of long-term modernization plan for the coconut industry, the production of coconut-based products has dropped.
The protracted legal battle between Danding Cojuangco and the government ended with the latter losing control of UCPB and CIIF oil mills which are three of the largest operating in the country which are San Pablo Manufacturing Corporation, Legaspi Oil Inc. and Granexport Inc. Granexport used to be the largest coconut processing facility in the country located in Iligan.
The claim that Cojuangco “stole” coco levy funds is false. The funds were invested in companies such as San Miguel Corporation, UCPB, Unicom, Unichem and CIIF. SMC has reverted to private control after the government didn’t subscribe to its additional share issuance. UCPB is now a shell of its former stature as one of the largest universal banks in the country as a result of its mismanagement by PCGG appointees to its board. It will now be merged with Land Bank.
The opposition will not admit it but the PCGG was established as an agency to run after only Marcos and his cronies. Up to today, cases remain unresolve and PCGG representatives are still sitting on the boards of these companies. Mainstream media doesn’t bother to do an in-depth investigative piece on what are the status of the cases and the companies which are still sequestered to date. There is also the issue of corruption in these sequestered companies where board appointees have taken liberties with company funds by way of their remuneration and allowances.
This begs the question, who is actually guilty of historical revisionism?
PACMAN and the GREMLINS. Today we are going to say something nice about Danding Cojuangco, not so much in the hope that he withdraws his libel suit against our favorite newspaper, but most certainly because Americans do not like him, and he happens to be a Filipino. Now some people might say we have been bought. Don’t you believe it. Any one who knows our nationalistic sentiments should know we would not only do this for FREE, we’ll even pay for the privilege. This is going to be fun! Americans do not like Danding because he beats them at their own game. Long before the Philippines opened diplomatic relations with the Soviet Union, Danding booked Soviet vessels to ply the Far East routes at comparatively cheap rates. This did not please the Americans and the Japanese who dominate the Pacific “Conference Lines”, the Shipping Cartel that sets freight rates in this part of the world. Then Danding was able to secure a “rationalization” of the coconut industry, creating the UNICOM Monopoly that frustrated the Monopsony of American companies, specifically Cargill & Co., Pacific Vegetable Oil, Lever Brothers and Proctor & Gamble. The Americans were so frustrated they filed an Anti Trust suit against Danding in the United States. Then Danding took over the San Miguel Corporation. Andy Soriano was an American citizen, the former President of the American Chamber of Commerce, the bankroller of the Philippine Association, the most effective lobby group for American interests. Andy was quarreling with his cousin Enriquito Zobel, the biggest single stockholder of San Miguel, when Danding came in quietly and with such finesse that left even Andy Soriano gasping but relieved. Andy was the linchpin of the American Community, and the San Miguel take-over scared the hell out of the Americans. They began to call Danding “PACMAN”, that cute little ball of a creature in the most popular of video games, and in the 7-Up commercial. You know, the one that goes gobble, gobble, gobble, gobbling everything in its path. From here on, PACMAN is suspected of trying to take over every company up for grabs, from the Bulletin Today newspaper to Banco Filipino. The Americans even got the IMF and the Technocrats to try to clip his wings. But if Danding is PACMAN, then the Americans are the GREMLINS, those malevolent creatures in Steven Spielberg’s latest blockbuster movie.
The Gremlins have been described as “E.T. with Teeth … Muppets reborn as Hell’s Angels”, teetering on the edge of lunacy and violence. That’s accurate enough to describe American monopoly in the Philippines. If the IMF, CRC and the U.P. School of Economics are so concerned about Danding’s Coconut Monopoly, why are they not equally concerned about the American Monopolies in the Philippines?? Why is there never a proposal for Anti Trust legislation?? (1) Three American companies — Goodyear, Goodrich and Firestone — monopolized the tire business for 3 decades, but instead of planting enough rubber trees, they waste our dollars for the importation of their materials. (2) Reynolds Aluminum was handed a monopoly here on its promise to set up an Aluminum Smelter in Iligan. That was 30 years ago; we might as well have asked them to plant bananas in the North Pole, ha ha! (3) Until only recently Esso, Caltex, Mobil and Shell completely monopolized the petroleum industry, but none of them made any serious attempt to explore for oil in the Philippines, preferring to use our dollars to import their crude at higher than world prices. (4) The American drug companies together dominate the market for ethical and the proprietary medicines which they import in bulk, and sell at exorbitant prices, according to a study by the U.P. Law Center. They have yet to manufacture a single aspirin or a single tablet of broad spectrum antibiotic. (5) Colgate Palmolive, Proctor & Gamble (PMC) and Lever Bros. (PRC) monopolize the detergent, shampoo and toothpaste market — yet until they were forced to, none of them would use coco fatty alcohols, preferring instead to import petro chemicals as material. (6) Two American communication firms, Globe McKay and RCA were given franchises that extend well into the 21st Century, putting our communications to the outside world subject to foreign control, something no self respecting nation would countenance. (7) Two companies, American Wire & Cable and Phelps Dodge have a grip on the manufacture of copper wires and cables, but they do not use the copper from our smelters, preferring to import their copper. (8) We export a lot of Activated Carbon, but Union Carbide which has a monopoly of our Dry Batteries (Eveready), uses up our foreign exchange importing Activated Carbon at higher cost. The government of India, getting sick and tired of Union Carbide, told the company to raise its own dollars for its operations. Union Carbide then became the world’s largest exporter of shrimps, from India. Do you think our technocrats can get the same deal for us? Ha ha ha. (9) Dole and del Monte which monopolize the export of pineapple with land leased from the government at bargain prices have been observed shipping through tax havens, why? (10) Why are General Electric and Phillips who supply us those lousy incandescent bulbs and flourescent tubes that do not last two months, not forced to improve their products? (11) How much royalty and franchise fees have already been wasted on American brands of cigarettes? (12) and on American junk foods of little nutritional value?
(13) How about milk companies that do nothing except import milk powder, instead of setting up dairy farms? (14) And the American manufacturers of ketchup who import huge quantities of tomato paste rather than grow tomatoes here?? It is plain to see that our biggest MISTAKE was to hand over our industries to the MONOPOLISTIC control of the Americans, something South Korea and Taiwan NEVER did. Because of our Colonial Mentality and American Parity Rights, we blew it. Thirty years ago, our Import Control authorities handed our Industries over to the very people who wanted to keep our economy import oriented, to the very guys who did not want us to industrialize, the same buggers who tell us, “We shoulda left ya to the Japs! Listen, we pull outa here, and you monkeys will be back climbing trees!” These GREMLINS, these American Monopolists made sure our industrialization stopped exactly where it started — importing semi-processed materials. What? The Americans do that to us? Those wonderful god-men who civilized the Indians, the Negroes, the Filipinos, the Vietnamese? What for? Greed, that’s what. By transfer pricing, by overpricing their imports, they can send their profits out with ease and at the same time understate their income for tax purposes. To further integrate their industries they have to make bigger investments. Why should they? Of their entire capital requirements, 88% is secured in pesos from domestic sources; and they send out more than 90% of the profits in dollars. These GREMLINS send out $5.56 for every $1.00 they bring in. The GREMLINS’ grip extends beyond our shores. The Shipping Conference is a organization of Capitalist Shipowners who determine the Rates we pay for the goods we ship. It is a Cartel which the industrial countries use to gain comparative advantage over the poor nations. For instance, the Philippines makes plywood cheaper than Japan does, because Japan has to buy the logs from the Philippines to make plywood. Yet Japanese plywood dominated the U.S. market because Conference rates between Japan and the States are cheaper than the rates between the Philippines and the States. Conference freight rates are often manipulated to give advantage to the United States and other rich countries. When the Soviets and Danding Cojuangco set up the FILSOV Shipping, in effect they challenged the Conference Lines. And the Americans could not even call Danding a Communist; he is more of a capitalist than any of them. Without defending the UNICOM, we will tell you why it came into being. Long before Danding was born, the trading in copra was between a Monopsony of 4 American firms and thousands of unorganized Filipino coconut planters. As a result, we sold mostly copra instead of processed coconut oil, and at a very low price which Americans controlled. The Philippines supplied 65% of the free world’s market for coconut products, but these Americans were the only ones making money. Two events changed the destiny of the Coconut Industry. First, from 1967 to 1970, the BOI encouraged foreign companies to set up oil mills in the Philippines. In 1979, the UNICOM took over most of the oil mills and became a Monopoly that now faces up to the American Monopsony. OK, OK, I’ll explain: Monopoly exists when the seller controls the market; Monopsony when the buyer controls the market.
From 1954 to 1966 at the time of American Monopsony, the price of copra averaged $162 per metric ton. From 1967 to 1978, when the Oil Mills were in operation, the price went up by 30% to an average of $211. From 1979 to 1982, when UNICOM was our sole trader, the price went up by a fantastic 88% to $396 per metric ton. At the time of American monopsony, the price of coconut oil averaged $250 per metric ton. When the oil mills were set up, the price increased ton average of $427/MT, but when UNICOM took over, the price zoomed to an average of $609/MT, in one year up to an average of $920/MT!! At the time of American Monopsony, we sold an average of 6.25 tons of Copra for every one ton of Coconut Oil. When the oil mills were set up, we sold 1.28 tons of Copra for every one ton of Coconut Oil. When UNICOM took over, the situation was permanently REVERSED. We now sell a fabulous 7.14 tons of Coconut Oil for every one ton of Copra! And this year we are starting to export Coconut Chemicals in great quantities: in June 1984 alone, 7.3 tons in copra terms, more than 3 times last year’s. UNICHEM is being set up to produce 70,000 tons of coconut chemicals (Fatty Alcohols, Fatty Acids, etc.) a year, in addition to the 18,000 tons per year being produced by Filipinas Kao. This will truly industrialize what we Filipinos long regarded as the “Tree of Life.” This would NEVER have happened under American Monopsony. Meanwhile PACMAN is besieged by the GREMLINS. First Danding was sued by the Americans under the Sherman Anti Trust in the U.S., but haha, as an Ambassador he had diplomatic immunity. Then the IMF and Virata tried to destroy the UNICOM by abolishing the copra levy, which the President promptly restored. Now the IMF, the Technocrats, the CRC and the U.P. School of Economics are lobbying to abolish the UNICOM itself, without in any way concerning themselves with the more dangerous American Monopoly network. For one thing, PACMAN earns more dollars than all the GREMLINS combined. PACMAN earns the dollars, the GREMLINS spend the dollars. The American monopolists use the dollars earned by our sugar and coconut planters to perpetuate their monopoly and earn enormous profits. When the IMF and the Technocrats tell us to engage in Export Oriented Agribusiness and Cottage Industries, they are in effect telling us to go back to the plantation and earn more dollars for the American Monopolists to spend. If we Flips are enjoined to be EXPORT oriented, it is because the American monopolists are IMPORT oriented. It’s PACMAN versus the GREMLINS, folks. Those of you with personal computers or Atari video players, should know by now that PACMAN is really on your side. He is the partner riding on your Joystick. But when Spielberg’s movie “The Gremlins” finally comes to the theaters and your Betamaxes, you will also discover that you deal with the GREMLINS only at your peril. And the most effective way to deal with them is to expose them to the Light of Truth … or push them into the Micro Oven, and cook them. Well done, please.
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