Why Duterte wants Smart and Globe Out

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Re-reading the State of the Nation Address of President Rodrigo Roa Duterte and you’ll find nuggets of inspired thinking. What made it controversial though are those off-the-cuff remarks made in devilish fashion that often blur the ideological underpinnings of the idea. One of them is his tirade against two of the country’s telecommunications firms–Smart Telecommunications and Globe Telecommunications.

What made Duterte’s attack against Smart and Globe too uncomfortable mainly to businessmen handling or heading big corporations is that it came amidst a public uproar on the ABS-CBN franchise issue. That ABS-CBN franchise issue created a chilling effect on the local business community. The perceived impunity shown by Duterte’s legislative attack dogs in causing the eventual downfall of the biggest media network in the country left an indelible imprint on the minds of businessmen particularly those involved in public utility services. Duterte was right when he said that he did not need martial law to do what he wanted– the powers necessary to cause a firm’s downfall exist and lurk within the pages of corporate and political codes. It also shows how powerful an Executive-Legislative tandem is and how destructive such a merger becomes especially directed at big firms run by billionaire businessmen and families.

The prevalent sentiment is obvious—if the government can do this to a publicly listed multi-billion peso Filipino company, what more to companies whose businesses involve direct to consumer public utilities such as power, telecommunications and water? The effects are two-pronged: fear of losing investments and trust issues on the part of those intending to partner with government in dispensing social services. If government can unilaterally withdraw from a perfectly crafted partnership, at the whim of a President or his cabal of political and economic allies, then, why do business with government in the first place? Who in his right mind now would even explore doing business with the Republic of the Philippines?

Duterte even mentioned a dreaded thing—expropriation of assets. The SONA looks like a threat against several corporations involved in public services– that we can pull you down and cause your bankruptcy if you don’t improve on your services. The traditional thinking about expropriation involves political and criminal circumstances, like when under martial law, any firm can be subject to expropriation at the behest of the sovereign. Or when a firm violates the law and committed a criminal act that attaches expropriation.

What Duterte is trying to say is that by mere or sheer number of complaints from consumers, the government can unilaterally decide to terminate its legal relationship with any social services provider and expropriate their assets if they continue to operate at sub-par or sub-standard levels. The President does not need to place the entire country under martial law, or a war, or rebellion— mere consumer complaints may be sufficient to cause a service firm’s closure and downfall.

That’s why Smart and Globe should listen very carefully because the very same thing happened with ABS-CBN. Duterte first attacked ABS-CBN in his SONA and what came thereafter was a series of moves aimed at implementing Duterte’s capricious whim. Unfortunately for SMART, GLOBE, MAYNIILAD AND MANILA WATER– Duterte and his minions are all well-versed on Philippine laws in such an extent that they already turned these very same laws into weapons of corporate destruction. And they are bold enough to cause wreckage and be entirely nonchalant about it.

What makes it extremely hard to defend these targeted firms is the fact that Duterte is not inventing these issues heaped against them. There are problems in connectivity, problems of excessive billings and issues on unsatisfied contractual commitments on the part of these firms. These firms have been operating for several decades now and their corporate practices, unfortunately are perceived largely as exploitative by nature. Many subscribers of telecommunication services feel underserved, overly charged and worse, robbed. 

Let’s set aside that malicious insinuation of favoritism and just analyze Duterte’s attacks on their faces and you’ll agree with him on this. Yes, probably Duterte wants these services to be managed by his closest business associates or even foreign firms like Chinese firms, but why are there no public uproar about this says much about the real reputation of these firms in the eyes of the consuming public. Absence of people going to the streets and militating against the president’s claims indicate how high in terms of moral standi, Duterte’s claims are against these telcos. 

Instead of resisting, why not just improve your services, huh, Smart and Globe? 

 

 

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