Regime of Marcoses, cronies, kleptocracy

Regime of Marcoses, cronies, kleptocracy

Editor's Note: Starting Sept. 21, the 42nd anniversary of the proclamation of martial law by President Ferdinand Marcos, we have been running a series of articles to remember one of the darkest chapters in Philippine history. The articles are necessarily commemorations and more so a celebration of and a thanksgiving for the courage of the men and women who endured unspeakable pain and loss to overcome the Marcos dictatorship and regain our freedoms. These are some of their stories.

MANILA, Philippines - "We practically own everything in the Philippines-from electricity, telecommunications, airline, banking, beer and tobacco, newspaper publishing, television stations, shipping, oil and mining, hotels and beach resorts, down to coconut milling, small farms, real estate and insurance," said Imelda Marcos, talking to the Inquirer in 1998 while she disclosed her plan to file an intervention suit against the cronies of her husband.

Imelda said the Marcos family accumulated its wealth "without dipping into government coffers."

Former Senate President Jovito Salonga challenged Imelda's claim, saying that the Marcoses had started raiding the government coffers barely two years into the first term of President Ferdinand Marcos in 1965, with his wife using intelligence funds to finance her foreign trips as first lady and stashing part of the money in Swiss banks.

In his book "Presidential Plunder: The Quest for the Marcos Ill-gotten Wealth," Salonga enumerated the ways by which the Marcoses acquired and safeguarded ill-gotten wealth.

Modus operandi

He said these included the creation of monopolies in certain vital industries and placing them under the control of Marcos cronies or associates, citing the sugar industry under Roberto Benedicto and coconut industry under Eduardo Cojuangco.

Another technique was the outright takeover by Marcos relatives or cronies of large public or private enterprises with nominal amounts as consideration. Case in point: the business and assets of National Shipyard and Engineering Co. and other related government-owned or -controlled entities were taken over in 1972-1973 by Baseco, a private corporation dominated by Marcos and Alfredo "Bejo" Romualdez, a brother of Imelda.

"That's how [Imelda] and her husband raided government funds," said Salonga, who served as the first chair of the Presidential Commission on Good Government (PCGG).


The PCGG was created in 1986, three days after the inauguration of Corazon Aquino as President, to recover the ill-gotten wealth of Marcos, his immediate family, relatives and cronies.

Because of the massive ill-gotten wealth amassed by the Marcos family and its cronies, the Marcos regime has been called a kleptocracy (from the Greek words for thief and rule).

In hearings in 1986, then US Rep. Stephen Solarz said the Marcos couple looted the Philippine treasury of millions of dollars to buy real estate in the United States. Solarz accused Marcos of running a kleptocracy and enriching himself and his wife at the expense of his country's citizens.

According to a 2003 ruling of the Supreme Court, assets presumed to be ill-gotten include Marcoses' wealth in excess of their total legal income of around US$304,000 (S$387,380) from 1965 to 1986.

Almost 30 years since its creation, the PCGG has recovered P167.5 billion, or about US$4 billion, less than half of the US$10-billion fortune believed to have been amassed by the late dictator, who stayed in power for 21 years.

The amount recovered is the aggregate cash value, as of February, of all accounts hidden in local and foreign banks, commercial and residential properties, shares in companies here and abroad, artworks and valuable personal effects that had been surrendered to the PCGG or awarded by various courts in the Philippines, Switzerland and the United States.

SMC shares, coco levy

The biggest single recovery (40 per cent of the total) was in 2012-P71.6 billion from 24-per cent block of San Miguel Corp. (SMC) shares, including dividends and accrued interest, which the government claimed were acquired with coconut levy funds.

The 24 per cent was part of the 47-per cent block of SMC shares sequestered by the PCGG on the ground that these were illegally acquired by the dummies of Marcos using funds from a tax imposed on coconut farmers from 1973 to the 1980s.

The Supreme Court ruled in 2012 that the 24 per cent (originally 27 per cent but diluted and reduced because of SMC's expansion) belonged to the government in trust for the country's coconut farmers.

But the high court ruled that the remaining 20-per cent block claimed by businessman Cojuangco had been legally acquired by the crony whom Marcos had appointed as administrator of the levy funds.

Swiss bank deposits

The Swiss bank deposits of the Marcoses constituted a fifth of the recovery, or an estimated P35 billion, which includes the P1.3 billion (US$29 million) recovered in February from the WestLB Singapore accounts.

The WestLB Singapore accounts were part of the ill-gotten wealth that the late strongman kept in various Swiss bank accounts under dummy foundations. In 1997, the Swiss Federal Supreme Court ordered that these deposits be returned to the Philippine government.

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