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PhilStar Business

An outlier taipan

Over the past weeks, I have been writing about how our economic elites have preferred to invest in protected and rent-seeking industries rather than in basic industries that will make our economy internationally competitive.

Context & Analysis

In the Philippines, capital has long flowed toward sectors where profits are secured by barriers rather than productivity. Licenses, franchises, import barriers, local content rules, and complex permits can make a modest operation earn returns that look less like entrepreneurship and more like regulatory capture. That is why a business leader who builds scale in exposed, competitive industries draws attention: it suggests a different theory of how wealth should be made.

For businesses and consumers, the distinction matters. Investment that relies on protected margins can crowd out capital from factories, logistics networks, energy systems, and export-oriented services where competition pushes down costs and raises quality. It can also shape public policy in ways that protect incumbent advantages, leaving shelves more expensive, supply chains thinner, and employment less tied to measurable productivity. In a country still trying to lift living standards beyond low-wage services and remittance-driven consumption, the direction of elite capital is not just a corporate strategy question; it is a national-development issue.

The regulatory backdrop has been slowly shifting. Agencies such as the Philippine Competition Commission, DTI, SEC, and BSP operate in an environment where investors are expected to comply with antitrust, consumer protection, securities disclosure, and financial stability rules. Yet implementation remains uneven across regions and industries. Reform debates over permitting, franchise grants, land use, tax incentives, power market design, and labor costs will determine whether unconventional investment behavior becomes a pattern or remains an exception.

What to watch next is not merely which large group expands into new sectors, but whether policy rewards measurable efficiency. Look for changes in how permits are processed, how competition cases are resolved, whether public procurement opens to more bidders, and whether PSE-listed companies disclose governance risks rather than hiding them behind family control. If capital begins chasing export competitiveness instead of protected margins, the Philippine economy may gain a rare advantage: growth that is less dependent on who knows whom, and more dependent on what can actually be produced and sold.

Analysis by IJE Software — original commentary on the story above.

This is an excerpt. Read the full article at the original source:

Source: philstar.com

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