Philippines - Mass Revolt Forces President Estrada to resign

The events last week looked just like a re-run of the "People's Power" movement in 1986 when the hated dictator Ferdinand Marcos was overthrown by a mass uprising in the cities of the Filipino archipelago. So it will surprise nobody that this extraordinary sequence of events has been dubbed the "People's Power 2" movement by local activists and by the media.

The events last week looked just like a rerun of the "People's Power" movement in 1986 when the hated dictator Ferdinand Marcos was overthrown by a mass uprising in the cities of the Filipino archipelago. So it will surprise nobody if this extraordinary sequence of events has been dubbed the "People's Power 2" movement by local activists and by the media.

We had all the ingredients for a volatile political drama over the last few weeks: a brutal and provocative interruption of the impeachment trial when the majority of senators voted not to open an envelope with incriminating evidence of corruption against the president; a tense stand-off of the different factions in the state apparatus; the call for a new "People's Power" protest by the bourgeois opposition led by former president Cory Aquino, Fidel Ramos, and serving vice-president Gloria Arroyo supported by left-wing organisations, NGOs and church groups; the mass demonstrations in Metro Manila where more than 1 million people gathered to demand Estrada's resignation; the strikes by factory workers; the movement of students, workers and urban poor; the avalanche of defections by former allies in the House of Parliament; the paralysis of his administration; the split amongst the highest magistrates; the condemnation by the Catholic Church; the pressure from the business world and the financial markets; and finally the rupture at the top in the military chain of command as a result of the withdrawal of support by the Minister of Defence, the head of the Police and the Chief of Staff of the Armed Forces of the Philippines (AFP).

The last minute desertions at the top of the armed wing of the state were due to the realisation that they would be unable to repress the massive tide of resistance (despite manoeuvres of intimidation with armoured vehicles and verbal threats against the "interest groups" trying to take advantage of the situation); and the risk of split within its own ranks (in October 2000 a call for the dismissal of Estrada was issued by a semi-clandestine group in the military which describes itself as the "Soldiers' Democratic Movement"). Clearly the general staff were preoccupied that their attitude would lead to a general breakdown of the unity of the armed forces, a very dangerous situation in the face of the active Muslim insurrection in the south of the archipelago and the activity of the Maoist-led National People's Army. If more and more bourgeois rats started to jump off the sinking ship it was not only to save their skin. More generally the whole of the business world was preoccupied by this movement leading to a general backlash against the system. Such an evolution was inherent in the situation. The whole system was disintegrating and was dominated by chaos. How can you else explain the decision of the management of 450 factories in Metro Manila with between 70 and 1200 workers to allow (!!) them to participate in the mass demonstrations when they were faced with the call for a strike by militant unions like the KMU. Clearly they were very anxious not to be associated with the decaying regime.

Mafia State

What started as a quarrel between corrupt political thieves opened a deep divide in the bourgeois class and led to a serious crisis of the regime. All the elements at the different levels of the state apparatus have been realigning themselves to stay out of the spotlight and out of the splashes of the Jueteng scandal. This is of course to safeguard their positions and privileges. The scandalous revelations of Estrada's corruption did not immediately and spontaneously throw the masses onto the streets. But the different attempts of the bourgeois opposition and of Estrada himself to call for popular support and their resorting to extra-parliamentary mobilisation encouraged the masses in the cities in particular to take to the streets. The stubborn refusal of Estrada to resign, and his blatant manoeuvres heightened to the extreme the tensions between the opposing bourgeois factions. It generated a general picture of a deep impasse in the ruling class and its political personnel. It created the possibility of a general rejection of the established order. It also uncovered the general "criminalisation" of the state and in particular the attempt to centralise the illegal gambling revenues in the hands of the president.

This process is of course not new and did not start with Estrada's presidency 18 months ago. However under Estrada's leadership it reached a new stage (see addendum below). A general crisis as to the legitimacy of the fundamental state institutions followed. More experienced bourgeois classes like the British ruling class have always tried to keep their differences behind closed doors. The reason for this discretion is evident: they know that there is always a third party listening and who would like to take advantage of the situation of indecision, division and weakening to further its demands. That third party is the working class and the other oppressed layers. Lenin was right when he stressed the importance of "fissures in the ruling class through which the oppressed classes will clear a way for expressing their indignation and dissatisfaction."

Again, Lenin helps us understand what kind of crisis the Philippines is going through with his very enlightening description of the situation in Russia in 1913: "A nation-wide political crisis is in evidence in Russia, a crisis which affects the very foundation of the state system and not just parts of it, which affects the foundation of the edifice and not an outbuilding, not merely one of its storeys. No matter how many glib phrases our liberals and liquidators trot out to the effect that 'we have, thank God, a constitution' and that political reforms are on the order of the day (only very limited people do not see the close connection between these two propositions), no matter how much of this reformist verbiage is poured out, the fact remains that not a single liquidator or liberal can point to any reformist way out of the situation." (May Day Action by the Revolutionary Proletariat, 1913). Those words could have been written yesterday in the Philippines.

This is clearly what has happened now in the Philippines: where the indignation of the oppressed at President Estrada's unchecked pillage and enrichment while they themselves have to suffer a steep erosion of their revenues due to the economic crisis; the fierce and shameful infighting between the bourgeois factions. The incapacity of the bourgeois opposition to deal with this corruption via constitutional means has left the masses only one option: that of mass action.

Unparalleled scope of corruption

When former political ally and friend, Ilocos Sur governor Luis Singson revealed last October that the president had taken more than $7.7 million in bribes from the operators of an illegal gambling racket known as "Jueteng" and another $2.5 million from provincial tobacco taxes it signalled a clear political manoeuvre from a faction of the national and international capitalists questioning his presidency. The allegations of this former friend were to be corroborated later in the impeachment trial by the House of Representatives.

Over the last two weeks damning evidence has come to light in the impeachment trial of Philippine President Joseph Estrada, linking him to a bank account under the fictitious name of "Jose Velarde" at the Equitable PCI Bank. According to the prosecuting team, money in the account came from payoffs from the illegal numbers racket "Jueteng". Last month Clarissa G. Ocampo, one of the bank's senior vice-presidents, testified that she had gone to the presidential palace on February 4, 2000 and sat alongside Estrada as he signed documents related to a US$10 million trust account using the alias. On January 2, Manual Curato, the bank's legal counsel, corroborated Ocampo's testimony, saying he was also present during the signing. The prosecution allege that the trust and a cheque for US$1.4 million, used to pay for a luxury mansion for one of Estrada's mistresses, are part of a US$24 million savings and current account held at the bank for Estrada.

His mistress Laarni Enriquez, who was due to testify on January 17, fled the country last week. Estrada's ownership of the bank account is a key piece of evidence in the prosecution case as it shows that the president had far in excess of his declared assets of US$700,000 and therefore breached the country's anti-graft laws by failing to declare his true extent of his wealth. Moreover, the account confirms that Estrada earned more than his presidential salary (officially US$1,000 a month) and adds weight to previous evidence given by his former friend Luis Singson. When Ocampo gave further evidence in early January, she dropped another bombshell. She testified that just six days after the impeachment trial began on December 7, an attempt was made to switch the ownership of the incriminating bank account to one of Estrada's close friends - Jaime Dichaves - and to backdate the documents to February 2000. In other words, Dichaves, who is said to have made a fortune by trading in telecommunications frequencies handed to him by the Estrada administration, was to be the fall guy for the president. Ocampo testified that she had been directed to draw up the necessary documents by PCI bank chairman George Go, another of Estrada's close friends, who resigned his post on December 19 and fled the country on January 12, citing health reasons and death threats. The transaction failed to go through mainly because "Velarde" was not on hand to sign the transfer. According to Ocampo, the attempted transfer, which involved herself, Go and Dichaves, took place in the private office of Estelito Mendoza - Estrada's leading lawyer in the impeachment trial and an attorney general under the Marcos regime.

Mendoza has denied any involvement or knowledge of the transaction, saying that he was just doing some associates a favour by letting them use his office. There have been calls for him to step down from Estrada's defence team and he could face the ethics investigation committee. At the end of last week, evidence was given on another charge - that Estrada had instructed former Securities and Exchange Commission (SEC) chief Perfecto Yasay to clear one of the president's business associates, Dante Tan, of insider trading involving gaming firm BW Resources Corporation. Stock in the company had risen more than 5,000 percent in the first nine months of 1999 before collapsing. According to Yasay, Estrada had called him five times between October and November 1999, saying on the fourth occasion: "Speed it up. You clear Dante Tan, you clear BW. I'm giving you three days. I am banking on you." Yasay resigned his post last February under pressure from the president. Tan was indicted for securities fraud last month. Yasay's testimony was corroborated by Estrada's former finance secretary Edgardo Espiritu, who told the Senate that the president had BW shares and had made a huge profit. He also alleged that Estrada had ordered the government-run Philippine National Bank to lend 600 million pesos to BW Resources in July 1999 even though the SEC was already investigating it.

According to the prosecutors, the second envelope which the senate voted not to open in the impeachment trial would have proven that Estrada had amassed US$66 million in bribes and kickbacks under four aliases during his 18 months in office.

General crisis of the bourgeois class

Estrada and his clique clearly saw his election to head of state as a licence to plunder it. Although this was becoming more and more intolerable, this was not the real reason for the growing opposition against Estrada in the business world, the IMF and the United States. The main reason for their behaviour is not moral indignation at the behaviour of Estrada. No, the fact is that he became more and more unreliable for putting into practice the recipes of the IMF, the World Bank and the USA. Even worse, he became a liability.

Just like in Indonesia, a mighty and even more unstable neighbour, the political leadership of the state has been characterised by indecision, inefficiency and contradictory directions. This is a general trend of weakened and feeble bourgeois rule in South East Asia, particularly since the meltdown of 1997. Thailand, the Philippines and Indonesia are good examples of this phenomenon. Just like Gus Dur in Indonesia, Estrada has upset the interests of the United States in the region (favours granted to the Chinese businesses with links to mainland China, whereas US businesses have strong links with its ally Taiwan; the insult to the USA in accepting Libya's offer to mediate in the affair of the hostage crisis in Mindanao; maintaining protectionist measures to safeguard the local economy from foreign monopoly capital, etc). More importantly, the IMF is dissatisfied with the lack of measures to restrict public expenditure. Recently the USA made it clear to him that he was on his own in his opposition to the impeachment trial and that they would not support any measure outside the framework of the constitution. They clearly supported Gloria Arroyo, a former Harvard student and classmate of Bill Clinton, who would be much more inclined to listen to the dictates of the USA.

American imperialism will nevertheless face further problems in their efforts to strengthen subservient bourgeois democracies in South East Asia. Given the prolonged economic crisis this region is facing, all former sources of stability are crumbling, seriously destabilised, and rapidly losing legitimacy in the eyes of the masses. Indeed there is no space for stable bourgeois democracies. When Estrada was put up as a candidate for the presidency 2 years ago by powerful friends (not a few of them from the old Marcos family and clique, let's not forget that Estrada was a Marcos loyalist) it was not for his personal qualities but because of his "winnability" as they say in the Philippines. A former actor pretending to be a champion of the poor he could rally the desperate poor masses of the country who looked for a saviour. He looked as if he would serve the poor. But during his election campaign he made it clear he would obey the IMF and World Bank who have the poor in their firing line. Those factions who put him to power wanted of course control over the government for themselves. The presidential palace was transformed into a haven for gangsters, illegal gamblers, kidnappers and other "state criminals". The palace became something like the pirates' island, where the pirate in chief, Estrada was maintaining a stable of mistresses and amassing a fortune very quickly. So it is not surprising that the dissatisfaction of the impoverished masses has been steadily increasing.

Unemployment has risen from 9.3% in January 2000 to 13.9% in April 2000 reaching a 9 year high. Foreign investment has not returned since the 1997 collapse. Capital flight is endemic. The peso, the national currency, is constantly losing value. In this situation it is no accident that the different bourgeois factions are starting to blame each other for the decline of the country.

The lack of stability and the lack of unity of vision on how to solve the urgent problems of the Filipino nation are also at the root of this political crisis. When the open fight of the bourgeoisie came to the surface, the working class movement was weak and semi-dormant. The workers, the urban poor and the poor peasants were busy struggling to survive this unprecedented economic crisis. The different bourgeois factions who wanted to settle their fight started to appeal for the support of the masses. Of course they always pretend to serve the interests of the poor and not their own greedy interests. Especially Estrada was very keen to present the campaign against him as a plot of the business community. Doing this he hoped to maintain the support of the poor. The other faction around Gloria Arroyo presented their movement as a movement to re-establish morality in politics. However Gloria Arroyo has been an obedient executor of the IMF privatisation and deregulation plans, causing misery and despair to thousands of people. Her moral authority is also in question as a result of her family relations with Bong Pineda, who has been tagged one of the country's top illegal gambling lords. Gloria Arroyo is also the godmother of Bong Pineda's son.

Focusing on the moral question they tried to distract the restless masses from the complete rottenness of the capitalist state apparatus. The experience of the last months is a good "in vivo" lesson on how the state really functions. What has been disclosed in the last months is just the normal functioning of the state in the epoch of capitalist decay. As a result of the drying out of legal sources of profit because of the crisis of capitalism, further corrupting the state has become one of the main sources of lucrative activity for a layer of capitalists. The only morality valid in the capitalist mind is that of making profit at all cost. When the bourgeois try to put the masses in motion they do it of course for their own interests. This is a dangerous situation for the working class especially when it leadership is pursuing a policy of class collaboration. But when the working masses move into action they follow a logic of their own. They try to bypass the limits of the demands imposed on them, they use their classical methods of action (strikes, mass demonstrations, insurrections etc).

As the scope and the depth of the corruption became clear to the working class, the students and other poor layers of society, the indignation grew. The corruption scandal around Estrada became the mother of all injustices and the fight to topple him the mother of all fights. This is especially true if the working class is partially blocked in their classical actions on the industrial front by the fear of unemployment and a reformist trade union leadership. The battle for the removal of Estrada became a symbolic fight against daily social injustice. As a result of the class collaborationist policies of the social-democratic left, the leadership of this movement was abandoned to bourgeois figures like Corazon Aquino (member of one of the biggest families of landlords), Fidel Ramos (former chief of staff of the armed forces under the Marcos dictatorship), and Gloria Arroyo (vice-president and close collaborator with the IMF and US imperialism).

More importantly, the lack of an independent working class movement can be blamed on the role played by the Communist Party of the Philippines, the New People's Army with the intervention of one of their legal cover organisations, Bayan (new patriotic front), and the new party, Bayan Muna, which they launched to participate in the local May 2001 elections. In an opportunist way they joined in with Gloria Arroyo. They describe it as a critical alliance. At the press conference where the Defence Minister and Chief of Staff of the AFP declared Gloria Arroyo as the legitimate successor of Estrada, the chairman of Bayan Muna agreed without criticism. They justify their policy of class collaboration by invoking the "fight against imperialist domination", and against the rule of the comprador bourgeois, landlords and capitalist bureaucrats. Here we are supposed to believe that Gloria Arroyo somehow represents the national and "progressive" bourgeoisie ready to fight corruption and the IMF dictates.

The main leader in exile, Jose M. Sison of the CPP-NPA, issued a press statement in which he correctly underlines that "the crisis is not due simply to the corruption and repressiveness of the Estrada ruling clique." He explains it is because "these are in fact the consequences of imperialist domination. The crisis is due to the fundamentally oppressive and exploitative workings of the ruling system of big compradors and landlords who are servile to foreign monopoly capitalism. The evils of this system will continue to inflict suffering on the people and incite them to wage all forms of revolutionary struggle. The revolutionary forces and people will continue the struggle for national liberation and democracy against foreign monopoly capitalism, feudalism and bureaucrat capitalism." As a good Stalinist he artificially divides the bourgeoisie into a national capitalist class and a comprador class. The national bourgeois is supposed to have a progressive and anti-imperialist potential. It becomes thus an ally in the so-called national democratic revolution (a strategy of two watertight and separate stages on the road of the revolution) which the CPP counterposes to the strategy of the permanent revolution. As in any other country in the underdeveloped capitalist world no substance can ever be given to this "progressive and anti-imperialist bourgeoisie". Bayan's attitude, and more generally that of the CPP because of their support amongst left activists has strengthened the bourgeois domination over the second edition of the "People's Power" movement. By refusing to challenge the Aquinos, the Ramoses and the Arroyos, they have strengthened the illusions in this faction of the bourgeois.

An authentic Marxist force should of course have participated in this movement but it would have brought forward the real class demands of the workers, the urban poor and the peasants (not only on the socio-economic front against privatisation/deregulation, against unemployment, etc - but also on the question of the state - for a general clean-up of all corrupt elements at all levels of the state by democratically electing committees of workers, peasants, etc). It would have explained the dangers of the workers being just an appendage of different bourgeois factions. Marxists would have denounced the bourgeois leaders with the necessary tact and methods taking into account the illusions of the masses. Marxists would have dedicated their efforts to building an independent working class leadership. It would explain that the workers and the poor peasants can only rely on their own strength.

The Filipino masses, and more generally the masses of South East Asia as a whole can learn many lessons from this experience. The new "People's Power" movement has exposed the weakness and rottenness of the bourgeois state. It has also revealed the great potential for struggle of the working class in the cities. Again it has shown that the fundamental social class for the socialist revolution resides in the cities - it is the working class. The developments over last week also reaffirm the classical methods of struggle of the working class - mass demonstrations, strikes, insurrections, etc. It also underlines the need for a independent working class leadership with a class programme separate from that of even the most "radical and democratic" sounding bourgeois democrat. The experience of seeing their own power will not be lost on the masses. The inevitable disillusion with the Arroyo government will open a new period of questioning and turmoil in the left which will give new opportunities for the development of a real Leninist policy.

Jean Duval,
January 23, 2001

Readers may also be interested in the (longer) article we have on our site regarding the first "Peoples Power" revolution: Perspectives for the Philippine Revolution. This was written in April 1987, at a time when a ferment of discussion had opened up in the Communist Party of the Philippines. This article was presented as a contribution to the debates taking place.


This short piece provides details about the extent of corruption in the Phillipines. It is written by Dr. Walden Bello, executive director of Focus on the Global South, a research, analysis, and advocacy programme of the Chulalongkorn University Social Research Institute, and Professor of Sociology and Public Administration at the University of the Philippines.

The Shakedown State

Crime and corruption are prominent features of governments the world over, but in the normal state, the sources of corruption are forces that subvert the machinery of government from without. The mafia is not indigenous to the government; it corrupts and subverts public officials from the outside. In the Philippines, on the other hand, organised crime external to the government apparatus has been rare. Of course, small-time crooks and gangsters have always existed outside the officialdom. Syndicates are, however, another thing. Syndicates - whether in gambling, drugs, or kidnapping - are unthinkable without the central organising role played by government officials and politicians. Even before the dictatorship of Ferdinand Marcos (1972-86), the pattern was for local or regional politicians to absorb petty criminals or toughs into their warlord bands, to be used to muscle into, control, and expand lucrative sub rosa activities such as illegal gambling, prostitution, or protection rackets, which served as additional mechanisms to squeeze the economic surplus from the citizenry that could be deployed for increasingly expensive electoral struggles.

The reign of Ferdinand Marcos in the 1970s and early 1980s was another important step in the "mafiasation" of government. The loss of competitive politics at the national, regional, and local levels led to the erosion of the already inadequate checks that the government machinery posed to regional and local political clans bent on expanding their access to the social surplus via criminal methods. Marcos-linked political clans were able to bring to a new level - the provincial and in some cases the regional - the organisation and control of activities like Jueteng, prostitution, and drugs. At the same time, the expansion and centralisation of the central administrative machinery that marked the Marcos years opened up tremendous opportunities for economic mobility for middle-class or lower-middle-class bureaucrats. With the traditional elites maintaining tight control over land and the private sector, the state became the choice arena for entrepreneurship by restive and ambitious elements from the more modest classes. Syndicates or sindicatos not only flourished in the traditional cesspools of corruption like the Bureau of Internal Revenue and the Department of Public Works and Highways but emerged in other agencies such as those on top of agrarian reform, energy, education, and natural resources. The economic crisis that brought economic growth to virtually zero from 1983 to 1993 made the government's position even more attractive as a site of private capital accumulation, despite the personal probity of the top people in government like Presidents Corazon Aquino and Fidel Ramos. Indeed, it was under Aquino that a government reorganisation was undertaken that, unwittingly, created a massive new site of graft. The agency promoting the exploitation of the country's natural resources was joined to that responsible for protecting the environment to form the new Department of the Environment and Natural Resources. The upshot was the creation of tremendous opportunities for money-making via the sale of environmental permits and timber licences to loggers, mining firms, and other private sector entities that had no intention of complying with environmental laws. Solidly entrenched, the mafia was able to thwart efforts at reform by progressive officials until, under the Estrada administration, it finally secured the top leadership posts in the agency.

The consequences of the massive expansion of the security forces under Marcos were similarly explosive. Many in the uniformed elite either lent themselves out as enforcers for local or national cronies of the dictator or carved out new illegal sources of income to supplement salaries that, more often than not, failed to match their new political role and status. By the time the Marcos regime ended, not a few officers had discovered that their command over men and firepower could be translated into successful entrepreneurship in the form of kidnapping the rich - especially rich Chinese - for ransom. Why, they reasoned, should this extremely profitable business be left to petty gangsters? With the perquisites of command and payoffs from politicians diminishing after the 1986 People Power Revolution that dislodged Marcos, and with the economic crisis deepening under the succeeding Aquino administration, the organisation of kidnappings moved higher and higher up the chain of command of the military and the police. Ordinary gangsters could never mount the sophisticated operations that involved getting inside knowledge of the net worth of prospective targets from within the banking system. Indeed, when regular gangsters sought to organise independently of the military and the police, they found out the hard way that the men in uniform would brook no competition. Some observers contend that this was the significance of the total rub-out of the upstart Kuratong Baleleng Gang a few years back, an operation carried out by security elites closely associated with the then Vice-President Estrada, like Panfilo Lacson, now the country's top police officer. From a sociological point of view, the most interesting item to come out of the revelations about the division of the spoils of the Jueteng gambling racket is that the main project of the Estrada administration was to centralise crime under the presidency.

Under Estrada, the most profitable criminal activities like Jueteng were to be rationalised, with a sub rosa bureaucracy stretching from the President to the smallest Jueteng collector paralleling and intertwining at key points with the formal hierarchy of government. What was exposed in the Jueteng scandal was probably only the tip of the iceberg. Were the worlds of prostitution, drugs, and kidnapping also on the way to becoming equally centralised under Estrada? Many Filipinos are convinced they were, and are awaiting revelations about the drug-related financial take of the now-impeached President that might surface in the Senate trial. Had the Estrada project not been disrupted, the President would have become the apex of both the state and the underworld. This was the real Estrada Revolution - and Filipinos had thought the man was stupid!

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