By Hilarion M. Henares Jr.
HOW many times were Filipino pioneers discriminated against by the CB in the allocation of dollars?
This happened in the paint industry when two pioneers, Elizalde and Henares, were given niggardly allocations compared to Johnny-come-lately Sherwin Williams, Connell Bros. (Dutch Boy), Fuller Paints, and many others.
Connell Bros. and Theo. H. Davies (which previously imported Sherwin Williams) were allowed to keep their previous allocations for use in importing other products, in addition to the enormous allocations given them for the manufacture of paint.
This happened in the tire industry, in which Marcelo Rubber Co., pioneered and were refused dollar allocations which were given instead to Goodrich, Goodyear and Firestone.
This happened in the drug industry and in many others. And to be sure that Americans get what they want, an American official by the name of Ed Milans sat on a desk beside Ms. Virginia Yaptinchay in the Central Bank, as she took charge of import allocations in the early days of Control.
Thus did US companies continue to preempt the most profitable businesses in the Philippines. In 1973, Professor Vicente Valdepeńas of the Ateneo University (Undersecretary of Trade at the time of this study) stated that in the wholesale and retail trade, in mining sectors, and in four industry groups, foreign controlled companies predominate.
In the wholesale trade foreign operators accounted for 60.7 percent of the output and 59.4 percent of the input.
In industry they accounted for 52.1 percent of the metal products; 57.6 percent of rubber products; 68.9 percent of chemicals and chemical products; and 100 percent of the petroleum and coal products.
How profitable are US companies and what do they do with their profits?
According BG Bantegui (opus cited), in a study of 108 out of a total of 157 registered US companies over a period of ten years from 1956 to 1965 (roughly covering the period of Control and Decontrol:
1) Out of a paid-in capital of $74.2 million in 1956, they generated $389.3 million in profits in ten years, 524.66 percent in ten years, or an average of 52.5 percent per year on original capital.
2) Of these $398.3 million profit, $369.0 million or 95 percent was remitted back to the parent company, and only 20.3 million or 5 percent was reinvested in the local company.
During the Martial Law era covered by this study (1971-76) on only 31 registered foreign companies, mostly American, the following may be noted:
1) Out of a paid-in capital of P380.7 million at the end of 1971, they generated P1,159 million profit or 305 percent in five years, or an average of 60.1 percent years on original paid-in capital. Original paid-in capital in this case refers to the capital stock outstanding as of the end of 1971, which is equivalent to original investment and stock dividends declared in previous years.
2) Of this P1,159.6 million profit, P537.7 million or 46 percent, was given out as cash dividends, and the balance of P621.9 million. or 54 percent was reinvested.
The biggest profit making firms are 3M Philippines, which averaged 351.8 percent profit per year on original paid-in capital; Rohm & Haas Philippines, 319 percent profit per year; and Pepsi Cola Far East Trade, 202.2 percent profit per year.
Of those who declared cash dividends, the biggest are Pepsi Cola Far East Trade, which declared cash dividends exceeding its profits, P40.98 million cash dividends out of profits totaling P36.98 million, or 110 percent of profits; Globe MacKay Cable and Radio, which declared P45.78 million out of P555.44 million profit, or 82 percent of profits; Ford Philippines, which declared P1.19 million dividends even as it incurred a loss of P7.88 million; and Weyerhauser Phil. Inc., which declared cash dividends also exceeding its profits, P36.1 million cash dividends out of only P30.9 million, or 116 percent of profits.
The profitability during first years of Martial Law (60.1 percent) was higher than in previous years (52.5 percent) and such was the confidence of the US businessmen in Marcos that much more of the profits were reinvested in the local subsidiaries during Martial Law (54 percent) than in previous years (5 percent).
It is hard to believe that from 1956 to 1965, 108 American firms actually declared cash dividends equivalent to 95 percent of their profits. From 1971 to 1976, in spite of the rise of oil prices and the world recession, the 31 firms, mostly Americans, declared only 46 percent cash dividends, and reinvested the rest, as a sign of their approval and endorsement of the Marcos regime.
This happened in the paint industry when two pioneers, Elizalde and Henares, were given niggardly allocations compared to Johnny-come-lately Sherwin Williams, Connell Bros. (Dutch Boy), Fuller Paints, and many others.
Connell Bros. and Theo. H. Davies (which previously imported Sherwin Williams) were allowed to keep their previous allocations for use in importing other products, in addition to the enormous allocations given them for the manufacture of paint.
This happened in the tire industry, in which Marcelo Rubber Co., pioneered and were refused dollar allocations which were given instead to Goodrich, Goodyear and Firestone.
This happened in the drug industry and in many others. And to be sure that Americans get what they want, an American official by the name of Ed Milans sat on a desk beside Ms. Virginia Yaptinchay in the Central Bank, as she took charge of import allocations in the early days of Control.
Thus did US companies continue to preempt the most profitable businesses in the Philippines. In 1973, Professor Vicente Valdepeńas of the Ateneo University (Undersecretary of Trade at the time of this study) stated that in the wholesale and retail trade, in mining sectors, and in four industry groups, foreign controlled companies predominate.
In the wholesale trade foreign operators accounted for 60.7 percent of the output and 59.4 percent of the input.
In industry they accounted for 52.1 percent of the metal products; 57.6 percent of rubber products; 68.9 percent of chemicals and chemical products; and 100 percent of the petroleum and coal products.
How profitable are US companies and what do they do with their profits?
According BG Bantegui (opus cited), in a study of 108 out of a total of 157 registered US companies over a period of ten years from 1956 to 1965 (roughly covering the period of Control and Decontrol:
1) Out of a paid-in capital of $74.2 million in 1956, they generated $389.3 million in profits in ten years, 524.66 percent in ten years, or an average of 52.5 percent per year on original capital.
2) Of these $398.3 million profit, $369.0 million or 95 percent was remitted back to the parent company, and only 20.3 million or 5 percent was reinvested in the local company.
During the Martial Law era covered by this study (1971-76) on only 31 registered foreign companies, mostly American, the following may be noted:
1) Out of a paid-in capital of P380.7 million at the end of 1971, they generated P1,159 million profit or 305 percent in five years, or an average of 60.1 percent years on original paid-in capital. Original paid-in capital in this case refers to the capital stock outstanding as of the end of 1971, which is equivalent to original investment and stock dividends declared in previous years.
2) Of this P1,159.6 million profit, P537.7 million or 46 percent, was given out as cash dividends, and the balance of P621.9 million. or 54 percent was reinvested.
The biggest profit making firms are 3M Philippines, which averaged 351.8 percent profit per year on original paid-in capital; Rohm & Haas Philippines, 319 percent profit per year; and Pepsi Cola Far East Trade, 202.2 percent profit per year.
Of those who declared cash dividends, the biggest are Pepsi Cola Far East Trade, which declared cash dividends exceeding its profits, P40.98 million cash dividends out of profits totaling P36.98 million, or 110 percent of profits; Globe MacKay Cable and Radio, which declared P45.78 million out of P555.44 million profit, or 82 percent of profits; Ford Philippines, which declared P1.19 million dividends even as it incurred a loss of P7.88 million; and Weyerhauser Phil. Inc., which declared cash dividends also exceeding its profits, P36.1 million cash dividends out of only P30.9 million, or 116 percent of profits.
The profitability during first years of Martial Law (60.1 percent) was higher than in previous years (52.5 percent) and such was the confidence of the US businessmen in Marcos that much more of the profits were reinvested in the local subsidiaries during Martial Law (54 percent) than in previous years (5 percent).
It is hard to believe that from 1956 to 1965, 108 American firms actually declared cash dividends equivalent to 95 percent of their profits. From 1971 to 1976, in spite of the rise of oil prices and the world recession, the 31 firms, mostly Americans, declared only 46 percent cash dividends, and reinvested the rest, as a sign of their approval and endorsement of the Marcos regime.
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