Philippine Conglomerates: Their Role in Promoting Inclusive Development

Economic Transformation and Growth in the Philippines: An Analysis of Political Settlements, Rents, and Deals

“…This export composition has resulted in cycles of growth (relatively high growth attained for very short periods), as closed deals within the politically-connected powerbroker sector have stifled competition and hindered the development of more competitive industries through 4 According to our estimates, the contribution to GDP of some of the leading conglomerates of developed nations is larger than those of Filipino conglomerates to the Philippines's GDP. For example, Torio et al (2021) showed that the Philippines's San Miguel Corporation contributed 1.61 percent to the country's GDP in 2018, whereas our calculation for South Korea's Samsung is 5.73 percent of Korea's GDP. In the case of Japan, Toyota contributed 3.33 percent to GDP the same year.…”

“…Philippine conglomerates have wielded significant influence in the business sector and have played a substantial role in the country's economic advancement. Torio et al (2021) found that the top 15 conglomerates in the country generated approximately one trillion pesos of value added, equivalent to 6 percent of the total national output in 2018. 4 These conglomerates predominantly focus on the production of non-tradable goods and rely on regulatory rents, establishing themselves as key players in the powerbroker sector.…”

“…4 These conglomerates predominantly focus on the production of non-tradable goods and rely on regulatory rents, establishing themselves as key players in the powerbroker sector. Appendix Table A1 provides a comprehensive list of subsidiaries associated with conglomerates, as identified by Torio et al (2021), along with their respective rents space classification, based on their primary business areas. Additionally, Appendix Table A2 presents the export activities of the subsidiaries of these conglomerates with the Product Complexity Index associated to product-export.…”