MEMBERS of the yellow tribe will mark today the 30th anniversary of what they call people power revolt. Hopefully, their numbers will be small enough to confine themselves to a road which is perpendicular to the 23.8-kilometer Epifanio delos Santos Avenue (EDSA, formerly called Highway 54.
The restriction may be justified by the fact that not many Filipinos believe anymore in EDSA’s spirit of unity against the alleged dictatorial regime of the late President Ferdinand Marcos. To some who choose to forget EDSA day even if February 25 has been declared a holiday, the late President Marcos was even a better leader than the first woman president who succeeded him.
This piece, however, is neither about EDSA nor about the yellow followers of the late President Corazon Aquino, whose son is the present temporary occupant of Malacañang Palace. I prefer to write again about the failed legacy of the first woman president of the Philippines, which was Hacienda Luisita Inc. (HLI), as I did on February 27, 2014.
Stock corporation
Why HLI? Why don’t I write about the uprising that had, as claimed by the yellows, successfully driven the Marcoses out of Malacañang Palace?
I am sticking to the topic that is HLI to illustrate how, as the Supreme Court has ruled, shares of stock could never replace a piece of farmland that the hacienda’s tenant farmers truly deserve to own.
HLI was a circumvention of the agrarian reform law. It was not only a frustration even as it was mandated under the governing provisions of the Comprehensive Agrarian Reform Program (CARP) of the late first woman president.
The agrarian reform version of Aquino the mother was bound to fail from the day HLI farmers agreed to become its stockholders on May 11, 1989. After 22 years, however, the high court upheld the Department of Agrarian Reform’s decision which declared as illegal the stock certificates instead of farm lots in complying with the law on agrarian reform.
Not beneficial to farmers
Here are the reasons why Cory’s version of agrarian reform was intended to benefit her family’s hacienda and not the tenants:
Aside from not being compliant with the agrarian reform law, HLI deprived its tenants the opportunity to own a piece of the property. Shares of stocks could never replace farm lots, which the Cojuangcos tried to impose on most of their tenants. Those who agreed to become HLI stockholders did not know what they were getting in exchange for farm lots. The company in which they were to own 37 percent, or even more, would eventually collapse with an accumulated deficit of more than P1 billion.
What happens to a company that has incurred that kind of deficit and continues to lose money? Definitely, it is bound to end in liquidation by the time its creditors start filing collection suits against it.
So, what happens to stockholders of such a bankrupt company?
In the order of priorities of claims against the assets of financially distressed corporations, the government enjoys the right to be paid ahead of other claimants, then the suppliers, workers, secured creditors and finally, the unsecured creditors, in that order. Being the tail-enders among claimants, the stockholders would get nothing.
Liquidation
In the case of Hacienda Luisita, had it been liquidated, the Bureau of Internal Revenue would have run after it for unpaid taxes, if it had any. Unluckily for the hacienda’s tenants-turned stockholders, as owners of a stock corporation, they would have been at the tail-end of the list of claimants.
Luckily, the high court ruled against the Cojuangcos by outlawing CARP’s stock distribution scheme that could have been a strategy to preserve one family’s ownership of 4,915 hectares of farm lands instead of distributing them to their tenants.
Had the SC’s ruling gone against the farmers, HLI would have served as the model for other wealthy families with vast tracts of tenanted farm lands. Unfortunately for the very rich, the high court saw in the Cojuangcos’ hacienda a diversionary tactic against the successful implementation of the Agrarian Reform law.
Today, the temporary resident of Malacañang Palace will probably join the yellows’ celebration of a forgotten EDSA spirit. He would probably wish his late mother were still alive to witness what to him would be a historic event, which it is obviously not.
Some, if not many, of those who were at EDSA on February 25, 1986 also wished that his mother should have lived long enough to have witnessed how the high tribunal led by Chief Justice Renato Corona nullified the distribution of stock certificates that she had conceived to protect the inheritance of her children.
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