Philippine Poverty and Farm-Based Economy Have Roots in Colonial Era

Rodino Sawan stepped into the wire harness and dug his toes into the muddy track that threads the sweltering plantation. He pushed forward, straining against the cargo trailing behind him: 25 bunches of freshly harvested bananas strung from hooks attached to an assembly line.

Six days a week, Mr. Sawan, 55, a father of five, tows batches of fruit that weigh 1,500 pounds to a nearby processing plant, often as planes buzz overhead, misting down pesticides. He returns home with aches in his back and daily wages of 380 Philippine pesos, or about $6.80.

One day last year, the plantation bosses fired him. The next day, they hired him back into the same role as a contractor, cutting his pay by 25 percent.

“Now, we can barely afford rice,” Mr. Sawan said. Still, he continued to show up, resigned to the reality that, on the island of Mindanao, as in much of the rural Philippines, plantation work is often the only work.

“It’s an insult,” he said. “But there’s no other job, so what can I do?”

The desperation confronting tens of millions of landless Filipinos stems in part from policies imposed by the powers that controlled the archipelago for centuries — first Spain, and then the United States.

In a region defined by upward mobility through manufacturing, the Philippines stands out as a nation still heavily reliant on agriculture — a legacy of outside rule. Nearly 80 years after the country secured independence, the colonial era still shapes the structure of its economy.

Because the United States opted not to engage in large-scale redistribution of land, families that collaborated with colonial authorities retain oligarchic control over the soil and dominate the political sphere. Policies engineered to make the country dependent on American factory goods have left the Philippines with a much smaller industrial base than many economies in Asia.

“The U.S. forced land reform on a whole lot of different countries in the region, Japan included, because of World War II,” said Cesi Cruz, a political scientist at the University of California, Los Angeles. “But in the Philippines, because they were fighting on the same side, they did not want to punish their ally economically by forcing all these restrictions on them.”

Over the last half century in much of East and Southeast Asia, national leaders have pursued a development strategy that has rescued hundreds of millions of people from poverty, courting foreign investment to construct export-oriented industry. Farmers gained greater incomes through factory work, making basic goods like textiles and clothing before evolving into electronics, computer chips and cars.

Yet in most of the Philippines, factory jobs are few, leaving landless people at the mercy of the wealthy families that control the plantations. Manufacturing makes up only 17 percent of the national economy, compared with 26 percent in South Korea, 27 percent in Thailand and 28 percent in China, according to World Bank data. Even Sri Lanka (20 percent) and Cambodia (18 percent), two of the poorest countries in Asia, have slightly higher shares.

The shortage of manufacturing and the lopsided distribution of land are part of the reason that a country with some of the most fertile soils on earth is plagued by hunger. It helps explain why roughly one-fifth of this nation of 117 million people is officially poor, and why nearly two million Filipinos work overseas, from construction sites in the Persian Gulf to ships and hospitals worldwide, sending home critical infusions of cash.

“You have an export strategy for Filipinos,” said Ronald U. Mendoza, an international development expert at Ateneo University in Manila. “This is really a middle class that we should have had in the country.”

Those who remain at home in rural areas typically plant and harvest pineapples, coconuts and bananas, laboring largely for the benefit of the wealthy, powerful families that preside over land.

The plantation where Mr. Sawan works is controlled by Lapanday Foods, which exports bananas and pineapple to wealthy countries in Asia and the Middle East. Its founder, Luis F. Lorenzo Sr., was a former governor of Davao del Sur, a province in Mindanao, and a senior executive at Del Monte, the multinational fruit conglomerate. His son Luis P. Lorenzo Jr., known as Cito, is a former agriculture secretary of the Philippines.

The founder’s eldest daughter, Regina Angela Lorenzo, known as Rica, oversees Lapanday from a corporate office in the Philippine capital, Manila, in a district full of five-star hotels, glittering restaurants and luxury car dealerships. She described her family as “a small player” in agribusiness.

“We employ people,” she said. “We add tax revenue. We make productive use of the land.”

Her sister Isa Lorenzo owns art galleries in Manila and Lower Manhattan — Silverlens New York, where she features modern Southeast Asian artists. An inaugural exhibit last fall put the spotlight on “issues around the environment, community, and development,” including the question: “Who owns the land?”

‘Our Ancestors Are Buried There’

Disputes over who owns the land dominate life for the Manobo, an Indigenous tribe in the highlands of central Mindanao.

For generations, members of the community lived along the banks of the Pulangi river, under the shade of teak and mahogany trees. They harvested cassava, hunted wild boar and caught fish from the river. They drank from a pristine spring.

“Our ancestors are buried there,” said the chief of the community, Rolando Anglao, 49. “That is the land that we inherited from them.”

There, he indicated, gesturing toward the other side of a busy highway. The forest was gone. In its place was a pineapple plantation stretching across nearly 3,000 acres. The land was ringed by barbed wire and guarded by an armed security brigade.

According to Mr. Anglao, the Lorenzo family seized the tribe’s land. One morning in February 2016, roughly 50 men arrived in trucks and began firing their rifles in the air, sending 1,490 members of the tribe scurrying away, he said.

Mr. Anglao, his wife and their two sons were among 100 families that live in shacks constructed with plastic and sheets of corrugated aluminum on the shoulder of the highway. They drink from shallow wells tainted with chemical runoff from surrounding plantations, he said. Children are frequently sick with amoebic dysentery. Tractor-trailers barrel through at all hours, their air horns blaring, carrying loads of sugar cane and pineapples to processing plants.

Over the years, the tribe has tried and failed to persuade local prosecutors to pursue charges against Pablo Lorenzo III, the president of the local company that controls the plantation, and — not incidentally — the mayor of the surrounding town of Quezon.

This year, the tribe secured legal title from the National Commission on Indigenous Peoples, a government body. But the commission has yet to formally record the deed. Mr. Lorenzo has accused the tribe of supporting an insurgency, the New People’s Army, said Ricardo V. Mateo, a lawyer at the commission’s office in Cagayan de Oro. That has prevented the tribe from reclaiming the land by prompting an investigation by the Philippine military.

Meanwhile, the security cordon remains, with the tribe on the outside.

“It’s the power of Pablo Lorenzo,” Mr. Anglao said. “He’s above the law.”

In an interview at city hall in Quezon, Mr. Lorenzo denied seizing the land.

“It’s a scam,” he said. “Those people claiming that — they were never even on that land.”

Still, he acknowledged offering the tribe “a small amount of money” to relinquish its claims.

His family’s wealth traces back to his grandfather, who worked as a corporate lawyer representing American investors, Mr. Lorenzo said. He personally owns 15 to 20 percent of the company that developed the plantation, he said.

Colonial Engineering

Americans did not create the inequality that defines the Philippine economy. Spanish authorities allowed Christian missionaries to seize land while forcing natives to make onerous rent payments.

But after the United States captured the archipelago following a war with Spain in 1898, the colonial administration reinforced the uneven control of soil through trade policy.

Agribusiness ventures in the Philippines gained access to the American market, free of tariffs. In exchange, American industry secured the right to export manufactured goods to the Philippines without duty. Tariffs on other countries kept out products from the rest of the world.

The United States used the Philippines as a laboratory for economic policies that were contentious at home, among them pegging the value of the national currency to gold, said Lisandro Claudio, a historian at the University of California, Berkeley. That kept the Philippine peso strong against the dollar, lowering the price of American goods and discouraging the creation of national industry.

Even after the Philippines secured independence in 1946, that basic arrangement held. The country had been decimated by World War II, prompting the United States to deliver $620 million in reconstruction aid. But the money was conditioned on the Philippines accepting the indignities of the Bell Trade Act, which perpetuated key aspects of the colonial arrangement.

“The most odious part of that treaty was really the peso provision,” Mr. Claudio said. “The Philippine government could not determine the price of the peso without consent from Washington.”

A strong peso has remained a cardinal principle of Philippine policy ever since, in contrast to neighboring countries. From China to Japan to Thailand, officials have favored weaker currencies to make their products cheaper on world markets, boosting their efforts to industrialize.

Meanwhile, the powerful and wealthy families that control business have lacked incentive to innovate, unlike in surrounding economies where land redistribution has generated pressures for risk-taking and experimentation.

“Then you force the next generation to figure out, ‘What can we do to compete?’” said Norman G. Owen, an economic historian affiliated with the University of Hong Kong. “But the United States didn’t do that in the Philippines, and the Filipinos didn’t do that to themselves, and here we are.”

‘A Tough Life’

On a mercifully overcast morning, with low gray clouds blotting out the tropical sun, a team of 48 workers pulled weeds from the soil of a Del Monte pineapple plantation in northern Mindanao.

The leader of the crew, Ruel Mulato, 43, was a third-generation plantation worker. His grandfather had worked for an American boss in a job that has changed little over the decades. Then as now, people hunkered over the soil and used their hands, earning too little to feed their families, forcing many households to borrow from loan sharks.

Mr. Mulato had seemingly escaped that fate. He had worked as a nursing assistant on the island of Bohol, as a security guard in Manila and as a crane driver in Saudi Arabia.

But when his wife died suddenly in 2011, he moved home to take care of his daughter, then only 4 years old.

He took the job that was available — on the plantation.

He has remarried and has three more children. He was hopeful that they would find more rewarding work.

“This is very hard labor,” he said. “It’s a tough life.”