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Tan: Overshadowed by Reality?

Maybe he is the richest Filipino, but you can't say Lucio Tan (right, behind President Estrada) is on a roll, despite the super-crony relationship he's alleged to have with Estrada. That friendship came into question on Sept. 26 when Manila signed an agreement allowing flights to resume between Manila and Taipei. Has Estrada abandoned his biggest campaign contributor? Or did he bow to pressure from the Philippine business community which is suffering under the dispute between Tan's Philippine Airlines and Taiwan's Eva Air and China Airlines? The new deal (actually a revived 1996 arrangement) allows Taiwan's airlines to carry passengers to the U.S. West Coast from Manila — PAL's most lucrative route. While the flight ban was in place, PAL made money. Before that, it operated at a loss.

But the suspension of the Taiwan-Manila flights hurt tourism and slowed Taiwan investment into the Philippines. Monthly arrivals from Taipei dropped 51% from the January-September 1999 average to 6,754 during October-December 1999, when the suspension was in full effect. Up to 200,000 tourists, worth about $200 million, never showed up. And this year the Philippines is the only ASEAN country where Taiwanese investment fell.

In other Tan news, the Court of Appeals dismissed a 27.5-billion-peso ($597 million) tax case against him on a technicality. But prosecutors want a reconsideration of the verdict and people in the streets see Marcos-era favoritism. Having won his case, Tan remains branded as the country's biggest tax evader.

Consider all this and Tan's backtracking on his bid to buy the government's 30% piece of Philippine National Bank after shares dove 60% from the price he agreed to pay. Tan stepped back, claiming he won't put more money into a money-losing bank, 66% of whose loans have gone bad. He only noticed that after making the winning bid? The truth is that no matter what he does, Tan has become the businessman more and more Filipinos love to hate.

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