Liberalism

Competition is Good Governance

2028 is election year - on May 8, the next presidential election will take place as scheduled after a six-year interval. Incumbent President Marcos Jr. will not seek reelection, as the presidency is limited to a single term. The country is polarized. Will Filipino liberals finally be able to reclaim liberalism’s tried-and-tested tool to make good governance resonate with ordinary Filipinos?

As the 2028 presidential election draws closer, Filipino liberals will likely once again campaign on the promise of good governance.

The spirit of the phrase dominated liberal politics in the Philippines for decades. It paints a picture of the tapat (“honest”) and disenteng (“decent”) government. Campaigners have embraced it with romantic fervor, accompanied by lines like kulay rosas ang bukas (“the future is pink”) and radikal na pagmamahal (“radical love”).

But 2022 delivered a harsh lesson. Good governance is abstract to voters worried about putting food on the table. The winning presidential campaign, meanwhile, found considerable appeal in a simple promise of cheaper rice. However unrealistic that promise may have been, it spoke to an immediate concern. And it won.

By this time, the rebuke of 2022 should have tempered some of our romanticism and redirected our attention to the everyday concerns of citizens. Filipinos continue to place inflation among the country's most urgent problems, while involuntary hunger in September 2026 has surpassed pandemic levels—a record high of 22.6%.

What’s the lesson here? For “good governance” to resonate with ordinary Filipinos, it must center on people’s practical concerns. Filipinos remain deeply concerned about corruption, but even more so about the price of food, electricity, transportation, and housing. The chief task of “good governance,” then, is economic. The quest for moral ascendancy, which has done little but further divide the liberals’ already fragmented base, must take a back seat. Any serious presidential platform must present a coherent strategy for lowering the cost of living.

Fortunately, liberalism already possesses a tried and tested instrument to give greater economic substance to “good governance”. We call it market competition. Oddly enough, calls for greater market competition have become faint, if not altogether absent, within Filipino liberal discourse. It is strange that a political tradition so concerned with limiting power has neglected one of its oldest mechanisms for doing precisely that.

We call for “transparency”, “accountability”, “poverty reduction”, and “affordability”. Yet in neglecting market competition, we have overlooked one of the most effective mechanisms for advancing these ideals. It’s precisely market competition that challenges the restrictions and privileges that allow a handful of businesses to dominate important sectors of the economy, while weakening the political patronage that helps sustain their dominance.

Market and political power

Much of our economic and political problems ultimately stems from concentrated power. This, liberals intuitively understand. In economic terms, the Philippines remains one of the more concentrated markets in the region.

A 2018 World Bank assessment found that Philippine markets had a higher incidence of monopolies, duopolies, and oligopolies than those of our regional peers. When businesses face little or no competition, why bother making their products better or cheaper?

When few businesses control a large share of a market, they acquire considerable bargaining power to cultivate relationships with politicians and seek policies that preserve their position. The political system then reinforces the economic concentration that gave rise to such political influence in the first place. In everyday discourse, we often call this “corruption.”

So, again, where is the stronger call for greater competition among liberals? Economists, of course, are right about its material benefits. Greater competition among firms can lead to lower prices, better products, and more choices for consumers. The logic is simple—innovate or perish. A business that offers poor or overpriced services will lose its customers to better competitors.

But have we ceded market competition entirely to the domain of modern economics? Lest we forget our heritage, the older liberal conception of competition went well beyond economic efficiency. Long before the advent of Foucault and today’s omnipresence of “everything is political,” liberals had pondered the nature of power for centuries. They understood that power—in particular, concentrated power, whether economic or political—should invite skepticism, contestation, and dispersion. They transcended mere theorizing and put their ideas to action. Liberalism challenged political authority once concentrated in monarchs and churches through constitutional democracy. In the economic sphere, liberals employed market competition.

John Stuart Mill, writing in the nineteenth century, was particularly clear about the dangers of monopolies. When businesses are shielded from competition, he argued, they have less reason to improve, innovate, or respond to consumers. In turn, consumers are left with fewer choices and little power to demand better products and services. Economic freedom, therefore, is inseparable from individual liberty. The freedom to choose means little when there are no meaningful alternatives.

In restraining power, liberals have long understood that market competition and democracy go hand in hand. A business facing no competitors has less reason to listen to its customers. Similarly, a government facing no constraints will ignore citizen feedback. In both cases, concentrated power creates opportunities for abuse. Market competition flips moralism on its head by compelling businesses to serve their customers, regardless of the personal virtues or intentions of those who run them. Innovate, or perish.

The economist Milton Friedman made the connection between economic and political spheres even more explicit in Capitalism and Freedom. He explained that market competition serves not only as a mechanism for producing prosperity but also a fundamental safeguard for political freedom. When the state exercises greater control over the economy, businesses and individuals become increasingly dependent on those in political office for their livelihoods and opportunities. Resist the government, and you may find yourself deprived of both.

A businessman who can operate without political patronage has less reason to submit to the whims of politicians. An individual who can seek employment from competing firms is less vulnerable to the dictates of any single employer. The practice of “job hopping” among young professionals, for instance, illustrates how the abundance of alternative employers, both local and foreign, gives workers greater bargaining power. Employers, in turn, face pressure to offer better salaries, benefits, and working conditions to attract and retain talent.

Economic power dispersed among competing actors is less easily converted into political influence than power concentrated in a few hands.

Reclaiming market competition

Somewhere along the way, Filipino liberal discourse seems to have forgotten this part of its inheritance. The consequences are visible in both the state and the economy.

Politically, the post-EDSA government has retained an extraordinary role in deciding who receives assistance, permits, franchises, licenses, protections, and other privileges. The expansion of ayuda is one manifestation of a broader political habit in which government becomes the principal answer to economic problems that might otherwise be addressed, in huge part, by expanding market competition.

This ideology of “statism” has permeated liberal discourse itself. When confronted with economic and political challenges, one’s default answer is often a fatter government—with bigger budgets, more projects, more taxes, and more debt. Really? From the same government that mastered the art of corruption scandals with its sprawling bureaucracies and inefficiencies?

Worse, many of us have succumbed to the argument that greater private-sector participation in economic sectors necessarily means “domination” or “exploitation.” In doing so, we have borrowed the language of our ideological opponents. We have exchanged our traditional skepticism of concentrated power for considerable faith in the benevolence and competence of the state, despite ample reasons to question both.

The private sector is hardly immune from this problem. Philippine industries remain highly concentrated, with established business players enjoying advantages that make it difficult for smaller players and newcomers to compete. Some of these advantages have been sustained by protectionist policies, defended by liberals themselves, in the name of preserving Filipino ownership.

The intentions sound noble. After all, economic nationalism emerged partly from centuries of colonial experience and the desire to give Filipinos greater control over their country's wealth. But we seem to forget that virtue knows no ethnicity. A company does not become “less greedy”, “benevolent”, or “quality” simply because it is Filipino-owned.

The 1987 Constitution restored democratic institutions and placed important limits on political power. Yet while post-EDSA liberalism sought to disperse political power, many of the economic rules it inherited and created continued to favor those who already possessed considerable capital and influence. Our people have been footing the bill through higher prices, fewer opportunities, and recurring corruption scandals.

Reforming our laws to allow greater competition offers a way to break this cycle. We have seen glimpses of what new entrants can accomplish even in industries long dominated by a few players. Philippine telecommunications is one example. For decades, a duopoly dominated the mobile and internet market, while Filipinos endured slow and expensive internet services. DITO's entry in 2021 introduced a third major mobile operator, while Converge emerged as a significant challenger in fixed broadband.

The changes have been encouraging. Internet speeds have improved considerably, although we still trail some of our ASEAN neighbors. More importantly, established players have had to respond to consumers who now have more alternatives. PLDT and Globe have introduced more competitive fiber plans, speed upgrades, and prepaid offerings to defend their market shares. The introduction of prepaid fiber services, in particular, has given price-conscious households more flexibility in accessing the internet.

Another example is the rise of budget-friendly grocery chains like DALI and O!Save. The 2021 amendment to the Retail Trade Liberalization Act lowered the minimum paid-up capital for foreign retailers from roughly ₱125 million to ₱25 million, making the Philippine market more accessible to foreign investors. Today, their no-frills stores and low-cost products are giving Filipino households cheaper alternatives to traditional supermarkets. A 2025 price comparison found that a basket of 17 basic grocery items cost ₱484.85 at DALI and ₱496.54 at O!Save, compared with ₱553.57 at a regular supermarket. For families struggling to stretch their weekly budgets, those savings matter.

This is what market competition looks like in ordinary life. Consumers gain more choices and lower prices, businesses face greater pressure to innovate new products. Economically empowered Filipinos, particularly the young ones, will become the intelligent voters and innovators of tomorrow. The hand of competition will compel the government to reform its policies as a more educated electorate demands good governance and a larger tax base generated by larger economic activity. As the experiences of South Korea and Vietnam have shown, this opens the economy to even greater competition and subjects bureaucratic processes to transparency.

The liberal tradition has long recognized that “good governance” means designing rules that disperse economic and political power. Will we finally reclaim this part of our liberal heritage in 2028, before it is too late?

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* Cesar Ilao III is Research Manager and Communications Specialist at the Foundation for Economic Freedom (FEF) in Quezon City. He is also a lecturer at the University of the Philippines Los Baños.