Feisty Filipino Province Rivals Manila as New Business Frontier

CEBU Governor Emilio "Lito" Osmena says his maverick ways have spurred his island's thriving economy. He hopes his track record in this central Philippine province will catapult him onto the national stage in the 1992 elections.

Osmena and his cousin, Cebu City Mayor Tomas "Tommy" Osmena are among a feisty new breed of regional leaders who are riding a populist wave against the traditional politics of big-monied bosses and strong-arm landlords with private armies.

Western and Philippine analysts give provincial reformers little chance of overthrowing the traditional politicians from the main island of Luzon. "Most people are resigned to the fact that we'll still get a lemon in 1992," says Bernardo Villegas of the Center for Research and Communication in Manila.

Still, diplomats and Philippine observers say administrators like Lito Osmena could tap anti-establishment resentment and become kingmakers next year.

"Osmena could be a spoiler in 1992," says a Western diplomat. "The Aquino government has only paid lip service to the regional leaders. They are taking matters in their own hands and taking a defiant stance."

Cebu, a densely populated island about 350 miles south of Manila, has long prided itself on independence and fast-dealing. Left with little productive land after massive deforestation, the 2.5 million Cebuanos, including a large core of entrepreneurial ethnic Chinese, have thrived on labor-intensive processing industries and a booming under- ground economy of smuggling, marijuana growing, and rattan furniture and garment production by small contractors.

Today Cebu is the Philippines second largest commercial center after Manila and a favorite of tax dodgers and foreign investors. It boasts a good port, international airport, export processing zone, and a tourist industry that has thrived by distancing itself from turbulent Manila.

This regional economic powerhouse grew at 20 percent in 1988 and in double-digits since then, despite a world-wide recession and a typhoon that lashed the island last year, economic observers say. Exports run at four times the national level, unemployment is a fraction of that in Manila, and developers look to Cebu as the new business frontier. "Cebu has become a model of economic progress for the rest of the Philippines," says an Asian diplomat.

Crucial to that image are the Osmenas, a prominent landed family that has dominated the island for decades. Lito Osmena's father, Sergio, was president of the Philippines in the 1940s before independence. His brother, John, is a senator in Manila.

But it is as businessmen that the Osmenas made their mark, rolling out the red carpet for foreign investment, streamlining investment approvals, and pioneering innovative financing such as regional commercial bonds.

Lito Osmena, an exporter and real estate developer who was elected governor three years ago, sounds like the impatient businessman that he is. He chafes at Manila's control, complaining that Cebu has too little say in its own affairs and gets little for the national taxes it pays.

"The government should get out of a lot of functions and take a different route," he says.

Lito's cousin, Tommy, studied in the United States and became a financial analyst. He echoes the frustration with Manila. "We are Filipinos. We are not trying to secede. We fight Manila to see what we can get out of it because we are being penalized for our productivity," he says.

"One of the big flaws of the national government is it acts too much like a charity organization. Who's going to support them later on if you drag down the productive areas?" he continued. "If the policy is help the poor, everyone is going to be poor."

But those fighting words have made the Osmenas many enemies. Tommy was accused of being anti-poor for approving a ordinance to clear squatters in Cebu City and clean up the downtown. He backed down.