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Philippines, Inc. Brought to You by San Miguel Selling Modernity and Nationalism in a Post-Colonial Nation-State By Jennifer Abalajon

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Page 1: Philippines, Inc. Brought to You by San Miguel...during our trip my father, with a San Miguel beer in his hand, spoke of how great life was in the Philippines back when he was a lawyer

Philippines, Inc.

Brought to You by San Miguel

Selling Modernity and Nationalism in a Post-Colonial Nation-State

By Jennifer Abalajon

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Table of Contents

Introduction ..................................................................................................................................... 2

Commodities as Symbols and the Production of Culture ........................................................... 4

Research Aims and Methods ....................................................................................................... 8

Part One: San Miguel‟s Rise to Power ......................................................................................... 11

A Brief History of San Miguel: 1890-2010 .............................................................................. 12

The San Miguel Family: Elite Business Networks in the Philippine Economy........................ 14

Friends with the Government: Privatization of SOEs and the San Miguel Utility Projects ..... 19

Summary ................................................................................................................................... 24

Part Two: San Miguel Imagined: Shaping Modernity, High Culture and Nationalism in

Philippine Society ......................................................................................................................... 25

Western Influences: Language and Standards of Beauty .......................................................... 26

Class & Racial Cleavages: San Miguel Reflections.................................................................. 32

Branding in Everyday Life ........................................................................................................ 34

San Miguel on Corporate Social Responsibility and Governance ............................................ 40

Symbolic Power: The San Miguel Foundation, Inc. ................................................................. 43

National Morality: Beyond the Bottom Line ............................................................................ 45

Summary ................................................................................................................................... 46

Conclusion .................................................................................................................................... 48

Author‟s Note................................................................................................................................ 51

Bibliography ................................................................................................................................. 52

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Introduction

I have been able to visit the Philippines three times since I left there permanently for the

US at the age of three. Each time, our family had pretty much the same itinerary. Manila for a

few days, then on to Roxas City, a day visit to the farm in Kasanayan where my mom grew up, a

trip to pay respect to the graves of three grandparents, and then off to the world-acclaimed

Borocay Islands where we would enjoy the rest of our vacation on the white-sanded beaches just

like the tourists. I remember one of the things my siblings and I looked forward to the most were

the Filipino foods and drinks. After all, we could never enjoy them in the US. Everywhere we

went, we ate Pure Foods hotdogs, Magnolia ice cream, San Miguel and Red Horse beer. We took

them on day trips, had them at parties, had them with dinner, on quiet nights, on rowdy nights, at

birthdays, for visits- for simply everything.

We thought our binge on Filipino treats had to do with the fact that we were foreigners

enjoying rare and treasured goods. However, one morning, when I smelled Pure foods hotdogs

cooking for breakfast, I realized that these products were not just used for celebratory purposes

but were part of everyday life. Little did I know that such goods were all owned and controlled

by a single food and beverage conglomerate, the San Miguel Corporation. Hearing that name, all

I remember thinking was that it was my father‟s favorite beer. Yet it was everywhere- on

billboards, on television, in movies, on clothing, invoked in everyday speech, on grocery items,

on sports teams, at music concerts, at important political events, in schools for book drives- the

name San Miguel loomed from the background at every major event in the country. My cousins

raved about it, took pride in it, bragging about how San Miguel is the “real” Filipino beer and

how we should appreciate it while we were around. All the uncles drank it when they played

Mah Jong and all the younger kids aspired to drink it one day when they were older. Often

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during our trip my father, with a San Miguel beer in his hand, spoke of how great life was in the

Philippines back when he was a lawyer and bank manager. He told us stories of how he used to

seduce his clients with San Miguel beer, food and women, to close deals. He told us that if you

wanted to do good business, you better have some San Miguel. Then I thought- why San

Miguel? Why not just say beer? Why do Filipinos have the tendency to talk about things in brand

name form? It was then that I realized how popular and loved such brands were and in particular,

how San Miguel was more than just a brand, it had come to be a significant cultural symbol in

Filipino society.

While other corporations may play a large role in Philippine society such as Jollibee

Foods Corp, Philippine Long Distance Telephone Company (PLDT), Ayala Corp, Nestle

Philippines, Inc. and Manila Electric, none of them arouse quite as much popularity and national

sentiment as the San Miguel Corporation. None of them carry such meaning and symbolism in

Philippine society and culture. This paper will argue that the San Miguel Corporation, through

monopolistic economic initiatives and pervasive branding, marketing and campaigning

strategies, has achieved cultural hegemony in Filipino society, actively shaping Filipino

perception of modernity, valuation of high culture, and sense of national pride and morality.

More importantly, San Miguel and its commodities have not just become a symbol of the modern

Filipino life but have also been instrumental in transforming the Philippines from a post-colonial

state into a post-modern capitalist society that accesses nationalism through consumption of

commodities.

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Commodities as Symbols and the Production of Culture

One of the most basic definitions of culture is “a set of ideas and behaviors that are

acquired by people as members of society.”1 Human culture in particular, as opposed to other

primates, depends on the use of symbols.2 As a result, cultural learning occurs in systems of

symbolic meaning. The symbols in such systems perpetuate a shared set of dominant economic

activities, social patterns, core values (key, basic or central values), ideas, judgments, and even

personality traits and behavior. 3

In a capitalist mode of production, such symbols prevail in the

exchange and representation of commodities.

Karl Marx, in his classic work Capital Volume I, argues that the most elementary form of

society in the capitalist mode of production is the individual commodity.4 He defines it as an

external object whose qualities satisfy human needs of whatever kind, whether from the stomach

or the imagination.5 He states that it is absolutely clear that man changes the forms of such

materials or commodities to make them useful to him, constituting its use-value.6 However, he

goes on to say that the mystical character of the commodity does not arise from this use-value

but rather from its ability to reflect the social relations between the producers, the objects and

men themselves.7 Marx states “It is nothing but the definite social relation between men

themselves which assumes here, for them, the fantastic form of a relation between things.”8 As

David Harvey explains in his series of lectures entitled Reading Capital, Marx understood that

people under capitalism do not relate to each other directly as human beings, rather they relate to

1 Robert Lavenda & Emily Schultz, Core Concepts in Cultural Anthropology, 16

2 Lavenda & Schultz, 22

3 Kottak,Cultural Anthropology, 28

4 Karl Marx, Capital Volume I, 125

5 Marx, 125

6 Marx, 163

7 Marx, 164-165

8 Marx, 165

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each other through the myriad of products which they encounter in the market. He argues that

there is a fetishism attached to commodities, which affect the material relations between persons

and the social relations between things. Thus, under a capitalist mode of production, social

relations are governed by this mass exchange of commodities, which functions in a symbolic

system.

In such a commoditized world, culture and even nationalism can thus be consumed.

Steve Kemper, in his book Buying and Believing, addressed the cultural production of ads and

marketing in Sri Lanka. Particularly, he wanted to explore the production of public culture in a

postcolonial nation-state. Notably, the Philippines, like Sri Lanka, possesses such a colonial past

(both from US and Spanish possession) and does dwell in a similar postcolonial nation-state

reality. Furthermore, Kemper discovered that in such a post-colonial state, whether or not

advertising sells commodities, it also “creates culture”, highlighting the often overlooked

importance of this function in the economy.9 More importantly, advertising has become a means

by which the people of a given postcolonial society acquire both a sense of global modernity and

local identity.

To support this seemingly paradoxical claim he first points out how access to global

modernity is produced. He states, “Participation in virtual communities of consumption depends

on advertising, electronic media, and patterns of living that link individuals to the

deterritorialized world of commodities.”10

Kemper‟s mention of the world of commodities as one

that is deterritorialized means that it is a world not tied to any territorial notion of a state, which

he argues could threaten local tradition and morality. However, according Kemper, advertising in

the post-colonial state actually gets pulled in two directions; it can have both a homogenizing,

9 Kemper, 4

10 Kemper, 2

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deterritorializing effect and a localizing effect in that it can shape local definitions of such things

as modernity and taste. He argues that “On the one hand, there are economies of scale that follow

transnational campaigns, the homogenization of taste, and the deterritorialization of the

imagination. On the other, advertising „in the local idiom‟ caters to, not to say creates, local

preferences.”11

Additionally, if one thinks of advertising as a device of capitalism, then the

system of capitalism itself, Kemper argues, “brings with it a set of values- individualism and

material gusto are two- as well as a set of material interests, and local societies enter the

intercultural encounter with their own economic and political interests.”12

Given this, Kemper

describes advertising agencies and executives as “middlemen to the national imagination”.13

More importantly, he claims that they do not just function as the avenue to this “national

imagination” but in a consumer society, they become the very sources of it, “producing new

images of what it is to be a woman, a man, a parent, a responsible person…and, naturally, a

consumer.”14

Looking more closely at how a consumer can be made to buy ideas of culture, modernity

and nationalism, Arjun Appadurai, a significant scholar on the study of modernity, emphasizes

the imagination as key to understanding the culture of global modernity. He argues that the

“imagination is central to all forms of agency, is itself a social fact, and is the key component of

the new global order.”15

Whereas the imagination was once viewed as a mechanism of fantasy,

escape, contemplation or elite pastime, Appadurai argues that the imagination has transformed

into an organized social practice, which functions as an interchange between individuals in their

11

Kemper, 14 12

Kemper, 10 13

Kemper, 6 14

Kemper, 6 15

Appadurai, Disjuncture and Difference in the Global Cultural Economy, 5

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local sites of agency and “globally defined fields of possibility”.16

Hence, through the utilization

of the imagination, individuals can connect themselves to this larger world of possibility that is

cosmopolitan in nature and homogenizing in effect, a world which we refer to as „modern‟. Even

the choice of words by San Miguel in their ads such as “imagine”, “reflections” and “dreams”

are indicative of this.

However, while the utilization of the imagination to gain access to the new world of

possibility may seem to deterritorialize the individual by connecting them to a world beyond

their borders, Kemper argues that modern institutions actually reterritorialize the imagination,

creating local tastes, preferences and common identity. Moreover, if we consider classical

theories on nationalism, namely that of Benedict Anderson, Appadurai‟s emphasis on the

imagination creates a very interesting revelation. On the one hand, Appadurai argues that the

imagination is what links individuals in their local sites of agency to global cultural modernity.

Anderson, however, discusses the imagination as a means to achieve nationalism. Taken

together, these theories represent two sides of the coin regarding the imagination and its ability to

connect people through the exchange of symbols. More specifically, Anderson emphasizes print

capitalism as the means by which national consciousness is spread, which in turn leads to the rise

of what he refers to as an “imagined political community”17

, which spurred the formation of the

nation-state. Anderson states, “…the convergence of capitalism and print technology on the fatal

diversity of human language created the possibility of a new form of imagined community,

which in its basic morphology set the stage for the modern nation.”18

Yet in this day and age,

capitalism has converged with much more than print technology, encompassing the entire

telecommunications industry via television, movies, music, the media and the internet reaching

16

Appadurai, 5 17

Benedict Anderson, Imagined Communities, 5-6 18

Anderson, 46

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unprecedented scopes of people at unparalleled speeds. According to scholar E. San Juan Jr.,

certain scholars, namely in the humanities, still perceive consumer goods as “narrowly conceived

material objects being exchanged”, however for scholars with a more postmodernist view, he

argues that “the significant point is the act of exchange and circulation of symbolic goods.”19

Such a of symbolic goods category includes “fast-foods, t-shirts, advertisements, music and other

items encompassed by what is called TRIPS (trade-related intellectual property rights).”20

Research Aims and Methods

The aim of this paper will be to examine how San Miguel reaches the consciousness of

the people through its branding, marketing and campaigning initiatives. I intend to highlight the

ways in which San Miguel produces culture, ideas of modernity and common identity in

Philippine society. Furthermore, aside from the mere production of culture, I also intend to asses

whether San Miguel has been able to reflect back ideas regarding national pride and morality on

the Filipino people.

In order to examine this, a particular mode of qualitative research will be adopted to

analyze San Miguel‟s symbolic commodities. For this, we turn to the field of semiotics, also

known as the science of signs, which provides a set of assumptions and concepts that permit

systematic analysis of the symbols.21

We rely particularly on social semiotics which sees “social

life, group structure, beliefs, practices, and the content of social relations as functionally

analogous to the units that structure language. By extension of this semiotic position, all human

communication is a display of signs, something of a text to be „read‟.”22

A sign is composed first

of an expression such as a word, sound or symbol and then of content, which completes the

19

E. San Juan Jr., 98 20

E San Juan Jr., 98 21

Norman K. Denzin & Yvonna S. Lincoln, Handbook of Qualitative Research, 466 22

Denzin & Lincoln, 466

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meaning of the expression. The linking or connecting of these two elements, along with the

participation of the observer or interpretant, is what creates meaning. Such meaningful

connections are socially created and maintained; they are “shared and collective, and provide an

important source of ideas, rules, practices, codes and recipe knowledge called „culture‟”.23

It is

this „culture‟ that structurally dictates sign concreteness.24

Commodities are constantly

represented by such signs or symbols. As a result, the commodity becomes a very powerful and

influential item, both in governing social relations and in producing meanings as a symbolic

device, shaping common identity and culture. Hence, as the commodity is something that is

consumed, such ideas, identities and meanings are also themselves consumable.

The research conducted for this paper is thus done in two parts. Part One will explain

how San Miguel was able to rise to its position of economic dominance, an entirely independent

process from its rise to cultural hegemony. It will pay close attention to the ownership structure

in the Philippines, the culture of elitism and the alliance between capitalist families and the

government as factors in San Miguel‟s rise and subsequent expansion into public works. Having

established such factors, Part Two will look at select print advertisements, images, branding,

television commercials, San Miguel Foundation Inc.‟s campaign entitled “Beyond the Bottom

Line” and other means used by San Miguel to foster their cultural hegemony in Filipino society.

Through close analysis of these ads and campaigns using semiotic methods, three very

important things will be discovered. First, San Miguel demonstrates the heavy influence of US

standards in their promotion of high culture and conceptualization of modernity. The US has a

particularly strong influence on social and political values as well as popular culture, which San

Miguel clearly perpetuates and values. Second, class and racial inequities are perpetuated

23

Denzin & Lincoln, 466 24

Denzin & Lincoln, 467

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through the ads as they clearly promote the values and lifestyles of the upper class. However,

San Miguel constantly promises the normal, everyday Filipino that the culture and lifestyle they

sell is attainable by all. As a result, San Miguel effectively sells the lifestyles of the bourgeois to

the masses. Thirdly, San Miguel masks its otherwise profit-generating motives by aggressively

campaigning its developmental initiatives, strategically avoiding potential criticisms regarding its

monopolistic conduct and anti-competitive practices. Moreover, the school of thought on

corporate social responsibility originated in response to the EDSA or People Power revolution of

1986, which indicates that San Miguel is also reflecting ideas of national morality on the people.

What occurs is the formation of national sentiments of morality and community, connecting the

consumers of the product with larger ideas on the greater good of Filipino society through

development and advancement. Ultimately, this project will reveal the often-overlooked

community-building potential of a consumer culture.

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Part One: San Miguel’s Rise to Power

Before discussing the influence San Miguel Corporation has had on Filipino national

identity and perception of modernity, its rise to economic and social dominance must first be

established. After all, it is only through achieving this economic dominance that San Miguel has

been able to pervade national consciousness and affect what it means to be a “modern” Filipino.

This part will now proceed to highlight the exact events, circumstances and structures that were

responsible for San Miguel Corporation‟s (SMC) rise in dominance. The most important

question to answer in the subsequent sections is how SMC over all other major corporations was

able to gain the capital to fund and/or political permission to proceed with its immense expansion

and pervasion into public utility projects.

In answering this question, we must first turn our attention to the partnership between

Filipino capitalist families, such as the one that owns and runs San Miguel, and officials in the

Philippine government. The following sections will analyze this partnership in great detail,

revealing the nature of elitism and familial traditions in Philippine society and its relation to the

ownership structure. This is the key to understanding San Miguel‟s most recent expansion into

public utility projects that were originally owned and organized by the government. While this

expansion has been the new engine of San Miguel growth, it has also had major implications for

the market of public services, raising concerns over whether a food and beverage conglomerate

should have so much control over necessary public works in infrastructure, expressway

construction, energy and oil. Moreover, the pervasion of San Miguel‟s influence is complicating

government regulation of such conglomerates as the government itself is entangled in their

capitalist interests.

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A Brief History of San Miguel: 1890-2010

San Miguel‟s history traces as far back as the era of Spanish colonialism. Even its name,

“San Miguel” is of Spanish origin. It was officially founded in 1890 by Don Enrique Ma. Barreto

under a Spanish Royal Charter that officially permitted the brewing of beer in the Philippines. It

was called La Fabrica de Cerveza de San Miguel and started off as a relatively small, humble

brewery operating in Manila. The original city seal of Manila, the escudo, was San Miguel‟s

corporate logo from 1890 to 1975 after which it was replaced by the leaf-droplets design.25

The

escudo possessed historic significance and is still used as a trademark for San Miguel Beer. In

many ways, it still serves as the symbol of the corporation itself. In later years, the company

came to be controlled by a series of powerful and influential Filipino families (namely the

Sorianos and Cojuangcos). This is indicative of its upper class origins as it was a brewery

chartered by the Spanish Crown and then transferred to families who belonged to the

socioeconomic elite. Such families have had control of the corporation, the management albeit

shifting between families, to this very day. It now stands as not only one of the most powerful

domestic conglomerates but also the most popular.

For nearly 100 years, through the period of US colonialism and subsequent

independence, San Miguel sold only the most famous beer, the national beer, San Miguel Beer. It

did not become incorporated until 1913 and it did not call itself the San Miguel Corporation until

the 1960s.26

In 1927, it became the very first foreign bottler of Coca-Cola and then proceeded to

begin a process of backwards vertical integration in which it acquired barley fields and expanded

its operations into other agricultural products. It was not until about the 1980s-1990s that it

began to acquire other industries, namely other food and beverage industries, coming to own

25

SMC Website, http://www.sanmiguel.com.ph/, Last Accessed 4/12/10 8:00pm 26

Rarick & Inge, San Miguel Corporation: Should a Beer Company Be a Public Utility Provider?

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90% of the beverage industry, 60% of meat production and 40% of poultry production, and came

to dominate the market for packaging goods and services. By the early 2000s, it spun off from its

regular food and beverage market, and bought huge, influential stakes in the industries of

telecommunications, oil, power, energy and infrastructure. It openly invested in several nation-

wide projects to build inter-region expressways and mobile networks. It had also expanded to

markets outside of the Philippines in the greater region of Southeast Asia, operating over 100

facilities in the Philippines, China, Vietnam, Indonesia and Australia. It generates most of its

revenue, about 63%, in the Philippines alone, 30% in Australia, and the rest scattered throughout

China, Indonesia, Vietnam and other nearby areas.27

Domestically, it has bought a notable

portion of real estate which it now manages and helps to develop, claiming that homes are being

built and offered at affordable prices for the Filipino citizen. It has clearly been posing itself as a

Philippine developmental organization, putting money into developing the nation‟s infrastructure

in addition to selling and marketing the most popular foods and beverages for daily consumption.

It prides itself on this fact, claiming to make “Profit with Honor”.28

In addition to mere

developmental initiatives, San Miguel has marketed itself as the corporation that gives back to

the Filipino community through its philanthropic project entitled the San Miguel Foundation,

Inc. This project devotes resources to social development programs such as those geared towards

improving the system of education and small business entrepreneurship. Moreover, it has

demonstrated its interests in environmental initiatives, indicating to the public that it is an

environmentally-conscious corporation.

Moreover, while San Miguel has come to cross national borders in order to expand

opportunities for profit, which technically classifies it as a transnational corporation (TNC)

27

Rarick & Inge 28

Luz, Corporations, 299

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carrying with it a negative stigma in Filipino society (as most TNCs are Western-based and non-

Filipino), it clearly characterizes itself as a “Filipino” TNC with deep, domestic origins and

loyalties. It highlights this as key, especially as it funds developmental initiatives for the greater

Filipino community rather than exclusively directing its efforts to profit-generation for stake-

holders. This has come to have a significant impact on its public image and has contributed to its

popularity in the mainstream media and on a national-level. However, much of the recent capital

San Miguel has accumulated has been through expanding its enterprise abroad, namely in

Australia. As far as gaining domestic dominance, it was able to do so through two specific

means, which will be the focus of the next sections: elitist standing and integration into the

network of capitalist families in Philippine society and establishing collaborative relationships

with the government, especially after the onset of privatization of state-owned enterprises.

The San Miguel Family: Elite Business Networks in the Philippine Economy

The Philippines has always had a strong elitist culture, especially with regard to business

and politics. Several scholars, including Walter Bello, author of Anti-Development State : The

Political Economy of Permanent Crisis in the Philippines, have criticized the pervasive nature of

this elite class in politics. These paternalistic figures represent both the most successful

businessmen and political leaders of the country. He blames the growing wealth disparities in the

region on this lucrative alliance between the government and the business network. He suggests

that the reason such inequalities are left unaddressed is because the very individuals who run the

country also own significant stakes in the industries they intend to regulate. In The Economy of

the Philippines: Elites, Inequalities and Economic Restructuring, scholar Krinks argues

Through the twentieth century, there was a large degree of continuity in the families at the peak

of the pyramid of accumulation. For example, out of twenty-eight families with members of the

Philippines Chamber of Commerce in 1903, at least fourteen are still among the most powerful

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capitalists. As a result, the wealth gap continues to increase despite the backdrop of otherwise

positive economic growth in recent years.29

Thus, these scholars illustrate the environment in which San Miguel has been able to thrive. The

San Miguel Corporation, like many others in the Philippines, has been controlled over the years

by a group of very powerful, elite families. These families have formed alliances with each other

to bolster the competition. However, before continuing along this point, it is important to

highlight how Philippines came to be structured this way in the first place. It is a process that has

its roots in the country‟s colonial past.

For over 300 years, the Philippines was a colony of the Spanish crown. This is the reason

why Spanish culture has come to pervade the country‟s language, religion and familial traditions.

More importantly, when the Spaniards came over, they also brought with them their culture of

entitlement, hierarchy and racism, subjecting many of the “brown” folk to positions of servitude.

As a result, there had always been this dichotomy of the classes; either one is part of the class of

capitalist owners, who control the means of production, (the burgis (bourgeoisie) or mayayaman

(rich)) who curiously enough possess lighter skin and sharper noses or one is part of the class

that lacks such means and is forced to sell their labor power as members of a rural or urban

proletariat (the masa (masses)), the darker kind of Filipino.30

Through the imposition of

Catholicism, there also came to be a clear difference between those who dwelled in the village

and those who served in the church, who were considered to be higher in status.

Given this, the Spaniards mostly transferred land or property rights to individuals of the

elite class of light-skinned mestizos or members of the religious order. Hence, this system of

land ownership was the source of the transference of both economic and political power to

certain members of the Filipino citizenry, the privileged class. By the end of Spanish rule, there

29

Peter Krinks, The Economy of the Philippines, 50 30

Krinks, 4-5

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was an entire class of these large landholders who also “monopolized public offices in the

provinces, from the mayoralty through to the police and judicial functions, so that extra-

economic means were available to bolster the power that they exercised through possession of

land.”31

This formed a very wealthy class that came to accumulate much of the land and capital

to reinforce their political positions. Others who did not posses land or lost it were forced to

move to more remote uplands. They eventually became bandits, dependent workers, or tenants.

This was the start of the gulf- “both economic and cultural”- between village folk and the town-

based landlords and priests.32

The Spanish-American war resulted in American possession of the Philippines. It was a

US colony for some time and it was during this period that the Philippines truly came to form

their own political structure, which they copied from US models. After the American conquest of

the country, they wanted to vigorously encourage democracy and did so by holding elections in

1901 for local officials and six years later, in 1907, for a new legislature in Manila. This enabled

the elites of the country, those who already owned a great deal of the land and capital left over

from Spanish colonialism, to entrench themselves in positions of political power. Those who

were the most ambitious gradually came to form a national oligarchy, albeit with an agrarian

base, that was divided by rivalries between families.33

These families then proceeded to form

alliances via marriage and Catholic co-parenthood, forming an elite network of business

families.34

These relationships within families built up models of trust and mutual support and

gave the members a sense of belonging, unity (kapwa, in Tagalog), obligation and community.35

In fact, in Philippine society, an individual‟s sense of self-esteem and personal honor often has to

31

Krinks, 27 32

Krinks, 27 33

Krinks, 8 34

Krinks, 9 35

Krinks, 6

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do with how they come to belong and fulfill obligations to their group, or in this case their

family, leading to a kind of “centrality of familism”.36

It is important to note that during this time period, even subsequent to Philippine

independence, there existed a lack of effective political and legal infrastructure, which resulted in

a lack of reliable legal protection of shareholders‟ and creditors‟ funds. So part of the motivation

behind the formation of such alliances between these capitalist families was the need to protect

family interests in light of a weak political state that could not be relied on. As a result, families

did not trust anyone who was not a member of the family with the handling of assets. This

formed an ownership structure that was based on a network of collaborative yet exclusive

capitalist families. As these capitalist families proceeded to expand their activities into new

sectors, a high degree of interlocking directorates, or cross-shareholdings formed. According to

Krinks, “This pattern of interlocks produced loose clusters of families, although these clusters

were not mutually exclusive unless political considerations entered.” As a result, a few very

important, well-known, dominant families ended up running the large conglomerate groups, such

as the Sorianos who run the San Miguel Corporation (who are related to the Ayalas, who ran the

food conglomerate PureFoods before SMC acquired it). More importantly, these loose family

clusters almost always included the loyalty of a bank, “which can give favored treatment to

affiliates despite regulations against excessive lending to related companies or individuals.”37

This implies that these loose clusters of families would also never have a problem finding the

capital for their enterprises. As cited in the Krinks‟ work, “Hutchcroft (1991) describes the

Philippines as a neo-patrimonial state. Quoting Weber, he says (pg. 415) that a patrimonial state

is one where „the political administration…is treated as a purely personal affair of the ruler, and

36

Krinks, 7 37

Krinks, 9

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political power is considered part of his personal property‟.”38

In short, the political system in the

Philippines is one that is dependent on personal connections, favors, promises and privileges,

treating such phenomena as personal property to protect.

Such a political system is most evident if we consider how elites have attempted to avoid

class-based conflicts by promoting vertical ties of reciprocity in patron-client relationships.

These politically active local elite use ties of patronage “to strengthen their particular faction in

elections, so that clients voted for the patron‟s preferred candidate. Factions and alliances thus

seemed to submerge differences between classes.”39

These mutual ties and obligations are further

reinforced through “fictive kinship”, which is produced by co-parenthood (created by

sponsorship) in Roman Catholic traditions of baptism and marriage.40

As a result, these

processes link clients to the familial circles of patrons, producing their own sense of honor,

belonging and obligation, as they promise to politically support their patron. Such processes

exploit the primordial importance of the family in Philippine society and utilize obligation as a

means of control. Ironically enough, as Krinks discovers, “many studies have shown that they

(these vertical ties of reciprocity between clients and patrons) are all-pervasive and frequently

served to mask resentment and inequalities.”41

As for the San Miguel Corporation, it was, for a long time, “the main source of

accumulation by the Soriano family (relatives of the Ayala family), until Marcos crony Eduardo

Cojuangco gained control of the company (Koike 1983)”.42

However, in 1986 after the People‟s

Revolution, also known as the 1986 EDSA revolution, the Sorianos regained control and

expanded the company domestically and abroad. In 2000, SMC bought back Coca-Cola Bottlers

38

Krinks, 8 39

Krinks, 5 40

Krinks, 5 41

Krinks, 5 42

Krinks, 175

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and also bought Pure Foods (from the Ayalas) and the Australian brewer J. Boag.43

Thus, SMC

is a fascinating example of how a domestic corporation has been able to take advantage of the

global trend of economic liberalization to expand, grow and generate capital for the country as its

enterprises alone account for 4% of the annual GDP.44

However, according to a business study

conducted at Barry University on the San Miguel Corporation, the company “has not been free of

controversy, and there have been questions of conflict of interest, and integrity issues.”45

Evidently, the government owns significant stakes in the company “due to seizure of assets

deemed taken from the people of the Philippines during the Marcos era.”46

More importantly, the

company has been accused before of using unethical practices against its competitors. In an

essay written by scholar Rogers, “Philippine Politics and the Rule of Law”, he argues that there

is an elite that seems to be exempt from the rule of law.47

He argues that “Economic reform

without political reform leaves antireform elites with enough influence and strength to impede

the success of economic liberalization. Reform opponents then blame the resulting unequal

benefit distribution on reform policies, rather than on the forces constraining these policies.”48

As Rogers argues, these elite members not only impede the distribution of wealth that has been

gained through economic liberalization, they have been able to politically maneuver their way

out of accountability, which leads us to our next section.

Friends with the Government: Privatization of SOEs and the San Miguel Utility Projects

43

Krinks, 175 44

SMC Website, Last Accessed 4/12/10 8:00pm 45

Rarick & Inge 46

Rarick & Inge 47

Rogers, Philippine Politics and the Rule of Law, 119 48

Rogers, 124

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Easily accessed on San Miguel‟s website, the following describes San Miguel‟s recent

pervasion into public works:

San Miguel has been pursuing ventures outside its established foods and drinks businesses to

fuel future growth. In a bid to diversify its portfolio into high-margin industries, the company

recently invested in Manila Electric Co (Meralco), the largest power distributor in the

Philippines. It has an option to become the owner of 50.1 percent of the country‟s largest oil

refiner, Petron, by buying a stake in another business from the UK‟s Ashmore Group. And it has

acquired 32.7 percent of Liberty Telecommunications Holdings. On top of that, it has submitted

a proposal for the government‟s Laiban Dam project and is in a non-binding agreement to buy a

stake in Private Infrastructure Development Corp, which controls a major toll expressway

project. The company has also won the state auctions of one coal-fired, one diesel-fired and one

hydroelectric power plant, its first power generation assets.49

Additionally, in a recent Manila Times Article released in January of this year, it reported that

the National Economic and Development Authority (NEDA) Board approved the contract of a

consortium led by SMC and Consunji group for the construction of the Tarlac-Pangasinan-La

Union Expressway (TPLEx). The project is supposed to have 8 interchanges, 9 toll plazas, 2

operating buildings, 20 bridges, 2 viaducts, 26 overpasses and 3 farm crossings. It is a project

that will cost about 15 billion pesos, 3.7 billion of which the government would provide. In

addition to this, SMC has publicly stated plans to increase its stake in the Private Infrastructure

Development Corp. (PIDC) to 51%. However, SMC does not stop there as it is also eyeing to

operate the Subic-Clark-Tarlac Expressway (SCTEx), which the government plans to privatize

soon. All of these recent projects and developments have been a product of this long established

relationship between the capitalist owners of these huge conglomerates and the government.

Privatization has come to be another means by which these conglomerates have achieved such

economic power in the Philippine economy.

The privatization of public enterprises was a trend that occurred subsequent to the demise

of the Marcos regime. During the 1970s in the Marcos era, the Philippines employed import-

49

SMC Website, Last Accessed 4/12/10 8:00pm

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substitution economic policies. President Marcos was aware of the powerful elite and their

attempts to gain wealth abroad and attempted to assert state power over them. However, instead

of directly battling the elite, he decided it was easier to nominate to office those members who

were willing to collaborate with his dictatorship. He wanted strong, centralized, state-led control

over the economy, such as state-owned monopolies over commodities, protectionism and

increased tariffs and import restriction, which led to detrimental effects on efficiency. Such

effects induced economic decline, which was one of the key reasons for the shrinking economy

in the 1980s.50

After Marcos fell however, there was move towards decentralization, devolution,

and deregulation, perpetuating the rising culture of neo-liberalism, or economic rationalism,

which had spread to the region from more developed nations such as the US. This led to major

structural reforms conducted by the state to make the Philippines more trade-friendly. These

reforms included, the abolition of the monopolies set up by Marcos over commodities, measures

to break down cartels (especially in the telecommunications industry), the sale of state-owned

corporations, the reconstruction of the central bank and reductions in import restrictions and

tariffs. These state-owned enterprises included energy, power, oil and mining industries, many of

which have come under the influence, via purchases of huge stakes (50% and up), by San

Miguel.

According to company chairman, Eduardo Cojuangco, San Miguel Corporation wants “to

be in industries that have scale and will grow” and claims they are “determined to build

leadership positions in key areas where important trends are driving future growth, not just for

San Miguel but for the Philippines too”. This decision to move into traditional public works is

certainly innovative but much evidence points to the fact that the decision does not necessarily

root from a pure interest to engage in developmental initiatives for the Philippines but rather to

50

Krinks, 1-10

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diversify its portfolio for greater profits. After all, according to the study conducted by the Barry

University, beer sales at the domestic level are not expected to increase much and so the decision

to spin-off is deeply rooted in the company‟s interest in investing in “more growth-oriented

industries”.51

According to the study, “the spin off of the beer business (the historical core of the

company) will provide capital to invest in new businesses, including the purchase of public

electricity generating assets which are being considered for sale by the government of the

Philippines.”52

The main dilemma that the study at Barry University intended to answer was

whether this form of diversification was a wise, strategic move or not. Moreover, the intent of

the study was to determine whether, in general, privatization of electrical services, or any public

service for that matter, is good for the Philippines. On the one hand, the company can indeed

capitalize on privatization while providing needed power generating facilities in the Philippines,

as the supply in that industry is often undependable. Such rate increases and efficiency moves

have the potential to improve the financial performance of public utility works, ultimately

contributing to quality initiatives that benefit the public. On the other hand, not only is such a

radical change in corporate strategy risky but it poses a challenge to the greater ethical issue that

a company with a questionable past and elitist origins (who tend to live above the law and

politically maneuver their way to impunity) should not be in charge of providing basic public

services.53

Moreover, according to a study by the Philippine Institute of Developmental Studies on

the impact of market reforms, the Philippines has an infamous lack of a culture of competition

that is “characterized by a weak and underdeveloped competition framework.”54

This is not

51

Rarick & Inge 52

Rarick & Inge 53

Rarick & Inge 54

Impact of Market Reforms, 1

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necessarily because there has never been an attempted regulation of this lack of competition by

the government. Interestingly enough, the country does indeed have antitrust laws forbidding

monopolies and cartels. However, as history shows, this legal system neither prevents nor fights

against illegal activities or violations of the laws. The enforcement mechanism of this sector in

the Philippines is purposefully weak. Evidence of this is established by the curious lack of

litigated cases in Philippine courts against monopolies and cartels though the level of

monopolistic activity is clearly very high in the Philippines55

In fact, domestic firms, like San

Miguel, have become very familiar with such laws on government-sanctioned monopolies and

cartels as well as policies on price controls and government protection. Addressing and

maneuvering through such laws has become part of how business is carried out in the

Philippines. According to the study, these domestic firms, instead of competing with imports and

focusing on efficiency improvements, attempt instead to evade the challenges of market

competition. They do so by orchestrating collusions and intensifying lobbying activities among

their political allies for government protection.”56

This system has come to favor business elites,

revealing serious implications regarding the impact of large firms in the Philippine market as

they undermine competition and have a great deal of influence over prices. Normally, this would

provide the impetus for state intervention, however, as this study suggests, such intervention has

been inadequate to say the least. In fact, it is more than just inadequate, the political leverage

such business elites possess actually makes this system one in which they can guarantee control

and dominance.

55

Impact of Market Reforms, 1 56

Impact of Marrket Reforms, 1

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Summary

Part One concludes with two very important points regarding San Miguel‟s rise to power

and dominance in the Philippine economy. One, that the San Miguel Corporation is a product of

the long-established network of elite business families, a social stratum which has its origins in

both colonial periods, when the transference of economic and political power was bestowed upon

a certain privileged class, first by the Spaniards and later by the US. This class consisted and still

consists of influential families, who formed alliances with one another in order to protect their

financial interests from a state that could not provide adequate protection. This contributed to the

elitist culture that continues to widen the wealth gap, causing disparities in development despite

recent economic growth through liberalization and privatization. Secondly, these familial

alliances also possess friends in the government, allowing for these huge conglomerates to gain a

great deal of access to the recently privatized public enterprises. As a result, SMC has been able

to buy influential stakes in huge enterprises aimed at providing basic public services to

Philippine society, such as projects in energy, electricity, power, oil, infrastructure and

expressways. While SMC claims it is doing so for the public interest, studies suggest that its

motivations are growth-oriented, investing in diverse industries for profit opportunities.

Additionally, such behavior, while it undermines competition and is monopolistic by nature, is

not punished by the government. Research indicates that elites have been able to maneuver the

law and establish the political ties they need to protect their activities. As a result, San Miguel

was able to attain dominance through its economic initiatives, namely expansion across borders,

monopolistic acquisitions of related industries and eased entrance into the market of public

works due to ties with the government. However, the story of San Miguel goes much further than

that.

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Part Two: San Miguel Imagined: Shaping Modernity, High Culture and Nationalism in Philippine Society

“What one consumes is a matter of national identity, or modernity, or decency.”57

-Steve Kemper

“This rupture with modernity spells the dissolution of the wall between culture and economy; not

only are economic and cultural spheres interdependent or reciprocally tied together, there is a

subtle elision between them such that cultural forms (from films to television, performances,

literary discourses of all kinds, pedagogy, conversations, political organizations, etc.) have

become commodities, and commodities in turn have become symbols or signs…”58

-E San Juan

Jr.

In Part Two, I intend to argue that the values, attitudes and lifestyles of the Filipino

people are being actively shaped by the pervasive nature of this corporation in everyday life and

the media. The people are affected by its presence in almost all aspects of modern life, including

fashion, popular culture, sports, political events, the arts, community outreach and national

developmental initiatives. The San Miguel Corporation is becoming a symbol and trademark of

the Filipino modern life and popular identity, shaping public perceptions of modernity and high

culture, producing access to nationalism through consumerism. Moreover, as the Philippines is

allowing for monopolistic, pervasive conglomerates to take hold and gain widespread cultural

influence in their society, they are transforming themselves into a society that obtains culture

through what they consume. Not only is San Miguel able to shape identity, it also reflects back

on the Filipino people perceptions they have of their own identity. This can be seen through the

campaigning on developmental initiatives and the establishment of the San Miguel Foundation,

Inc. Thus, the San Miguel Corporation, through its effective branding, marketing and

campaigning initiatives, has shaped what it means to be a modern Filipino, manufacturing a

ready-made identity, which is half modern consumer and half responsible Filipino citizen.

57

Steve Kemper, Buying and Believing, 1 58

E. San Juan Jr., English in Cartography of Globalization, 97

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Western Influences: Language and Standards of Beauty

It was in the Philippines where the U.S. first devised and perfected its neo-colonial methods of

military counter-insurgency and „civic action‟ pacification; of cultural desublimation and

cooptation; and of economic domination by diplomatic and political machinations. 59

-E San Juan

“The conventional wisdom is that the source of cultural production is the West, and it is true that

entertainment is the United States‟s second largest export…As commentators have said in a

variety of ways, the West is everywhere. 60

-Steve Kemper

The analysis of the ads in this section will reveal the origins of Western influence in

Filipino modern culture. This is significant in that Filipinos model their polity and society after

U.S. structures. To mention a brief history, subsequent to the Spanish-American war, the U.S.

took possession of the Philippines as a colony unit and as the first quote above suggests,

transferred its system of economic and political structures to the region. Moreover, as Part One

explains, the U.S. prioritized and legitimized a particular class, the socioeconomic elite of the

Christian majority. As a result, economic and political dominance was awarded to them and as

they were backed by U.S. polity models and armed support, the greater population was incapable

of challenging the Christian Filipino symbolic “establishment”.61

Such U.S. polity models and

neo-liberal economic ideals became the bedrock upon which Filipinos, even after gaining

independence, founded their own common national culture and identity. This is supported by

cultural anthropologists who argue that

…elements of colonial culture played an important role in the construction of the new national

culture. This included not only the bureaucratic apparatus of governmental administration

inherited from the colonial past and the new ways of doing business or educating the young

introduced during the colonial period but also the language in which all these activities would

be carried out.62

59

San Juan, E. Crisis in the Philippines: The Making of Revolution, 19 60

Kemper, 9 61

Federico V. Magdalena, Intergroup Conflict in the Southern Philippines: An Empirical Analysis, 299 62

Lavenda & Schultz, 28

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As a result, popular culture as well as national identity in the Philippines is highly influenced by

such Western models and standards. In fact, Western culture came to be the meaning of high

culture and Western standards act as the yardstick for modernity, uprightness, decency, and even

beauty. In fact, the media constantly perpetuates Western standards of beauty and notions of

what is “sexy” and “cool”. According to Kemper,

To locate its origins in space as well as time, advertising began as a Western practice, and more

narrowly an American one. In its origins it had no connection to colonialism or Western

domination. But wherever advertising has spread- and in the early twenty-first century, few

places on the planet lie beyond its reach- it has carried with it values, assumptions, and

economic interests that are also Western.63

Perhaps the most obvious area of influence the US has had on Filipino culture is the

language. There is a clear pervasion of the English language in everyday life and education. As

scholar E. San Juan Jr. argues in his article entitled “English in the Cartography of

Globalization”, in the Philippines there is a “cultural empire of English-speaking peoples”.64

According to San Juan Jr., “English remains the language of opportunity and aspiration.”65

It

spread rapidly in the Philippines because it was the new language of government, the school

system and of general preferment. It is considered civilized to know English and most higher

education systems for skilled work such as lawyering, nursing and medicine are conducted in

English. Hence, the incentives to learn English are very strong as they entail such things as

getting a high-paid job, community respect and leadership as well as “recruitment into the civil

service, opportunities to study in-and migrate to- the US; and the use of English for business

beyond the islands.”66

If Spanish colonialism can be thought of a Westernizing force on the

Philippines through the spread of Catholicism, then U.S. colonialism superimposes this

63

Kemper, 19 64

San Juan Jr., 99 65

San Juan Jr., 104 66

San Juan Jr., 103

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Westernization, tapping into the school and political systems paving the way for other

Westernizing agencies.67

According to cultural anthropologists, this is a typical occurrence in

new nation-states that were formerly colonized.68

Such nation-states choose “the language of

their former colonizer as the new national language of government, business, and education.” 69

They argue that it was efficient, allowed continuity in changing circumstances and it also did not

permit the state to favor any particular indigenous language group over others.70

San Juan Jr. further argues that the native languages have been neglected and have

suffered from underdevelopment. As a result, he agues that the pervasion of English has

“retarded the intellectual life of the people” and “has made the Filipino mind most receptive to

the more banal aspects of American culture as transmitted through films, TV and popular reading

matter. Such „cultural‟ fare in turn transmits those consumer tastes and attitudes that U.S.

corporations find it most profitable to implant. 71

However, while San Juan Jr. emphasizes how

U.S. corporations profit from this transmission of consumer tastes and attitudes, I emphasize that

domestic conglomerates, such as the San Miguel Corporation, often employ the same strategies,

localizing taste and forging common identity. Figure 1 shown below is an example of one such

San Miguel ad that features such use of English. In order for a consumer to even understand the

ad for instance, they must know how to speak English. More than that, they also must know the

cultural meanings of “hotness” and “sexy”. The fact that Filipinos use these American words to

communicate their „coolness‟ so to speak says a lot about how they model their own pop culture

after American norms.

67

San Juan Jr., 103 68

Lavenda & Schultz, 29 69

Lavenda & Schultz, 29 70

Although, ironically for the Philippines, the imposed language on all other indigenous languages is Tagalog. 71

San Juan Jr., 103

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Figure 1 A print advertisement for the promotion of San Mig Coffee demonstrating the pervasion

of the English language in the mainstream media. It also hints at Western standards of beauty.

Aside from social and political values, Western standards also dictate what is considered

beautiful in the mainstream. For example, Figure 1‟s catchphrase is “Be the #1 in hotness” and

features two such individuals who model such “hotness”. Looking at their physical make-up, it is

evident that Western features such as lighter skin, sharper and more distinct noses, bigger eyes,

etc, are considered the yardstick of beauty. The closer one exhibits such features, the more

beautiful they are considered. Individuals with such features are often the ones that appear in ads

and commercials. It is rare to see a San Miguel commercial with a darker-skinned protagonist. In

the greater region of Southeast Asia, even Thailand, Vietnam and Malaysia, there is the

phenomenon of the pan-Asian. They are considered the “yardstick of beauty,”72

because they

lack a definite ethnic look. In fact, models that look solely Caucasian have an even greater

advantage than those who merely exhibit Caucasian features. According to the pan-Asian head

72

Kemper, 55

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of a casting agency in Malaysia, these pan-Asian men and women are valued for their ability to

represent both native Malaysians and European beauty because their “partially European origins

give them stronger noses and sharper jaw lines than most Southeast Asians.”73

Evidently,

Malaysians find these strong features attractive because the images and people that are featured

on television and in the movies (Sylvester Stalone, Tom Cruise, Cindy Crawford) from the

entertainment industry imported from the U.S. have such features. As a result, these pan-Asian

stars definitely represent the Malaysian people but look like American stars. Businesses hence

exploit their association with Western standards of physical beauty.74

The San Miguel

Corporation applies all of the aforementioned Western influences in their ads and commercials,

advancing the interests of a particular class and race. Consider the portrayals of beauty in the

following ads:

Figure 2 A series of San Miguel print advertisements demonstrating Western standards of

beauty, characterized by lighter skin, bigger eyes, stronger noses and more defined jaw lines.

Certain models exhibit the characteristics of the „Pan Asian‟, lacking a definite ethnic look.

Figure 2 clearly perpetuates such Western standards of beauty, especially as the women are more

light-skinned, have bigger eyes, sharper noses and jaw lines than most Filipinos. They also look

very American in general yet are meant to represent the Filipino population, supporting the

73

Kemper, 55 74

Kemper, 55

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notion of the desirability of the “Pan-Asian” look. Additionally, the women are wearing very

revealing tops, showing a lot of skin, which indicates the very distinct theme of sexuality that is

very prevalent in the US media, which seems transposed here into the Philippine mainstream,

perpetuating ideas of what is “hot” and “sexy”.

Perhaps the most notorious examples of such Western standards of beauty and lifestyle

are promoted in the San Mig Coffee commercials. Every so often, San Miguel launches the

promotion of a new product. In the month of July, that product was the new line of San Mig

Coffee, which spawned the release of a series of commercials that intended to promote the new

line as a commodity that is both delicious and healthy. This new line has four variants: Pro-

beauty, Pro-Fiber, Pro-Power and Pro-slim. They promote the coffee as “the perfect coffee”

because it is pro-health and challenges the consumer to “drink to perfection”. In one particular

commercial75

, San Miguel sells its new Pro-Health coffee and it features a series of models

consuming the product and then proceeding to engage in a series of healthy activities such as

exercising, going to the spa, doing yoga, etc. Aside from the health club music and dazzling

images, the most important thing to note about this commercial is the kind of people that model

in it. They appear to be completely Western. The women in the commercial are light-skinned and

blonde and the men featured are tall, white and athletic. While the main crux of the San Mig

Coffee promotions is to market a product that will make Filipinos both healthy and beautiful, it

continuously utilizes images of the Western man and woman as the mascots of such beauty and

health. Not to mention, this commercial is also entirely in English. This tells Filipinos to

associate beauty, health and popular communication with being light-skinned, westernized and

knowing English.

75

http://www.sanmiguel.com.ph/Articles.aspx?MID=1&ID=5&a_id=791, Last Accessed, 4/12/10 4:55pm

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Class & Racial Cleavages: San Miguel Reflections

What is powerful and frightening about this transformative process is that advertising- at least in

its exemplary forms- works by indirection and metaphorical association. Rather than focusing on

the commodity itself, it puts the commodity in contexts marked by signs of class, gender, nation

and personhood. The commodity is more accessible; the context more engaging. In that

interaction, the commodity acquires meanings otherwise unearned.76

-Steve Kemper

The quote above comments on the idea that commodities can acquire meanings as they

are placed in contexts of class, gender, nation and personhood. To return to Kemper‟s theory on

advertising, he argues that it mediates certain social forms and relationships, such as the nation

and what lies beyond the nation, culture and commerce, producers and consumers, rural and

urban, and citizens and government.77

Because advertising produces culture, rather than just

profits, it links these social forms and reimagines the relationships between them.78

Moreover,

advertising tends to be all-inclusive, catering to any and all who expresses interest in the product.

Advertising executives would not necessarily pin this as a bad thing. In fact, as Kemper points

out, such executives insist that advertising has social benefits because it empowers people to

practice choice and consume. They would argue that the consumer is sovereign and thus

“informs and plays a role in fostering rational choice on the part of individuals…”79

This results

in an increase in sales, which would reduce the cost of products. In developing economies where

there is a large population of people mired in poverty, advertising allegedly creates economic

development by turning peasants and farmers into consumers and citizens.80

Therefore, San

Miguel commodities and advertisements perpetuate class and racial divides in Filipino society

while being inclusive to all Filipinos including people of the lower class in order to compel them

to consume the lifestyle of the rich and „modern‟.

76

Kemper, 21 77

Kemper, 21 78

Kemper, 21 79

Kemper, 23 80

Kemper, 23

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The recent TV commercial entitled “San Miguel Reflections” illustrates this with

precision. 81

In this commercial, which is very aesthetically-pleasing and flashy, San Miguel

markets its very versatile line of beers to cater to any occasion, any night and any group of

people. Each kind of beer corresponds with a particular style of gathering, such as a night out

with friends, as a couple, at a rock concert, doing business, out at the rice fields, etc. However,

while it seems to cater to all tastes, it is evident that it normalizes certain lifestyles and values,

namely those of the upper class. Most of the people in the commercial are portrayed as living a

very luxurious lifestyle- a life of glamour in an urban environment. This touches on the

association of modernity with urbanization. Moreover, the way the people interact with one

another, what they are wearing and even the way they look spur the public imagination of what it

means to be modern and civilized in Filipino society. It sells an extravagant lifestyle to the

masses, delivering modernity to the people through the consumption of these products. This can

be seen particularly with the bit in which it shows San Miguel beer being enjoyed by two farmers

in the rice fields. This communicates to Filipinos that even the farmers are drinking the product.

San Miguel clearly markets itself as having products which bring the fruits, comforts and joys of

modernity to the ordinary citizen.

As compared with the lifestyles portrayed in the commercial, the life of most Filipinos is

not quite as extravagant. The numbers of those living in poverty have doubled and the wealth

gap itself is increasing.82

In fact, it has been described as “a peculiar aspect” of the Philippine

economy and development that poverty reduction has been the slowest in East Asia and

economic inequality has been persistently high even after increases in GDP and wealth.83

The

distribution of wealth in the Philippines has been consistently unequal. To remedy this, economic

81

http://www.youtube.com/watch?v=_1veIaBVX4I, Last Accessed, 4/12/10 5:14pm 82

Krinks, 220 83

Arsenio Baliscan and Hal Hill, The Philippine Economy: Development, Policies and Challenges, 311

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analysts have emphasized that the government ought to prioritize providing good-quality, equity-

oriented public goods such as education, health services and rural infrastructure. They also point

out that the privileged commercial position of the highly concentrated family conglomerates (the

so-called “oligarchs”, such as the San Miguel family) ought to be subjected to greater

competitive pressure. They point out that one of the more intriguing issues of the Philippine

political economy is how this concentrated commercial power translates into political power.84

However, as Kemper points out, advertising executives will highlight the positive social benefits

of advertising as they turn peasants into consumers, which increases sales and lowers price.

Turning these lower class individuals into consumers also entails awarding them a sense of

citizenship to the world of commodities, which has localized itself to be reimagined as the

Filipino modern world. As a result, San Miguel effectively sells the life of the bourgeois to the

masses as it transforms itself into a symbol of national identity.

Branding in Everyday Life

Perhaps another area in which San Miguel maintains a pervasive influence is through the

constant appearance of its name and logo in all aspects of everyday life. With regard to the

cultural influence and symbolic power of branding, we must turn to scholars Celia Lury and

James Twitchell. Celia Lury, in her book entitled Brands, argues that the brand is a “market

cultural form” that “mediates the supply and demand of products through organization, co-

ordination and integration of the use of information.”85

This use of information is what allows

corporations like San Miguel to manipulate the public imagination. She argues that the brand is

an interface that organizes the exchange of information between producers and consumers,

84

Baliscan and Hill, 33 85

Celia Lury, Brands, 4

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affecting how they relate to one another.86

Moreover, she alleges that branding involves both

exclusion and inclusion, as it produces both sameness or identity but also “difference, sensation

and intensivity”, making it a market cultural form that is both abstract and concrete.87

Its

symbolic power to create common identity coupled with its incompleteness and openness allows

a variety of consumers to relate to the product or symbol of the product in a plethora of ways,

accommodating multiple perspectives and identities. Lury would argue that this dual function of

the „virtual‟ and the „actual‟ is what makes brands so effective. San Miguel Corporation

maintains such openness in its choice of words and catchphrases in ads. Observe the following

examples of San Miguel branding:

(Ito Ang Beer- This is Beer)

86

Lury, 7 87

Lury, 10

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Figure 3 A series of images that features San Miguel branding and the appearance of the San

Miguel name in aspects of everyday life such as on grocery items (beer, coffee and the corned

beef can), in the sale of real estate, as sports teams (note: Ginebra is also owned by San Miguel),

in backyard gathering, in the production of raw goods and in community development

initiatives88

.

88

Image 1: sanmiguelbeer.com/ph, Image 2: sanmiguel.com/ph, Image 3: Filipino-store.com, Image 4:

business.nfo.ph, Image 5:filsg.com, Image 6: store.pba.ph, Image 7: sanmiguelpurefoods.com, Image 8:

greatfoodsolutions.com, Image 9: 4.bp.blogspot.com/.../s400/San-Miguel-beer.jpg, Image 10: sanmiguel.com.ph

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The images in Figure 3 portray how San Miguel has made itself a name that cannot be escaped in

Philippine society. Moreover, it locates itself in versatile settings, even though its main market is

for food and beverages. For example, there is the portrayal of Filipino soldiers drinking San

Miguel and a San Miguel community clinic. These are symbols that communicate to the people

of the Philippines that anything they could possibly need, want and desire for themselves and for

their nation can come from San Miguel.

James Twitchell also touches upon this issue in his book entitled Branded Nation.

Twitchell defines branding as the commercial process of story-telling and the meaning-making

motor of consumerism.89

Moreover, he suggests that branding could be a means to transmit high

culture. He argues that “the most successful recent branding exercise has to do with how high

culture is currently being created and shared.”90

He alleges that branding concentrates consumer

desires toward manufactured items, functioning in a marketplace of cultural values of beliefs.91

He relates the search for community to the concept of cool and how producers exploit such

concepts to create a sense of unity based on shared use. He argues that achieving cool means the

“certification of membership in a branded community”.92

Twitchell wittingly articulates this

relationship in the following hypothetical scenario:

Mr. and Ms. Product and their kin are not from Utopia but from Adopia, a parallel universe, a

kind of commercialized version of Romantic nature, inhabitants of Brandville. We all know many

of them, often better than we know some of our own family. And we know them because of (1)

storytelling necessity of separating fungible products, (2) the predictable humanizing of the

manufactured world to generate those stories, and (3) our learned and practiced willingness to

move back and forth between the real world and Adopia, suspending judgment in the hope of

building some kind of magical relationship that will generate meaning for what is really just

beer, chocolates, sugar water or a meat patty.93

89

James Twitchell, Branded Nation, 2-3 90

Twitchell, 3 91

Twitchell, 3 92

Twitchell, 23 93

Twitchell, 25

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I want to emphasize his mention of a kind of “magical relationship” that generates meaning for

consumers regarding ideas over common identity, modernity and high culture. This is in many

ways what is occurring with the San Miguel ads as they pervade all functions of life in the

Philippines. As San Miguel is monopolizing certain industries, its name and brand is found on all

commodities of that industry. As it has expanded to public works, Manila Times articles are

exposing the San Miguel name behind some of the nation‟s biggest developmental projects like

the construction of expressways, mobile networks and energy projects. As a result, it appears that

everyday Filipinos are living in a world that is provided by San Miguel as they sip their drinks,

eat their food, go to events, watch television, package their goods, purchase properties, drive

down expressways, use their electricity, go online and look for jobs.

If brands possess symbolic power, San Miguel utilizes this process to advance its cultural

influence by putting its name purposefully on the food brands it has acquired, such as Filipino

favorites like Purefoods, which appear in general stores and supermarkets. The name San Miguel

is thus a constant presence even on regular grocery store goods, finding its way into kitchens

nationwide. The effect is psychological as people constantly see the name San Miguel on their

most beloved items to consume. A trust is established then between the people and the label and

the brand San Miguel comes to symbolize happiness and joy, which is what people feel and they

eat their favorite foods and drink their favorite beverages. Especially if we are to consider the

fact that San Miguel‟s very motto is “Making life a celebration”, it is clear that San Miguel

considers itself the brand that brings greater joy to an otherwise difficult life in the Third World.

Such marketing tactics are comparable with that of Coca-Cola, one of the most successful

marketing corporations in the world.

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San Miguel on Corporate Social Responsibility and Governance

Ideas on corporate governance and corporate social responsibility have become a

growing trend for modern corporations. According to Lodge & Wilson in their book entitled

Corporate Solution to Global Poverty, there has been a decline in the legitimacy due to large

scale abuses in corporate governance. While in the past corporations derived their legitimacy

from maximizing profits and shareholder value and satisfying consumer desires, now they are

being expected to address community needs. Such a role was normally assumed by the

governmental bodies. However, now that poverty reduction is a part of the agenda, many

governments are ill-equipped to make an impact on such an issue. Not to mention, many

governments would be reluctant to pressure corporations to address such concerns. As a result,

there is a growing trend that the social responsibility should be embedded in the corporate

structure and agenda. Moreover, in order for corporate managers to regain their legitimacy, they

must respond to the demands increasingly being made on their firms to “do more to alleviate the

poverty that plagues most of the world.”94

With regard to the San Miguel case, it is through this medium that we see how San

Miguel has reflected the growing concerns of Filipinos themselves regarding the nature of

corporations, namely transnational corporations, which have been identified as imposing neo-

liberal conditions on the country inducing unfavorable growth in wealth disparities. In 1986, the

EDSA revolution, also known as the People Power revolution, indicated the onset of negative

feelings towards the establishment, which included members of the elite in positions of both

economic and political power. A single school of thought on community relations originated in

the San Miguel Corporation Agribusiness Division after the outset of the revolution and the

94

Lodge & Wilson, Corporate Solution to Global Poverty, 2

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return of the Sorianos to the corporation.95

It was then that San Miguel began putting together a

firm-wide corporate social responsibility policy, which would later be translated in a five-year

community relations program.96

Launching this program was San Miguel‟s attempt to publicly

proclaim that they recognized their role in the social and economic development of the country.

They adopted a new corporate philosophy, „Profit with Honor‟, which they attempted to integrate

into the culture of the firm, affecting its operation as a business corporation, employer, user of

stockholder and financial funds and corporate citizen.97

This included improving worker

conditions and providing employment enhancement/livelihood opportunities for worker

dependents. There was a big emphasis put on community education and the formation of values

within these communities.98

Hence, in addition to already having popularity in the mainstream

media, San Miguel also portrays itself as the corporation that gives back, the corporation that can

do no wrong, which it makes a point to campaign.

While this may all seem like good news, there is much to be said about novel ideas

regarding social responsibility that evolve from an entity with this degree of cultural hegemony.

In a way, by evolving a single school of thought on this issue as far back as 1986 when notions

of freedom from the Marcos era were fresh, San Miguel was able to be the first on the scene in

addressing these issues, essentially controlling the discourse on the matter. Moreover, as it was

discovered in Part One, their monopolistic and anti-competitive practices suggest that at the heart

of their actions is the profit-generating motive. Furthermore, the funding poured into public

works seems to emanate more from a desire to diversify their portfolio rather than from notions

of social responsibility. In fact, as this section will prove, addressing these issues of corporate

95

Luz, 299 96

Luz, 299 97

Luz, 299 98

Luz, 299

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governance and social responsibility, while they are reflective of growing Filipino consciousness

about the environment, economic development and the promotion of education, may just be

another means of control and cultural dominance. David Henderson in his book entitled

Misguided Virtue, False Notions of CSR heavily criticizes supporters of corporate social

responsibility and argues that the progressive widening of competition and economic freedom,

which would allow businesses to function better and create opportunities, ultimately working

towards poverty reduction is not a part of their thinking. He argues that they instead advocate for

a radical program of change based on environmental norms, „social justice‟, and bringing in

stakeholders.99

As a result, the preoccupation is with making businesses more popular and more

respected through making a genuine commitment to corporate social responsibility. However,

what is not considered is how such a response may affect competition and economic freedom.

Henderson states, “It may indeed be true, or eventually become true, that a general adoption of

CSR would promote the objective of making MNEs better liked and appreciated, and thus help to

keep them alive and profitable in an unfriendly world. But this would come at the cost of

accepting false beliefs, yielding to unjustified attacks, and impairing the functioning of the

market economy.”100

Hence, the San Miguel Corporation utilizes its campaigns on corporate social

responsibility to be more respected and popular, especially among the proletariat who are most

concerned with issues of development, the environment, literacy and education programs, quality

working conditions and support for small entrepreneurship. It comforts the lower class Filipino

that San Miguel the giant is taking care of him or her. However, as Henderson warns, such

policies and promotions of values around this issue of corporate social responsibility do not

99

David Henderson, Misguided Virtue, 141 100

Henderson, 142

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actually take into account the effects it may have on economic freedom and competition. Having

codes of corporate social conduct does not necessarily undo the negative effects of monopolistic

or anti-competitive business practices, though it may be enough to appease potential criticisms of

NGOs, the public or academics. However, the more interesting thing to analyze is that what San

Miguel is doing with these campaigns is more than just portraying themselves as the do-good

corporation, but they are also selling ideas of national morality to complement their cultural

dominance over national modern identity. Now, not only is it nationalistic, classy, „cool‟ and

modern to consume San Miguel products but through supporting the San Miguel business, it also

means that you care about your fellow Filipinos, as San Miguel is very active in funding

developmental initiatives for the country. As a result, San Miguel masks the maintenance of its

monopolistic activities through campaigning developmental initiatives and promoting positive

ideals regarding national morality and decency. After all, San Miguel helps bring books to

schools, helps restore rivers and clean up the environment, assists small businesses in launching

themselves and restores hope in the country and the people.

Symbolic Power: The San Miguel Foundation, Inc.

We believe social responsibility and corporate citizenship are integral parts of our business. We

are committed to improving lives of people in the communities in which we live and work.

–San Miguel Website101

101

SMC Website, Last Accessed 4/15/10 6:17pm

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Figure 4 Images associated with the San Miguel Foundation, Inc. highlighting its educational

initiatives such as the national book drive.102

The San Miguel Foundation, Inc. has a very powerful, symbolic meaning for the Filipino

people. The campaign itself produces ideas about what it means to help and give back to the

Filipino community. On the San Miguel Website, it states its vision as the following: “To take

the lead in realizing San Miguel Corporation‟s commitment to social development in the

Company‟s effort to contribute towards the improvement of life in the communities in which it

operates and the public it serves.” It does so in the following ways:

Promote education to youth from low income families through scholarships, literacy classes and

support programs like supplemental feeding, book donations, etc. Strengthen communities

through capability building activities and the provision of basic social services; Support local

enterprises that bring livelihood opportunities to community groups, dependents, San Miguel

retirees and other stakeholders; Provide assistance to disaster-stricken communities through

relief and rehabilitation programs; and protect, preserve and regenerate the environment.103

It is important to note that, when thinking about these initiatives, whether or not they are

actually successful has little to no significance. What is more significant is the symbolic power

of the campaigns. With regard to this phenomenon, we must turn to the social semiotic analysis

of McDonald‟s advertisements, especially focusing on how it promotes its environmental

programs. It was discovered that while many people have negative or ambivalent associations

with McDonald‟s, “the corporation, through charitable activities and gaudy, enthusiastic, loud,

family-focused ads, simulates happiness, togetherness and „giving Mom a break‟.”104

This

represents a systematic attempt “to replace or displace attention from the potentially ambivalent

or negative significance of a McDonald‟s trip.”105

By marketing the “positive experience of

going to McDonald‟s, such as „happy‟ meals, clowns, playgrounds, golden arches-reminiscent of

102

All images taken from SMC website 103

SMC website, last accessed, 4/12/10 6:20pm 104

Denzin & Lincoln, 471 105

Denzin & Lincoln, 472

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rainbows and heaven,” the symbolization defers focus from possible negative implications of the

visit.106

More importantly, “environmentally friendly” pamphlets written in 1990 were meant to

indicate recycling initiatives were underway, which “function ritually” to demonstrate that the

organization is addressing concerns for health and the environment.107

The San Miguel Foundation, Inc, functions in a very similar way. It addresses the main

concerns of the Filipino people, including poverty, environmental degradation, illiteracy, poor

working conditions, lack of small entrepreneurship and disaster relief. By campaigning

initiatives that remedy these concerns and devoting an entire foundation to funding and

executing projects in response to those concerns, it convinces the modern Filipino consumer that

by supporting and consuming San Miguel products, one is helping to generate profits for the

greater good of Filipino society. Such campaigns have two very important effects; they allow

San Miguel to maintain its image as the do-good corporation which defers focus from the

possible negative associations with its anti-competitive and monopolistic practices, constituting

the main focus of this section, yet more importantly, they also produce notions of national

morality, generating an “imagined community” so to speak that is accessed through

consumerism. It is this second effect that is the focus of the next section.

National Morality: Beyond the Bottom Line

Perhaps the best manner in which to demonstrate how the concept of national morality

has been advertised by San Miguel is through the semiotic analysis of its corporate video

“Beyond the Bottom Line”. 108

In this video, with heart-warming music, San Miguel

communicates that it has “a passion for life…life that flows in abundance…abundance that leads

106

Denzin & Lincoln, 472 107

Denzin & Lincoln, 472 108

http://www.sanmiguel.com.ph/Content.aspx?MID=0&coid=1&navID=10, Last Accessed, 4/12/10 8:00pm

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to sustainable growth…growth that uplifts the quality of life.” It then proceeds with symbolic

representations of four elements of nature; fire, water, earth and wind, indicating a return to the

values of nature. It proceeds to highlight environmental programs, including cleaning up rivers,

reducing gas emissions, etc. Most of the people shown in the video reside in local communities

and there is a constant usage of nostalgic images of islands, palm trees, which are symbolic of

native, uncorrupted land. The use of children indicates their emphasis on the concern for future

generations and also serves to arouse feelings of family, kinship and community. Moreover, it is

clear that through this campaign, San Miguel has been able to perpetuate a sense of national

pride and morality because of these developmental initiatives. It is both reflecting and shaping

how Filipinos are conceptualizing national morality. Although such a campaign may have been

meant to mask monopolistic practices as mentioned in the section before, it is important to point

out their nationalistic potential in that they provide a way in which Filipino citizens can begin to

take pride in paying attention to their domestic problems.

Summary

Part Two concludes with the fundamental argument of this thesis: San Miguel

Corporation is a powerful commercial engine of cultural production, catering to both

individualistic, consumer desires and national sentiments. Through its marketing tactics, which

include its advertisements, television commercials, branding strategies and campaigns on

developmental initiatives, it has not only shaped what it means to be modern, cool, classy,

beautiful, healthy, civilized and have high culture in Filipino society but it has also become a

medium through which the Filipino people can establish a sense of nationalism. However, while

nationalism was once an idea attached to the territorial nation-state which was accessed through

citizenship, the form of nationalism discussed here is one that is accessed through consumerism.

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Such a phenomenon has implications regarding the nature of society in the capitalist mode of

production in a postmodern world; that is, that the line between citizenship and consumerism is

becoming more blurred.

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Conclusion

Figure 5 San Miguel recent advertisements featuring national icon Manny Pacquiao

109

After boxing his way to become the current WBO World welterweight champion, Manny

Pacquiao has become more than just an idol in the international sport of boxing, he has become a

Filipino national icon and hero. As a pioneer of Filipino representation in global athletics, he has

become an inspirational public figure in Philippine society. Idolized and adored, Pacquiao has

become a symbol of national pride, strength and ambition as people take pride in his

accomplishments as if they were their own. His story parallels with the story of San Miguel, as

San Miguel Beer is a pioneer of Filipino representation in global beer, earning a spot amongst

the top ten global beer brands. San Miguel‟s success as a transnational business that does not

forget its Filipino roots is a point of pride for the Philippine people. It is only natural then that

these two stories merge, as San Miguel features Manny Pacquiao frequently in its recent ads and

commercials. San Miguel utilizes the face of this national hero as its own face, conjuring up

109

All images taken from SMC website

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national sentiments that in turn attach to its commodities and products. Now, as a Filipino, you

can drink, eat, live in, package with as well as develop, build a community, clean the rivers and

help children with San Miguel products because after all, it is what Manny Pacquiao, the national

hero, would do.

These Manny Pacquiao ads illustrate quite effectively the fundamental discovery of this

thesis; that is, in post-colonial nation-states, the tools of the post-modern capitalist order, those

being commoditization, advertising, branding, marketing and campaigning, can be used to

produce or provide access to nationalism. Returning to Anderson‟s classic theories on this issue,

he emphasizes print capitalism as the means by which national consciousness is spread, which in

turn leads to the evolution of an “imagined political community” that spurs the formation of the

nation-state. However, as this case study with San Miguel suggests, there evolves a new kind of

print capitalism that manifests itself in the form of visuals ads, labels, commercials, television,

movies, music, and the internet. This new kind of print capitalism moves rapidly, reaching

unprecedented scopes of people at unparalleled speeds, and uses symbols, colors, music and

signs to communicate with its viewers. However, this “imagined community” is not one

sustained by anti-colonial sentiment or the desire for horizontality. Rather, it is sustained by both

the societal need to attain high culture and modernity and the desire to forge a sense of national

identity and morality through the shared use of commodities. As a result, San Miguel has been

instrumental in the process of transforming Philippine society into one that exists in a post-

colonial nationalist framework into one that functions within a post-modern capitalist order that

provides access to nationalism through shared consumption of commodities.

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Such a phenomenon has both negative and positive implications. The negative

implication is that in such a capitalist order, corporations, like San Miguel, do not just possess

the ability to monopolize in an economic sense but also in a cultural and nationalistic sense. San

Miguel, especially as its name is inescapable in Philippine society, is not just able to establish

cultural hegemony but also a monopoly over the most popular values, lifestyles and ideas on

modernity in Philippine society. However, from a more utilitarian perspective, one positive

implication of the dominance of such corporations is their ability to reach the national

consciousness with great effectiveness and speed. If nationalism can be accessed through

consumerism, then that entails a social unification of peoples through the shared use of

commodities.

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Author’s Note

This research was mainly conducted through applying relevant theories on the production

of culture through commodities and advertising to the case of San Miguel. Most of the analysis

comes from readily available media, such as its website, print ads, television commercials and

campaigns. While this research makes very clear how San Miguel portrays itself, what it lacks is

a more in-depth understanding of how the Filipino people themselves respond and react to San

Miguel. It is clear that San Miguel is a huge influence in popular culture but perhaps more

interviews with people on the ground could provide a more nuanced perspective of how they

shape the meaning of San Miguel in their lives. After all, the nature of a corporation is to respond

to consumers, thus consumers can shape corporations themselves. Hence, these mega-companies

entail a new way in which citizens can project their identities amongst each other, holding

together their own imagined community. The community-building potential of such shared

consumption is yet a topic for further research.

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