Bernardo M. Villegas
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The Enduring Value of Competition

           If there is only one more major bill that I would like the Philippine Congress to pass before the end of the present Aquino Administration, it is the Competition Law that has been languishing in the Legislature for more than a decade.  An effective competition law will go a long way to reduce the inequality of wealth and income in Philippine society, still controlled by a few families through monopolies and oligopolies of vital and strategic industries.  My deep involvement and passion for football, further fueled by the ongoing World Cup games in Brazil, have convinced me even more that competition is a very healthy force in many spheres of human life.

          Take what happened on June 14, the second day of the World Cup, when the Spanish team, the defending champion,  suffered a catastrophic defeat in the hands of the Dutch and then on June 18 when Spain was finally eliminated from the 2014 World Cup by losing to Chile, 2-0.  There was a lot of talk before about the sheer dominance of the Spaniards in European football.  Two Spanish teams--Real Madrid and Atletico de Madrid--reached the finals of the Champions League for 2014.  Sevilla won the UEFA champions league.  The Spanish team is the reigning World Cup and European League champion.  Well, as was obvious last June 14, even the person previously known as the best goal keeper in the world, Iker Casillas, could make so many elementary errors.  The same could be said about the Spanish League, the one I watch most closely every season.  For the last three or four years, Spaniards were complaining about the duopoly exercised by FC Barcelona and Real Madrid.  It was a foregone conclusion that either of them would win the various tournaments in Spain.  But the 2014 season saw a very different landscape.  Atletico de Madrid, very poorly funded in comparison to the two duopolists, won the Spanish League.  Towards the end of the season, even FC Barcelona and Real Madrid were losing to teams that were close to being relegated to the second division.  As a friend of mine remarked in commenting on these unlikely reverses, "Ang bola ay bilog" (the ball is round). I am sure that given the experiences of the 2014 season, Spanish football fans will no longer complain about the boring panorama of a duopoly and will go in increasing numbers to the La Liga games.  This is a clear example of how greater competition among the Spanish teams can result in increased revenues for the various clubs, not only in terms of gate receipts but also in the greater willingness of business enterprises to endorse the teams and the individual players like Cristiano Ronaldo, Lionel Messi, Neymar and other star players. Increased competition among the clubs can actually lead to an increased GDP, in the same way that competition among business enterprises can lead to increased income and employment for the entire economy.  Monopoly is bad for both sports and the economy.

          Sadly, I must confess, my favorite team, FC Barcelona, is facing an uncertain future in the next few years.  Referred to as the "best football club ever" by some sports commentators just two or three years ago (in 2009, it bagged all the possible six trophies it could win), Barca did not win a single title in 2014.  It has had three changes of coaches in the last two years, once because of death.  It has now a new coach, Luis Enrique--a former Barca player like two of its most recent coaches--but it still remains to be seen whether Enrique can bring back the Catalan team to the peak of its glory under Pep Guardiola, who now coaches the German team Bayern Munich, and who is the highest paid football coach in the world today.  This is not the first time in the last ten years that Barca is facing a crisis.  When I resided in Barcelona in 2006 to 2008, it was not winning any title and had difficulties with both its coach and the President of the Club.  The pressure of competition forced the Club to change both President and Coach and the rest is history.  Under Pep Guardiola, Barca was unbeatable both inside and outside Spain.  In an analogous way, I would venture to say that increased competition in our energy, telecom, transport, public utilities, and media sectors can bring prices down and improve services, especially if we open them up to more foreign investments.  Note that some of the best strikers in the 2014 World Cup are playing for clubs outside their home countries:  Lionel Messi, Neymar da Silva Santos Junior, Robin Van Persie, Arjen Rooben and Luis Suarez.

          Fierce competition can thwart even the most research-based forecasts.  Before the World Cup began, the investment bank Goldman Sachs used sophisticated statistical models to forecast that the four leading contenders for the cup would be Brazil, Argentina, Germany, and Spain.  The results  of the knock out games so far  show very different possible outcomes.  Brazil is highly favored to be the winner because it has won the World Cup five times since 1950--in Sweden in 1958, in Chile in 1962, in Mexico in 1970, in the United States in 1994 and in Japan in 2002.  No European team has ever won in Latin American soil. Now that Spain is out of the competition, I would like to see Brazil bag the trophy.  It would be a vindication for its leaders who risked a lot politically and economically for agreeing to host the World Cup.  A victory could even bring the B in BRIC back to leading the emerging markets in powering the world economy in the coming decade or so.  Here again, competition among the BRIC countries and the Next Eleven in attracting investors from all over the world may pull up the rest of the global economy from the lingering effects of the Great Recession. For comments, my email address is bernardo.villegas@uap.asia.