37 (Implication 10). Finally, the government tries to privatize the telephone systems it has developed before the end of the president's term in office (Implication 4).

By 1990 the new competitive political system had weathered several crises and become more settled. The leadership also had become more cohesive, as the elite regained control and reestablished the institutions through which they exercised control, although the non-elite groups, especially the middle class, had more influence than in the past.

The PTIC group managed to improve its political standing with the elite groups that finally won out in the leadership struggle. The influence of the Cojuangco family in the legislature and the bureaucracy and its control of a major newspaper turned government policies more favorable toward PLDT and ensured that the PCGG representatives on the boards of PTIC and PLDT remain inactive (Tiglao, 1933a). However, the increased competitiveness of politics kept a lid on telephone tariff rates (see figures 4.6-4.9), and the uncertainty about the post-Aquino administration slowed PLDT's investment in its local network. The number of unfilled applications for new lines soared, and many undeveloped areas remained without telephones (see figure 4. 10).

Some in the government had hoped that the competition stimulated by the authorizations of new gateways and services would bring about a fundamental change to the sector and enable it to meet the growing demand. But the road to competition proved a rough one, thanks largely to the weaknesses of the regulatory institutions and the strong anti-entry bias of the franchise system under the more normal political conditions of 1990-92.

PLDT's appeals to the Supreme Court and evasion of interconnection orders threw effective obstacles in the way of greater competition. The court agreed with PLDT that Eastern Telecom's franchise allowed it to carry only "messages," not "voice." Supporting the decision was the argument that PLDT had "sufficient" number of international circuits and there was no "necessity" to have another company operate additional circuits _(Manila Bulletin,_ August 29, 1992). This was in sharp contrast with the court's earlier decision that the mobile telephony authorization granted to Extelcom was valid because competition would be in public's interest. (Gavino 1992, section IV.B.6.) Curiously, PLDT did not challenge PhilCom's gateway in the courts and even granted it interconnection, apparently because of common interests between owners of the two companies.' 'Someone familiar with the case explained in an interview that the fundamental difference between Eastern and PhilCom may be that Eastern has been penetrated by middle-class professionals while PhilCom is still an elite-controlled firm and maintains close ties with the PTIC group. According to the 1991 _Annual Reports_ of PhilCom and PLDT, at least two of PhilCom's directors in that year wcre related to PLDT's chairman, Alfonso Yuchengco: Alfonso S. Yuchengco III and Helen Y. Dee, the president of Malayan Insurance Company, a Yuchengco-owned enterprise. Helen Dee has been a director at PLDT since 1986 and her company has been providing insurance services