MARCOSIAN ECONOMICS: MYTHS AND REALITIES
(Part 1 of my Demythicizing the Marcos Era)
(Part 1 of my Demythicizing the Marcos Era)
ALVIN D. CAMPOMANES*UA&P Department of History
“A country without a memory is a country of mad men.”
- George Santayana
“Matakot sa kasaysayan pagka't walang lihim na di nahahayag."
- Greogoria de Jesus
In a video originally posted in Youtube that has gone viral in Facebook, Marcos was hailed as the president who “rebuilt” the economy. Used as “proofs” of his accomplishments in the economic sphere were the following:
(1) the exchange rate of the peso to the dollar was Php 2: $ 1
(2) the infrastructures built by the regime (Heart Center, Cultural Center, roads, bridges, schools) and
(3) the Philippines had supposedly became self-sufficient in rice production;
In my experience of teaching Philippine history, never did a semester pass that I do not meet a student who claims that according to his/her parents, life was better under Marcos’ watch. But this perception is not only limited to people born after EDSA. When I talk to those who are old enough to remember martial rule, not a few say that “life was easier then” because “the prices of commodities were cheaper”. This perception has not yet been convincingly refuted in cyberspace.
While it is true that there were significant economic gains under Marcos, particularly in the first term and in the years following the imposition of martial law, it is erroneous to claim that the economy was performing at its peak for the entire period Marcos was in power (1965-1986). This is unhistorical wishful thinking. Allow me to debunk this myth in the light of academic studies, point per point.
An exchange rate in itself does not indicate whether a country’s economy is performing well or not. The Japanese yen is even valued less than the Philippine peso but no one will mistake Japan for the Philippines. The uncritical acceptance of the Php 2:$ 1 exchange rate as supporting evidence to the claim that “the Marcos years were the best for the Philippine economy” reflects not just an ignorance of history but of economics as well. The truth is, the economy plunged into a crisis after Marcos doled out large amounts of government pork barrel funds during his reelection bid in 1969. From its peg at Php 2:$ 1, the peso dropped to Php 6: $ 1. Inflation rose immediately. After the Batasan elections of 1984, the exchange rate of the peso to the dollar was Php 18: $1.
I agree that Marcos may be given credit for the improvement of rural infrastructures needed to develop our agriculture sector. The network of roads built during his time reflect the sweep of his vision. However, a critical analysis of Marcosian economics will show that the enormous expenditures on construction projects contributed much to a sharp rise in overall deficit. Simply put, the infrastructures built under the regime are not indicative of the true state of the economy under Marcos.
The government’s share of the total construction expenditures increased from 21% in the first term of Marcos to 40% in 1975 and 43% in 1980. Majority of these projects, often used as vehicles for private gains by the Marcoses and their cronies, were “unproductive and outrightly wasteful.”[1] Much of the funds for infrastructures were also diverted to the “showcase projects” initiated by Imelda to emphasize the so-called “achievements” of New Society.
The dramatic increase in government spending and heavy foreign borrowing despite modest growth had ultimately disastrous ramifications on the national economy. From just over $ 2 billion in 1972, our country’s total debt ballooned to $ 25 billion in 1983, making us one of the ten most indebted developing countries in the world.[2]
It is true that rice self-sufficiency was achieved in 1968. This was picked up as a key-item in the video and was meant to buttress the overall idea that the economy was superb during the Marcos years. During the height of martial law, our total production gains surpassed those of our Southeast Asian neighbors: Malaysia, Burma, Thailand and Vietnam. But towards the end of the Marcos era, signs of decline in the agriculture sector were becoming apparent. In fact, for the period 1980-1985, the total gains of our agricultural production deteriorated continuously that by 1985, we were producing less than the aformentioned countries.[3]
Praises on the regime’s management of agriculture must be heavily qualified. The Masagana ’99 was a centerpiece of the Marcos government’s efforts to enhance productivity by providing high yielding varieties of rice (HYV’s). The yields improved as expected. It doubled for the period 1973-1985. However, these HYV’s required more inputs in the form or fertilizers and pesticides. When the second oil shock hit in 1979, the government could no longer afford to subsidize these inputs through low interest loans.[4] Mismanagement and neglect plagued the rural banks that used to subsidize these inputs by the early 1980s. This situation ultimately led to the mass impoverishment of farmers. Many of them fell prey to more exploitative arrangements with traders, lenders, and landlords.
The regime’s support for the creation of crony conglomerates in the sugar and coconut industries also proved detrimental, counter-productive, and exploitative in the long run. In a 1984 report of UP economists, it is stated that for crop year 1974-1983, sugar planters were deprived of profits amounting between 11.6 billion and 14.4 billion, while coconut farmers were paid 9-15% less by Unicom.[5]
The land reform program of Marcos had very limited success despite the unprecedented power that he had to implement it. Contrary to its avowed aim of redistributing lands to farmers, the result of the land reform program was an increase in landless laborers in the countryside. This is undoubtedly an ingredient in the growth of peaseant unrest.
What are the facts? It exempted sugar and coconut lands. P.D. 1942 further limited the scope of land reform. This law states that lands planted to other crops to be converted to rice and corn are exempted from land reform. This is meant to be an incentive to local and foreign corporations that will enter into the production of non-traditional crops. As a result, local and foreign agribusiness corporations gained control of vast tracts of land. Also, the export oriented industrialization (EOI) strategy of the regime defeated the purpose of land reform. It encouraged landlordism and corporate access to agricultural lands. In 1981 alone, corporations and corporate farms acquired 86, 017 hectares while less than 2,000 hectares were distributed to farmers after 10 years of implementation of land reform.[6] Marcos’ claim that he emancipated tenant farmers through martial law is a myth.
It is true that the imposition of martial law had immediate positive effects on the national economy. The restoration of peace and order and the strike ban convinced the elite of the efficiency of one-man rule and technocracy. There was also a dramatic increase in foreign investments as a result of the regime’s pro-multinationals policies. US backing ensured the cooperation of Filipino elites. The profits of the top 1000 corporations increased. Agriculture benefited from infrastructure development, cheap credit, and subsidy of inputs. The economy sustained real GNP growth at an average of 6.5% per annum from 1972-1977. The economy posted a balance of payments surplus of $ 10 million in 1974 as a result of the world commodity boom of 1973-1974. The demand for contract workers in the oil producing countries of West Asia caused the Filipino overseas workers’ remittances to increase. The government expanded the service and commercial sectors and provided some affordable urban housing through the Bagong Lipunan Sites Services (BLISS) program.
The regime harped on this semblance of prosperity. This is perhaps the “good old days” that many Filipinos are nostalgic about. It was the urban middle class and the co-opted section of the traditional elite that generally benefited from the economic diversification and growth that followed the imposition of martial rule.
But this prosperity was short-lived and illusory. The regime was not able to sustain its initial accomplishments under martial law. A confluence of internal and external factors caused the economy to falter in the late 1970s and early 1980s. Marcos quickly exculpated his regime by blaming external factors. However, academic studies reveal that the internal factors outweighed the external factors. David Timberman summarized these internal factors: one-man rule; the suppression of dissent; the absence of accountability in government; the failure of economic development programs; the massive corruption and cronyism.
Signs pointing to an economic breakdown had been surfacing as early as 1980. It took Ninoy Aquino’s assassination on August 21, 1983 to expose the political and economic fragility that our country was experiencing for years. From then on, the economic difficulties became increasingly felt across social classes. Aside from the loss of confidence of international creditors, the gruesome murder led to a devaluation of the peso, a record amount of capital flight, and a worsening of the balance of payments problem. The disillusionment of local and foreign business and the strains in our relations with the US cut our lines of credit. The deficits of the national government mounted from 1.2% to 4.3% of the GNP between 1978 and 1982. The inflation rate increased from less than 10% in 1983 to an average of 50% in 1984. It was the country’s highest inflation rate since World War II.
The sharp increase in the price of manufactured imports cause inflation and the erosion of real wages and salaries of workers.[7] This unfavorable condition for workers was further compounded by government intervention in collective bargaining to prevent wage increases in order to keep the country attractive to foreign investors. As a result, only 10% of the the country’s employers bothered to follow the minimum wage for workers.
In order to respond to the crisis, the government decreased imports drastically. Industries that required importation of raw materials were obliged to close shop or slow down their production. Mass layoffs followed. The sector that was hardest hit by the retrenchment measures was manufacturing. Unemployment escalated from 14.7% in 1978 to 24% in 1982.[8] In 1983 alone, 68,000 workers were laid off.
Along with the decline of incomes came a worsening distribution of income. The poorest 60% of Filipino households received 25% of the nation’s total income in 1971. By 1979, this share had shrunk to only 22.5%.[9] Between 1971 and 1981, the percentage of total family income accounted for by the poorest 40% decreased from 11.9% to 9.3%, while families in the highest quintile accounted for a greater percentage of the national income in 1981 than in 1971.
Concentration of income at the top continued, with the highest 10% of families receiving 42% of total family income in 1981, up from 1971. The Communist Party (CPP) had broadened its urban base to include not just university campuses but also factories and slum areas where the unemployed and underemployed lived. Marcos was the number one recruiter of the New People's Army (NPA). He claimed in September 1972 that martial law was necessary to quell the communist rebellion. But history tells us that it was under his rule that the NPA had grown ominously.
Marcos never failed to boast that under martial law, significant advances in nutrition and health were achieved. But reports made by Asian Development Bank (ADB) showed that our average per capital caloric consumption was lower compared to those of Bangladesh, India, and Indonesia. Our own Ministry of Health also noted that nearly 3/4s of all Filipino children suffered from some form of malnutrition.[10] Other studies noted the lack of sufficient sanitation facilities, supplies of potable water, a shortage of medical personnel and resources, and the disproportionate number of doctors and hospitals in urban and rural areas.[11] The president used to extol the accomplishments of the human settlements program. This silenced the fact that improvements in housing often led to forcible relocation of squatters and that the poorest did not have enough income to buy these constructed dwellings.[12]
Confidence in the likelihood of an economic recovery was eroded by revelations of the unbridled corruption of the Marcoses and their associates. Indubitably, the sophistication of the techniques that they used to hide their ill-gotten wealth overseas makes it difficult for all of us to fully comprehend the magnitude of their corruption. [13] And they never apologized for this. In an interview, Bongbong Marcos arrogantly challenged us: "where are these staggering amounts of money? I haven't seen any of it. Where is it?"
By the end of 1983, 60% of all Philippine families were living below the poverty line. The massive anti-Marcos protests that were ignited by the Aquino assassination and that culminated in the EDSA People Power Revolution of 1986 should be viewed within this political and economic context. The dismal condition of the Philippines in 1986 is proof enough of the disastrous consequences of his kleptocratic and repressive one-man rule. If things were fine under Marcos, why would thousands of Filipinos risk their lives in fighting his regime? Why would the country's brightest leave the comfort of their homes and give up their education just to take to the hills and join the communist movement?
I think what lies beneath the confused nostalgia for martial law is the perception that EDSA did not improve the plight of many Filipinos. But while it is true that the revolution did not significantly change the structure of power and wealth in Philippine society, we must not fall into the trap of imagining that we were better off under the dictatorship.
As a historian and educator, I have always encouraged discourse inside and outside the classroom. I am all for a historically-grounded analysis and assessment of the post-EDSA governments [14]. But a meaningful exchange can only commence if our countrymen are well-informed. This task of educating our people about our past demands from our teachers genuine commitment in the heroic mold.
I cannot afford to be silent when historical truth is being pretzeled by forces that are so determined to make our people forget. I surmise that these attempts at historical revisionism are intentionally being circulated in cyberspace where it could be picked up by young Filipinos who do not have a memory of the violence and corruption of the martial law regime. These young people will comprise the majority of the voting population in the near future when, perhaps, Bongbong runs for president. To blame the EDSA People Power for our misfortunes and to praise the dictator as a messiah that we had slandered and crucified is a despicable display of cowardice.
Last September 2012, our nation commemorated the 40th anniversary of the declaration of martial law. But up to this very day, there has been no military or police officer publicly condemned for violating human rights. The unrepentant crooks, murderers, torturers, and rapists are still among us and worse, many of them are still in halls of power. It is disturbing that many of the people from the old regime who should be behind bars are still presiding over our national life.
Rizal once said in his Filipinas Dentro de Cien Años: “in order to foretell the destiny of a nation, it is necessary to open the book that tells her past.” If many of our countrymen do not even bother to study our past, how can we know where we are heading as a nation? The willingness of many of our fellow Filipinos to forget the massive crimes of the Marcos regime speaks much about our sense of history (or the lack of it). The Marcoses have been peddling a reconciliation based on oblivion since they had returned to the country. The task at hand, I believe, is to forge among ourselves an inviolable national memory of the injustices and outrage of the Marcos era. We must make the truth clear to our fellow Filipinos so that future attempts at historical revisionism would not be possible. This is a humble contribution to the creation of such a national memory.
_______________________
[*] Historian, educator, public speaker, historical tour docent, budding entrepreneur. He is an instructor at the Department of History of the University of Asia and the Pacific (UA&P). He obtained his Bachelor of Arts in History (cum laude) from the University of the Philippines (UP) in Diliman where he is also finishing his Master of Arts in History. He is former president of the UP Lipunang Pangkasaysayan (U.P. LIKAS). He is co-editor and co-author of Kaalaman at Pamamaraan sa Pagtuturo ng Kasaysayan (2008).
[1] Emmanuel S. De Dios et al., An Analysis of the Philippine Economic Crisis: A Workshop Report (Quezon City: University of the Philippines Press, 1984), p. 14.
[2] Patricio Abinales and Donna Amoroso, State and Society in the Philippines (Pasig City: Anvil Publishing, 2005), p. 213.
[3] See National Economic Development Authority, Philippine Statistical Yearbook, 1987.
[4] Rigoberto D. Tiglao, “The Consolidation of the Dictatorship,” Dictatorship and Revolution: Roots of People's Power (Manila: Conspectus, 1988), p. 37.
[5] Emmanuel de Dios, ed., An Analysis of the Philippine Economic Crisis (Quezon City: University of the Philippines Press, 1984), pp. 45, 49.
[6] Kilusang Magbubukid ng Pilipinas (KMP), “Policy Statement on Agriculture and Countryside Development,” p. 6; “Philippine Poverty Report,” Philippine Peasant Institute, October 1985, p. 4.
[7] Ibon Facts and Figures, 15 April 1980, pp. 3-4.
[8] James Boyce, Political Economy of Growth and Impoverishment in the Marcos Era (Quezon City: Ateneo de Manila University Press, 1993), pp. 27, 31.
[9] Emmanuel S. De Dios, ed., An Analysis of the Philippine Economic Crisis: a Workshop Report (Quezon City: University of the Philippines Press, 1984), p. 20.
[10] Keith Dalton, “The Undernourished Philippines,” Far Eastern Economic Review, 1 September 1978, pp. 35-36; Ibon Facts and Figures, 15 December 1979, p. 3.
[11] Ibon Facts and Figures, 15 December 1980, pp. 1-5.
[12] Ibon Facts and Figures, 15 October 1980, pp. 1-8 and November 1983, pp. 1-8. For an in-depth academic study on the human settlements program, see Michael Charleston Chua, “Ang Maynila ni Imelda: Isang Kapanahong Kasaysayan ng Pagbabagong-Anyo ng Metropolitan Manila (1965-1986)” MA History thesis, University of the Philippines, 2010.
[13] See Ricardo Manapat, Some Are Smarter than Others: The History of Marcos' Crony Capitalism (1991); Jovito Salonga, Presidential Plunder: The Quest for the Marcos Ill-Gotten Wealth (2000); Belinda Aquino, Politics of Plunder:The Philippines Under Marcos, 2nd ed. (1999).
[14] See Walden Bello, et al. The Anti-Development State: The Political Economy of Permanent Crisis in the Philippines (2009); Amando Doronila, ed. Between Fires: Fifteen Perspectives on the Estrada Crisis (2001); Amando Doronila, The Fall of Joseph Estrada: The Inside Story (2001); Francisco Nemenzo and Ron May, eds., Philippines After Marcos (1995); Oligarchic Politics: Elections and the Party-List System in the Philippines (2007); Francisco Nemenzo, "From Autocracy to Elite Democracy,"Dictatorship and Revolution: Roots of People's Power (Manila: Conspectus, 1988), pp. 221-268.
SOURCE : https://www.facebook.com/notes/alvin-campomanes/marcosian-economics-myths-and-realities/10151425500823406
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