965-1986: Marcos Administration

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The early years of the Marcos era were characterized by economic growth and ambitious public-works projects, financed by foreign loans. Through a system known as crony capitalism, Marcos sequestered businesses owned by oligarch families and redistributed them to small-time businessmen. Monopolies were established in most sectors of the economy, including manufacturing, media, construction, financial services, and agriculture. These were controlled by Marcos, his wife and their closest associates and relatives. The system worked well for awhile, but by the mid-1980s the country's continued borrowing and inability to repay its foreign debts led to a severe economic recession. In the same decade, the IMF (International Monetary Fund) and World Bank introduced the Structural Adjustment Program (SAP), emphasizing the policy of privatization, to underdeveloped countries. In 1984, in return for a $300 million World Bank loan to bail out the staggering economy, Marcos issued presidential decress 2029 & 2030, paving the way for privatization of state assets. Foreign debt grew from from US$3 billion in 1975 to US$28 billion in 1986. In spite of an abysmal human rights record, Marcos enjoyed unwavering support from a series of US Presidents due to his dogged support of US foreign policy and the seemingly vital US bases at Subic Bay and Clark. However when his policies began to drive the Philippine economy into the ground in the 1980s, US support tapered and his friend Ronald Reagan was ultimately forced to pull the plug: in 1986, Marcos was instructed to abandon Malacanang Palace and get on a waiting USAF C-141 for exile in Hawaii.

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The Bataan Nuclear Power Plant was a pet Marcos project. Construction began in 1976 and was completed in 1984 at a cost of $2.3 billion. The project was eagerly embraced by the World Bank which arranged funding, with the majority of the loan coming from the U.S. Export-Import Bank. A Westinghouse light water reactor, it was designed to produce 621 megawatts of electricity. This huge project was situated on an earthquake fault line, badly designed, unsafe, extremely overpriced (which EXIM knew), and a magnet for corruption. Because of these safety and other concerns, the plant never became operational. The plant was finally paid off in 2007, following 41 years of Filipino taxpayer payments, and presently sits mothballed, having never produced a single kilowatt of electricity. For the World Bank, the Westinghouse Corporation and Marcos cronies, the fate of the plant is almost irrelevant: huge profits were generated by its construction.

1986-1992: Aquino Administration The Aquino administration was notable for: "Restoration of the oligarchy": dismantling of monopolies established under Marcos and confiscation of the assets of Marcos' crony-capitalist buddies, with assets being returned to the previous elite owners. Failure to institute substantive reforms to alleviate massive poverty. A land reform law was approved by the legislature in 1988, but Aquino exempted her own family's sprawling Hacienda Luisita estate from the land reform process, giving a green light to other big landowners to circumvent the land reform. Facing massive foreign debt accrued during the Marcos years. The Aquino government sought debt relief from the IMF, which required severe austerity measures and structural reform. This led to: Initiation of privatization of state assets in order to stimulate the private sector. Aquino issued Proclamation 50, which created the Committee on Privatization to identify assets which could be sold, and the Asset Privatization Trust which took charge of disposing of public assets. Initiation of a policy promoting "nontraditional" exports such as textiles, footwear, electronic components, and fresh and processed foods.

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1992-1998: Ramos Administration

Under the banner of "Philippines 2000", President Ramos pursued an ambitious economic reform program based on trade liberalization, privatization and deregulation, as mandated by the IMF and World Bank. Ramos opened banking and business to foreign investment and transferred government assets to private ownership. His government improved tax-collection policies and practices, and this combined with the growing economy to generate higher tax revenues for the government. In 1994 and 1995 the country had its first consecutive government budget surpluses. Philippines joined the WTO (World Trade Organization) in 1995. Unemployment remained a serious problem in spite of the "miracle" of economic growth under Ramos. The first big privatization effort of the Ramos Administration was in response to frequent brownouts due to huge demand for electricity and antiquity of power plants (partially due to the National Power Corporation's staggering debt caused by the Bataan Nuclear Plant.) Ramos ordered the issuance of licenses to independent power producers (IPP) to construct power plants within 24 months. This resolved the power crisis, but in turn created a financial crisis: the supply contracts guaranteed the government would buy whatever power the IPPs produced under the contract in U.S. dollars, but when the East Asian Financial Crisis hit in 1997 the demand for electricity contracted and the Philippine Peso lost half its value, with the price of electricity soaring to become the second highest in Asia. Philippine ratepayers footed the bill.

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The second big privatization of Ramos was that of Manila'sMetropolitan Water Works and Sewerage System (MWSS) in 1997. One of the largest privatizations anywhere in the world, the formerly public utility was broken into two concessions: East Concessionaire Manila Water Company Inc. (owned by the Ayala family with foreign partners), and West Concessionaire Maynilad Water Services, Inc. (owned by the Lopez family and also with foreign partners.) The privatization resulted in 500%-plus water rate increases for Manila residents. The case has been publicized by privatization critics as demonstrating that the process leads to increased rates for poorer service; they suggest that cost-recovery and profit-making are the primary goals of privatization, even at huge economic and social costs to consumers and citizens.

1998-2001: Estrada Administration President Joseph Estrada, a former Marcos loyalist, vowed to help the poor ride the wave of economic development through an ambitious synthesis of being pro-poor and pro-market. Coming to power during the Asian Financial Crisis, Estrada tried to resist protectionist measures, while continuing the privatization and liberalization reforms begun by the Ramos administration. During his administration, some Marcos cronies crept back to power. Provided protection to monopolies such as Philippine Airlines including limiting the flights of competing foreign airlines; a presidential order that placed all petrochemical product imports at the discretion of petrochemical producers and users; an administrative order protecting present providers of port services as purportedly a mean to modernize the industry; and a reconcentration in the telecommunications industry, among others. Despite touting his "para sa masa" (pro-poor) program as the lynchpin of his presidency, Estrada was very slow to activate an anti-poverty program, notably the National Anti-Poverty Commission (NAPC). Slashed funds for DAR (Department of Agrarian Reform implementor of the agrarian reform program) in 1999, which seemed to belie his commitment to helping the poor. Estrada's conviction on charges of massive plunder by the Sandiganbayan graft/corruption court in 2007 ultimately showed that Estrada actually had no interest in helping the poor.

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2001-2008: Macapagal-Arroyo Administration

President Gloria Macapagal-Arroyo is a Georgetown-educated neoliberal economist who has been a complete blessing for the financial triumvirate of the IMF-WB-WTO, for transnational corporations (TNCs) doing business here, and for the Philippine elites who desire maintenance of the social status quo so they can continue to live in luxury far from the squalid slums. Her accomplishments include: Maintenance of a delicate domestic financial stability concurrent with the pursuit of increasingly large international loans. She has kept the IMF and international banks happy by adhering to a strict loan repayment schedule, thus feeding the cycle of increased borrowing and a growing national debt. Total net portfolio investment inflow (FDI: Foreign Direct Investment.) of US$3.68 billion in 2007. Increasing the VAT (value-added tax) in 2004 by two percent, up to 12%, a regressive revenue generating tax which has hit the poor hard. Dramatic expansion of the Business-Process Outsourcing (BPO) sector. It is estimated that 200,000 people were working in 120 BPO (mostly Contact Centers) in the Philippines in 2006, with revenues of $2.1 billion. The sector expanded significantly in 2007 and is expected to keep growing. The Arroyo government, spurred on by the World Bank, has made mining a central plank of its economic recovery program, naming 24 proposed large-scale mining projects as "priority projects" that the government is determined to permit in the coming years (The TNC-dominated mining industry in the Philippines has been heavily criticized because of a long history of environmental disasters, displacement of indigenous communities and mineral resource depletion.) Increase in the number of OFWs (see below.)

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