The Corazon Aquino Government

Guardian of the Filipino Masses or Guarantor of Elite Rule?

1987 Virgilio Rojas
Institute of Development Studies Dept. of Government, Uppsala University Sweden

Introduction
On February 1986, an old chapter in the annals of post-war Philippine history ended and a new one began. A popular uprising combined with an eleventh-hour mutiny and defection of significant segments of the Armed Forces and bureaucracy successfully brought fourteen long years of authoritarian rule to its swift and dramatic conclusion. The downfall of the Marcos dictatorship paved the way for the installation of, what many political observers viewed as, a liberal democratic government under the charismatic leadership of Corazon Aquino. The widespread expectation from broad quarters of the anti-dictatorship movement forces who uncompromisingly challenged the Marcos regime and brought Aquino to power was that with Aquinos ascension to power primary obstacles to fundamental social change would in time be eliminated. In other words, according to Philippine economist Emmanuel de Dios, a real possibility existed that by getting rid of Marcos, some aspects of Philippine underdevelopment would be relieved, since the features of the Marcos regime were the form in which these aspects existed in the concrete.1 Moreover, it was expected that the democratization process the Aquino government was to set in motion would enable the Filipino masses, through their popular organizations, to have an expanded role in national policy-making directly addressing the problems of under-development.

Synthesis: Before and Beyond February 1986, ed. Santiago, see essay by de Dios E,, Rebuilding from the Ruins or Ruining the Rebuilding, Inter-Disciplinary Forum (IDF), University of the Philippines (1986): 27-28.

Indeed, Aquino herself had repeatedly affirmed her governments commitment to enlarging popular empowerment: As I said, it (the government) will be a government of consultation and that is really what we have been doing ... It is best that we really listen to all sides, because Marcos just closed the doors.2 A retrospective glance at the initial reforms instituted by the Aquino administration appears to corroborate this avowed commitment. Her first year in office witnessed the dismantling of a substantial part of Marcos political institutions tailored to suit the dictators personal requirements. Thus, Aquino moved to abolish the KBL (New Society Movement, Marcos party). She seized control of a large part of Marcos domestic economic assets, as well as those of his relatives and cronies. By the same token, a large part of Marcos foreign assets were tied up in litigation. A committee to investigate human rights violations committed by military personnel had been created, while a number of well-known Leftist dissidents and other political prisoners incarcerated by the dislodged regime had been released.3 Also, she radically departed from her predecessor, at least at the outset, in terms of handling the insurgency issue, by attempting to forge a peaceful political settlement with the revolutionary movement, which, although registering success in the beginning, eventually broke down early 1987. However, as the Aquino government progressed through its first year in office, a growing chorus of critical voices from the ranks of the very popular movement which wheeled her to power had started to question her political will to decisively address the fundamental ills of Philippine society. These critics contended that Aquino had gradually succumbed to pressures exerted by the more conservative wing of the ruling elite, the powerful military hierarchy, and the machinations of foreign interests, primarily the United States, by instituting reforms catering essentially to the predilections of the latter. As such, these forces had started to abandon their previous give-Aquino-a-chance position. They had begun anew to ventilate their sentiments in the streets. Disenchantment from particularly the labor and peasant sectors had once again erupted into militant strikes, pickets, demonstrations and mass actions. Increasingly, legitimate protests were being met, not with tolerance and reconciliation anymore, but with violence and repression. Despite the fact that Corazon Aquino still commanded wide popularity, there was growing evidence that this was slowly eroding. The widening gap between the rhetoric and reality of a people powered development under the aegis of the Aquino administration seemed to lend credence to Philippine anthropologist, Ponce Bennagens premonitions in a lecture
2

Far Eastern Economic Review, 28/8 1986: 30-31.

Transn ational In stitute, Europe and the Philippines: Towards a New Relationship, TNI, The Netherlands (1987): 15.

delivered at the University of the Philippines a few weeks after the February revolt: People power runs the risk of being co-opted by power-brokers in the same way that manpower gets co-opted and brutalized by technocrats, management and capitalists. It could be manipulated to serve the interests of a privileged few, whether remnants of the old order or those of the new.4 Economist Emmanuel de Dios, speaking at the same symposium, appraised the then newly installed Aquino government and posed several questions of future relevance:5 It is claimed that a revolution has occurred, but after accomplishing the huge task of overthrowing the dictator it is not clear in what direction the new regime is pushing, or whether, given its amorphous composition, it is even inclined or capable of doing much else. Several questions put themselves to the fore. How adequate is the regimes agenda in relation to the interests of the broad masses? Second, given the regimes agenda and the existing balance of forces, what are the prospects of success in implementing it, in other words, how much of the pro-people agenda can really be accomplished under the current framework? With the luxury of hindsight, this paper is an attempt to address the relevant questions raised by less euphoric and critical observers like de Dios. In the main, it will address the question: Is the Corazon Aquino government the guardian of the Filipino masses interests or is it the instrument of elite class rule? To answer the question, this paper will present an historical re-examination and analysis of the developments leading to the downfall of the Marcos dictatorship. This will be followed by a review of the economic and political directions the Aquino government has taken during the past 18 months. A comparative analysis of the previous and the current governments economic policies set in relation to the structural problems of Philippine economy will be included in the section on economic directions. The section on political directions will include the following aspects: the process of consolidation, the composition and balance of forces within the government, the challenge from the Left, the building of institutions of democratic rule, human rights. Lastly, the impact of US interests on economic and political developments in the Philippines will be discussed in a separate chapter. The concluding portion of the paper will summarize the basic findings relative to the question addressed here.

Santiago, op cit, see essay by Bennagen P, Peoples Power as an Evolutionary Process Towards Social Transformation, (1986): 101.
5

Santiago, op cit, see de Dios (1986): 27.

On the Literature
The corpus of systematic and scientific study on the central issues addressed in this paper, viz., the economic and political directions taken by the post-Marcos regime, has certainly yet to cohere more clearly. The short-term character, and thus inconclusive nature, of both focus and locus of study (hardly a year has transpired after the Aquino regimes installation) and the still invigorating euphoria beclouding the political and cultural landscape in Philippine society today may account for the apparent caution exercised by the academic corps in delivering off-hand views on the matter. One of the very first attempts to initiate serious debate and evaluation of the status of the post-Marcos era took shape in an inter-disciplinary forum sponsored by the University of the Philippines in 1986. Concerned political and social scientists presented their respective positions in the hope of establishing whether or not the shift in political power indeed represented an historical discontinuity. The printed upshot Synthesis: Before and Beyond February 1986, ed. E. de Dios of this landmark attempt generated strategic analytical information for this essay. Elsewhere, other observers and political analysts have made equally important critical contributions and are also to serve as berthing-points for our study: the Dutch-based policy institute and think-tank, Transnational Institutes findings embodied in Europe and the Philippines: Towards a New Relationship (1987), where specially Joel Rocamoras insights have been tremendously enlightening. The 1986 Berkeley lecture delivered by Rocamora has particularly lent an invaluable critical template, much of which has left an unequivocal trace here. Going beyond academia, this author has relied copiously on two sets of printed sources: authors of articles, some with liberal or socialist persuasions and official publications of Philippine national, multi-sectoral, human rights and non-governmental organizations generally with a progressive bent. Footnote references attest to the authors propensity to rest analysis on the statement and views of the latter, which may perhaps serve as a major source of weakness. Such bias has its logical origins in this authors declared perspectives and particular methodology, where he has consciously made it a point to give adequate room for the views and opinions of forces involved in the struggle for social liberation and change. Confessing biases openly in this manner draws not least from Gunnar Myrdals critical methodological discussion on objectivity in social research.6

Myrdal, Gunnar (1969) Objectivity in Social Research. University of Michigan: Panthe on Books.

I
The Demise of Authoritarian Rule and the February 1986 Revolution A Historical Reexamination
The overthrow of the Marcos dictatorship can largely be attributed to a unique set of circumstances and events combining just the right way and at a given historical juncture. However, it was also the logical outcome of a protracted political, economic, and social crisis which had shaken the very foundation of Marcos rule and led to his almost extreme isolation. Credit should be given to Ferdinand Marcos for being the first in a string of Philippine presidents since postwar Independence who arrogated to himself unlimited political powers when he instituted martial rule on September 21 1972. The institution of authoritarian rule had several implications for other actors in the Philippine political arena. It also had significant implications for the economy at large. At this historic juncture, Philippine society was witnessing a surging radicalization, not only among the ranks of the working class, peasants and students traditionally volatile social groups but also among substantial segments of the domestic elite and the oligarchy. Nationalist sentiments had penetrated certain sectors of the state bureaucracy, Congress and the Supreme Court. The Supreme Courts controversial decision in 1972 not to extend the Laurel Langley Agreement an agreement giving US citizens parity rights to own and exploit natural resources and public utilities in the Philippines manifested in lucid terms the extent of nationalist sentiments prevailing at that time. The nationalist fever was partly a reaction against previous governments attempts (Macapagals regime 1961-1965 and Marcos 1965-1972) to de-protectionize the economy as a result of pressures exerted by foreign interests, multilateral agencies (World Bank and IMF) and the US government for unhampered access to the Philippine economy. Decontrol (de-protection) had negatively affected local entrepreneurs who benefitted handsomely during the height of the s-c import-substitution era, a development strategy implemented by the government in the 1950s providing for the development and protection of domestic infant industries as the floodgates were opened to the influx of cheap imported durables from the United States. Unable to compete, these industries folded up. Massive unemployment in the urban areas and increasing peasant marginal5

ization in the rural areas transformed the country into a virtual social tinderbox. The political instability brought about by this explosive situation became an oft-cited justification for the declaration of martial law. Martial rule, as a political arrangement, essentially implied the dismantling of democratic institutions, which had, in the traditional Filipino political sense, served as conduits whereby different factions of the elite conducted political patronage and settled their conflicts via a coterie of representatives in the executive, legislative and judiciary bodies of the state. At the time of the declaration, these contending factions were deeply divided. Martial law, in effect, cut the Gordian knot that rendered ineffective unified elite class rule. But Marcos originality lay above all in institutionalizing local caciquism and patronage in its highest conceivable form. Benedict Anderson noted thus: Marcos bent it (the oligarchy) to his will by punishing financially particular oligarchs he disliked or feared, and by abolishing the political and legal structures by which the oligarchys economic power was independently safeguarded. But he was one of them in every way though with the good fortune to have the state military and the police as his private army.7 Marcos was to lord over, not only the working class, peasantry, urban poor, middle-class, but also other factions of the elite outside his circle of friends and relatives. He brought these classes under his absolute potentate. Hence, Marcos quickly moved to consolidate and build the political and economic premises of dictatorial rule. Although mainly ruling by decree, he nevertheless tried to give this a semblance of legitimacy. After junking the old Congress, he erected an interim national assembly (later to become permanent following parliamentary elections in 1978) controlled by his party, the New Society Movement (KBL). He personally handpicked and appointed public officials from town mayors, provincial governors, to members of the Supreme Court and other officials in the bureaucracy. He had the 1935 Constitution rewritten according to his preferences to legitimize authoritarian rule a mode of rule he proudly referred to as constitutional authoritarianism. Marcos reorganization of the military warrants special attention. According to political scientist, Francisco Nemenzo, Marcos, by converting the military organization into his power-base, inadvertently de-professionalized the Armed Forces and developed this into

London Review of Bo oks, see Anderson B, Old Corruption (5 Feb 1987): 6.

an autonomous political force ... the authoritarian commander-in-chief had the Armed Forces expand from a force of 45,000 men in 1967 to a quarter of a million by the late 70s.8 While the Philippines did, unlike some Latin American countries, not have a tradition of military castes acquiring wealth and power through their role in government, the Marcos regime had now politicized the Army, with provincial and local military officers taking over civilian functions of governorship and mayorship. Moreover, these officers had also assumed lucrative managerial positions in state agencies like the National Oil Company, the National Electrification Administration and the huge agro-industrial corporation, PHIVIDEC.9 At the national level, the generals shared power and inter-penetrated with the two other groups which formed the pillar of the regime: Marcos powerful business cronies, who were able to bring key sectors of the economy under their control through the methods of pirate capitalism, and the US-backed technocrats who were charged with implementing the program of authoritarian modernization directed and funded by the World Bank.10 Marcos gave special attention to the urban and rural middle-classes. His relative success in co-opting the support or at least neutralizing this traditionally volatile social group, created a congenial buffer between the authoritarian regime/ruling elite and the radical organizations of the working class and peasantry under the influence of the Left. In the beginning of Martial rule in 1972, Marcos started to cultivate the middle-class as a support base. Marcos projection of strong authority to dispel the chaos and lawlessness of the old society was meant to appeal to one side of the middle-class its yearning for political and economic stability. Marcos assured the middle-class that opportunities for social mobility would be opened up by an economic development program based on the attraction of massive amounts of foreign capital. Middle-class prosperity was the promise of what Marcos missionaries called the Revolution from the Center.11 Though suspicious of Marcos and resentful of the ostentatious and extravagant ways of the First Lady, Imelda Marcos, the middle-class was nonetheless neutralized and rendered placid by policies, which in the initial years of dictatorship, sustained economic growth
8

Where do we go from here? Midweek (25 March 1987): 10-13. Our Socialism , see San Juan, E, rrent Struggle Against US Imperialism, (Nov-Dec 1983): 24-30.

Third W orld Qu arterly, Vol. 6 No. 2, see Bello, W, Benigno Aquino: Between D ictatorship and Revolution in the Philippines, (April 1984): 290-91.
11

10

Ibid: 299-30.

within tolerable limits. This mode of middle-class co-optation resembled what Walden Bello once described as the Brazilian model of de-politization: so long as the middle strata felt that their living standards were rising, they would turn a blind-eye to the fall of living standards among the peasantry, labor and urban poor.12 The collapse, starting in 1979, of the export-oriented foreign capital-dependent economic strategy from a combination of external recession, mismanagement and growing resistance from the victims of underdevelopment, triggered the alienation of the middle strata, whose ranks were hit hard by rising unemployment and whose pocket-books were worn thin by inflationary pressures resulting from the World Bank, WB/IMF imposed devaluation of the peso.13 Marcos similarly alienated sections of the capitalist class when he complied with an ultimatum issued by the World Bank and the IMF to de-protectionize Philippine economy in 1979. In the early years of martial rule, the dictator had tried to keep these national entrepreneurs enjoying the privilege of a relatively protected internal market on his side, by resisting WB and IMF pressures to considerably bring down tariff walls. Initially supportive of Marcos for establishing a sound business climate in the early 1970s, the local elite and foreign investors began to worry when Marcos cronies were able to secure control of key industries like coconut, sugar, construction, and energy. The rapid expansion of these conglomerates had been fueled by the contraction of foreign and domestic credit. When this hothouse borrowing created a major financial crisis in 1981, Marcos indebted friends were left high and dry and bankrupt. Being the absolute patron that he was, Marcos tried to bail them out by persuading the multi-lateral agencies (WB/IMF) to allow the establishment of a $ 600 million rescue fund for his cronies, then promptly overshot the level of financing agreed upon with the two institutions. The rescue scandal shattered whatever confidence was left among the financial elite and foreign investors. 14 Overall, the accelerated economic decay during the latter part of the 1970s and the beginning of the 1980s compelled Marcos once staunchest supporters, both domestic and international, to take a more cautious position. US private banks holding the bulk of the countrys $22 billion debt by the middle of the 1980s drastically scaled down their loan programs out of fear that instability, unbridled

12 13

Ibid. Ibid. Ibid.

14

corruption and economic stagnation has made the Philippines a major risk. When Marcos support from the middle-class and the business elite started to erode coupled with mounting resistance from more radical groups of workers, peasants, students, and urban poor mainly influenced by the Left, the situation soon became starkly polarized. Since Marcos blocked all venues of legitimate redress, and as the economic crisis deepened, alienated sectors of Philippine society more and more systematically turned to militant forms of struggle in what was fashionably referred to as the parliament of the streets. Peasants and workers who experienced grinding poverty and untold abuses in the hands of the military, the Catholic Church which grew increasingly outspoken on issues of human rights and poverty, elite businessmen and politicians denied a share of power by the ruling clique, and even a sector of the military frustrated with corruption and lack of promotion opportunities within the Armed Forces all, constituted the potential seeds of a future coalition of anti-dictatorship forces that was to seriously threaten the hegemony of the Marcos regime. Despite it being the target of official repression, the Left had not only managed to survive, it experienced exponential growth during the dark years of dictatorship. The shattering of elite opposition pushed mass dissent towards the hitherto only force capable of withstanding the Marcos juggernaut: the Left. As the decade wore on, the key axis of political conflict became that between a massive armed ruling class and the armed Left.15 Gaining wider political and military terrain, the latter started to draw concern from the Reagan administration. After a three-month investigation of political developments in early 1982 on the island of Mindanao, the archipelagos second largest, a US consul cabled then secretary of state, Alexander Haig, that in some areas, the New Peoples Army (NPA), had become more important than the local government structure. He concluded: This may sound as a worst case scenario, but present circumstances are not encouraging and the future is ominous.16 The same concern was underscored by the Assistant Secretary for East Asia, Paul Wolfowitz, testifying before the American Congress: ... (T)he growing challenge of the Communist New Peoples Army ... if unchecked could ultimately threaten US military facilities (in the Philippines).17

15 16

Ibid. Ibid: 293. Ibid.

17

Benigno Ninoy Aquino Jrs assassination on August 21 1983, marked what observers called the beginning of the end of the Marcos dictatorship. Indeed, Aquinos assassination provided the spark that finally ignited the tinder of widespread resentment. For the first time, the middle-class was galvanized into action, joining the Left in huge numbers in anti-Marcos street protests . Soon enough, Marcos was left with only two pillars of support: the military and the United States. But the turmoil also jolted the Reagan administration into a belated recognition of just how serious political crisis had become. Fearing the destabilizing effects of further polarization, US policy-makers urgently reassessed the policy of uncritical support for Marcos and settled on a new strategy designed to appease the moderate opposition and out-maneuver the Left. The new strategy, according to Charles Foubert and Kathy Silvaggio, followed a formula similar to that tested in El Salvador: pressuring Marcos to enact political, economic, and military reforms, and to transform the ineffective military into a welltrained and well-equipped counter-insurgency force.18 Eventually, Marcos succumbed to American pressure and made his dramatic announcement to hold a snap presidential election during an appearance on American television in November 1985. However, this set in motion a series of unique events and circumstances which reeled wildly out of Marcos control, leading to his downfall four months later. Marcos intention (basically supported by the Reagan government) had been to put a democratic facade on his badly discredited rule, and, in the process, acquire more aid from US Congress. But the strategy badly backfired. Several factors intersected and made this happen. Firstly, the otherwise notoriously fragmented elite opposition managed in a manner few could have reckoned to unite behind Corazon Aquino just hours before the registration deadline for presidential candidates. Once chosen, Aquinos popular appeal proved boundless, generating a groundswell of spontaneous feeling and strong determination for fair elections despite the tremendous odds against them. Then the powerful Church hierarchy moved away from its previous neutral posture to play a remarkably active role in mobilizing support for Aquinos campaign, safeguarding ballots, and, in the final hours, encouraging masses of people to protect mutinous military officers.19 Perhaps the most unforeseeable factor was the US governments decision to do what Reagan had vowed never to do i.e., to pull the plug on an anti-Communist ally. However,
18

Socialist Affairs, see Foubert C and Silvaggio K, Overcoming the Marcos Legacy, (2/1986): 28-43. Ibid.

19

10

the decision to finally desert the man towards whom the US had shown extra-ordinary indulgence was made well into the eleventh-hour, and only after the military was already firmly at the helm of the revolt. The defection of Marcos defense minister, Juan Ponce Enrile, supposedly one of the main architects of martial rule, and foremost representative of the disgruntled members of the militarys officer corps, general Fidel Ramos, together with American distancing during the critical days of February 22-25 1986, ultimately sparked a chain of defections from considerable sections of the state-bureaucracy. At this juncture, Marcos was irrevocably transformed into a political strawman with no other prerogative but to abdicate from more than a decade of one-man rule. On February 25 1986. Marcos left the Philippines aboard a US Air Force jet, probably never to return to the country he had ruthlessly ruled. Thus, Corazon Aquinos installation to the presidency was a fait accompli, ending an old era and ushering in a new one.

II
Rebuilding From the Ruins or Ruining the Rebuilding?20 Developments After the February Revolution
In the wake of popular euphoria following the triumphant rise to power of Corazon Aquino, the new government was now confronted with a project of draconian proportions. It was faced with the obligation of delivering on its promises of rebuilding from the economic and political wasteland Marcos recently abandoned. Rebuilding from the ruins of dictatorial rule chiefly meant the dismantling of authoritarian institutions, and correspondingly, therefore, a return to a democratic political order, the removal of primary obstacles to economic development and growth, effecting a more equitable and just distribution of wealth and resources to alleviate the conditions of the majority of Filipinos living under abject poverty. After 18 months in office, how had the Aquino government faired in translating rhetoric to concrete reality, both in terms of policy-creation and implementation? How much of the
20

Quoted from Synthesis (1986) op cit.

11

s-c Peoples Power demands were actually reflected in these policies? How much had popular empowerment and participation in decision-making been enlarged? In the following sections, an attempt will be made to elucidate and enlighten on the general political and economic directions taken by the new dispensation.

Economic Directions
Faced with a plethora of economic woes from the very start a $26 billion debt burden, a shrinking economy, rampant corruption, agrarian and labor unrest and widespread poverty the Aquino governments immediate agenda was to formulate an approach that would address national economic problems in a comprehensive and decisive manner.

A People-Powered Development Program

This approach would by mid-1986 be embodied in an official five-year (1987-1992) economic recovery program dubbed the People-Powered Economic Development Program. The twin objectives of economic recovery and sustainable growth emblazoned in the plan hinges on an overall strategy mainly premised on an employment-oriented, rural-based development process ... leading to a better export performance. Its underlying principles were: respect for human rights, social justice, minimum government intervention, free interplay of market forces, growth and efficiency, peoples participation in planning and implementation.21 The Policy Agenda of this mid-term development program would address multi-sectoral and sectoral concerns. Included in the former were policies on external debt, trade, exchange rate, money and finance, the budget and public spending, population, labor and employment and distributive justice. Sectoral concerns referred to social services, rural development and trade and industry. The formulation and implementation of these policies generated both rancor and enthusiasm from different quarters of Philippine society. The concrete implications and effects of these policies will be examined below. The economic recovery program called for massive government spending to create one million jobs annually in the rural areas. The strategy had been called pump-priming
21

IBON F acts and Figu res, Prescriptions for People-Powered Development, (31 July 1986): 2-3.

12

because governments concentration of capital infusion was expected to prime the domestic market and stimulate new investments.22 In its initial phase in the second half of 1986, the pump-priming program was designed to create 618,000 jobs through more than 20,000 government projects with a 3.9 billion peso budget. It disappointed official economic planners on January 1987 when only 40% of the projects took off in various stages of completion and created 60% of the target jobs with 88% of the budget already disbursed. It may have halved the years 750,000 new jobseekers, but it certainly left the ranks of the 2.6 million unemployed and considerable sections of the 5.5 million underemployed (1986) basically untouched. Also, since the jobs created were related to infrastructure projects (90% of the jobs) these were mostly temporary in nature.23 One vital requisite of the economic program was the re-scheduling of foreign debts maturing within the programs span. Aquinos debt negotiators were aiming at a reduced interest rate and an amortization spread over 20 years to hold down to 60% the countrys debt-to-GNP ratio from the current 90%.24 The rest of the foreign exchange would then be available for capitalization. But aside from a renegotiated debt, new money in various forms foreign exchange earnings, new loans, aid and foreign investments were nevertheless vital in financing the national budget, including the job creation scheme. The government had to make a choice between financing development programs and servicing foreign debt with its marginal foreign exchange earnings. It opted for a growthoriented debt management scheme whereby all debts were to be honored but restructured to allow growth. However, debt service alone ate up 45% of the 1986 national budget.25 In the beginning of 1987, the countrys total external debt stood at $27.8 billion, an increase of more than $1 billion from the 1986 figure ($26 billion). On March 17 1987, the World Bank announced the final approval of the loan negotiated earlier on during Aquinos state visit to the US in mid-September 1986. The Philippines, the World Bank said, had achieved the main objectives of economic stabilization. In other words, it had followed the Banks

22

Philippin e Insights , Vol. 1 No.5, Vitan Shalimar, Looking for a Breather, Losing Sight of Genuine

Recove ry, (Jan-Feb 1987): 1 -4 .

23

Ibid: 2 . Ibid. Ibid.

24

25

13

recommendations.26 Several economic policies implemented by the government rhymed well with World Bank and IMF prescriptions: the removal of import barriers (s-c import liberalization), the return to free market mechanisms, the emphasis on export promotion as a motor for growth, and minimum state interference in business. The current import liberalization scheme was actually a carry-over from an earlier plan instituted by Marcos in 1980. When the Marcos government obtained the first structural adjustment loan (SAL) from the Bank back then, it committed itself to reducing tariff rates on imports. Parallel to lowering tariff rates, import restrictions were also lifted. However, the debt crisis of late 1983 temporarily froze the further implementation of this program. It was gradually resumed in 1986, when a joint IMF-World Bank mission required the Marcos government to meet its earlier commitment to liberalize 1,232 imported items.27 The liberalization scheme would, according to the Aquino government, stimulate local producers to adopt more efficient methods of production. This would also remove the monopoly of a few firms over the market distribution of imported materials. Under Marcos, a total of 1,027 imported items since 1981 were liberalized. Since March 1986, the Aquino government had allowed for the liberalization of 502 items more.28 Undeniably, the implementation of the import liberalization program strategically presupposed the granting of the $300 million World Bank economic recovery loan. The Bank required the current government to, as it did Marcos, submit a new schedule for liberalizing the remaining import items associated and negotiated with the previous government. Until this schedule was approved by IMF and the Bank, it wouldnt extend the $300 million loan.29 Aquinos compliance with these demands among others, convinced the multi-lateral agencies to finally release the loans on March 1987. Critics to this program contended that such move would further marginalize local businessmen and force many local enterprises to shut down, further exacerbating massive unemployment problems prevailing in the country.

26

Philippine Tren ds, Vol. V No. 7 (March-April 1987): 3-4. Ibon Facts and Figures, When Import s B reak Loo se, (15 O ct 1986 ): 2 . Philippine Trends , op cit: 3. Ibon Fac ts and Figure s (Oct 19 86), op cit: 4.

27

28

29

14

Import liberalization came at a time when local industries were operating at 30-40% capacity, hardly sufficient for surviving against foreign competition.30 Return to free market mechanisms was reflected inter alia in the reduction of government interference in business, privatization of a number of state-owned enterprises, dismantling of monopolies and conglomerates formed and owned by Marcos and his cronies in the sugar, coconut, construction, and energy industries. At the outset, the most logical step taken by the administration was the creation of the Presidential Committee on Good Government (PCGG), to retrieve Marcos and his close associates hidden wealth assets. By the end of 1986, the PCGG had recovered assets worth 30 billion pesos from hundreds of corporations and properties sequestered from the dictator and his friends. A related step taken by Aquino was the privatization scheme for at least 108 state-owned corporations (with combined assets of more than 153 billion pesos) tapping foreign investors and transnational corporations as buyers.31 Many of these corporations fell under the strategic industries category. Since many corporations earmarked for privatization were found in agriculture, the scheme, in effect, also widened the doors for increased entry of foreign capital into this area as well. The dismantling of corporate monopolies and privatization were two Aquino policies which differ from those of the previous government. As a matter of fact, while Marcos did encourage the rise of monopolies and engineered the proliferation of state-owned and controlled firms, Aquino was determined to do just the opposite. Yet like the development plans of the Marcos regime, Aquinos high target of an annual average of 6.5% GNP growth was predicated on huge inflows of foreign financing (loans and investments).32 However, the availability of large new foreign money in 1987 was doubtful. As a result, only about 7 billion of the projected 19 billion peso budgetary deficit would be financed out of loans or foreign aid. The remaining 12 billion pesos would have to be raised from domestic sources, inevitably forcing the government to hike taxes or print new money.33

30

Ibid. Philippine Trends , op cit: 3. Ibid.

31 32

Liberation (Official pub lication of the N ational De mocratic F ront of the P hilippines, N DF), A C risis Postponed, (April-May 1987): 17.

33

15

To lessen the burden of the huge foreign debt, the Aquino government approved the debtequity-swap program in August 1986. Under this program, program investors could take unpaid foreign loans contracted by the Philippines from creditor banks at discounted rates but they should convert such loans into investments in the hundreds of firms the government planned to privatize. As of December 1986, 48 applications covering $218 million had been reached, and of these, 7 were approved, amounting altogether to $37 million.34 Moreover, in a bid to attract more foreign investments, Aquino announced a draft Omnibus Investment Code in May 1987 to offer more liberal terms to new investors. The proposed Code, expected to be approved by the Cabinet, would give tax incentives and customs privileges to new investors, further relaxing foreign exchange policies as a result. Once implemented, it would allow foreign investors to freely repatriate profits to their respective mother countries, to pay a reduced tax bill, to import capital goods without duties, and to hire foreign nationals without restrictions.35 According to the Department of Trade and Industry, the draft Code combines the incentives offered by the (deposed) President Marcos and new ones proposed by the Aquino administration. Its liberal provisions should make the Philippines competitive for foreign investments in Southeast Asia.36 Many nationalists condemned the Investment Code as part of the World Bank-IMF demands to open up the economy to foreign investment. A study made by researchers from the University of the Philippines revealed that for every dollar invested by American corporations, the net profit was $3.58. Of these, $2 were actually repatriated to the home country and $1.58 were reinvested. The study also showed that of the initial investment, only 24% came from abroad. In other words, foreign investors borrowed the rest from local banks, draining scarce local capital.37

34

Philippine Trends , op cit: 4.

KMU Internationa l Bulletin (Officia l publication of the First of M ay Mov ement, a trad e union cen ter in the Philippines), Vol IV No. 1 (June 1987): 19.
36

35

Ibid. Ibid.

37

16

Labor and Employment Policies

President Aquino set down the economic priorities of her administration in a speech before members of the Asian Development Bank (ADB) on April 30 1986. There, she vowed to give top priority to poverty alleviation, employment provision, and income and wealth redistribution. Prime targets of the administrations redistributive policies were the labor and agrarian sectors. For labor, Aquino, during her May 1 1986 speech, vowed before a huge crowd of listeners to revise or rescind a host of Marcos-decreed laws repressing workers rights to an equitable share in the benefits of government development efforts.38 In sharp contrast to the expeditious manner by which policies favorable to foreign investors and transnational corporations had been carried out, creation and implementation of ameliorative labor policies had been slow and indecisive. It was only on March 1987 that such policies were promulgated through an executive order issued by Aquino (Executive Order No. III). Even so, the directive only embodied certain issues which glossed over the gist of the issues presented by the President a year earlier. No mention was made, for instance, of the repeal of Marcos repressive anti-strike laws, which were still in force. This led a group of academics to conclude that the Aquino government did a lot of footdragging in many areas of reform affecting the non-Marcos identified rich during its first 11 months in power. This statement appeared in a paper entitled A Review of the First 11 Months in Power of the Aquino Government Economic Recovery and Long Run Growth, conducted by the Philippine Institute for Development Studies. As such, the Institute argued, the governments labor policies failed to adequately address the low levels of and decreases in real wages and the large number of families living below the poverty line.39 It was therefore to no surprise that militant organizations from the labor movement had been the most vocal detractors of the governments economic recovery program. Indeed, the labor sector had very valid reasons to protest. The weak showing of the economy in 1986 (0.13% real growth) did not improve the lot of the poor majority. This marginal growth was lower than the level achieved in 1979. Real per capita income continued to fall, resulting in further erosion of living standards. By October

38

Ibon Facts and Figures, The Ch arting of Rec overys Co sts, (30 Jun e 1986 ): 2 .

Pinoy O verseas C hronicle , Vol. V N o. 2, see P hilippine La bor D own and O ut But Still Fighting , (Mayo-Hu nyo): 5 (POC is a bi-monthly publication for Filipino migrant wo rkers)

39

17

1986, 11% of the labor force had been forced out of the labor market. More than a third of those employed had work for less than 40 hours a week.40 While the daily cost of living was estimated by IBON data bank, a non-government research group, at 113 pesos/day, state legislated wages as of 1986 for non-agricultural workers in Metro Manila was and still is 57 pesos/day and 46.67 pesos/day for plantation workers.41 The wide popularity the President still enjoyed found its clear limits among the ranks of the workers as she had failed to deliver on her promises. Aquinos refusal to set a wage standard leading to the de facto freezing of the nominal minimum wage to its 1985 levels had only added fuel to growing unrest in the labor front. By the end of 1986, the number of strikes hit an all time high of 571 nationwide, surpassing the previous 1985 record by more than 50%.42 Demands for increased wages and benefits, unwarranted dismissals and retrenchment of workers by management were the prime causes of strikes. Rebuffing labors demands to raise the minimum wage, Aquino contended that the economy is just beginning to stand on its feet and cant handle such a hike at this time. However, labor did not buy Aquinos arguments noting that she managed to hike salaries for her Cabinet and herself, and even grant a 15% across-the-board raises for government employees, soldiers and policemen.43 Aquinos policy of letting wage hikes be determined by the outcome of collective bargaining agreements (CBAs) had been assailed by her critics as a highly anti-labor policy. Given that only 1.5% of the total employed were actually covered by CBAs, majority of the workers would in this sense be entirely left at the mercy of management with respect to wagesetting.44

Agrarian Reform
One of the most controversial popular demands Aquino had to face was agrarian reform. Previous governments did institute agrarian reforms but had paid lip service to the actual resolution of the peasants age-old problem of landlessness. In this respect, the Aquino

40

Philippine Trends , op cit: 4. Pinoy O verseas Ch ronicle, op cit: 6. Midweek, Militant Labor vs Aquino, (Aug 5 1987): 9-13. Ibid. Galang, Jose, Labor Troubled Relations, Far Eastern Economic Review, (7 Aug 1986): 54-56.

41

42

43

44

18

administration had been dawdling in the formulation and implementation of an agrarian reform program. Government inaction on land reform had been reviled by peasants and farm workers. On June 5 1986, the Kilusang Mambubukid ng Pilipinas (KMP), a 750,000-strong national organization of peasants and rural workers, submitted to Aquino its proposed land reform program. Since Aquino herself had promised land reform during her election campaign against Marcos, the peasants sought an immediate policy expression assuring them of governments sincerity. No such policy expression came until the January 22 1987 Mendiola Massacre, where 20 peasants and workers were slain by the military while trying to get an audience with President Aquino after four aborted attempts. After that bloody incident, a Cabinet Action Committee (CAC) was formed and approval of the national budget was delayed to incorporate the funding for land reform.45 The CAC came out with a draft proposal for a Comprehensive Agrarian Reform Program (CARP), targeting 3.7 out of the countrys total cultivated land of 9.7 million hectares as the total area for land transfer. It envisaged to benefit around 2.81 million small farmers and landless agricultural workers, or 27.6% of the 10.2 million workers employed in agriculture.46 It envisioned phased implementation, starting with the redistribution of rice and corn land, while leaving the redistribution of sugar and coconut plantations and other large landholdings until the last phase ends in 1992. The four phases of CARP were: Program A (1987-1989) would complete Marcos land reform in rice and corn areas and cover 557,000 hectares. Program B (1987-1989) would distribute sequestered lands, foreclose or forecloseable lands, idle and abandoned lands, voluntary offers and expropriated lands, and cover 600,000 hectares. Program C (1989-1992) would deal with landed estates (plantations) under labor administration and tenanted non-rice and non-corn areas, and cover 1.28 million hectares.

Midweek, Cory Aq uinos Land Reform P rogram, first part of a series o f articles written by the KMP or Philippine Peasant Movement (June 3 1987): 17.
46

45

Philippine Bulletin, No. 2, Agrarian Reform: Hot Issue in the Philippines, (July 1987): 1-4.

19

Program D (1989-1992) would push land reform in public domain, and cover 1.35 million hectares. Land ceiling retention limit would progressively be reduced from 50 hectares in 1989 to 7 hectares in 1992.47 President Aquino signed the Executive Order providing for the implementation of land reform shortly before the newly-installed Congress was convened in July 27 1987. But the Order only embraced Programs A and B. This represented nothing more than a continuation of Marcos controversial land reform program under Presidential Decree 27. Programs C and D would then be promulgated after deliberations in Congress. However, given the fact that the overwhelming majority of those elected in the Senate and the House of Representatives in the recent May 1987 congressional elections belong to the traditional elite and land-owning classes, decision on land reform would most probably favor the interests of the latter. A much-debated aspect of the governments land reform program had been the issue of landlord compensation. Landlords would, according to it, receive just compensation based on the market value of the land as set by official assessors. Peasant beneficiaries were obliged to pay a price equivalent to the latest market value of the land. They were also expected to amortize the land costs over 30 years with a 6% annual rate of interest to the state-owned Land Bank, which in turn would compensate the landlord among others in the form of shares of stocks in public corporations. Reacting strongly against the provisions on landlord compensation, KMP (Peasant Movement of the Philippines) asserted: The compensation provisions grant too many concessions to the land-owning classes and ignore the primary issues of social justice and wealth redistribution. The repayment program while ostensibly considering the financial capability of the farmers will likely turn out to be too burdensome to the beneficiaries and may eventually negate the very purpose of agrarian reform. 48 KMP, immediately withdrew from the dialogue with the CAC (by virtue of the officially declared commitment to the principle of consultation with the people and encouragement of popular participation in the creation and implementation of policies, the CAC was designed to serve as a venue to that effect), citing reasons of bad faith and rigidity in its position on land reform. At the same time, KMP vowed to intensify the implementation of its own program of land reform through land occupation. Since September 1986,
47

Ibid: 2-3.

Peasant U pdate Int ernational, Issue No. 4, see The Compensation and Repayment Schemes of the Aquino Agrarian Reform Program, (July 1987): 9. (PUI is KMPs international publication)

48

20

KMPs chapters had launched organized land occupations nationwide, resulting in the take-over of more than 50,500 hectares, with 20,000 hectares already transformed into productive farm-lots under collective supervision.49 Meanwhile, the government subjected the CARP to further revisions, apparently in an attempt to placate strong reactions from land-owners. On June 3 1987, two key changes were introduced. Firstly, the period of implementation was extended from five to ten years with the seven hectare land ceiling taking full effect only in 1997. Secondly, compensation to the landlord would be based on the current market value as declared by the land-owner himself.50 In sum, Aquinos comprehensive land reform program conflicted in several key aspects with the more radical changes demanded by militant peasant organizations like the KMP. As far as the plan focus on compensation and payment was concerned, KMP asserted that tenant farmers or share tenants had already paid for the value of the land many times over as a result of exorbitant arrears imposed by land-owners for many generations. As such, it proposed free land redistribution. KMP also contested the use of foreign funding whereby the government expected to receive $5 billion to fund its overall five year development program, including land reform arguing that landlord compensation formed a large chunk of the total costs of land reform. KMP stressed instead the principle of self-reliance as well as changing agrarian economic power structures in favor of the peasant majority. Further, opposition was leveled at the reforms bias towards already existing laws favoring maize and rice growing tenants, not to mention the fact that redistribution of large public and private land-holding was being held back.51 On the whole, the economic directions pursued by the government then were sending reassuring signals to already economically powerful groups, and distressing ones to marginalized sectors of society. At best, Aquino appeared to be managing the economy towards short-term relief from both economic distress and the social unrest it engendered.

Towards Independent or Dependent Development?

One of the major tasks of the new regime was to rebuild the economy devastated by decades of neglect and misdirection. But how much do the economic policies and development program really differ from Marcos economic program, or, for that matter, other previous governments in terms of addressing structural economic problems in the
49

Midwe ek (June 1987) op cit: 17. Philippin e Bulletin , op cit: 3 . Far Eastern Eco nomic Review , Land Reform : Rhetoric or Reality , (5/3 1 987):32 -37.

50

51

21

Philippines? The Marcos regimes economic policies could be summed up in four basic points: a. a strategy to promote labor-intensive manufactured exports; b. various incentives to attract foreign investments, including tax and credit incentives; c. a repressive labor policy designed to keep real wages low in order to exploit one of the Philippines biggest assets and where it has comparative advantage, i.e., cheap labor; d. a dependence on foreign debt to finance large infrastructure spending to attract transnational investments.

A central feature of the Marcos development program was to promote labor-intensive, light industry exports in tandem with rural industrialization. The latter failed dismally as Marcos land reform program never did translate into any significant redistribution of land and income in the rural areas. Nor did Marcos export-led strategy actually take off. It only succeeded in changing the composition of exports. Non-traditional manufactured exports, the growing thrust then, were themselves highly dependent on imported inputs and, together with traditional products, contained very little value-added. This doomed official strategy to fail from the very start. Growth in the 1970s was financed instead by massive foreign debt, since imports had perennially outpaced exports. As such, national debt ballooned from $2.2 billion in 1972 to roughly $25 billion immediately before the crisis of 1983. A substantial part of these loans was used to finance shady deals on which the deposed dictator and his network of friends ill-gotten wealth rested.52 Because loans were not put to productive use, and with the trade deficits invariably in the red, it was inevitable that the Philippines would sink into the proverbial debt trap. As longterm loans dried up in 1981 and 1982, the country relied more and more on short-term loans. World recession and the end of easy foreign loans in the late 1970s and early 1980s saw the end of debt-led growth as GNP sputtered to almost zero growth. Due to its complete dependence on foreign loans, the Marcos government capitulated to most of World Bank and IMFs demands. Some of them called for further implementation of de-protectionist

52

Santiag o, op cit, see essay by Lim , Joseph, Our E conom ic Crisis: A Historica l Perspe ctive,

pp15-25.

22

economic policies, heightened interplay of market forces and less state intervention in the economy, deflationary measures like wage-freezing, and expanded incentives to foreign investments. It should be pointed out that basic structural defects had certainly not been seriously addressed by any postwar administration. The current crisis manifested by and large the basic ills of Philippine society taking shape long before the declaration of Martial Law in 1972. Central features of post-colonial Philippine economy included:53 1. A strong dependency on imported capital goods, industrial inputs and technology, making for its failure to go beyond the final assembly stage of production even in the export manufacturing sector in 1970s; 2. Non-integration of the industrial structure, making the latter by nature highly import dependent; 3. Low inter-sectoral integration between industry and agriculture; 4. Noted structural defects (1-3) translated to perennial trade and balance-ofpayment deficits; 5. Thus, foreign control and intervention increased as economic problems continually brought about a complete reliance on the IMF and World Bank, foreign banks, the US and Japan for loans and assistance (2/3s of foreign loans, trade and investments were tied up to these two countries);54 6. The structures of economic power and wealth distribution were skewed in favor of a small wealthy elite. A society wherein the top 10% own more than 40% of the countrys income and wealth. This delimited the size of the domestic market for locally produced goods. Comparatively, the Aquino governments policies appeared to replicate the previous regimes in many respects. The main features of these policies were: 1. The focus on debt repayment;

53

Ibid. Cited from The Philippines Towards a New Relationship, op cit: 44.

54

23

2. Import liberalization, including basic agricultural products; 3. Open-door policy to foreign investments; 4. Reduced government role in business; 5. Employment-oriented (i.e., labor intensive) rural-based development that would lead to better export performance; Notwithstanding the similarities, the Aquino government could claim credit for certain rectification of previous policies. It did espouse and carry out a hands-off free enterprise policy to completion, much to the delight of international creditors and investors. It did substantially dismantle monopolies under the protective wings of the past regime and privatize more than half of the numerous state-owned corporations competing with private and foreign companies. Less government intervention in the economy had also meant refusal to intervene in economic disputes between management and labor, relegating wage-setting to the vagaries of collective bargaining agreements and managements disposition. These policies were at best stop-gap solutions to the effects of the structural problem of economic dependency. Furthermore, most of these policies echoed IMF-World Bank prescriptions dating back to the previous regime. In dismantling Marcos-owned and/or sanctioned monopolies in industry, and specially in agriculture and adding more incentives to foreign investments provided by the Omnibus Investment Code, the Aquino administration seemed to even exceed its predecessor in terms of being a more efficient economic manager in favor of foreign interests. The governments economic development strategy was even more dependent on foreign financial sources than Marcos program. The new five year economic plan called for $14.9 billion in foreign loans, grants and investments.55 The present government had yet to take decisive steps to correct extremely skewed structures of wealth and income distribution intrinsically favoring the wealthy minority. Aquinos vaunted redistributive measures, like the Comprehensive Agrarian Reform Program (CARP), hardly transcended in their actual and practical ramifications Marcos discredited reforms, those which by the end of the day would leave iniquitous economic and social power structures in the rural areas essentially intact.

Right W ing Vigilantes an d US Inv olvemen t: Report of a U S-Philippine F act Finding M ission to the Philippines May 20-30 1987, Philippine Alliance of Human Rights Advocates, PAHRA , (July 1987): 34.

55

24

Apparently, in the drive to reach declared objectives of its trademark people-powered development program economic recovery and growth the current government had tragically relegated to the backseat some of the most basic principles on which the very success of Aquinos development program had been predicated, i.e., social and distributive justice as well as popular participation in planning and implementation. If Marcos policies most patently failed to address the structural problems of Philippine economy and society, i.e., those which subserviently and blindly complied with as it were IMF-World Banks debt-recycling and perpetuating prescriptions, it would be quite plausible to hazard that any government, including the present one, navigating along similar coordinates would likely be unable to deliver the country from the state of economic underdevelopment.

Political Directions The Consolidation of Power

Upon assuming power, Corazon Aquinos immediate political agenda was to dismantle institutions of authoritarian rule and replace them with a democratic system of government. In the process, she was, however, placed under considerable pressure from both within and without the newly installed government. This was a logical outcome deriving from the very manner by which Aquino was catapulted to power. The fact that she had been politically empowered by a loose coalition of forces with divergent political views and interests, united basically by broad resolve to overthrow Marcos, meant that contradictions within such a coalition would sooner or later break out in the aftermath. Attempts from the Right, from those forces remaining loyal to Marcos, to destabilize the new government through a number of aborted putsches and demonstrations were successfully fended off. The challenge from the Left had been temporarily suspended when the government forged an interim cease-fire agreement with the revolutionary forces of the National Democratic Front (NDF) on December 1986, which eventually broke down two months after. True to the image of a populist and charismatic leader, Aquino invariably positioned herself in the middle of feuding political factions within her government in the spirit of reconciliation and compromise. Her government had been described by a few political observers as a coalition of forces incorporating elements from the rightist or conservative and liberal democratic sections of the elite. At this point in time, Aquinos unquestionable popularity had made it difficult for these factions to outmaneuver her. More importantly, after 25

acquiring more solid support and official blessing from the United States in mid-1986, Aquino had then been able to further fortify her position. However, in consolidating her power, she had to give considerable concessions to the military hierarchy, the domestic financial and land-owning elites, and the US and other foreign creditors and investors. For instance, as a trade-off for the removal of Defense Minister Juan Ponce Enrile, the most prominent representative of the Right or conservative faction within the ruling coalition and main threat to her within the government, Aquino had to dismiss a number of Left-leaning and nationalist Cabinet members at the end of last year. Their removal had been demanded by the military, business elite, foreign investors and multi-lateral agencies, and the US from the very outset. Also, Aquinos conciliatory stance in handling the Left and the revolutionary movement had given way to a more mail-fisted and militarist position. The rising trend of human rights violations and the legitimization and proliferation of anti-Communist vigilante groups, all attest to the administrations rightward drift. This political trend dove-tailed with a similar shift in the economic sphere as noted earlier on in terms of policies serving the preferences of foreign capital. Such developments raised great concern and agitation specially among popular organizations and movements, those instrumental to Aquinos rise to power. Increasingly, militant organizations were subjected to repression and violence as they begun to challenge the policies of the present administration.

The Process of Consolidation

Through a series of dramatic announcements in the early months of her presidency, Aquino moved to implement campaign promises by restoring the writ of habeas corpus or the right to due process of law, and freeing nearly half of the Marcos-era political prisoners, including some prominent leaders of the Communist Party of the Philippines (CPP) and the Left. With the dissolution of the Batasang Pambansa or national legislature dominated by Marcos party, the New Society Movement (KBL), and the abolition of the 1973 Constitution fathered by Marcos, Aquino declared a provisional revolutionary government. On March 16 1986, she created and mandated the Presidential Committee on Human Rights (PCHR) to assist the new government in safeguarding its avowed commitment to human rights, and to immediately investigate violations of human rights by military personnel during the dark

26

years of martial rule.56 At this juncture, the revolutionary government was to be led by a Cabinet of ministers appointed by Aquino. It was a heterogenous set of figures with divergent political interests and views. Such heterogeneity evolved from the very mode by which Aquino rose to power, the process of which necessitated the reconciliation of strategically opposing political platforms for the tactical objective of dislodging the Marcos regime. In the appointment of Cabinet ministers, political accommodation as such became the most logical approach. At one extreme were several officials who held positions in the Marcos government: Defense minister Juan Ponce Enrile, Central Bank president Jose Fernandez. In another camp, were powerful businessmen and traditional politicians who had hardly any access to power under Marcos mandate. Salvador Laurel, the vice president, would perhaps be the best example of this group. Feuber and Silvaggio described this segment critically as one marked by dualism: While vowing to break up crony monopolies and clean up corruption, they are expected to favor corporate and landlord interests, and to rely on machine politics (political patronage) in much the same mold as Marcos. Like the former Marcos associates, most of them are regarded as strongly pro-American. 57 The Cabinet also embraced liberal democrats, like Aquino herself, as well as several appointees closely identified with the nationalist movement, some of whom were prominent human rights lawyers during the Marcos era. Presidential spokesman Rene Saguisag, executive secretary Joker Arroyo, labor minister Augusto Sanchez, director of the Human Rights Commission Jose Diokno, the commissioner for Good Government Jovito Salonga, the minister of Justice Neptali Gonzales, and the minister of Social Services, founder of grassroots community based health program Dr. Mita Pardo de Tavera all belonged to this bloc. An institution remaining virtually intact after the s-c February Revolution was the military under the command of General Fidel Ramos. The new governments wholesale acceptance of military introduced a powerful element and counterweight to nationalists moves that government might make. After all, the military hierarchy, had, in all previous governments, been well predisposed to official US support and direction. From the very beginning, Aquino sought to strike a delicate balance between these contending groups jockeying for position and power in the new government. Beyond the populist rhetoric of difference from the previous regime, the reality of Aquino politics sang
56

Ibid. Our S ocialism , op cit: 39.

57

27

the disappointing refrain of yore in terms of the glaring absence of representation from the ranks of the working class and peasantry sectors which by and large provided the antidictatorship movement with a strong and solid social base for many years. Commanding wide popularity, but having no organized base of support to fall back on, Aquinos efforts to maintain balance at the center had thus been extremely delimited. The strongest threat to the stability of the new government was, specially during the first few months when the Reagan administration was still reluctant to accord wholehearted recognition to Aquino, posed by right-wing elements from the military and the ruling coalition. This threat occasionally broke out in the shape of aborted coup attempts the most significant of which occurred in July and November 1986, and most recently, in the last week of January this year. Tensions generated by the Rights most ardent proponent, Defense minister Juan Ponce Enriles aggressive attacks against the government in October and November 1986, dramatically illustrated the Aquino governments biggest problem dealing with the vestiges of the Marcos dictatorship. Enrile was Marcos Defense minister from 1972 and was widely believed to be one of the chief architects of Martial rule until he led the military mutiny in February 1986. Enriles removal from the Cabinet along with the neutralization of his military supporters in late November eliminated the hitherto most serious threat to the government. But his dismissal was achieved only because Aquino conceded to major demands raised by a disaffected segment of the military delivered through the intercession of General Ramos. Many political observers believed that these concessions in effect drew the Aquino government gradually to the Right. As a quid pro quo gesture, Aquino was compelled to ask for the resignation of some Left-leaning and nationalist ministers in the Cabinet, like the radical Labor minister Augusto Sanchez who had antagonized domestic and foreign business interests as a result of his pro-labor policies. The final ouster of a very strong contender for power such as Enrile was brought about by several factors. During her first six months in office, Aquino had quietly and steadily built up her influence within the military. She enjoined many of the Marcos-era generals to retire and insisted on personally interviewing officers to be promoted to the rank of general and above. Aquino had moved quickly to build up her palace guard, the Presidential security group. Apart from troops guarding the palace, a large contingent, the s-c Yellow Army (the color associated with Aquino and her constituency), was being trained in the Aquino family estate in Tarlac province north of Manila. In addition, politicians close to Aquino were

28

reportedly organizing their own armed groups and private armies. 58 Aquino was able to gradually wean away Armed Forces Chief of Staff Ramos from the Enrile camp (as we might recall, Enrile and Ramos both led the military mutiny in February 1986 signaling the fall of the dictatorship). Where Ramos, another key remnant of the Marcos ruling circle had first appeared close to Enrile, in the last few months, he gradually moved to a position of neutrality. After Aquino had gained clear and solid sanction from the US government following her state visit to Washington in mid-September 1986, coupled with her increasing influence in the officer corps, Ramos was finally compelled to take an anti-Enrile position in November 1986. Since then, Ramos began to set himself up as the main obstacle to coup plots and threats from the Enrile camp (Enrile had been connected by unofficial reports to the November coup plot). Then, as earlier mentioned, Aquino conceded to the militarys demand to weed out Left-leaning and nationalist ministers from the Cabinet. Vice-president Laurel, also representing the Right within the ruling coalition, had been attacking the leadership of Aquino. While being more restrained than Enrile, he criticized the governments initial soft line handling of the insurgency, Aquinos local government appointees. He also threatened to oppose the ratification of the draft Constitution proposing to extend Aquinos tenure by one more year. Laurel had been under pressure from his party, the United Nationalist Democratic Organization (UNIDO). UNIDO leaders had been wary about the growing influence of a competing party, the Philippine Democratic Party-LABAN (PDP-LABAN). Led by Aquinos brother, Jose Cojuangco and minister of Local Government Aquilino Pimentel, PDP-LABAN outmaneuvered UNIDO in the scramble for government positions when Pimentel appointed a considerable number of his party associates to local government posts as officers-in-charge, replacing governors and mayors. Reporting on this factional dispute, James Clad noted, The traditional patronage dimension to Philippine politics explains much of the increasingly bitter relationship between Aquino advisers and Laurel. Bitter division-of-spoils arguments between PDP-LABANs party and Laurels UNIDO have occurred.59 In Aquinos bid to strengthen her power base outside the government, she extended personal backing to PDP-LABAN. When Aquino first announced her decision to run against Marcos, she did not have the financial and organizational resources that usually determined
58

Rocamora, Joel, Stability for Who m? The A quino Era in the Philippines, (stencil: Lecture delivered at the Transnational Institute) Berkeley, California (Oct 10 1986): 1-17.
59

Far Eastern Eco nomic Review , Clad and Taskner, Factions and Confusion, (28/8 1986): 30.

29

the outcome of elite factional battles during elections. Laban ng Bayan (Peoples Struggle), the coalition initially supporting her candidacy, was not as widely or as well organized as the UNIDO. Aquino won the election (although Marcos, of course, declared himself winner amidst massive electoral fraud and cheating) and rose to power because she captured the imagination of broad sectors of society and was able to harness and mobilize twenty years of pent-up anti-Marcos sentiments. During the campaign, hundreds and thousands of unorganized middle-class Filipinos campaigned for her, monitored the elections, and spearheaded the anti-fraud campaigns. The PDP-LABAN, behind which most of the middle-class rallied, was a coalition of the vaguely social democratic PDP and a loose grouping of traditional politicians from Manila and the adjoining provinces. Other parties veering toward the Aquino-camp, like the Liberal Party, an old and greatly weakened party of traditional politicians and several other smaller regional parties, had united with PDP-LABAN in a larger group called Lakas ng Bayan or Peoples Power Coalition and contested in the recent Congressional elections last May 1987. Candidates from this coalition won a substantial part of the Congressional seats and were personally endorsed by Aquino during the electoral campaigns. Another organized base of support for Aquino, Lakas ng Sambayanan or Power of the People drew to its ranks, students, professionals, labor and urban poor groups clustered around the social democratic alliance, BANDILA, and the independent socialist group, BISIG. The two coalitions, Lakas ng Bayan and Lakas ng Sambayanan illustrated the tensions within the Aquino camp. The former consisted of pragmatic politicians and political parties, while the latter was made up of grass-roots oriented groups. Although Lakas ng Sambayanan remained supportive of Aquino, individual organizations increasingly criticized government policies. BANDILA, although much smaller than the Left-influenced BAYAN or New Patriotic Alliance with its two million members from the militant labor and peasant movement, students, women and other sectoral anti-imperialist groups, was expected to expand its mass base rapidly under the impetus of close ties to the Aquino government. However, incorporation of its top and middle-level leaders into the government bureaucracy or into candidacy for electoral positions had drained these groups of their organizers. Thus, these social democratic groups now had more clout within the government, though clearly not as much as the traditional politicians. Yet as a result, they had not managed to organize a larger base in the population at large.60

60

Europ e and th e Philipp ines: Tow ards a N ew Re lationship (TNI), op cit: 19.

30

Although Aquino had personally backed up these groups, she was reluctant to take up the challenge of building her own political party. She feared that if she did, she would in effect surrender her role as unifier, as the non-politician who supposedly represented the interests of the country as a whole. Even as she insisted on retaining that role, she had to make decisions in the intervening months that did in fact generate varying degrees of agreement and disagreement among factions in her coalition. Another power factor was the Catholic Church hierarchy. In a country with few organizations of significance, the Church remains to be one of the most formidable institutions along with the military. Thus, it did exert tremendous influence over the new government as could be gleaned from, for example, the inclusion of an anti-abortion provision in the Constitution and the growing anti-Communist position of the government. During her first 18 months in office, Aquino had set in motion a process of reconstructing the institutions of democratic governance. Among the first problems encountered by the government in the early months of its career concerned the legitimacy of the provisional revolutionary government. As the head of such government, Aquino assumed broad powers resembling those of Marcos. Nepatali Gonzales, minister of Justice, clarified basic differences of the incumbent from the previous government averring hence: it is civilian in character, revolutionary in origin, democratic in essence and transitory in form. It gives the president broad powers to achieve the mandate of the people to completely reorganize the government, rehabilitate the economy, recover ill-gotten properties, restore peace and order and settle the problem of insurgency.61 On March 25 1986, Aquino issued a decree creating and mandating a 48-member committee to draft the Constitution. Committee members, with the exclusion of a handful of representatives from the progressive organizations, were mostly traditional politicians barred from power during the Marcos years. The committee proposed to resurrect the USstyle form of bicameral government abandoned in 1973, and to extend Aquinos tenure by one year until 1992. The proposed government set-up was a system wherein a bicameral legislature confronts a separately elected president and a separate judiciary occasionally confronts both. The new charter envisaged a nationally elected 24-member Senate joining a 250-seat House of Representatives in a new Congress. The charter was later ratified through a national plebiscite held in February 1987. The massive turnout of votes for the Constitution reaffirmed Aquinos popularity.

61

Our S ocialism , op cit: 41.

31

However, certain groups strongly opposed the charter. Opposition to the latter sorted under two basic categories. Criticism from some segments of the traditional political elite harped on one basic issue: the seal the Constitution sets on Aquinos presidency until June 30 1992. To this sentiment the oppositionists added silent no votes from the military. Many officers were upset by Aquinos initial soft line policies relative to the Left or aggrieved by realignments within the military power structure. The most radical position was of course taken by the Left, specially by the Communist Party of the Philippines (CPP), assailing the Charter as a piece of bourgeois superstructure reflecting dominant class interest. Some nationalist-minded economists and businessmen, and interest groups like the Federation of Free Farmers (FFF) who did not necessarily side with the Left, had been incensed by claimed deficiencies in the charter. Among others, they pointed at concessional provisions to foreign interests and the watery formulation of provisions on land reform. Left-leaning labor organizations such as the First of May Movement (KMU) opted for a no-vote.62 Still, others claimed that Aquino had personalized the referendum for her own reasons in an attempt to consolidate power. These detractors argued that pro-Charter campaigning evoked memories of past electoral contests, specially Aquinos promises of hefty local spending. In one rally alone, she promised 2.4 billion pesos for 700 km of new road, 500 artesian wells, 6,600 km of communal irrigation works, and 1,061 new classrooms.63 Liberation theologist and prominent leader of a progressive group called Volunteers for Popular Democracy, Father Edicio de la Torre, analyzed the implication of the Charter:64 ... the rectification of a new Constitution is a step towards consolidation. It essentially defines the relationship among different factions of the elite their respective share in power and the framework for solving their conflicts. The reorganization of the various elite forces, usually in political parties and the emergence of a dominant bloc that gets the lions share of posts is more important. This bloc must skillfully accommodate the other factions by giving them their share and offering them a reasonable chance of increasing their share.

62

Far Eastern Eco nomic Review , Corys C onstitution al Gam ble, (29 /9 198 7): 22. Ibid: 21.

63

Notes on the Current Situation, Father Edicio de la Torre (a prominent Philippine liberation theologist who recently received the M onismanien aw ard in Uppsala, Sw eden last Nov. 1986 ) Midweek (March 11 1987): 30-35.

64

32

De la Torres analysis appeared to tally well with developments in the past 18 months. As such, the military, traditional politicians, and powerful business groups had from the outset all been demanding for the swift realization of the constitutional framework of the provisional revolutionary government in order to determine their respective positions toward Aquino, based on how well their interests were accommodated within such a framework. Also, many candidates and supporters endorsed by Aquino during the May elections won a substantial portion of the Congressional seats and had become wellentrenched in other sectors of the state bureaucracy as a result of appointments made by the president in the past months. Following the ratification of the Constitution and the Congressional elections, the Aquino government finally gained formal legitimacy. Although factional disputes inside still persisted, Aquino had adeptly been able to contain them, and was well on her way in stabilizing the situation within the government. However, as repeatedly noted, stability came not without a price: the intensifying Right-ward drift of the Aquino administration. This trend was ironically recapitulated in the area of human rights. A report made by a USPhilippine fact-finding mission in May 1987 revealed that:65 It is no longer clear how capable the Aquino government is of attaining the primacy of the civilian over military authority, or to the efficacious participation of the people in the process of governance. Despite the overwhelming ratification of the 1986 Constitution, and what appears to be an overwhelming victory for Aquino candidates in the recently concluded May elections, serious fissures are emerging and anti-democratic tendencies appear to be consolidating. While the government did create and mandate the Philippine Commission on Human Rights (PCHR) to investigate violations of human rights by military personnel, it did very little to restrain the military or punish human rights violators. Aquino had also undercut the authority of the Commission by assigning several major human rights cases to independent commissions. The latter were, however, ineffective in pushing the prosecution of identified violators. The committee investigating the brutal murder of maverick and First of May Movement (KMU, the 800,000 strong Left-leaning trade union center) leader, Rolando Olalia in November 1986, identified military intelligence officers and civilian agents as primary suspects, yet none of them had been arrested. Statistics gathered for the first quarter of 1987 by the Task Force Detainees of the Philippines (TFDP), a well-respected and accredited human rights group, painted a bleak

65

Right Wing Vigilantes and US Involvement .., op cit: 7.

33

picture. The total number of prisoners still detained for political reasons remained at 431; arbitrary arrests, 193; forced disappearances, 11; salvaging (liquidation), 19; torture, 74; massacres, 7 incidents with 40 persons killed and more than 8,000 individuals affected.66 An alarming trend had been the proliferation of armed vigilante anti-communist groups aggravating the human rights situation. Now numbering more than 30 nationwide, these armed groups were responsible for wanton violations of human rights, from harassment and extortion to outright killings of suspected Communists. Since the peace negotiations broke down, the government had increasingly taken a more militarist attitude in addressing the 18-year old armed struggle. The government did renege on its declared commitment to dismantle the notorious para-military groups Marcos had once deployed to terrorize the civilian population in the past, particularly in the rural areas, as a strategy to deprive the guerillas of their mass base. Far from demobilizing them, the government had, on the contrary, recently (March 9 1987) even started to endorse vigilante groups as a paragon of peoples power fighting a protracted peoples war. The late minister of Local Government (assassinated last June 1987)Jaime Ferrer, was one of the staunchest proponents of the formation of grassroots anti-Communist groups. He ordered all local government officials to set up Nakasaka (a model vigilante group) organizations in their provinces by May 31 1987, or else loose their posts. 67 Former US Attorney General Ramsey Clark and former CIA operative Ralph McGhee, heading the earlier noted US-Philippine fact-finding mission, established parallels between the counter-insurgency program of the government and the Phoenix Program once applied by the United States to crush the revolutionary forces in Vietnam. In a similar vein, armed anti-Communist vigilante groups in the Philippines like the Alsa Masa (Peoples Uprising) had all the attributes of such counter-insurgency strategy fashionably labeled as population control.68

The Challenge from the Left

The fact that the Left had been given top priority by the Aquino administration demonstrated the extent to which it emerged as a major contender for power. Joel
66

An Unbroken Trend of Repression, Midweek (10 June 1987): 17. Pinoy O verseas Ch ronicle, Fascism at the Grassroots, op cit: 10-12. Right Wing Vigilantes and US Involvement.., op cit: 38-49.

67

68

34

Rocamora noted that: While elite factional rivalries play a major role within the government, the political dynamics in the system as a whole is determined more and more by the continued growth of the Left, armed and unarmed, above and underground.69 In early November 1986, General Fidel Ramos disclosed military intelligence estimates that the New Peoples Army (NPA) grew at roughly 33% per year since 1982. The NPA, Ramos said, now had 23,000 guerillas. While militarily still inferior to the Armed Forces of the Philippines (AFP) 160,000 troops, the NPA, was, according to the general, only the tip of the iceberg. Close to 20% of the countrys villages were either controlled or influenced by the NPA.70 From a state of disintegration and decimation in the 1950s and early 1960s, the revolutionary movement did in fact manage to expand and consolidate its military capability, political terrain and organizational base throughout the 1970s and 1980s in a manner that earned it the reputation of being the fastest growing revolutionary movement in contemporary Asia. It traces its humble beginnings in the late 1960s when radical young cadres from the old Communist party, at loggerheads with the incumbent leadership on basic strategic and ideological issues, decided to reestablish the Communist Party of the Philippines (CPP). After this reestablishment, some units of the old partys nearly decimated military wing regrouped to form the New Peoples Army (NPA) a few months later. The founding document, Rectify Errors and Rebuild the Party, was a carefully argued polemic which traced the defeat of the peasant rebellion in the 1950s (then led by the old party) not principally to external causes, but to internal ones an adventurist military strategy of swift armed uprising, lack of coherent policy on the united front, and the absence of a thorough-going political and ideological training of party cadres and the mass base. It then went on to chart the strategy of the revolution: the character of the current stage of the Philippine revolution was national democratic i.e., anti-feudal and antiimperialist meaning it could potentially appeal to most classes, from the peasantry to the s-c national bourgeoisie, and draw them to oppose imperialism and its local base consisting of an alliance of landlord and comprador elites. The principal vehicle for this project was a protracted peoples war in which the main force, the peasantry, would be mobilized and armed to encircle and liberate the urban bastions of imperialism in the final stage of the revolution.

69

Rocam ora, Joel (ste ncil), op cit: 2. Ibid

70

35

Complementing the armed struggle was a flexible application of united front tactics designed to win as many allies as possible, isolate the enemy and neutralize its potential allies. The insurgent leadership attempted, in short, to apply lessons vernacularly from national liberation struggles elsewhere in Southeast Asia like those in China and Vietnam. It would not be until the mid-1970s that revolutionary strategy would acquire characteristics unique to the Philippines.71 At the outset of martial rule, the mass organizations of the Left were smashed, while the NPA became the target of several massive counter-insurgency campaigns. Yet, it had rebounded by 1977. Two critical steps taken by the CPP then explained this phenomenon. One was the decision to boldly create multiple base areas in each of the countrys 11 major islands, instead of relying on a single major base as had the old partys armed wing in the 1950s. The other was to correct dogmatic and ultra-Leftist methods of organizing to broaden the appeal of the national democratic program among social groups other than the peasant and working classes. Set forth in two classic documents, Specific Characteristics of Peoples War and Our Urgent Tasks, the two policies paid off handsomely by the beginning of the 1980s. In 56 of the countrys 72 provinces, an estimated 10,000 NPA regulars kept Marcos 250,000 man army and paramilitary groups perilously thin. In many cities, skillful organizing had created intersecting layers of legal, semi-legal and illegal organizations among workers, students, certain professional sectors and the Catholic clergy. The National Democratic Front (NDF), the preparatory commission of which was erected in 1973, had become a major political reality by the end of the decade. Church sources estimated that all in all the NDF had 40,000 active organizers throughout the archipelago and a mass base of about 6 million Filipinos.72 Currently incorporating 12 underground mass organizations from almost all sectors of Philippine society workers, peasants, students, teachers, clergy, ethnic minorities, artists, writers, cultural activists, health workers, youth, scientists, engineers and other professional groups, women, nationalist businessmen plus the CPP and NPA, the NDF had its own program of government and development strategy. It succeeded to erect provisional revolutionary local governments in several consolidated base areas where underground peasant organizations and village governments had been implementing a revolutionary agrarian reform program in varying degrees. These village governments were among others delivering health and literacy services, collecting taxes, providing for security and self-defense functions, building credit and cooperative facilities, and ad71

Third W orld Qu arterly, op cit: 292. Ibid: 293.

72

36

ministering justice in s-c peace courts. General Ramos was alarmingly referring to these local organs of political power as the base of the iceberg which had transformed the revolutionary movement into a formidable force and prime contender for state power. Emerging as the spearhead of the popular opposition to Marcos, the NDF was a source of grave concern to the US and elite opposition. It was indeed this concern that compelled the disenfranchised anti-Marcos elite to gradually position itself in the forefront of the Marcos opposition movement in the wake of the Aquino assassination in 1983 a movement which had otherwise traditionally been the exclusive province of the Left. When Benigno Aquino was literally executed before international and national media upon returning to Manila from his self-imposed exile in the US, the anti-dictatorship movement widened to include the middle-class and political parties of the elite and moderate opposition once excluded from power by Marcos. As a result of the Lefts fateful decision to boycott the presidential elections of 1986, the elite opposition was able as such to retrieve the political initiative, supporting the Aquino presidential campaign, and thus being able to position itself well in the government after the collapse of the Marcos regime. This political miscalculation would prove to be a major tactical error. Clinging rigidly to the boycott position, asserting that the elections were a sham, De Dios concluded that:73 The radicals were theoretically right, after all (i.e., the elections were really a sham and Aquino was brought to power through mass insurrectionary means and not through elections) but this advanced thinking distanced them from the real ideological level of the masses, and they were not able to benefit from the fact ... By virtue of the boycott position, national democratic groups found themselves isolated from the main thrust of the anti-dictatorship movement, specially in the metropolitan capital, Manila. Alliance with liberal democratic personalities and other progressive groups eventually broke down. Although completely excluded from the government, the NDF, took a supportive position towards Aquino nonetheless, even as it worked to expose and oppose remnants of the Marcos regime who, like Enrile and Ramos, were able to position themselves within the government after the downfall. However, the NDF had steadily been able to recover lost political terrain as a result of among others the incorporation of top and middle-level leaders and organizers of the elite opposition, liberal democratic groups and social democratic organizations in the government, leaving the popular movement wide open for reinvigorated NDF organizing

73

Santiag o, see De Dios, op cit: 30-31.

37

initiatives. And as government policies began to antagonize an increasingly disillusioned portion of the popular movement, the NDF alternative attracted once again some of those organizations it lost to the elite opposition back to its fold. The Left welcomed government overtures by mid-1986 to negotiate a temporary cease-fire, believing that in so doing both political program and agenda could be projected to a wider audience. It sought to show good faith to Aquinos initial democratic reforms, particularly when some prominent leaders detained during the Marcos years were unconditionally released in the beginning of her term. Hence, despite repeated attempts by the military hierarchy to subvert the negotiations, the NDF and the government finally forged an interim cease-fire agreement in December 1986 intended to last no more than two months. The idea was to continue the talks later for a more long-term agreement. However, negotiations totally collapsed in February 1987. While the government insisted that negotiations for a political settlement be conducted within the framework of the draft Constitution, existing government policies for economic recovery, a rehabilitation program for the rebels. NDF responded by arguing that the Constitution was too narrow a framework for political settlement. The Constitution did, according to the Left, not provide conditions conducive to meaningful participation by organized groups of workers, peasants, and urban poor. Nor did existing government policies accommodate the need for fundamental social and economic change.74 The massacre of 20 peasants and workers at Mendiola in Manila on January 22 1987, finally provided the emotional edge to a growing conviction that the Aquino government only wanted to negotiate the terms of an NPA surrender, not a political settlement. Government position was badly compromised by the resignation of official negotiator Maria Serena Diokno and nine members of the government negotiating panel staff on January 23 1987 in protest against the Mendiola massacre. In their statement, the resigning staff said:75 We believe that the government was sincere; that the military was supportive of a peaceful solution to the insurgency. To these ends, we studied and put together proposed programs of government which were to make real for our people the aspirations which fired the February Revolution. We find that those programs human rights, land reform, industrialization, etc. were merely statements of intention. But we continued to hope and continued to work. Yesterdays brutal dispersal has practically killed that hope.
74

Europ e and th e Philipp ines: Tow ards a N ew Re lationship , op cit: 21. Ibid.

75

38

III
US Role and Im pact on Philippine Economy a nd Politics

As often since the days of colonial control of the Philippines, the United States had shown extraordinary interest in the recent developments there. US officials and members of the press of all political stripes bubbled over with enthusiasm at the turn of events in the Philippines. After first trying to disclaim American involvement in removing Marcos from office where the final transition of power had been mediated from the US Embassy in Manila and it was aboard a US Air Force jet that Marcos was finally shuttled out of the country the Reagan administration succumbed to unabashed self-congratulation for its positive intervention in support of democracy.76 With Marcos gone, the US agenda would greatly be simplified. American vested interests had not significantly altered relative to her former colony. US geopolitical and security interests were to be ensured and sustained i.e., strategic American military bases, like Subic Naval Base and Clark Field Air Base and other installations would remain in service. American business concerns would continue to operate within an auspicious environment. And most importantly in the immediate term, the much coveted defeat of the Left, specially its armed component, the NPA, now appeared to be more conceivable through the dual strategy of reform and counterinsurgency with the view of defusing the movements mass base and popular support Since the assassination of Senator Benigno Aquino on August 21 1983, Washington focused its attention on the urban unrest that followed in the aftermath. The slaying stripped away whatever remaining legitimacy the Marcos regime had, pushing for the first time a large segment of the middle and business class into active opposition. Soon a loose working coalition between the popular opposition, largely influenced by the clandestine NDF and pro-US elite opposition, developed. In response, the US government sought to split that coalition and isolate the Left via a two-tracked program. The first track consisted of pressure from the State Department and Congress to set up an independent commission to investigate the assassination. Although the stated purpose of the commission was to bring Aquinos killers to justice, its primary aim appeared to be the deflection of the escalating political polarization fueled by the killing.

76

Our S ocialism , op cit: 40.

39

The second and more significant track was pressure from the State Department for the elite opposition to participate in the parliamentary elections scheduled in May 1984. Evidently, these pressures were designed to avert this groups further radicalization and fan hopes for an impending possibility of some sort of power-sharing with the authoritarian ruler.77 While the elections did take place, with the elite opposition succeeding in fact to gain a token number of seats in the legislature, Marcos obdurate insistence to cling to his decreemaking powers seemed, however, to vindicate the Lefts position to boycott the elections. Escalating political polarization, the unabated growth of the revolutionary movement, and Marcos increasing political isolation amidst a rapidly deteriorating economy, compelled the US government to intensify its pressures on Marcos to accommodate the moderate elite opposition. These efforts were, for example, accentuated by the cancellation of Reagans state visit to the Philippines in 1984, as well as dilatory action by the American Congress on the release of official economic and military assistance to the Philippines. Eventually, Marcos acquiesced to these pressures when he finally announced on American broadcast that he would call for presidential elections in February 1986. Despite pressures to effect a modicum of democratic reform, the Reagan administration was still unwilling to abandon a close ally who had served its interests well. During the presidential debate in the last US elections, Reagan declared that he would not countenance throwing them (Marcos regime) to the wolves and then facing a Communist power in the Pacific.78 During the time of the downfall and until Aquino went to the US on official state visit in mid-September last year, the US had no unified policy towards the newly-installed government. We might recall that the US had been hesitant to abandon Marcos until the eleventh hour when Aquinos victory was already a done deal, and only when the military was already well in control of the situation. Aquinos state visit and assurances elicited therefrom at that point, put the finishing touches to the reconciliation of two rival tendencies in US policy towards the Philippines. That is, on the one hand, enthusiastic support to the Aquino government by State Department professionals and Congressional liberals, and on the other, hard-edged skepticism among the more conservative Reaganites in the White House, the Central Intelligence Agency and the Pentagon. For now, at least, the two sides both endorsed the

Katarungan, Vol IV No. 1, ECJP, see Pentagon Plans for the Philippines, by Eric Galuyot (JanFeb 1985): 17.
78

77

Ibid: 16.

40

Aquino government.79 Reaganites, with their sustained incredulity, dominated American policy during Aquinos first four months. Key administration officials, including White House Chief of Staff, Donald Regan, CIA chief William Casey, and Pentagon head Casper Weinberger, still doubted that Aquino would serve American interests as deftly as Marcos did. They started off by applying leverage on her to commit to an extension of the Military Bases Treaty beyond 1991, when the current treaty would expire. They also encouraged Aquinos plans to remove human rights violations from the military, to ignore negotiations with the NDF and the revolutionary movement and instead to get on with the counterinsurgency effort more relentlessly. The Reagan administration used its assistance program as bargaining chip. After 100 days in office, the cash-starved Aquino government had received only $9 million in US food aid. Even assistance allocated to the Marcos regime was held back. By late May 1986, Aquino officials were complaining. As one government spokesman, Rene Saguisag sardonically remarked: Were getting petty cash and a lot of nice rhetoric. Aquino herself said: I am a little disappointed, to tell you the truth. What is America waiting for? ... I have already explained what our needs are. I dont like to nag. Its just a question of are we friends or arent we?80 Secretary of State George Schultz finally took the initiative in developing better relations with the Aquino government. Where Schultz had earlier scoffed at Aquinos demands for larger amounts of aid, by the time of his May 9 1986 visit to Manila, he was already alluding to help raise $2 billion in aid from the US and her allies. On June 4 1986, the Secretary of State praised Aquino in a major policy speech and encouraged foreign investments in the Philippines. When Schultz returned to Manila on June 26 the same year, he brought with him a check for $200 million in aid. He then extolled Aquinos economic and security policies as encouraging. Cease-fire negotiations with the NDF were part of a sensible policy that was no different from US policy in Central America, according to the Secretary.81 Bilateral relations did continue to improve in the course of the next two months, culminating in the Aquino state visit to the US in mid-September 1986. There was a rising realization among conservative members of the Reagan administration that Aquino was

79

Rocamora, Joel (stencil) op cit: 2. Ibid Ibid: 3.

80

81

41

the best they could get given current political conditions in the Philippines. Her popularity lends credence to the government and legitimacy to the whole social system. She was the only politician capable of mitigating conflicts between factions of the elite. Conservatives in the Reagan government remained ideologically predisposed toward the Right-wing factions within the Philippine elite. But these forces clearly did not have the capability to take over power on their own at this juncture. The spectacular failure of the Marcos loyalist coup attempt on July 1986 showed that proMarcos elements ability to determine political directions on the national scene had been radically undercut. Former Defense minister Juan Ponce Enrile, while still cultivating ties with a group of disgruntled military officers and mobilizing pro-Marcos politicians into a new political party, had otherwise been conspicuously discredited by his strong association with the exdictator and would hence be incapable of unifying the fragmented elite. It had also become increasingly clear that tension between the Reagan and Aquino governments did not reflect fundamental differences. Disputes on economic policy within the Aquino Cabinet would soon give way in favor of a policy framework that closely hewed to IMF-WB guidelines. The deconstruction of authoritarian machinery had stopped short of the military establishment. Moreover, the Aquino-appointed Constitutional Commission had de facto crafted a Charter of an elite-centered political set-up.82 Upon Aquinos arrival in Washington, all the ingredients for the stabilization of USPhilippine relations along traditional client-state lines were in place. Even the issue of US military bases was settled for now with Reagan convinced that Aquinos refusal to commit to the extension of the bases lease was less a nationalist position than a savvy politicians recognition of the strength of current nationalist sentiment against the bases.83 American imprimatur had traditionally been a key factor in securing elite support for any ruling regime. Aquinos highly successful trip to the US was pivotal in her governments new image of stability. To secure US patronage, however, Aquino had to move her government farther to the Right. She had, to a certain degree, neutralized Right-wing and conservative groups by doing so. But she had at the same time antagonized strong nationalist elements within and without the government, i.e., the Left and other popular organizations.

82

Ibid: 4. Ibid

83

42

To grasp the magnitude of American interests in the Philippines, and thus, corresponding considerable influence and impact on Philippine economic and political developments, a quick historical review is in order at this point. US interests date back to the late 1890s, when American occupation forces annexed the Philippines as a colony as a result of the Spanish-American War. Although literally routed by the Filipino revolutionary movement, Spain refused to surrender to the native rebel forces, and instead ceded the colony to the US for $20 million. Indeed, economic motivation was one of the central rationales for annexation. American Congress moved quickly after colonial occupation had been largely secured in the Islands, to pass the Tariff Acts of 1901 and 1902, lowering tariff rates on US exports to and imports from the Philippines. The Payne Aldrich Act of 1909 and the Underwood-Simms Act of 1913 abolished tariffs on all goods except sugar, tobacco and rice, junked all quotas allowing unlimited trade between colonizing and colonized economies. Thus, US share of Philippine trade shot up from 11% in 1900 to 72% by 1935.84 In 1946 when the US granted formal independence to the Philippines, much of colonial economic policy remained. Just before independence, the US passed the Philippine Trade Act, which provided that US citizens would have equal rights as Filipinos to exploit natural resources and operate public utilities in the Philippines. US economic interests prospered. From 1946 to 1976, every dollar invested by US corporation raked in a profit of $3.58, $2 of which were repatriated to the mainland.85 In 1984, 170 (mostly US) corporations ranked among the top 1000 Philippine companies. Together they earned roughly 66% of the total combined net income of the top 1000 firms. The three largest US firms Union Oil, Citibank and Bank of America all ranked in the top six Philippine firms.86 When Aquino came to power in 1986, she appointed human rights lawyer Augusto Sanchez to be the minister of Labor. Sanchez vowed to protect workers rights and look into allegations that both domestic and multinational firms were violating said rights. One of his harshest critics was the US business community in the country. Another was the US State Department, Undersecretary of Political Affairs Michael Armacost, in a speech to the Foreign Service Institute, said that I am apprehensive that the Labor Minister is attacking multinationals (and) endorsing strikes ... Maybe theyve got to rein Mr. Sanchez in, or get

84

Right Wing Vigilantes and US Involvement ..., op cit: 9-10. Ibid: 11. Ibid

85

86

43

him to change his policy views. Under pressure from the US, the Philippine military and the domestic business community, the President finally fired Sanchez last December 1986.87 In addition to economic interests, US policy sought to protect national security interests. In the Philippines, the primary guarantors of such interests were five American military facilities, including Subic Naval base, the largest US overseas naval base, and Clark Field Air Force base, headquarters to the 13th US Air Force and logistical hub of US military air traffic in the Wester Pacific. Upon entering office, US policy-makers began to pressure Aquino on her position towards the renewal of the Military Bases Agreement, which was supposed to expire in 1991. Robert Dole, who was then Senate majority leader proposed that US aid to the new government should be conditioned and presupposed by Aquinos agreement to push for renewal. As we might have seen in the above discussions, US impact on Philippine developments had been tremendous. And the primacy of her interests go before all others. In the past, the US nursed and nourished intimate ties of friendship and loyalty with members of the native elite classes. The US had supported efforts of democratic governments as well as Marcos authoritarian rule in safeguarding strategic American interests in the Philippines. What type of government system Washington ultimately settles for would all depend on how effective such government would perform in perpetuating US basic interests. As a concluding note, let us quote MABINI lawyers, a progressive group of attorneys, when they examined the state of US-Philippine relations at the height of the anti-Marcos struggle in 1984:88 The issue of democracy versus dictatorship as the preferred form of political rule in the Philippines is only secondary to the fundamental concerns of the US its security interests and its economic interests. The US primary consideration then is to insure that the Philippine government maintains USPhilippine relations that safeguard such fundamental concerns, and consequently to insure the stability of the government that fosters such a kind of relations.

87

Ibid

Plaridel Papers, No 2 MABINI (Association of Progressive Lawyers), The Opposition: Lines of Fragmentation, Lines of Coalition, (August 1984): 5.

88

44

IV
Conclusion

Based on the study presented in this report, one can safely infer that no substantial alteration had taken place with respect to the fundamental character of Philippine society. At best, the ouster of Marcos from power and the dramatic installation of democratic rule under Aquino meant a mere realignment of positions within the elite power structure. In this context, the restoration of democracy should essentially be read as shift in shape rather than substance, where the monopolization of political and economic power by one faction of the elite over all other factions personified by Marcos had been replaced by a modality leveling the playing field for competition and power-sharing among sundry factions of the elite. Ironically, however, while the current government paid lip service to the demands of the popular movement for greater empowerment, it continued to invoke Corazon Aquinos popular mystique to legitimize elite-class rule. Concurrently, the liberalizing impact of the February 1986 Revolution, while immediately leading to wider space for popular and democratic expression at the outset, had now begun to slowly erode. The Right-ward political turn the Aquino government had taken was paralleled in the economic realm and manifested in the unaltered concessional treatment of foreign investors, creditors and local big business. In other words, political directions intersected well with official economic ones. Such intersection did come to no surprise. We might recall that expanded foreign entry and control of the economy during the Marcos years necessarily required political repression as social injustices and tensions amassing from Marcos foreign capital-based development program inevitably intensified and radicalized broad sectors of Philippine society. Similarly, legitimate grievances and protest generated by the incumbent governments policies advancing the interests of foreign capital had increasingly been met with intolerance and violence. As the report here revealed, the US had tremendous impact on both economic and political directions. The Left, far from being emasculated in the face of the overwhelming popularity enjoyed by Corazon Aquino, had indeed regained initiative and increasingly attracted many Aquino supporters to its more comprehensive alternative social program.

45

In sum, as this paper suggests, no significant discontinuation in elite-class rule had occurred with Aquinos ascension to power. Insofar as elite-class rule traditionally meant the maintenance of elite-class interests, interests in diametrical variance with those of the Filipino masses at large, the Aquino government should therefore make a clear choice. Aquinos first year in office had shown that she had, whether willingly or not, tended to favor the former. However, times have changed. Organized sectors of society had undergone a dramatic degree of consolidation and tempering. And with unabated and growing repression and economic marginalization, the stage appears to be set for an impending repeat performance of the February 1986 popular uprising. Only perhaps this time, with an entirely different political, economic and social agenda.

46

REFERENCES
BOOKS Nemenzo, Francisco & May, R J (1986) The Philippines After Marcos, Sydney: Croom Helm Ltd. Santiago, Lilia Q ed (1986) Synthesis: Before and Beyond February 1986, Manila: Interdisciplinary Forum (IDF) of the University of the Philippines, Edgar Hopson Memorial Foundation. Simbulan, Rolando (1986) The Bases of Our Insecurity A Study of US Military Bases in the Philippines, Manila: Balai. Transnational Institute (1987) Europe and the Philippines Towards a New Relationship, Amsterdam: TNI.

DOCUMENTS/REPORTS Our Vision of a Just and Democratic Society A Primer on the General Program of the National Democratic Front of the Philippines (March 1987) NDF Publishing House Policy Proposals on Agricultural and Countryside Development (1986) Quezon City: Peasant Movement of the Philippines (KMP). Program for Genuine Land Reform (1986) Quezon City: KMP. Questions and Answers on the Philippines Foreign Debt, Freedom from Debt Coalition (1987) Quezon City: National Economic Protectionism Association (NEPA). Right Wing Vigilantes and US Involvement Report of a US-Philippine Fact Finding Mission (May 20-30 1987), Manila: Philippine Alliance for Human Rights Advocates (PAHRA). Two Essays on Popular Democracy, De La Torre, Edicio & Morales, Manila: Institute of Popular Democracy Publications, Vol 1 No 1. Stability for Who? The Aquino Era in he Philippines (stensil), Rocamora, Joel (Oct 10 1986) Lecture Delivered at Berkeley, California, USA.

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ARTICLES Anderson, Benedict, Old Corruption, London Review of Books (Feb 5 1987): 3-6. Bello, Walden, Benigno Aquino: Between Dictatorship and Revolution in the Philippines, Third World Quarterly, Vol 6 No 2 (April 1984): 283-309. Concepsion, A de Garcia, Lessons from the February Uprising, The New Progressive Review, Vol 2 No 2 (1986): 3-7. Foubert, Charles & Silvaggio, Overcoming the Marcos Legacy, Socialist Affairs (2/86): 3843. Goodno, James B, Aquinos Acceptable Left, In These Times, Vol 10 No 34 (Sept 10-16 1986): 8-11. San Juan, E Jr, The Current Struggle Against US Imperialism in the Philippines, Our Socialism (Nov/Dec 1983): 24-30. Silliman, Sidney G, The Philippines in 1983 Authoritarian Rule Beleaguered, Asian Survey, Vol XXIV No II (Feb 1984): 149-58.

NEWSPAPERS, WEEKLY MAGAZINES, ETC. Ang Bayan, Official Organ of the Communist Party of the Philippines. Far Eastern Economic Review, Hongkong. Filippinsk Solidaritet, Stockholm. Ibon Facts and Figures, Manila. Katarungan (Publication of the Ecumenical Movement for Justice and Peace), Manila. KMU International Bulletin (Published by the First of May Movement), Manila. Liberation (Official Publication of the National Democratic Front, NDF), Philippines. Peasant Update International (Published by the Peasant Movement of the Philippines, KMP), Philippines.

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Philippine Bulletin (Published by the Filipino Committee), Utrecht. Philippine Insights (Published by the Ecumenical Partnership for International Concerns, EPIC), Manila. Philippine News and Features, Manila. Philippine Report, Berkeley, California. Plaridel Papers (Published by the Association of Progressive Lawyers), Philippines. Pinoy Overseas (Published by the Philippine Migrant Workers), Philippines.

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