Wednesday, May 18, 2005

President Garcia's Short-lived "Filipino First" Policy

”We gave the Philippines political freedom to enter the world family of nations, but did we give them internal political liberty? More important still, did we grant them economic freedom?”  – Harold L. Ickes, longest tenured U.S. Secretary of the Interior (1933-1946)

" Fear history, for it respects no secrets" - Gregoria de Jesus (widow of Andres Bonifacio)

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Hi All,

Under past and current conditions, Filipino nationalism among native (Malay) Filipinos is imperative for the Philippine government to truly plan and act for the well-being or common good of the majority of native Filipinos in the Philippines.

Nationalism is imperative if economic independence, i.e. self-sufficiency and ability to control the direction of the national economy in order to primarily serve the nation's native majority-- the major reasons for having a government-- were to be attained, and from which true political independence and national sovereignty would follow.

Without economic independence, political independence is hollow. This hollowness is demonstrated by our nation, through its leadership, its inability to overcome foreign pressures and to chart its own national priorities.

All our Asian neighbors [South Korea, Taiwan, HK, Singapore, Malaysia, Thailand and very soon China, Vietnam] which previously were lagging behind our homeland have now economically surpassed it; primarily by instilling and/or reviving nationalism in their populace and their leadership.

Malaysia, as late as the 1980s, was propelled by a nationalistic and strong leadership under Dr. Mahathir bin Mohamed. The Malaysian leadership instituted the "New Economic Policy" (NEP) - a national policy that gave preference to the "bumiputeras" (sons of the soil), that is, native or ethnic Malays in business, government and education to attain and catch up with the Chinese and Indians in terms of competence and competitiveness. Dr. Mahathir did so despite the NEP's unpopularity among the local Chinese, Indians and other foreigners, including the wrath of the International Monetary Fund (IMF).

Similarly, under strong but truly nationalistic leaderships, South Korea with Park Chung-Hee and Taiwan with Chang Kai Shek and their corresponding successors brought to their nations economic prosperity, to become known as "Asian Tigers", and full political democracy within 30 years (while our homeland deteriorated economically, then politically within a shorten span of time).

As anyone with a sense of history would remember -during the late 1950s, our own President Carlos Garcia, who succeeded America's Boy and CIA-backed Ramon Magsaysay,  implemented the "Filipino First" Policy which encouraged native Filipinos, who were becoming successful, on the road to nationalist industrialization.

However, American pressure and colonial mentality took over when a willing presidential aspirant [Diosdado Macapagal] was supported by the Americans, local Chinese merchants and local partners to defeat Garcia.

Macapagal betrayed Filipino nationalism and the Filipino people by immediately discarding the "Filipino First" policy. Macapagal would not be the first nor last of the modern-day Judas Iscariots to the Filipino people.

Subsequent presidents such as Marcos, Corazon Aquino, Fidel Ramos, Joseph Estrada and now Gloria Macapagal-Arroyo wittingly or unwittingly duped their fellow mis-educated and/or ignorant Filipinos by paying lip-service to nationalism and giving away the patrimony to foreign interests. Thus, the present and ever deepening predicament of Filipinos in the Philippines.

So far, due to the absence of Filipino nationalism among the majority of Filipinos --thanks greatly to their miseducation, ignorance and colonial mentality-- the current and foreseeable future breeds of Filipino leadership and their legacies will be more of the same: further despair and impoverishment for generations of Filipinos in the Philippines.

Diosdado Macapagal started enlarging the foreign borrowings which always come with the usual conditions set by the foreign lenders now via IMF, WB : so-called "structural programs" consisting of austerity, devaluation  100% profit repatriation, buying only from vendors of loaning governments/institutions, opening the local markets to foreigners, controlling/defining the Filipino educational system to serve foreign investors, etc. that are extremely favorable to foreign corporations and institutions.

Then the Marcos regime (and successors) further contracted massive amounts which were mis-spent and/or stolen thus becoming the compounded millstones on the daily lives of all Filipinos, born and yet unborn.

Below is one of the many excellent articles written during the early 1980s by Leticia Constantino, wife of the great Filipino nationalist of recent history - the late Renato Constantino.

A collection of these concise essays, in several slim volumes, to help understand important national issues and developments was published, as a teacher's aid to developing a nationalist education, under the title "Issues Without Tears", extremely useful to those who have no time nor patience to read books or scholarly treatises, as Mrs. Constantino explained. Hopefully the books are still available in Philippine bookstores. I highly recommend buying them.

- Bert


ISSUES WITHOUT TEARS, Volume 1 - Mrs. Leticia Constantino

On August 28, 1958 the National Economic Council passed Resolution #204 promulgating the "Filipino First" Policy. Filipino First meant that the government would adopt measures giving Filipinos preferential treatment in their own country. The government wanted to help Filipino businessmen to have a bigger share of the economy than foreigners. If Filipinos needed dollars to buy machines to set up new enterprises, the government would give dollar allocations to them than to non-Filipinos. If a Filipino wanted to enter a business field controlled by foreigners, the government would give him all the help necessary.

This government assistance together with import controls which prevented many foreign goods from entering the country encouraged many Filipinos to establish new industrial enterprises. By 1960, Filipino businessmen were doing well in food, wood, pharmaceutical, cement, fluor, textile, paint, paper, glass, chemical, fertilizer, appliances, electronics, plastic, fuel refinery, intermediate steel, shipbuilding, motor vehicle, machine parts, engineering and other industries. Even though some of these industries were only assembly plants for imported parts, at least the ownership was Filipino and it was a good beginning.

Other Filipinos took up the Filipino First idea and urged that Filipinos should be given preference in the development of our resources. Educators likewise began to demand freedom to design our own pattern of education more responsive to our own needs. Of course, since the Americans had "parity" rights, they could set up their own subsidiaries in the Philippines (Colgate-Palmolive, Reynolds Aluminum, Mead Johnson, Union Carbide, Mobil Oil, Esso,etc) and enjoy the same protection as Filipino businesses. 

But they did not like the implications of the nationalist feelings encouraged by the Filipino First policy. If Filipinos became nationalistic they might eventually even impose strict rules on American investments here.

The American Chamber of Commerce joined Chinese and other foreign sectors in condemning Filipino First. They called it an insane policy, a fascist slogan. "Why should Filipinos threaten the hard-earned wealth of foreigners just because they are Filipinos?" they asked. They[foreigners] were so used to controlling our government and economy that they reacted with anger when President Carlos Garcia began to assert our right to formulate policies favoring our own citizens

The Americans began to pressure Garcia to abandon his Filipino First policy. The American Central Intelligence Agency (CIA) started funding Garcia's opponents and a plot to stage a coup d'etat was discovered.

The Americans did not want Garcia to be re-elected because as a re-elected president who could no longer run for a third-term, he could afford to be more independent. They wanted the Filipino First policy dismantled. They wanted the import and exchange controls abolished. They supported Diosdado Macapagal {Gloria Arroyo's dad] because Macapagal agreed to lift import and exchange controls, abolish Filipino First and open wide the doors to foreign investments.

Macapagal won. He lifted the import and exchange controls. The peso was devalued and went down to P3.90 per $1.00. What were the effects of these [reversal of] policies? With decontrol, Filipino businessmen were no longer protected. On the other hand, American corporations could now remit their profits which had not been allowed to go out under exchange controls. American corporations alone immediately remitted US$300 million [or Y2004 equivalent to P18 billion].

Then they began to borrow pesos from local banks to finance their operations so that Filipino businessmen found it harder to borrow money for their own ventures. Tight credit and diminished sales due to the " buy stateside" mentality of Filipino consumers made it difficult for Filipino businessmen to compete with foreign corporations.

Devaluation gave them another big headache. When US$1.00 was equivalent to P2.00, if they bought machinery for US$100,000 on credit, they needed only P200,000 to pay their debt. All of a sudden at P3.90 to US$1.00 their debt rose to P390,000.On the other hand, foreign firms needed less dollars to invest in local business since their US$100,000 was now worth P390,000 not just P200,000.

This advantage, plus tax and other incentives given by the Macapagal administration, plus availability of local credit, plus the colonial mentality of Filipino consumers, meant high profits for foreign corporations and bankruptcy for many local manufacturers especially the new ones who had established their businesses under import and exchange controls. Many closed down or sold out to their foreign competitors.

Unlimited repatriation of profits and unlimited imports rapidly depleted dollar reserves. The government had to apply for loans from the World Bank and other international financial institutions. These institutions then imposed conditions favorable to foreign transnational corporations (TNCs) and the result was further depletion of reserves, bigger loans, and more foreign control of our country's economy.

READ ALSO:;  Filipino First (not Philippine First) by the late Claro M. Recto

**************************END OF POST****************************

Hi All,

The below link will show a short list of my past posts (out of 540 posts so far) which I consider as basic topics about us native (indio)/ Malay Filipinos. This link/listing, which may later expand, will always be presented at the bottom of each future post.  Just point-and-click at each listed item to open and read. 

Thank you for reading and sharing with others, especially those in our homeland.

- Bert


PLEASE DONATE CORE SUBJECT BOOKS TO OUR HOMELAND (i.e. your hometown public schools, Alma Mater, etc.). Those books that you and/or your children do not need or want; or buy books from your local library during its cheap Book Sales. Also, cargo/door-to-door shipment is best.  It is a small sacrifice.  [clean up your closets or garage - donate books.THANKS!]

"Upang maitindig natin ang bantayog ng ating lipunan, kailangang radikal nating baguhin hindi lamang ang ating mga institusyon kundi maging ang ating pag-iisip at pamumuhay. Kailangan ang rebolusyon, hindi lamang sa panlabas, kundi lalo na sa panloob!" - Apolinario Mabini La Revolucion Filipina (1898)

“Nations whose NATIONALISM is destroyed are subject to ruin.” - Colonel Muhammar Qaddafi, 1942-, Libyan Political and Military Leader

“Colonies do not cease to be colonies because they are independent” – Benjamin Disraeli, 

British Prime Minister (1804-1881)

"We shall be better and braver and less helpless if we think that we ought to enquire, than we should have been if we indulged in the idle fancy that there was no knowing and no use in seeking to know what we do not know..." – SOCRATES

Source: Issues Without Tears, A Layman's Manual of Current Issues, Volume I (1984),
Teacher Assistance Program (TAP) - Leticia R. Constantino, Director

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Anonymous said...

The Malaysian is just a proof that affirmative action do not really take off. The NEP is 30 years old... and the Malays will lag behind the Chinese and Indians.

The greater problem lies within the "natives". Last week I was in the jeep on my way to town. There was this lady who rode the jeep and to my surprise, after just one minute of continuous motion, she said "para". Isipin mo, walking distance na nga yung lalakarin niya, nag jeep pa. I'm not surprised why our non-native counterparts see us as lazy. Simple things, we DONT want to do for ourselves.

Before we go on blaming others, why don't we look at our own flaws too? We keep on blaming Spain, America... Jeus. FIlipinos hardly know that when this countries experienced regression, they were poorer than us, but in a short time, they managed to pull themselves...

There must be something wrong with the Filipinos themselves

Anonymous said...

Your blog is very informative. I hope many Filipinos will visit your blog to nourish the nationalistic spirit.
Some intellectuals don't want to talk about nationalism anymore. They say that the discourse should be on world citizenship. It's not a choice between nationalism or world citizenship. You can only be a worthy world citizen if you are very much rooted in your specific context. The Filipino mind should be nurtured so that it is able to reach its highest evolution. Thank you for contributing to the nourishment of the Filipino spirit.

Anonymous said...

Filipino First Policy is "myopic". As Philippines is a relatively backward economy it needs all the inputs available. If indigenous people are that capable they would be the world number one economy. Since that is not the case, it needs all the inputs of other cultures, other people.

Anonymous said...

i agree with Francis C.

Anonymous said...

That comment about the capability of indigenous people is pure racism!

Anonymous said...

I re-posted your blog on facebook Bert. I hope it helps. Indeed, we used to be just second to Japan in terms of economic status but now, where are we?
For now, I'm not so sure how I can help the nation but I'm learning at my own pace from my exposure here in Singapore. (although the way this nation goes seems very similar to the Marcos era). We used to have well masterplanned cities and good transport systems and I hope we start moving up again.

Anonymous said...

Indeed, the anonymous guy (who wrote @ 5:37 PM)is totally right in saying that the 'myopic' comment (posted @ 5:17 PM) is racist. When we were a forward economy, we never relied on inputs of other cultures. In fact most of our rsearches such as that of IRRI(International Rice Research Institute at Laguna), etc., etc. is proudly Filipino up to now. Other asian countries even went to our universities to study.

Anonymous said...

We should revive the Filipino First Policy but not in a time like this. We must find a way to encourage the local elite to expand their business before we show total support. If not, it will result to economic failure since most sectors of businesses are under foreign influence.

Anonymous said...

Protectionism will lead to ruin in the long run. If you do not open the state, there will be no competition, no innovation. Ever wonder why Chocnut still has the same old packaging and flavor after all these years?

I prefer an environment wherein only a select FEW get protection and safety nets, but only to incubate them and make them ready for eventual competition with their foreign counterparts.

Bert M. Drona said...

Hi All,

If one is sincerely serious in knowing and understanding this classic issue between free trade versus protectionism in the recorded history of the so-called advanced countries and how they got there, please check out this post made last year or so (copy and paste below URL)

NOTE: The nationalism of the leadership in each case/country was importantly paramount in implementing their decision for protectionism (not for their own selfish, individual interests).



Anonymous said...

wow. ako'y taas noo sa mga Pilipinong binibigyang importansya ang ating bansa. Sa aking palagay, ang kakulangan ng pagmamahal natin sa bayan ang pangunahing dahilan ng ating kahirapan. Tama na ang pagsisisi sa corruption, sa nakaraang administrasyon, sa rehimeng Marcos, sa issue ng RH bill at kakulangan sa pondo.

kung may pagmamahal tayo sa ating bayan, lahat ng isyung iyan ay unti-unting mawawala. Sana, ay mabuksan ang mata ng ating mga kababayan.