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Managing the Philippine economy, 1973 to 1983

"Here are the words of the members of the Marcos economic team."

 

Several weeks ago, I wrote about a newly published book titled “A Dialogue: The Economic Managers of the Marcos Administration.” As its title suggests, the book is a transcript of a round-table discussion conducted, between November 2012 and March 2013, by five members of the economic management team of the administration of President Ferdinand Marcos. The five economic managers were Cesar Virata (Minister of Finance, later concurrently Prime Minister), Jame Laya (Governor of the Central Bank of the Philippines), Gerardo Sicat (Director General of the National Economic and Development Authority), Vicente Paterno (Minister of Industry and Board of Investments chairman) and Placido Mapa Jr. (Development Bank of the Philippines chairman). Estelito Menzdoza (Solicitor General) was invited to join the group to provide a legal-political context to the discussion.

As I stated in my earlier column, “A Dialogue” is a useful and instructive book for students of Philippine economic history in general and the Philippine economy’s management during the critical 1973-1983 period in particular. That period started shortly after Mr. Marcos’s placement of this country under martial law and ended shortly after the assassination of former Senator Benigno Aquino Jr.

In “A Dialogue,” the Marcos administration’s economic managers and Mr. Mendoza have placed on record, freely and dispassionately, their perspectives on managing an economy in a martial-law environment and their recollections of the roles they played in the Philippine economy’s management at such a momentous juncture in this country’s history. Many of the perspectives and recollections are surprising, even startling.

So that there will be no loss in translation and in order to preserve the quality and flavor of the participations of the six gentlemen in the round-table discussion, I have decided to simply quote some statements made by them that in my view are deserving of notice and remembrance.

Dr. Sicat on deciding to accept the NEDA post: “I had already accepted an appointment at Yale University. I was going to be far away. But I decided eventually to change course because I felt that the challenge of serving the government was by far more important.”

Dr. Laya on President Marcos’s appointment of Faustino Sy-Changco as Budget Commissioner: “Mr Sy-Chanco had turned him down (for a dollar allocation). President Marcos never forgot that; he remembered how he was turned down by Sy-Changco. But he got retained as Budget Commissioner. The newly elected President Marcos said to Sy-Chanco, ‘I want somebody like you.’”

Mr. Paterno on the approval of the PCMP (Progressive Car Manufacturing Program): “I got so incensed by all the things that people in Congress were doing, were saying, that I said in April 1972 that I would be prepared to resign my post if I should be reversed by Congress. That episode lasted until September 1972, when martial law was declared. Naubos na lahat yung mga objections one week after martial law was declared, the PCMP was approved. My reaction was, salamat na lang at yung mga problema ko sa Kongreso ay natapos na.” (RVR’s note: Mr. Paterno has passed away).

Dr. Sicat on getting economic proposals approved by Congress: “We had a really very difficult system getting decisions made in the government. Essentially the government was in a gridlock, there was what we would call transactional decisions based on the trading between various major players. It was not a healthy system. The little time we had in the first few years of martial law, especially the first three or four years, were characterized by the removal of the major dreadlocks hampering Philippine economic development.”

Mr. Paterno on the presidential instruction regarding the price of cement:”(O)ne day I was asking the President, ‘Sir, what do you expect of me in the BOI?’ ’Only one thing,’ he said ‘Do not allow the price of cement to increase because my government is anchored on the basis of infrastructure. If you increase the price of cement, you will be sabotaging the government’s program’.’Sabi ko, yes, sir.’”

Mr. Virata on the situation of the land reform (Presidential Decree No.27) beneficiaries: “The new owners were highly indebted—indebted for the land and indebted for the crop loan. Unlike before, when the landowner borrowed a crop loan, if there was a typhoon, he was the one who suffered. But in this case the (land reform) beneficiary was the one who suffered.”

Mr. Virata on the reform of the banking system: “As far as finance was concerned, banking reform was necessary because during the time of President Diosdado Macapagal, a number of banks were created with very low capitalization. They did not survive the floating of the rate in 1970.”

Dr. Sicat on the mergers of the small banks: “The raising of capitalization created tension among the small banks because they didn’t have enough money but were required to raise their capitalization to strengthen their structures. So they had to seek partners from other banks.”

The martial-law economic managers made numerous other informative and insightful statements in “A Dialogue,” but they will have to await another column. 

Topics: Rudy Romero , Philippine economy , A Dialogue: The Economic Managers of the Marcos Administration
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