1Synthesis: 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.

The Corazon Aquino Government

Guardian of the Filipino Masses or Guarantor of Elite Rule?

1987 Virgilio RojasInstitute of Development StudiesDept. of Government, Uppsala UniversitySweden

Introduction

On February 1986, an old chapter in the annals of post-war Philippine history ended anda new one began. A popular uprising combined with an eleventh-hour mutiny anddefection of significant segments of the Armed Forces and bureaucracy successfully broughtfourteen long years of authoritarian rule to its swift and dramatic conclusion. The downfallof the Marcos dictatorship paved the way for the installation of, what many politicalobservers viewed as, a “liberal democratic” government under the charismatic leadershipof Corazon Aquino.

The widespread expectation from broad quarters of the anti-dictatorship movement – forceswho uncompromisingly challenged the Marcos regime and brought Aquino to power – wasthat with Aquino’s ascension to power primary obstacles to fundamental social changewould in time be eliminated. In other words, according to Philippine economist Emmanuelde Dios, “a real possibility existed that by getting rid of Marcos, some aspects of Philippineunderdevelopment would be relieved, since the features of the Marcos regime were theform in which these aspects existed in the concrete.”1

Moreover, it was expected that the democratization process the Aquino government wasto set in motion would enable the Filipino masses, through their popular organizations, tohave an expanded role in national policy-making directly addressing the problems ofunder-development.

2Far Eastern Economic Review, 28/8 1986: 30-31.

3Transn ational In stitute, “Europe and the Philippines: Towards a New Relationship,” TNI, The Netherlands

(1987): 15.

Indeed, Aquino herself had repeatedly affirmed her government’s commitment to enlargingpopular empowerment: “As I said, it (the government) will be a government of consultationand 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 appearsto corroborate this avowed commitment. Her first year in office witnessed the dismantlingof a substantial part of Marcos’ political institutions tailored to suit the dictator’s personalrequirements. 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 asthose of his relatives and cronies. By the same token, a large part of Marcos’ foreign assetswere tied up in litigation. A committee to investigate human rights violations committedby military personnel had been created, while a number of well-known Leftist dissidentsand 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 handlingthe insurgency issue, by attempting to forge a peaceful political settlement with therevolutionary movement, which, although registering success in the beginning, eventuallybroke down early 1987.

However, as the Aquino government progressed through its first year in office, a growingchorus of critical voices from the ranks of the very popular movement which wheeled herto power had started to question her political will to decisively address the fundamental illsof Philippine society. These critics contended that Aquino had gradually succumbed topressures exerted by the more conservative wing of the ruling elite, the powerful militaryhierarchy, and the machinations of foreign interests, primarily the United States, byinstituting reforms catering essentially to the predilections of the latter. As such, theseforces had started to abandon their previous “give-Aquino-a-chance” position. They hadbegun anew to ventilate their sentiments in the streets.

Disenchantment from particularly the labor and peasant sectors had once again erupted intomilitant strikes, pickets, demonstrations and mass actions. Increasingly, legitimate protestswere being met, not with tolerance and reconciliation anymore, but with violence andrepression.

Despite the fact that Corazon Aquino still commanded wide popularity, there was growingevidence that this was slowly eroding. The widening gap between the rhetoric and realityof a “people powered development” under the aegis of the Aquino administration seemedto lend credence to Philippine anthropologist, Ponce Bennagen’s premonitions in a lecture

4Santiago, op cit , see essay by Bennagen P, “People’s Power as an Evolutionary Process Towards Social

Transformation,” (1986): 101.

5Santiago, op cit , see de Dios (1986): 27.

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 thatmanpower gets co-opted and brutalized by technocrats, management and capitalists.It could be manipulated to serve the interests of a privileged few, whether remnantsof the old order or those of the new.”4

Economist Emmanuel de Dios, speaking at the same symposium, appraised the then newlyinstalled Aquino government and posed several questions of future relevance:5

“It is claimed that a revolution has occurred, but after accomplishing the huge taskof overthrowing the dictator it is not clear in what direction the new regime ispushing, or whether, given its amorphous composition, it is even inclined or capableof doing much else. Several questions put themselves to the fore. How adequate is theregime’s agenda in relation to the interests of the broad masses? Second, given theregime’s agenda and the existing balance of forces, what are the prospects of successin implementing it, in other words, how much of the pro-people agenda can really beaccomplished under the current framework?”

With the luxury of hindsight, this paper is an attempt to address the relevant questionsraised by less euphoric and critical observers like de Dios. In the main, it will address thequestion: Is the Corazon Aquino government the guardian of the Filipino masses’ interestsor is it the instrument of elite class rule?

To answer the question, this paper will present an historical re-examination and analysisof the developments leading to the downfall of the Marcos dictatorship. This will befollowed by a review of the economic and political directions the Aquino government hastaken during the past 18 months. A comparative analysis of the previous and the currentgovernments’ economic policies set in relation to the structural problems of Philippineeconomy will be included in the section on economic directions. The section on politicaldirections will include the following aspects: the process of consolidation, the compositionand balance of forces within the government, the challenge from the Left, the building ofinstitutions of democratic rule, human rights. Lastly, the impact of US interests oneconomic and political developments in the Philippines will be discussed in a separatechapter.

The concluding portion of the paper will summarize the basic findings relative to thequestion addressed here.

6Myrdal, Gunnar (1969) Objectivity in Social Research. University of Michigan: Panthe on Books.

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 certainlyyet to cohere more clearly. The short-term character, and thus inconclusive nature, of bothfocus and locus of study (hardly a year has transpired after the Aquino regime’s install-ation) and the still invigorating euphoria beclouding the political and cultural landscapein Philippine society today may account for the apparent caution exercised by the academiccorps in delivering off-hand views on the matter.

One of the very first attempts to initiate serious debate and evaluation of the status of thepost-Marcos era took shape in an inter-disciplinary forum sponsored by the University ofthe Philippines in 1986. Concerned political and social scientists presented their respectivepositions in the hope of establishing whether or not the shift in political power indeedrepresented an historical discontinuity. The printed upshot – Synthesis: Before and BeyondFebruary 1986, ed. E. de Dios – of this landmark attempt generated strategic analyticalinformation for this essay.

Elsewhere, other observers and political analysts have made equally important criticalcontributions and are also to serve as berthing-points for our study: the Dutch-based policyinstitute and think-tank, Transnational Institute’s findings embodied in Europe and thePhilippines: Towards a New Relationship (1987), where specially Joel Rocamora’s insights havebeen tremendously enlightening. The 1986 Berkeley lecture delivered by Rocamora hasparticularly lent an invaluable critical template, much of which has left an unequivocaltrace 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 ofPhilippine national, multi-sectoral, human rights and non-governmental organizationsgenerally with a progressive bent. Footnote references attest to the author’s propensity torest analysis on the statement and views of the latter, which may perhaps serve as a majorsource of weakness. Such “bias” has its logical origins in this author’s declared perspectivesand particular methodology, where he has consciously made it a point to give adequateroom for the views and opinions of forces involved in the struggle for social liberation andchange. Confessing “biases” openly in this manner draws not least from Gunnar Myrdal’scritical methodological discussion on objectivity in social research.6

5

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 ofcircumstances 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 socialcrisis which had shaken the very foundation of Marcos’ rule and led to his almost extremeisolation.

Credit should be given to Ferdinand Marcos for being the first in a string of Philippinepresidents since postwar Independence who arrogated to himself unlimited politicalpowers when he instituted martial rule on September 21 1972.

The institution of authoritarian rule had several implications for other actors in thePhilippine political arena. It also had significant implications for the economy at large.

At this historic juncture, Philippine society was witnessing a surging radicalization, notonly among the ranks of the working class, peasants and students – traditionally volatilesocial groups – but also among substantial segments of the domestic elite and the oligarchy.Nationalist sentiments had penetrated certain sectors of the state bureaucracy, Congressand the Supreme Court. The Supreme Court’s controversial decision in 1972 not to extendthe Laurel Langley Agreement – an agreement giving US citizens parity rights to own andexploit natural resources and public utilities in the Philippines – manifested in lucid termsthe extent of nationalist sentiments prevailing at that time.

The nationalist fever was partly a reaction against previous governments’ attempts(Macapagal’s regime 1961-1965 and Marcos’ 1965-1972) to de-protectionize the economyas a result of pressures exerted by foreign interests, multilateral agencies (World Bank andIMF) and the US government for unhampered access to the Philippine economy.

Decontrol (de-protection) had negatively affected local entrepreneurs – who benefittedhandsomely during the height of the s-c import-substitution era, a development strategyimplemented by the government in the 1950s providing for the development andprotection of domestic “infant” industries – as the floodgates were opened to the influx ofcheap imported durables from the United States. Unable to compete, these industriesfolded up. Massive unemployment in the urban areas and increasing peasant marginal-

7London Review of Bo oks, see Anderson B, “Old Corruption” (5 Feb 1987): 6.

6

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-citedjustification for the declaration of martial law. Martial rule, as a political arrangement,essentially implied the dismantling of democratic institutions, which had, in the traditionalFilipino political sense, served as conduits whereby different factions of the elite conductedpolitical patronage and settled their conflicts via a coterie of representatives in theexecutive, 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 highestconceivable form.

Benedict Anderson noted thus:

“Marcos bent it (the oligarchy) to his will by punishing financially particularoligarchs he disliked or feared, and by abolishing the political and legal structures bywhich the oligarchy’s economic power was independently safeguarded. But he wasone of them in every way – though with the good fortune to have the state militaryand 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 broughtthese classes under his absolute potentate.

Hence, Marcos quickly moved to consolidate and build the political and economic premisesof dictatorial rule. Although mainly ruling by decree, he nevertheless tried to give this asemblance of legitimacy. After junking the old Congress, he erected an interim nationalassembly (later to become permanent following parliamentary elections in 1978) controlledby his party, the New Society Movement (KBL). He personally handpicked and appointedpublic officials from town mayors, provincial governors, to members of the Supreme Courtand other officials in the bureaucracy. He had the 1935 Constitution rewritten accordingto his preferences to legitimize authoritarian rule – a mode of rule he proudly referred toas “constitutional authoritarianism.”

Marcos’ reorganization of the military warrants special attention. According to politicalscientist, Francisco Nemenzo, “Marcos, by converting the military organization into hispower-base, inadvertently de-professionalized the Armed Forces and developed this into

8“Where do we go from here?” Midweek (25 March 1987): 10-13.

9Our Socialism , see San Juan, E, rrent Struggle Against US Imperialism,” (Nov-Dec 1983): 24-30.

10Third 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.

11Ibid : 299-30.

7

an autonomous political force ... the authoritarian commander-in-chief had the ArmedForces 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 ofmilitary castes acquiring wealth and power through their role in government, the Marcosregime had now politicized the Army, with provincial and local military officers takingover civilian functions of governorship and mayorship. Moreover, these officers had alsoassumed 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 othergroups which formed the pillar of the regime: Marcos powerful business “cronies,” whowere 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 implementingthe 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 successin 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 radicalorganizations 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 asupport 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 – itsyearning for political and economic stability. Marcos assured the middle-class thatopportunities for social mobility would be opened up by an economic developmentprogram based on the attraction of massive amounts of foreign capital. Middle-classprosperity was the promise of what Marcos’ “missionaries” called the “Revolution fromthe Center.”11

Though suspicious of Marcos and resentful of the ostentatious and extravagant ways of theFirst Lady, Imelda Marcos, the middle-class was nonetheless neutralized and renderedplacid by policies, which in the initial years of dictatorship, sustained economic growth

12Ibid.

13Ibid.

14Ibid.

8

within tolerable limits. This mode of middle-class co-optation resembled what WaldenBello once described as the “Brazilian model of de-politization: so long as the middle stratafelt that their living standards were rising, they would turn a blind-eye to the fall of livingstandards among the peasantry, labor and urban poor.”12

The collapse, starting in 1979, of the export-oriented foreign capital-dependent economicstrategy from a combination of external recession, mismanagement and growing resistancefrom the victims of underdevelopment, triggered the alienation of the middle strata, whoseranks were hit hard by rising unemployment and whose pocket-books were worn thin byinflationary pressures resulting from the World Bank, WB/IMF imposed devaluation ofthe peso.13

Marcos similarly alienated sections of the capitalist class when he complied with anultimatum issued by the World Bank and the IMF to de-protectionize Philippine economyin 1979. In the early years of martial rule, the dictator had tried to keep these nationalentrepreneurs 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 tosecure control of key industries like coconut, sugar, construction, and energy. The rapidexpansion of these conglomerates had been fueled by the contraction of foreign anddomestic 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 patronthat 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, thenpromptly overshot the level of financing agreed upon with the two institutions. The rescuescandal shattered whatever confidence was left among the financial elite and foreigninvestors. 14

Overall, the accelerated economic decay during the latter part of the 1970s and thebeginning of the 1980s compelled Marcos’ once staunchest supporters, both domestic andinternational, to take a more cautious position.

US private banks holding the bulk of the country’s $22 billion debt by the middle of the1980s drastically scaled down their loan programs out of fear that instability, unbridled

15Ibid.

16Ibid: 293.

17Ibid.

9

corruption and economic stagnation has made the Philippines a major risk.

When Marcos’ support from the middle-class and the business elite started to erodecoupled with mounting resistance from more radical groups of workers, peasants,students, and urban poor mainly influenced by the Left, the situation soon became starklypolarized. Since Marcos blocked all venues of legitimate redress, and as the economic crisisdeepened, alienated sectors of Philippine society more and more systematically turned tomilitant forms of struggle in what was fashionably referred to as the “parliament of thestreets.”

Peasants and workers who experienced grinding poverty and untold abuses in the handsof the military, the Catholic Church which grew increasingly outspoken on issues ofhuman rights and poverty, elite businessmen and politicians denied a share of power bythe ruling clique, and even a sector of the military frustrated with corruption and lack ofpromotion opportunities within the Armed Forces – all, constituted the potential seeds ofa future coalition of anti-dictatorship forces that was to seriously threaten the hegemonyof the Marcos regime. Despite it being the target of official repression, the Left had not onlymanaged to survive, it experienced exponential growth during the dark years ofdictatorship.

The shattering of elite opposition pushed mass dissent towards the hitherto only forcecapable of withstanding the Marcos juggernaut: the Left. As the decade wore on, the keyaxis of political conflict became that between a massive armed ruling class and the armedLeft.15 Gaining wider political and military terrain, the latter started to draw concern fromthe Reagan administration.

After a three-month investigation of political developments in early 1982 on the island ofMindanao, the archipelago’s second largest, a US consul cabled then secretary of state,Alexander Haig, that in some areas, the New People’s Army (NPA), had become “moreimportant than the local government structure.” He concluded: “This may sound as aworst case scenario, but present circumstances are not encouraging and the future isominous.”16 The same concern was underscored by the Assistant Secretary for East Asia,Paul Wolfowitz, testifying before the American Congress: “... (T)he growing challenge ofthe Communist New People’s Army ... if unchecked could ultimately threaten US militaryfacilities (in the Philippines).”17

18Socialist Affairs, see Foubert C and Silvaggio K, “Overcoming the Marcos Legacy,” (2/1986): 28-43.

19Ibid.

10

Benigno “Ninoy” Aquino Jr’s assassination on August 21 1983, marked what observerscalled the “beginning of the end” of the Marcos dictatorship. Indeed, Aquino’sassassination 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 hugenumbers in anti-Marcos street protests . Soon enough, Marcos was left with only twopillars of support: the military and the United States.

But the turmoil also jolted the Reagan administration into a belated recognition of just howserious political crisis had become. Fearing the destabilizing effects of further polarization,US policy-makers urgently reassessed the policy of uncritical support for Marcos andsettled on a new strategy designed to appease the moderate opposition and out-maneuverthe Left.

“The new strategy,” according to Charles Foubert and Kathy Silvaggio, “followed aformula similar to that tested in El Salvador: pressuring Marcos to enact political,economic, and military reforms, and to transform the ineffective military into a well-trained and well-equipped counter-insurgency force.”18

Eventually, Marcos succumbed to American pressure and made his dramaticannouncement to hold a snap presidential election during an appearance on Americantelevision in November 1985. However, this set in motion a series of unique events andcircumstances which reeled wildly out of Marcos’ control, leading to his downfall fourmonths later. Marcos intention (basically supported by the Reagan government) had beento put a democratic facade on his badly discredited rule, and, in the process, acquire moreaid from US Congress. But the strategy badly backfired.

Several factors intersected and made this happen. Firstly, the otherwise notoriouslyfragmented elite opposition managed in a manner few could have reckoned to unitebehind Corazon Aquino just hours before the registration deadline for presidentialcandidates. Once chosen, Aquino’s popular appeal proved boundless, generating agroundswell of spontaneous feeling and strong determination for fair elections despite thetremendous odds against them. Then the powerful Church hierarchy moved away fromits previous neutral posture to play a remarkably active role in mobilizing support forAquino’s campaign, safeguarding ballots, and, in the final hours, encouraging masses ofpeople to protect mutinous military officers.19

Perhaps the most unforeseeable factor was the US government’s decision to do whatReagan had vowed never to do – i.e., to pull the plug on an anti-Communist ally. However,

20Quoted from Synthesis (1986) op cit .

11

the decision to finally desert the man towards whom the US had shown extra-ordinaryindulgence was made well into the eleventh-hour, and only after the military was alreadyfirmly at the helm of the revolt.

The defection of Marcos’ defense minister, Juan Ponce Enrile, supposedly one of the mainarchitects of martial rule, and foremost representative of the disgruntled members of themilitary’s officer corps, general Fidel Ramos, together with American distancing during thecritical days of February 22-25 1986, ultimately sparked a chain of defections fromconsiderable sections of the state-bureaucracy. At this juncture, Marcos was irrevocablytransformed into a political strawman with no other prerogative but to abdicate from morethan a decade of one-man rule.

On February 25 1986. Marcos left the Philippines aboard a US Air Force jet, probably neverto return to the country he had ruthlessly ruled. Thus, Corazon Aquino’s installation to thepresidency 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 CorazonAquino, 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 theeconomic and political wasteland Marcos recently abandoned.

Rebuilding from the ruins of dictatorial rule chiefly meant the dismantling of authoritarianinstitutions, and correspondingly, therefore, a return to a democratic political order, theremoval of primary obstacles to economic development and growth, effecting a moreequitable and just distribution of wealth and resources to alleviate the conditions of themajority of Filipinos living under abject poverty.

After 18 months in office, how had the Aquino government faired in translating rhetoricto concrete reality, both in terms of policy-creation and implementation? How much of the

21IBON F acts and Figu res, “Prescriptions for People-Powered Development,” (31 July 1986): 2-3.

12

s-c People’s Power demands were actually reflected in these policies? How much hadpopular empowerment and participation in decision-making been enlarged?

In the following sections, an attempt will be made to elucidate and enlighten on the generalpolitical 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, ashrinking economy, rampant corruption, agrarian and labor unrest and widespreadpoverty – the Aquino government’s immediate agenda was to formulate an approach thatwould 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 DevelopmentProgram.” The twin objectives of economic recovery and sustainable growth emblazonedin the plan hinges on an overall strategy mainly premised on an “employment-oriented,rural-based development process ... leading to a better export performance.” Its underlyingprinciples were: respect for human rights, social justice, minimum government inter-vention, free interplay of market forces, growth and efficiency, people’s participation inplanning 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 andemployment and “distributive justice.” “Sectoral” concerns referred to social services, ruraldevelopment and trade and industry.

The formulation and implementation of these policies generated both rancor andenthusiasm from different quarters of Philippine society. The concrete implications andeffects of these policies will be examined below.

The economic recovery program called for massive government spending to create onemillion jobs annually in the rural areas. The strategy had been called “pump-priming”

22Philippin e Insights , Vol. 1 No.5, Vitan Shalimar, “Looking for a Breather, Losing Sight of Genuine

Recove ry,” (Jan-Feb 1987): 1 -4.

23Ibid : 2.

24Ibid.

25Ibid.

13

because government’s concentration of capital infusion was expected to “prime” thedomestic market and stimulate new investments.22

In its initial phase in the second half of 1986, the “pump-priming” program was designedto create 618,000 jobs through more than 20,000 government projects with a 3.9 billion pesobudget. It disappointed official economic planners on January 1987 when only 40% of theprojects took off in various stages of completion and created 60% of the target jobs with88% of the budget already disbursed. It may have halved the year’s 750,000 new job-seekers, but it certainly left the ranks of the 2.6 million unemployed and considerablesections of the 5.5 million underemployed (1986) basically untouched. Also, since the jobscreated were related to infrastructure projects (90% of the jobs) these were mostlytemporary in nature.23

One vital requisite of the economic program was the re-scheduling of foreign debtsmaturing within the program’s span. Aquino’s debt negotiators were aiming at a reducedinterest rate and an amortization spread over 20 years to hold down to 60% the country’sdebt-to-GNP ratio from the current 90%.24

The rest of the foreign exchange would then be available for capitalization. But aside froma 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 andservicing foreign debt with its marginal foreign exchange earnings. It opted for a “growth-oriented debt management scheme” whereby all debts were to be honored but restructuredto allow growth. However, debt service alone ate up 45% of the 1986 national budget.25

In the beginning of 1987, the country’s total external debt stood at $27.8 billion, an increaseof more than $1 billion from the 1986 figure ($26 billion). On March 17 1987, the WorldBank announced the final approval of the loan negotiated earlier on during Aquino’s statevisit to the US in mid-September 1986. The Philippines, the World Bank said, had achievedthe main objectives of “economic stabilization.” In other words, it had followed the Bank’s

26Philippine Tren ds, Vol. V No. 7 (March-April 1987): 3-4.

27Ibon Facts and Figures, “When Import s B reak Loo se,” (15 O ct 1986 ): 2.

28Philippine Trends , op cit : 3.

29Ibon Fac ts and Figure s (Oct 19 86), op cit : 4.

14

recommendations.26

Several economic policies implemented by the government rhymed well with World Bankand IMF prescriptions: the removal of import barriers (s-c import liberalization), the returnto “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 planinstituted by Marcos in 1980. When the Marcos government obtained the first structuraladjustment loan (SAL) from the Bank back then, it committed itself to reducing tariff rateson 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 theMarcos government to meet its earlier commitment to “liberalize” 1,232 imported items.27

The liberalization scheme would, according to the Aquino government, stimulate localproducers to adopt more efficient methods of production. This would also remove themonopoly of a few firms over the market distribution of imported materials. UnderMarcos, a total of 1,027 imported items since 1981 were liberalized. Since March 1986, theAquino government had allowed for the liberalization of 502 items more.28

Undeniably, the implementation of the import liberalization program strategically pre-supposed the granting of the $300 million World Bank economic recovery loan. The Bankrequired the current government to, as it did Marcos, submit a new schedule for liberal-izing the remaining import items associated and negotiated with the previous government.Until this schedule was approved by IMF and the Bank, it wouldn’t extend the $300 millionloan.29

Aquino’s compliance with these demands among others, convinced the multi-lateralagencies to finally release the loans on March 1987. Critics to this program contended thatsuch move would further marginalize local businessmen and force many local enterprisesto shut down, further exacerbating massive unemployment problems prevailing in thecountry.

30Ibid.

31Philippine Trends , op cit : 3.

32Ibid.

33Liberation (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.

15

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 governmentinterference in business, privatization of a number of state-owned enterprises, dismantlingof monopolies and conglomerates formed and owned by Marcos and his cronies in thesugar, coconut, construction, and energy industries.

At the outset, the most logical step taken by the administration was the creation of thePresidential Committee on Good Government (PCGG), to retrieve Marcos and his closeassociates’ hidden wealth assets. By the end of 1986, the PCGG had recovered assets worth30 billion pesos from hundreds of corporations and properties sequestered from thedictator 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 billionpesos) tapping foreign investors and transnational corporations as buyers.31

Many of these corporations fell under the strategic industries category. Since manycorporations 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. Thedismantling of corporate monopolies and privatization were two Aquino policies whichdiffer from those of the previous government. As a matter of fact, while Marcos didencourage the rise of monopolies and engineered the proliferation of state-owned andcontrolled firms, Aquino was determined to do just the opposite.

Yet like the development plans of the Marcos regime, Aquino’s high target of an annualaverage of 6.5% GNP growth was predicated on huge inflows of foreign financing (loansand 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 outof loans or foreign aid. The remaining 12 billion pesos would have to be raised fromdomestic sources, inevitably forcing the government to hike taxes or print new money.33

34Philippine Trends , op cit : 4.

35KMU 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.

36Ibid.

37Ibid.

16

To lessen the burden of the huge foreign debt, the Aquino government approved the “debt-equity-swap” program in August 1986. Under this program, program investors could takeunpaid foreign loans contracted by the Philippines from creditor banks at discounted ratesbut they should convert such loans into investments in the hundreds of firms thegovernment planned to privatize. As of December 1986, 48 applications covering $218million had been reached, and of these, 7 were approved, amounting altogether to $37million.34

Moreover, in a bid to attract more foreign investments, Aquino announced a draft OmnibusInvestment Code in May 1987 to offer more liberal terms to new investors. The proposedCode, expected to be approved by the Cabinet, would give tax incentives and customsprivileges to new investors, further relaxing foreign exchange policies as a result. Onceimplemented, it would allow foreign investors to freely repatriate profits to their respectivemother countries, to pay a reduced tax bill, to import capital goods without duties, and tohire foreign nationals without restrictions.35

According to the Department of Trade and Industry, the draft Code “combines theincentives offered by the (deposed) President Marcos and new ones proposed by theAquino administration. Its liberal provisions should make the Philippines competitive forforeign investments in Southeast Asia.”36

Many nationalists condemned the Investment Code as part of the World Bank-IMFdemands to open up the economy to foreign investment.

A study made by researchers from the University of the Philippines revealed that for everydollar invested by American corporations, the net profit was $3.58. Of these, $2 wereactually repatriated to the home country and $1.58 were reinvested. The study also showedthat of the initial investment, only 24% came from abroad. In other words, foreign investorsborrowed the rest from local banks, draining scarce local capital.37

38Ibon Facts and Figures, “The Ch arting of Rec overy’s Co sts,” (30 Jun e 1986 ): 2.

39Pinoy 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)

17

Labor and Employment Policies

President Aquino set down the economic priorities of her administration in a speech beforemembers of the Asian Development Bank (ADB) on April 30 1986. There, she vowed to givetop priority to poverty alleviation, employment provision, and income and wealthredistribution. Prime targets of the administration’s redistributive policies were the laborand agrarian sectors.

For labor, Aquino, during her May 1 1986 speech, vowed before a huge crowd of listenersto revise or rescind a host of Marcos-decreed laws repressing worker’s rights to an equitableshare in the benefits of government development efforts.38

In sharp contrast to the expeditious manner by which policies favorable to foreign investorsand transnational corporations had been carried out, creation and implementation ofameliorative labor policies had been slow and indecisive. It was only on March 1987 thatsuch policies were promulgated through an executive order issued by Aquino (ExecutiveOrder No. III). Even so, the directive only embodied certain issues which glossed over thegist of the issues presented by the President a year earlier. No mention was made, forinstance, 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 foot-dragging in many areas of reform affecting the non-Marcos identified rich during its first11 months in power.” This statement appeared in a paper entitled “A Review of the First11 Months in Power of the Aquino Government – Economic Recovery and Long RunGrowth,” conducted by the Philippine Institute for Development Studies. As such, theInstitute argued, “the government’s labor policies failed to adequately address the lowlevels of and decreases in real wages and the large number of families living below thepoverty line.”39

It was therefore to no surprise that militant organizations from the labor movement hadbeen the most vocal detractors of the government’s 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 ofthe poor majority. This marginal growth was lower than the level achieved in 1979. Real percapita income continued to fall, resulting in further erosion of living standards. By October

40Philippine Trends , op cit : 4.

41Pinoy O verseas Ch ronicle, op cit : 6.

42Midweek, “Militant Labor vs Aquino,” (Aug 5 1987): 9-13.

43Ibid.

44Galang, Jose, “Labor – Troubled Relations,” Far Eastern Economic Review, (7 Aug 1986): 54-56.

18

1986, 11% of the labor force had been forced out of the labor market. More than a third ofthose employed had work for less than 40 hours a week.40 While the daily cost of living wasestimated by IBON data bank, a non-government research group, at 113 pesos/day, statelegislated wages as of 1986 for non-agricultural workers in Metro Manila was and still is 57pesos/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 theworkers as she had failed to deliver on her promises. Aquino’s refusal to set a wagestandard – 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 numberof strikes hit an all time high of 571 nationwide, surpassing the previous 1985 record bymore than 50%.42

Demands for increased wages and benefits, unwarranted dismissals and retrenchment ofworkers by management were the prime causes of strikes. Rebuffing labor’s demands toraise the minimum wage, Aquino contended that “the economy is just beginning to standon its feet and can’t handle such a hike at this time.” However, labor did not buy Aquino’sarguments noting that she managed to hike salaries for her Cabinet and herself, and evengrant a 15% across-the-board raises for government employees, soldiers and policemen.43

Aquino’s policy of letting wage hikes be determined by the outcome of collective bargainingagreements (CBAs) had been assailed by her critics as a highly anti-labor policy. Given thatonly 1.5% of the total employed were actually covered by CBAs, majority of the workerswould in this sense be entirely left at the mercy of management with respect to wage-setting.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 actualresolution of the peasants’ age-old problem of landlessness. In this respect, the Aquino

45Midweek, “Cory Aq uino’s Land Reform P rogram,” first part of a series o f articles written by the KMP or

Philippine Peasant Movement (June 3 1987): 17.

46Philippine Bulletin, No. 2, “Agrarian Reform: Hot Issue in the Philippines,” (July 1987): 1-4.

19

administration had been dawdling in the formulation and implementation of an agrarianreform program.

Government inaction on land reform had been reviled by peasants and farm workers. OnJune 5 1986, the Kilusang Mambubukid ng Pilipinas (KMP), a 750,000-strong nationalorganization of peasants and rural workers, submitted to Aquino its proposed land reformprogram. Since Aquino herself had promised land reform during her election campaignagainst Marcos, the peasants sought an immediate policy expression assuring them ofgovernment’s sincerity.

No such policy expression came until the January 22 1987 Mendiola Massacre, where 20peasants and workers were slain by the military while trying to get an audience withPresident Aquino after four aborted attempts. After that bloody incident, a Cabinet ActionCommittee (CAC) was formed and approval of the national budget was delayed toincorporate 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 country’s total cultivated land of 9.7 million hectares as thetotal area for land transfer. It envisaged to benefit around 2.81 million small farmers andlandless agricultural workers, or 27.6% of the 10.2 million workers employed inagriculture.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 land-holdings until the last phase ends in 1992. The four phases of CARP were:

Program A (1987-1989) – would complete Marcos’ land reform in rice andcorn areas and cover 557,000 hectares.

Program B (1987-1989) – would distribute sequestered lands, foreclose orforecloseable lands, idle and abandoned lands, voluntary offers andexpropriated lands, and cover 600,000 hectares.

Program C (1989-1992) – would deal with landed estates (plantations) underlabor administration and tenanted non-rice and non-corn areas, and cover1.28 million hectares.

47Ibid: 2-3.

48Peasant 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)

20

Program D (1989-1992) – would push land reform in public domain, andcover 1.35 million hectares.

Land ceiling retention limit would progressively be reduced from 50 hectaresin 1989 to 7 hectares in 1992.47

President Aquino signed the Executive Order providing for the implementation of landreform shortly before the newly-installed Congress was convened in July 27 1987. But theOrder only embraced Programs A and B. This represented nothing more than acontinuation 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 Houseof Representatives in the recent May 1987 congressional elections belong to the traditionalelite and land-owning classes, decision on land reform would most probably favor theinterests of the latter.

A much-debated aspect of the government’s land reform program had been the issue oflandlord compensation. Landlords would, according to it, receive “just compensation”based on the market value of the land as set by official assessors. Peasant beneficiaries wereobliged to pay a price equivalent to the “latest market value” of the land. They were alsoexpected to amortize the land costs over 30 years with a 6% annual rate of interest to thestate-owned Land Bank, which in turn would compensate the landlord among others inthe form of shares of stocks in public corporations.

Reacting strongly against the provisions on landlord compensation, KMP (PeasantMovement of the Philippines) asserted: “The compensation provisions grant too manyconcessions to the land-owning classes and ignore the primary issues of social justice andwealth redistribution. The repayment program while ostensibly considering the financialcapability of the farmers will likely turn out to be too burdensome to the beneficiaries andmay eventually negate the very purpose of agrarian reform.”48

KMP, immediately withdrew from the dialogue with the CAC (by virtue of the officiallydeclared commitment to the principle of consultation with the people and encouragementof popular participation in the creation and implementation of policies, the CAC wasdesigned to serve as a venue to that effect), citing reasons of bad faith and rigidity in itsposition on land reform. At the same time, KMP vowed to intensify the implementationof its own program of land reform through “land occupation.” Since September 1986,

49Midwe ek (June 1987) op cit : 17.

50Philippin e Bulletin , op cit : 3.

51Far Eastern Eco nomic Review , “Land Reform : Rhetoric or Reality ,” (5/3 1 987):32 -37.

21

KMPs chapters had launched “organized land occupations” nationwide, resulting in thetake-over of more than 50,500 hectares, with 20,000 hectares already transformed intoproductive farm-lots under collective supervision.49 Meanwhile, the government subjectedthe CARP to further revisions, apparently in an attempt to placate strong reactions fromland-owners. On June 3 1987, two key changes were introduced. Firstly, the period ofimplementation was extended from five to ten years with the seven hectare land ceilingtaking full effect only in 1997. Secondly, compensation to the landlord would be based onthe “current market value” as declared by the land-owner himself.50

In sum, Aquino’s comprehensive land reform program conflicted in several key aspectswith 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 thattenant farmers or share tenants had already paid for the value of the land many times overas 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 yeardevelopment program, including land reform – arguing that landlord compensationformed a large chunk of the total costs of land reform. KMP stressed instead the principleof self-reliance as well as changing agrarian economic power structures in favor of thepeasant majority. Further, opposition was leveled at the reform’s bias towards alreadyexisting laws favoring maize and rice growing tenants, not to mention the fact thatredistribution of large public and private land-holding was being held back.51

On the whole, the economic directions pursued by the government then were sendingreassuring signals to already economically powerful groups, and distressing ones tomarginalized sectors of society. At best, Aquino appeared to be managing the economytowards 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 bydecades of neglect and misdirection. But how much do the economic policies anddevelopment program really differ from Marcos’ economic program, or, for that matter,other previous governments’ in terms of addressing structural economic problems in the

52Santiag o, op cit , see essay by Lim , Joseph, “ Our E conom ic Crisis: A Historica l Perspe ctive,”

pp15-25.

22

Philippines?

The Marcos regime’s 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 creditincentives;c. a repressive labor policy designed to keep real wages low in order toexploit one of the Philippines biggest assets and where it has comparativeadvantage, i.e., cheap labor;d. a dependence on foreign debt to finance large infrastructure spending toattract 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 asMarcos’ land reform program never did translate into any significant redistribution of landand income in the rural areas.

Nor did Marcos export-led strategy actually take off. It only succeeded in changing thecomposition of exports. Non-traditional manufactured exports, the growing thrust then,were themselves highly dependent on imported inputs and, together with traditionalproducts, contained very little value-added. This doomed official strategy to fail from thevery start. Growth in the 1970s was financed instead by massive foreign debt, since importshad perennially outpaced exports. As such, national debt ballooned from $2.2 billion in1972 to roughly $25 billion immediately before the crisis of 1983. A substantial part of theseloans was used to finance shady deals on which the deposed dictator and his network offriends’ ill-gotten wealth rested.52

Because loans were not put to productive use, and with the trade deficits invariably in thered, it was inevitable that the Philippines would sink into the proverbial debt trap. As long-term loans dried up in 1981 and 1982, the country relied more and more on short-termloans.

World recession and the end of easy foreign loans in the late 1970s and early 1980s saw theend of debt-led growth as GNP sputtered to almost zero growth. Due to its completedependence on foreign loans, the Marcos government capitulated to most of World Bankand IMFs demands. Some of them called for further implementation of de-protectionist

53Ibid.

54Cited from “The Philippines Towards a New Relationship,” op cit : 44.

23

economic policies, heightened interplay of market forces and less state intervention in theeconomy, deflationary measures like wage-freezing, and expanded incentives to foreigninvestments.

It should be pointed out that basic structural defects had certainly not been seriouslyaddressed by any postwar administration. The current crisis manifested by and large thebasic ills of Philippine society taking shape long before the declaration of Martial Law in1972.

Central features of post-colonial Philippine economy included:53

1. A strong dependency on imported capital goods, industrial inputs andtechnology, making for its failure to go beyond the final assembly stage ofproduction even in the export manufacturing sector in 1970s;

2. Non-integration of the industrial structure, making the latter by naturehighly import dependent;

3. Low inter-sectoral integration between industry and agriculture;

4. Noted structural defects (1-3) translated to perennial trade and balance-of-payment deficits;

5. Thus, foreign control and intervention increased as economic problemscontinually brought about a complete reliance on the IMF and World Bank,foreign banks, the US and Japan for loans and assistance (2/3s of foreignloans, trade and investments were tied up to these two countries);54

6. The structures of economic power and wealth distribution were skewedin favor of a small wealthy elite. A society wherein the top 10% own morethan 40% of the country’s income and wealth. This delimited the size of thedomestic market for locally produced goods.

Comparatively, the Aquino government’s policies appeared to replicate the previousregime’s in many respects. The main features of these policies were:

1. The focus on debt repayment;

55“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.

24

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 thatwould lead to better export performance;

Notwithstanding the similarities, the Aquino government could claim credit for certainrectification of previous policies. It did espouse and carry out a hands-off free enterprisepolicy to completion, much to the delight of international creditors and investors. It didsubstantially dismantle monopolies under the protective wings of the past regime andprivatize more than half of the numerous state-owned corporations competing with privateand foreign companies. Less government intervention in the economy had also meantrefusal to intervene in economic disputes between management and labor, relegatingwage-setting to the vagaries of collective bargaining agreements and management’sdisposition. These policies were at best stop-gap solutions to the effects of the structuralproblem of economic dependency.

Furthermore, most of these policies echoed IMF-World Bank prescriptions dating back tothe previous regime. In dismantling Marcos-owned and/or sanctioned monopolies inindustry, and specially in agriculture and adding more incentives to foreign investmentsprovided by the Omnibus Investment Code, the Aquino administration seemed to evenexceed its predecessor in terms of being a more efficient economic manager in favor offoreign interests.

The government’s economic development strategy was even more dependent on foreignfinancial sources than Marcos’ program. The new five year economic plan called for $14.9billion in foreign loans, grants and investments.55 The present government had yet to takedecisive steps to correct extremely skewed structures of wealth and income distributionintrinsically favoring the wealthy minority. Aquino’s vaunted redistributive measures, likethe Comprehensive Agrarian Reform Program (CARP), hardly transcended in their actualand practical ramifications Marcos’ discredited reforms, those which by the end of the daywould leave iniquitous economic and social power structures in the rural areas essentiallyintact.

25

Apparently, in the drive to reach declared objectives of its trademark “people-powereddevelopment program – economic recovery and growth – the current government hadtragically relegated to the backseat some of the most basic principles on which the verysuccess of Aquino’s development program had been predicated, i.e., social and distributivejustice as well as popular participation in planning and implementation.

If Marcos’ policies most patently failed to address the structural problems of Philippineeconomy and society, i.e., those which subserviently and blindly complied with as it wereIMF-World Bank’s debt-recycling and perpetuating prescriptions, it would be quiteplausible to hazard that any government, including the present one, navigating alongsimilar coordinates would likely be unable to deliver the country from the state ofeconomic underdevelopment.

Political Directions

The Consolidation of Power

Upon assuming power, Corazon Aquino’s immediate political agenda was to dismantleinstitutions 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 andwithout the newly installed government. This was a logical outcome deriving from the verymanner by which Aquino was catapulted to power. The fact that she had been politicallyempowered by a loose coalition of forces with divergent political views and interests, unitedbasically by broad resolve to overthrow Marcos, meant that contradictions within such acoalition would sooner or later break out in the aftermath.

Attempts from the Right, from those forces remaining loyal to Marcos, to destabilize thenew government through a number of aborted putsches and demonstrations weresuccessfully fended off. The challenge from the Left had been temporarily suspended whenthe government forged an interim cease-fire agreement with the revolutionary forces of theNational Democratic Front (NDF) on December 1986, which eventually broke down twomonths after.

True to the image of a populist and charismatic leader, Aquino invariably positioned herselfin the middle of feuding political factions within her government in the spirit of recon-ciliation and compromise. Her government had been described by a few political observersas a coalition of forces incorporating elements from the rightist or conservative and liberaldemocratic sections of the elite. At this point in time, Aquino’s unquestionable popularityhad made it difficult for these factions to outmaneuver her. More importantly, after

26

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 themilitary hierarchy, the domestic financial and land-owning elites, and the US and otherforeign creditors and investors.

For instance, as a trade-off for the removal of Defense Minister Juan Ponce Enrile, the mostprominent representative of the Right or conservative faction within the ruling coalition andmain threat to her within the government, Aquino had to dismiss a number of Left-leaningand nationalist Cabinet members at the end of last year. Their removal had been demandedby the military, business elite, foreign investors and multi-lateral agencies, and the US fromthe very outset.

Also, Aquino’s conciliatory stance in handling the Left and the revolutionary movementhad given way to a more mail-fisted and militarist position. The rising trend of humanrights violations and the legitimization and proliferation of anti-Communist vigilantegroups, all attest to the administration’s rightward drift. This political trend dove-tailedwith a similar shift in the economic sphere as noted earlier on in terms of policies servingthe preferences of foreign capital.

Such developments raised great concern and agitation specially among popular organiza-tions and movements, those instrumental to Aquino’s rise to power. Increasingly, militantorganizations were subjected to repression and violence as they begun to challenge thepolicies of the present administration.

The Process of Consolidation

Through a series of dramatic announcements in the early months of her presidency, Aquinomoved to implement campaign promises by restoring the writ of habeas corpus or the rightto due process of law, and freeing nearly half of the Marcos-era political prisoners, includingsome prominent leaders of the Communist Party of the Philippines (CPP) and the Left. Withthe 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 byMarcos, Aquino declared a provisional revolutionary government. On March 16 1986, shecreated and mandated the Presidential Committee on Human Rights (PCHR) to assist thenew government in safeguarding its avowed commitment to human rights, and toimmediately investigate violations of human rights by military personnel during the dark

56Ibid.

57Our S ocialism , op cit : 39.

27

years of martial rule.56

At this juncture, the revolutionary government was to be led by a Cabinet of ministersappointed by Aquino. It was a heterogenous set of figures with divergent political interestsand views. Such heterogeneity evolved from the very mode by which Aquino rose topower, the process of which necessitated the reconciliation of strategically opposingpolitical platforms for the tactical objective of dislodging the Marcos regime. In theappointment of Cabinet ministers, political accommodation as such became the most logicalapproach.

At one extreme were several officials who held positions in the Marcos government:Defense minister Juan Ponce Enrile, Central Bank president Jose Fernandez. In anothercamp, were powerful businessmen and traditional politicians who had hardly any accessto power under Marcos’ mandate. Salvador Laurel, the vice president, would perhaps bethe best example of this group. Feuber and Silvaggio described this segment critically as onemarked by dualism: “While vowing to break up “crony” monopolies and clean upcorruption, they are expected to favor corporate and landlord interests, and to rely onmachine politics (political patronage) in much the same mold as Marcos. Like the formerMarcos associates, most of them are regarded as strongly pro-American.”57

The Cabinet also embraced liberal democrats, like Aquino herself, as well as severalappointees closely identified with the nationalist movement, some of whom were prominenthuman rights lawyers during the Marcos era. Presidential spokesman Rene Saguisag,executive secretary Joker Arroyo, labor minister Augusto Sanchez, director of the HumanRights Commission Jose Diokno, the commissioner for Good Government Jovito Salonga,the minister of Justice Neptali Gonzales, and the minister of Social Services, founder ofgrassroots community based health program Dr. Mita Pardo de Tavera – all belonged to thisbloc.

An institution remaining virtually intact after the s-c February Revolution was the militaryunder the command of General Fidel Ramos. The new government’s wholesale acceptanceof military introduced a powerful element and counterweight to nationalists moves thatgovernment 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 thesecontending groups jockeying for position and power in the new government. Beyond thepopulist rhetoric of difference from the previous regime, the reality of Aquino politics sang

28

the disappointing refrain of yore in terms of the glaring absence of representation from theranks of the working class and peasantry – sectors which by and large provided the anti-dictatorship movement with a strong and solid social base for many years. Commandingwide popularity, but having no organized base of support to fall back on, Aquino’s effortsto maintain balance at the center had thus been extremely delimited.

The strongest threat to the stability of the new government was, specially during the firstfew months when the Reagan administration was still reluctant to accord wholeheartedrecognition to Aquino, posed by right-wing elements from the military and the rulingcoalition. This threat occasionally broke out in the shape of aborted coup attempts – themost significant of which occurred in July and November 1986, and most recently, in the lastweek of January this year.

Tensions generated by the Right’s most ardent proponent, Defense minister Juan PonceEnrile’s aggressive attacks against the government in October and November 1986,dramatically illustrated the Aquino government’s biggest problem – dealing with thevestiges of the Marcos dictatorship. Enrile was Marcos’ Defense minister from 1972 and waswidely believed to be one of the chief architects of Martial rule until he led the militarymutiny in February 1986.

Enrile’s removal from the Cabinet along with the neutralization of his military supportersin late November eliminated the hitherto most serious threat to the government. But hisdismissal was achieved only because Aquino conceded to major demands raised by adisaffected segment of the military delivered through the intercession of General Ramos.Many political observers believed that these concessions in effect drew the Aquinogovernment gradually to the Right. As a quid pro quo gesture, Aquino was compelled to askfor the resignation of some Left-leaning and nationalist ministers in the Cabinet, like theradical Labor minister Augusto Sanchez who had antagonized domestic and foreignbusiness 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 byseveral factors. During her first six months in office, Aquino had quietly and steadily builtup her influence within the military. She enjoined many of the Marcos-era generals to retireand insisted on personally interviewing officers to be promoted to the rank of general andabove. Aquino had moved quickly to build up her palace guard, the Presidential securitygroup. Apart from troops guarding the palace, a large contingent, the s-c Yellow Army (thecolor associated with Aquino and her constituency), was being trained in the Aquino familyestate in Tarlac province north of Manila. In addition, politicians close to Aquino were

58Rocamora, 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.

59Far Eastern Eco nomic Review , Clad and Taskner, “Factions and Confusion,” (28/8 1986): 30.

29

reportedly organizing their own armed groups and private armies.58

Aquino was able to gradually wean away Armed Forces Chief of Staff Ramos from theEnrile camp (as we might recall, Enrile and Ramos both led the military mutiny in February1986 signaling the fall of the dictatorship). Where Ramos, another key remnant of theMarcos ruling circle had first appeared close to Enrile, in the last few months, he graduallymoved to a position of neutrality. After Aquino had gained clear and solid sanction fromthe US government following her state visit to Washington in mid-September 1986, coupledwith her increasing influence in the officer corps, Ramos was finally compelled to take ananti-Enrile position in November 1986. Since then, Ramos began to set himself up as themain obstacle to coup plots and threats from the Enrile camp (Enrile had been connectedby unofficial reports to the November coup plot). Then, as earlier mentioned, Aquinoconceded to the military’s demand to weed out Left-leaning and nationalist ministers fromthe Cabinet.

Vice-president Laurel, also representing the Right within the ruling coalition, had beenattacking the leadership of Aquino. While being more restrained than Enrile, he criticizedthe government’s initial soft line handling of the insurgency, Aquino’s local governmentappointees. He also threatened to oppose the ratification of the draft Constitution proposingto extend Aquino’s tenure by one more year.

Laurel had been under pressure from his party, the United Nationalist DemocraticOrganization (UNIDO). UNIDO leaders had been wary about the growing influence of acompeting party, the Philippine Democratic Party-LABAN (PDP-LABAN). Led by Aquino’sbrother, Jose Cojuangco and minister of Local Government Aquilino Pimentel, PDP-LABANoutmaneuvered UNIDO in the scramble for government positions when Pimentelappointed 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 dimensionto Philippine politics explains much of the increasingly bitter relationship between Aquinoadvisers and Laurel. Bitter division-of-spoils arguments between PDP-LABANs party andLaurel’s UNIDO have occurred.”59

In Aquino’s bid to strengthen her power base outside the government, she extendedpersonal backing to PDP-LABAN. When Aquino first announced her decision to run againstMarcos, she did not have the financial and organizational resources that usually determined

60Europ e and th e Philipp ines: Tow ards a N ew Re lationship (TNI), op cit : 19.

30

the outcome of elite factional battles during elections. Laban ng Bayan (People’s Struggle),the coalition initially supporting her candidacy, was not as widely or as well organized asthe UNIDO. Aquino won the election (although Marcos, of course, declared himself winneramidst massive electoral fraud and cheating) and rose to power because she captured theimagination of broad sectors of society and was able to harness and mobilize twenty yearsof pent-up anti-Marcos sentiments. During the campaign, hundreds and thousands ofunorganized middle-class Filipinos campaigned for her, monitored the elections, andspearheaded the anti-fraud campaigns.

The PDP-LABAN, behind which most of the middle-class rallied, was a coalition of thevaguely social democratic PDP and a loose grouping of traditional politicians from Manilaand the adjoining provinces. Other parties veering toward the Aquino-camp, like the LiberalParty, an old and greatly weakened party of traditional politicians and several other smallerregional parties, had united with PDP-LABAN in a larger group called Lakas ng Bayan orPeople’s 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 werepersonally endorsed by Aquino during the electoral campaigns.

Another organized base of support for Aquino, Lakas ng Sambayanan or Power of the Peopledrew to its ranks, students, professionals, labor and urban poor groups clustered aroundthe social democratic alliance, BANDILA, and the independent socialist group, BISIG.

The two coalitions, Lakas ng Bayan and Lakas ng Sambayanan illustrated the tensions withinthe Aquino camp. The former consisted of pragmatic politicians and political parties, whilethe latter was made up of grass-roots oriented groups. Although Lakas ng Sambayananremained supportive of Aquino, individual organizations increasingly criticizedgovernment policies.

BANDILA, although much smaller than the Left-influenced BAYAN or New PatrioticAlliance with its two million members from the militant labor and peasant movement,students, women and other sectoral anti-imperialist groups, was expected to expand itsmass 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 intocandidacy for electoral positions had drained these groups of their organizers. Thus, thesesocial democratic groups now had more clout within the government, though clearly notas much as the traditional politicians. Yet as a result, they had not managed to organize alarger base in the population at large.60

61Our S ocialism , op cit : 41.

31

Although Aquino had personally backed up these groups, she was reluctant to take up thechallenge of building her own political party. She feared that if she did, she would in effectsurrender her role as unifier, as the “non-politician” who supposedly represented theinterests of the country as a whole. Even as she insisted on retaining that role, she had tomake decisions in the intervening months that did in fact generate varying degrees ofagreement and disagreement among factions in her coalition.

Another power factor was the Catholic Church hierarchy. In a country with feworganizations of significance, the Church remains to be one of the most formidableinstitutions along with the military. Thus, it did exert tremendous influence over the newgovernment as could be gleaned from, for example, the inclusion of an anti-abortionprovision 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 reconstructingthe institutions of democratic governance. Among the first problems encountered by thegovernment in the early months of its career concerned the legitimacy of the provisionalrevolutionary government. As the head of such government, Aquino assumed broadpowers resembling those of Marcos’.

Nepatali Gonzales, minister of Justice, clarified basic differences of the incumbent from theprevious 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 achievethe mandate of the people to completely reorganize the government, rehabilitate theeconomy, recover ill-gotten properties, restore peace and order and settle the problem ofinsurgency.”61

On March 25 1986, Aquino issued a decree creating and mandating a 48-member committeeto draft the Constitution. Committee members, with the exclusion of a handful ofrepresentatives from the progressive organizations, were mostly traditional politiciansbarred from power during the Marcos years. The committee proposed to resurrect the US-style form of bicameral government abandoned in 1973, and to extend Aquino’s tenure byone year until 1992. The proposed government set-up was a system wherein a bicamerallegislature confronts a separately elected president and a separate judiciary occasionallyconfronts both. The new charter envisaged a nationally elected 24-member Senate joininga 250-seat House of Representatives in a new Congress. The charter was later ratifiedthrough a national plebiscite held in February 1987. The massive turnout of votes for theConstitution reaffirmed Aquino’s popularity.

62Far Eastern Eco nomic Review , Cory’s C onstitution al Gam ble,” (29 /9 198 7): 22.

63Ibid: 21.

64“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.

32

However, certain groups strongly opposed the charter. Opposition to the latter sorted undertwo basic categories. Criticism from some segments of the traditional political elite harpedon one basic issue: the seal the Constitution sets on Aquino’s presidency until June 30 1992.To this sentiment the oppositionists added “silent no” votes from the military. Many officerswere upset by Aquino’s initial soft line policies relative to the Left or aggrieved by realign-ments within the military power structure.

The most radical position was of course taken by the Left, specially by the Communist Partyof 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 sidewith the Left, had been incensed by claimed deficiencies in the charter. Among others, theypointed at concessional provisions to foreign interests and the watery formulation ofprovisions on land reform. Left-leaning labor organizations such as the First of MayMovement (KMU) opted for a no-vote.62

Still, others claimed that Aquino had personalized the referendum for her own reasons inan attempt to consolidate power. These detractors argued that pro-Charter campaigningevoked memories of past electoral contests, specially Aquino’s promises of hefty localspending. In one rally alone, she promised 2.4 billion pesos for 700 km of new road, 500artesian 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 forPopular Democracy, Father Edicio de la Torre, analyzed the implication of the Charter:64

“... the rectification of a new Constitution is a step towards consolidation. Itessentially 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 andthe emergence of a dominant bloc that gets the lion’s share of posts is moreimportant. This bloc must skillfully accommodate the other factions bygiving them their share and offering them a reasonable chance of increasingtheir share.”

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

33

De la Torre’s analysis appeared to tally well with developments in the past 18 months. Assuch, the military, traditional politicians, and powerful business groups had from theoutset all been demanding for the swift realization of the constitutional framework of theprovisional revolutionary government in order to determine their respective positionstoward Aquino, based on how well their interests were accommodated within such aframework. Also, many candidates and supporters endorsed by Aquino during the Mayelections won a substantial portion of the Congressional seats and had become well-entrenched in other sectors of the state bureaucracy as a result of appointments made bythe president in the past months.

Following the ratification of the Constitution and the Congressional elections, the Aquinogovernment finally gained formal legitimacy. Although factional disputes inside stillpersisted, Aquino had adeptly been able to contain them, and was well on her way instabilizing the situation within the government. However, as repeatedly noted, stabilitycame 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 US-Philippine fact-finding mission in May 1987 revealed that:65

“It is no longer clear how capable the Aquino government is of attaining theprimacy of the civilian over military authority, or to the efficaciousparticipation of the people in the process of governance. Despite theoverwhelming ratification of the 1986 Constitution, and what appears to bean overwhelming victory for Aquino candidates in the recently concludedMay elections, serious fissures are emerging and anti-democratic tendenciesappear to be consolidating.”

While the government did create and mandate the Philippine Commission on HumanRights (PCHR) to investigate violations of human rights by military personnel, it did verylittle to restrain the military or punish human rights violators. Aquino had also undercutthe authority of the Commission by assigning several major human rights cases toindependent commissions. The latter were, however, ineffective in pushing the prosecutionof identified violators. The committee investigating the brutal murder of maverick andFirst of May Movement (KMU, the 800,000 strong Left-leaning trade union center) leader,Rolando Olalia in November 1986, identified military intelligence officers and civilianagents as primary suspects, yet none of them had been arrested.

Statistics gathered for the first quarter of 1987 by the Task Force Detainees of thePhilippines (TFDP), a well-respected and accredited human rights group, painted a bleak

66“An Unbroken Trend of Repression,” Midweek (10 June 1987): 17.

67Pinoy O verseas Ch ronicle , “Fascism at the Grassroots,” op cit : 10-12.

68“Right Wing Vigilantes and US Involvement..,” op cit : 38-49.

34

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 groupsaggravating the human rights situation. Now numbering more than 30 nationwide, thesearmed groups were responsible for wanton violations of human rights, from harassmentand extortion to outright killings of suspected Communists.

Since the peace negotiations broke down, the government had increasingly taken a moremilitarist attitude in addressing the 18-year old armed struggle. The government didrenege on its declared commitment to dismantle the notorious para-military groupsMarcos had once deployed to terrorize the civilian population in the past, particularly inthe rural areas, as a strategy to deprive the guerillas of their mass base. Far fromdemobilizing them, the government had, on the contrary, recently (March 9 1987) evenstarted to endorse vigilante groups as a paragon of “people’s power” fighting a “protractedpeople’s war.”

The late minister of Local Government (assassinated last June 1987)Jaime Ferrer, was oneof the staunchest proponents of the formation of “grassroots” anti-Communist groups. Heordered 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 betweenthe counter-insurgency program of the government and the Phoenix Program once appliedby the United States to crush the revolutionary forces in Vietnam. In a similar vein, armedanti-Communist vigilante groups in the Philippines like the Alsa Masa (People’s 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 administrationdemonstrated the extent to which it emerged as a major contender for power. Joel

69Rocam ora, Joel (ste ncil), op cit : 2.

70Ibid

35

Rocamora noted that: “While elite factional rivalries play a major role within the govern-ment, the political dynamics in the system as a whole is determined more and more by thecontinued growth of the Left, armed and unarmed, above and underground.”69

In early November 1986, General Fidel Ramos disclosed military intelligence estimates thatthe New People’s Army (NPA) grew at roughly 33% per year since 1982. The NPA, Ramossaid, now had 23,000 guerillas. While militarily still inferior to the Armed Forces of thePhilippines’ (AFP) 160,000 troops, the NPA, was, according to the general, only the tip ofthe iceberg. Close to 20% of the country’s villages were either controlled or influenced bythe NPA.70

From a state of disintegration and decimation in the 1950s and early 1960s, the revolution-ary 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 thatearned it the reputation of being the fastest growing revolutionary movement incontemporary Asia.

It traces its humble beginnings in the late 1960s when radical young cadres from the oldCommunist party, at loggerheads with the incumbent leadership on basic strategic andideological issues, decided to “reestablish” the Communist Party of the Philippines (CPP).After this reestablishment, some units of the old party’s nearly decimated military wingregrouped to form the New People’s Army (NPA) a few months later.

The founding document, “Rectify Errors and Rebuild the Party,” was a carefully arguedpolemic which traced the defeat of the peasant rebellion in the 1950s (then led by the oldparty) not principally to external causes, but to internal ones – an adventurist militarystrategy of swift armed uprising, lack of coherent policy on the united front, and theabsence of a thorough-going political and ideological training of party cadres and the massbase. It then went on to chart the strategy of the revolution: “the character of the currentstage of the Philippine revolution was “national democratic” – i.e., “anti-feudal” and “anti-imperialist”– meaning it could potentially appeal to most classes, from the peasantry to thes-c national bourgeoisie, and draw them to oppose imperialism and its local base consistingof an alliance of landlord and comprador elites. The principal vehicle for this project was a“protracted people’s war” in which the main force, the peasantry, would be mobilized andarmed to encircle and liberate the urban bastions of imperialism in the final stage of therevolution.

71Third W orld Qu arterly, op cit : 292.

72Ibid: 293.

36

Complementing the armed struggle was a flexible application of united front tacticsdesigned to win as many allies as possible, isolate the enemy and neutralize its potentialallies. The insurgent leadership attempted, in short, to apply lessons vernacularly fromnational liberation struggles elsewhere in Southeast Asia like those in China and Vietnam.It would not be until the mid-1970s that revolutionary strategy would acquirecharacteristics unique to the Philippines.71

At the outset of martial rule, the mass organizations of the Left were smashed, while theNPA became the target of several massive counter-insurgency campaigns. Yet, it hadrebounded 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 country’s 11 majorislands, instead of relying on a single major base as had the old party’s armed wing in the1950s. The other was to correct dogmatic and ultra-Leftist methods of organizing tobroaden the appeal of the national democratic program among social groups other than thepeasant and working classes.

Set forth in two classic documents, “Specific Characteristics of People’s War” and “OurUrgent Tasks,” the two policies paid off handsomely by the beginning of the 1980s. In 56of the country’s 72 provinces, an estimated 10,000 NPA regulars kept Marcos’ 250,000 manarmy and paramilitary groups perilously thin. In many cities, skillful organizing hadcreated 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 erectedin 1973, had become a major political reality by the end of the decade. Church sourcesestimated that all in all the NDF had 40,000 active organizers throughout the archipelagoand a mass base of about 6 million Filipinos.72

Currently incorporating 12 underground mass organizations from almost all sectors ofPhilippine society – workers, peasants, students, teachers, clergy, ethnic minorities, artists,writers, cultural activists, health workers, youth, scientists, engineers and otherprofessional groups, women, nationalist businessmen plus the CPP and NPA, the NDF hadits own program of government and development strategy. It succeeded to erectprovisional revolutionary local governments in several consolidated base areas whereunderground peasant organizations and village governments had been implementing a“revolutionary agrarian reform program” in varying degrees. These village governmentswere among others delivering health and literacy services, collecting taxes, providing forsecurity and self-defense functions, building credit and cooperative facilities, and ad-

73Santiag o, see De Dios, op cit : 30-31.

37

ministering “justice” in s-c “peace courts.” General Ramos was alarmingly referring tothese local organs of political power as the base of the “iceberg” which had transformedthe 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 ofgrave concern to the US and elite opposition. It was indeed this concern that compelled thedisenfranchised anti-Marcos elite to gradually position itself in the forefront of the Marcosopposition movement in the wake of the Aquino assassination in 1983 – a movement whichhad otherwise traditionally been the exclusive province of the Left.

When Benigno Aquino was literally executed before international and national media uponreturning to Manila from his self-imposed exile in the US, the anti-dictatorship movementwidened to include the middle-class and political parties of the elite and moderateopposition once excluded from power by Marcos. As a result of the Left’s fateful decisionto boycott the presidential elections of 1986, the elite opposition was able as such to retrievethe political initiative, supporting the Aquino presidential campaign, and thus being ableto 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 tothe 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 reallya sham and Aquino was brought to power through mass insurrectionarymeans and not through elections) but this “advanced” thinking distancedthem from the real ideological level of the masses, and they were not able tobenefit from the fact ...”

By virtue of the boycott position, national democratic groups found themselves isolatedfrom the main thrust of the anti-dictatorship movement, specially in the metropolitancapital, Manila. Alliance with liberal democratic personalities and other progressive groupseventually broke down. Although completely excluded from the government, the NDF,took a supportive position towards Aquino nonetheless, even as it worked to expose andoppose remnants of the Marcos regime who, like Enrile and Ramos, were able to positionthemselves within the government after the downfall.

However, the NDF had steadily been able to recover lost political terrain as a result ofamong others the incorporation of top and middle-level leaders and organizers of the eliteopposition, liberal democratic groups and social democratic organizations in the govern-ment, leaving the popular movement wide open for reinvigorated NDF organizing

74Europ e and th e Philipp ines: Tow ards a N ew Re lationship , op cit : 21.

75Ibid.

38

initiatives. And as government policies began to antagonize an increasingly disillusionedportion of the popular movement, the NDF alternative attracted once again some of thoseorganizations 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 wideraudience. It sought to show good faith to Aquino’s initial democratic reforms, particularlywhen some prominent leaders detained during the Marcos years were unconditionallyreleased in the beginning of her term. Hence, despite repeated attempts by the militaryhierarchy to subvert the negotiations, the NDF and the government finally forged aninterim 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 conductedwithin the framework of the draft Constitution, existing government policies for economicrecovery, a rehabilitation program for the rebels. NDF responded by arguing that theConstitution was too narrow a framework for political settlement. The Constitution did,according to the Left, not provide conditions conducive to meaningful participation byorganized groups of workers, peasants, and urban poor. Nor did existing governmentpolicies 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, finallyprovided the emotional edge to a growing conviction that the Aquino government onlywanted to negotiate the terms of an NPA surrender, not a political settlement.

Government position was badly compromised by the resignation of official negotiatorMaria Serena Diokno and nine members of the government negotiating panel staff onJanuary 23 1987 in protest against the Mendiola massacre. In their statement, the resigningstaff said:75

“We believe that the government was sincere; that the military wassupportive of a peaceful solution to the insurgency. To these ends, we studiedand put together proposed programs of government which were to make realfor our people the aspirations which fired the February Revolution. We findthat those programs – human rights, land reform, industrialization, etc. – weremerely statements of intention. But we continued to hope and continued towork. Yesterday’s brutal dispersal has practically killed that hope.”

76Our S ocialism , op cit : 40.

39

III

US Role and Impact on Philippine Economy and Politics

As often since the days of colonial control of the Philippines, the United States had shownextraordinary interest in the recent developments there. US officials and members of thepress of all political stripes bubbled over with enthusiasm at the turn of events in thePhilippines. After first trying to disclaim American involvement in removing Marcos fromoffice – where the final transition of power had been mediated from the US Embassy inManila and it was aboard a US Air Force jet that Marcos was finally shuttled out of thecountry – 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 interestshad not significantly altered relative to her former colony. US geopolitical and securityinterests were to be ensured and sustained – i.e., strategic American military bases, likeSubic 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, speciallyits armed component, the NPA, now appeared to be more conceivable through the dualstrategy of reform and counterinsurgency with the view of defusing the movements massbase and popular support

Since the assassination of Senator Benigno Aquino on August 21 1983, Washington focusedits attention on the urban unrest that followed in the aftermath. The slaying stripped awaywhatever remaining legitimacy the Marcos regime had, pushing for the first time a largesegment of the middle and business class into active opposition. Soon a loose workingcoalition between the popular opposition, largely influenced by the clandestine NDF andpro-US elite opposition, developed. In response, the US government sought to split thatcoalition and isolate the Left via a “two-tracked” program.

The first track consisted of pressure from the State Department and Congress to set up anindependent commission to investigate the assassination. Although the stated purpose ofthe commission was to bring Aquino’s killers to justice, its primary aim appeared to be thedeflection of the escalating political polarization fueled by the killing.

77Katarungan, Vol IV No. 1, ECJP, see “Pentagon Plans for the Philippines,” by Eric Galuyot (Jan-

Feb 1985): 17.

78Ibid: 16.

40

The second and more significant track was pressure from the State Department for the eliteopposition to participate in the parliamentary elections scheduled in May 1984. Evidently,these pressures were designed to avert this group’s further radicalization and fan hopesfor 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 atoken number of seats in the legislature, Marcos’ obdurate insistence to cling to his decree-making powers seemed, however, to vindicate the Left’s position to boycott the elections.Escalating political polarization, the unabated growth of the revolutionary movement, andMarcos’ increasing political isolation amidst a rapidly deteriorating economy, compelledthe US government to intensify its pressures on Marcos to accommodate the moderate eliteopposition. These efforts were, for example, accentuated by the cancellation of Reagan’sstate visit to the Philippines in 1984, as well as dilatory action by the American Congresson the release of official economic and military assistance to the Philippines. Eventually,Marcos acquiesced to these pressures when he finally announced on American broadcastthat he would call for presidential elections in February 1986.

Despite pressures to effect a modicum of democratic reform, the Reagan administrationwas still unwilling to abandon a close ally who had served its interests well. During thepresidential debate in the last US elections, Reagan declared that he would “notcountenance throwing them (Marcos regime) to the wolves and then facing a Communistpower in the Pacific.”78

During the time of the downfall and until Aquino went to the US on official state visit inmid-September last year, the US had no unified policy towards the newly-installedgovernment. We might recall that the US had been hesitant to abandon Marcos until theeleventh hour when Aquino’s victory was already a done deal, and only when the militarywas already well in control of the situation.

Aquino’s state visit and assurances elicited therefrom at that point, put the finishingtouches 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 StateDepartment professionals and Congressional liberals, and on the other, hard-edgedskepticism among the more conservative Reaganites in the White House, the CentralIntelligence Agency and the Pentagon. For now, at least, the two sides both endorsed the

79Rocamora, Joel (stencil) op cit : 2.

80Ibid

81Ibid: 3.

41

Aquino government.79

Reaganites, with their sustained incredulity, dominated American policy during Aquino’sfirst four months. Key administration officials, including White House Chief of Staff,Donald Regan, CIA chief William Casey, and Pentagon head Casper Weinberger, stilldoubted that Aquino would serve American interests as deftly as Marcos did. They startedoff by applying leverage on her to commit to an extension of the Military Bases Treatybeyond 1991, when the current treaty would expire. They also encouraged Aquino’s plansto remove human rights violations from the military, to ignore negotiations with the NDFand the revolutionary movement and instead to get on with the counterinsurgency effortmore relentlessly.

The Reagan administration used its assistance program as bargaining chip. After 100 daysin 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, Aquinoofficials were complaining. As one government spokesman, Rene Saguisag sardonicallyremarked: “We’re getting petty cash and a lot of nice rhetoric.” Aquino herself said: “I ama little disappointed, to tell you the truth. What is America waiting for? ... I have alreadyexplained what our needs are. I don’t like to nag. Its just a question of are we friends oraren’t we?”80

Secretary of State George Schultz finally took the initiative in developing better relationswith the Aquino government. Where Schultz had earlier scoffed at Aquino’s demands forlarger amounts of aid, by the time of his May 9 1986 visit to Manila, he was alreadyalluding to help raise $2 billion in aid from the US and her allies. On June 4 1986, theSecretary of State praised Aquino in a major policy speech and encouraged foreigninvestments in the Philippines.

When Schultz returned to Manila on June 26 the same year, he brought with him a checkfor $200 million in aid. He then extolled Aquino’s economic and security policies as“encouraging.” Cease-fire negotiations with the NDF were part of a “sensible” policy thatwas 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 risingrealization among conservative members of the Reagan administration that Aquino was

82Ibid: 4.

83Ibid

42

the best they could get given current political conditions in the Philippines. Her popularitylends credence to the government and legitimacy to the whole social system. She was theonly politician capable of mitigating conflicts between factions of the elite.

Conservatives in the Reagan government remained ideologically predisposed toward theRight-wing factions within the Philippine elite. But these forces clearly did not have thecapability to take over power on their own at this juncture.

The spectacular failure of the Marcos loyalist coup attempt on July 1986 showed that pro-Marcos elements’ ability to determine political directions on the national scene had beenradically undercut.

Former Defense minister Juan Ponce Enrile, while still cultivating ties with a group ofdisgruntled military officers and mobilizing pro-Marcos politicians into a new politicalparty, had otherwise been conspicuously discredited by his strong association with the ex-dictator and would hence be incapable of unifying the fragmented elite.

It had also become increasingly clear that tension between the Reagan and Aquinogovernments did not reflect fundamental differences. Disputes on economic policy withinthe Aquino Cabinet would soon give way in favor of a policy framework that closelyhewed to IMF-WB guidelines. The deconstruction of authoritarian machinery had stoppedshort of the military establishment. Moreover, the Aquino-appointed ConstitutionalCommission had de facto crafted a Charter of an “elite-centered” political set-up.82

Upon Aquino’s arrival in Washington, all the ingredients for the stabilization of US-Philippine relations along traditional client-state lines were in place. Even the issue of USmilitary bases was settled for now with Reagan convinced that Aquino’s refusal to committo the extension of the bases’ lease was less a nationalist position than a savvy politician’srecognition of the strength of current nationalist sentiment against the bases.83

American imprimatur had traditionally been a key factor in securing elite support for anyruling regime. Aquino’s highly successful trip to the US was pivotal in her government’snew image of stability. To secure US patronage, however, Aquino had to move hergovernment farther to the Right. She had, to a certain degree, neutralized Right-wing andconservative groups by doing so. But she had at the same time antagonized strongnationalist elements within and without the government, i.e., the Left and other popularorganizations.

84“Right Wing Vigilantes and US Involvement ...,” op cit : 9-10.

85Ibid: 11.

86Ibid

43

To grasp the magnitude of American interests in the Philippines, and thus, correspondingconsiderable influence and impact on Philippine economic and political developments, aquick historical review is in order at this point.

US interests date back to the late 1890s, when American occupation forces annexed thePhilippines as a colony as a result of the Spanish-American War. Although literally routedby the Filipino revolutionary movement, Spain refused to surrender to the native rebelforces, and instead ceded the colony to the US for $20 million.

Indeed, economic motivation was one of the central rationales for annexation. AmericanCongress 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 importsfrom the Philippines. The Payne Aldrich Act of 1909 and the Underwood-Simms Act of1913 abolished tariffs on all goods except sugar, tobacco and rice, junked all quotasallowing unlimited trade between colonizing and colonized economies. Thus, US share ofPhilippine 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 colonialeconomic policy remained. Just before independence, the US passed the Philippine TradeAct, which provided that US citizens would have equal rights as Filipinos to exploit naturalresources and operate public utilities in the Philippines.

US economic interests prospered. From 1946 to 1976, every dollar invested by US corpora-tion 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 theyearned roughly 66% of the total combined net income of the top 1000 firms. The threelargest US firms – Union Oil, Citibank and Bank of America – all ranked in the top sixPhilippine firms.86

When Aquino came to power in 1986, she appointed human rights lawyer AugustoSanchez to be the minister of Labor. Sanchez vowed to protect workers’ rights and lookinto allegations that both domestic and multinational firms were violating said rights. Oneof his harshest critics was the US business community in the country. Another was the USState Department, Undersecretary of Political Affairs Michael Armacost, in a speech to theForeign Service Institute, said that “I am apprehensive that the Labor Minister is attackingmultinationals (and) endorsing strikes ... Maybe they’ve got to rein Mr. Sanchez in, or get

87Ibid

88Plaridel Papers, No 2 MABINI (Association of Progressive Lawyers), “The Opposition: Lines of

Fragmentation, Lines of Coalition,” (August 1984): 5.

44

him to change his policy views.” Under pressure from the US, the Philippine military andthe 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 militaryfacilities, including Subic Naval base, the largest US overseas naval base, and Clark FieldAir Force base, headquarters to the 13th US Air Force and logistical hub of US military airtraffic in the Wester Pacific.

Upon entering office, US policy-makers began to pressure Aquino on her position towardsthe renewal of the Military Bases Agreement, which was supposed to expire in 1991. RobertDole, who was then Senate majority leader proposed that US aid to the new governmentshould be conditioned and presupposed by Aquino’s agreement to push for renewal.

As we might have seen in the above discussions, US impact on Philippine developmentshad 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 thenative elite classes. The US had supported efforts of democratic governments as well asMarcos’ authoritarian rule in safeguarding strategic American interests in the Philippines.What type of government system Washington ultimately settles for would all depend onhow 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-Marcosstruggle in 1984:88

“The issue of democracy versus dictatorship as the preferred form of politicalrule in the Philippines is only secondary to the fundamental concerns of theUS – its security interests and its economic interests. The US primaryconsideration then is to insure that the Philippine government maintains US-Philippine relations that safeguard such fundamental concerns, andconsequently to insure the stability of the government that fosters such akind of relations.”

45

IV

Conclusion

Based on the study presented in this report, one can safely infer that no substantialalteration 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 ruleunder Aquino meant a mere realignment of positions within the elite power structure. Inthis context, the restoration of democracy should essentially be read as shift in shape ratherthan substance, where the monopolization of political and economic power by one factionof the elite over all other factions personified by Marcos had been replaced by a modalityleveling the playing field for competition and power-sharing among sundry factions of theelite.

Ironically, however, while the current government paid lip service to the demands of thepopular movement for greater empowerment, it continued to invoke Corazon Aquino’spopular mystique to legitimize elite-class rule. Concurrently, the liberalizing impact of theFebruary 1986 Revolution, while immediately leading to wider space for popular anddemocratic expression at the outset, had now begun to slowly erode.

The Right-ward political turn the Aquino government had taken was paralleled in theeconomic realm and manifested in the unaltered concessional treatment of foreigninvestors, creditors and local big business. In other words, political directions intersectedwell with official economic ones. Such intersection did come to no surprise. We might recallthat expanded foreign entry and control of the economy during the Marcos yearsnecessarily required political repression as social injustices and tensions amassing fromMarcos’ foreign capital-based development program inevitably intensified and radicalizedbroad sectors of Philippine society.

Similarly, legitimate grievances and protest generated by the incumbent government’spolicies advancing the interests of foreign capital had increasingly been met withintolerance and violence.

As the report here revealed, the US had tremendous impact on both economic and politicaldirections. The Left, far from being emasculated in the face of the overwhelming popularityenjoyed by Corazon Aquino, had indeed regained initiative and increasingly attractedmany Aquino supporters to its more comprehensive alternative social program.

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In sum, as this paper suggests, no significant discontinuation in elite-class rule hadoccurred with Aquino’s ascension to power. Insofar as elite-class rule traditionally meantthe maintenance of elite-class interests, interests in diametrical variance with those of theFilipino masses at large, the Aquino government should therefore make a clear choice.Aquino’s first year in office had shown that she had, whether willingly or not, tended tofavor the former.

However, times have changed. Organized sectors of society had undergone a dramaticdegree of consolidation and tempering. And with unabated and growing repression andeconomic marginalization, the stage appears to be set for an impending repeat perform-ance of the February 1986 popular uprising. Only perhaps this time, with an entirelydifferent political, economic and social agenda.

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REFERENCES

BOOKS

Nemenzo, Francisco & May, R J (1986) The Philippines After Marcos, Sydney: CroomHelm Ltd.

Santiago, Lilia Q ed (1986) Synthesis: Before and Beyond February 1986, Manila:Interdisciplinary Forum (IDF) of the University of the Philippines, Edgar HopsonMemorial Foundation.

Simbulan, Rolando (1986) The Bases of Our Insecurity – A Study of US Military Bases in thePhilippines, 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 NationalDemocratic Front of the Philippines (March 1987) NDF Publishing House

Policy Proposals on Agricultural and Countryside Development (1986) Quezon City: PeasantMovement 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 ofPopular 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 ProgressiveReview, Vol 2 No 2 (1986): 3-7.

Foubert, Charles & Silvaggio, “Overcoming the Marcos Legacy,” Socialist Affairs (2/86): 38-43.

Goodno, James B, “Aquino’s Acceptable Left,” In These Times, Vol 10 No 34 (Sept 10-161986): 8-11.

San Juan, E Jr, “The Current Struggle Against US Imperialism in the Philippines,” OurSocialism (Nov/Dec 1983): 24-30.

Silliman, Sidney G, “The Philippines in 1983 – Authoritarian Rule Beleaguered,” AsianSurvey, 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.