“This Nation Can Be Great Again”

THE MARCOS PRESIDENCY

(1965-1986)

Ferdinand E. Marcos’ defeat of Macapagal was accomplished by the usual pattern of elite
interdependence – the help of Ilocano allies in consolidating his Northern Luzon bailiwick, a tactical
alliance with the Lopez-sugar-media-energy dynasty, and a war chest of funds accumulated as a member
of the Senate. On the campaign trail, Marcos promised that “this nation can be great again,” that the days
of corruption and inefficiency were over. By 1965, however, the idea of a new president turning things
around was hardly believable. The corruption of the Garcia and Macapagal presidencies had nurtured
public cynicism, and Marcos himself has been accused of corruption while in the Senate. Neither his
candidacy nor his slogan inspired much optimism, although the candidate was youthful and his beauty-
queen wife Imelda gave his campaign a touch of glamour.

First Term (1965-1969)

1. Marcos’ rural development strategy was to increase productivity on existing rice lands in order to
make newly opened land especially in the interior of Mindanao available for foreign investment
in the new export crops of bananas and pineapples.
a. He therefore launched an ambitious rural infrastructure program funded by local and
external borrowing and development aids.
b. He built new irrigation systems, supported technological innovations, and began to
upgrade existing road systems.
c. He also pumped credit into the rural economy through the state-owned Land Bank.

2. Not to neglect social development, Marcos upgraded rural education with the construction of
“Marcos schoolhouses,” prefab buildings designed for public elementary and secondary
education. (This and other projects funded by U.S. aid obliged him to break a campaign promise
not to involve the Philippines in the American war in Vietnam. Soon after he became president, a
battalion of military engineers were sent to South Vietnam.)

3. To lessen dependence on agricultural exports, Marcos pushed the 1967 Investment Incentives Act
through Congress. This legislation encouraged investors of foreign capital to participate in
domestic industrial development and to use the country as a base for export production.

4. Like Magsaysay, Marcos deployed the Armed Forces of the Philippines in development projects
particularly in areas where civilian agencies lacked the resources to undertake projects
themselves. This laid the groundwork for further military involvement in national and local
administration and politics.

In his first-term initiatives – economic liberalization, pursuit of productivity gains over comprehensive
land reform, and the use of executive and military agencies to shape society – we see continuity with past
presidents. Neither did Marcos differ in the use of power to enrich himself, his clan, and his allies.
Marcos’ first term developmentalist though it was, exhibited the self serving corruption of his
predecessors. Increased government involvement in agriculture led to overpriced rice in times of
shortage, and in the infrastructure program, officials took kickbacks from construction companies owned
by Marcos supporters who built roads with inferior materials.

What undermined Marcos was the fact that economic progress could not be sustained:
 1. The government had borrowed heavily for development programs on the assumption that export
earnings and other revenues would finance debt repayment.
a. But export revenues did not improve as much as expected. The rising cost of imports
was not offset by the value of such a narrow export base (sugar, coconut, and forestry
products), which was subject to the fluctuation of global commodity markets.

2. Other sources of government revenue went untapped. From 1959 to 1968, Congress passed no
tax legislation at all, despite significant structural changes in the economy.

3. American development assistance declined in the late 1960s – from $190 million in 1968 to $144
million in 1969.

4. Foreign investment plunged fro $20 million to $8 million as the international community became
wary of corruption and inefficiency.

The president had lost much of his original panache and was confronted by growing criticism from
political opponents and even the hitherto tolerant middle class. Nevertheless, in 1969 Marcos became the
first Philippine president to win reelection.

Second Term (1969-1972)

Marcos’ reelection plunged the country into crisis.

1. The unprecedented government deficit of more than one billion pesos forced Marcos to float the
currency in early 1970. A sense of unease spread in urban areas as the m idle class feared an
economic tailspin.
2. Social and political activism became much more urgent and student protest on Manila campuses
grew in frequency and intensity.
3. Activism addressing national and social themes also emerged within the Catholic Church whose
political influence had grown with its anticommunist offensive of the 1950s.
4. After almost a decade of silence, the Partido Komunista ng Pilipinas (PKP) renewed organizing
for parliamentary struggle. With its peasant and worker base still recovering from the Huk
debacle, the party recruited students at the UP and the Lyceum of Manila who were already
attracted to Marxism.
5. It was also a time of unabashed opportunism. Radical propaganda got a great boost when
Marcos’ discarded allies, notably the Lopez and Laurel families, sensing that he was faltering,
announced their sympathy with the “revolution” and opened their media outlets to student
radicals.
6. The intensification of political battles outside the state was paralleled by escalating combat
within. Anti-Marcos delegates to the 1971 Constitutional Convention planned to prevent him (or
any immediate family member) from seeking another term. In Congress, the opposition regained
a majority after key Nacionalistas withdrew their support and a Communist bombing of a Liberal
party rally in August 1971 was popularly attributed to Marcos.

The “US-Marcos Dictatorship”

The declaration of martial law devastated Marcos’ opponents.

1. Overnight the entire network of anti-Marcos forces had disappeared from the public arena.
Politicians were jailed, their patronage machines adrift, and private armies demobilized.
2. Students, academics, journalists, businessmen, and labor and peasant organizers had also been
arrested.
 3. The rest of Philippine society simply accepted the new order. This reaction especially among
weary and strained urbanites, is not surprising. After almost three years of political conflict,
martial law was a welcome respite. Others it as a way out of economic crisis.

With his new powers, Marcos moved easily from the original idea of martial law as an emergency
response to crisis, to martial law as an instrument for creating a “New Society.” He is now in a position
to craft a strong state with two powerful centralizing agencies – a military empowered during his first
term and technocrats who shared his idea of national development.

Guaranteeing the early success of martial law was the support of the US government. Washington’s
foremost interest in the Philippines was no longer its success in practicing “American-style” democracy,
but rather the two huge military bases north of Manila – Subic Naval Base and Clark Air Base. American
military assistance soared from $18.5 million in 1972 to 45.3 million the following year.

By various economic measures, the Philippine economy – along with state strength and Marcos’ rule –
reached a high point in the mid-1970s after twelve years of average annual GNP. The green revolution
produced unprecedented harvest and land reform largely redistributed the country’s rice and corn land to
tenants. Rice producers’ net revenue peaked in 1972 after rising an average of 2.85 percent annually for
ten years. This period also saw the expansion of the service and commercial sectors and the provision of
some affordable urban housing through the New Society Sites and Services program.

In the export agricultural sector, the acreage devoted to sugar and coconut doubled, a development made
possible by the increased productivity of rice land.

Decline

The factors that enabled Marcos to consolidate his dictatorship were also factors in its decline. The
export boom and external borrowings boosted GNP in the early years of martial law, but the benefits of
economic growth were distributed disproportionately to the Marcos family, its immediate relatives, and
close friends. Presidential decrees gave this group monopoly control of the sugar and coconut industries,
the domestic market for cigarettes and beers, and other expropriated private enterprises throughout the
economy. This consolidation of wealth and power within a segment of the country’s elite eventually
acquired the name “crony capitalism.”

All signs – including the Marcos couple’s profligacy – pointed to a breakdown.

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Reference: Abinales and Amoroso. State and Society in the Philippines.