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34yearslater

PhilippineDailyInquirer/05:15AMAugust21,2017
Ithasbeen34yearssinceBenignoNinoyAquinoJr.was
killeduponhisreturnfromexileintheUnitedStates,and
manystillcitehismurderasthelaststrawthatprecipitated
theeconomiccollapseofFerdinandMarcosdictatorship.
Therealitywasthatfailedeconomicprogramsfinancedby
hugeforeignloanscombinedwithcronyismtoensurethe
worsteconomiccrisisinpostwarPhilippinehistory.
Insummary,theMarcosregimeembarkedonanimport
substitutionpolicy,offeringtaxincentivestoattract
investmentinindustriesandprotectinglocalsfromforeign
competition.Whatitshouldhavedonewastoadoptatthe
sametimeanexportorientedstrategytomakelocal
industriescompetitiveinforeignmarkets,aswhatwasdone
byothercountrieslikeSingaporeandMalaysia.
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Ataboutthesametime,theoilboominthe1970sprovided
theMarcosregimewithlowinterestpetrodollarloansto
financeanambitiousindustrializationprogramcenteredon
11majorprojectsthatincludedtheBataannuclearpower
plant.Thiswasasidefromthebillionsofpesosspenton
roads,bridges,irrigation,damsandpowerplants,with
financingcomingmainlyfromforeignloans.
Theresultsweredevastating.ThePhilippinesforeigndebt
burdenrosefrom$2billionin1970toabout$4billionin
1975andontoalmost$13billionin1980.In1983,when
muchcapitalhadfledthecountryduetoeconomicand
politicaluncertainties,anofficialaccountingshowedthat
thetotaldebthadswelledtonearly$30billion.
Asidefromtheforeigndebtissue,thestateofmartiallaw
since1972ledtomonopoliescontrolledbyandbehest
loansgiventopersonscloselyassociatedwithMarcos.This
hasbeenreferredtoascronycapitalism,withthe
dictatorsassociatesandfriendsthelikesofthe
Benedictos,theCojuangcos,theDisinis,theCuencas
controllingkeyindustrieslikecoconut,sugar,miningand
telecommunications.
Atthestartofthe1980s,aninternationaloilcrisiswhich
sawcrudeoilpricesskyrocketingfollowingtensionsinthe
MiddleEastledtosoaringimportcosts,higherinflation
andasurgeinbankinterestrates.Thedifficulteconomic
timessawincreasedprotectionisminmajorinternational
marketsliketheUnitedStates.
ThisaffectedthePhilippineeconomy,whichreliedonraw
commoditieslikesugar,coconutandmineraloreforits
exports.
TheassassinationofNinoyAquinoonAug.21,1983,
simplyquickenedtheeconomicdownfallofthePhilippines
underMarcos.Politicaluncertaintytriggeredcapitalflight,
andwhenforeignbanksstoppedlendingtothePhilippines,
businesseshadtoturntotheblackmarkettopayfortheir
imports,weakeningthevalueofthepesointheprocess.In
Octoberofthatyear,theMarcosregimewasforcedto
declareadebtmoratorium.
Theresultingnumbersweredisheartening.Theeconomy
contractedfrom1983to1985(grossdomesticproductfell
by6.8percentin1984and3.8percentin1985),inflation
wasat50percent,factorieswentidle,andthe
unemploymentrateshotup.Localandinternational
pressureonMarcoseventuallyledtohisdeclarationofa
snapelectioninFebruary1986,pittingthedictatoragainst
NinoyAquinoswidow,CorazonAquino.Therest,asthey
say,ishistory.
Thirtyfouryearsandfiveadministrationslater,itsa
differentstory.Thegovernmentreportedlastweekthat
economicgrowthwassustainedinthesecondquarterof
2017,cominginatarespectable6.5percent.
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ComparethiswiththeaverageGDPgrowthratefrom1972
to1985of3.4percentayearhardlythegoldenage
toutedbytheMarcosheirs.ThePhilippineshascomea
verylongwaysincetheeconomiccrisisoftheearly1980s.
Thelessontobelearnedfromallthisisclear:Politics
shouldneverinterferewithacountryseconomicaffairs.

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