I respect Bongbong’s right to run for president. It is the right of every Filipino of legal age to do so. And as they say, may the best man, or woman, win. As an economist, however, I cannot allow history to be bended and manipulated to portray the Marcos years as the country’s golden age. The truth must be told according to data and statistics. From there, our people can intelligently decide if another Marcos deserves a second shot at the presidency.
I belong to a generation that bore the brunt of a broken economy in the early ’80s and the long, difficult path towards paying the mountain of debts Marcos left behind. It was our generation that had to flee the country just to find jobs, the majority as domestic workers. It was our generation that witnessed the death of our industries as they fell into crony hands. It was our generation that suffered through the failures of Marcos monopolies (hence, the power crisis, telecom crisis, PAL bankruptcy, water crisis, etc.). It was our generation that witnessed the breakdown of government institutions to one that was corrupt to the core. It was our generation that suffered the indignity of being Asia’s sick man.
Numbers don’t lie and records show that the economy grew by an anemic annual growth rate of only 3.8 percent during Marcos’ 21-year rule. The peso depreciated from a strong P3.92 to one US dollar in 1965 to P19.99 in 1986. Real wages (spending power) plummeted from P100/day in 1966 to just P27/day in 1986; per capita income (nominal) increased by only three-fold over 21 years while it increased ten-fold in Thailand and Malaysia. Unemployment was at 7.2 percent in 1965 and surged to 33 percent in 1986. Poverty rates were at 7.2 percent in 1965 and rose to a staggering 44.2 percent in 1986.
With so much economic wreckage and debt under Marcos’ leadership, it was only in 2004 that the country was able to surpass GDP per capita income of 1982. We lost two decades of economic development – four decades if you include Marcos’ 21 years in office. A generation of mismanagement is why the country remains a lower-middle-income economy today.
Backtrack to 1965 and Marcos inherited a country in the pink of health. Not only did the country have the second-largest economy in Asia, but our policy of import substitution also resulted in advanced manufacturing capabilities in textiles, metalworks, electronics, machineries and petroleum products. In agriculture, President Carlos Garcia’s International Rice Research Institute (IRRI) ushered in a boom in rice production, making the Philippines one of the world’s leading rice exporters. We were also among the leading exports of sugar. Given the strength of our economy in 1965, we could have been at par with Japan today if Marcos followed the course of good governance.
Where did it all go wrong? At the heart of Marcos’ failure was his insatiable need for power and economic control. He used billions in foreign debts to give the impression of progress amid runaway corruption and an economy rapidly losing competitiveness.
With borrowed funds, Marcos established the Construction and Development Corporation of the Philippines (CDCP). While a record number of roads, bridges and classrooms were built by the CDCP, larger chunks of funds fell to personal pockets. It was the same story for the power sector, the housing sector and the transport sector.
Prestige projects like the Cultural Center, the Coconut Palace and Folk Arts Theater gave the image of progress but yielded little or no economic returns. They were all funded by debt.
In the ’70s, the economy appeared to be growing steadily. It was actually due to a boom in demand for Philippine commodities like sugar and coconuts. But beneath the impression of growth were eroding economic fundamentals.
From an external debt of only $600 million when Marcos took office in 1965, debts increased 43 times to an eye-watering $26 billion by 1986. The tragedy is that the majority of Marcos’ projects failed to contribute to job generation and economic productivity. White elephants were numerous.
A cabal of technocrats was appointed to the Marcos Cabinet to supposedly reshape the economy towards greater competitiveness. These “technocrats” were later made to establish monopolies to give Marcos absolute economic control. Danding Cojuangco controlled the coconut industry, Juan Ponce Enrile controlled logging, Roberto Benedicto controlled sugar, media and banking, among others.
Martial law gave Marcos extraordinary legislative and executive powers, which he used to sequester successful industrial companies such as those in auto manufacturing, steel mills and textile mills. These companies were taken over by cronies, all of whom failed to sustain their competitiveness. The failure was due in one part to corruption and in another part to the sheer lack of management expertise. Marcos selected his cronies not for their talents but for their loyalty.
Political instability in the early 80’s caused multilateral lenders to tighten credit to the Philippines. The US slipped into recession and increased interest rates and this further bloated Philippine debt. Eventually, the Marcos government ran out of dollar reserves and in October 1983, had to declare a moratorium on debt payments. To keep the economy afloat, Marcos resorted to short-term loans at high interest rates. By 1986, our debts were so massive that debt service alone accounted for half of the country’s exports. This resulted in a currency crisis and need to devalue the peso.
Economists agree that the Philippine economic collapse of the ’80s was due to Marcos’ debt-driven economic policy. The painful economic recovery in the ’90s and early 2000s was due to the economic and political scars left by Marcos.
So this is the score from an economic viewpoint. The Marcos era was not a golden era but the years in which our once strong economy slowly discombobulated.
If Bongbong’s intention for running for president is to acknowledge what really transpired in history and do good by the country by returning the plundered wealth – then we can say that he has evolved for the better. But if his intention is to vindicate the reputation of the father and perpetuate a twisted version of history, then nothing has changed and we can only expect a repeat of the Marcos catastrophe. The pangs of the catastrophe are real. My generation lived through it.
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Email: andrew_rs6@yahoo.com. Follow him on Facebook @Andrew J. Masigan and Twitter @aj_masigan