Who torpedoed Marcos’ economy?


In / A Manila Time article published on January 24, titled “Did Ninoy torpedo Marcos’ economy to sink it?”, columnist Rigoberto Tiglao argued that Ninoy Aquino’s return to the Philippines and his assassination in 1983 sank the economy philippines, causing it to default on its foreign debt in october of that same year. According to Tiglao, Aquino made the Marcos era the “darkest years in the country”.

This article explains why this statement is false. But don’t take it from me, take it from Tiglao’s own arguments and data, as found in his earlier articles dating back to 1988.

In a 2016 Manila Time article, Tiglao wrote, “Ninoy Aquino’s assassination in August 1983 only hastened, but was not really the reason, for the default.” It is therefore disconcerting that in the space of a few years, Tiglao has gone from acknowledging that Ninoy’s assassination was only a trigger for the downfall of our economy to blaming him for the economic collapse.

The Philippines defaulted on its foreign loans a few months after the assassination of Ninoy Aquino in 1983, and experienced a deep recession in 1984 and 1985. However, at that time a political and economic crisis, a “perfect economic storm” , had been preparing for a long time. .

The crisis was the result of an accumulation of internal (mismanagement of resources, corrupt crony schemes, inefficient spending, massive and unpredictable corruption) and external (the global debt crisis of the 1980s) factors. While Tiglao’s 2022 column delved into the effect of the global debt crisis on our own economic collapse, he failed to mention the huge role played by the regime’s poor economic policy, on which he blamed. written articulately in his previous works.

To further defend the dictatorship’s economic policy and shift the blame to Ninoy, Tiglao asserted that the regime’s economic performance should be understood in two parts: the first being a period of growth and prosperity from 1972 to 1980, and the second , the era of economic collapse thereafter.

He claimed that during the “golden years” of martial law from 1972 to 1980, the economy grew robustly, which is why there was a lot of support for martial law and Marcos at the time. Indeed, for the elite, the early years of martial law were prosperous and the business environment favored them.

However, in a chapter Tiglao wrote in the 1988 book Dictatorship and revolution: roots of popular power, he wrote that it was only a semblance of prosperity. He noted that “the regime began accumulating its foreign debt at this time, partly to finance the infrastructure projects that would artificially stimulate the economy, and partly to finance the growth of a faction of the Filipino ruling elite who granted [Marcos] absolute loyalty: the “friends”.

This façade of prosperity brought about by massive infrastructure spending (financed by foreign debt) pushed the elite to embrace martial law. Economic power was concentrated in the hands of very few, and crony capitalism, defined as an economic system characterized by close and mutually beneficial relationships between government officials and business leaders, flourished.

In 1988, Tiglao also noted that this massive infrastructure development policy would later become one of the factors that caused the debt crisis of 1983, and that it was “the path of debt-led growth that led to the Philippines’ worst recession and ultimately contributed to the debt crisis. the fall of the regime. This contradicts Tiglao’s later writings – in 2018, in his book DebunkedTiglao defended the path of debt-led growth, citing that countries in Latin America and Asia also borrowed from US banks in the 1970s.

The Philippines’ debt-driven growth strategy failed because during the Marcos dictatorship, corruption was massive, unchecked, and unpredictable, and the spending of economic resources was unproductive and inefficient. In Debunked, Tiglao described the Filipino elite as “rapacious, in stark contrast to their Southeast Asian counterparts”. He cited a study that, during the Marcos era, “the elite from 1970 to 1981 took away $3.1 billion in massive capital flight.” (This was about a third of the country’s increase in foreign debt.)

Also, business may have boomed for the middle and upper classes, but as Tiglao explained in 1988 in Dictatorship and Revolution, poverty and inequality have worsened, leading to massive social unrest. He used the following data to illustrate poor distribution results during martial law:

• Due to the Green Revolution, poverty has increased in rural areas. The Masagana 99 program, which used high-yielding rice varieties dependent on fertilizers and pesticides, did not benefit all farmers equally. Poorer farmers were disadvantaged due to high investment costs. The sector was now vulnerable to the volatile influence of the international market economy. Because fertilizers and pesticides were petroleum-based, when the oil shocks hit in 1979, the government could no longer subsidize these inputs. Due to their lack of capital, farmers were swindled into more inequitable sharing arrangements with landlords or traders. Many had to sell their land and massive impoverishment ensued.

• Wage rates have also fallen considerably. From 1972 to 1978, the real wages of skilled urban workers fell by 24%, while those of unskilled workers fell by 32%. The regime has indeed issued a decree ordering the Central Bank to stop the investigations that determined these salaries.

• In central Luzon and southern Mindanao, more than 80% of the rural population lived below the poverty line. More than 40% of the rural population lived below the poverty line in the mid-1970s, and a majority of them depended on rice cultivation and maize cultivation.

• Sugar cane workers and coconut farmers under the Benedicto sugar monopoly and the Cojuangco coconut conglomerate were impoverished. When the Benedictos mechanized the sugar industry in the 1980s to reduce production costs, thousands of sugar workers lost their jobs. Meanwhile, capital was extracted from coconut farmers through the coconut tax, and when the commodity boom ended in 1974, there was massive impoverishment in the coconut areas.

Tiglao’s own arguments from his 1988 article show that martial law was certainly not the golden age, especially for the rural poor.

In 1981, the economy stagnated. Tiglao’s 2022 column blamed this not on government mismanagement, but on external factors: the “Volcker shock” in late 1979 when the U.S. Federal Reserve raised high interest rates and the soaring oil prices in 1980 due to the Iraq-Iran war. In 1982, Mexico defaulted on its foreign loans.

In 1983, Ninoy returned from his three-year exile in the United States. At this point, the country was already facing a huge economic crisis and Marcos’ health was deteriorating. In 2022, Tiglao, again blaming Ninoy, said that Ninoy had returned home to replace Marcos, and if he hadn’t been assassinated, a coup would have ensued, which would also have led to an economic crisis.

After Ninoy’s assassination, the political situation was unstable and business confidence plummeted. The Central Bank had gone bankrupt and at one point we didn’t even have enough money for our basic imports. Fifty-four days after Ninoy’s assassination, the Philippines defaulted on its foreign loans by declaring a moratorium on debt repayment. In 1984, we plunged into what was then the worst postwar recession the country had ever experienced.

Ultimately, the Philippines’ economic collapse was caused by a confluence of many factors, and as Tiglao mentioned in 1988, Marcos’ economic policies led to this catastrophe. Weak institutions, inefficient spending (both by the government and the Marcos family using public accounts), uncontrollable corruption, and crony capitalism embedded in traditional sectors under Marcos had already taken their toll on the country by the time Ninoy was killed.

“It was the straw that broke the camel’s back in the quagmire of our foreign debt,” Tiglao wrote of Aquino’s 2020 assassination, acknowledging that the Philippines was already struggling when it comes to our external debt in August 1983.

In 1988, Tiglao cited the Marcos regime’s economic policy decisions as contributing factors to the 1983 debt crisis, and he even recently claimed that Ninoy’s assassination was not really the reason for our collapse. His 2022 claim that “Ninoy torpedoed the economy” is therefore a complete about-face and distortion of the narrative.

If we’re to blame anyone for the “country’s darkest years,” it should rightly be Marcos. As Tiglao said in Debunked“Of course, the responsibility stopped with Marcos, and he had command responsibility.”

Pia Rodrigo is the Strategic Communications Manager for Action for Economic Reforms.

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