‘THE US-MARCOS DICTATORSHIP 27 ‘Marcos ignored this advice and went ahead and announced the end of ‘martial law, But,as noted in the previous chapter, Marcos retained for himself all the crucial instruments of dictatorship, o in fee martial law was lifted in znameonly. Amnesty Intemational founda continuing pattern of gross human rights violations [see selection 7.14]. The view ftom Washington, however, ‘was rather more optimistic: in August 1981, U.S. Vice President George Bush raised a toast to President Ferdinand Marcos, declaring “We love your adherence to democratic principle and to the democratic processes.” So the United States both in wore and deed increased and strengthened its support for the Marcos dictatorship as opposition co the dictatorship reached new levels, Selection 8.1: New York Times Advertisement, Philippine Government Editors’ Introduction ness section of the New York Times According t0 a US. oil executive by the Philippine government, pro- ‘quoted by Busines: Week (Novernber Vides further confirmation of the E1972,p 42)shordyaferthe dees. Mis rime’ soliude for fr ration of martial iw, “Marcos says, “8m capital, “We'll pass the hws you need—jus , Source: New York Times, July tellus what you want.’* Thefollow- 2 1974,p. 5F ing advertisement, placed inthe busi- Seven Good Reasons Why You Should Be Looking to the Philippines. Now. 1, We've pur ourhouse in order. You can’tafford to overlook the new Philippines in surveying your Asian prospect this year. For the authoritative government in Manila has put an end to political factionalism and social anarchy Restored peace and order. Purged the bureaucracy of the inept and the comupt. Freed economic policymaking from the constraints of extremist chetoric. Result: ‘The renewed optimism of 40 million people,and the resurgence of the national economy. 2. Consider these investment opportunities. The government has just finished rationalizing the three major hws regulating foreign business operations in the Philippines. Foreign investment may ‘now go into most sectors of the economy. There are attractive investment packages for you if you want to explore, develop and pprocessmineral resources. There are justas magnificent opportuni- ties in basic industry, finance, tourism, manufacturing, chemicals, engineering, commercial agriculture and export trading,THE PHILIPPINES READER ‘Apart from the basic rights and guarantees written into the ‘Constitution, the new incentives include: Unrestricted repatriation ‘of earnings and investments. Tax exemptions and credits. Tax deductions for reinvestment and labor-training expenses. Acccler- ated depreciation. Carry over of net operating lost incurred during the first ten_ years of operation, Easy entry for expatriate staf. Protection from government competition, Protecion of patents and other proprictary rights. Our corporate-tax incentives are rated as better than those offered by Indonesia, Singapore, South Korea, Australia and Japan. (This might be why close to $94 million came in from the ‘United States alone during the first 11 months of 1973.) But the best incentive we offer may not be so easily quantifiable. It is the rationalization of economic policymaking, and the consequent cer- tainty thac economic expansion inthe Philippines wilfrom now on be by quantum jumps. Doesn't that sound ike an offer you can't refuse? 3. We like multinationals, Manila's naturil charms as a regional business center have been enhanced by «special incentive package. “The multinational company setting up its regional or area head- quarters in the Philippines is now “‘exempy from all forms of local licenses, fees, dues, imposts or any other local taxes or burdens.” In Marila yous expstriate-managers will enjoy Asia's lowest living costs among the most outgoing people in the Pacific. Many bungalows in the Makati arca have swimming pools as standard ‘equipment. A cook starts at $28; a maid at $14, ond a first-class chauffeur at $52. Quick entry-and-exit clearances; income taxes limited to 15 percent of gross. « «Local staf? Clerks with a college education start at $35, a fourth of what chey cost in Singapore. Accountants come for $67, executive secretaries for $148. Move your Asian headquarters to ‘Manila and make your cost accountants happy. 4. The Pacific action is moving back to Bataan. The Philippines! first industrial estateis geing up at Mariveles, a porttown atthe tip of historic Bataan peninsula, on the northwest coast of Manila Bay... ‘Thetax and incentives package for foreign investors at Bataan includes: Admission of 100 percent foreign-owned or controlled ‘companies, Unrestricted employment of foreign personnel, Tax and duty-free importation of capital equipement, spare parts, raw ‘materials, nd supplies. Exemption fromexport tax snd paymentof all municipal and provincial taxes. ‘Among the first ones into Bataan are Ford Philippines, which is setting upa $50-million carbody stamping plant; Flonda, British‘THE US-MARCOS DICTATORSHIP Leylandand Winthrop Products, Inc. Cen youaffordto lag too far behind the competion? 5. Our labor force speaks your language. Whesher you're talking electronic components, garments or car-manafacturing, National literacy was placed at 83.4 percent in 1973 (English isthe median of instruction), which brings the Philippines closest tothe Japanese standard among all Asian countries... . Recent Presidential decrees have simplified conciliation and arbitration of labor disputes (both strikes and lockouts are proki- bited), lifted work restrictions on Sundays and holidays, liberalized the employment of women and children, snd ex panded the scope of the apprenticeship program, Labor costs for the foreign company setting up plant in Manila could work out from 35 to 50 percentlo wer thaa they would bein either Hongkong or Singapore... 6. The country is lovely. And loaded. Beneath the tropical lands- ‘capes of our 7,000 islands lies a wealth of natural resources. - 7. We sell seashells. As well as sugar, copper, plywood, copia, embroidered shirts, cam shafts, bananas, television tubes, hand. made shoes and freshwater eels. And business is good. ... Selection 8.2: Telegram to President Marcos, Ametican Chamber of Commerce of the Philippines Editors’ Introduction 29 Commerce of the Philippines U.S. investors in the Philippines, (ACCP) is the organized expression reported Business Week sx weeksafter of U.S. business interess in the Phi the declaration of martial law (Nov-lippines. The following document is ember +, 1972, p.42), “have become the textofa telegramsent by the head increasingly sanguine about their fu- of the ACCP to President Ferdinand cure.” “On balance,” declared the Marcos on September 27, 1972, a vice-president of the Ford Motor few daysafterthedeclaration of mar. Co., “Marcos's actions have stabil tial law, izedthe situation.” Andthepresident Source: Telegram reproduced in of Mobil’s Philippine subsidiary telegram of the same date from Wil- noted thatthe “reaction among busi- liam Mitchell to W. S. Lowe, presi- nessmen is one of cautious ism." The American Chamber of the United Scates. HIS EXCELLENCY FERDINAND E. MARCOS PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, dent of the Chamber of Commerce of230 “THE PHILIPPINES READER THE AMERICAN CHAMBER OF COMMERCE WISHES YOU EVERY SUCCESS IN YOUR ENDEAVORS TO RESTORE PEACE AND ORDER, BUSINESS CONFIDENCE ECONOMIC GROWTH AND THE WELL BEING OF THE FILIPINO PEOPLE AND NATION. WE ASSURE YOU OF OUR CONFIDENCE AND COOPERATION IN ACHIEVING THESE OB- JECTIVES, WE ARE COMMUNICATING THESE FEELINGS TO OUR ASSOCIATES AND AFFILIATES IN THE UNITED STATES, WILLIAM MITCHELL, PRESIDENT OF THE AMERICAN CHAMBER OF COMMERCE IN THE PHILIPPINES Selection 8.3: Foreign Investment in the Philippines, Charles W. Lindsey Exttors’ Introduction ment in the Philippines Under Mar- Thelollowing article, writ this tal Law,” Pacifie Affzirs, vol. 56, Reerees reife Fall 1983;and “The Philippine State investment in the Philippine econ. 4 Transnational Investment,” in ‘omy and its impact on Philippine Trawnational Corporation: end the development. Charles W. Lindsey is S###e,ed. Robert B. Stauffer, Sydney: massociateprofessorofeconomicsar Te#nsnational Corporations Re- Trinity College. (For more details 4h Project, Univerity of Syd- and data, see Charles W. Lindsey, “In "Ys 1985.) Search of Dynamism: Foreign avest- Historical Context All Philippine presidents since 1946 have sought increased inflows of Amer- ican capital and resisted nctionalist-inspired legislation that would limit for- eign investment. There wis the persistent belief that, on its own, the Philip- pines did not have sufficient capital—nor, to 2 lesser extent, the technology and managerial skills—to develop its economy. Beyond these narrow eco- ‘nomic considerations, however, was the larger political context. As former Philippine president Dioscado Macapagal put it, presidential candidates found iemecessary “to obeain the support of the American government or at east not antagonize it in their bid for the Presidency.’ Despite presidental support of foreign capital, however, Fi ‘occurred in many sectors of the economy, though manufacturing remained relatively open to transnational corporations (TNCs). During the 1950s, foreign investment flowed imo the Philippines in response to 4 strategy of impor-substivution induswialization (ji., producing goods former'y im-