Corazon looked back to their experiences and ninoy’s suffering during the martial law that was

ginawa ni dictator marcos .

hilippines: The Marcos debt

by Eduardo C. Tadem
5 November 2018

Another compelling argument against the “hero’s burial” for Ferdinand Marcos was his corruption-
ridden mismanagement of the country’s debt. At the height of martial law in 1977, he issued
Presidential Decree 1177 mandating the automatic appropriation for debt service, thus starting the
process that continues to this day of prioritizing debt repayments before budget allocations for social
and economic services and other government expenditures. The Philippines is the only country in the
world with such an automatic debt appropriation law, Walden Bello says.

In the 1970s Marcos took out huge amounts of foreign currency loans that by the 1980s his regime
could not repay. He tried to hide the dire financial situation by overstating the figures for foreign
reserves. By then the economy was in a free fall: GDP growth dropped 5.3 percent, prices of primary
export commodities fell by 50 percent, workers’ wages were reduced, and unemployment hit one-
fourth of the labor force. The crisis worsened with the assassination of Ninoy Aquino in August 1983.
As foreign banks withheld their credit facilities, Marcos declared bankruptcy in October 1983 and
sought a 90-day moratorium on principal debt payments. The World Bank provided bailout loans to
avert a default but with painful conditions like cutting the government budget, peso devaluation, tariff
dismantling, and ending subsidies. Marcos had become the proverbial debt addict wholly dependent
on foreign aid.

The Philippines is the only country in the world with such an automatic debt appropriation law

Cronyism became more rampant as Marcos prioritized the bailout of companies owned by his friends
and close business associates. The Freedom from Debt Coalition cited the proliferation of behest
loans with government guaranteeing the procurement of borrowed capital without complying with
banking rules and procedures. The most notorious case was the $2-billion Bataan Nuclear Power
Plant, which was completed in 1985. Total repayments, which ended only in 2007, reached $22
billion, with a debt service of $140 million a year, $12 million a month, and $388,000 a day. Marcos,
through a crony, was reported to have received an $80-million payoff.

Ibon Databank reported that the Philippine debt in 1983 comprised 91 percent of GNP and 509
percent of export earnings. In addition, the loans became costlier as creditors imposed higher and
floating interest rates. When Marcos became president in 1965, the total debt was $600 million; by
the time he was ousted in 1986, it had ballooned to $26 billion—a 4300-percent rise.

Mamoru Tsuda and Gus Yokoyama wrote in 1986 that hearings by the US House subcommittee on
Asia-Pacific affairs revealed that “Japanese corporations had paid rebates to Marcos and his cronies,
as well as to financial groups allied with the former President, in connection with Japanese yen loans
to the Philippines.” Total commissions—in reality, bribes—allegedly paid by five Japanese
corporations amounted to $1.03 million.

In April 1986, the Commission on Audit accused Marcos of diverting US aid funds, particularly the
interest earnings of P236 million from the Economic Support Fund (ESF) which were illegally
disbursed and classified as “confidential fund” via a Malacañang memorandum. The COA also
reported the “irregular and illegal” diversion of P35 million to the “confidential fund” of the ESF Council
headed by Imelda Marcos.

A May 1986 report by the UP School of Economics said: “The foreign debt incurred by the old regime
is one of the biggest obstacles to Philippine economic recovery. The Philippines is one of the most
heavily indebted countries in the world: seventh in size of debt, sixth in debt to exports ratio, fourth in
debt to GDP ratio, and ninth in debt service ratio.”

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The UP report also said that “most of the projects financed by the foreign loans were unproductive; …
not well chosen or were probably chosen precisely to finance capital flight through the overpricing of
projects.” Furthermore, projects were found to be “overpriced, mismanaged, not viable to begin with,
or made unviable by changes in exchange rate and the international environment.”

As a result, the government had “to squeeze basic services and maintenance expenditures, reduce
investment in infrastructure, incur huge deficits, and raise taxes and user fees to service the debt,”
the UP report said.

CONCLUSION
Considering how poverty increased, wages for workers decreased, and prices of goods increased
significantly, one gets a clearer picture of the changes in lifestyle experienced by the ordinary Filipino.
Progressively earning less while all around them, food and other basic needs were getting more and
more expensive, one can imagine concretely the real economic impact that the supposed Golden Age
had brought upon the nation.

Our assessment is exacerbated by an appraisal of the corresponding impacts the Marcos regime had
both on the environment and our economic standing with other countries. Massive deforestation and
accumulation of international debt plunged the nation’s resources into peril in more ways than one,
leading to effects we continue to feel and pay for to this day.

So was the Marcos era truly a Golden Age? Different people may tell different stories, but the data tell
only one.

IT WAS ALL A DEBT-DRIVEN DEVELOPMENT/ GROWTH

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 When the former President Corazon Aquino delivered her speech before a joint session of the United State

Congress on September 1986, it was almost seven months since the country had got a grasp of the democracy it has been

waiting for. She gave a brief account of how Marcos suspended the Philippine Constitution and shut down the Congress,

leading to Ninoy’s exile and death, emphasizing the Suffering he endured at the hands of the military and the dictator.

During this time, those considered dangers to Marcos, such as prominent politicians and members of the media, were

picked up and arrested by members of the military and the dreaded Philippine Constabulary (Francisco, 2016). According

to Amnesty International, between 1972 and 1981, over 70,000 individuals were imprisoned, 34,000 were tortured, and

3,240 were died. Thousands of victims were tortured in various ways during this dark period in Philippine history.

Prisoners were strangled, electrocuted, and beaten. They were set on fire with a flat iron or cigars. Water was poured

down their throats and then beaten out of them. Women were raped while naked, with various objects shoved into their

genitals.

She then described how the job of liberating the Filipinos and fighting for democracy fell on her shoulders. She

spoke about her own experience with the Commission on Elections' corruption and complimented the people's

togetherness and courage through times of oppression. This was proven during the 1986 snap election, which according to

Jose Conception, co-founder of National Citizens Movement For Free Elections (NAMFREL) was one of the dirtiest and

deadliest elections that happened in the Philippine history which resulted to the death of more than 60 Filipino people

trying to defend the ballot box from getting rigged. Initially, the COMELEC declared Marcos the winner, with almost 1.5

million more votes than the next candidate, Cory Aquino. Marcos received a total of 10,807,197 votes in the COMELEC

tally. In contrast, NAMFREL's preliminary results showed Aquino winning by more over 500,000 votes. This served as

the signal for the Filipino to start the historical EDSA People Power Revolution.

There are some people who claim that the Marcos era was the Golden Age of the Philippines, characterized by

booming infrastructure and a tiger economy, but it was all a debt-driven growth. Former president Corazon Aquino

mentioned in her speech about how the Filipinos will take responsibility in paying the debt that the former president

Marcos left, when in fact, they never really benefited from it. All of these was a result of corruption, budget

mismanagement, and crony capitalism that cost the country 3-7 billion US dollars. One great example was the infamous

Bataan Nuclear Powerplant that went bankrupt after it was closed down since it is located in an active earthquake fault

line causing it to become a volcanic hazard. The said project cost the government around 2.3 billion US dollars.

According to Tadem, 2018 “When Marcos became president in 1965, the total debt was $600 million; by the time he was

ousted in 1986, it had ballooned to $26 billion—a 4300-percent rise”. On this note, she took the chance to ask for

assistance from the US government in rebuilding the Philippine economy.

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 The speech was personal, sensitive, and effective. It was a watershed moment for both the Philippines and the

United States. It expressed the Filipino people's aspiration for democracy and human rights, as well as their optimism for

a better future. The speech by Cory Aquino contributed to reshape the relationship between the United States and the

Philippines, and it has left an indelible mark on both countries.

So Aquino lodged an appeal for help. Addressing the House, she delivered a
historic speech that managed to sway in our favor the vote for an emergency $200-
million aid appropriation. In the moving speech penned by her speechwriter (and our
current ambassador to the United Nations) Teddy Locsin, Jr., Aquino defended
her reconciliatory stand on the communist insurgency—a sensitive issue in the U.S.,
given that this was 1986—and asked for financial aid towards rebuilding the
Philippine economy.

So Aquino lodged an appeal for help. Addressing the House, she delivered a
historic speech that managed to sway in our favor the vote for an emergency $200-
million aid appropriation. In the moving speech penned by her speechwriter (and our
current ambassador to the United Nations) Teddy Locsin, Jr., Aquino defended
her reconciliatory stand on the communist insurgency—a sensitive issue in the U.S.,
given that this was 1986—and asked for financial aid towards rebuilding the
Philippine economy.
So Aquino lodged an appeal for help. Addressing the House, she delivered a
historic speech that managed to sway in our favor the vote for an emergency $200-
million aid appropriation. In the moving speech penned by her speechwriter (and our
current ambassador to the United Nations) Teddy Locsin, Jr., Aquino defended
her reconciliatory stand on the communist insurgency—a sensitive issue in the U.S.,
given that this was 1986—and asked for financial aid towards rebuilding the
Philippine economy.
So Aquino lodged an appeal for help. Addressing the House, she delivered a
historic speech that managed to sway in our favor the vote for an emergency $200-
million aid appropriation. In the moving speech penned by her speechwriter (and our
current ambassador to the United Nations) Teddy Locsin, Jr., Aquino defended
her reconciliatory stand on the communist insurgency—a sensitive issue in the U.S.,
given that this was 1986—and asked for financial aid towards rebuilding the
Philippine economy.
So Aquino lodged an appeal for help. Addressing the House, she delivered a
historic speech that managed to sway in our favor the vote for an emergency $200-
million aid appropriation. In the moving speech penned by her speechwriter (and our
current ambassador to the United Nations) Teddy Locsin, Jr., Aquino defended
her reconciliatory stand on the communist insurgency—a sensitive issue in the U.S.,
given that this was 1986—and asked for financial aid towards rebuilding the
Philippine economy.
So Aquino lodged an appeal for help. Addressing the House, she delivered a
historic speech that managed to sway in our favor the vote for an emergency $200-
million aid appropriation. In the moving speech penned by her speechwriter (and our
current ambassador to the United Nations) Teddy Locsin, Jr., Aquino defended
her reconciliatory stand on the communist insurgency—a sensitive issue in the U.S.,
given that this was 1986—and asked for financial aid towards rebuilding the
Philippine economy.
So Aquino lodged an appeal for help. Addressing the House, she delivered a
historic speech that managed to sway in our favor the vote for an emergency $200-
million aid appropriation. In the moving speech penned by her speechwriter (and our
current ambassador to the United Nations) Teddy Locsin, Jr., Aquino defended
her reconciliatory stand on the communist insurgency—a sensitive issue in the U.S.,
given that this was 1986—and asked for financial aid towards rebuilding the
Philippine economy.
4
So Aquino lodged an appeal for help. Addressing the House, she delivered a
historic speech that managed to sway in our favor the vote for an emergency $200-
million aid appropriation. In the moving speech penned by her speechwriter (and our
current ambassador to the United Nations) Teddy Locsin, Jr., Aquino defended
her reconciliatory stand on the communist insurgency—a sensitive issue in the U.S.,
given that this was 1986—and asked for financial aid towards rebuilding the
Philippine economy.
So Aquino lodged an appeal for help. Addressing the House, she delivered a
historic speech that managed to sway in our favor the vote for an emergency $200-
million aid appropriation. In the moving speech penned by her speechwriter (and our
current ambassador to the United Nations) Teddy Locsin, Jr., Aquino defended
her reconciliatory stand on the communist insurgency—a sensitive issue in the U.S.,
given that this was 1986—and asked for financial aid towards rebuilding the
Philippine economy.