A Changing Philippines

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A Changing PhilippinesAuthor(s): David WurfelSource: Asian Survey, Vol. 4, No. 2, A Survey of Asia in 1963: Part II (Feb., 1964), pp. 702-710Published by: University of California PressStable URL: http://www.jstor.org/stable/3023578.

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A CHANGINGPHILIPPINESDAVIDWURFEL

The Manila Times has said, While the MacapagalAdmini-stration has dropped Nationalism as a slogan, its foreign policy is no lessnationalistic than that of its predecessor. ' Some would add, if not moreso. This has been true both in the context of Philippine-Americanrela-tions and in regard to the Philippines' positionin Asia.The year closed with the U.S. and the Philippines brought together incommon grief at the death of John F. Kennedy. President Macapagal flewto Washington for the funeral; as both head of state and head of govern-ment, he walked in the front rank of mourners. After the funeral heconferred with President Johnson. In February he had announced hisintention to invite Kennedy to the Philippines, denying that he had anyplans to go to Washington. His projected trip in 1962 had been cancelledbecause of the initial defeat in Congress of the Philippine war damagebill.War damage claims continued to be a sore point in 1963. ThoughCongress authorized payment of $73 million in claims in August 1962,fulfilling an obligation assumed for the U.S. by President Roosevelt, sub-sequent disclosures of intensive lobbying on behalf of large claimants byformer members of the Philippine-American War Damage Commission,O'Donnel and Delgado, raised congressional ire. Senator Long of Louisi-ana advocated killing the authorization entirely. Senator Fulbright pre-sented an amendment which would have paid the full amount to thePhilippine government for educational purposes, not to the individualclaimants. Thousands of claimants in the Philippines, who felt the U.S.governmenthad an obligation to reimburse them, became bitter when theyheard these proposals. Furthermore,nationalist pride was pricked. CapitolHill debate of the matter was lengthy; the conference committee did notagree on a compromise until July. Finally on August 14 President Ken-nedey signed the bill amending the previous authorization.2The amendment permitted full payment of small claims, but not morethan $25,000 to each claimant. Though less than 5%oof the 86,000 claimswere larger than this maximum, the total amountof the excess was nearly$30 million. This amount is to be paid to the Philippine government inlump sum for educational programs and exchange. Sensitive to Philip-pine charges that the U.S. was attaching strings to Philippine money, adebt being returned, Assistant Secretary of State Roger Hilsman ex-

IJuly 20, 1963, editorial.2See MT, Aug. 2, 15, 1963.

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PHILIPPI NES 703plained that educationalprograms could be interpretedby Manila verybroadly.Though Macapagalat one point expressed a desire to use the $30million redounding to the Philippine government for land reform, itsutilizationhas not yet beenlegally specified.Just as the war damage issue was being decided, another economicdispute between the U.S. and the Philippines flared up. On August 9 theU.S. announcedimposition of restrictive quotas on importation of Philip-pine dresses and embroidery. Dressmaking is an industry that employsmore than 300,000 persons on a part time basis in the Philippines, and animmediate uproar followed, with threats of demonstrations at the U.S.Embassy. A 30-day postponement of the quota to allow further negoti-ations took the matter out of the headlines, but agreement has not yetbeen reached. Other economic questions in the two countries' relationsalso remain. Secretary of CommerceBalmacedahas moved to open talkson the renegotiationof the Laurel-LangleyAgreement which allows specialtariff concessions for Philippine exports to the U.S. only until 1974. Hehas predictablyreceived sugarbloc support.3The military bases issue, which was the major irritant to relations inthe late 1950's, was also revived in 1963. Negotiations on the problem ofcriminal jurisdiction within bases, which have been suspended sinceMacapagal's election, were called for by the influential Manila Times.4The House of Representativespassed a resolution urging negotiations toreturn unutilized base land to Philippine jurisdiction.5 The Speaker Pro-Tempore advocated abolition of the Joint U.S. Military Advisory Group(JUSMAG). The joint statementproducedby the Manila Summit Confer-ence in August, which had been called to discuss Malaysia, referred toforeign bases as temporary n nature.The birth of Malaysia, the major event of the year in Southeast Asiaand in Philippine foreign policy, also served to divide the Philippinesfrom the U.S. President Kennedy's reference to Malaysia in February asthebest hope of security for SoutheastAsia irked many Filipinos. Since1962, the Philippine government had been actively pressing a claim toNorth Borneo which it derived from its succession to the rights of theSultan of Sulu. The British had deigned not to discuss the matter untilafter the Brunei revolt in December 1962. Then early in 1963 talks wereheld in London, but they were quite unproductive of any agreement.Britain greatly resented Philippine pressure, which seemed to complementSukarno's konfrontasi against Malaya. No further Anglo-Philippine dis-cussions of a formal nature were held. As the creation of Malaysia-toinclude North Borneo-became more probable, Philippine negotiationswith Abdul Rahmanbecame essential. However, despite the fact that bothRahman and Macapagal are pro-Westernleaders of democratic countriesand are already joined in the Association of Southeast Asia. an under-

3MT, June 18, 1963.4March 14, 1963.5MT, May 19, 1963.



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704 DAVID WURFELstanding proved difficult.Rahman, who saw his main threat in Indonesia,was determined to push through the establishmentof Malaysia; and hewas disturbedby any apparentattempt to obstruct it, especially in consul-tation with Indonesia.Though Macapagal denied in March6 that the Borneo claim wasdesigned to prevent the formation of Malaysia, he did continue to coordi-nate efforts with Sukarno. Philippine-Indonesian cooperation had theeffect of delaying Malaysia, despite the implicit clash of ambitions be-tween these two governmentsin Sabah, or North Borneo. Sukarno's dis-claimers of territorial designs were accompanied by successful efforts tocontrol and direct anti-Malaysiaguerrillas in northern Borneo. In fact,cordial Indonesian-Philippinerelations, across barriers of ideology andalignment, have been one of the great puzzles of the year.The puzzle can best be explained as a combination of nationalism, Pan-Malayanism, and an inadequate grasp of political realities. Nationalismtransformedthe Philippine claim to North Borneo from a matter of pri-vate interest to one of the most intense public interest. Macapagal in es-pousing the cause saw a chance to cast off the tag of colonial mentalityplaced on him by the Nacionalistas in the 1961 election. The Britishby their haughty attitude inflamed nationalist pride. Thus as public com-mitmentto the Borneo claim grew and as prospects of its easy acceptancedimmed, the Philippine President looked for allies and for face-savingsolutions. Indonesia, eager to frustrate Malaysia anyway, was available.Filipinos tended to accept at face value the Jakarta line that Indonesiaonly wanted to assist the process of self-determination n Borneo. This wascombined with a view (shared by very few of the Filipinos' friends) thatpolitical stability of the north Borneo territories could only come fromtheir recognition as independent and sovereign states. 17Such an assessment was plausible only within the framework of Pan-Malaysian unity. Pan-Malaysian has been a minor strain in the nation-alist movements of Malaya, Indonesia, and the Philippines for years. Itgains prominencein the Philippines now partly because of a strongly feltneed to identify more closely with Asia. In 1962 President Macapagalbegan to talk of a Confederation of GreaterMalaysia. By early 1963 theconcept had been clarified to include Malaya, the Philippines, and Indo-nesia, without stress on independent Borneo. While Sukarno proclaimedkonfrontasi, this seemed a most unlikely combination. But after the sur-prising reconciliation between Rahman and Sukarno in Tokyo, seriousdiscussions became possible. A ministerial level conference was held inManila in early June which produced the Manila Accord and supportedPresident Macapagal's plan envisaging the grouping of the three nationsof Malay origin working together in closest harmony but without surren-dering any portion of their sovereignty. At the summit conference in

6MT, March 15, 1963.7MT, March 10, 1963, editorial.

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P H I L I P P I N E S 705Manila in early August this grouping was christened Maphilindo, butlittle was said about its precise structureor functions.The optimism in Manila on August 5 about cooperation in dealingwith common problems among the Malayan triplets had completelydisappeared by mid-September.Riots and mutualrecriminations in Jakar-ta and Kuala Lumpur indicated that Filipinos had overestimated thedegree of understandingreached in Manila and had badly underestimatedSukarno's determination to try to block Malaysia. Despite this set-back it is still the official Filipino view that Manila's role should con-tinue to be that of mutual friend and intermediarybetween Jakarta andKuala Lumpur in order to help rebuild Maphilindo.8 President Macapa-gal's commitmentof prestige to Maphilindois great, and he will not let itdie easily; his desire to be close friend and advisor to Indonesia, balan-cing Communistinfluence, is understandableand commendable.But thereare many factors tending to sabotage the effectivenessof this role. One isthe Filipinos' own lack of an intimate knowledgeof their neighbor's poli-tics.As 1963 ended, the Philippines had no relations at all with the neighborwho seemed the more natural ally. The Federation of Malaysia contendedthat, not being a new state, she would not need to seek recognition butwould automatically succeed to the status of Malaya. This was also theview of the U.S. State Department.The Philippines, on the other hand,held that Malaysia was a new state and continues to hold its recognitionunder advisement. Since September 17, when Abdul Rahman deemedthe Philippine request to reduce its Kuala Lumpur embassy to a consulateas tantamount to severing relations, 9 no diplomatic ties have existed.The Philippines now has established prerequisites for its recognition; itrequires that Malaysiaexplicitly commit itself to the peaceful settlementofthe Philippine claim to North Borneo and agree on the procedure to befollowed. Whether Tungku Abdul Rahman, who has protested that thePhilippines insulted Malaysia by withholding recognition, will meettheseconditionsremainsto be seen.The new Secretary of Foreign Affairs Salvador Lopez has admitted thatthe immediate cause for Philippine withholding of recognition wasdifferent-namely, its dissatisfaction with the manner in which the UNsurvey of public opinion in Borneo was accomplished.The Manila Accordof August provided that UN Secretary-General or his representativeshould ascertainprior to the establishmentof the Federation of Malaysiathe wishes of the people of Sabah and Sarawak. Each interestedstate wasauthorized to send observers. Great Britain, suspicious that Indonesianand Philippine observers would do more than observe, at first allowedonly one for each. As tempers shortened, negotiations dragged on. Notuntil September1 was a compromise agreement reached; Philippine and

8Salvador P. Lopez, The Crisis over Malaysia and the Future of Maphilindo,address at the University of the Philippines, Oct. 4, 1963.9New York Times, Sept. 18,1963.



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706 DAVID WU RF ELIndonesian observers were present in Borneo only the last four days of thesurvey. Shortly after they arrived, Kuala Lumpurannouncedthe new datefor the inauguration of Malaysia (September 16) implying therefore thatthe substanceof the UN survey report was either already known or wouldhave no effect on the decision. The Philippines protestedvigorously at thetime and alleges an old imperialist plot to alienate the Malayan trip-lets.In sum, for the first time since independencethe Philippines' relationswith Asia have become more importantthan her relations with the West.This was partly the result of external events, e.g., the decision to createMalaysia, and partly the outgrowth of a stronger nationalism. This senti-ment has been expressed not only in foreign policy but also in culturalactivities. It is an encouragingdevelopment.A pride in the uniqueFilipinoparticipationfor the first time of Igorots in an IndependenceDay parade,or in the acclaim for the Bayanihan dancers, can give Filipinos the clearcultural dentity whichthey seek.

Secretary of Foreign Affairs Lopez, who must now attempt to resusci-tate Maphilindo,was undersecretaryuntil late July. To understandhow hereplacedVice-PresidentEmmanuelPelaez, former secretary,at this crucialmoment in the nation's foreign relations requires an explanation of therealignments taking place in domestic politics.Emmanuel Pelaez was a warm, highly competent Foreign Secretary anda popular political figure. He gained his nomination in 1961 as the formerleader of the Grand Alliance-made up mostly of the progressive youngfollowers of the late President Magsaysay-when it merged with theLiberal party in 1960. Magsaysay himself had expressed a desire to havehim as running mate in 1957. It is thus natural that Pelaez, his support-ers, and his competitors think of him as presidential timber. So doesPresident Macapagal. The President, despite assurances in 1961 that hewould not seek re-election, now appears to be his party's most likelycandidate in 1965. He has been impressively successful in undermining thepositions of his rivals.

Senator Ferdinand Marcos, Liberal party president, is one hopeful whowas promised the 1965 Liberal nomination by Macapagal in 1961. In1962, however, although Administration pressures brought the election ofa Liberal Speaker in the overwhelmingly Nacionalista House of Represen-tatives, similar efforts were not made to win the Senate presidency in theevenly divided upper house for Marcos. Only in April 1963 did Marcosbecome Senate President and then as a result of internal dissension inNacionalista ranks. Pelaez, who preferred a cabinet post allowing fre-quent contact with the people (e.g., Secretary of Agriculture), was namedto the prestigious but politically sterile Foreign Affairs Department.Macapagal paid little heed to his recommendations for appointments inother departments, although Grand Alliance support undoubtedly providedMacapagal's margin of victory.



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P H I L I P P I N ES 707These efforts to neutralize opposition were gentle in comparison to thestep taken in July, however. The President, acting through his Secretaryof Justice, publicly charged Pelaez, Marcos, and dozens of other politicalleaders with being involved with Harry Stonehill. Stonehill, an ex-GI,settled in Manila after the war and within 15 years became one of thewealthiest,most influential-and certainly one of the most unscrupulous-men in the Republic. He spread a web of corruption which touched almosteveryone in the Philippine political elite. Unlike othersengaged in bribery,he kept a careful record of all his transactions.Within a few months aftertaking office, President Macapagal arrested Stonehill and, before he couldbe prosecuted, had him deported. Ever since then exposes of namesappearingin the Stonehill files have caused political heads to roll in whathas been called the greatest scandal in the nation's history. One of thefirst to be forced to resign was the Secretary of Justice himself, JoseDiokno.In July 1963, Diokno, a Nacionalista nominee for senator, charged thePresident himself with active complicity in the Stonehill network.10Aweek later the incumbentSecretary of Justice released a new list of namesfrom the Stonehill files which included Pelaez and Marcos. SecretaryMarinomaintainedin a TV speech that it appears that Pelaez received

from Stonehill P10,000. The President gave Marino his full backing;Pelaez resigned in a rage. Senator Marcos took similar charges quietlyand remained as Liberal party president. Although President Macapagalat first refused to accept Pelaez's resignation, and then offered him fullauthority to implementthe new land reform act, the Vice-President wasadamant. He said farewell at Padre Faura-Manila's Quai d'Orsay-andbegan to attack Macapagalfor his dictatorial tendencies and violationof dueprocess. He said he would not resign from the Liberal party, but hewas soon campaigningfor the Nacionalista senatorialslate.Both parties held their biennial conventions before mid-April andlaunchedtheir campaigns in early July. The Liberals ran on the Adminis-tration's accomplishments:the deportation of Stonehill, decontrol of for-eign exchange, stabilization of prices (the government's Rice and CornAdministrationsold subsidized 80 centavo rice along the President'scam-paign trail), and passage of the land reform bill. The opposition chargedrising prices, condemned dictatorial techniques, and attacked thehandling of the Stonehill case. The results showed the Liberals to beweakerthan the Nacionalistas had been in 1959, which was a comparable

point in the political cycle (two years after the election of a president).Four Nacionalistasand four Liberals were elected. Only three out of sevenincumbentswere successful. Diokno ran third, GerardoRoxas, son of thelate president, was second, and Nacionalista Senator Arturo Tolentinoplaced first, thus qualifying as a presidential candidate. Vice-PresidentI0MT, July 14,1963.



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708 DAVID WURFELPelaez, supposedly no longer a Liberal by that time, is also being men-tioned as a possible Nacionalista nominee in 1965.Concurrentlywith the realignment among leading personalities, otherless dramatic but more fundamental changes in Philippine politics occur-red during 1963. There were indications of basic shifts in the compositionof the political elite as a result of the continued decline of the sugar bloc.In 1962, Macapagal became the first Philippine president everto launch afrontal attack on sugar barons in politics. And his assault was more thanjust verbal. Such prominent names as Yulo, Lopez, and Araneta wereprosecuted for tax evasion and other violations that had long been toler-ated. Senator Ledesma, despite strong sugar bloc and Knights of Colum-bus backing, was not nominated for reelection by the Nacionalistas in1963. Of course, this does not mean that men of great wealth will no.longerbe prominentin Philippine politics or the recipients of governmentfavors, but they will be different men-more likely industrialists thanagriculturists. Jesus Cabarrus, a close friend of President Macapagal, re-ceived a direct loan of P19.3 million and a loan guarantee of P108 millionfrom the Development Bank of the Philippines, the largest loan evergranted a private establishment by a government financial institution.1Cabarrus s a mining magnate. The sale of governmentcorporations, e.g.,the Cebu Portland CementCompany, and the raising of tariffs also helpsto strengthenthe industrialelite. In addition, labor continues to assert itspolitical role. In Manila the Lapiang Manggagawa (Labor party) nomi-nated candidates for mayor and councilmen, and midway in the campaignthe Nacionalista mayoralty nominee withdrew to make possible a coalitionticket. The coalition supported Robert Oca, powerful waterfront laborleader.Changes are also taking place in party decision-making.For the firsttime the Nacionalistas selected a senatorial ticket from among namespresentedon the convention floor who were nominated by secret ballot ofthe 227-man national directorate rather than by the party's rulingjunta.The passage of a major piece of social reform legislation, the LandReform Code, is perhaps the most significant occurrence for understand-ing the contemporary power structure. Very little was said in the 1961election campaign about land reform, and Macapagal had not previouslyshown any particular interest in the subject. Pelaez, as Senator, hadpushed for strengthening the leasehold provisions of the AgriculturalTenancy Act of 1954 in order to increase the security of tenure. Althoughsome looked to Pelaez for leadership in land reform within the MacapagalAdministration, t soon becameapparentthat he was not in a very influen-tial position. Officialsappointed by Macapagalto head existing agrarianreformagencieswerenot capableof nationalleadership.11 The Case of the P127,000,000 Loan, Philippines Free Press, July 21, 1962, pp.13, 84.



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PHILIPPI NES 709Then early in 1963 President Macapagal took a strong interest in thematter,appointed a committee to draft legislation, and submittedhis pro-posals to Congress in mid-March.The reforms were bold proposals in the

Philippine context; they were more sweeping than those in PresidentMagsaysay's land reform bill. Share tenancy was to be immediately andtotally abolished and replacedby leasehold arrangements.The governmentwould be empoweredto expropriateon petition of lessees all private landsover 24 hectares and to pay for the property chiefly in bonds at a pricepegged to the land's productivity. A progressive land tax was included inorder to penalize underutilizationof large holdings; and agriculturallaborwas given a bill of rights, including an increase in minimumwage fromP2.50 to P3.50 per day. All agencies concerned with agrarian policy,extension, land settlement,public land distributionand agriculturalcredit,were reorganized and coordinated in accordance with provisions of thebill. Magsaysayhad waited more than a year for passage of a weakerbill;Macapagalpushed through the adoption of his measure in less than fourmonths.However, the measure adopted was not the same as the one presented.The progressive land tax was eliminated. Courts handling expropriationcases were authorized to consider other factors, thereby opening thedoor to the possibility of prices so high that tenants could not pay fortheir own lots. The 24 hectare retention limit was raised to 75-still farbelow the generous maximum of the 1955 act. Coconut share tenancy wasexempted from the mandatory shift to leasehold; and land worked bywage laborers, i.e., most sugar land, was exempted from governmentappropriation.Despite Congressional dilution the new legislation is a clear improve-ment over the old. Provisions for financing the expropriation of landedestates are designed to move landowners into industry. Priorities for pur-chase of estates set forth in the law reduce opportunities for corruptpractices. Loopholes for landlords who want to avoid expropriation arefewer. Effective coordination of different aspects of land reform is morelikely. And, if enforced, the high minimum wage for agricultural laborand the maximum on leasehold rentals of an amountequivalentto 25%ofnet yield will substantiallybenefit low income level families in rural areas.The passage of such a bill is a tribute to the determination of PresidentMacapagaland to the skill of its key legislative sponsor, the brilliant andpersuasive Senator Raul Manglapus. Special interests did not emasculatethe bill as much as they liked.A well administeredland reform program could be a major factor inpreserving the degree of social stability in the Philippines and keepingelite politics within constitutionalbounds. A poorly administeredprogramcould, on the other hand, induce agrarian unrest. The MacapagalAdmin-istration will set the pattern in the next two years. Although Macapagal isnow less fettered by obligations to the landed elite than any Philippinepresidentbefore him, his penchant for multiplying political foes could so



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710 DAVID WURFELthreaten his future that his fight for survival within elite politics willdivert his attention from good administration.If he is willing to risk thecontinued falling away of elite allies, he may find that vigorously imple-mented agrarian reformwould be his best election-timeasset. However, nosuccessful Philippine politicianhas yet relied primarilyon this tactic.

Selected ReadingOrtiz, Pacifico A. Legal Aspects of the North Borneo Question, Philippine Studies,II (January 1963), 18-64.Agpalo, Remigio. The Political Process and the Nationalization, of the Retail Trade.Quezon City: University of the Philippines, 1962.Anderson, James. Some Aspects of Land and Society in a Pangasinan Community,Philippine Sociological Review (January-April 1962), 41-58.Rivera, Juan. The Congress of the Philippines. Manila: Ayuda and Co., 1962.

DAVID WURFEL is Assistant Professor in the Department of Political Scienceat the University of Missouri.

Documents

A Changing Philippines