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Chapter 9 Agabin

Martial Law

Martial Law as an instrument for economic development

 1972, Marcos declared martial Law and assumed the powers of the legislature. As a lawyer, he
covered all bases to make sure that the SC or Congress would not be able to struck it down. As
commander in chief, he issued the ff orders:
o General order divesting the Judiciary of its jurisdiction over cases involving the legality of
his Proclamations, decrees or any order promulgated by him or his representatives.
o He cajoled the Con Con into including a provision in the draft of the 1973 constitution
which legitimizes Martial Law. In return, he offered them a sure seat in the National
o Marcos organized “citizen assemblies” which allegedly met to ratify the constitution
o After the 1973 constitution took effect, Marcos issued a proclamation announcing that
Martial Law shall continue to pave the groundwork for a new society
 Foreign investors saw Marcos’ declaration as an opportunity to build businesses in the Philippines.
They predicted that our country would become the next economic miracle in Asia.
 Marcos locked the doors of the House of Rep and Senate to prevent them from convening and to
monopolize the power to legislate. He then took this opportunity to issue PDs to stimulate the
sluggish economy and pave the way for economic development. He hired a group of intellectuals,
to rationalize his assumption of power, and technocrats from the business sector who would
implement policies aimed at making the PH a newly-industrialized country. This, initially, garnered
support from economists and left-leaning intellectuals.
 Marcos declared all public land in PH as Agricultural Land reform area (this got the leftist’s hopes
up as this may pave way to social revolution)
 The World bank, International monetary fund and other international commercial and banking
institutions approved of the new regime: “Developmental authoritarianism” which was the
perceived solution for economic stagnation.
 Marcos claimed to have declared Martial Law to spur economic development through fast paced
industrialization. He promised foreign businessmen the ff:
o Complete access to PH’s resources thru service/management contracts
o Guaranteed repatriation of profits and capitals
o Adequate supply of foreign exchange required for exports, tourism and loans from international
financing institutions
o Unrestricted access to local credit resources
o Creation of export processing zones with special incentives
o Freedom from strikes and work stoppages by labor unions
o Freedom to bring foreign personnel to Ph
 The Regalian Doctrine and the 60-40 rule in the 1935 constitution posed a big problem for Marcos’
vision of development (Although this was amended in 1946 to accommodate americans, the parity
amendment expires in 1974). The SC by 1973 had, by a long line of precedents, placed a strict
limitation on the right of foreigners to own or exploit our natural resources. Foreigners may only
own land thru succession. This doctrine barred aliens from the disposition, exploitation,
development or utilization of all lands and natural resources of the PH. This an obstacle for Marcos’
idea of economic development focused on exploitation of the country’s natural resources.
Constitutionalizing service contracts

 Marcos went around the economic restrictions on foreigners by adding the concept of “service
contract” as a qualifying provision to the regalian doctrine in the constitution. The legislature may
allow Filipinos to enter into service contracts for financial, technical, management or other forms
of assistance with foreign entities for the exploration, development, exploitation or utilization of
any of the natural resources, subjected to review by the president.
 Marcos issued PDs legalizing service contracts for Petrol exploration, mining, electricity
generation, commercial fishing and exploitation of forest resources.

Effects of new legislation

 the efforts of the Marcos’ administration paid off as millions of pesos’ worth of investments
entered the Ph. The explorations reduced the Ph’s dependence on imported products