Tew eee PUTTING FILiPINos First The ugly but indisputable fact about the Philippine economy was its domination by foreigners. This condition made a farce out of Philippine independence and took away both its substance and meaning. This was President Carlos Garcia’s blunt appraisal of the national economy during the start of the 1960s, He warned that if this condition persisted, the Philippines would remain, in many ways, a colonial country. He then proceeded to denounce the “hereti- cal and outmoded notion of laissez faire (which he accused the Liberal Party of ped- dling), in favor of his “Filipino First” policy. To propose a completely free enterprise at this stage,” asserted Garcia, “is like sending out an infant into the streets to engage in a free-for-all with the neighborhood gang,” He further observed: “It would be naive to sup- pose that, we, who have only just started. could expect to overhaul that (foreign busi- ness) lead in the foreseeable future under conditions of free enterprise.” This was the reason for the various control mechanisms imposed by the government until such time that Filipino participation in trade and in- dustry could “hold its own against powerful alien competition President Garcia was pleased with the outcome of the 1960 election in which “Fili- pino First” became the rallying cry of his party, the Nacionalistas. For the first time since independence, Garcia said, “national- ism became a burning issue at the polls” and. through the ballot, the people had given their unmistakable endorsement to the na- tionalistic policies of my Administration.” No doubt the president was speaking in the throes of electoral excitement and, apart from the Nacionalistas themselves, no one could say with certainty that their election victory was proof of their nationalism against which, they claimed, the Liberals paled in compari- son, But what was clear was that in the late 1950s and early 1960s, nationalism both in rhetoric and in practice had become the of- ficial economic policy of the country. The war had long ceased to be the driving motive behind the government's economic pro- grams, I was now time to push for a larger Filipino role in the nation’s economic life Stimulating more local participation The National Economic Council estimated that foreigners held 70 percent of the country’ foreign trade and 80 percent of its local trade. Moreover, the share owned by Filipinos included businesses owned by naturalized Filipinos, who were mostly Chi- nese. This meant that the share of natural- born Filipinos was probably smaller than one-fifth of all the trading enterprises in the country. Also, since Filipinos were the over- whelming consumers of trade goods that passed through foreign hands, the ability of foreign traders to play around with the vol ume and prices of goods had an immediate Opposite: For this newlywed couple, the road to prosperity seems to be more quickly achieved by adopting the rural ‘wedding practice of having guests pin money on them as they dance. Inset: Under President Carlos P Garcia term, the government sought to achieve prosperity by making Filipinos ‘own a substantial share of industries.pact on the consuming public. Marcelo ultimate goal was Filipino acquisition of “a Balatbat, a member of the Central Banks substantial share” of the count ident of the — manufacturing. The c ilippines, Commerce | that not sons in the country ams that would enable Filipi- patt in the countrys alue of fo since the regulations on Council in 2 proposal Philippines ry. In approving the plan, the egorically stated that it was the to stimulate Filipino participation in areas cent Filipino-owned) in cases where appli of commerce and industry that were neces- _cants for dollars planned to put up a com sary for the development of the country. The mercial or industrial establishment, Awareofthe capital requirements for trade and ind try, the council also resolved to encour: joint ventures between Filipino and foreign businesses so that Filipino participation could reach at least 60 percent ownership of the capital stock Guests taking over the house Why did the Shell Company's proposal to ie National Eco. gn exchang distribution system as an instrument for sup- porting Filipino capital? From the start, the system of apportioning foreign exchange had worked to the advantage of foreign entrepre neurs. In 1949, before the imposition of im- port control, the government gave priority nomic Council to adopt thi individuals and firms already established in the country, most of whom were foreign ers who had dominated prewar trade In the particular case of thi petroleum industry, three foreign firms, two of them American (Caltex and Standard Vacuum) and one Dutch-British (Shell), controlled the in dustry entirely. According to Jose Locsin chairman of the National Economic Coun 2 virtually perma nent franchise of the domestic gasoline 1 cil, these firms enjoyed nar ket because of the prevailing system of dol: lar allocations and the shortage of foreign exchange. Hence, the NEC created a preferential zed the whole point of using the foreign exchange option for Filipinos. As Locsin emphas allocation was to have a handy tool to help Filipinos enter a field of business dominated by foreigners. Besides, he pointed out, the resolution did not strip foreigners of the rights they enjoyed under the constitution and other laws, such as the repatriation of capital and profits, tax-exemption privileg and parity for American citizens and firms, A week after the NEC passed Resolution No. Philippiny sultants, Incorporated (PHINMA), in part- nership with the Gulf Oil Corporation, to set 4, it approved the proposal of the Investment-Management Con: up a refinery with a capacity of 10,000 to 000 barrels a day at the cost of P46.6 million. The PHINMA Group was 60 per cent owned by Filipinos and the council support for it was in keeping with its earlier resolution. To reaffirm its position, the NEC stipulated that the company had to be owned and managed at all times by Filipinos. If for- eign technicians were necessary, they had to be replaced by Filipinos within five years from the commencement of the project, and the dollar salaries of these foreigners could not come from the Central Bank’ fore In addition, the NEC did not al exchang low recurring dollar remittances for manage- ment and engineering fees, royalties, and technical services. Under Resolution No. 206, the NEC also set an absolute ceiling on the production of all foreign-owned refineries, including Caltex (which was already in place), Standard Vacuum (still under construction), and Shell Spread: People supported Garcia’s «all for renewed nationalism by electing him president in 1960.Spread: Foreign firms controlled the Philippine petroleum industry. One of the three biggest players was the American firm Caltex, whose refineryis shown here ‘whose plan had just been approved). More over, the dollars set aside by the Central Bank for these refineries could not go beyond the amountsallocated the year before in, (1957), these restrictions enabled the PHINMA Group to absorb whatever in- creases would accrue over the years in the demand for oil products From Locsin’ point of view, this open pref erence for the Filipino-owned corporation was entirely reasonable. He argued that at the start, anyway, such preference would have little effect since the company still had to build up its domestic market. In NEC fed as antiforeign because added Locsin, the new resolution should not be vie a week earlier, the council had just approved the concession of Shell. Furthermore, none of the concessions given to the other oil com- panies were taken away by either resolution. ed that neither Resolution No. 106 nor Resolution No. Locsin reitera 204 were antifor eign; rather, they were “simply a policy dic- tated by common sense Limits on foreign ownership Apparently, the National Economic Council was prepared to issue preferential conces sions for Filipinos even outside the oil in- dustry. At one point, it proposed the creation of absolute ceilings on production by all for- cign-owned and controlled industrial firms. Such a requirement would thus have placed these establishments under quotas based on their current volume of business To prevent an uproar from foreign busi nessmen, the council clarified that the limits on production would not apply “where Fili pino capital might be either unwilling or unable to meet the investment require- ments.” In areas where this was the case, existing business enterprises would be al- lowed to expand their operations, although temporarily The NEC could not singlehandedly imple- ment the Filipino First policy. The Central Bank, too, played a role in seeing to it that his policy did not simply remain on paper: The bank implemented import controls that reduced the share of consumer goods in to tal imports from 50 percent in 1949 toabout 2 percent ten years later. Following the Na tional Economic Councils Resolution No. 4, the Central Bank apportioned a greater Inge to Filipi- nos, In 1953, for example, only two-fifths of the rr allocations went t¢ Three years later, the F 48 percent, and by ttle more Filipinos, ppino share rose to 1959, this share had an half of the totalcredit controls, the Central Bank was also able to regulate the pattern of trade and in dustry in favor of Filipino enterprises. Soon, commercial banks began to expand the credit cilities of Filipino businessmen, a chan rom their usual preference for foreign borrowers The dollar allocations of Chinese business: cent in 1957 to slightly more than 5 percent n 1960. But ng Gover nor Andres Castillo explained, these figures as Central Bank Act did not quite tell the whole story terms, the decline in the percentage share of the Chinese was open to questio growing number o! aturalized Filipino citizens to enable them to go around the nationality require: imposed by government controls Since the Filipino First policy made no distinct and natu ralized Filipinos, it was difficult to mea | growth of Filipino participation the ac n trade and industry. Moreover, a sizable sh modities were handled by Chinese traders. of local products and imported com organized and could easily manipulate prices if they wanted to. Balatbat estimated that the share of dol- lars allocated to native-born Filipinos was ac tually very small. In 1958, for example, only 14 percent of the total foreign exchange al- locations for regular quota importers went to them, with the balance divided among Americans, Chinese, Europeans hat the share of natu- and other foreigners. This meai al-born Filipinos was less than a filth of the combined dollar allocations of non-Filipino importers. Left: In 1958, the National Economic Council set absolute ceilings on the production of all foreign-owned refineries, 10 create a more hospitable situation for Filipino ‘companies in thisSpread: Workers haul logs through the forests of Mindanao. Philippine timber was ‘4 1op export earner. ‘nment tried to reduce this in by the shortage of foreign exchange. Also, the Central Bank decided to lessen the quo- tas of non-American foreign importers by half in the first quarter of 1959, by one-fourth in the second qu: nd another fourth in the third quarter. The objective was to provide a living quota” of US$2,500 per quarter to each of the nearly 2,000 regular Filipino im ing purch wo pe ‘os to a dollar, they could (and some did) sell their dollars at the black market rate ¢ P3.50 to P4.00 to a USS1.00 if they did not ced their entire quota. These earnings amounted to some kind of bonus that went ocation, On the basis of their privileges en were thus able to influence some Fili- joyed a quota of tions, One, for instance, ¢ $$750,000 a year Filipino-foreign joint ventures the Filipino First policy, although they were open to the idea of joint ventures as long as these were free of government restrictions In early 1958, Gerald Wilkins Davies and C e Managem of the Philippines: of Theo H. mpany, Far E Limited, told at Association re told that their gimented and that to be compulsory, or the cause if foreign investo participation is to be r not voluntary, they may not turn up wedding the American Cham per af Com Declaration of P in which it asserted the contri ment and the mutual gains that could be deAlso about that ind fore’ made a study of joint partnerships in the Phil ippines, tracin; e,a group of Filipinos ners from Columbia Universit the history of such endeay- ors to as early as the Spanish colonial pe riod. They found that since the imposition of government controls after the isinesses that maintained an interest in the Philippines were those that already had a pre war presence in the country or prewar links with the Philippine market ip were concerned mainly with protect tha these firms ing the markets they had carved out for themselves The group noted, tho over the years rather than developing new ones. Indeed, the rms roup observed, new entering the country for the first tin notably few: The study therefore propose joint ventures as the “optimum arrangement for any foreign group wanting to engage in the Philippine market, especially given the current political and economic climate 4s for Filipino nationalist aspirations, the slumbia study group could not predict whether the positive or negative aspects of these sentiments would prevail in the long run, It did admit, however, that at least dur ing the time of the study, the negative as- pects of nationalism tended to bear more heavily. The study also warned that, encour aged by preferential dollar allocations, some Filipino businessmen were merely taking idvantage of the nationalist fervor to improve their position in the market For their part, most of the member firms of the American Chamber of Commerce state 1 they were not inclined to shift from American to Filipino ownership in the light of the Filipino First policy, In response to a questionnaire sent out by the Chambe: of 181 members) replied that they were maintain slightly more than 100 firms (ou ing their American ownership. Six said they were raising Filipino participation though still with American control, while 18 were moving toward ultimate Filipino control In the face of foreign business reactions, n ob: President Garcia retorted: “It has be served that some foreign corporations, while decrying and fearing nationalism on the one hand, seek to reserve for themselves complete ownership and administration of their over al tice an insidious kind of nationalism, ted instead that if the: open up ownership to Filipinos, even in par firms on the other. Perhaps without re ingit, these corporations th mselves prac- Garcia firms were to ‘the cause of international friendship and un ding wo President Garcia explained that Filipino nced. Id indeed be far adva dersta nationalism was not antiforeign or ant American. It was “simply an honest-to-good- ness effort of the Filipino people to be the masters in their own economic household for exactly the same natural reason that Americans would be masters of the U.S. A Filipino worker demonstrates his dexterity with American-made equipmentSpread, top: Foreign participation in the rice and corn industry would have been phased out within six months, if Senator Alejandro Almendras had his way national economy, the British in England, the Japanese in Japan, etc.” Garcia, in fact, was at the F with the ations and tre careful to point out U policy would be implemented tional obli ppines’ intern ties in mind, inclu Laurel-Lan Just how much impact the Filipino First ing parity rights and the policy had on the people is difficult to Sixto Roxas, a member of the Columbia study group, maintained that if the Filipino people rallie round the policy, “it must be because they have come to realize that in his own country, the Filipino has not enjoyed a pri ority of place—he has not been ‘first.’ ” Roxas Iso believed the Philippine government was being unfairly accused of intervening in the market “because, to begin with, there is no free competition in any market where one or a few large companies rule supreme. Wary of Chinese busi ess AL any rate, Filipino businessmen were com- fortable with the Filipino First policy: At the 6th National Convention of Filipino Busi- men in Bi ne io in 1960, the delegates passed a number of resolutions expressing their support for what had become the Fil pino First movement. But they focused their attention not so much on American or Eu. ropean interests as on Chinese merchants in the Philippines. In one resolution, the busi: nessmen asked the government to take steps to “confine the selling activities of alien middlemen within their storehouses, thereby removing an unfair competition directed against Filipino businessmen. The delegates enumerated the Chinese practices they found unfair or disadvanta- geousto Filipino traders, For example, most Chinese itinerant traders peddled their ware without paying taxes, the implication being (not entirely correct) that Filipino business men had a better taxpaying record. Chinese merchants usually obtained their goods on loan or consignment and could thus afford to sell them without profit just to eliminate competition from Filipino dealers. Once eliminated, Chinese traders would then raise their prices. Also, since they allowed theirsnsumers to repay them in kind or on credit, the market of Chinese merchants in he country was extensive and durable the same time, the convention delegates h econ sympathizers to use the Filipino First Spread, bottom: nist or leftist lea despite the Garc Chines: built up marketing n ilipino First throughout the jiely set them: country. They helped popularize credit sales Statistical Coordination and othe unde ore than half ice and cor millers in dded up to P65.1 millior belonged to foreigners.A City Transformed AUGUSTO E VILLALON Ma. of Manila was bombed, burned, and destroyed as American forces recaptured the Japanese-occupied city in 1945. The annihilation was so close to total that it is said that the destruction of Manila ranked second to that of Warsaw, known as the city most ravaged by World War IL, The grief and shock that gripped the nation when the war ended caused a ‘wound in the Filipino psyche. A ravaged city was not the best environment to hasten the healing of that deep wound. Therefore, all traces of burning, bombing, and bullets were quickly and carefully removed from sight and memory Destroyed public buildings, particularly those lining the length of Taft Avenue, Manila’ principal artery where most of the grand American colonial civic structures stood, were restored to their prewar state as quickly as possible. Beginning with the Manila Post Office on the south bank of the Pasig River, all the architectural symbols of the American regime were carefully resurrected: the Metropolitan Theater across Plaza Lawton from the Post Office, the Manila City Hall, the Legislative Building and the grouping of buildings at Agrifina Circle, the Philippine Normal School, the Philippine General Hospital, De La Salle College, and finally the Rizal Memorial Stadium standing on the southern boundary of Manila and at the entrance to Pasay City The reconsiruction of civic buldings managed to renew, at least symbolically After «d and moved back into public confidence in the government people had rep their war damaged structures, an aura of calm returned to the restored sections of the city. In what seemed a relatively short time, the leaves on the acacias grew back, shading Taft Avenue and other Manila streets as they had before the war. The visual image of a serene, peaceful Manila protected by an American-style democracy was back Intramuros, its walls blasted open, and the Spanish colonial structures within its fortifications totally bombed out, was left with only San Agustin Church standing intact. Through the years that the postwar generation was growing into adulthood, the area remained neglecte , standing as a sad reminder of the war. Intramuros was the nation’s open wound, a reminder of the war, abandoned until the 1970s, when its rebuilding began in earnest However, outside the walls of Intramuros, the rest of Manila rebuilt as quickly as it could. It wanted to forget the war, get back to business and, most importantly, resume its life. The business centers of Binondo, Quiapo, and Santa Cruz, especially the city’s economic and commercial backbone, the Escolia, rose as fast as they could from the rubble. Any structures fortunate enough to still be salvageable were rebuilt. Buildings damaged to the point of collap: were torn down, and replaced with whatever could provide shelter as quickly and as cheaply as possible. Expediency, rather than good architecture, was the key to rebuilding the city after the war, and thus Manila lostmuch of its special flavor, The postwar structures that replaced prewar buildings were hurriedly built, with no attention given to restoring the architecture that had given Manila its gracious prewar ambience. ‘Thus after the war, Manila changed. drastically, losing much of its old character. The loss of the city’ ambiance can be seen as the greatest and most irreparable damage done by the war. The city paid no attention to preserving its ambiance, and thus lost its soul forever. Caught up in the fever of rapid renewal and change, Manila exploded out of the traditional boundaries delineated by the old city center and the surrounding residential areas. In that decade after the war, Manila moved to the suburbs, The government sponsored a series of bedroom developments of middle-class tract housing in Quezon City, an unoccupied area right next to Manila, that had been envisioned hy President Quezon as the new capital for the Philippine Republic. Quezon City was no longer a politician’ dream, but was rapidly filling up with residents, The University of the Philippines relocated from Padre Faura in Ermita to Diliman on the outer fringe of Quezon City. A few years later, the Ateneo de Manila and Maryknoll College moved from Manila to distant Loyola Heights. Wanting to live close to their children’ schools, people followed the schools and moved away from old Manila. Everything boomed. Rice fields were subdivided into the posh New Manila residential area or into subdivisions with meandering tree-lined streets following the suburban American garden city style in Makati. Most of the business establishments moved out of old Binondo to occupy spaces in the fashionable modem buildings that lined both sides of broad Ayala Avenue in Makati, starting the decay and signaling the death of the traditional Manila city center. Although Makati was the development phenomenon of the decade, other commercial areas opened near the new residential neighborhoods to service the suburban. population in areas surrounding Manila Cubao grew from a transportation ‘crossroads in suburban Quezon City into a major commercial center. The open fields that had separated Manila from its neighboring towns disappeared. The city sprawled, connecting with Novaliches and Valenzuela to the north, with Makati, Parafiaque and Las Pifias to the south, and with Marikina in the east. In the 1950s and 1960s, the old city center became unfashionable, and eventually went into decay. Manila focused its sights on its suburbs, expanding steadily into a megalopolis without realizing the need for a master development and zoning plan to clearly focus its direction and growth. Infrastructure could not keep up with the rapidly increasing demands of the population. Basic services degenerated. ‘The quality of life in central Manila deteriorated. During this period of accelerated growth, more destruction was done to the urban fabric that had survived the war than what the war itself devastated. Compared to the development in the suburbs, central Manila remained neglected. The generation that survived the war may not have wanted to return to Manila because of the unsetiled memories remaining there. Although much of Manila’ original identity has been irretrievably lost, whatever was left waited for the postwar generation to grow to adulthood. This generation is rediscovering, Manila once again, and focusing its attention on reviving the city as the psychic center of the Philippine nation.262 Opposite: Supporters of President Garcia's Filipino First policy believed that Filipinos Jailed to progress because ofall the advantages given to foreigners as a result cof more than 400 ‘years of imperialist colonization. Official data on the number of Chinese- owned trading and milling establishments, however, tended to understate the actual extent of Chinese ownership of the industry. In 1959, for example, the Bureau of Com- merce reported that 64 large rice and corn mills and warehouses and 372 small ones belonged to foreigners. According to the National Rice and Com Corporation (Nari) the wholesale trade centered in Manila had 34 foreign wholesalers, Overall, reported Naric, foreign wholesalers in the country numbered fewer than 100. These figures, however, did not indicate the number of mills, owned by dummies fronting for the Chinese Chinese rice traders and dealers, in par- ticular, had distinct advantages over their Filipino competitors. Often, they would ad- vance cash without collateral to small rice growers to control the supply of rice grains at their source. Loans could be paid in ei ther cash or sacks of rice deposited in Chi- nese warehouses. Dealers and warehouse owners collected interest on both the loan and the storage fees. Garcia vetoes nationalization Asa matter of practice, Chinese rice traders bought the rice grains from their borrowers at lower than the current price at the time of the loan, from PO.50 up to P1.00, in order 10 pay for the cost of storage, handling, and other incidental expenses. The Chinese were thus able to have at their disposal a substan- tial supply of rice after harvest, enough to affect, if not command the local price of rice By creating artificial rice shortages, for ex- ample, they could make the price rise. Chi- nese dealers also had the additional advan- tage of having access to foreign (Chinese- owned) banks that sometimes lent to them without any collateral The sponsors of the nationalization bill were therefore taken aback when President Garcia vetoed it. All along they were under the impression that the measure enjoyed the backing of the administration. The Filipino First policy, after all, had been appropriated by Garcia and his Nacionalista party, with the intent of encouraging Filipinos to enter areas of the economy that were controlled or dominated by foreign capital. Not only was the rice and corn industry one such area of the economy; it was so fundamental 10 Philippine agriculture (and the Filipino diet) that to allow foreigners continued control over it would have made a farce of the avowed official preference for Filipinos. In his veto message to Congress, the presi dent explained that although he agreed with the intent of the bill, he found the transi- tional period for the phaseout of foreigners engaged in the industry much too shor, “too sudden and abrupt to afford those affected, an opportunity for readjustment.” When the retail trade was nationalized, he said, the transition period was 10 years (compared with the period of six months to two years in the rice and corn nationaliza- tion bill), and the retail trade did not even concern prime commodities. Claiming that investments in all areas of the rice and com industry (production, milling, warehousing and sale, including of by-products) were con- servatively placed at P500 million, Garcia maintained that too much was at stake t0 gamble away in a sudden withdrawal Garcia further feared that the abrupt shift in ownership would lead to unemployment not only of “friendly aliens who have cok laborated with the Filipino people for cen- turies in building up our national economy” but also of Filipino workers employed in the establishments owned by these foreigners. He Claimed that half the population were directly and indirectly dependent on the industry, Iwo years, he insisted, were not enough 10 enable Filipinos to invest in the industry, bring in their equipment and run thriving businesses, In the end, Garcia warned that rice and com production could suffer asa result, and the dislocation could be so se= vere that it might even endanger the countrys peace and order situation Garcia also considered the impact of nationalization on the country’ foreign re- lations, “In these times of international tension produced by ideological conflicts recently intensified by the collapse of the summit conference in Paris,” he noted, “we need friends and allies and, by the goldenSpread: President Garcia gives a press briefing o explain his new plans for stimulating Philippine business. rule, in order to get and keep friends we must first be friendly. the rice and corn industry “have been with ies, are contributors to our na: tional economy, have mingled and intermar ried among us and many of them were born here.” Removing them suddenly “would be tantamount to an unfair confiscation of their property The aliens who engaged in us for cent Disputing the president Senator Alejandro Almendras, chairman of Senate Committee on Commerce and Indus try and principal sponsor of the bill, refuted each of the president’ veto arguments First, he said, the six-month transition pe- riod for the rice and corn industry to be na- tionalized was “reasonable enough” since rice and corn were not stocked for months or years. The one and two ods for the wholesale trade and for milling, and warehousing would not spell the end of a business future for foreigners in the indus try because for mills and warehouses even afier the transi tion period had lapsed. They would have a ready market since Filipinos who would en- ter the industry would likely lease the exist ing machines and facilities because that cat phaseout peri- tout their would be less costly than. buying them Almendras contended Almendras disputed the pre sident’ figures on foreign capital and Fili- pino employment in the industry. Arguing that Garcia's estin the industry wasan exaggeration, Almendras claimed instead that some P300 to P500 mil- lion of Filipino capital was “lying idle, timid, and afraid to face alien competition, a great portion of which is being hoarded.” By the senator’ estimate, Filipino workers in the in- dustry did not even number 50,000, let alone double that figure Baffled by the presidential veto, the spon- sor of the bill in the Senate questioned the real intent of the Filipino First policy. “Cer- tainly,” Almendras stated. etic much less platform byword.” In his view the purpose of the policy was clear and un: Second, ate of total investments in it is not just a po: equivocal: to give Filipinos prefe nee in whatever field of the economy they were pre- pared to take part in, Especially in the case of rice and com, it would be wrong “to en- trust such an important aspect of the eco- nomy to aliens who owe allegiance to the country of their birth or adopted country.” Buying out the foreigners Some members of the legislature suspected that the president’ turnabout position had something to do with his recent visit 10 Taipei. A few questioned the conference com mittee report. One senator pointed out, for that the transition periods in the House and Senate versions of the bill differed The House measure provided for shorter phaseout periods: six months for retail trade, exampl while the Senate provided for 12 months, one year for wholesale trade, whereas the Senate provided for two; and two years for milling and warehousing, while the Senate, in contrast, provided for three. The final version adopted the time limits in the House version of the bill fect, the President vetoed the House After the presidents veto, Congress length ened the phaseout period to two years al the effectivity of the law (1961) for the retail and wholesale trade, and the transportation and handling of rice and corn and their by products. Foreigners engaged in the milling and warehousing aspects of the industry were ven three years to wind up their business. To assist in the financial requirements o| the shift in ownership of the industry, the Development Bank of the Philippines was instructed to set aside at least P50 million for Filipino entrants into the industry at an rate of 7 percent. The Philippine Na jonal Bank was also required by law to allo cate at least P50 million for the production of rice and corn, including credit for crop loans. One-third of the total available financ ng was for the purpose of buying the assets owned by foreigners and the rest, to finance Filipino traders who would take over from foreigners leaving the industry. The rice and corn nationalization law also supported the establishment of producers’ cooperatives so s to facilitate the access of farmers to loans from the two government banks. An “economic Katipunan” In the end, of course, the effectiveness of the nationalization bill rested on the truthful re porting and registration of foreign interests in the industry as required by law. Econom nationalism was a challenge that could not be met with laws or policies alone, no mat i The laws had to ter how well-intentioned be matched with conviction and the will to carry them out To the question why many Filipinos “fail on the road to economic progress while non Balatbat replied that “the momentum of more than Filipinos jump over their heads, 400 years of imperialist colonization which has placed all advantages in favor of alien: during all these past centw ened. On the contrary, it has persisted to nsult the national dignity In the light of this long history of advan tages to which foreign capital could lay claim, the Filipi tobe,a Coune an Economie Katipunan, > did not have much choice but 1¢ head of the National Economic militant soldier of vised him, Left: A Filipino farmer’ wife and children wear their best clothes for a village wedding The day was a respite from the poverty they experienced the rest ofthe year.