PHILIPPINE ECONOMY DURING AND AFTER MARCOS

The Philippine Economy During and After the Marcos Regime

Maria Christiana Ocampo San Juan

Reading and Writing (Eng 011)

Professor Rafael “Raffy” Santos

November 15, 2019

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The Philippine Economy During and After the Marcos Regime

During the 1965 presidential elections, Ferdinand Marcos triumphed over Diosdado

Macapagal. He would then dominate the country’s political scene for the next 21 years, and

would go as far as being the dictator of the nation from 1972 up until his last year of service in

1986 (Chikiamko, 1998).

When Marcos was airlifted from the Philippines in 1986, he left the economy in complete

disarray. According to the Bangko Sentral ng Pilipinas, the average yearly income was only a

modest $540, which was an insufficient ​₱11,048.4 per person. Unfortunately, the corruption that

took place over three decades ago, still haunts the Philippines until today.

The twenty-one years of Marcos’s rule had three central pillars for the nation’s economic

development, whose strategies were “enthusiastically backed by the regime’s international allies,

who not only tolerated the President’s authoritarian rule, but welcomed it” (Boyce, 1993, p.1).

The first of the three pillars was the “green revolution” specifically created for rice agriculture,

which successfully doubled production of rice, the country’s basic food staple. The second was a

continued reliance on export agriculture as a major source of income and foreign exchange

earnings, while the third and last of these pillars was substantial borrowing from foreign banks

and official lenders (Boyce, 1993).

Although much of the Philippine economy had been disrupted and remained in disorder

after 1986, Ferdinand Marcos - during his first term of presidency - initiated ambitious public

works projects. He had constructed roads, bridges, schools, health centers, irrigation facilities,

and organized urban beautification projects that had improved the Filipino person’s quality of

life, and also provided generous pork barrel benefits for him and his friends (Adriano ​et al.​,
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1987). It was only in his second term that the “optimistic atmosphere that characterized his first

years of power was largely dissipated” (Romero, 2008 pp. 29-31). Ordinary Filipinos, most

especially in urban areas, noted a rapidly deteriorating quality of life, spiraling crime rates, and

random acts of violence from government officials themselves. Often times, student

demonstrators would storm the Malacanang Palace for reform, but were only greeted with

military force and communist bombings, that ultimately resulted in many injuries and several

deaths (Adriano ​et al.​, 1987).

Based on a study done by Bossworth and Collins in 1996, the Philippines stands out as

having the lowest growth in labor productivity since the 1970’s and most especially in the

1980’s. In sharp distinction, Asia’s newly industrialized economies, Korea, Singapore, and

Taiwan, fared remarkably better by the late 1980’s in terms of the growth of output per worker

and total productivity along with Malaysia, Thailand, and Indonesia (The Society, Economy, and

Philippine Development Core Group, 2004). This conclusively led to the poor productivity

performance of the Philippines, which later on rendered into the declining competitiveness of the

country, and “increased vulnerability of Philippine industries to the detrimental effects of policy

inconsistency” (The Society, Economy, and Philippine Development Core Group, 2004, p.7).

However, between 1990 and 2008, the Asian economy was growing at 5.3 percent per year on

average, compared with 2.8 percent in the U.S. economy. Unfortunately, the Philippines missed

the growth opportunities of the industrial restructuring in East Asia, as trade and investments

found their way into Malaysia, Thailand, and Indonesia in the late 1980s up until the 1990s.

Moreover, China posting double digit growth rates attracted substantial foreign direct

investments and overtook all other countries of East Asia in economic performance, and attained
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a dramatic poverty reduction in the 1990s. In addition, Thailand, a close comparator country

became a high middle income country in 2011 leaving behind the Philippines, although it was

significantly poorer than the Philippines in the 1950s (The Society, Economy, and Philippine

Development Core Group, 2004).

Ferdinand Marcos’s 21 years in power tremendously influenced the Philippine’s

economic performance, most especially after the EDSA revolution in 1986. “This period can be

described as one of limited reforms. The post-Marcos political economy looked like an ill

designed quilt by an unwieldy and cumbersome governance formed from half-baked

constitutional tinkering that effectively restored and perpetuated all the ills that hounded previous

administrations. Not even agrarian militancy, rural-based dissidence, military coups, and middle

force distributions could rewrite the political history of the republic” (Romero, 2008). Instead of

the country flourishing and thriving, it instead turned out to have $26.2 billion in debt, and no

means to pay back the lenders(Fabella ​et al.​ , 2001).

In the post-Marcos Era, the Philippines saw four presidents. Two out of these four

presidents were women, one a general, and the other, a movie actor (Chikiamko, 1998). The first

of these four presidents is Corazon Aquino, a housewife who restored democracy in the country.

During her term, she formed a revolutionary government, and provided for a transitional

constitution. This constitution was later on approved and enacted in February 1987, but only

restored the old discredited political status quo (Romero, 2008). Accordingly, the Aquino

administration was viewed to be “weak and fractious, whose economic development was

hindered by attempted coups by the Philippine military (Romero, 2008, p. 34). Administrations

during this era were typically short of vision and long on details (The Philippines Beyond the
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Crisis, 1998). Using a debt-driven development paradigm, which was unsustainable, led the

economy into the clutches of multilateral lending institutions, whose “structural adjustment”

impositions led to depression, deindustrialization, and generally, political instability. This

ineffective governance had a lot to do with the poor performance of the republic, however, the

flawed culture of the citizens whose western “taste and eastern productivity” cannot be

discounted (Romero, 2008, p.33).

No matter the amount of struggles, inadequacies, and failures, the Republic of the

Philippines has undeniably come a long way from the political and economic turmoil that

defined the end of the Marcos regime (The Philippines Beyond the Crisis, 1998). Within 1986 to

1997, the Philippines had transformed into the “sick man” of Asia, to an economy which stands

to recover from the 1997 financial crisis that gripped the majority of East Asia. Gross Domestic

Product, otherwise known as GDP, expanded at an average rate of 3.9 percent from the years

1986 - 1991, and 3.7 percent from 1992 - 1997. Fortunately, the FIES, or the Family Income and

Expenditure survey revealed that poverty lessened to 39 percent in 1994. Poverty incidents had

also declined to 32 percent by the year 1997 (Abdula ​et al.​ , 2002). Despite the economic gains,

there is no longer room for complacency. The same economic data still presents that the country

still faces multiple daunting problems. Between 1985 and 1994, and 1994 and 1997, the number

of families below the poverty threshold increased. Savings and investment rates in the

Philippines remained pale, as comparison to the country’s neighbors, and despite all the hype

surrounding the country’s economic performance, was the second lowest in Southeast Asia at 5.7

percent. (Abdula ​et al., 2002, pp. 119-120)

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Political liberalization since EDSA was marked by a degree of restoration,

transformation, continuity, and change. Term limits forced legislators to build careers at national

and local levels, whilst decentralization measures have distributed bureaucrats from the national

governments, subnational governments, and less frequently, local governments. Despite this,

traditional politicians continue to use their power and superiority to weaken and sabotage

legislations that could reform the country’s governance (Fabella ​et al​., 2001).

Administrations after EDSA restructured the nation’s body politic. Political absolutism

gave way after EDSA to a dispersal of power, creating new players who now enjoy the

democratic space. People of power, such as Cardinal Sin, Ramos, and Enrile, moved into the

center stage together, whilst traditional politicians such as Salvador Laurel and Ponce Enrile

were to enjoy the limelight for only a split-second, before Corazon Aquino and her allies would

cut the ground right beneath their feet (Chikiamko, 1998).

In summary, EDSA put an end to centralization with its centrifugal effects, and to some

extent, unleashed centripetal forces with the empowerment of civil society’s “big players” who

acted as a countervailing force to absolutism. The prevailing difference between the post-Marcos

elite and the traditional elite is that whereas in the past, “the politically entrenched came from the

ranks of hacienderos and the land-based aristocracy coming out of the local elite schools that

were noted for their conservatism,” whilst the new elite were coming from the “professional

ranks and were schooled abroad, who, unlike their counterparts in the Solidaridad days, imbibed

liberal ideas that transcended the narrow sectoral interest championed by their counterparts in the

past” (Romero, 2008, p.51).

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The Philippines today still struggles to keep up with its neighboring countries’ economy,

and is still haunted by the corruption and the injustice that occurred during the Marcos Regime.

Thankfully, the nation has taken great strides to improve productivity performance and better

international economic competitiveness, and continues to prove its resilience and strength, even

through the toughest of times.

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