Assess the Nation’s Debt During the Years

The debt increased fifty-fold from US$599 million in 1965 to US$28.3 billion in 1986
especially to fund the “Golden Age of Infrastructure” and the enormous kickbacks that
came with this. The peso’s value against the dollar plummeted from Php3.91 in 1965 to
Php19.03 in 1985. Inflation soared and the prices of goods which only increased by half
between 1960s (64% increase) more than quadrupled between 1975 and 1986 (358%).
As of March 2022, the general government debt of the Philippines amounts to ₱12.03
trillion ($232,255,149,900)

REFERENCES
https://www.ibon.org/golden-years-the-real-long-lasting-economic-damage-wrought-by-
marcos/
https://martiallawmuseum.ph/magaral/martial-law-in-data/
https://www.nber.org/system/files/chapters/c7525/c7525.pdf
Before the Second World War the Philippines was still a colony of the United States and
its monetary system was a currency board administered by the largest bank in the
country, the Philippine National Bank that exchanged foreign currency at the rate of Php
2:1 USD. After regaining independence, the country maintained the pre-war rate to
follow the stipulation of an agreement (Bell Trade Act, 1946)

Multiple exchange rates were maintained up to the middle of the decade through the
retention of margin requirements and differential fees. In 1965, the exchange rates were
unified at P3.95:USD1, almost twice the target exchange rate of a decade earlier.
However, currency trading was still under tight control and the central bank continued to
keep monetary policy tight to help maintain the exchange rate.

The assumption of a new president in 1966 signaled fiscal activism as the government
started to float bonds in significant volumes and use the fiscal deficit to build up
infrastructure. This, and significant government current expenditures for the presidential
elections in 1969, led to a very high inflation rate. By 1970, the Philippine peso could no
longer be maintained and was “floated” to P6.91:USD1.

The fiscal deficit and resulting devaluation with its attendant inflationary episode and did
not discourage the government from expansionary government expenditure. Political
change came with the imposition of martial law in September 1972. High world prices of
its main exports, coconuts and copper early in the decade and increasing access to
international credit both official and commercial allowed the country to continue its
expansionary fiscal activities