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Philippine Institute for Development Studies

Intentions vs. Implementation of Philippine Economic Reforms Under Aquino, 1986-92 V. Bruce J. Tolentino DISCUSSION PAPER SERIES NO. 94-01

The PIDS Discussion Paper Series constitutes studies that are preliminary and subject to further revisions. They are being circulated in a limited number of copies only for purposes of soliciting comments and suggestions for further refinements. The studies under the Series are unedited and unreviewed. The views and opinions expressed are those of the author(s) and do not necessarily reflect those of the Institute. Not for quotation without permission from the author(s) and the Institute.

March 1994 For comments, suggestions or further inquiries please contact: The Research Information Staff, Philippine Institute for Development Studies 3rd Floor, NEDA sa Makati Building, 106 Amorsolo Street, Legaspi Village, Makati City, Philippines Tel Nos: 8924059 and 8935705; Fax No: 8939589; E-mail: publications@pidsnet.pids.gov.ph Or visit our website at http://www.pids.gov.ph


TABLE OF CONTENTS

Introduction ................................................ i.

1

The Recent Performance of the Philippine Economy

......

.......

......

The Agricultural and Rural Sector ............................. The Agricultural Content of Philippine Industry ................... Agricultural Employment, Value of Production and Exports ............. Agricultural and Rural Employment ......... . .................. Agricultural Exports ........... ....................... II.

The Literature and Analytical Framework

.......

,

"...

. . ...............

The New Political Economy ................................. The Political Economy of Agricultural Policy .................... The Political Feasibility of Policy Reform . ........................ Endogenous Policy Making ..... ......................... Policy Substance Plus Policy Process ................ The Bautista Framework ................................... HI.

The Record of Recent Economic Reforms in the Philippines

11 17 23 27 31 33

. . ..... ...........

.........

The Roots of the Economic Crisis ............................. The Bubble Bursts ....... , .............................. The Productive Sectors ................................... Agriculture as the Bulwark of the Economy ....................... Continuing Rural Poverty .......... ..................... The Marcos Economic Legacy ............................... The Aquino Government's Attempts at Reform ..................... The Analytical Sources of the Aquino-Era Reform Measures ...... The Policy Reforms ........... .......................... IV.

4

.....

34 35 36 37 37 40

. . ..

43

. . .

43 46 49 52 54 54 57 59 63

. .

Political Economy Aspects of Policy Reform Implementation in the Aquino Period ................................

74

The Record of Policy Implementation Lack of an Implementation Schedule

79 84

A. B. C.

. . . ......................... ...........................

Asp_ts of the Policy Reform Record ...................... lnad_uate Capacity for Reform ......................... The.,Influence of.... =th'e Iniernational Financial Community ': " " '":.. '. " ' 'ii' .. • ...

.

"

85 119 . . . 148


V.

The Outlook for the Successful Implementation of Policy in the Ramos Administration ........................... Policy Initiatives, !uly 1992 to March 1993 .... The Promotion of peace ............... Tile Strengthening of the Government's Capacity The Democratization of Private Sector Influence "Empowerment" and the Balancing of Influence Balancing the Odds in International Finance ..... A Concluding Note ..... . ..................................

References

........................

......

Reform 154

. . . ................. : ................... for 12conomic Refornl ...... ..... ; ............... . ........ ..... ...... .......... .........

...........

.......

155 158 163 167 170 172 174 176


LIST OF TABLES

! 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Growth Rates of GDP and Subsectoral GVA, 1981-91 ............ . .... Value and Share of I:'roduction by industrial Origin .................. Growth in Real GDP, Total Agriculture and Fisheries GVA .......... . . . Shares of GDP by Sectoral Origin ............................. Agribusiness Elements in Manufacturing. ...... .................. Business and Employment Multipliers by Sector, Philii_pines . . .......... Shares of Total Value of Crop Production by Crop ............ . ..... Shares of Total Value of Livestock Production by Major Commodity ....... Shares of the Value of Fisheries Production by Major Subsector .......... Agricultural Employment, Philippines, 1970-1991 ................... GVA, Employment and Labor Productivity in Agriculture, Fisheries and Forestry Total Exports and Agricultural Exports ..... ....... . . . ........... Current Account and Public Sector Deficits ....................... External Debt . ; . .................... ............ • • .... Initial Policy Pronouncements of President Corazo,_ Aquino . ............ Selected Economic Policy Initiatives of the Aquino Administration ......... The Post-EDSA Period: An Enumeration of the Major Events . ........... Economic Policymaking in the Aquino Administration, 1986-1992 ......... Major Natural Calamities and Other Exogenous Events, 1986-92 .......... Key Economic Officials, 1986-92 ............................ . Key Officials and their Backgrounds, 1986-92 .....................

5 12 16 18 19 22 24 26 28 29 30 32 45 47 64 69 77 80 112 131 137

LIST OF CIIARTS

1 2 3 4 5 6 7 8 9 10 11 12

Self-Rated Poverty, Philippines, 1983-91 ........... . ...... ........ Losers vs. Gainers, Philippines, 1984-91 . . . . ..... ................ Real Growth of GDP and Major Industries ........................ Shares of GDP by Sector, 1976-91 ............................ Agribusiness Components of Manufacturing, GVA .................. Meier: The Policy/_ormation Process ..... ................. .... Meier's Policy Formation Process Modified ....... .......... . ..... Bautista's Analytical Framework ............... . ............... Direct Effects of the External Environment ............. .......... Terms of Trade ..................................... -... Rural Poverty: FIES vs Constant Rural Areas, 1961-1991 ..... ............ Philippine Structural Adjustment Measures, 1986-1992 ................

6 7 9 13 20 38 39 41 42 51 55 68


ktar.dLt7A993 D[il/L._L.l!t'g_g!_.latlon.

Intentions Economic

please

vs. Implementation of Reforms Under Aquino,

do not quole.

l'hilippine 1986-921

t

by V.

Bruce

J.

Tolentlao

2

Y,lmal _,a kl kara. Mood determlne_ 5late. 3 - Japanese

proverb

lntr lzcl/_on The and

Imperative

development

Presidency

reform

predecessor

After

the

twenty

he could than

was

FerdLnand

leader

fresh

who years

not

challenge

the

Marcos.

the

reform

his

imbued of national

policies

for

of

Corazon

1986.

"l'lle need

reason

has finally

promise

"to make

it had

economic

for broad

become

realized this

painfully

a new mandate renewal

and

was

now clearly

Research

Fellow,

Phl]ll_pine

Marcos great

Institute

again",

apparent

that No less

necessary

for

for I)evelopmen!

l_conomles, 1993. The

Studies.

3 Many.hours of dlscusshm wilh Mr. Shinlchi Nt)zt)e, Director of International Exchanges Dep ariment o[ Iht,, ll)F., gave me a unique window japanese history and policy iiiaking. Ills valmtble hlsighls are aclolowledged. I

was

recovery.

l Prepared during a fellowship at the lns lltule for Developing Ministry of International Trade and Industry, Tokyo, January-April generous support of the IDE Is gratefully acknowleged. 2

and

of Aqulno's

that

nation

to the

political

that he was In fact, part of the problem.

with

growth

Aqulno

for the overthrow

Filipinos

as President, and

and

ascendance

principal

The

fulfill

of Marcos

institute

upon

in February,

In [act

would

leadership,

• the arduous

the stralegles

was obvious

of the l*hlllpplnes

economic

not

to reform

the on


But while growth the

Ill 1986

it was clear

were the ultimate

specific

economic

veh|cles

of rapid

growth

the key

impetus

goals of reform,

toward

development

in agricultural

Yet

implemented

Philippines.

agricultural:based, Its

substituting

Industrialization the

treated

productivity

and

policy

Philippines'

inward-looking

has

(ISI).

was the paul and

fact"

non-farm

country

employment

strategy

recognized

a policy

countries

on

outward-oriented,

economies

and adopted in its

thepath

environment have

as

has not been

strategy kept

the

the pattern

of agricultural-based

generally

Such

neighboring

ISI to more

rural

development

the

sustainable

II), the mld-1980's

development

mix

and

as a "stylized

development

the agricultural-led

statements,

as

ol)je(-live.

already

While

recovery

mr, oh less transparent

outward-looking actual

economic

ultimate

for the accelerated

like the Philippines.

.even

that

literature

in the

tliat

persisted

turned

trade-dominated

official

of Importhas

rapidly

an

from

the

development

strategies. Certainly potentials year)

of the

Philippines'

pointed

Plans

since

agriculture

and

The plans

also decried

the

almost

acceleration

and the moderrdzatlon

of

declared

process

of:!both

agricultural

to the

of bledlum-Term

(five-

produced

output

of the

by

the

Philippine

the

dominant

contribution

4.

The

also

agricultural

particularly goals

of Industrialization,

oblivious

been

recognized

as policy

been

series

have

poverty,

not

The

have

to economic

the extent

have

that

low productivity

always

of the

1960s

rural sector

makers

strategy.

(M'I'DP)

the early

to the relatively

plans

policy

agricultural-based

Development

government the

the

the the

plans sector

generation

and Industrial

uniformly

(Sakal,

1989).

In the rural areas. reduction

of

Thus

of poverty,

the

of employment

production.

|

4

So far, eleven

Medium-Term

l')(.=veh_i_nR,nt Plans

have

been

formulated

' = Pig ew, /D92,_o.M'H)I tmd_:r i reside|it I:idel i_am0s. For reviews the MTDPs until :the 1987-92 MTDP, see Sakal (1989) lind Miralao (1988). 2

b), of

•


The recordof development and povertyalleviation in tilePh|iipl_ines over the past three decades Is however between the official objectives

eloquent

and the actual

economic development policy and strategy, the Philippines'

development

[esllnlony

record

[o the discrepancies

accompll_hn_ents

it is clear that any

of Philippine

Judgements about

have to be made with

care, principally

because of wide ggp_jd_at may be observed between:

• a.

planners/

policy makers

and lmplementors,

+b.

pronouncementsand

c.

planned

d.

policy Intentions and actual effects.

timetables

_. above,

Implementation between

care,

between

to provide In the

reform.

schedules,

some

Aquino

The discussion

since

outcomes

agricultural

and

Philippines.

Chapter

1986-92

rural

program period

process

Implementation

objectives

clearly

result

to

sector

and

2 of the paper

will

in Cl_apter 4.

record

focuses

many

set out

Chapter

our

from the review, with some notes and a general 3

emphasis

on the

of development. outcomes

The Is made

some

information

on the

experience

of

framework

3 will describe activities

on selected

analysis

5 summarizes

comparison

factors

the

Chapter

tile

of

other

economic

we expand

In depth,

on

with some

Since the set of reform

Is large and complex, Illustrate,

administration's

with economic

recent

of the reform process. of reforms.

of the gaps as

1 provides

the

and

explanations

strategy

from

The rest of Chapter

our discussion

government's

of an agricultural-based

policy reform

policy.

learned

observed

of policy

government

reform

implementation

flllltOUll.ced 0ctlD_ns with ilcLuid__il.ctlotl_

comparison

the

and actual

as

record of Implementation

organize

policies,

This paper attempts

enumerated

with

actual

of

from

which

attempted

the

the will

the Aquino

aspects

the lessons outlook

aside

in

of the

process

of

that may be

of the prospects


for successful economic

reform

in the new government

of the PhUlpplnes

led by

President Fidel V. Ramos.

I.

The

Recent the

The the World

PhlUpplnes Development

_. decade real

per capita

1980s

economic

1990).

In fact,

economy

optimistic

- they

. The

things

thought

indicate

little

Stations, themselves were

shrank

Inc.

War

get worse.

tllat people's

optimism

for

reported

as poor the year

of the

to most

averaged

{Chart

the

that

middle a period

in

While

of the

so dismal

and

II experience Opinion

were

1985

1985

4

- the l).

at their

lowest

future.

For

fully

in

Many

the

actually

felt

ever that

the

example,

in the

clearly

population's

- and that there

that they

saw

were

time

tracked

the

and

better.

first

"/4% of

in the

(Intal

198Os

Filipinos

last

economic

3.5%,

of the

most

the

tile 1970s

3.396 In 1981-85

whlcl_ have

tl_at 5695 thought 2).

that

over

respectable

decade

(Table

polls

immediate in July

over

to go was up and for the

1984

spirits

economy

a relatively

third

country

stood at $750 at yeaz--e_nd 1992.

to zero, and was at minus

1), and

be/ore:(Chart

middle-income

Philippine

analysts.

the only way

post-World

just couldn't

outlook

the

through

economy

Philippines'

close

GNP per capita

of growth

gro_h

Economy

as a medium-sized,

1992.

disappointing

Philippine

they

record

the rate dropped

Power,

very

Report

The

has been

Philippine

Is classified

of

Performance

Social

was Just Weather

population were

w_rse-off

rated than

-


Table 1

Growth

Rates of GDP and Subsectoral GVA, 1981-91

"Ye;_i;.... GDP'= -I=l-it-ind-uetrial origin Agricultui-e IIndustry Services Fisheries & I -(1985 Mi#_onP) 1981 1982 1983 1984 1985 19'1_

1987 1988

Forestry I (I985 MilrK)/1P)

347 3.57 187 -7,32 -7.31 3.4;)

4.L_8' 6.25

(1_ I_ll_on P)

3.81 060 -338 -093 -1.88 3.68 "'

3.22 3.24

1989 6.06 ....... 3.01 L, 1990 2.42 0.48 1991' -O,t_J 0,70 Sourco: 199'2NSCBSlall_licolYealbook

S

(1983 Afillion P)

4.65 2.48 1 52 -11.51 -15.75 2.30!

_.37 7155 8.21 1.81 : -3,25

1,92 6 82 5 56 -6,53 -2.08 4.23'

,S_j 693 .

5.97 4,04 = 0 04


Chart 1

6


Chart2

Losers vs. Gainers, Philippines, 1984-91 0

............

50

.

............................

30

..

.................

° ..........

: .... " ....................

"""

-+--- ....

...... IN"'----.-._ iO__.__,._. i .,...

20

........

10

"_ =- ........... "_

.......................

0

--I I_

=

I---+I---I

CO '

03 _

-'J

::E

¢:0 °

.... CO ,.L ::E

I....... CO _

• <:3

I............I.... CO

CO

¢4

,,

I...... OO

I......

I--'

¢T1

13"1

_

Z

I ,_L

Survey Dalea ,

LL..I m.+._,__...Ga!ner.s

- ............

...... "1:-.

7

........

._

'

No Chango-•

.

...... ........ losers

I


Tlle

llealnnlngofJhe

llo[!_X.l_l_2_cJll.

the population

front

"people

A¢lulnc_ was widely

the so-called

power

of

1986 was seen by most cff ihe Flllpln_o i_Ol_ulati()n as the answer to their

deliver

of. the

administration

February

President

surge

of llle

Corazon

prayers.

on the

entry

President

Iong-cltanted

Aqulno

The

of

seen as IIie i>erson voile could

"kleptocracy"

Hope and anticipationpervaded the atmosphere

revolution"

of the

Mattes

reghne,

surrounding Aquino's entry into

government.

2_he period

Roller-Coaster.

were

heady.

revolution"

negative

Pesos)

-7.3% (Table

boomed.

And,

evident

surge

growth

the

fled

1). Pent-up

two

and

Don_estic 1985

demand

with

the govertm_ent

shackles

of crony

to three

activity

In February

of Gross 1984

first

In economic

Mattes

between

to 1989

most

The

from which

r_eal (1985

Indeed,

rapidly

privilege

and

Aqulno

the

=people

power

was ,_,,x)nderful

Product

(GDP)

and

investment

the

In 1988 retailing

the economy

monopoly,

The

from

6.25%

Consumption to free

to see.

recovered

stratospheric

unleashed.

moving

of the

after

1986

to a relatively

was

years

from

the

began

to

respond. The economic the economy relatively

boom

plunged

steeply

until

was sl_ort-llved,

into

decline

1988,

and

however.

As if riding

In 198.-1, abruptly again

droi)ped

recovering

to a minus

a

roller-coaster,

in 1986,

-0.99%

climbing

In 1991

(Chart

3).

Trade Thailand

and Balance

and even

In the Philippines In

1002

Thailand Phlllpphtes

the

has

Indonesia.

In 1982

was 3296, compared

ratio

and

of Pavnl.gllL_.

for

the

Plilllppines

Indonesia

,have

continued

(on tile

both patli

The

Phllipfdnes

Imports _th Ires

and

is less trade-oriented

exports

as a percentage

40% in Thailand grown

surpassed ()Iprimarily

and

to about 60%.

than

Tills

of GNP

,14% In Indonesia.

42')6, while indicates

Inward-looking,

that that

import-

of the


Chart 3

Heal _irowtrl of GDP and Major Industries 10

....................

!:....... --',\......... I

0

t "

_

'lit .....

i}.

t--t----t I'...

ilo

-<P-_--xx-_ o'l

o

xt-i.

"5

-10

_15

..................................

DZO

..............................

u_

GDP

,

-----I-J---

Agricult

,

.

......................

....... â&#x20AC;˘ .....

tire

Flsherie s& Forestry

.

...

Industry

---

<"_ .....

,

,

Services


substituting ISi

Industrialization

by tile

Philippines'

(ISI), even

neightx_rs

"newly-|ndustriallzed

countries".

The

imports

with

a highly

prone such

Philippines' distorting

to Balance BOP crises

ushered

trade

third

crisis

In 1969

precipitated

â&#x20AC;˘and serious

episode

lasted

major

first

savings

years"

Real gross

and the

between

Titus

and

its exports.

controls

did

of the

highly

experience

1960s.

beginning

of the Peso.

of

Combined

War ii. Tt_e 1949-50

prog_'am

1965

status

the economy

the Pltilippines World

of the

the e_tviabLe

to make

devaluation

1963

abandonment

altained

combined

and trade

1970

the

outstripped

devaluation

Investment.

of recent

and

of the early

attempted

crisis

The

1960

In ]962.

A

The most recent

and its control

again

government bureaucratic foreign-sourced consequent

which

climbed

fell

pump-priming inherited

maintenance. borrowing Investment

were

and

during

also quite

savings

required

rate

In 1986

a heavy

burden

the

1970s

10

and early

to 1981

a

not

be

a great

- the

Savings

of

The crisis

to 1596 in 1984.

Aquh'lo

government folio_s_ed only

sustained

by

sea, ice, recovery

Ihal

1980s.

foreign

at 8 - 1096 of GNP.

but savings

of debt

induced

1973

3196 of GNP.

The

anal_,se s conclude

aid assistance

by

dropping

to 1988, could

along

1992).

ltlgh,

1-1% In 1985.

spending

Recent

et al.,

from 2196 to over

t() only

the economy

had

helped

(Lamberte,

saw tl_e national

to pump-prhne Tile

history

businesses

similarly

1980s

savings,

from 20% to 2596 of GNI > bet,,veen

economic

correspondingly

weakly.

National

unincorporated

Investment

Investment

quite

now

tile end of

exchange

decontrol

of 4 - 5%, rose sharply

households

years

since

face of

devaluation.

Savings:and

"good

this

(BOP) crises.

In the era of foreign

led to the

have

I_ave usually

intermittently

crisis

who

policy,

of Payments

in the

massive

inflows

deal of savings

Public

Investment

the and of and was


made possible by such external induced

by public activity

,The A_rlcultural The past

decades,

agriculture

forestry

fisheries

Philippines'

growing

its

will

(APS'I', 1986),

Such

has

been

experience.

like

-that

a shift

shift

industry in 1980

of production

taken

rentalned

tip by

a

share

Yet the

This

South

pattern

Korea Asia

as

the

and

economy indicative

of the

the

areas,

and

and

on the agricultural

sector

of the

Philippine

economy's

such

_hat over

not

the

international

in GDP tlas

to 2296 In the most agriculture

3596, the contribution

recent to

While of services

time

of

sector

of development development dropped

from

five-year

industry the

thas

more

agricultural,

of

services.

of the

Indonesia.

_he paltern

agriculture

those

or of Its recently

with

fact"

not go from

unlike

Talwan,

Industrial,

"stylized

Iow-i_roducllvily

In the rural

is quite

- Thailand

be consistent

seventies did

at about

resided

Through

the agricultural,

of the

would

of 2696 in the latter

has

agricultural.

2195 to 2896 of Its GDP from 2),

from

as

the

and

is, to sl_ifl In structure

originate

observed

Indeed,

was

was

the Plllllpplnes

analysts

average

slack

investment

Moreover,

In Southeast

by some

production

that

(Table

dependence

to Industrialize

rural

half of all employnlent.

between

sector

continuing

is basically

about

neighbors

Interpreted

failure

corporate

et _d, 1992). 5

of Ihe population

NIC neighbors

The been

majority

to â&#x20AC;˘produce

and

raplclly

economy

has provided

has continued

(l.amberte,

and private/

and Rural Sector

Philippine

three

resources,

an

period.

instead

contribution

to GDP rose from

the of 3696

to over 4496 in 1991 (Chart 4).

5 The so-called ('onL,_lLlejltill'LLy H.k'I_(_!2LILe_IS o! lnvesime._ where public Investment "CroWds-ill" pi'ivate ijpcestme_t. A. Chll_ber a|ld l_l. Daiiami (1990) observe ti_at public â&#x20AC;˘infr_astrticture spendil]g complemei_ts ln-ivale invesunent, but public lnvesllnellt In pi'oductlve sectors cro_sLi out private spelldillg. 11


T,_ble 2 Value 'Year

' ' (%) 1976. 1977 1978 ,L, 1979 1980 1981 1982

"

---

1"984 i985" 1986 1'_)87 1988 1989 "" 1990 1991 Sou!ce;

of Production

Share In GDP Agriculture, i Induslry Fisheries & Forestry

....

-_

andShare

(_,_)'

Services

GDP .....

(=,'-)

(Current

Mm P)

27.81 27.22 ..... 26.66 25.53 25.12 24.89 23.35

34,08 34 43' " 34.49 35.36 38.79 "' 39.17 38,8_3 "-

38.12 3835 38 85 39 10 36 10 3594 37.82

22.37

39.23'"

3u_.40i.. 3890 -

24.75 37,91 '24,58 35 07 23,95 3458 23,93 .... .... 34 6 r' _,_, 22.07 35 5i 22.70 35 42 _ 21.96 35.-11_ 21118 34.29 1991,

by Industrial

1992

37.34 ,40135 4'i48

...... 41 4! 41 42 44

-

-' ":

,12 r_.3 88 95 45

Value of Pr0d'uction Ag_'icul|ure. Industry Fisheries & Forestry _(CurrentMill

135272 :''37615 ,'154226 ' 4i982 177669 .... 473"60 217543 55543 243"740 61219 281596 70092 317177 74055 524481 571883 608887

82545

"- 129824 14055-_4 145807

P)

46095 53100 61281 76934 94,545 110309 123154

:

14480

198819 _ =: 200548 _210528

163927 i035/5 ........ 210009 235956"'-262342

S-lailslical Yem.books. Nali()l_a]-_lalisilcai-C,,oofdiri-a/ion

Services

(Curretit Mill (Current Mall

P)

685068 ....._-025.19.......... 925181 --i074280 ' 1238686

lZ

Origin

2:_7398 ;28,i93_327667 377173 424712

Board

P)

51562 59144 69028 85066 87985 101195 --i 19968

141 31

195838 230781 25255'2

2R,3743 334067 387485 461450 550593


Chal t 4

Shares of GDP By Sector, 1976-91 100.00 90.00 IlO.OC) 70.00 60.00

so.oo 40.00 30.00 ZO.00 10.00 0.00

iI

Agriculture, Fishery kJ Industry and Forestry

13

Ill Services


T

Tile lnabll|ty

of the Industrial

services

and

delayed

abandonment

through

the

to

be

agricultural

19S0s

sectors

IS! strategy

196Os,

Thus

only

tmcompetltive.

In

The system

the

not only

whole,

making

strategies

sector

the

has

weak

of Thailand

earlier

over

the

stages

sectors were

shrinking

light, In

agriculture,

has continued

constraints

and

of t.his system economy

has as a

competitive

War

in tile sense and

to domination qtllte

Illat while

growth

of 6-7%

over

296. The

barely

of "I'aiwan

of the

1985.

at

and

South

by the

rapidly.

has

tile Industrial sector

grow, albeit at a low rate of about 396 in 1972 Pesos_(lamberte,

Korea

industrial

Domestically,

Philippines

the agriculture

flsl_eries

t.he agricultural

continuing

occurred

experience

and

While

lagged

the shift

period

forestry

standards.

experienced

but

1984

much

countries

outward-looking,

of tile economies

by agriculture,

favorable

Imposed

the

internationally

of Ule Philippine

Philippines

agriculture-dominated

In a somewhat

thus

the growth

have

of tile development

the

sector

continuation

East Asian

tile

Korean

developing

- and

to

than

Philippines'

protracted

Phlllpph!es'

decade,

rapidly

painful.

Indonesia

past

In tile post-war

however,

and

of the

and

market

adjustment

by ASF.AN and

also dominated

sector

of

difficult

of growtit

been

stynded

process

all the more

year

were

but also

"]'he rate

sectors par

stunted,

in

industrial

has in turn

The

more

to tile

popular

the country's

of protection

much

attributed so

domestic

costs on the rest of the economy. thus

to grow

l_as been

of the and

protected

sector

been

and

seen

services

continued

to

1991).

?

Even

a

agricultural, is a critical

cursory

forestry

examlnatloli and fisheries

segment

on an underestimation.

better

appreciated

:.

and

' ,

.

'..

possibly

...

â&#x20AC;˘

.,,

ways: tile

econonty.

14

Oil

the

contribution

to it cotlclusion

Yet even

fisl_er!eS

of

that

tile

tills conclusion

of agriculture

(1) by sei_aratlng

artisanal

â&#x20AC;˘

data

s,,_lll lead

The full impact

In threemore

also

tile

sector

of the Philippine

based

forestry,

of

may

sectors,

sector may

lm revealed

the coJitribution (2)

tl_e

be and.

of the

through

a


disa_gregaUon

of the output of tile industrial

examlnaUon

of the Pltllipplnes'

$eo,aratlng ,, forestry nation's been

to overall

reserves forced

particularly

sector

forestry,

the

forestry

shifted

of current

value

be reported

of

forest

separately

when

â&#x20AC;˘policy the

the

as

rate

is

of the Given

agriculture

Income

and

accounts

exploitation,

fr_mt tl_e performance

has

shift

of forestry,

between

the

policy

This

growth

national

resource

of the

and

exploitation.

the exclusion

itt adjusting

(3) by an

to negative

dwindled,

than

development

as the difficulties market

with

and

contribution

positive

have

1980s,

greater

The

front

rather

to late

sectors,

Matrix.

products

conservatLon mid-

(I-0)

'l._EL_erle_.

forest

Is consistently

"true"

sltould

has

attd

In the

directions

as well

reflect

growth

to emphasize

tire opposing

Artlsanll

of woodland

evident

agriculture

Input-Output

Forestry.jand

sector

and services

the

to

data

of agriculture

on a.nd

fisheries.

The growth

reasoning

can also be applied

municipal

fisheries

bmxs and Manii_a sector even

same

closed

Bay and

sector

sector fisheries

the

to

fislteries.

of tile

of forestry

on

total

It Is evident

that

the ax'tisanal,

Pl_liippines

have

been

declared

one

two

other

l ishlng

erratic,

with

or

quite

by -18% In 1984 performance

impact

seasons

has In f.'tct been _

on

shottld

thus

(Table also

I_ IS

bays. growth

The

tire

sector coastal

overexplolted.

in particular behavior

as higii

Clearly

consider

i

become

for areas

3).

sector.

JlILI_I_RI" Y 81_

tias

agricultural

Thus

distress, of

the

a different

like

fisheries

as 20% in 1981-1t2 analysis

or

alld

of agricultural

framework

for

the


....

i

Table 3

Growth In Real GDP, Tolal Agrlcullure and Fisheries GVA .......Ye_- .........

GDP

" "I A0ricLiltu_e_ ' Fish,erie'." Fisheries & GVA Fo¢estfy GVA

I

'"

19_ ,98_ 1982F

,

060

1.99

-3 3e

8 21

198.4

-7,32

-0 93

• 1B,7"8

19B5i

-7,31

- 1.el) ......

8, 19

_9_

342

3,ee"'

1:'987'

4'7B

3 22

-10 3-7i

1968

B2__

324

:: 24t _

1989

6 061

3.01

• 199o ,

"" 362

3e-, :: 2o.o_

1,87

_983

'

376_-

i ....

242 •

o.49

1991 -0 99 0' 70 Source: 1992 NSCB Slatistical Yearbook

16

_e_ _

=545

' o _61 2 97


The

A_J'lcultural The

Content

Importance

underestimated

primary°

of

due

contributions.

to

The

pervasive

the

of

contributions

to total

of Industry,

by Itself,

contributed i)atterl_

at least is

5).

This

the

large,

like

not

the

transition

manufacturing

manner,

the

sectoral only share

examination

agriculture

of

of the

Is much

a

a large

proportion,

subsector

to

of

out

to

more

l_ldustry, output

be reported

of the corporatlo[i

thus

over

(Table

have

et al.

1986).

pi-ocessing, S and

be counted

that

many

Chart

output

of

firms

production

may

This

wliich

agrlbuslness

in the total

24%

1976.

the farm-level

multhaatlonai

as lumped - and

since

I)y food

output

because

subsector

manufacturing

(Chenery,

be dominated

large,

subsectoral

averaging

max])' count_'ies

be an ullderestimate, of the

of

the manufacturing

to Industrialization

turJ_s

may

breakdown

that

even

Del Monte

of the

as Industrial,

output,

finding

Is supported

and

and food

Corporation

Philippines

A

exl)ertc_lce

plantations

corporations

Miguel

â&#x20AC;˘ that

31% to 45% of ma_lulacturiitg

operations

agrlbuslness

reveals

on

often

Incorporate

Yet a closer

fronl

Integrated

agricultural

largest

Cola

nmy

a

as %1% of Industrial

completed

Dole and

This

As

tile

figure

Integrated

1991.

6196 to as much

has composed

data

such

4).

shows

contributes

with

Furthermore, which

Added

consistent

successfully

In

Is

reporting

forestry

lqanul'i_clurlllg.

already to

statlsilcs

economy

will reveal.

GrOss Value

1976

I)llilippllle

and

and services

Dominance

period

fisheries

28% ('Fable

Tile

the

the

21% and

glance

the

of

Reported

a first

over

design

as industry

than

In

production.

is between

categorized

agriculture

agricultural,'

farm-level

zgrlculture data

of Phll_d_st_,.

and and

by the

bush_ess

conglomerates

manttfacturh_g. its subsidiaries

B-Meg Feeds,

among

17

observation

These

Include

Magnolia others.

of the Philippines'

are

based

the

international

Corporation, The other

on

agriculture, giant

Campofrlo, large

food and

San Coca-


,-

_

..... .

,,_&,,, _

-_"'o °

"_

_j

q

_. q

_

_ _

q,_.

_#

'_

_

i

I

F---"---" I

L_

I

i

_

i

_

_"

I

......

_

:

_

.

i

I "" o

'_)

m

0 or)

I.JJ

E

_

_ "- _5 _.=__

O o _

_

0 _ o c.J _ _

"

_

,:::) _:::_o

"_ "_. _ '=. ":'_'_

I

o o o,0

q

_

,,_:_ _::;_c_,,_,,_;_,_::_,_:;:__

_

r_

_

r_

_ _

_ o o o o o o o o ,-, o ,'-,o o =,,o °_

i_

_

°° 0 o o _ _ _ _ _ _ _ _,o o'"

18

"

"


.......

"Table 5

.......

Agrlbusiness Elements In Manufacturing Breakdown of Manufacturing-GVA, % Year

Food ,:

Beverages

Tobacco

%

%

%

;--C)lher"Agr]- Olhac Manu. Relaled laclures %

%

1976

31.27

3 98

4,79

11.29

46 67

1977

31.11,

4.37

4,74

11.71

48.0,8

1978

31.15_

4.21

4,45

13,42

46,77

30 30

3 86

4, 10 •

12 61

49.14

15.81

'42.44

1979 . .

=..-:

_

1980

=_J

3494 .

--.

1981

.

,

39.06

,

44,77

.,.

45 90 _13,69 ,_'2,58

1989

41,74

3.41

14.71

3888

3,40

1285

39186

4.19

3.1B

11.20

39.27

4 49

3.46

9 54

37.75

9,79

36 19

354

,

J,

4 81

J

-..

e

4,62 L

11.61 •

source__'Esttmates iiom

4,67

data in the1991

19

=:

36.2B -

,

11.46

37,58

3.30

1251

37, 82

L

4.56

3981

--

3 63

=

2.91 ,•

1991

.....

3,61 • ......

4,75

41.20

39.84

r

,

1988

16.12 .,

4,57 -

199(3

3.33

,

42, 15 .

......

•=

. 39:781_,,, .4.o9

liN_14

1987

_

3.94 =

1986

,

3.77 ,

1983

3,21, •..

36.95

1982

,

3 59 :

......

1985

.

275

-

12.34 ,

_

3899"

,,

1245

N_3CB Stalisl_cal Yealbook

40.32


Chart 5

Agrlbuslness Components of Manufacturing GVA

2O 10

2O '

i


agricultural-based Purefoods

firms

Corporation

Bottlers Pl_ilippines,

include

and

llepublic

Flour

Its subsLdiaries,

Vitarich

A third

melhod

of agriculture

Input-output

(I-O) table of the Phlilppix_e ecof_omy.

the

between

processing

sugarcane

products

fruits and vegetables,

sector

summarized

investments the

greatest additional

blorgan

Morgan's

and

products

lnlerindustry

about

90 percent

aresold

directly

sector. business

levels of business

activity

peso of business

Indicate

multipliers.

sectors...

In the economy.

purcl_aser

crops"

of primary

coconut

- which

and include

This ind|cates

following

by

the additional

l_lorgan

business

In response

Thus

these

to an additional

sectors

sectors

activate

in response

The food and feed processLng livestcx-k and poultry.

are

activity

and nmtural resources

In the rest of the economy

21

raw

The tile food and feed

esllmaled

in tile economy

In the sector.

multiplier,

indicate

from other

In fresh form.

multipliers"

Tlne agrl¢tll!urM

highest-ranking

Thus

of these commodities.

and employment

In a particular

not

recently

estimates

of rice, corn,

to households

processinll

that may be generated

has the second-lllghest

is in fact the

(1991)

linkages

Note that fully 5696 of the "other

In Table 6. These mt,ltipllers

or employment

of the

"... has ._ i_lx,ot;ll role In pt_rchilsil_g

labor, services

- buying

broad scope for value-added "business

of the

since It quantifies

also turns out to be Ihe most Important

production,

The

In this report,

13% of lls Input costs are for transfx_rtation."

agricultural

enormLty

"l'l_ismethod

for the l_lXllipplnes.

from farms and

sector

Pepsi-Cola

Is by an analysis

c_m be shown,

sector has some of the most lml_rtant

For instance,

have

the sectors

and feed prc wesslng

food products

subsidiaries,

of tile sectors but als¢_ breaks _hese down Into lalpuls.

such an analysis

that the f_d

the

to the l+hllil)t_hle economy

of the three mentltmed

only the final outputs

performed

its

Corporation,

of appreclall,_g

contribution

the lnterlinkages

and

and so fortt_.

TJ_e I-0 Table.

more comprehensive

Mills

the to an

Industry

Food arid feed


T able 6

Business

and Employment Multipliers By Sector, Philippines

..... Sector

Business Multiplier

Rank

Employment .Multiplier

Rank

1 Rice

3_41

4

1,41

16

2 Corn

3,24

7

1.33 •

!9.

3 Coconut

3 64

3

1,54

14

4 StJgar

3 .,3..5.

5

1,4,=_

15

5 Oliver Crops,

3.00

12

1,37

17

6 Livestock & Poultry

3.77

1

2,05

12

7 Agrl Servi_ 'ces

3.02

11

1,35

18

8 Fishing

2.95

13

1,59

13

2.47

17

2.42

10

10 M!nlng.

1.60

,19

3,89

5

11 .F. ,ood,/Feed P.rocessinrj

3.75

2

17.52

1

!2 Manufacturing

2,51 .....

16 ..

5.74

4

13 Fertilizer & Pesticides

2 35

18

6.29

3

14 Constr_uclio.n

292

15

3.25

7

15 Ut!tlties,

3,21,,

9

7, "tO,

2

3.24

8

2,48

9

,17 .Ocean Transport .

2.93

14

3.43

__

18 OIher Transport

328

3,19

19 Services

3.06

10

4, 17

9 Logging

,m

,.

16 Rail and Road

=l

....

20 Households

Source; Morgan, 1990.

22

.....

6

. .

2.31

.,,

6 ii

B

11

.


processing otl_er

also

generates

greater

levels

of employment

Em01ovment.

A striking

commodities. 1980s

even

the

production

most

more

and Ex!_tts

agriculture

diversified value

as dramatically

12%, and

that

as the structures

fl._herles

In

16% In I080.

the the

structure on

prt_luctlon

of agricultural

_f

the

dependence

of ai_ricultural

of tl_e value

and

Is

from

ASI_AN nelghl_ors

to 54%0 21% and A further

not

of the

livestock

were 57%,

Philippine

shares

fast-growing

crops,

of Production

has

in the last decade

of

slightly

output

that

of the

shares

of

A breakdown

shows

changed

Value

feature

agricultural-based

traditional through

the

production

have

not

of the Asian

NICs, nor

Phllll_l_lnes. total

of

The

value

of

In 19Âś)1 the shares

respective agricultural

had changed

only â&#x20AC;˘

18%, respectively.

disaggregatlon

of the

value

of agricultural

production

is even

revealing:

Crops. changed

The corn-position

though

remain

to

be

commodities and

the

1980s

paddy,

grew

(Table

coconut,

provided corn

of the value 7).

of agricultural

Tile largest

sugarcane

and

63% of all Crop value from

2,.1% In 1983

crop

and bananas

dropped

_.

slightly.

Shnllarly

concentration

also

livestock

has come

sector 8).

In 1983

in

with

the

to crop

bananas.

in 1991.

pr(_luctlon

Together,

In fact, the

to 28% tn 1991.

barely

these

five

contribution

The contribution of coconut,

of

of corn sugarcane

"

crops,

livestock

to be much

the respective

protlu_'tion

contributors

also grew from 9% In 1983 to 12% In 1991, while the shares

('Fable

than

sectors.

Agricultural

paddy

relatively

there and

poultry

more

dominated

shares 23

has been

of hogs

a tendency

sector.

and

by

Over hog

chicken

toward the

1980s,

,'rod poultry (plus

more

chicken

the

output eggs)


II

24


o

25.


I Table 6

Shares of the Total Value of Livestock Production, By Major Commodity "ye_'i1983

J Ca-,abao =caltle. i_ % % 3,1.6'

j -HogsL" ! %

8,11

Goats ,, iI %

3489

096

.

I984

Dairy, J Chicken % % 000

31.75

-= _ .--

3.38

839!

36 49

.=

1985

3,70

881

1986

3,28

9,66

1987

3.8Z

8.-70 J,

,

.,

42,11

J

_

096

:

7,51 - .....

1 09 _=

Ducks Jl'Ch_cke"Eggs J - DUCkEggs % % %

.

: ,

12 _3--_ ;

0.67

=-

0 14

31.12

6,29

11.911

1.19

0 10

2529

4 78

1231

094

39 61

1 40

0 28

28,80

4 56

10,47

1 84

41.6_1

1.38

0 25

28 74

3 72

10.25

i.40

I,,

1988

3.40

8,37

43 05

I 44

0 24

27.28

3 77

10 60

1 86

-'_;989

3.62

7.08

4841

I 31

0.20

25, 15=

3,03,

9.68

1.52

_99o _4_o._ I ,. 8.9,_ 4_,28 ........ _,!.28._ 0,7 199, 311 5o9, 41,9_ 2o._ Ol4 source:

Estlmates

based

on daln

In the

1991.

26

2_:_7. 2 3G2o ,_

1992 _Nsc[_

statistical

• ;.8 9 . 1._ 5 7o_ _.__1 Yearbooks


were 35% and 4596. chicken

dominant,

col_trl|)ution

In 1991 these

the output

shares

from

were 42% and 4196. caltle

Cilliil_ao,

illld

shift ill the slrtlt'lure con_merclal

and

ixlcreased.

In

aquaculture

fisheries

alld iiItlnil'll_ill aquaculture

1983

lishetles

the

have

respec'iive

('l'abie 9).

falleil,

shares

while

lind dll)Pllt'd

small.

The conlril)utlOllS

tllal (if il/iUiliilllure

of cotnmercial,

were 29%. -lq% and L:I%. In Iqgl

fisllerles

Tile

and ih,est_'k, there lilts been a definite

of the fisheries sect(Jr

arlisallal

hogs and

have drc)pped.

dLic_S

of goats, dairy and duck eggs Ilave renmil_ed quite

Flsh_.Fies. 17nllke tile cases _if cl,ps

With

t)f ilas

municipal

and

shares cJf t'{imlnercllil

the

to 24% alld :17%, while Ihe co|lti-ibulioll

oF

had risen to 39%.

,Agricultural ,:and Rural Employlllent Over the past two decades forestry)

production

and employed absorbed

contributed

Close to one-half

44% of to total hlbof

population has

has

seen

growth,

population.

the stunled

agricultural

the

agricuhural

about

(along

one-quarter

of the econmu)',

forced

to shelter

has thus stagnated

per capita agrlcuhural

10).

and

output,

In 1991 the sector

with tile relatively

force. Combined grmvth

with fisheries

of all economic

of the lala_r force (Table

sector

I.abor productivity

Real (1985 Pesos)

primary

rapid

paitlcul.uly more

rate of

of industry,

and

more

and even declined

of ihe

(Table

11).

GVA smls P16,528 in 1980 and was P15,559

ha 1991. A basle opportunities agricultural however lhis

indicator

of the

for employment

economy's - !'Jarticularly

to non-agricultural

not occurred

phenonlenon

mport-substltuthag

tllen

country's

ixldustrhdtzatlon.

is its capacity

In being

industrial

in tlae l_hilippines. to the

health

Ranis and Stewart

('oxllllHxlng

2t

to shift

occupations.

This

(1989)

entrapment

The ISI strategy

/

able

to

Ilas created

generate

labor shift

from has

llave ascribed

In a strategy a dualistic

of


T_ble 9

Shares of the Value of Fisheries Production, By Major Subsector

'

Yeai-

I co,,_m,,,c,_,,, .... Mu,_,c,pa,l_I Aqu,_,,uie %

%

1983

28.91' 1 ....

â&#x20AC;˘

,

'

'

22.53

?_4,46

5026

2528

198,5

25.42

48,25

28.33

1986

25, 10

47.02,

27.88

24.80

46.16

2904

26.29

43 13

_

.....

1988 '

48.56 ,,

1984

1987 . ==

-

4,

%

1989

"

'''

''

--i

30.58 ' '

24.3_

3o.49!

36._2

1990

23.97

39.191

36.84

1991

23.79

36._

39.23

Source: Estimates on"_Jalain 1991 NSCB Slattstical Yearbook

.28


Table 10

Agricultural Employment, Philippines 1970 ,. 1991, In Millions Y_/"

Total Employm enl _

AgriCuliu'rai Sector + EmlJloyllieNt Number % of Total Employment

1970 1971 1972 1973 1974

10,73 11,58 12,09 12.71 13.08

5.61 5,61 6,34 6,73 7.07

52.30 48.40 52,42 52.99 54,03

1975 1976 1977 1978 1979

13,44 14.45 14.55 15.74 16.73

7.08 7,60 7,28 8.12 808

52.64 52.59 50.02 51.58 48,27

1980 1981 1982 1983 1984

16.79 17.63 16.73 18.54 18.55

8.67 9.05 9.31 9,63 9,55

51.65 51.33 51.73 50.96 49,66

1985 1986 1987 1988 1989

18.97 19.63 20 80 21.50 21.85

9.74 10.20 9,73 9 92 9.90

49.44 49.77 48_53 4678 45.18

1990 1991

22,53 2298

9.98 10 03

44,94 45,0l

SoU_CO: 1991 StaltslLcal Ye_utx'_ok,Nahon_ Slalisllcal (_ordmaling f.3oard


Tablo 1 1

GVA, Employment and Labor Productivity In Agriculture, Fisheries and Forestry Year

....

ne,ql AgdmJll,,_l ' }TmpIoyment In ('_fossVnl|le Ad_l_3'(l A|)tlc;HlltJl_. Fi._ reties afld Forestry

i at_r P:ndtJctivity

i

"

,

1980

143295 00

_367

. 16527.6"8

1981

148749 O0

9 05

t6436 35

1982

149641 O0

9 3t

16073.15

1983

.,1445_86.00

1984

143247 OO

9 55

14999.69.

1985

1405.5.4.00

9 74

14430 60

1986

.iJ

.....

, !45.72500 ......

9.53

10.2_0_..

â&#x20AC;˘

15014 12

14286 76

1987

150414.00

9.73

15458 79

1988

155292 (30

9.92

156.5,444

1989

159964 OO

9 90

16157 98

1990

160734 CK)

9 98!

16105.6 !

1991

t61859 O0 , ,

CB Statistical Yearbooks

3O

-

tO 40

15558.88


economy growth,

where

the

modern,

but not Jobs. Such

Metro-Manila

area, which

lllgllly

development

half of all of manufacturlng's

that

the Philippine non-farm

economy's

flourish

with

AIzrict,ltural

agricultural

;llritulture

hi

- lexllles

in the

of the country's further

abundance

rural

:lctlvlties

some

concentrated

(1990)

greatest

to nurture

and

however,

GDP.

observes

of labor

non-farm

- the

enterprises

Ihat primarily

multiply

-

and

growth.

serif.n" t¢l the ecoliollly

lli¢._ past

two decades.

exp(irts

lias howevttr

were d¢lilllil_lill,

lhlil

lil tile liiipol'l and lilU-iiitlllS. value.

these ar_ diila

Is hiw-llll_lil. Titus

(_heiiih'ai

Ih¢? lliillllil

COlllOlll "l'ilestt

(if

feriillzt?r

is iht

iJl I}lilliillllii¢_

t'illillll')"S tlUllilll.%

llirllcSl

rcllilll'tt

at of

greail),.

accoulltilig

of iii=l)Orled

i'l)liltiil

_ii)' lilt#

IlllUlilfill'iUli2tl

changed

of agriculture gr(iss

has remahied The proporliofi

with its gi'flss vlilue

In 1991 Ihecoiiiribuilon

hi general,

least 6096 of Ihelr

GDP over

the cotllilly's

exports

has Io lie lnlliOrlt_ll. l'omi]ared

=t tlllrd

B,iutlsta the

of tile iigricllltural

of total gross exports. Note

wlth

productivity

of total

products

1970 agricultural

1_-).

sector

been

has provhled

Exports

olie-quarter

agricultural

value-added.

sized, htlxn'-Intensive

The ¢cliltrlbuthlil about

lias ftirther

sector - was not enabled

the small and medium

sector

now itct'¢)unts for _llllnlt

and

rural

¢al)ilal-Jntensive

In

J'or 5696

was only

1796 {Table

llipuis,

PhiiiptMne

lllai¢n" li=.l_lil which illlrtculiure

l_'x|l(lll_i

ill

lli=llorled

i_r(iti$

ililluts

is low, lerllis of ill


--

.

qL

"

Table 12

Total Exports .... Yeai; .........

and Agricultural

TolalExpons

..... J -' Total •Agrlcullural ....J "---AgdcOlluraJ--

(FoB Mill US$) 1970 1980 1981 1982 1983 1984 1985 1986_ 1987 1988 1980 '1990 ' 1991 Source: 19_)i

.

I

Exports (F-(_B Mill US$)

1142 57BB 5720 5021 5005 5391 462g

'

Exports

Total Exlx_rts J Exports as %o1 ' =,_'

644 ..... 2262 -. • . 2502 _L 2060 1966 2107 .... 151'0

4842 1473 5720 1582 ..... 7074 174"_ 7B21 " 2392 E}'1'86 14i6 • . , .=, 8840 1476 1991 I_lSCi3"Stntisllcal Yearbooks

56.39 39 08 ., 43.74 41.03 " "3g,28 39.08 32.6,;

,

_

3Z

,

J

..

=.

30•42 27.66 24 61 30.58 17.30 16,70


II,

The

Literature

Analytical

Another more

often

of the age-old than

(analytically) many on

imports

across

Yet

marketing

has

levels.

much

research food

and

often

targetted

rapidly

low,

and

even

impose

prohibitive

will I)e borne

have

I_t:t_ttdevoted have

allowed

government

to

taxpayers.

and/or

enterprises,

be

the

unsustainable

bc_osled

fartners

of

ill developing

to JfTigllli()n,

perlilanelitly local

the

and

i_ubiic

good

cost

Ill productioll high

same

tile

COlillliOIl

lntei-ventJoJi

such

to the

by far fewer

ave

are

tariffs

of tile l)iotected

from

are

tltere

lilt: price

financed

maintained

that

provided

to dllngerously

would

Indeed,

COIISUIIIeV$ tO bear

goverflmeJtt

could

in ways

subsidies

l_arastalals

set lip lind

wltk'h

raise

do governments,

to act

often

subsidies

mounted

allloul|l$

techliology

prices

choose

wheat

all

agricultural

have

smaller

lind

f()tcing

is: "Wily

sub-optin_ai?"

"l'ht2 tariffs

the cost of such

Governments

when

producers,

cost less, attcl that cost

food

where

and/or

governments

efficient.

eCOtIOllty,

will certainly

countries,

kept

domestic

provided.

Similarly,

policies,

behaviour:

will be move

protection budget

of such

entire

In ecoj_omics

to be economically

to protect

the

Framework

questions

choose

considered

examples

producers

not,

and

even

rural

[()acts,

productivity, internationally

competitive. Another clung "rural

major

example

to import-substituting and

agricultural

Is a particular

substituting

policies

have

been

and

tenacity

Industrialization

sectors

lqllllppines

is the

- often

example strategies

3?

which

strategies, most

of a case have

reformed.

their

with

Iingered

governments

to the neglect

productive

In which - even

the

of

resources. effects

tltough

have their The

of Import-

officially

tltese


The New Political Economy Of course

it is known

Implementation complexity

of

that

economic

policies.

of understanding

and rules of conduct. "...polilical

economy

in their analysis, for analysis

Is simply

problenl

have chosen

and political

at knowing delimit

lifforts

to explain

Increasingly

the economic

of the effects of and interaction and rapidly-growing and

body of literature

strategy,

particularly

and

on the

in the context adjustment

of

what

experiences

- while new, tackles ti_emes of economics

that they

"The

'new

neoclassical

experience,

the dichotomy

of governme,_ts

that

consistent and

S

i

i

in consideration

economy

of policy

of

making,

stabilization

countries

has always

.

"

Srinlvasazl

agents

|

"

the new political

economy'

.

bce_

This

behave

an action

economy

one of the great,

rationally:

I

define that

over the outcomes whose

outcome

interpreting

Frank llahn

as

the

it narrowly

by

is, they

have

of their

actions,

is preferable

: _ "

(1991),

as:

defined

(1985).

and

body of

the stale in the economy.

Is often

of I'_)lllics...

a large

of development

macroeco_omlc

of the developing

theory

set of preferences

they choose al

political

between

l_ave now produced

determinants

- that of tile role

defined

economic

the axiom

i

has

coven

Yet tl_e denmnds

/

T. N. Srlnivasan

thai

Is not know-able. "5

developme_t

factors

rece,_t

which

patterns

to comment

Ihe factors

on the political

a topic

the

untenable.

political

the

tile

and consequently

factors as given.

behavior

with polllical

and

been

the embedded

of l_ternatlonal

science

always

led some analysts

to strictly

understanding

formulation

has

In the post World War II period, has rendered

economics

continuing

have

the pretense

tile

and behavior,

and treat social and political

and

particularly

literature

Tile

affect

such alld determinhlg

Such difficulties

Thus most economists

structural

factors

of political and social phenomena

great difficulty

policy

political

a

to the


outcomes

of" other

constraints

within

restricted behavior

actions which

they

they act...

analyses

from

the perspective

the NPI] literature

of the ooiltical

feasibility

feasible,

'political

given

ecoaomy'

the

will be

1991)."

Given that tile field is growhig

in general,

also

to analyses that are based on the postulate of rational by all agents Ill economic a_ld political spl_eres

(Srlnivasan,

NPI;. literature

find

so rtlpidly,

it is useful

of its ¢levc:h)pme_t

l_as progressed

econo[!ly

to briefly

wllhhl the recellt

through

three

of agl'let_ltura_,

of t)oll_3r_gjR/_Q_lts, alld ii1()$l rereilll)',

;-eview tile decade.

major-phases6:

focus on lh_polilical

the

h|vesllgillion

of

eLld()Rell()lJS

12_iLLingii_S.

:]'he Political .Economy of ARgifAIILRrilLEc2IIty. axlalyses of tile i]()llth'ill

Tile

to explain: subsidize

(a)

less developed

tileir agrlculttJral

sharly differing the political 1988),

why

u¢'()n(Jmy

coutttrles

sectors,

of: (a) taxation

(b) the transition

countries

(Anderson

developed

countries

tax, while

Sucll research

in developing

from taxation

and ilayami,

policy

rix.st

to protection

countries

Intervene

at

led to the literature

on

countries

(Krueger,

et aL

In the newly-industrializing

1986) and (c) commodity

like the U.S. and some

altempled

developed

and (h) why do governments

levels across cornmodltlesl

economy

()1 ilgu'l,'ultural

price support

l!uropean_ coulltrles

((;ardner,

In the 1987;

PeUt et al., 1987). The political-economy have, lxl general, been

commonly

employment, agricultural

6

utilized

explanations

the "stylized

Observed:

the

This summation

in the literature

facts" of the development falling

a rising share of marketed production,

and Interpretations

sl_are surpluses,

a fall In tile relative

relies substantially .:LS"

process

of agriculture Increasing

incomes

in

Ll_at have GNP and

fixity of factors

of farmers,

(m de Janvr 3, and Sadoulet

a declining

([992)

in


share of food in consumers'

budgets, a decreasing price elasticity of food demand, a falling

elasticity of wages with respect to food prices, a shift in comparative advantage from agriculture to industry,

more agricultural diversification,

lesser reliance on trade taxes and more on direct

taxes, and an increased capacity to decouple incomes from commodity price supports.

The PQlitical Feasibility of Policy Reform As the inefficiency and costs of existing policies have mounted, the inevitability of reform and of the difficulties met in initial reform efforts have led to the development

of the literature on

the understanding as well as the determination of the political feasibility of policy reform. analyses

have been expanded

in the examination

of reform

in relation

These

to macroeconomie

stabilization and structural adjustment (Nelson, et al., 1990); the transition to import-substitution to outward orientation

(Magee, et al., 1989), and the shift from centrally-planned

to market-

oriented economies. The above literature include:

(a) more

redistdbutive

indicates some of the determinants favorable

macroeeonomic

economic

of politically context

successful

for reform;

reform

to

(b) smaller

effects of reform; (c) appropriate sequencing of reforms, with experience pointing

to the following chain: exchange rate adjustment and inflation control, followed by trade and tax reforms, then financial liberalization and public sectorâ&#x20AC;˘ adjustment, and finally productive sector â&#x20AC;˘reforms;

(d) packaging of reforms in mutually-reinforcing

sets; (e) the greater coincidence between the distribution distribution polarization;

and thus more politically-palatable of the gains from reforms with the

of economic power; (f) a high level of state autonomy; (g) lower levels of political and (h) greater social consciousness.

36

"i


l_ndo_enous

Policy Making

Some advances the result

have also been made in Ihe modelling

of hlleractlons

"in U_ls re.text,

I)elwee-

tile view Is [aken that 1992).

game-theoretic

developed

frameworks

the theories Tabellinl,

of governmeat

provides

the opportunity

the economist

approach,

have partaken

choice

literature.

iu_ policy

making

of

of the

Included and

(Persson

its own agenda.

makers (Chart

the policy

is passive. aPl)roat'h,

Policy

and

and Implementors, 7).

It Is clear Top

Ill c()ntrast,

or

In the soclety-celitered

Is dependent

()n societal

views government

as possessing

are Influential.

by making

experience

government

officials

l_ave to be lnlplemented,

:tlld

ill

Is del)e_lclex_t upon

of the policy maker and

the• latitude

lobbying

eFfoa'ts dix'ected

Influence

of policy from

the "society-centered"

and technocrats

from

these

and

forces

a distlnctioxi

between

and also of tl_e forces at work on these separate

whole.

of the modlFicatlorl

tile various

Meler's representation

maker.

choice

adds to Meler's relwesentatioll,

homogenuous decisions

process.

but also to examine

The state Is autonomous,

This paper

6) to depict

not (rely the linear progression

forces that bear upon

tile gover_m_ent

(Chart

in tl_e decision

to discuss

The state-centered

extent

outcome

m_der IobI)yluig by l,_terest groups,

and (:redlblllty

to a policy outcome,

"state-centered"

actors

tile public

an illustrati(m

that bear on the policy maker

policy

by Ih_ Ix)lli:y.

Plus Policy P[.o.£._ss

Meier (1990)

Inl}ut$.

I.

as

1(_)90).

Policy Substance

provides

affected

Ihus_

'Fhese nllodelllng e[forts

I)ehavi()u

of time consistency

;llld

"l'c)llcy Is itself tile endogenous

a social process (de Janvry,

are the theories

+

I)OIIc)'JlliLkt:fS

of policy making

policy.

3_

of the

that

governments

do make

policy

the l)rocess are olle_l the

co_lsistency

lml}lementor,

specifically

and

are

not a

decisions,

but

mcxlified. 'File

between

the views

olx tile success

at the lml)lemexltors

of

•of the


The Rautlsta Framework Bautlsta

(1992)

presents

strategies

In support

experience

or tile Philippines.

9,

witli

the

l'ormer

Incorporating Bautlsta's ret'orm

tile

showing

lnnuences

framework In the

of rural

a framework development, Bautlsta's only

and

framework domestic

of the international

to organize

Philippines.

Ihe

for

a,ld

discuss

tile

analysis

applies

the

of

policies

framewok

and to

the

is illustrated

In Charts

8 and

influences,

and

latter

economy. Ihe subs[antive

This

the

paper

areas

adopts

of policy


41


â&#x20AC;˘.

,-4

X

4J

c-

0 :>

.el

42


III. The

Record

of

i(ecelll.

In

It look economic witl_

at least

hardship

five

years

so-called

"I_DSA people-power

the crisis

were

in the

tile early

1970s

and

culminating

oi_Posltloti

in

poIlik'i_lll

nlomentum, for

n_ismamLgement revolution"

government's again

enough

frustration,

government's

l,I li|e

February

Rflforms

Philippines

for

and political

the Marcos

1985.

the

E¢ononlk:

1986

and

avarice

[o the

l')8Os. was

The the

by

population's

of February

responses early

tile

fueled

continuing

dissatisfaction

to coalesce

into

the

1'38(,. 7 The beginnings

of

inlernational

{fit.leer

oil shocks

of

for the eye, his of late

assassin:ili(m

of

tile

popular

l_elligl_o Aquh_o Jr. lit AUgtLsL 1')83.

The Roots of the Economic Crisi_ The government sevenUes, first

late

its it struggled

internatioxlal

threat

of food 1971 and

difficulties Law

shortages

as

period

OPI_C's cartellzaUon government

to provide

the

mounled

whal

ecoilonly

Io comhine

raiicmale

and

it called

buffeted

b), typhoons

the economic his

declaration

(_f Martial

to llje

pressures

induced

o1" a food

shortage.

the

Ihreal

a set of "counter-cyclical

the

and political

|_rog|'am

of

by

through

it broad

response

pricing

for

ill tile early

uil m lhe wake of tt_e

was also

was devastaLed

eslal_lishe.d

governme_lt's of oil

verb! expensive

harvest managed

lie

currez_[ accotsJ)t deficits

domeslic

adroitly

1972. the

The

sudd,_nly

as lhe rk'e

1972. Marcos

of the

to run large

_o afford

oil shock.

h _. September

expenditures

started

expansi(mary by the

maneuvers",

The in

,t

ternls of a sharply-Increased

fiscal

and public

lnvesm_ent

program

(World

Bank.

1992).

7 "EI)SA" Is tile popular a¢'ron),m for I_pifan/o tle los Santos Avemle. the ring road enclrclhlg tile Ill'ball |ll¢)ller of _.l£._ll'Ol_Itllllii.l, li[')SA was tile l'brhl(-ipal site of tile clenlo|Islratiotls |[i oppositlon to l'resicletlt Marcos. 43


_l_en 'official

Growlh.

and comnlerclal

projects.

IIorrowlng

lleutralized

during

opposition

to be a good credit "petrodollars" decision that

to

The

rate

Inflows

Jlank's

risk.

required

poll(y,

Ileavily

from

both

for Ille program s and

L'asy. Mal-(:os has effectively

.'llld

the Philippl|_es

(inatlclial

market

was perceived

was awash deposils

of

gains amassed by Ihe t}I'I!C ¢(_untries due to their sudden The International provided

reserves

financiers,

imbued

loans freely,

h l tile l)hillpl_ine

externally-sourced

lallel'llatlOll;ll

was quite

The internalic)nal

riot default°

of Increase from

for Ih_ flmuwing

the i_e|'lod

raise oil prices. could

borrowed

to governnletit

- the large

coul_trles

annual

sources

The government

Between

goverxmlea_t's

loans

were

(..veil lllt'rl;.15c'd

also

witl_ a belief 1974 - 80, the

sl)endlng

averaged

so large

thai

|)ulWet, Ii 1_)74 alid

tile

1979

2296.

Central

(Bautlsta.

1987).

At first the

glance,

mld-1970s

overall

unexperienced public

heights

spending,

transforming

and the

traditional

unstable

account countr also

core

deficit

of 6 to 7% in real

terms.

construction

to pay

to

of

plailipl_ine

a

more

off and

to the extent

to borrow refinance that

gover,_ment aill'lUlll

worked.

surged

Private

to

diversified

hitherto-

investment

Manufacturing exports

Through

from

followed

grew one

•structure

rapidly,

dominated with

by

significant

content.

by the

operating

boomed.

aggregate Indicators

as well as the public

7 continued

borrow

per

structure

however

by the

growth

non-traditional

Masked

adopted

economic

commodities

manufactured,

very

the strategy

not

accumulated

tile ratio

deficit only debts.

of the country's

,14

statistics

of economic

sector

heavily

growtli

of•the

period

management.

(Table to finance

The

13) mounted new

debt

the

current

rapidly.

The

expenditures

The government external

were

continued

to GNP ballooned

but to


,,

m,

Table 13

Current Account and Public Sector Deficits (% o! GNP) :

Year=.

..

=

(,:u=rent Account/ 96

"

l

:

• .

.

"' Source:

'

Public Sector

I

..

%

1975i 1976 1977 _ :

o5.66 -5.89 -3.61

1.23 1.751 1.88

1978 1979 198o 198i . .

-4.56 -5.00 -5,401 -5,36 ..

1,22 O. lS 1.2B _4100 ,,

.

,

=

,

1982

-8.1 5

1983 1984

-8.07 • • -3,53

,,

198%"

.,

4.2.9 J

.

" .o.3z

Canlas (1989) and Monies (1989).

45

1.70 1.58

1.9_


from only 34% In 1970 to 93%

by 1986 ('l';ible 14)8. In retrospect,and as

summarized by Ranis{1991),the Phllll_l_Ines experlel_ced allextended period of "debt-drivengrowth".

The BubbleBursts Thus the Phlllpplne economy was hardly in a positionto effectively adjust to the second Internationaloli shock of 1979-80.

Stillheavily exposed to

internatlonaI debtswl_Ichhad been Incurredat a low LIBOR rate,the government continued to borrow evettat I.IBORof 1695.In 1982, foreign borrowing had reached

8.5% of GNP, and the public sector deficit stood at 4.596 of GNP. bloreover,

a substantial borrowings either

proportion

did not pay off.

establish

• ..

The

government financial

13anks In Crisis. llnancial

through

Phillppineg. annual

blany were made

new enterprises

flows arising

handled

of the lnvestmeats

The conm_crcial

Institutions,

foreign National

borrowing

from

loans.

been

made

utilizing

of the Marcos regime

system,

to

a major

Much

including

the

handling

the

loans

were

link

of the crony

Bank az_d the Development foreign

the

ventures 9.

l)anki_g

was of course

from the

had

to cronies

or to save existing

the Philippine

Private

that

sources

also

Bank of the

increased

by an

average of 20% from 1973-82.

|

i

.

8 Prior to 1981, loans ss_ere freely av:lilabie. When the see'end inlernaticmal oil shock l_it and Me×leo del'lar_,d il lllC)l'itl(}l'itllti Oil its debts, lhe debt (risis l)r(_l,¢:. 'i'l_e Pliilippines contjltued i() I)0ITow, I)til lit Very steel) riiles arid also because its creditors il_oped to salv.'ige their aireildy lai'ge e×posures to the couniry. .

.

.......

....

9 or, to =continue t0 funnel domestic public inves tntents.

funds 46

to per sollal

catches, ostensibly

through


Table t 4

External

Debt

(Million $ al_d %)

Exte_mal Debtl Million $

-'-_.... year ......... = .-

.

i

_. •

t..

1977 ,, 197B

1979 1980 ...... 19B1 1902 '_ 1983 . '

t986j

..

--

.

8069 10694

,

.L

'" 28256 ....

19871_.. 286,19 Source:Monies(1989).

31.30 37.50

.

39,00, 44.501

- .....

13352 17252 20693 ..... 24677 24816.. •

96 ,

4939,__ . 6768 • = .........

19s, 2s418 '19"sSl "_ ' 2e_52

"'

% .

J

1975 1976 .

'

Debt/GNP- O. ebt/,Exports

=,,

=

J

.,.

45 20 49.00 54140 62 80.=_ 72.80 I.

80,5o el.7o .92.90. _

8340

,. 154.30 196:50 190".50 217,B0

,

213,40 215.40 " 242,40 308 . 30 • . 305, 20

31Z.lO '_16o 327.30

31080


In 1081, the financial

system was exposed

in crisis by tile abscondment

Dee, a textile

tycoon

connections.

Dewey large,

tangled,

of Dee's

mess

creditors

signalled

Industry

of unsecured, and

a general

Savings

dried

Tl_rough

the first half

to prevent

undertook

a major

growth

crisis falling

the years

and

Mexico come

to 1985

had defaulted,

necessitated

the

Moreover

there

short-term

CB's

credit,

both

with

the Central

capital

a

imprudence

the

Bank

economy.

official

and

Bank of the Philippines

did

the banking

nmnagement,

issuance

in

to only about

actually

be financed

and the lemling halt.

lh)wever,

drawing

down

was increasing inflows

It

tile

stashing

-

specialized

"I'i_e Pidllpplnes'

torpor • to result 196 in 1982

and

from

contlntllHg

t)f the

Central

difficulty

foreign

need Bank's

In ohtahthig

were lilac)tit three

in GNP 1983.

that tile Pidlippines'

In

times

for

those

foreign

lnterrtationai long-term In 1979

current

loans after

spree of the w_)rhl's commercial the

of

shrank.

The second oil sllock meant no longer

Bills"

supply.

markets

Tile Government by

"jol)o

the money

Internatlomd

system. marked

of the

reduce

GNP per capita

could

IO .'tit al)rupt

from

of tile Central

International

to less tllan 3.596 in 1981, and

deficits

services

and

run on

at crisis tile

combined

1982

revealed

system

198Os,

to dnlslically

The Debt Crisis. account

of the

attempt

designed

domestic

The

in tile financial and

a generalized

expenditures

instruments

fled,

Dee escaped

up 10.

all it could

public

debts.

of tile regulatory

loss of confidence capital

Marcos

interlocking

tl_e weakness

plununeted,

commercial,

with

of

loans, ($12.1B),

1981.

banks had exchange reserves. in

1982,

asld tile

I0 By one estimate, Capital flight at this time amottnted to $2.S Billion. estimated as tile total of residual cltaitge lit exieriiai del)t, with atijtistinents due to direct foreigtl investntent, current flt_COtti|t transactions, ¢;haltgtt ill internaticmal reserves, nioilet!zatiOn of gold_ sileclai ¢t!'awh!g r:lghts aml revaluath)n of debt due to change in tile:rate of foreign excltange (I. T. S!cat, "Capital l;light: The l'itlllpphle Case," •••The .Cen_t_ti Bati_k •lCe•i,•iet_:•Manila, May 1990. ....

II

,.

...

.

'.

: .

../..

,!..

"

"Jobo" is tile nleicname Bank of the Phlllpphies

.

, ":

.

.

. .

.

,)f Mr, Jose B. i;ernandez, front 1983 to 1989.

the

Governor

of

tile


ratio

of short-term

financing by

tile

to total debt

was required commercial

(Lamberte,

to meet

banks

(1985)

"The

the increased

in a desperate

instability

provides

debt

discontinued

the

a concise

crisis

arose

rolling

over

after â&#x20AC;˘August

from debt

1996 to 2696. burden,

attempt

The

additional

and was also

to avoid

provided

wholesale

default

description

of tile 1983-85

essentially

1983.

because

crisis:

external

of short-term

loans

owing

To compound

the problem°

lenders

to political there

was

massive at $200

capital flight following M within a few weeks.

the Aqulno assassistatlon, estimated "l'he $2.7B current account deficit

incurred

In 1983

8% of GNP) had

l|_ternlatlonal

(representing

reserves,

than one month's standard, soon

declared

The Productive While early

growth

colinlrles

to .a level

by mld-()ctober.

exclnanlle

a moratorium

Industrial

capacity

environment. substituting

sluml_Cd crisis.

amounting

to al)out

equivalent

PInilippi|le

of debt

from to less

Tills represented, The

on paymelll

to be financed

by any

g_)vernment

prhnclpai,

a Iotai

$2611 at tile thne."

Sectors

eighties,

and

which

Imports

a foreign

debt outstanding

The

development

agricultural to weather Philippines

industrialization to attempt the

dominaled

production adverse was strategy

to al)a_td()|t

entrenched

In

beneficiaries

as well as believers

making

sharply

et al., 1992).

Bautlsta

the

rose

policy

it.

structure.

one

,19

rhetoric

provided turns

the

In Ihe

of line earliest

in the posl-WWli I_IcmvL_IS of There

in line slralegy,

persists.

tile

of

actual

development

in

foundations

for

lnLerJlatlonal coJ_verts era.

to the

It is among

the ISI slr_Ltcgy

also and

continues their

economic

the last

â&#x20AC;˘still

Lo be

influence

import-

on

remain fervent policy


_dl2O.t:Llncelltlves which shift

anfl_tllg_B_l.

strengtllened Io a tltore

variations Board

the

Investment

of the Act since

the llA, provided

various

taxes;

of

deductions

strat('gy,

then,

(BOI),

had

which

kinds

and

:xporters.

Export

_ubsldles

In terms

_xport processing

These

alley

ere only

also

:acerbating

the

growing

ntlnued _e period

i=j

were

|

In the

since

support

Import

and prices

advantage financing

terms,

enough

to

still

1980 were

behhld

overvaluatlo_

Most

paid on,

promotion

to investors

and

SUl)Port

and

Infrastructure

in

services.

system

the

The

Export

on taxes

of selective

tariff market,

the

of the EIA and

of export

provided

a

and

enterprises.

tax credits

trade

problems. 1972

taxes;

overall

domestic

to

between

i

to qualified

handling

signalled

protectionism.12

Implementer

Incentives

not

1967,

of 1970,

lmplenlenlath)ll

by the

protective

of

of Increased

easier

however,

Act IEIA)

and deductions

take

and

engendered

highly

the

also

marketing

exporters'

(Chart

among

It) finance,

served

to fall,

lml_)rts;

t)f access

competitive

_strlctlons

were

(IIA)

its

of tax exentpti(ms

could

zones,

The

but

the effect

producers

to exports

regime.

ports

costs

Incentives

Islneentlves

Act

export revenue from Income

freight

Incentives

was the principal

as well as on the cost of, raw material ._xpenses

Exix)rt

itwentlves

outward-looking

of Investments

The

slgnlficantiy,

at 23%, growing

compensate and

for

foreign

ensured

that

tariff

walls.

the of

the

even

tile Plfllipplnes' at 17.5%

per

exchange exporters The

exchange with

tariff rate,

the value

terms year

the

of

of trade

during

the

10),

,

i

.

Tile Philippines has a long history of selective iitce,)tlves for itltlt, stries, h the earl!est provided In 1,)46. I{t.'pt, l)llc Act 35 t)f 1:)46 granted new a,ld _essiu'y industries exemptioi_ from the i)a)'ment of hlter,aal revenue taxes for fir.st fotlr.:-years of Opi2i"atlon. P()wttr ittltl SlOt.it (1971), Jurado (19761 alitl aasan (1986) provide useful overviews of l'tlllipphle Incentives over tile years._


J_

Chart 10

Terms of Trade

oooo ii,......... .......................... 70.00

=.......

_=,-

_ ......

,e

. .......................

60.00

...............

50.00

.i .....

40.00

........................................................

30.00

............................................

_".,_ .. : ..-I

I

._

.......

I_/'-,,,\l/i

ae

20.00

..........................................................

10.00

...........................

0,00

--'1--I----I _.

h.

...........

.... I ---I -- I.. f_.

t_.

. ...............

I- ,- I =. I ......I .... t--t---I co

_

Semesters

51

cO

'....

.... I -- t--I--t---t-,--] co

cO

' cO


Aericulture

as the Bulwarkof

The growlil

agricultural

tl)_ I_C0IIP_ILLY

sector was the Internal

in the. 1970s.

Foreign capital

source

of

the economy's

rapid

.lnfh)ws provldc, d tl_e extern_,! resources

for _,.

growth,,

Riding

Philippine

spending

througl

! the

In tile

Philippines

much

of the

wl_erewl[hal

countries

1970s.

the

International

performance

performance strong of the

whose

economy,

GDP growth

industrial

"stylized

a seenls

growth, 1_

see,us

1982

World

exceeded

596 per

"rice

fact"

and

rate of 6.596

spread

In turn,

to

ti_rough

provided

the

to grow.

industrialization in

tile

In

development

the analysis

ti_e capacity

growth

mid-1970s,

as implemented

anti

sector

to support

developing

The

root

growtll,

is now

to

average In rice

took

precondition

agricultural

at not less than

looking

early

expansionary

particularly

Is a key

asrlcultural

the

annual

13. Agricultural

experience

of

a massive,

99 program,

inward

PhiIipplnes

by

revolution",

sector

growth

boom

at an impressive

as the b lasagat_a

li_k betweez_

Furthermore,

along

to grow

Tile "green

agricultural

14

commodity

pushed

rice-growing

rnacroeconomic

growing

was

program

like

literature.

world

for the protected,

That

countries

the

agriculture

roads"

a strong

oll

that

there

for industrialization,

is and

Countries

(Bautlsta,

1987).

to

tl_e strollg

overall

underlie

DevelopmeLtt year

had

ltepo:'t agricultural

noted

that

sectors

396 per year.

13 Brewsler Grace, "Food and Small-Farm Slrategles in the Philippines," in Barbara Iluddleston and Jo,_ Mcl,i_ (eds.) Politl,'al lt_vc, stmetJts it] Food Plodt_cllolI. indiana University Press, 1979. 'i i.I Bautlsta (1991) provides a concise agricultural growdl on rural development.

52

review

of the

demand-side

effects

of


Finally, agricultural During only

strength

the worst-performing agricultural

years of the Plllllpplne

GVA grew, albeit

GVA growth were negative. whose

growth

did

performances

provide s the capacity

at a low rate.

Adelman

not deteriorate

to withstand

economy

adveisiry.

in 1983

Industrial

to 1985,

as well as services

(1984) observes

that 8096 of the 31 countries

during

1970s

the late

had above-average

In agriculture.

Yet the policy regime of the 1970 and the early 1980s i,_ the Pl_lllpplnes not exploit

the country's

end of tile world

commodity

country's

terms

continued

to Implement

of trade

on an Incentive-fueled _owever

comDarative

In the late a strategy shift

Inputs.

of

and

In agriculture.

tile consequent

1970s,

development

and

highly

Their expansion

Even with the

deterioration

the country's

to non-traditional

very narrowly-based

_ld imported

boom,

advat_tage

dependent

of the

economic

characterized exports.

managers

by the reliance

These

exports

on government

was thus unsustalnable,

did

were

protection

and collapsed

with

he debt crisis and the second oll sh(x.-k h_ 1979-80.

It was only lear

signal

in 1984. Ioward

of a seeming

omprehensive

program

t Improving

agrlct, ltural

iversified

its end,

turnaround

productivlly,

system,

and

alance of payments

through

expanded

)87).

in its

of agricult_,ral-based

farming

But by thel_ the efforl

that tile t_lar_:os government

increasing

policy

toward

agriculture.

deveh)i)ment was launched, promoll_lg agriculture's

a stronger

exi)orls and h_ll_()rt stll)stilull()||

53

A aimed

and

contribution

was too hHe It) revive the eco_lomy

_glme.

gave a

more to the

(Baullsta, and save

the


+.

ConHnulng_ural

Poverty

The most tellingevidence of the misdlrected strategy of governance in the 1970s and early 1980s Is the contlnuIng pervasiveness of poverty.

Ballsacan

(1992) shows that the proportion of tilepopulation earning incomes below the poverty

line rose from around

of the Marcos alternative more

presidency

measures

(Chart

data adjusted

by Ballsacan

(1992).

eve

characterized •

of

official

holds

commonly-used

for changes

and

Expellditures

in the definitiotl

even

with

headcount

gap or Foster-Greer

Income

to 1985

of "niral

the use of

index,

Thorbecke data,

- the years

or the

measures)

or tile "Constant areas"

prepared

an

economy

Lc_ac.v. the

by the

35 million,

1965

15

Economic

The

(the

Family

55% between

This observation

poverty

official

Rural Areas"

Marcos

11).

of poverty

dlstrlbutlonally-sensitive

or sets of data (the

The

50% to almost

February

following

1986 stark

or 5996 of I:lliplnos,

poverty

revolution

thus

saw

features: subsisting

on incomes

of size below

the

line;

rural

poverty

double

that of urban

more

than 6596 of all school-age

poverty;

children

mt×lerately

or severely

malnourished; +,

negative

agricultural

GVA growlh

and services

GVA also al minus-2.9%

..

a public

=

-

=

(-4.196) GNP growth

sector

11

deficit

In 1985

at only

(SONA, 1991);

1.296, while from

Industrial

1983-85

GVA at minus

([amberte,

-6.696,

et al., 1992);

of 3.1% of GNP;

|

lS The adjustment Is made necessary by [he flaw in the lntertemporal comparisons of income levelsof l'ur_tl househokls, when the definitionof "rural" ha's been modified over time, and wi_lch thus introduces a systematic undertestlmatlon of rural Incomes (Iklutlsta, 1991 ). .54


Rural Poverty:

FIES vs Constant 1961-1991 HEAD COUNT

N t-t"_ i

I' :. _'\'_ • ,... _,\_

:: .:: \\

_,\_

....

e

_.\,,.

_

I_1

I_l

101'1

I_1111

_,_

" :-

\\_

.

\\V

liii41

POVERTY GAP 40-'.

_,_-t i •

_.s,%

.,.

,o :_,:l+

_ _,_,_

iO

'

_

:

w,

a

-_

i

I

mot

_

li_l

_

_

IDOl

Distribution-Sensitive Measute 10 _

-- •

I_1 _

.......

tO

_ k_

I0

• I -.

..,

.... '_'.

'._,]

I_i

.. \\ \\ \\ • \_

,.. _.

_

. ,let1

_

mcl

55

Imi

Rural Areas


annual Inflation of 23% in 1985, 27.9% over 1983-85;

exports In decline

a debt-to-GNP

unemployment

the grains,

of 12.696 in 1985, alid underemployment

telecommunications

an partlally-alx+rted

protectionist

still restricted,

,,

government

system,

Development

shipping,

port

in tile grips of

iultl

;I trade lx+licy structure

with quantltativerestrictions;

sector

programs

reh_rm

program,

continuing

with

branching

and tim rural

the large, government-owned

institutions

deadweight

of "non-performing

government

and to "crony"

subsidiaries)

Industries

the l_hllll_pine National

Bank of the Phllil_pitles , practically

301 government-owned

airline,

repressed;

particularly

financial

program

financial

still quite

of 29.5% in 1983-85;

mo:_opolles,

and riddled

special lending

system

a banking

fertilizer,

and coconut

trade reform

a i_artlally-hnldemented

financial

banana,

or government-protected

still heavily •

rating;

meat, flour, sugar,

government •

from 1981-85;

ratio of 92% in 1985, and a very poor international

credltworthlness

handling,

by 496 annually

assets."

Individuals

and controlled

which we.re nbsorbhag

bankrupt

loans and advances

and l_nk

operated

and

under

the

the

to tile

and businesses; eerie>rations

(93 parent

about 5.3% of GNP am_ually

and 208 ill

subsidies; and •

only 3,7% of the total government 1985.

budget allotted

to public investments

in


The .Aqulno

Government,s

President 1986

economy,

politics,

because could

be

flush

were

the

government.

reforms

the

design

and

macroecononlic

balance

conducive

to accelerated

definition

may

not

also

bureaucracy.

Krueger policies

intended life

(1992}

programs

packages"

to be implemented

L"_OtlOilty

...

In

five

may

emphasis

as "...

and

since

to correct

long

The

would

as

be

strict

generally

structure

program'."

any

had

are

"crash

to define

announced

in the

In

under'went

eleven

that

and

change

Brazil

changes

(including)...

well

at restoring

term.

"... ira practice,

difficulties

would

of art environment

proceed

is on tile set of policies...

57

aimed

does

long-run

a program

as

Krueger

a set of policy

from

as a comprehensive,

aclix,ltles

Argentina

the

government

called

implententing

and

from

nflrj!cles

stabilization

the

that

reforms

view of a program

of reforms

reform

19891

weary

Aquino

the creation

tile

- ambitious

which

expected

conceived

notes

years,

with

l+e truly

program

as a 'policy

They

what

over

by

future - right.

Ihe

then

however,

In two years

program"

the

understood

is described

reform"

reform

tltat

- its

population, literally

in

country

speed

economic

growth

the

Whether

of i+ollcles

economic

require

if

set

responsibility

set of reforms

A strict

both

In the short-term,

also

supported,

"policy

Filipino

measures - all deliberately

h_ternally-conslstent

entire

and

regime,

of

Into =o set

ambitious

facility

the

came

and

of judgeinem.

execution

cohesive,

economic

tile

because

Is a matter

adjustment

"policy

ambition

and Imiflementlng

structural

economic

and

a very

of the Marcos

construcilng

of economic

team

Its situation

about

also

her

"Progrz+,m_efgl+lllj.

in

demand

a bit naive

exploitation

Aoulno's

enthusiasm

to accomplish

and

and

succeeded

and

bureaucracy,

achieved,

excesses new

Aqulno

with

attempted

they

at Rel+m+m

Corazon

February

lnmmdlately

Attemt+ts

and

functioning

monetary

a

of

policy,


alterations

in government

liberalization

expenditures

and tax policies

... and changes in the exchange

rate and

of the trade regime.

The reforms of the Aquino period contained all of the elements enumerated by Krueger.

On that

basis, the Aquino period may thus be viewed as possessing of an economic reform program, as indeed it is viewed in the literature, including by the PIDS, 1987; Krueger, 1992; Haggard, 1990; Nelson, 1990; World Bank, 1992; and Soriano, 1992. But such a listing does not reveal the disparities in the sources and impetus for the various reform activities within the policy making community and official hierarchy. In examining the process of reform in the Aquino era, it needs to be emphasized that the various reform activities iml)lomented added up to into an "ect)noulic reft)rm i)rogram ". altar)st serendll_itl_ously. there were individual officials in the Aquino administration to undertake the reforms as a package, not designed, with predetermination,

who had both the capacity and willingness

in general the government's to be simultaneously

Willie

policy initiatives and activities were

nor coordinatively

implemented.

The fiscal

expenditures reform activity was principally the province of the Department of Budget and Management. The activities to improve the generation of fiscal revenues was an effort of the Department

of Finance.

All along the Central Bank of the Philippines appeared to manage the money supply and exchange rate like variables with consequences recognized

only on its own accounts.

as an issue of broad consequence

and interest late in the Aquino regime.

later years of the Aquino period when the interactions became recognized

among the economic policy makers.

efforts to meld the disparate liberalizing

elements

The trade reform program only became

and interrelations

of the various policies finally

Toward the latter half of 1990 that deliberate

into a coordinated

program

were taken, when a package

measures were presented to the cabinet (,principally by the Department of

58

It was also in the

of


Finance)

for approval,

prior

to discussions

with

tile

multilateral

upon

by the Aqulno

fh_anclng

Instil utlons. 16 The set of economic was not completely adjustment

measures

fiscal

the Ilnanclal

and

corporations

in the

- particularly

IlleAnalytlcal

Sources

From

the point

leadership, economic

liberalization

she

ideals.

Such a situation,

political

she hoped, recovery

to economic

members

directly

Individual

experiences°

That

ideas. i

The presentallon Eshililsllto,

autonomy

1,_ charge ii

i6

as

In •1980,

hi 1986 were refi)rms in and

operated

sector.

agenda

it is clear of

unexpected

was

that

political

much

her

adventure

clearer

principal

normalcy

than

and

along

democratic

From such a vlewpohat,

when

left the thinking on development

on political

specific

and execution, strategy

and

it is thus

matters,

tltiestiol_s

her

priority

would then set the stage for participatory,

most of her energies

In

and

would

be

both

on the

and policies

to the

concerned.

Given the relative

Jesus

was Initiated

()ngohtg

on her

mlm;Igemet_t

overall as well as the detaUed levels, members

to Implement

g(|ver,||tlcntc_wned

and growth.

that Aquino focussed

to her for resolution.

cabinet

of

an environment

economic

attention

in 1981.

embarked

In hindsight,

was to create

paying

program

those In the agricultural

Aqulno's

program.

not surprising

had begun

structural

Ihe

with the lblF and th(: WB Ihat had l>egun In

disptlsltloll

that

Corazon

sustainable,

from

government

of tile Allliin_E[iL_P_gllLl_ls/il._u/_¢s

interest

raised

negotiations

elements

gover_ment

by the tariff reform program policy

really

that ti_e lqarcos

For example,

followed

embarked

It conlalnetl

new.

early as 1980, following 1978.

reforms

The

provided

of eco,_omic Ideologies,

by Preslde_t policies,

beliefs,

Aquino

they

each

Interests

and

to the Cabinet

fell back to their circles

of advisers

i

was Spezlrheaded hy p reseiltil|Ioll

was

Io meet wilJi the I/_iF oii a new llnancing 59

the new Secrelary of Finance, Dr. shortly before lhe governme_t had facllity.

nlade

••


for tire i_tellectual tl_at

riley

whicl_

and

espoused

and/or

they

expected

responsibility,

apart

effects

on other

Aquino

from

vociferous

critic

because

of

Carlos

are

used

for had

stance,

Domlnguez.

elected

of liI_eral

an effective

adjttstmel_tâ&#x20AC;˘

agricultural

C_ngressntatl

economists

from

sl_e bad

been

based

at tile which,

analysis

and

growth.

Ramon

enunciated

partnership became and

Minister a

Mitra.

and

Businessman

Chairman

manufacturer,

manufacturers most

structure upon

of

lie

were

also

engaged

Romulo,

brought

Diokno

as his Deputy

Chamber

in bushiesses policy.

of the

Speaker.

And.

c,0

Central

4

l_ank

his

Industry

on

heavily,

than

Industry as

fellow (PCCI)

the protectionist

had

The Minister

of tl,e "white

the thh,klng

and

with

amd

dependent

Research.

authors

Trade

of

on his own instincts

of Commerce

The

his

Secretary

House

frequently

heavily

of Economic

In one

Minister,

consulted

relied

a

of

the UP at Los Banos

appointed

investments,

of and

lndustrl;tl

Department

Alberto

met

Philippine

Philippine

Its internal

Concepcion,

of the Board

In the

of whom

Jose

a for

and grew to espouse a policy stance quite more open and market-oriented that of Mr.

by

spokesperson

and

later

the

economists,

tn

who

of

National

interests,

particularly

of

appointed

M{msod)

of these

areas

of tile

broad-gauged

Domlnguez,

being

the Input

the

wllo

been

because

(lll(iudllig

returns

regardless

Director-General partly

measures

of tl_e

individual

had

the Input

appropriate

politician

Mltra's

on

their

C. Monsod

and

provided

agriculture-first

with

Domlnguez

fell back

tire basis

and

least

policies

lx31icles a_d

â&#x20AC;˘officials,

and

at

economic

training,

veteran

Minister

Sollta

Minister"

oil

on

oilier

Authority

She

which

market-oriented

measures

of a grotH} of ecollomists

their

an astute

the ecol_ontic largely

of the

Planning

of l_conontics.

Agrlct|ltore

those

of Marcos

recotnmendallons

Deputy

tl_ese

Development

tire reconunendatlons U.P. School

of

of tile economy.

to be Economic and

content

lmplentented,

from

areas

Economic

Mltra,

al_alytical

always of tl,e

paper"

of the Department

relied Budget,

- Benjamin of Finance


-was driven sector

by the enormous

manager

Into regime's

who had been

the NEDA.

Initial

One

group

the

monograph

1984),

The

policies

are described

.were

Finance

from

by Fabella

(1989)

Secretary

set

Philippine

known

-- Jalme

on tile

alley

of tile

of inputs

economists

produced,

o[ the

became

and enthusiasm

comprehensive

had

popularly

conceded

appointed

tliose

An Analysis

"...

â&#x20AC;˘ energy

most

of UPSP. professors

which

individual

much

Economic

as the "white

faculty

policies

weakness

and

financially properly the

and

community, Encouraged,

i

l

reaction

and time,

policies t

which

of

lll_E

of

and

and functions

the

by

was popularly

actions

discussion

faculty

produced

the discourse and

contents

market

the

and

extreme

power.,

significant

paper',

by

facilitated

causing

This

i

process

even

in 1985,

â&#x20AC;˘ i

a

much

"white

et al.,

the chronic

massive

of roles

dlscl_arged

generated

Growth

of

--

group

UPSE.

tim same structures

for

progressive,

by government

paper"

of tile

package

tile

efficiently

of political

another

1985)

on

"white

authors

al.,

usurpation

sector

concentration

of Ihe responsibility

harped

ordinarily

private

The

ihesls

bloody

whose

r(fles of the oil sh<_L'k and ... terms

be absolved

... The

of the

as:

tile adverse

cannot

Aqutno

(De Dies,

trade deterioration bill ... Ihat other countries experiencing difficuhles did not buckle under... The domestic economic and

the

soul-searching,

Crisis

paper"

Ongpln 17

into

lnterllal

private

for

from

the

mettlhers,

Towards dubbed

was more

in

the Marcos

making

government. nlost

lncludll|g

Becovery

"tile

policy

and

of

tile

Sustainable

Yellow

Report"

(Alburo,

er

for'ward-looking,

and

detailed

a

liberal,

market-oriented

economic

jjm

17 Jalme Ongpin, tragically, committed suicide a few months after leaving governmetlt in late 1986. Iris ldography (Joaquin, 1989) traces much of his depression to having beei t forced to leave governmen t because )nany of ills fellow officials Could not match his strong beliefs and comniltments regarding Philippine development. 61


rehabilitation

and management.

of the

economists

liberal

Tids document

who participated

became

in tile

the principal

rapidly-growing

manifesto antl-Marcos

movement, Immediately

upon

her appolntnlent

1986, Professor Monsod summoned

as NEDA DirecloroGeneral

academics and economists

from the UPSE, the

UP at Los Banns0 tile PIDS, the UP College of Business Admlnistrathm to formulate group

an official,

produced

Re[arm.

comprehensive

Economic

This document

program

submitted

An Agenda

was the

Into

the DA. The Center

faculties for

as file "Agriculture

carefully

assess

findings

became

seen

the

team of

APST's

to assist

briefly

and

In 1987.

economists Department's

principal

1986

the

An Agenda

the Cabinet

for

of the formal on October

1986

1986 the 1987-

Economics

Development

and

Strategy

Team",

at tile time

of the February

Minister

He henceforth

-

1992

Natural

for Action guiding

who

often

upon

of Agriculture° Resources, the

and for

DA essentially

for the Philippine reference

(x2

soon

which

In its policies

an effort

1985.

1986

Their

revolution

after

I)ominguez the Sector and

work

to

of the

Department wits

Minister

of die

(APST, 1987) advocacy.

were

began

members

also the

to

Initial

and

enthusiastically various

and

UPLB, loosely

i_ad hlitlated

adopted Rural

Economics,

at the

in late

Domlnguez, called

and

Studies

agrlcuhure

Moreover,

Agenda

Growth:

and In December

of Philippine

tl_e Department

Environment

and

Policy

Deputy

work.

In May,

underpinning

and

of Agricultural

Policy

state

available

by Agriculture

use

Long-Run

and the NEDA.

Plan.

organized

the

strategy.

basic intellectual

Developme;3t,

DevelopmeJ)t

of the

and

by tile NEDA to the President

for People-Pot¢)ered

Medium-Term

the staff

Recovery

economic

In February

UPLB as the


The

Policy

Reforms

For tile collected These

purposes

of

tills

add up to tile set of policy

lists are:

(I)

PIDS(1987)

of the

Aqulno

and (2)

(1992)

who

Soriano

principal

structural period.

of the

1988)

who

a set

attempted 1

which

in Its first

list

the

government,

actions

and

front

to the debt

as based

on

the official

in

sources,

(Chart

12)

the

"policy

1986-92

of the

International

of

of the

in the

the texts

the

In office,

official

letters

Monetary

restructuring

Initiated

when

government.

months

Ihe government

government financing

on

reforms

by information

Aqulno

which

enumerates

eleven

based

by

of lists

by tile Aquino

g()vermnenl's

undertaken

International

by the Aquino

process

and

pre-1986

era

and

dialogue"

minutes

the USAID.

Finally, reform

government

of tile Aqulno

by tile

assemble

sets out a framework,

measures

submitted

etal.,

¢:ontinued

reforms

lists are supplemented

as part

Dohner,

with

adjustment These

of Intent Fund

objectives

we

set out in Table

pronouncements

the

paper

Table

measures

tl,e framework

1:. summarizes

undertaken proposed

i .

within

by Bautlsta

all of the above the (1991).

Aquino

information

period,

organized

on

the

policy

according

to


t_5


66


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69


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72


IV.

Political Economy Implementation Corazon power".

Aqulno

power

was swept into office

She completed

to being an electoral brownouts

Aspects of Policy Reform in the Aquino Period

her six-year "lame duck"

term In i992 and

activity

The power Aqulno's.

sputtered

public

Investment

electrification. maintained.

In the early

Its economy being

hard, _onomy crony

respond greed.

agreed

upon

Philippine While

very

had

Under with

the

lerms

the

speed

took the option

the levels of infrastructure

five years Immediately

preceding

In roads,

hit

fell

effectivity,

energy.

before levels

irrigation

of

and

but were not

the Philippines

Imported

particularly Nor could

the

since It was crippled

by

stabilization

Fund and

of drastically

spending

record

In the late 1970s,

macroeconomlc

Monetary

output

in the period

particularly

and

of the

origins

had achieved

on

of Metro

power outages.

Marcos

oil shock

tlel_entlcnt

the International

government

its

were attained

with sufficient

with electrical

Worse, econondc

of President

1980s

grappling

due partly

In darkness 18.

problem

heights

powerless,

of the populations

In infrastructure,

The record

of "people

proportion

under the intermittent

generation

The administration

somewhat

more to vainly

that had a substantial

Manila and other major cities groping as Industrial

in 1986 on the s(rength

measures

the World

reducing

public

Bank, the Investment.

had risen by 1,1% In real terms In the

1980, such Investment

_

by 1496 per year

from 1981 to 1985.

:

18 Aqulno

tlmt

|

i|

Despite cosltroversy on whether or nt)t it _w,ls t'onSlllttlio_mll)' lo $lltlltl for I'e-elet'tjcJlt il_i Ih'esltletll, Iher_ wit_i wltlesi'we_tO slle would, l_h's. Aqtlintl, htlwt_.vtq â&#x20AC;˘ i|llllotll|t'etl Ihill she ,,vt_tlld

threw laer still-considerable weighl behind victorious from the May 11, 1992 elecwlons. 74

F|tlel

Itnmos,

valltl for /_lrs. t, xpet'l,tliolt ilt_! full, alld

wht_ did

emerge


Tile lnstallallon maintenance

of existing

stabilization Aqulno

program.

government,

the llataan the

Apart there

shortcuts

were

Moreover,

It seems

construction cronies.

costs

that the financing for plant,

and

related

courts, both in the Philippines

emerging.

arraagemeats

funnelled questions

policy

to mount and

part

almost-uncontrolled

of

the

of the

to mothball

of

design

area,

severe criticism of

is not

cĂ&#x2014;acerhated

the

its

and

Philippine

safe,

substantially of the gain

Its design,

and

that

shortcomings. overpriced

to Maxcos

are still being deliberated

and

the his

upon in the

as well as lsl the U.S. and Geneva. 19

started

her

any subsiantial

prevent

Manila

provisions

which

term

Yet Aqulno ,'rod her adn_lnlstration,

were unable energy

Aqulno

part

billed as the key to meeting

the subject

tl_e plant's

lt_ Its construction

Tl_ese and other

'l'hus when

been

"nuclear-free" that

as

was the earl)' decision

of the Mett'o

has however

is evidence

taken

reduced

as well as the

of the new, 1987 Constitution0

needs

the

capa('ity,

tlr_stically

The BNPP has been

power

from

gesJerating

the problem

with the support

and construction

Constitution,

was

(.'ontpoulldlng

anti future

controversy.

power

capacity,

Nuclear Power Plant,

increased

financing

of additional

the

effort

problem

the

power

tl_rough

problem

the six )'ears of her term,

to acid generating from

was already

worsening

power

or reform

to the point

of the

brownouts.

19 The BNPP case Is under deliberation in the U.S. as well as Genevq because an American firm -Westinghouse - undertook the design and construction of the plant ....Get!eva is the venue oF :the Inte r,mtl(mal Courl ol'.]ustlee, before which tl_e Pl!l!lr_phie Governnlent:llas sottghl redress of Its claim that Westinghouse was negligent in design and also aided and abetted the absconding of l'hlllppine funds related to theBNlSP. .. ! i:::

75


'!_Gettlng Its Act Togetll_r_._ general

concern

administration quite

of could

clear and

or worse,

competing

constrained

the

of the

private

consumers,

and

even

in and

to solve

the

areas

tile

resolve

wrong

the

Interests

parastataI

action lnt'htde

Philippine

multinational

oil

inadequacies

in the

for Declsloll_.

Table

seemed

InfuriaUngly

inaction)

with

those

t'elated

on

tightly any

the energy

and

to the implications

for

of these

the

and

underlie

Oil Company,

concern

slow,

factors

clearly

(or

management

the problem

Political

and

National

companies,

Aquino

combined

government,

government's

Ilere

ti_e more

the

it seemed

factors

and

where

directions.

exogenous

of

political

of

l+roblem,

to "get its act together".

resources

The

i,etlevatttm

is one

Yet action

and

pov_@r problem,

of the

seem

of the Aqulno

privatlzation

policy,

Interests

fiscal

explanation

not

pressing,

muddling

events,

energy

The power

tile

of

the influence

welfare

of urban

factors,

¢

Context the

1986-1992

the context

period.

Tile table

of tile decisions

took

too long

tasks

of reform

to take,

on

confronting

that the

provides

and

tJte most

Important

the Aqulno

power

the

1:7 enumerates

background

government

energy

government.

"76

important

problem

took. and

events

information or did the

on

not take,

myriad

of

or

other


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77


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.._u 78


The

Record of PolicyImolementation In Table

1G of Chapter

initiatives

of tile

framework

suggested

2.

We

now

informaUon

by Bautista

examine

The

been

between

to 1992.

leadership

1986

as well as

added,

some

In the lmndllng

(1991)

which

which

were

the

of

(1991)

of

16

at what

policy analytical

in Chapter

and point

is presented framework,

implementing

Information

aspects

and

the

earlier

Table

information

the various

the concern.

79

in

selected to

introduced

taken,

llautista

provide

of the political

finally

of

according

was

This

dlstrlllutlng

We also

outline

enumerated

administration. wilit

an

arranged

initiatives

is consistent

dimensionhas

factors,

the

of tile Aquino

table

presented

administration,

as tile the actions

tile six years 11_

Aquino

3, we

on

the policy

area.

during in Table

but actions

lmi_ortat_t

provide

a time by year

exogenous

particularly

on


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6-_,..=,..

o _

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o_" o_ .. Im <

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lack

of an ImplententaUon

the assessment

of the Aquino

of tile reform

measures

timetables for

the plan, tile MTDP. pvogr_.ult

_tnd the

measures

with

exist

agreements to adopt

that

level

of

targets

achievement quite

low.

Medium-Term various

tile

Also,

More population

and

of the

Aqulno

taken,

despite

as soon

Plan may

or not

these

the

in

the

it may

be

paper.

as a whole

agreements

governance

not be considered

The vast emphasizes

of speed>,

expectatlotts or

undoubtedly

formed

part

at least

of this

financillg

and

the USAID.

agencies,

government

In this ianaiysls

that

the

as

It is to the

may

according

manclatory

expectations

of the Philippines

as possible.

implementable

process.

in

it is clear

or. actually

reform

in the

reform

adjustment

contained

purposes

in

have to the

across

the

of government.

observers

avowals

the

by

in tile Philippine

WB and

timetables

targets

to be taken

structural

financing

for

contained

the

explicit

covered

is t!m tariff

(oiltained

of

explicit

of conmiitment

administration earlier

Plan had

measures

with'tile

lnternalional

however,

of most

t_trgeis

nor

tile five years

as explicit

agreements

timetables

agencies

generally,

accomplished

whether

and

for

in

Is that most

specific

Development

Ikll: _tt_ci some

_he implementation

Development

ministries

the

such

tile the

staled

relatively

with

without

activities

slatflliz_tti(m the

tile

planned

reform

to this lack of time frmues

as part of fin:tncing

there

inappropriate

rarely

macroeconotttit:

pledged

fitlanclng

were

that has to be faced

of policy

Medium-Term

specific

clear exceptkan

progranxs

While

and

record

were

The

reforms

Tile only

governmetlt's

been

undertaken

outcomes

but policy

One difficulty

administration's

for lmplenmntatlon,

macroeconomic

possible

Schedule.

were

majority the

with which

intplententatlon. reasonable Yet

of the political we therefore

of seeing

of commentary

slowness

achievable.

84

Is one

of the Filipino the reforms on the record actions

It is arguable,

were

of course,

i.e.,

technically

these

popular

expectations

equation

of the policy

economy

will also

refer

to tile

appropriate,

timetable

for


actions lmnosed on the Aqulno administration

by popular expectations for policy

outcomes.

A. Aspects of tile. Po!!_cyRefer R.g:L_.¢..O._ In the following implementation discussion

we shall

of policy

of the various

reform aspects

cases from the actual experience on the policy decisions clearly

not only

relevant,

particular

actions

by the Aquino

will be Illustrated

and actions,

exogenous

aspects

of tl_e record

administration.

with examples

and

or pt_lh:y reform In tl_e Plllllpplnes.

the result only

Including

discuss

not cm outcomes.

of policy

actlous.

The specific

The focus is

Outcomes Many

of

or Impact

other

are

Influences

are

events.

8

The specific attempts policy

at policy reform achievements

slmllowness

[he period;

and development sector"

coalition

below

supporting

(4) the shortsighted

among the policy makers; In policy

n_aking; and

(6)

capacity

for policy

international

agencies

are also Important

are each quite

are:

and end

government's

last tWO factors

aspects of tl_e Aquino

to be discussed

at the beginning

of the political

cl_aracterized

"private

but closely Interrelated

reform

lengthy,

and C) below.

85

administration's

(1) the concentration

of the Aquino Aqui,lo; visions of

(3)

period;

(2}

the instability

economic

aqd

lmplemel_tation,

factors. these

and

in separate

that

of the

factors.

The

the role of

Since the discussions

are placed

the

adjustment

(5) the co=_tlnui,_g dominance the effects of exotlenous

of

on the

sections

(B


The Concentralion

I.

_"1 ui no's

of Achie_,cntCILt_.l'owal'¢Llh.c_J_.L_.'h_JlLng and h'!!(I of

Term.

A simple

enumeration

achieved

by

Aqulno

harness

is quite

and

officials

her

government and

the

Impressive. were

revealing

- particul,'u-ly

the_e Aquino

were

few months

In 198G

special

Banking toward and

that

abolished;

Phllipph_es

initiated;

most

hard,

of six years

doubt

and

policy

that

worked

and

also

initiated

completed

examination

completed

the

to achieve

- in 1986

after

The

trade

reform reform,

large

a host

changes

of olher

of that record,

in Table

most

of its major

February,

and

in sugar,

coconut,

19.

in 1992,

in

actions

however

to the specific

done

in

Aquino

agrarian

are assigned

- as has been

in was

continuously.

continued

least

reform

President

of tl_e tax system, achieved

was able

in office

be any

at

A closer

achieved

Ihe _otal

commodities,

programs,

he|'e.

to economic

is

years

It is clear reform

that

actions

during

its last

In office.

were

Bank of the

worked

exchange,

administration

Itwas

effort

They

If the actions

actually

Its first year

cannot

set of reforms

to enumerale

related over

traditional

of foreign

too nunierous

fertilizer

busy.

a brofid

tl_e management

during

There

liberalizatioq

implemented

the

admi'nistration

demonopollzed

financial

when

of tl_e actions

that

credit

system a broad

that a broad

the

monopolies

that the were

the

provided

financial

programs

a new lease

and

that form;

pump-prhnlng

National

liher_dlzation

l_alted

tn_plemented: and liberal

Phllli)pine

that a whole

8_

and the

on life, and

program

a rehabilitation

ngar-lan

program

Bank

reform

beef,

the

mewed

privatizatlon with

for the

relatively

slew of tax reforms

and

Development

was accelerated, program

was Implemented.

wheat

were

Rural

rapidly decreed:


in 1992, major tariff

reform

movements

program

413 - finally

became

tile higllest

levels. 20

Not much

took place In foreign

as represented op{_ratlbnal.

In economic

by F.O 470

- the

E-O 8, following

reform

was

to July

26,

exchange much

weaker

up on F.O ,170,

implemented

policy;

and

version

of EO

was drafted

in tile interim,

the

up to

from

mid-

1987 to late 1991. From governed

March

according

into office,

after

popularity

rating

promise wltil

25

to the "Freedom a Constitution

and

for

her

been

the

- a period

The

drafted

and

Aquino

was still to be elected

popuhuion

and

16 months,

approved

international

COulltry,

of

Congress

"l'lle Filipino

renew:d. and

1987

Constitution".

had

was vo.ry lligh.

of change

goodwill

1986

in pleblcite,

was euphoric

Comnlunlty

with

fairly

OI)A wits offered

tier the

brimmed

generously

and

freely. Dttrlng willing only

the initial

to implenlent too

EDSA.

willing

fi'om

found

Secretary

Romuio,

Monsod.

The

in Minister had

Marcos i

period. ]

ii

iI

the

their

services

at tile IIPSI.'., and

Ministers

wile

Agriculture

Ongpin,

in

wile

recommending

were

the

willing

but

paper"

book"

from

tllelr NEDA

of Finance

were

also very

never

were

following and

UPI.B.

advice

"yellow The

in

UP

Budget

Director-General

found

a set

who

months

"white

and

up tlle ball on

for years

exciting

to use

Mltra

:it the Ministry picked

the

"Braun

were

of analysts

in the

Secretary

staff

of the Ministers

recommendations

recommendations

a man

of fiscal

implemented

of act.ion

reforms

that

during

the

21 I

â&#x20AC;˘

ii

20 President Fldel Ramos suspended it soon after. 21 Joaquht Leung.

EDSA, several

accumulated

professional

JMme been

after

to volun!.eer

economists

economists

II

tile

"l'l_ese included

book"

they

period

(1990),

from

signed

it tiuring

atx interview

87

with

I_is first

finance

month

in

Undersecretary

office,

ile

Ernest


It helped session.

speed

By its

many

of

also

not

would

during

present

of the policy

not

not

What

prepared

to exercise

terms

lack

Only

(CBPO) created

to provide

Finally,

much months

many

ImPlemented

wanted

consensus after

of

In 1989

EDSA

effectively

reforms

that

Congressmen

notion

that

regardless

office

of

tim

were were

.Executive

of the primacy

actions

that

because

of

- one

much

possible

almost

and

the Congressional st,ppor!

had

been

with

Budget

proposed Aquino's

a_ware of tile fragility

very

and

her

and the election of Congress.

88

period-

the

other

Congress

proposals were of

in

often

economic

Planning

Office

hy the legislators.

early

inherent

In

19.86

were

caution

of the coalition

dial

but as responsll_lllty.

I_y ('t)JtSel|StJS, aJRI size worked

throughout

each

bills

needed

both

was

appreciation

should

her Officials

and

draft

Into

a major

time

Neither

and

so hadly

President

to deal

its actions

exposes;

support

and

Fly the

over.

In general,

Congress

Aqulno

how

came

introduced

efficiently.

th:lt sl_e saw not as power

to Ilnple!ltent as

was

analytical

thne Congress

President

and

legislation",

was

the

had learned

the analytical

Site was very

her to office

much

col_stiluents,

term.

of Congress

that

Members

in

from

entergence

Its role optimally.

Implications.

very

the

This Is not to say that

reform

with

in aid

In their

conservatism.

of

Legislative,

dismal.

the

of economic

tl_e Cabinet

their

appalling

of the

lmi_lententatlon

is that

to deal

of "Inquiries

brought

on the simple

has heen

Is clear

and

productively,

never

actions

of reform

prepared

Congressmen

terms

of Aqulno's

reform

many

and

was not in

Issue.

In 111e politics

were

16 months

on July 26 1987

exist.

factor

first

the

to

that Congress

inlt_rests

objected

on the prerogatives

Tile record operation

sp¢2ciiIi

have

to derail

was encroaching

_ great deal

Congress represunls

nature,

whom

accomplished

up tile implementalion

even

to achieve

in the

crucial

and had She as 16


2.

Th.e Shallow Coalltlot_gunportlnn "I'l_e coaittlon

that

brought

Aouino

Aquino

into

power was very broad

- at least

initially. Itencompassed ideologiesl'romthe mid-rigl_t to the told-left of the ideological spectrum,and was essentially united by no more than an agreement ,i¢ on the need to replaceMarcos. Itincludedthe "enlightenedbusinessmen",which counted among itsmembers the managers toldowners of enterpriseswhich had not benefited had

from the cozy, parasitic

developed

Business

Club,

with each other. which

In the

particular.

22 There

(Advocated

- .'i grouphlg

and businessmen - like Executive

Aqulno

among

organizations

agrarian

reform,

peasant

organizations

who

Finance who had

the other

and

also

threw

of the impetus

their

rural.development were Tadeo

and

was

Aquim)

and Jailed on criminal

support

appol.tcd

In 1986 and 1987.

by President

liberal

for the Aquino

demonstrations

i

men

of the Makatl

who would

Secretary beloHged

later

Jalme

become

Ongpin.

in

to the M;Inlndigan!

- most of wl_om were lawyers

also supply some other

would

Jalme

i

Its board

lawyers

government.

|

were the members

of hum;m rights qdvocates

groups

much

arrested

that Marcos and his cronies

Aqulno cabinet

members

secretary Joker Arroyo.

provided

appointed

these

government-

were also

and

The peasant peoples'

Antong

counted

prominent

relationships

a

key

and left-leaning

"sectorai"

hehl_d

Tl_eir support

Aquino.

government's

agricultural

growth.

to se.lor

positions

leader

the

of

Initial rhetoric No leaders In the

pro-agrarian

lie served briefly as Commissioner to draft

charges

tile

unrelated

and

1987 (:onstlt.tion,

on

of the Aquino reform

in the body

and

was later

i() his advocacy.

. .

22 Mr. "lloy Blue" delRosario. I'rosident also a memimr of the Makaii llusi.ess (:luh. 89

Fidel Ramos' Finance

Secretary,

was


The

extreli|e

Hght

Ihe

COIltllltllllS|-Jl|[ltlL'll('(_tl

Nt;w

rebelliotl

disrupted

periotl

alid of

Ltttacks

Aquino's

illlellllll._

wilhill

IIIICdlIII)IS

ill

[IOllll, ling

ItlcidelllS

area,

The

I(} lt)92. Ihe

leftist The

_,|elr()

respite

1987

bad

first

ilnd

IlJllr

ill

rebels

Alln)'

_el)els

rehels

% ill'l{'r

198{).

_lililar)'

fl'Olll

Hrezl,

extrelne

I:_'ht Ilill _' |_)8(,,

wIIh

|'ehels

Ih()ught

ill'e

I;ll[_(.,lill[_ leftist

Ill(,

illltl

ft'Hr

ill

l_OV(?l'lllllt'lI|

inilitar)'

alltt Ill

d HIIII(I._I lilll|llill

tile

"]'h(_il"

leas{ Illl'

tile

the

seven

coup

IIl(}._t St'l'tc)llS IO |)e

behind

Metro

Manila

thr()ugh

1986

a%%il._;_illalil)ll SQUaLlS ill

pf)li('(,.

1()_7

-

through

[(tl't't,_S

ll) IlaVL, li(,hled

(li._ltll'l);lll('(,._

The p;l('t ,_o()lt det(,t'lciratL,

HIs()

left

Ai.|tXJllO,

Ct)lltillUOuSly ill

It)Ilal'a.%s

eXil'('lllL_ Icdt i_ ,'lls() Stl_,llt,('lt'{I

eXIl'ellle

IIi()tllll(;tl

It) CatlSL, Ul|t't,.l'lliillty

;list)I'(Intillllt't|

tile

IIL,V¢;I" t.llLIol'St2d

i_lllIOSt

Illtlital')'

)'('ill

a_)d

Jliltl

-

_()V(._l'llilllL'e

The

tlesi_lled

Manila

ne[lotlated,

P('(qd{'.%'

watch,

lilt'

military

There

wh(,n

was

a brief

;1 il(211('e I}iicf

was

vi(datiOltS

,'llld

a('('IIS;IIi(}IIS

()f

faith.

It was

als()

_.¢Jnlinistration

fruiwl

inlplentelltatiozl, resistance and

Callz|hle

would

Inequities p(_lltlcal

of tile

o1r ill

(!xerci._ll|l]

policy

have

tile

th(:

('l_;llili(}tt

p()|_lllar

tl._;ll.l(,, political _l'_;t i_olitical

re'florins

Illat

tllal

iIOtiOll will

of

were

th(}ugl)t

the

p;lli_al_le,

po[)r,

Io policy

()f wealth, "invisible

maklnl

l.

O0

ottly

"p(llili('al

n|itjc)lrity"

will"

A(luino in

wit() for are

renlaiiIs

the

Aquin(), ('apahle -

support

fllld called

f()rlll(2{I

invisihle

polio), despiLe

(_ll political

COlTeCt

supp(_rt the ahl_

tile

ilnplementati()lz

will is f_lmded

Ih(. _ illlel'(L%l._; or those

l_h),.,_i('al,

i_rev('illed

denotes

att,'lck(_,{I

di,_trlbutinn "i'he

r)r

the

itltel-e._t._,

providing

muscle,

|laconsequential

,_hall()wnes._

Ill pOptll_tr

l'l'Olll vested

many

analy._;ts

lit(:

[or

by

('()alitloll Given

or

-

tile

l_rovh, llng and

titus


3.

PoEtl].3mtalailLl The

fat:! thal

It togetlter

apart

obvious

._oon

tile

ct,aliticm

I'rcmt the nl'ter

the

l!!)._A

illlercst

gt'OUl_S

!_olillcal

recovery,

their

lhal

claslled,

followed,

c'elll(,r

ll;ll'klll'llllllll

eX,-li-erb_te llilllllil-),

tlio

rt.qlt, lA iillll IVllliln

lilitl

lll_l_li

('_lllOi'.

Givel)

illl

set'lois

i_lid lit oxll_ildoil

long

ilel_)'5

ill

ildlniliisllfllioil polllioil$

i_l(lt_%_l ,

tlelll)lo,

policy 11o[orill of

Aquino

i!overnnlolil fOCUS was

clurinl_

lilt'

Ihe

P_ogralli. 111 liar

tile

While

llilft_

w_il

I_:l_'

the

Tilt,

AilliillO

and

was

and

emerged

and debales rigtlt-of-

lilll)'

llt'illll

Ihe

ec_)nomi¢

clivlsive

cllllllict._

m_de

and

conservative,

illrelid)'

A¢llllllil

li'tiill

ll[

scq'ved

('iliif(,d

olist

lin Milssilcre

91

ivilh

._ulqecl

Ilil,

Io

h 7 Ihe

l)iirl-¢lw liikiiig,

_l[

dt_llilte,

illlill'k

llie

call

Io

added

Slil_l_Orl

al 10,i.%1pui)licly,

the

[I-Olll

h(,$ililll('),

discu._,_i_lll

llast,

Ihal

w_)f righl-(i[-

(_ll(,ll

.%t't#illiilt|

lll_llliicletl

itli,lihig)'

Alliiili(I

I_ IliliCll

Aqllillli's

ui_ to

foi"

her

ver) ° sll'ollll

illl(;rell$.

in inll)l_lii_nlaliiln ill

r_l'oiill"

I%llirl'ol,

ltlionlion

"Meiidioia

Ihlif

iilld

Ihal

i_i_c't_%s_.%;lli(I

is fOUlld

ilgl'ill'ilil)

ilt, llr

_llilllll

Ihe dela)'_

llci'iod

"gl_,nilhl_ to

ill)ill;

dolninillll

exlinilll_

i_llllp,_illll

by

witl

with

illliT_lW

ciirlelllly

1"111811),l'iicu$$od spurred

;)jill

Io lll_iliilc'l'illii"

I]_llllllilil,tl

also ¢lifslliided

nlakilig

viewpoinls

c_)l_tiou._,

1¢)i4l_._il w_il

tle('i._i#lli-_li;ll_illt_.

TI_i_g__lG.__l!__, A niajor

power

It) hold

governnlent

noisy

I_fflil*) ° lillil_ilill

ldt_llhlgit*_il

/ol" o1" ilg_lilst

of

little

i'iillf(,l.

t'Cllilliltllll(,lil

¢lul (if

Ill_ll

had

oi" national

and

ill,l_illt'._

lllll'{q'lilliil)"

out

new

lll(._ laSk

ba.,_ically

"l'he._,

in ll¢lvt'rlinll'lil

IIIIITIIW

the

acrimon!ous,

o1_ her

iillt_l * I:l.,llrii;ll)'

Aquiiio'l

(lOVCl'lllll(.'lll's vilrlollS

lefll._l

il ),i,ilr

illSllillod

hack

As to

ttl ptJwer

I_tarcos

intere._ts

frequ_:nlly

iliill

gelling

down

i'll)ltlrt,,

tellfliin._

AtlU[no

rev(dution.

differing

fell illld

,if

buckled

lsl the

Aqulllo

I_r_tullht

obJecllve

resurgent

inevltal)ly

which

ainiost th_

Ili_

charliclerizinll

Cilllll_r_li_listv_

hiid

I_eeil

a )°_al"

crlillillg

'° ol" Januar),

of

)ill

explicit

pilssed

a proljram, 22,

Allrllliiln

1987..

pletlge

l)_fore

the

and

thai

Prior

to tile


incident,

only

el)Ra|led

ill planning

Reform

tile NF.DA - given

were

a p rogranl.

I_artlclpating

and encouragement

provided

with

groups tile

calling

II|:issat*l'e"

for agrarian

Aquino's

d_,monstrations

had

become

Mentliola

Bridge

just outside

violence,

during

which

and

Presidential

Reform, The

of

practically

were

relatively

drofls

became

agribusittess eschewed the eleventh

ripe

but witl_uut

the official

was still to be reorganized

for

The

on .Ltnuavy

Palace

Socrel;Irlt_s

were

and

Finance

and

were

also

Environment

app(_inled

ht int|_letl_t,t_tl,dh_tt restrictive

Interests

made

lit.elf

all <)f the CAC's drafts i! st, Vt, lill

and

sIpned

('htso

itn I!() hurriedly

il(Ivist'l-S

t,._l_Otlsil)g

In

and

The CAC

Agrarian Resources.

CA(:

at least

of the worked

lG drafts

drafts

sttl_sequent lobbies

the end,

and

Aquino

t-c)l_l_lt,tl I(_gether, ('orlst'l'v_llive

of

by the CAC

The

as Ihe lattdowner known.

into

for agriculture

The

in scope,

at

into the farmers'

Natural

The initial

ittltl hroatt

OlU_osilioll

police

and a representative

to produce

Reform.

and c()nst:rvatlve

the

Planning,

CAC.

the

held

incident.

and

to the

four nt(mths

Agrarian

promise,

tilt: most con¢c'vn

B:mk of the Philil_Pines

and calls for

by

to look

the Sc,crc, tavies of l_conomic

i}ei.l$;.lIl|

22 tlid erupt

killed

Committee"

wilh

of

demonstration

the day after the blendiola

nlore

hy

violence.

by Aquino

to Implement

hottr,

campaign

l_er

demo_lslrators

the clock for about

liheral

of

Action

Justice,

Orders

demonstrations

the ihesitlt, nllal

including

Presh.lent

around

the .Executive

Agrarian

{If

A "Cabinet

of the Land

the

process°

was

13Ul);llllllenl

repeated

fulfillment

of Ihe Cabinet

Agriculture,

President

office

Guard.

reform,

After

14 peasant

was appointed

agrariail

- h:d

of tilt'

[)lit. _ td' it St'l'Jt_._ 1)1"tlt-'lilt)llStl'atk:lllS

w,|s

reform.

of

WilS conlposed

N_m_e _ffricers

Monsod,

firm leadership°

'*Mendiola

complaiilts

or l)ireclor-General

of the DAR, wlHch

fulfillment

the

interest

In the NI!I)A

blessings

The

tile

at

views 23.

i

23 The advisers inchtcletl l:Jllltll('o Set'l(q;lr)' illltl l;lll(I Ililllk (;lltlirlllall Jainle t)nglHn, l.and Bank Pres!denl I_et_gracias \'istatl and I'resiOelllial legal Adviser l'eodoro l.ocsin Jr. L/i_on tile signing _)1 i!t) 229. the President warned the cabinet q2


'['lie signed

dral't,

to determine.

worse,

to pass

the

and

of tile

Tile mullilude

in tile form

of Athninistrative

has

liueli

ulwleiti,

Aquino

period.

Aquino

in the ¢vilical

llehers(m

Finally,

The

Ah, arcz

MAR Mhlister

- In April

Fel+rtiary

and

earl)'

resigning

hi March

1987

post

Philil}

was named

became

sale

1"lit Juice embroiled

under

the

was

lit till

fillt,d

Agrarian

lilt2

lteform

was

I'll'st

25 lllitl

i.

"i'"

tllht'.r

slaFetl

Ior

Reform

to

and

the

tile

22

iWCel)lt.'tl

tile

Senate

oVeVllVit'illg

!.987

Sl-illll

on

if

iWt_lgl'alll

I't-tml

hllltl lille

t';llllli)l Reguhtlituts'"

to be

Ilad

I)AR

by

activist

bit.

for

less

Ah'arez'

than

in

a )'ear,

I.ABAN ticket.

The

months

unlil

place. 25

The

voliltilarily

its

named

Mr. DAR

stlvl'etltleretl

OlIWIII'OS.

AS it

for

result

tilt: ('.al+lm+t.

Ill' i ml_lt, nlt, ntetl ulilil alltt lie" the law are tlrallotl +'lntl issued

]It%VS

t2itlil+t_

named

been

for four

1 988

Program

Ihe iti+plJililtllellt

Atlttitlo's

to take

f(}l"

last

Ministers

at

Reform

Antl-/_larcos

h)' an ()fli,'er-lli-Charge

on July

i

The

]J[-|.._ lliOlilh_,

Mcml+et-s that everylmtly had bt, itt, r stti+l+t+l'l li() 22<1, tw It art: lih-et:lov (;e,_t+,ral Nollta I_ltmstltl h,lt Ihe ('.al+lnot In .lets 1089. 2,t In general, all "h'nplemenlln B Rttles altd l!xecutlve llrattch.

mailers

for ihe CARL,

of Agrarian

till'tiugll

tile

Alvarez

ruhwm

Ilgrilriltll

Regulations"

of the

lit: itrliWhlllll)'

All

to rult

DAII Secretary's

leadership illist;lit

- anti

March.

To make

of the CARP still had

of Iht_ I!!)SA revolulion.

1987.

Ill Collgress

its implementation.

structures Rules and

of Agrarian

tvas lialtiotl

Congress

to be issued. 1"1

the

aftermath

Law.

of Ihe Secret,try

(it" t,x't,ll

Minister

for

it took the government

Reform

implementing

needed

l,tllsellhPtl

was thai

did llOl .assure

of "implemenling

by tile President,

I.e_d_crsbi.tl.

1988

Ordel's

of the program

_dlowud for uxtugltlctl debate

Agrarian

of the CARL In July

organization

CARP

prm, isions

The elld result

Comprehensive

be secured.

necessary,

critical

to tlct'idu llgaill

in tile Executive.

the passage

funding

left many

This failure

¢,nd hlactioil moLLLJ_

EO 229,

of

NIiI)A

utlless

by the

.

Mr..!u iCe waS:::li.iroi|_tlll_|lit fill'l)' |961(].% lit ;IC.181, :!it , Wits

t_l lilt, Iiillllt,tl

31iliixlvy tll" .'Xll!itltlllllO _i_ ]\_i_lillil _Ct'It'I+IIV

ill' Agriculitiro,:+_ilil ;hlie: ii)st;.hu iii_lvt, d ill ih0 I)t,l+ai-tiiiciii Natul+itl Iteiour(Tes. iwhT<_£+i iie sevVt,tl tim l lildt, ist, cl-ctltr), until 93

tit lht, lair. 19711s ill lht.' llol_iitllnt, nt

cJl linvironnielll iiild tlrafle_d to tile I)AR.


tile controversy

rt,gardhtg

II1(: land (,vt.,I)ri('hq;

ill(+ithml.

I_h..luh'o

resigned

in

July 1989. 26

S0.!!liago_Zt Judge in July

1989..qanliago

tough-talking

at tlle

Appointments. l)uild

on

A.b_ll. serious

Aquino

Congressman

group

of Congressmen however,

Appointments,

front

extensive refused

Congressmen

was

regarding

-'lgricultural

l.ankaalL essentially

in Cavite whether

()._mt,ila

that

use. within

been

l:lnded

Santiago

to

had

<)llh'e,

phtns

l)h)(-ked in 1902.

out

I'))â&#x20AC;˘tlle

of December

member

1989.

appointed

of the

version tile

her

small

of the

CARl..

Commission

interests

be+It

on

within

and

appolntmel+t.

not

being

It) take

a

use

"i'lte property kilt)meters

of wr<)ngd(ling

on

She Instead

a key

Again

from

conversi,)lt

by The Comnlission

x_is drowned

l_ro-farmer

of tile

40

only

for Vlce-l'resident

.qanthtgo.

()ffice,

[(it' Ahad

conversion

She

the first week

Ill)oral,

lit_, chose

that

al+l+ointment

had

took

reastltl

JlOt tile

26 Mr.'Juice was cleared (A._ti-Graft) court i,t 1992.

who

:Is a graft-busting, lasted

l),)lili('al

ran

+luring

lobbyit+g

to industrial

or

hlpht,r

to act on Abad's

the

Province,

ccmfirmati,m

I,w

tile

formally

Another

controversy

Abad,

stint

as DAR Secrelary

Nattzralitation.

not to re:ti)i)oint

supporting

Iaa_ilP.k.aan.

and

wlt(, sttsl+t,clcd

John

decided

tot)k her turn

spectacular

r(2_'tlSt'(.]

of the l+eriotl

never with

but

on Ms.._;tntlallt>'s

Florenclo

of Congress,

fellow

being

Sellat()r

attempt

young

a brief

let)st as +a bast,

111tPnll)olr

COIl l)

._antlag()

of Intmigrati(m

']'he CA debate

In the aftermath,

outside

had

CA meml_ers

.+l Mlnlsterlal CA

l)elens()r

DAR, after

Sever+tl

aplx)Inlment.

Abad,

had

Commissioner

slx months

IIIOS|

Miriam

pro-farmer

of a particular was located Soullt

of tile

by

colllirmed

tile

by

hi+

_;tance

in

tile

piece

it+ Barrio

of I_lanila.

official

even

land

(Village)

The issue

classification

country's

of

of

Satldigilnba),an

was tile


l_rol)el-l)' llliis illi

should

l_l;Ic'c, I)L,f(_I(,

l_IS.S('tl illlO c)Wllt, l'.,ihll_ ill (._×('t:pll()II

pr()t:eed

I() lh_.' (:AIII'.

_11i_nd, ;illd

prop(_rly

(l{_il[

l)ene/ici,'Iries. lh:iI

wilh

lhe

(_lli()lJoli,l],

(if

illitl

tll'llwlh.

w(iuld

illill TI)

ilitll£:ill(_

ruled

Illc_ ¢onversio_l

Mr,

lh;it

ilpi_olnlnienl

1_87,

NI].I)A,

w_s _l)l)oilllod

Govei-nmonl r(._volulloii Reform

ill _llile ilntl

ri

l_2.

A(luln_i's

l)i-olram

was poised,

_eci'(_lary.

was lonll

'Thus, rc, peillctl

her

l,_sl, for

Ili_

_t lh(,

ll'lilil).%,

_llUil)'

lilt'

r(_/'ornl

i)1-_il_e1-1), li(:Icl ilS iuduslrial

tlc't'i.%i(lll

arid

illlill),$l$

lll,iWc'_'il

i_('llllillni("

ililtl

the

l>¢_Glnle (:olifusecl

ll,lLl_'._ll{"

t'lluily

l)ll

l_lllklillll

l_(_lic) , illllJ

I_l'owlh. hi

wlis 11o[ (-()ver_(I

April

iv_s

who

1990, iilitl ilo

iii£_ _ll(l

[)y Ille

il_ltl

h_lviiltl

Iho

tloblilt:

h_£_ii il Ilion

iil(_ _u-_lico

CARl.,

_llld

that

dr,_illed

by

lllo

tlt, i-l_li'_llll)lls

_ldliliiiislrillion's inilll(_ill(_lll_ilioll,

IJv@i" l_inkll_lli, s(,pporilve

1.ooiiB0

lolllJ-IOrlll

il

ii_l('r Ill_ll

uillil

£J_'el" four ilie

"t'enli_rpiec(_

lie

also

her

ill|ld-ill_lnllered,

oMel_ll Ill _ relio_l

Uliclersoerol_li'y

sel'vc, tl -is _eei-Ol_lry

it w_is ()lily

ll_eil

lolil_ol _ tully llelll_lilliil

_ecrel:lry lie

use of

iC_ilii1_ l)lilns

_o1".5_V(_l'ill i11o111]i5,

pi'iit't,._s

Aliuino

Assisi:inl

sh()ul,l

()fli_-l_11._. _i_lv()[':lli, S ililel

ll£_tlvt:(:ll

Non-i'(inlrovel-.siill

Ilion

il(llc)ll

I11_ ll(_W _l_rilriilll

)' illlll

llild

Ihe CAI(P;

in

st'l'(_(_llillll

i ln(l

_x_ulLI t,11,e I)I,I_'(: _Is

hlduslriill

of 111_ issue

hlll'l't'_il

i)rolierl),

resillll(:(l

bul'(_lut:r,_t

lht"

ft._-'lliil(_'.5 _if i,()%t.llllli_ill , ,,'

[.allkaali

Pop hlnl.

o£_i¢e 0£ tile

illlti

l'5) ° I'_ill_tl

l)resid(_nl

14overillneiit

nll,ll_'l;

Illi_ IIiitl£_-()l/

AI)_(I

)'

f11._ l)(,lw[.i.il

proce£_cl ouiside

illip()illllnl2111s

bellevecl

career

Ihe

would

l,eonll, Ilrll(_lilili

thai

in

iu pi()vilu-iill

I() tht, r(:s,)luti()u

ilr_llllll,

t'(illll'OVt,

5hill

('ARI)

I11_1! lhi: ('()llV/Jl$J(ill

inl,.,1t,sl_,tl

l)_:¢:u _,)n(,d

Ih(.' /Ullllilnii_lllill

"('lie l_ilikil_ill

I_$' the

iu i11(_ i,lUli¢,_li_11c, (-_ulw,lsi_u

illlvili'illt_.%

(ill

i'llllVt,l

Ih¢,. lHclll(.lll

ih.,vt, hil)lll_,lll

Ill(Ill)'

._li'ill(_l_), , p:l]'tlculiil'ly

Secrelary i

le;l¢linl]

llliIl

111'

/%lille( illslSl_.,ll

c)wllers

J11vo]_il)l_ lle,'lled

|lllhlSllliill#_illhlll

f;ll'lll('l'.5,

lliv,,Sl()1-s

|lii_.r(,sl(_d

pr(>('ess

l)VC_l_('1"l)' W,I._ _'_veit,(l

llie

lhe l_rOl_(_lI}, |I_I_I :111eilcly The

lilt"

lhi'

Mr.

lh_I

Tllos£,

prolic, rly.

(in

lllke

ill his

yelir_i

Iho

i'(_liren_0ll[ sill¢e

Coinpi-i.)li_llSiV£: protlr_lnl"

_AR

' Ililil

since /ronl

Llle EDSA Atl.ill-iii lhe

n

CARP


4.

SJlczlit The

le .LVJsim]I

etmflit-ts

ill the ideologies policy elites

making over

suri'oundhll,

team,

.lose

anti

Co,lcepc!on

industrlaliz;ttion

behind views

ol'ten

as til[f_l)L! by tile

Secretary

first

t'2abinet,

miRhlily

anti

nlhlhnlze

l_overnlllelll

hold

de[hlite

agrarian managerial holieS1

Ramon

slrivlnlI

blltra

saln_2 grouilds

ill'St

as Setrelarj,

l}rol_lenls

27 V_'ilS Ill

l-ronl

('_l|)illel tile

()tin ()f Secretary t'hltl'i|t'

life iltllltt_r

Ill" thl2

thitl "What

in free

strtmg

ill g(,llelIiI,wilh AtlU|llt)'S

,'_r21"ri, I;ir._'

Ak|lls

espt>tlsed

allO

al)tl in

her

t<_ t_vt,rc<mlt, sl,ppc_rl

{7++nt'epcioll,

and

to

his

and

own

also

and

and

)7

ill etlterplise. hJr a

i'_erspettlvt,

AtillJllt)

firm

fal'nt_.,rs,

(_1

imlividual

(:lillt't'l'_t'it_ll'.S |lllth,rst,Clelilrlt,s, Ih|iutl tll JtlVt'%llllt'lllS, IIIll-t'

is gootl

ctmsumers

I()

liberal

'

<>,1 much

2s See Nick Joaquin, Jaime Ongpin the l.nigma: Manager; Jaime v. Ongpin Foundation, blanila, It)90.

A l'rofile

the

api+_.,:ll. llltrlllhi21s(1[

exlllnJlle

iltltl

is good

in

Secretary

iirllls,

(2t'(_ll()lllJt' and

b.ll". "ltqll,ts ,,\h'iilll;Ir,t, It'llldfl',.l.'tl ill at tltscus.,iRm

It)r N,til bligltt;I 17orpot'atio_

did

of exceptional,

Agt+it'tllturt

It'lldt'tl

She

believer

wJlh il SellS{2 for popt|list

Jlt, l_i(,Ji,

¢otllrols,

I_roatl,

lilt: extt.jlthlll iii St,t'l-elill} ' hhlllsOtl, the PlesJtJl,lll

Fcotmmic

prh'e

capacity

_ and

were

of tim Atitlino's

I_artic'ipiltiotl

iwohlt, tn._, 28

a

ofteil

Firms

abolish

was

as

he

whose Imh,stry.

anti _m tile

Industry

I'_et'altlSe

privi|tlzation,

(.)ngpill

wealthy

experience

market-oriented

I<JJ :lgrlctllturc

of her

Import-substituting

strrml I advocacy

.false

tmlerprlse,

in an

ol Trath: illosl

members

Trade

Imslzlesslnen,

t_ accelt, rate

beliefs

anti

lllall+tgelll(rllt

w:ts the

lntervmlti,m

l:lzlllnt'o

excellence

pc_lJt.Jt, s,

differences

of the traditional,

belief due

l)t, lmrtmmlt

lqotlsod

egalitarian

reform,

a strong

ol r i|ll'i_rt-stzl_sliltltilll[

.golita

the various

ill tile Philippines.

protectionist

the

Planrting

forth

anti

{a) the deep

dominance

ulldersland.'ll_ly

rel_resented treated

ILv Aq'uino

governmeul

held

strategy,

manufactt,rer

held

and (b) the continuing

making

eve I

tile C.ARI' al.,,t) reve:lled:

of development

policy

Secretary

IJv. J. u

titus

vtho with

for the countr3,." of

the

Filipino

as


geilel'aled

arid

suppor||n

B Ihese

arid

proposed

Iriu.le-offs

actIons

enlilie$.

alld

"rhcir

of the acliolls

m_asurL._

propo._als

Whi¢ll

Ihus

o11, lille| wilh

ellen

Were did

focussed

not

olllc, l entilies,

a,ld

on

consider oll

directly

Ihe

effecls

file e¢onom),

as a

whole. Most of

of Aquino's

lll=l¢'roecollomic

system

was

commodities

of

for

held

of

sector

II_e Iwo lllajor

as

s_tl tin

privale

lit

also

dol;i),ed

would

presence

lhe

the

ill]

nllihlieltllnce alid

be adversely

levels

lhe

the

Moltelary

Mcll)t)lill;)'

1o the

sI),nilt%l ll),

Ihe

of

This Ihe

policy

Central

.qecrelary

tile

wax ilit

line lit

Iht,

("(llntll),.

"Jhe i-efcllln Ihe f.)it

executive

pioles! closer

needs was

o[" tin

!o

Chalrma_ of of erie

;int.I Ihil5

()[ laril'f

not

Bank

arid

lltll

reform,

were

exchange

"l'wc} represenlalive5

Io

staple

of producers

ih_ard.

thte

of

Price controls

Rarely

foi'eigll

of

hltlustry

pesi). ,tlI