A Changing Philippines

David Wurfel, University of Missouri
in Asian Survey, February 1964.

The Manila Times has said, “While the Macapagal Admini­stration has dropped Nationalism as a slogan, its foreign policy is no less nationalistic than that of its predecessor.”1 Some would add, “if not more so.” This has been true both in the context of Philippine-American rela­tions and in regard to the Philippines’ position in Asia.

The year closed with the U.S. and the Philippines brought together in common grief at the death of John F. Kennedy. President Macapagal flew to Washington for the funeral; as both head of state and head of govern­ment, he walked in the front rank of mourners. After the funeral he conferred with President Johnson. In February he had announced his intention to invite Kennedy to the Philippines, denying that he had any plans to go to Washington. His projected trip in 1962 had been cancelled because of the initial defeat in Congress of the Philippine war damage bill.

War damage claims continued to be a sore point in 1963. Though Congress authorized payment of $73 million in claims in August 1962, fulfilling an obligation assumed for the U.S. by President Roosevelt, sub­sequent disclosures of intensive lobbying on behalf of large claimants by former members of the Philippine-American War Damage Commission, O’Donnel and Delgado, raised congressional ire. Senator Long of Louisi­ana advocated killing the authorization entirely. Senator Fulbright pre­sented an amendment which would have paid the full amount to the Philippine government for educational purposes, not to the individual claimants. Thousands of claimants in the Philippines, who felt the U.S. government had an obligation to reimburse them, became bitter when they heard these proposals. Furthermore, nationalist pride was pricked. Capitol Hill debate of the matter was lengthy; the conference committee did not agree on a compromise until July. Finally on August 14 President Ken­nedy signed the bill amending the previous authorization.2

The amendment permitted full payment of small claims, but not more than $25,000 to each claimant. Though less than 5% of the 86,000 claims were larger than this maximum, the total amount of the excess was nearly $30 million. This amount is to be paid to the Philippine government in lump sum for “educational programs and exchange.” Sensitive to Philip­pine charges that the U.S. was attaching strings to Philippine money, a “debt being returned,” Assistant Secretary of State Roger Hilsman explained that “educational programs” could be interpreted by Manila very broadly. Though Macapagal at one point expressed a desire to use the $30 million redounding to the Philippine government for land reform, its utilization has not yet been legally specified.

Just as the war damage issue was being decided, another economic dispute between the U.S. and the Philippines flared up. On August 9 the U.S. announced imposition of restrictive quotas on importation of Philip­pine dresses and embroidery. Dressmaking is an industry that employs more than 300,000 persons on a part time basis in the Philippines, and an immediate uproar followed, with threats of demonstrations at the U.S. Embassy. A 30-day postponement of the quota to allow further negoti­ations took the matter out of the headlines, but agreement has not yet been reached. Other economic questions in the two countries’ relations also remain. Secretary of Commerce Balmaceda has moved to open talks on the renegotiation of the Laurel-Langley Agreement which allows special tariff concessions for Philippine exports to the U.S. only until 1974. He has predictably received “sugar bloc” support.3

The military bases issue, which was the major irritant to relations in the late 1950’s, was also revived in 1963. Negotiations on the problem of criminal jurisdiction within bases, which have been suspended since Macapagal’s election, were called for by the influential Manila Times.4 The House of Representatives passed a resolution urging negotiations to return unutilized base land to Philippine jurisdiction.5 The Speaker Pro. Tempore advocated abolition of the Joint U.S. Military Advisory Group (JUSMAG). The joint statement produced by the Manila Summit Confer­ence in August, which had been called to discuss Malaysia, referred to foreign bases as “temporary” in nature.

The birth of Malaysia, the major event of the year in Southeast Asia and in Philippine foreign policy, also served to divide the Philippines from the U.S. President Kennedy’s reference to Malaysia in February as “the best hope of security” for Southeast Asia irked many Filipinos. Since 1962, the Philippine government had been actively pressing a claim to North Borneo which it derived from its succession to the rights of the Sultan of Sulu. The British had deigned not to discuss the matter until after the Brunei revolt in December 1962. Then early in 1963 talks were held in London, but they were quite unproductive of any agreement. Britain greatly resented Philippine pressure, which seemed to complement Sukarno’s konfrontasi against Malaya. No further Anglo-Philippine dis­cussions of a formal nature were held. As the creation of Malaysia to include North Borneo became more probable, Philippine negotiations with Abdul Rahman became essential. However, despite the fact that both Rahman and Macapagal are pro-Western leaders of democratic countries and are already joined in the Association of Southeast Asia, an understanding proved difficult. Rahman, who saw his main threat in Indonesia, was determined to push through the establishment of Malaysia; and he was disturbed by any apparent attempt to obstruct it, especially in consul­tation with Indonesia.

Though Macapagal denied in Marchp that the Borneo claim was designed to prevent the formation of Malaysia, he did continue to coordi­nate efforts with Sukarno. Philippine-Indonesian cooperation had the effect of delaying Malaysia, despite the implicit clash of ambitions be­tween these two governments in Sabah, or North Borneo. Sukarno’s dis­claimers of territorial designs were accompanied by successful efforts to control and direct anti-Malaysia guerrillas in northern Borneo. In fact, cordial Indonesian-Philippine relations, across barriers of ideology and alignment, have been one of the great puzzles of the year.

The puzzle can best be explained as a combination of nationalism, Pan-Malayanism, and an inadequate grasp of political realities. Nationalism transformed the Philippine claim to North Borneo from a matter of pri­vate interest to one of the most intense public interest. Macapagal in es­pousing the cause saw a chance to cast off the tag of “colonial mentality” placed on him by the Nacionalistas in the 1961 election. The British by their haughty attitude inflamed nationalist pride. Thus as public com­mitment to the Borneo claim grew and as prospects of its easy acceptance dimmed, the Philippine President looked for allies and for face-saving solutions. Indonesia, eager to frustrate Malaysia anyway, was available. Filipinos tended to accept at face value the Jakarta line that Indonesia only wanted to assist the process of self-determination in Borneo. This was combined with a view (shared by very few of the Filipinos’ friends) that “political stability of the north Borneo territories could only come from their recognition as independent and sovereign states.”7

Such an assessment was plausible only within the framework of Pan-Malaysian unity. Pan-Malaysian has been a minor strain in the nation­alist movements of Malaya, Indonesia, and the Philippines for years. It gains prominence in the Philippines now partly because of a strongly felt need to identify more closely with Asia. In 1962 President Macapagal began to talk of a Confederation of Greater Malaysia. By early 1963 the concept had been clarified to include Malaya, the Philippines, and Indo­nesia, without stress on independent Borneo. While Sukarno proclaimed konfrontasi, this seemed a most unlikely combination. But after the sur­prising reconciliation between Rahman and Sukarno in Tokyo, serious discussions became possible. A ministerial level conference was held in Manila in early June which produced the “Manila Accord” and supported “President Macapagal’s plan envisaging the grouping of the three nations of Malay origin working together in closest harmony but without surren­dering any portion of their sovereignty.” At the summit conference in Manila in early August this “grouping” was christened “Maphilindo,” but little was said about its precise structure or functions.

The optimism in Manila on August 5 about “cooperation in dealing with common problems” among the Malayan “triplets” had completely disappeared by mid-September. Riots and mutual recriminations in Jakar­ta and Kuala Lumpur indicated that Filipinos had overestimated the degree of understanding reached in Manila and had badly underestimated Sukarno’s determination to try to block Malaysia. Despite this set­back it is still the official Filipino view that Manila’s role should con­tinue to be that of mutual friend and intermediary between Jakarta and Kuala Lumpur in order to help rebuild Maphilindo.8 President Macapagal’s commitment of prestige to Maphilindo is great, and he will not let it die easily; his desire to be close friend and advisor to Indonesia, balan­cing Communist influence, is understandable and commendable. But there are many factors tending to sabotage the effectiveness of this role. One is the Filipinos’ own lack of an intimate knowledge of their neighbor’s poli­tics.

As 1963 ended, the Philippines had no relations at all with the neighbor who seemed the more natural ally. The Federation of Malaysia contended that, not being a “new state,” she would not need to seek recognition but would automatically succeed to the status of Malaya. This was also the view of the U.S. State Department. The Philippines, on the other hand, held that Malaysia was a new state and continues to hold its recognition “under advisement.” Since September 17, when Abdul Rahman deemed the Philippine request to reduce its Kuala Lumpur embassy to a consulate as “tantamount to severing relations,”9 no diplomatic ties have existed. The Philippines now has established prerequisites for its recognition; it requires that Malaysia explicitly commit itself to the peaceful settlement of the Philippine claim to North Borneo and agree on the procedure to be followed. Whether Tungku Abdul Rahman, who has protested that the Philippines “insulted” Malaysia by withholding recognition, will meet these conditions remains to be seen.

The new Secretary of Foreign Affairs Salvador Lopez has admitted that the immediate cause for Philippine withholding of recognition was different—namely, its dissatisfaction with the manner in which the UN survey of public opinion in Borneo was accomplished. The Manila Accord of August provided that UN Secretary-General “or his representative should ascertain prior to the establishment of the Federation of Malaysia the wishes of the people of Sabah and Sarawak.” Each interested state was authorized to send observers. Great Britain, suspicious that Indonesian and Philippine observers would do more than observe, at first allowed only one for each. As tempers shortened, negotiations dragged on. Not until September 1 was a compromise agreement reached; Philippine and Indonesian observers were present in Borneo only the last four days of the survey. Shortly after they arrived, Kuala Lumpur announced the new date for the inauguration of Malaysia (September 16) implying therefore that the substance of the UN survey report was either already known or would have no effect on the decision. The Philippines protested vigorously at the time and alleges an “old imperialist” plot to alienate the Malayan “trip­lets.”

In sum, for the first time since independence the Philippines’ relations with Asia have become more important than her relations with the West. This was partly the result of external events, e.g., the decision to create Malaysia, and partly the outgrowth of a stronger nationalism. This senti­ment has been expressed not only in foreign policy but also in cultural activities. It is an encouraging development. A pride in the unique Filipino participation for the first time of Igorots in an Independence Day parade, or in the acclaim for the Bayanihan dancers, can give Filipinos the clear cultural identity which they seek.

Secretary of Foreign Affairs Lopez, who must now attempt to resusci­tate Maphilindo, was undersecretary until late July. To understand how he replaced Vice-President Emmanuel Pelaez, former secretary, at this crucial moment in the nation’s foreign relations requires an explanation of the realignments taking place in domestic politics.

Emmanuel Pelaez was a warm, highly competent Foreign Secretary and a popular political figure. He gained his nomination in 1961 as the former leader of the Grand Alliance made up mostly of the progressive young followers of the late President Magsaysay when it merged with the Liberal party in 1960. Magsaysay himself had expressed a desire to have him as running mate in 1957. It is thus natural that Pelaez, his support­ers, and his competitors think of him as presidential timber. So does President Macapagal. The President, despite assurances in 1961 that he would not seek re-election, now appears to be his party’s most likely candidate in 1965. He has been impressively successful in undermining the positions of his rivals.

Senator Ferdinand Marcos, Liberal party president, is one hopeful who was promised the 1965 Liberal nomination by Macapagal in 1961. In 1962, however, although Administration pressures brought the election of a Liberal Speaker in the overwhelmingly Nacionalista House of Represen­tatives, similar efforts were not made to win the Senate presidency in the evenly divided upper house for Marcos. Only in April 1963 did Marcos become Senate President and then as a result of internal dissension in Nacionalista ranks. Pelaez, who preferred a cabinet post allowing fre­quent contact with the people (e.g., Secretary of Agriculture), was named to the prestigious but politically sterile Foreign Affairs Department. Macapagal paid little heed to his recommendations for appointments in other departments, although Grand Alliance support undoubtedly provided Macapagal’s margin of victory.

These efforts to neutralize opposition were gentle in comparison to the step taken in July, however. The President, acting through his Secretary of Justice, publicly charged Pelaez, Marcos, and dozens of other political leaders with being involved with Harry Stonehill. Stonehill, an ex-GI, settled in Manila after the war and within 15 years became one of the wealthiest, most influential and certainly one of the most unscrupulous men in the Republic. He spread a web of corruption which touched almost everyone in the Philippine political elite. Unlike others engaged in bribery, he kept a careful record of all his transactions. Within a few months after taking office, President Macapagal arrested Stonehill and, before he could be prosecuted, had him deported. Ever since then exposes of names appearing in the Stonehill files have caused political heads to roll in what has been called “the greatest scandal in the nation’s history.” One of the first to be forced to resign was the Secretary of Justice himself, Jose Diokno.

In July 1963, Diokno, a Nacionalista nominee for senator, charged the President himself with active complicity in the Stonehill network.10 A week later the incumbent Secretary of Justice released a new list of names from the Stonehill files which included Pelaez and Marcos. Secretary Marino maintained in a TV speech that “it appears” that Pelaez “received from Stonehill P10,000.” The President gave Marino his “full backing;” Pelaez resigned in a rage. Senator Marcos took similar charges quietly and remained as Liberal party president. Although President Macapagal at first refused to accept Pelaez’s resignation, and then offered him full authority to implement the new land reform act, the Vice-President was adamant. He said farewell at Padre Faura—Manila’s Quai d’Orsay—and began to attack Macapagal for his “dictatorial” tendencies and violation of due process. He said he would not resign from the Liberal party, but he was soon campaigning for the Nacionalista senatorial slate.

Both parties held their biennial conventions before mid-April and launched their campaigns in early July. The Liberals ran on the Adminis­tration’s accomplishments: the deportation of Stonehill, decontrol of for­eign exchange, stabilization of prices (the government’s Rice and Corn Administration sold subsidized 80 centavo rice along the President’s cam­paign trail), and passage of the land reform bill. The opposition charged “rising prices,” condemned “dictatorial techniques,” and attacked the handling of the Stonehill case. The results showed the Liberals to be weaker than the Nacionalistas had been in 1959, which was a comparable point in the political cycle (two years after the election of a president). Four Nacionalistas and four Liberals were elected. Only three out of seven incumbents were successful. Diokno ran third, Gerardo Roxas, son of the late president, was second, and Nacionalista Senator Arturo Tolentino placed first, thus qualifying as a presidential candidate. Vice-President Pelaez, supposedly no longer a Liberal by that time, is also being men­tioned as a possible Nacionalista nominee in 1965.

Concurrently with the realignment among leading personalities, other less dramatic but more fundamental changes in Philippine politics occur­red during 1963. There were indications of basic shifts in the composition of the political elite as a result of the continued decline of the sugar bloc. In 1962, Macapagal became the first Philippine president ever to launch a frontal attack on sugar barons in politics. And his assault was more than just verbal. Such prominent names as Yulo, Lopez, and Araneta were prosecuted for tax evasion and other violations that had long been toler­ated. Senator Ledesma, despite strong sugar bloc and Knights of Colum­bus backing, was not nominated for re-election by the Nacionalistas in 1963. Of course, this does not mean that men of great wealth will no longer be prominent in Philippine politics or the recipients of government favors, but they will be different menmore likely industrialists than agriculturists. Jesus Cabarrus, a close friend of President Macapagal, re­ceived a direct loan of P19.3 million and a loan guarantee of P108 million from the Development Bank of the Philippines, the largest loan ever granted a private establishment by a government financial institution.11 Cabarrus is a mining magnate. The sale of government corporations, e.g., the Cebu Portland Cement Company, and the raising of tariffs also helps to strengthen the industrial elite. In addition, labor continues to assert its political role. In Manila the Lapiang Manggagawa (Labor party) nomi­nated candidates for mayor and councilmen, and midway in the campaign the Nacionalista mayoralty nominee withdrew to make possible a coalition ticket. The coalition supported Robert Oca, powerful waterfront labor leader.

Changes are also taking place in party decision-making. For the first time the Nacionalistas selected a senatorial ticket from among names presented on the convention floor who were nominated by secret ballot of the 227-man national directorate rather than by the “party’s ruling junta.”

The passage of a major piece of social reform legislation, the Land Reform Code, is perhaps the most significant occurrence for understand­ing the contemporary power structure. Very little was said in the 1961 election campaign about land reform, and Macapagal had not previously shown any particular interest in the subject. Pelaez, as Senator, had pushed for strengthening the leasehold provisions of the Agricultural Tenancy Act of 1954 in order to increase the security of tenure. Although some looked to Pelaez for leadership in land reform within the Macapagal Administration, it soon became apparent that he was not in a very influen­tial position. Officials appointed by Macapagal to head existing agrarian reform agencies were not capable of national leadership.

Then early in 1963 President Macapagal took a strong interest in the matter, appointed a committee to draft legislation, and submitted his pro­posals to Congress in mid-March. The reforms were bold proposals in the Philippine context; they were more sweeping than those in President Magsaysay’s land reform bill. Share tenancy was to be immediately and totally abolished and replaced by leasehold arrangements. The government would be empowered to expropriate on petition of lessees all private lands over 24 hectares and to pay for the property chiefly in bonds at a price pegged to the land’s productivity. A progressive land tax was included in order to penalize underutilization of large holdings; and agricultural labor was given a “bill of rights,” including an increase in minimum wage from P2.50 to P3.50 per day. All agencies concerned with agrarian policy, extension, land settlement, public land distribution and agricultural credit, were reorganized and coordinated in accordance with provisions of the bill. Magsaysay had waited more than a year for passage of a weaker bill; Macapagal pushed through the adoption of his measure in less than four months.

However, the measure adopted was not the same as the one presented. The progressive land tax was eliminated. Courts handling expropriation cases were authorized to consider “other factors,” thereby opening the door to the possibility of prices so high that tenants could not pay for their own lots. The 24 hectare retention limit was raised to 75—still far below the generous maximum of the 1955 act. Coconut share tenancy was exempted from the mandatory shift to leasehold; and land worked by wage laborers, i.e., most sugar land, was exempted from government appropriation.

Despite Congressional dilution the new legislation is a clear improve­ment over the old. Provisions for financing the expropriation of landed estates are designed to move landowners into industry. Priorities for pur­chase of estates set forth in the law reduce opportunities for corrupt practices. Loopholes for landlords who want to avoid expropriation are fewer. Effective coordination of different aspects of land reform is more likely. And, if enforced, the high minimum wage for agricultural labor and the maximum on leasehold rentals of an amount equivalent to 25% of net yield will substantially benefit low income level families in rural areas. The passage of such a bill is a tribute to the determination of President Macapagal and to the skill of its key legislative sponsor, the brilliant and persuasive Senator Raul Manglapus. Special interests did not emasculate the bill as much as they liked.

A well administered land reform program could be a major factor in preserving the degree of social stability in the Philippines and keeping elite politics within constitutional bounds. A poorly administered program could, on the other hand, induce agrarian unrest. The Macapagal Admin­istration will set the pattern in the next two years. Although Macapagal is now less fettered by obligations to the landed elite than any Philippine president before him, his penchant for multiplying political foes could so threaten his future that his fight for survival within elite politics will divert his attention from good administration. If he is willing to risk the continued falling away of elite allies, he may find that vigorously imple­mented agrarian reform would be his best election-time asset. However, no successful Philippine politician has yet relied primarily on this tactic.

DAVID WURFEL is Assistant Professor in the Department of Political Science at the University of Missouri.

Selected Reading

Ortiz, Pacifico A. “Legal Aspects of the North Borneo Question,” Philippine Studies, II (January 1963), 18-64.

Agpalo, Remigio. The Political Process and the Nationalization of the Retail Trade. Quezon City: University of the Philippines, 1962.

Anderson, James. “Some Aspects of Land and Society in a Pangasinan Community,” Philippine Sociological Review (January-April 1962), 41-58.

Rivera, Juan. The Congress of the Philippines. Manila: Ayuda and Co., 1962.


1 July 20, 1963, editorial.

2 See MT, Aug. 2, 15, 1963.

3 MT, June 18, 1963.

4 March 14, 1963.

5 MT, May 19, 1963.

6 MT, March 15, 1963.

7 MT, March 10, 1963, editorial.

8 Salvador P. Lopez, “The Crisis over Malaysia and the Future of Maphilindo,” address at the University of the Philippines, Oct. 4, 1963.

9 New York Times, Sept. 18, 1963.

10 MT, July 14, 1963.

11 “The Case of the P127,000,000 Loan,” Philippines Free Press, July 21, 1962, pp. 13, 84.

Categories Philippines, General politics