February 25 is upon us once again. For the past six years, the celebration of the Edsa Revolution has been muted not only because most of the major players have passed away but also because the Filipino people have lost their interest. Edsa is only for the diehards nowadays and since the Yellowidiots have been out of power, there is not much they can do about it.
The 36th anniversary of the “People Power Revolution” this year is unique because it is an election year and Ferdinand Marcos Jr. is running for President. You can be sure the Yellowidiots will bring back every memory of those three days in February 1986 when a standoff between the pro-Marcos and anti-Marcos factions in the Armed Forces put the country at a standstill until it was resolved after the US succeeded in persuading Ferdinand Marcos Sr. to step down.
Our generation as martial law babies witnessed most of the significant events of the last quarter of the Marcos regime. We were college students at the time of Ninoy Aquino’s assassination and we were at the forefront of the anti-Marcos protests along with those who were born five years earlier. We did not have any idea of who Ninoy Aquino was until after he was shot at the airport tarmac. There was no internet at that time and our sources of information were limited to the broadcast and print media and libraries.
There was much hope for our generation after Marcos was ousted. We were made to believe that our lives could be better not that it was bad during the time of Marcos. I personally witnessed the comings and goings of Apo Lakay and Imeldific since we were residents of Concepcion Aguila Street in the San Miguel district of Manila. The street was perpendicular to Jose Laurel Street, which was known as Aviles during the Spanish colonial period.
There was a general feeling of euphoria not because we did not enjoy freedoms but in our case, the barricades which came on at 9 p.m. every night stopped. Residents were no longer required to obtain car passes from the Presidential Security Command at Malacanan Park across the Pasig River. The security perimeter of the palace was moved back to the confines of the immediate vicinity. This would later prove to be a mistake during the August 28, 1987 coup attempt.
My employment by an American trading company afforded me the opportunity to travel throughout the country, particularly provinces in Visayas and Mindanao. It was at this time that I saw how different the situation was in the Greater Manila Area, as Metro Manila was known then, compared to the regions. Cory was not able to unite the country behind her leadership. The leftists and the rightists were engaged in urban warfare in Metro Manila and the provinces where the NPA had strongholds. Where poverty was highest, the NPA could be found, exploiting the poor and convincing them to take up arms against the government.
Davao City then was a hotbed of the insurgency. The streets were empty at 8 p.m. every evening. This was due to the NPA presence in the Agdao district, referred to by residents as Nicaragdao. In the mornings, residents woke up to see the casualties of the encounters between the NPA and the police and military based in the city. It fell on then Mayor Rodrigo Duterte to overcome the challenges of the regional hub which was the largest city in the world in terms of land area at that time.
I saw firsthand why Mindanao was described as the land of promise after visiting the vast pineapple plantation and processing facilities of Del Monte in Cagayan De Oro and Dole in South Cotabato. Mindanao held vast growth potential if only peace could be had. Traveling by land from one end of the island to the other required navigating through checkpoints of the AFP, the NPA, the MILF and the MNLF. The infrastructure was poor which and peace and order difficult which was why there were few foreign investors who would even consider setting up any kind of business. It was only for the daring and adventurous type.
The same was true in the Visayas. The poverty level came as a shock to someone who was born and raised in the capital city. Cebu and Iloilo were progressive since they were the regional hubs. Again, the sorry state of infrastructure was evident. Poverty was highest in the Samar provinces. The same was true in the least developed provinces in Panay such as Antique and Aklan and the outlying municipalities in Negros.
The ouster of Marcos in 1986 created a wide political divide. I realized that the mass gathering at Edsa was not representative of the sentiments of the Filipino people as a whole. Everywhere I went, the people were split but not evenly. The majority were still for Marcos. Doing business with the ECJ Group of Companies opened my eyes to the reality that Eduardo Cojuangco Jr., was not the rapacious Pac-Man he was painted out to be. I saw how much passion he had for agriculture. It was for this reason that I volunteered for his campaign in the 1992 election.
If it were not for Imelda running in 1992 for President, the Marcos loyalist vote would not have been split and Danding Cojuangco would have been elected President. But fate and the Comelec had other plans. Fidel Ramos became President with only twenty-three percent of the vote. Thus began our political dysfunction brought about by the defects of the 1987 Constitution.
The truth was there was no structural reforms made as promised by Cory. The most significant was the amendments to the martial law provision in the Constitution. Other than that, it was business as usual. Corruption scandals aplenty as those close to the new powers that be brokered deals left and right for the Marcos crony’s who were targeted by the PCGG. There was no observance of due process. It was guilty until proven innocent and all the PCGG had to do was issue a Writ of Sequestration. The late Louie Beltran lamented that he did not even have time off writing about the ills of the Marcos regime that he was forced into detailing the excesses of the Cory administration and this was only months into her Presidency.
Since last year, we have been barraged with remembrances of the excesses of the Marcos regime. This is a natural reaction to the inevitability of Bongbong Marcos running for President. The opposition did not accomplish much during their years in power which was the reason why Duterte won in 2016. Deja vu is an old Yellowidiot strategy, including blaming everything on Apo Lakay. The Yellowidiots were in power for thirty years but all they can boast of is a plethora of monuments, schools, streetss roads and the airport named after Ninoy Aquino. That’s about it.
Boo Chanco writes about the Marcos regime in his column:
Can a country’s president bankrupt its Central Bank? Ferdinand Marcos did that in 1983, and today, generations of taxpayers not yet born during Marcos’s time are still paying for those bad loans the Marcos regime took out and wasted.
I remember those bad old days. I was with PNOC at that time and Saudi Aramco wouldn’t load any crude oil to our very large crude carrier (VLCC) parked at their Ras Tanura port unless we paid in advance. We used to get 60 days of credit.
I was privileged to join a mission to negotiate oil supplies around the same time. We used our company Learjet because it would facilitate our movement from one oil producing country to another. Besides, the aircraft was due for maintenance in Germany and was flying in that direction.
Our pilots carried several duffel bags full of dollar bills to pay for refueling our aircraft and other needed services. Our usual credit card was no longer honored.
They were not taking chances with us. The whole world knew Marcos drove the Philippines to the rocks. There was not enough foreign exchange at the Central Bank to pay for imports, including essential medicines.
Those were the days after Ninoy Aquino was killed by the regime. The country’s political situation was volatile. Business confidence was down. There was capital flight, further exacerbating our precarious foreign exchange situation.
Then prime minister Cesar Virata was worried enough to take former Central Bank governor Jaime Laya and Cesar Buenaventura, the private sector representative to the Monetary Board, to New York to talk to our bankers.
Little did they know that the situation was worse than they imagined. As soon as they sat down with the head of the lead bank managing our account, they were told that the Philippine foreign exchange reserves were overstated by $600 million.
“We were caught with our pants down,” Buenaventura told me in an interview last Saturday. The banker told them there was nothing to talk about until they got their financial statements in order.
Buenaventura said they knew they had problems, but they were shocked to hear how bad the country’s situation was. Neither Virata, who was also the finance secretary, nor Laya who was CB governor, had any inkling.
The first order of business was to avert a debt default.
So they rushed back to Manila to verify the information they were given. They got SGV to go through the numbers, and sure enough they were told the $600 million overstatement was true.
The country was broke. It was caused by a combination of factors constituting a perfect storm. The Marcos cronies couldn’t pay PNB, DBP, GSIS, giving rise to a crisis among the three GFIs. Also adversely affected were crony banks: Traders Royal and UCPB.
Principal exports like sugar and copra were suffering price declines. In the meantime, prices for essential imports like oil were rising fast. Capital flight worsened after the assasination of Ninoy. In short, we had a forex crisis.
It was also found that PNB branches moved money to branches in another time zone with the same going back before banking hours opened in the sending branch. It gave the impression we had more dollars than we really did.
The economic managers had to face the reality of having no more dollars in the Central Bank to pay the banks or to pay for basic imported necessities like oil. Virata knew they had no choice but to request for a debt payment moratorium for about $20 billion in outstanding debt to some 300 banks.
But the banks did not even want to talk to a Marcos government official. Virata knew they needed a new CB governor with enough international gravitas. They turned to Jobo Fernandez.
It took a while to convince the veteran banker to take the job. When he finally agreed, he sat down with Virata and company to assess the situation. At the end of it, Buenaventura said Fernandez remarked: “Gentlemen… the way this looks it seems we are just shuffling deck chairs on board the Titanic.”
The sudden collapse of confidence from international financial institutions made it difficult for the Philippine government to get debt relief, much less to borrow. Both were needed to cut the increasing budget deficit.
The government had to impose import controls and implemented foreign exchange rationing.
Forex access was primarily for the purchase of crude oil and petroleum products. All others had to get their own forex from the black market.
To make sure the Central Bank had enough forex to pay for crude oil, then trade and industry secretary Roberto Ongpin tapped the Binondo Central Bank. Ongpin met weekly with five or six of the top Binondo blackmarket traders of forex and decreed that they supply so much forex weekly at a set price.
The dollar bills were packed, flown by private plane to Hong Kong, and deposited presumably in the Central Bank account at PNB Hong Kong. That simulates forex coming into the system to at least cover oil purchases. The country was on a hand-to-mouth existence for its forex requirements.
The Central Bank also created a fund to guarantee payment of airline tickets at guaranteed rates. The airlines refused to accept the unstable peso for payment.
To address the threat of runaway inflation, the Central Bank introduced the so-called Jobo Treasury bills, which paid interest rates as high as 38 percent, to mop up liquidity. However, this may have also contributed to the rise in the cost of goods. They also hoped the high interest rate of the Jobo bills would attract foreign exchange.
The economic mess got worse. Stagflation set in and GDP contracted for successive years. As a result many businesses failed.
The peso was devalued from P8:$1 to P14 then to P20 from 1983 to 1985.
A tough IMF economic stabilization program induced severe recession. The Marcos government had to cut overall government expenditures to reduce deficits.
Epilogue: Marcos bankrupted the Central Bank; it had to be dissolved and replaced by the Bangko Sentral ng Pilipinas. Its bad accounts are still being paid for by taxpayers.
Young Filipinos should learn from history.
What Chanco will not tell young Filipinos today is how the Philippine National Oil Company was part of the energy security infrastructure that Marcos had his Energy Minister, Geronimo Velasco, draw up and put into place. While the government did not regulate oil prices per se, Petron was state-owned and operated its refinery at Limay, Bataan. At that time, it even operated its own VLCCs, very large crude carriers or supertankers and we were buying oil from Saudi Arabia, on a government-to-government basis. This kept oil prices in check as Shell and Caltex could not afford not to compete with Petron.
What happened with Petron? Privatized and now owned by San Miguel Corporation.
As far as the main exports of sugar and coconut-based products, what Chanco will not tell young Filipinos is the US had been experiencing a period of stagflation beginning in early 70s. It had run out of domestic oil reserves since 1969 and was dependent on Middle East countries for supply. Unfortunately, the Arabs and Israelis went to war in 1973 and the Shah of Iran was toppled in an Islamic Revolution in 1979 which had not only the US but the global economy reeling from oil price shocks. It was not only the Philippines which was in this boat as other Latin American countries also defaulted on their debts to the IMF-WB.
Objectively, Marcos was also to blame. In The Economic Legacy of Marcos, Gerardo Sicat is brazen enough to attribute the fall of Apo Lakay to Imelda after he began grooming her to succeed him since his children were not of age yet.
That Marcos fell from power the way he did was due to a train of mistakes that he made relative to the succession issue. For these he was mainly to blame. As time was no longer on his side and his health began to flounder, he handled this issue with self‐interest as the guiding principle. In dealing with it, he made the mistakes that ordinary politicians commit. One could argue that he belonged to a much shrewder variety that was several steps ahead of the game. Marcos understood that no one could hold on to power indefinitely. The name of the game was to manage a predictable transition. He had good material available around him but he wanted a restricted access to the leadership succession and he excluded that resource. He had many brilliant and hardworking lieutenants who might have been waiting to be involved but he practically quelled any such thoughts from amusing or challenging them. By his overt actions, every one of those around him could tell. By this time, all these men had reached an age that was already older than Marcos himself when he became president at the age of 46. He did not give any of them any open encouragement. What he wanted from them was loyalty.
He could have introduced a succession process that was competitive, transparent, and unselfish so that the future could be protected with a good leader of his own choosing who could take over in his place and preserve his legacy. Or he could have opened the succession issue more widely so that there would be more participants in that process. That would mean of course opening the arena to include his critics and political foes. He would have won great applause for that kind of move. This was what Benigno Aquino, Jr., Salvador Laurel, and others wanted. In doing that, the chance of preserving the political innovations that he had introduced by that time would have survived the succession issue thus securing for him the legacy of imparting the political institutions that he had created for the future. But he probably focused mainly on overseeing a dynastic succession that would assure political continuity for his personal lineage. He gambled that his wife could be that successor since his children were too young to be in that kind of fray at the time. He ignored the thought that his wife would be a political lightweight without the beam of light that she derived from being the wife of the incumbent. It became clear that towards the close of the 1980s. Marcos was bothered by the question of succession and he had to make clear his intentions. When he gave Mrs. Imelda Marcos prominent political powers as member of the cabinet in a new and powerful ministry on human settlements in 1978 (a combination of housing, environment, local government and other things that could be imagined) and as Metro Manila Governor simultaneously, it became clear who was being given enormous political advantage for that future battle for succession. As soon as this had taken place, it seemed as if there were almost two presidencies: Marcos’s which was the real government and that of Mrs. Marcos, which tried to corner as much resources from the first. Marcos could have stopped this from happening. But he seemed to have been humored by this turn of events. Perhaps he felt that he could snuff it when he needed to, because in the end he made the final decisions. Mrs. Marcos began building a political constituency and alliances that were meant to expand her political fences. Her activities began to cause disarray in government directions and priorities. Her programs and projects began to chip away at scarce government and financial resources. She demanded financial support from the government financial institutions for her favorite off‐budget activities. She tried to corner some development aid funding for her favorite projects.
She began to call governors and mayors to help her in her ministry programs sometimes at the expense of what they had planned to do. Some programs of the government were getting relabeled as her own. This caused mixed signals about government intentions and priorities. In addition to these, she traveled extensively out of the country sometimes on diplomatic assignments for the government. But often some of the destinations included travel in the world capitals that were not required for the missions. They were obviously for fun and shopping. Her well known trademark of financial profligacy, jet travels and other extravagances made her into a serious political liability to Marcos that he had failed to read. Even as Marcos might have recognized what was happening, he could not fully stop these activities. In time, his health would get in the way and cause him to remain quiet about the burgeoning public criticisms that the activities of Mrs. Marcos invited. Perhaps he had made a calculated risk that these could be corrected later. This was surely a sign of his waning judgment as a politician, a massive case of diminishing returns in political skills. As his health had begun to fail, his political decisions began to lose their quality.
Marcos could have put into place a succession plan among his more qualified lieutenants who were aplenty. He got the best and the brightest to join government. Not all of them were politicians as some were purely technocrats, mandarins, as the British refer to them. As Sicat writes;
One could easily make a list: Cesar Virata, Juan Ponce Enrile, Jose Rono, Blas Ople, Vicente Paterno, Jose Aspiras, Estelito Mendoza from his cabinet, Conrado Estrella (from his own generation of leaders) and Fidel Ramos and even Ver from the military, and Eduardo Cojuangco from among the younger politicians who were aligned to him. Even younger and well prepared and dedicated leaders were serving in the government who could rise to the challenge if that were open to them. From the more technocratic officials of the Marcos administration, there were those who exhibited enormous potential – but they lost favor early or died prematurely. Alejandro Melchor, Rafael Salas, and Alfredo Juinio were certainly prominent technocratic materials of those times who possessed different temperaments. There was a long list of other professional materials who excelled in their fields. To mention only a few, there were for instance, One could also add for instance those who headed the Agricultural departments at one time or other – Dioscoro Umali, Arturo Tanco, or Jose Drilon. There was a lot of material that could have risen to a competition for the country’s future leadership.
The final mistake Marcos made was to fall into the trap set for him by the Americans by calling for a snap election, one year ahead of the scheduled polls in 1987. As Sicat notes, Marcos’ health issues began to affect his political decisions and he must have not taken into account the seriousness of the divisions in his own camp which had four major factions in 1985; Imelda/Ver, Danding, Enrile and RAM, Ramos and his SAF.
Danding and Enrile were former allies but the alliance and friendship broke over the ascent of Danding as the primus inter pares among those who were part of the original group which was privy to the declaration of martial law. Enrile had been laying the groundwork for a revolt by financing the publication of the opposition Mr. & Ms., a magazine tabloid published by Eggie Apostol which would later be transformed into the Philippine Daily Inquirer.
While Danding had certain officers in the AFP who were loyal to him, he could not muster the kind of force that Enrile had with the RAM who were composed of both junior and senior officers in the different services of the AFP who were disgruntled at Fabian Ver as Chief of Staff because he had his own clique of favorite officials within the armed forces.
A Marcos restoration was inevitable given the family did not opt for exile in a foreign country but instead chose to return and defend themselves from the charges filed against them by the PCGG. They have remained in the Filipino psyche because the opposition found them to be a convenient bogeyman for their failures during their thirty years in power.
Up to today, they are the best campaigners for BBM because the Marcos’ live rent-free in their collective heads which keeps them in the news cycle 25/8. If Marcos becomes President in May, the opposition only have themselves to blame. The onus has always been on them since they took power to deliver the reforms they promised to the Filipino people.
It is convenient for Chanco to blame the Aquino assassination on the Marcos’ but thirty-six years and two Aquino administrations later, we still do not know who the mastermind is or who the masterminds are.
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