1983: Marcos- Martial Law and Ninoy Aquino assassination - PH Trending

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Tuesday 14 July 2015

1983: Marcos- Martial Law and Ninoy Aquino assassination

Philippine economy after "Ninoy" Aquino assassination - the fall of Martial law!

  1. 1983 The Economy After Ninoy Aquino Assassination

    ***External Dept = $18 billion
    ***June - Peso devalued by 7.3 percent, to a rate of 11 to the U.S. dollar
    ***October - Peso was devalued by a further 21.4 percent, to 14 to the dollar.
    1.      Faced with a foreign debt of $18 billion, the Philippines government agreed to cut spending as a condition for receiving International Monetary Fund loans. In June, it was announced that plans for five major industrial projects costing $3.1 billion were being postponed. Also in June, the peso was devalued by 7.3 percent, to a rate of 11 to the U.S. dollar.
    2.      In the aftermath of the Aquino assassination, economic problems increased. Business executives joined in antigovernment protests in Manila's financial district, speculation against the peso and the flight of capital out of the country intensified, and many foreign banks became reluctant to extend further loans. On October 5, the peso was devalued by a further 21.4 percent, to 14 to the dollar. On October 14, an advisory committee representing the Philippines' foreign bank creditors agreed to a 90-day moratorium on payments of the country's foreign debts. The next month, the minimum wage was raised 20 percent. (Slightly smaller increases had already been granted in July.) It was announced that efforts were being made to reschedule the foreign debt so that major commercial bank repayments would be delayed through 1985.

    1985 Philippine Economy

    1.      A last-minute loan package from the International Monetary Fund in mid-December 1984 bought some time for the government to cope with severe economic problems. Fiscal austerity measures required by the IMF to curb 1984's inflation rate of more than 50 percent had the immediate effect of producing higher prices for essential commodities and sharply increased unemployment. Interest rates climbed early in 1985-sometimes as high as 45 percent—and the stock markets consequently set records for low levels of activity. However, by midyear both inflation and interest rates were coming down.
    2.      Low sugar prices in world markets—only a third the Philippines' current cost of production—hurt an industry that for the last several decades had contributed 40 percent of the country's export earnings. The gross national product, which fell 6 percent in 1984, was expected to decline further in 1985. A major financial rescue package was signed with foreign bank creditors on May 20; it included new loans and trade credits and steps to reschedule over $10 billion in debt. A majority of the population was living below the poverty line, and malnutrition was a major problem.
    3.      There were reports in the U.S. press that government officials had illegally diverted billions of dollars abroad. Although President Marcos and his wife, Imelda, were allegedly among those involved, the president responded to public pressure by appointing a commission to investigate. By its estimates, over $3 billion left the country illegally in 1983 and 1984, much of the capital flight occurring since the assassination at Manila International Airport of opposition leader Benigno Aquino, Jr., in August 1983. The allegations that the Marcos family had transferred assets abroad led to the introduction by opposition legislators of a bill of impeachment against the president. The bill was defeated in August.

    1986 People Power Movement| Aquino Administration (1986- 1992)

    1.      As the economy collapsed, President Marcos tried to win a new mandate by calling an unscheduled election for February 1986. Although deeply divided, the opposition united behind the candidacy of Ninoy’s widow, Corazon Aquino, who proved to be a dedicated campaigner. Simultaneously, a military faction headed by Marcos’s ambitious defense minister, Juan Ponce Enrile, began plotting a coup d’état.
    3.      Aquino moved very slowly on the economy, where continued low prices for the Philippines' main exports — sugar, copra oil, and copper — made progress difficult. Her ministers' squabbles over the proper method of land reform also held up progress in this crucial area. But she did manage to reduce inflation from more than 50 percent in 1984 to an estimated 4 percent for 1986.

    1988 Philippine Economy

    1.      The economy continued the rebound begun in 1987 after years of negative growth under deposed former President Ferdinand Marcos. In 1988 the gross national product was projected to increase by 6.5 percent, reflecting increased consumer spending and growth of investment. Economists warned, however, that high birth rates and a massive foreign debt burden constituted long-term curbs on full economic recovery.
    2.      Interest payments on the country's $28 billion foreign debt ate up 43 percent of the national budget, leaving the government starved for resources with which to develop infrastructure and finance badly needed social welfare projects. Part of the aid provided for in the new U.S. base agreement will go to finance debt relief. Other allies, principally Japan and Western Europe, have conferred with the United States on a major aid program to help ease the debt burden.

    1990 Philippine: Weak Economy

    1.      Growth in gross national product fell to an annual rate of 3.4 percent in the first half of the year, and it was expected to decline to 2.5 percent for the whole of 1990, below the rate of population growth. Then on July 16 a severe earthquake hit the main Philippine island of Luzon, killing over 1,600 people and injuring hundreds more. Later, a government study estimated the damage from the earthquake at $361 million, probably a low figure. Engineers suggested that it would be years before damaged roads and bridges could be restored. The earthquake triggered new demands in Congress for a partial moratorium on foreign debt repayment, resisted by the president.
    2.      On November 13 a typhoon hit the Visayas and Mindanao regions, killing over 140 people and destroying more than 40,000 homes. Relief agencies said more than 120,000 people were left homeless.
    3.      The cost of the Persian Gulf crisis to the Philippine economy was expected to be even more substantial, since the Philippines remained almost totally dependent on oil imports. At the same time, tens of thousands of Filipino workers were returning from Iraq and Kuwait without jobs or savings. This therefore cut back on remittances, a major source of Philippine foreign exchange, and introduced into the body politic a very frustrated group. Meanwhile, an annual inflation rate of around 15 percent encouraged new wage demands by labor unions.

    1991 Philippine Economy

    1.      The year 1991 in the Philippines, like the preceding year, was fraught with natural disasters and economic crises. A series of eruptions of Mount Pinatubo in central Luzon in June and the massive mudslides and flooding that followed, which left hundreds of people dead and tens of thousands without shelter, was followed five months later by an even more calamitous event, tropical storm Thelma. Earlier in the year, the Persian Gulf War dealt a series of blows to the Philippines' already weakened economy, causing an oil price hike ordinary Filipinos could ill afford and the costly evacuation of thousands of Filipino contract workers from Kuwait. Reports of Filipino women workers being raped by Iraqi soldiers were also prominent in the Manila press.
    2.      Other top stories included the return of Imelda Marcos to Manila on November 4 after almost six years of exile in Hawaii, the defeat of the treaty extending the U.S. lease on Subic Bay Naval Station, and the excitement surrounding preparations for the 1992 presidential elections.

    Aquino's Farewell Speech

    1.      On July 22 an emotional President Corazon Aquino made what turned out to be a valedictory address to the country she had governed with little success since becoming president in February 1986, when a 'people power' revolution toppled the 20-year regime of Ferdinand Marcos. In her speech, which was meant to be a state-of-the-nation address before Congress, Aquino promised to conduct a peaceful and orderly succession after the May 11, 1992, presidential elections. Although Aquino repeated (by some counts for the 85th time) that she would not seek a second term, there was speculation that she might run again in order to unify the ruling party, the LDP (Strength of Democratic Philippines), and to blunt a possibly revitalized opposition. Some political observers said that a presidential run by Imelda Marcos would force Aquino's hand.
    2.      In her speech Aquino cited democracy as her major 'steadfast and unalloyed' achievement. The transfer of power in 1992, she predicted, would be a solemn moment signifying the 'glory of democracy.' She expressed her hope that history would judge her favorably, because, 'as God is my witness, I honestly did the best I could.'
    3.      But although her place in history as a symbol of moral outrage and 'people power' was secure, Aquino had been largely unsuccessful in instituting meaningful reform and change. Her lack of political savvy and executive experience hampered her ability to govern a long-troubled country of 66 million people, 60 percent of whom live in poverty. Per capita income grew at an annual rate of 2.4 percent between 1987 and 1990, compared to Indonesia's 9 percent and Thailand's 4 percent, giving credence to the Philippines' reputation as the 'basket case' of Asia. The economy was projected to grow at only .2 percent in 1991, and inflation and unemployment stood at almost 20 percent.

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