Crossroads (Toward Philippine economic and social progress)
Philippine Star, 14 November 2012


It used to be that electoral contests in the US had enormous significance to the lives of all Filipinos. The outcome is no longer as important today as it used to be. Last week, Barack Obama, of the Democratic Party, was reelected president for a second term over Mitt Romney, the challenger of the Republican Party.

As a gauge of how we rank in American priorities, Obama does not include the Philippines in his trip to Southeast Asia to mark his second travel to the region. He went to Indonesia on the first trip. In the next itinerary, he will go to Cambodia, Myanmar, and Thailand but not to the Philippines.

As a colonial possession. In our history, the Republican Party had been the party of economic imperialism and the Democratic Party, the party more sympathetic to our cause as a nation seeking its independent destiny. The Republicans were associated with industrial interests intent on expanding America’s political and economic empire. The Democrats were more identified with the agricultural interests of the country and cared more about promoting their markets and the interests of agricultural states.

The Republicans were in charge of the United States at the turn of the 20th century when William McKinley decided to annex the country as a possession of the United States. For a few years, the Philippines was a colony under a military government controlled by the US Secretary of War. Then, still under the Republicans, that governance was transferred to a civilian commission that ran our government affairs as a territory under the US Department of Interior.

During the presidency of Woodrow Wilson, a Democrat, the beginnings of self-government on local issues began in earnest. In 1916, the Philippine Assembly was established and elected Filipino legislators to pass local laws. However, an American governor-general who took orders from Washington D.C. ran Philippine government affairs.

After the First World War which ended in 1918, the Republicans won the presidency again and ruled until 1932. And the Philippine cause for autonomy suffered somewhat for some time under the same political framework.

During this period, Sergio Osmena was the Speaker of the Philippine Assembly and, as a consequence, became the natural leader of the Filipino local fight for autonomy and independence. Osmena stood as the symbol of the perennial political challenge to the power of the American governor-general.

Independence struggle succeeds. In 1933, the Democrats regained control of the American government with the election of Franklin Delano Roosevelt. The Great Depression was the dominant problem of the times. The extreme weakness of the US economy provided Filipino leaders with the grand opportunity to press for political independence.

US agricultural interests became strong advocates of Philippine independence. Their main motive was to get rid of competition from sugar and other agricultural products coming from a low cost competitor.

In securing this independence law, Manuel L. Quezon outmaneuvered Sergio Osmeña who first successfully lobbied for the passage of a bill for Philippine independence in the US Congress in the form of the Hare-Hawes-Cutting bill. Quezon mobilized the domestic political front in Manila to indicate dissatisfaction over this independence bill and vowed to secure a deal from the US Congress. As events would evolve, the Tydings-McDuffie bill, essentially a window-dressed image of the early Hare-Hawes-Cutting bill, would become the new independence law. Quezon’s mission would appear triumphant at home.

In 1934, Franklin Delano Roosevelt signed the Philippine independence law which provided for a transitional provision for a Commonwealth government for ten years before the grant of full independence.

A necessary part of this political drama called for the drafting of a political Constitution. A constitutional convention presided by Claro M. Recto, drew up the document in 1935 which included the restrictive provisions on foreign capital in critical industries – land ownership, natural resources exploitation, and public utilities.

The Philippine Constitution was approved by the American president and the political process toward independence went forward. In 1936, Quezon was elected the Commonwealth president and Osmena the vice president. The main leaders of the independence struggle were duly rewarded by the Philippine electorate. When the war broke out, the Commonwealth government went into exile to the United States under American orders after the fall of Bataan.

Philippine economic adjustment and American parity rights. In 1944, Harry Truman, the new vice president who was elected with Roosevelt in his unprecedented fourth presidential quest, succeeded to the presidency when the latter died suddenly just before World War II ended in 1945.

The politics of Philippine independence continued on its course. A grave discontinuity brought about by the war destruction aggravated the political and economic conditions in the country as important decisions were to be made. On the dawn of independence, American political power asserted itself and contested the restrictive economic provisions in the Philippine Constitution by demanding equal rights for its citizens.

In exchange for this sovereign choice of Filipinos that could be achieved through Constitutional revision, a 25 year economic adjustment period anticipated in the independence law was to be backed up by a bilateral trade agreement and further supplemented with immediate war damage payments for economic rehabilitation that the US government would fund. The quid pro quo was accepted and Americans citizens were given equal rights – or parity – with the rights of Filipino citizens. The referendum took place during the national elections that also elected the first president of the Republic who was Manuel A. Roxas.

During the term of Dwight Eisenhower, Republican president, after Harry Truman’s presidency, the inequities of the treaty of trade with the US became the subject of a negotiated settlement. This was the so-called Laurel-Langley Agreement that was concluded in 1955 when Ramon Magsaysay was Philippine president. The terms of the bilateral trade preferences partly improved for Philippine exports and the country was given full control of the exchange rate of the peso, one inequitable provision of the old independence law. The end of special relations was still scheduled for 1973 as originally planned.

Today, US-Philippine economic relations. Over the decades of independence, Philippine political and economic destiny was shaped by the course of actions taken by the country’s leaders. The nationalistic path initiated in the Constitution created impediments toward increasing foreign direct investments to improve economic performance. In contrast, a few East Asian neighbors aggressively used American investments and trade opportunities to fuel their economic growth. As these countries attained their spectacular progress, the volume of their economic relations in trade and investment relations with the US became much more substantial than that of the Philippines with its former colonial ruler.