PHILIPPINE ECONOMIC

AND POLITICAL HISTORY

(ABCOM 1)

Economic history of the Philippines (1965–1986)

PHILIPPINES ECONOMY UNDER MARCOS

Economic history of the Philippines (1965–1986)

• Ferdinand Marcos became President of the Philippines in 1965 at a time when his country was
viewed as one of the great models of Third World political and economic success.' His
presidency coincided with a great Pacific Asian economic boom, the broadest-based rapid
economic takeoff world history has yet seen, and with a similarly broad-based political
consolidation throughout the region except for Indo- China.? Marcos himself was widely
acknowledged as one of the most brilliant lawyers and political leaders among a generation of
great Asian leaders.

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PHILIPPINES ECONOMY UNDER MARCOS

Economic history of the Philippines (1965–1986)

• The 21-year period of Philippine economic history during Ferdinand Marcos’ regime – from his
election in 1965 until he was ousted by the People Power Revolution in 1986 – was a period of
significant economic highs and lows.
• Infrastructural development, such as roads, health centers and schools as well as intensifying tax
collection which gave the Philippines a taste of economic prosperity through the 1970’s He built
more schools than all his predecessors
• The dramatic rise and fall of the Philippine economy during this period is attributed to the
Marcos administration's heavy dependence on foreign loans.

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ECONOMY OF THE PHILIPPINES BEFORE 1965

Economic history of the Philippines (1965–1986)

• Before Marcos first became President in 1965, the Philippines was already the second largest
economy in Asia, behind only Japan at a time when the entirety of Asia was still recovering
from the ravages of World War II. The country's GDP was higher than that of South Korea,
Malaysia, Thailand, Indonesia, and Singapore from 1950-1960.

• During the 1960s up to the declaration of Martial Law, the Philippine economy was primarily
agricultural with 60% of the labor force working in 1957 and 1964. Following an economic
strategy of import substitution industrialization, the Philippine economy before Marcos was
characterized by growing industrial production in sectors including textiles, clothing,
metalworks, machinery and petroleum products

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ECONOMY OF THE PHILIPPINES BEFORE 1965

Economic history of the Philippines (1965–1986)

• New, high-yielding crop varieties new irrigation and mechanization techniques brought growth
to the Agriculture sector. International collaboration for new agricultural technologies was
pursued, most notably with the International Rice Research Institute was founded in 1960 under
the administration of Carlos P. Garcia.

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MAJOR LEGISLATION SIGNED

Diosdado P. Macapagal Sr.

• Republic Act No. 3844 – An Act To Ordain The Agricultural Land Reform Code and To Institute
Land Reforms In The Philippines, Including The Abolition of Tenancy and The Channeling of
Capital Into Industry, Provide For The Necessary Implementing Agencies, Appropriate Funds
Therefor and For Other Purposes.
• Republic Act No. 4166 – An Act Changing The Date Of Philippine Independence Day From
July Four To June Twelve, And Declaring July Four As Philippine Republic Day, Further
Amending For The Purpose Section Twenty-Nine Of The Revised Administrative Code.
• Republic Act No. 4180 – An Act Amending Republic Act Numbered Six Hundred Two,
Otherwise Known As The Minimum Wage Law, By Raising The Minimum Wage For Certain
Workers, And For Other Purposes.

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MAJOR LEGISLATION SIGNED

Diosdado P. Macapagal Sr.

Socio-economic program
• immediate restoration of economic stability;
• alleviating the plight of the common man; and
• establishing a dynamic basic for future growth.
Free enterprise was restored with decontrol. The Five-Year Economic Program had been
prescribed. Land reform abolishing tenancy had been launched. These were essential foundations
for economic and social progress for the greatest number.

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MAJOR LEGISLATION SIGNED

Diosdado P. Macapagal Sr.

Role of the government in free enterprise, in the view of Macapagal,

(1) to provide the social overhead like roads, airfields and ports that directly or proximately
promote economic growth,
(2) to adopt fiscal and monetary policies salutary to investments, and most importantly
(3) to serve as an entrepreneur or promote of basic and key private industries, particularly those
that require capital too large for businessmen to put up by themselves. Among the enterprises
he selected for active government promotion were integrated steel, fertilizer, pulp, meat
canning and tourism

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ECONOMIC HISTORY OF THE PHILIPPINES
(1965–1986)
Economic history of the Philippines (1965–1986)

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ECONOMIC HISTORY OF THE PHILIPPINES
(1965–1986)

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ECONOMIC HISTORY OF THE PHILIPPINES (1965–1986)

The country’s stock of debts grew

exponentially in the late 1970s, and this
imprudent debt management burst into a
full-blown crisis by 1983.

the unsustainability of debt during the

Marcos regime. From 1977 to 1982 (or in
just 5 years) the country’s total external
debt grew from $8.2 billion in 1977 to
$24.4 billion. As a result, interest
payments as a share of national income
(in gray) increased eightfold in the same
period,
11 a trend closely mirrored by the
debt-exports ratio (in orange).
ECONOMIC HISTORY OF THE PHILIPPINES
(1965–1986)
The two variables usually go together, as
experienced by our regional neighbors (notably
South Korea); that is, income growth is usually
accompanied by manufacturing growth. This
would become the typical pattern of East Asian
success that the Philippines, unfortunately,
failed to replicate.

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ECONOMIC HISTORY OF THE PHILIPPINES
(1965–1986)
Marcos era is remembered by many as an age
of industrialization, it was characterized by
“crony capitalism” where Marcos’ closest allies
were awarded industries (e.g., TV and car
manufacturing) and ambitious industrial
projects (e.g., the Bataan Nuclear Power Plant),
many of which ended up being inefficient or
bankrupt. Such an economic environment led to
the neglect and stagnation of the vital
manufacturing sector, which, in turn, slackened
the pace of the country’s structural
transformation.
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ECONOMIC HISTORY OF THE PHILIPPINES
(1965–1986)
Work conditions deteriorated rapidly

Finally, the martial law regime resulted in poor

work conditions as testified by the sharp rise in
underemployment, which at one point afflicted
a third of the employed.

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ECONOMIC HISTORY OF THE PHILIPPINES
(1965–1986)

underemployment contributes to poverty, the

severe underemployment brought by the
martial law era gives a glimpse of the
deterioration of welfare for Filipino households
during that time. This dissatisfaction in the
labor force (especially among skilled workers)
would later give rise to the widespread growth
of the OFW phenomenon after 1986.

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Retrieved From

• https://www.gmanetwork.com/news/money/content/172779/martial-law-costly-lessons-in-econo
mic-development/story/
• https://web.archive.org/web/20170605030808/http://www.livinghistoryfarm.org/farminginthe50
s/crops_17.html
• https://agris.fao.org/agris-search/search.do?recordID=XB8310418
•
https://www.gmanetwork.com/news/opinion/content/276345/what-is-wrong-with-political-dyna
sties/story/

• https://www.heritage.org/index/country/philippines

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