02 - Essential Truths Economy During Martial Law
02 - Essential Truths Economy During Martial Law
Summary: The Essential Truths about the Economy during the Martial Law era
(1972-1986).
FOREWORD
The series on the Essential Truths about the 1972-1986 Martial Law Era
seeks to provide teachers and instructors a quick reference guide that is evidence-
based. This series is divided into key topics and will be issued separately.
The “Essential Truths about the Economy during Martial Law Era” is the
second of the series.
We hope that the reader will have a deeper understanding of the danger of
capitalist forces when it captures government bureaucracy to turn polices to favor a
few against the interest of millions of ordinary Filipinos.
INTRODUCTION
This is the second of the series tackles the essential truths about the
impact of Ferdinand Marcos’s martial law on the Philippine economy.
All in all, it will be apparent from the evidence that the Marcos
martial law years can hardly be called the “golden age” of Philippine economy.
THE ECONOMY DURING THE MARTIAL LAW ERA (1972-1986) 2
ESSENTIAL TRUTHS
about the Economy during the
Martial Law Era (1972-1986)
There are claims that the Marcos’ Martial Law era was the “golden
age of Philippine economy”. This claim is purportedly backed up by the selective
choice and presentation of data that showed robust economic growth during
the early years of the Marcos Martial Law era and the various infrastructure
projects undertaken by the regime. But the Essential Truth is that, after the
early years of growth, Marcos’ debt-driven economic strategy along with the
systematic plunder and mismanagement of the economy plunged the country
into deep economic crisis from which it took two decades to recover and further
impoverished the poor. This can be gleaned from the analysis of the entire set
of economic data during the years before, during and at the end of the Marcos
era.
1
Gross Domestic Product or GDP is the monetary value of all goods and services produced within a country
within a specific period (usually one year). It is an indicator of the size of the economy and how the economy
is performing. GDP per capita is the measure of a country’s economic output for each person. It is computed
by dividing the country’s GDP by its population for a specific year. GDP per capita is one of the indicators of a
country’s standard of living.
2
Gross National Product (GNP) is the estimated value of all goods and services made by a country’s residents
and businesses regardless of whether these were made inside or outside the country.
3 ESSENTIAL TRUTHS SERIES
During the 1960’s and up to the declaration of Martial Law, the Philippine
economy was mainly agricultural with 60% of the labor force working in the
agricultural sector in 1957 and 1964 but going down to 50% in 1971 [NCSO3
cited by Tidalgo and Esguerra, 1982, 55]. But family farm income was small and
remained stagnant. According to the Family Income and Expenditure Surveys of
the NCSO for the years 1961 and 1971, agricultural family income was less than
half of non-agricultural farm income, Average growth rate of agricultural family
income was a measly 0.2% over those years [Oshima, 1983, 15-17].
The meager rural family income and equally meager (though higher) urban
family income is the reason why poverty was widespread. Not only was proverty
widespread, it was becoming worse by the time Martial Law was declared. Official
data shows that in 1965, about 41% of families were poor. But by 1971, poverty
incidence had increased to 43.8% of families. Rural poverty was higher with more
than half of farming households living in poverty.4
These dynastic families used their political power and influence to protect
and increase their wealth. Economists often refer to activities that aim to increase
the wealth of individuals without creating any wealth or benefit to society as “rent
seeking”. Oligarchs manipulate the levers of power (particularly the political
process) to obtain more wealth or benefits. Methods used include protecting
favored enterprises or businesses from competition through regulatory measures
and state-engineered privileges such as quotas, subsidized credit, and access to
government resources.6 However, to maintain political power, politicians must
maintain a patronage network: political leaders that deliver votes, private armies
3
National Census and Statistics Office, a precursor agency of the Philippine Statistics Authority (PSA).
4
Data compiled by the Martial Law Museum (https://martiallawmuseum.ph/) from various sources.
5
In general, an oligarchy is the government by a few. Thus, oligarchs are people who control a country by controlling
both wealth and politics.
6
Readers wishing for more detailed discussion of rent-seeking in the context of the Philippines and especially during
the Marcos dictatorship, is referred to Paul Hutchcroft’s “Oligarchs and Cronies in the Philippine State: The Politics of
Patrimonial Plunder”
THE ECONOMY DURING THE MARTIAL LAW ERA (1972-1986) 4
that protect them against political rivals, and bureaucrats and lower level politicians
that safeguard their interests. This, of course, needs lots of money and most of
this money comes from the public coffers. Thus, the country had a dysfunctional,
inefficient and corrupt government bureaucracy that failed to provide needed
public service.
By the late 1960s, the Philippine economy had started to stagnate and
was plunged into a full-blown economic crisis in the aftermath of the 1969 election
which Marcos won to become the first Philippine President to be reelected. The
crisis was largely caused by reckless spending of government funds by Marcos in his
reelection bid. As a consequence, the government was unable to meet payments
on its US$2.3 billion international debt and had to borrow a US$27.5 million
standby credit with the International Monetary Fund (IMF). To access this loan,
the Philippines had to renegotiate the country’s external debt and devalue the
Philippine peso. This pattern of submitting to the dictates of the IMF and the
World Bank in order to secure loans to tide over the Philippines during times
of economic difficulties brought about by economic mismanagement would be
repeated with increasing frequency for the next twenty years. [Dolan, 1991]
The global economy too grew after the Second World War. Growth
accelerated in the 1960s with an average global GDP growth at 5.3% from 1961-
1970 [World Economic Survey, 1971, 1972, 20]. The United States had become the
leading economic power in the world by then. Traumatized by two successive world
wars, the countries of Western Europe were moving towards economic integration
on the hope that an economically integrated Europe will prevent the repeat of
these catastrophic wars. The European Economic Community (the precursor of
the European Union) was set up in 1957 and this set the stage for the impressive
economic growth in Western Europe. Also by the 1960s, Japan was emerging from
the devastation of World War II to become an economic power itself. The advanced
capitalist countries, then collectively known as the First World (or, as they called
themselves, the free world), was moving towards a new integrated market in part
through the creation of such institutions as the International Monetary Fund
(IMF)7 and the World Bank.8
7
The IMF was created in 1945 and its “primary purpose is to ensure the stability of the international monetary system”.
One of its function is to lend to countries with balance of payment difficulties. (From the IMF website, www.imf.org)
8
The World Bank is an international financial institution set up ostensibly to provide “development assistance” to
middle- and low-income countries. It consists of two organizations: the International Bank for Reconstruction and
Development and the International Development Association. The USA has controlling voting interest in the Bank.
5 ESSENTIAL TRUTHS SERIES
Europe and China consolidate power in their countries. The developing countries
(the so-called Third World) also experienced vigorous growth with the developing
nations of Asia growing by an average of 7.6% from 1961-1970. [World Economic
Survey, 1971, 1972, 20]
But by 1970, the world economy had slowed, and inflation became
persistently high in a number of advanced capitalist countries. They were faced
with business stagnation coupled with high inflation that many feared would
further fuel the social unrest then prevalent in many countries. Then in 1971, the
United States totally abandoned the gold standard12 with the announcement of
US President Richard Nixon that the US dollar will no longer be convertible to
gold. This was a response to its large balance of payment deficits13 and double-digit
inflation. International transactions became unstable as the currencies of different
countries sought to adjust to this new reality thereby delaying recovery of businesses
in many countries. The developing countries suffered as a result given their very
weak position in the world economy. [World Economic Survey, 1971, 1972]
Today some people think and believe that President Marcos’s regime was
good for the economy. They even say it was the “golden age”. In a 2016 New York
Times article a number of people said that during that time “the Philippines was the
10
A centrally planned economy is an economic system in which a central authority, such as a government, makes
economic decisions regarding the manufacturing and the distribution of products. During that time, countries ruled by
communist parties are centrally planned. This is in contrast with market economies of capitalist democracies wherein
production and distribution of products are made by private businesses and consumers.
11
The Union of Soviet Socialist Republics (USSR) is the rival superpower of the United States during that time. It was
the leader of the communist world and was locked in a Cold War with the bloc of capitalist democracies led by the USA.
It was dissolved in 1991 and lost its status as a superpower. Twelve independent states emerged out of the dissolved: are
Russia, Georgia, Ukraine, Moldova, Belarus, Armenia, Azerbaijan, Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan,
and Tajikistan.
12
The gold standard is a monetary system in which the value of the currency of a country is linked to the value of
gold. A country on a gold standard cannot increase the amount of money in circulation without also increasing its gold
reserves. (https://www.mentalfloss.com/article/12715/why-did-us-abandon-gold-standard)
13
A balance of payments deficit means the country imports more goods, services and capital than it exports. It must
borrow from other countries to pay for its imports.
THE ECONOMY DURING THE MARTIAL LAW ERA (1972-1986) 6
leader of Asia,” “life was easier under Marcos,” and “the economy was booming.14”
The early years of the Marcos regime indeed saw respectable economic
growth. Gross domestic product or GDP—which roughly measures a country’s total
income—grew at an average of almost 6% per year from 1972 to 1980. This is good
insofar as high economic growth is typically (or at least in principle) a necessary
(though not sufficient) condition for achieving higher incomes and more jobs for
the people.
So large was this downturn that it took the country more than two decades
to recover the level of GDP per person in 1982. GDP per person back in 1982 was
more than P48,000. This dropped sharply because of the economic crisis during
the Marcos regime’s waning years and did not recover until 2003 (Figure 1). These
so-called “lost decades of development” singularly demonstrate the pernicious
impacts of the Marcos regime on the economic lives of Filipinos.
14
https://www.nytimes.com/2016/02/24/world/asia/30-years-after-revolution-some-filipinos-yearn-for-golden-age-of-
marcos.html
7 ESSENTIAL TRUTHS SERIES
During the Marcos years we also lost our standing as one of the economic
leaders in Asia. Back in the 1950s and 1960s, barring small nations like Brunei and
Singapore, we had in fact the largest per-person income among ASEAN countries.
But one by one our neighbors overtook us: Malaysia in the mid-sixties, Thailand in
the early eighties, and Indonesia in the late eighties. Today, the average Malaysian,
Thai, and Indonesian are much richer than the average Filipino. Even in times
of growth during the Martial Law years, our economy was not outstanding in
performance in comparison with our neighbors: Philippine GDP grew by an average
of 6%, while Malaysia grew by 8.1%, Indonesia by 7.5%, and Thailand by 7.1%. If
you include the crisis years of 1984 and 1985—which fall squarely within the Marcos
regime—our performance was even worse.
Finally, the economic crisis due to the Marcos regime pulled down our
country’s long-term economic trajectory. Filipinos today would have been richer
had we not deviated from the growth performance of our ASEAN neighbors. Based
on estimates by J.C. Punongbayan and Prof. Manuel Albis of the University of
the Philippines, and based on various assumptions, per-person incomes in the
Philippines would have been 3 to 4 times larger than present. This would have
catapulted us to the top of the ASEAN region in terms of average incomes.
The next question is: Why did the economic crisis happen in the first
place? We approach this question by first looking at the various sectors of the
economy, namely agriculture, industry, and services. Then we explore specific
policies that Marcos implemented in each.
15
Vertical integration is the control by a single entity of two or more stages of production normally operated by separate
companies.
16
Danding Cojuanco is a cousin of former President Corazon “Cory” Aquino and uncle to former President Benigno
“Noynoy” Aquino III. Cory Aquino is the daughter of Jose (Pepe) Cojuanco, Sr. Pepe’s brother, Eduardo (Endeng)
Cojuanco, Sr. is the father of Danding. These two branches had been at odds politically since the 1960s.
17
“Rolex 12” refers to Marcos’ twelve close confidants who engineered and implemented Martial Law. Ten were top
ranking military men. The only two civilians were Juan Ponce Enrile (who was Defense Chief then) and Danding
Cojuanco.
THE ECONOMY DURING THE MARTIAL LAW ERA (1972-1986) 10
United Coconut Oil Mills, Inc. (UNICOM), which at the time held 93% of the
country’s coconut milling capacity and controlled copra trading nationwide.
Danding also became the administrator of the Coconut Levy Fund, which comes
from the Coco Levy18 imposed on coconut farmers from 1971 to 1983 supposedly
to help develop the industry. The Philippine Coconut Authority (PHILCOA, today
known as PCA) was tasked to collect and manage the Coco Levy Fund. The initial
PhP100 million collected was used to establish the Coconut Industry Fund. The
collection which reached PhP 9.7 billion19 was used by Marcos and his cronies
(Danding Cojuanco and Juan Ponce Enrile among them) to set up or invest in their
businesses. Money from this Find was used to acquire two huge blocks of shares
from San Miguel Corp. Despite the huge amount collected from coconut farmers,
they remained one of the poorest in the country. To this day coconut farmers are
pushing to gain the promised benefits of the Coco Levy Fund.
But the land reform program was limited to agricultural lands planted
to rice and corn and did not cover lands planted to export crops such as coconut,
sugar and banana. Moreover, the coverage was limited to tenanted lands and did
not cover hacienda lands and lands owned by agricultural corporations. Because
of the exclusion of haciendas and agricultural corporations from coverage of land
reform, landless farm workers were not included as beneficiaries of the Marcos land
reform program. And because of its limited scope, only 12 percent (1.01 million
hectares) of the 8.49 million hectares of agricultural land were covered by PD 27.
18
The coco levy was the tax imposed on coconut farmers from 1971-1983. The initial tax imposed was 55 centavos for
the first domestic sale of every 100 kilos of copra. This was high for that time. For comparison, the minimum wage of
agricultural workers in 1971 was PhP4.75 according to data from the National Wages and Productivity Commission.
Over the years, the levy collected increased reaching PhP100 per 100 kilos.
19
The value of the coco levy assets today is estimated to be PhP 100 billion.
11 ESSENTIAL TRUTHS SERIES
Patents) for the land. Most of the tenants received Certificates of Land Transfer
which is not actually a land title but an instrument attesting that a particular
tenant is tilling a particular parcel of land and has future right to own the land
pending completion of landlord compensation and amortization by the beneficiary.
By 1987, only 314,000 former tenants have received CLTs for 539,000 hectares.
Wurfel [1989] citing Ministry of Agrarian Reform data said that by December
1984, only 120,702 tenant-beneficiaries received Emancipation Patents for 164,881
hectares of land. This, however, turned out to be an overestimation. Data from the
Department of Agrarian Reform (DAR) would show that only 15,061 hectares were
issued Emancipation Patents [De los Reyes, Librojo and Capacio, 2016]. This is
so because the original implementing rules of PD 27 provided that Emancipation
Patents can be issued to the beneficiary only upon full payment of the awarded
land. [De los Reyes, 2016]
Wurfel [1989] would claim that the primary desire of the Marcos land
reform program was to undermine the strength of the landed elite who oppose
Marcos. Moreover, as Elvinia [2011] noted, the Marcos land reform program enabled
many Marcos supporters among the landed elite to gain more land . [Hayami et al.,
1990: 69 cited by Elvinia, 2011].
B. Industry
C. Services
At any rate, labor market conditions during martial law were dire. Though,
unemployment levels remained low even during the martial law years, working
conditions began to deteriorate. The number of underemployed (employed workers
who wanted to work more hours or wanted to augment their incomes through
additional work) began to rise. Starting 1976, underemployment rate was more
than 20% (except for 1978). At one point (1983 and 1984) almost one-third of
employed workers were underemployed (Figure 3).
This lack of good, high-quality jobs and the worsening economic condition
led many a Filipino to seek greener pastures abroad. For millions of breadwinners,
working abroad was the only option. Thus, one might argue there’s a direct link
between the Marcosian economic crisis and the so-called OFW phenomenon.
Leading this move to export Philippine labor for the private sector was Jose
de Venecia, Jr. who was the first prime contractor for the export of Philippine labor
to the Middle East. De Venecia was a Marcos crony who controlled Landoil.20 The
number of Filipino overseas worker in the Middle East ballooned from just 7,800
in 1976 to more than 250,000 in 1975. At the start, overseas Filipinos working in
the Middle East consisted of engineers and skilled construction workers. Later, with
a push from the Philippine government, Middle Eastern countries opened their
20
Landoil, where Marcos had a 45% equity, borrowed USD 120 million, guaranteed by the Marcos government, to
build ports and drill for oil in the Middle East. The company eventually failed and left the Philippines with the USD 120
million debt.
THE ECONOMY DURING THE MARTIAL LAW ERA (1972-1986) 16
doors to services workers like hotel staff and nurses and to the most vulnerable of all
workers, women domestic workers. This last suffered the worst working conditions
and were, in many instances, treated as slaves by their employers. Working alone
within the confines of a single household in a foreign country, many women
domestic workers worked long hours and were in many cases subject to abuse and
even sexual abuse and rape. Eventually, the destination of women domestic workers
expanded to include Europe (Spain and Italy were favorite destinations), Hongkong
and Southeast Asia (particularly Singapore and Malaysia).
One priority of Marcos not mentioned as such when Martial Law was
declared was tourism development primarily for legitimacy, international influence,
patronage and personal fortunes. The regime invested substantial resources for
tourism development. In 1976, for example, between one-seventh and one-fifth of
government expenditures was allocated for tourism. The Development Bank of the
Philippines lent USD229.29 million in the first half of 1976 on tourism projects.
Jose Aspiras, the Secretary of Tourism then was one of the most powerful and
influential of Marcos’ cabinet. (Richter, 1980)
However, tourism promotion had a dark side. In 1979, 26% of the tourists
were Japanese, of whom 95% were males, traveling in groups. Most of their activities
had to do with visits to clubs, massage parlors, bars which proliferated in Manila.
The Japanese underworld organization, the Yakuza played a key role this kind of
tourism, facilitating the contacts with local operators and financing also the clubs
which offered these sexual services (De Dios 1992: 43 cited by (Bonnet, 2017)). The
number of cocktail lounges, bars and clubs increased exponentially from 225 to
436. The number of “hospitality women” in Manila issued with health certificates
increased from 1,700 in the early 1980s to more than 7,000 in 1986 (Manahan,
1991, 5 cited (Lim, 1998) and these are only the registered “entertainers”. In the
1980s, because of international pressure, the Japanese government began cracking
17 ESSENTIAL TRUTHS SERIES
down on sex tour. At the same time, changes in regulations in both the Philippines
and Japan led to the influx of Filipina “entertainers” to Japan. In other words,
instead of the Japanese going to the Philippines, the country started exporting its
women to Japan.
Today some people thank President Marcos for all the infrastructure
projects he built during his regime. Indeed, this plays an integral part of the “golden
age” myth.
Such projects include many buildings and edifices (like the Philippine
International Convention Center, Philippine Film Center, Folk Arts Theater),
hospitals (Heart Center, Lung Center, Kidney Institute, Philippine Children’s
Medical Center), roads and bridges (North Luzon Diversion Road, San Juanico
Bridge), hotels (today’s Sofitel), and even a nuclear power plant (Bataan Nuclear
Power Plant).
More importantly, the white paper also found that: “In a number of
instances, though the outward purpose of projects might be endowed with some
plausible or social justification, a more urgent reason for pursuing them was
the opportunity to use government activity as a vehicle for private gain, whether
pecuniary or political.”
Just as politicians today like to plaster their names on public works like
basketball courts, waiting sheds, and ambulances, Marcos favored large-scale public
infrastructure projects that people can easily associate with him and his regime.
True enough, people do that to this day.
It must be remembered that what Marcos spent on all these projects came
mostly from the colossal debt he accumulated in behalf of the country. Economic
growth at the time was debt-driven. During that period the Middle East countries
was awash with cash, what with oil price shocks21, and this led to a surfeit of
“petrodollars” which they sought to invest around the world. Marcos benefited in
part from the surplus, financing many of his projects.
In a span of five years, from 1977 to 1982, our country’s external debt
grew by a whopping $16 billion (Figure 5). Interest payments ballooned. Many of
21
From October 1973–January 1974, the price of oil nearly quadrupled the price of oil from $2.90 a barrel to $11.65 a
barrel.
19 ESSENTIAL TRUTHS SERIES
the new debt accrued to the public sector: the share of debt that went to the public
sector doubled from about 40% to 80% at the beginning and end of martial law.
At the same time, however, our country was running out of dollars to finance for
this debt. Apart from the excessive importation which resulted in the worsening
current account deficit22 (Figure 2), growing debt further bled our country dry of
foreign reserves.
Thus, while the economy unarguably grew especially during the early years
of martial law, debt piled up at the same time. From 1972 to 1981, debt growth
exceeded GDP growth by a factor of 3.4. Debt growth outstripped export growth—a
potential source of dollars—by a factor of two. Clearly, the debt was unsustainable.
Even with all the incurred debt, some of Marcos’ infrastructure projects
were especially unproductive. The Bataan Nuclear Power Plant, for instance, never
produced a single kilowatt-hour of power. The specialty hospitals—Heart Center,
Lung Center, Kidney Institute—all of which are found in Manila and were the
brainchild of Imelda, were also inefficient in the sense that they were grandiose
medical projects that focused the provision of health services in Manila and served
mostly the rich at the expense of the medical needs of our people in the provinces.
Inefficiency was rife across many other different projects, and this is plainly evident
in the country’s data on productivity and inefficiency.
It should be pointed out that debt per se is not bad as long as it is not
beyond the capacity of the country to pay. In the crisis year of 1983, debt-to-GDP
ratio grew to 56%, that is, the country’s debt was more than half of its domestic
income. Debt service ratio23 was 38%. This is clearly unsustainable and it took
several years for successive Administrations to lower the debt burden to sustainable
levels.
IV. What were the effects of Marcos’ policies and actions on the
financial health of the country?
In 1984, then Prime Minister Cesar Virata admitted that such behest
loans were abused:
Even the then Central Bank (the progenitor of the Bangko Sentral ng
Pilipinas) became bankrupt. This is astounding and jaw-dropping because a central
bank is literally the only institution that can print money. Marcos appointed friends
as Central Bank governor . He ordered them to lend loans to cronies which soon
became known as behest loans. This ran contrary to the typical function of a
Central Bank, which is supposed to be a banker of last resort of private banks and
not to individuals or corporations.
“In essence the problem is that the Central Bank is itself insolvent.
Abuse of its domestic credit creation during the Marcos era has left the Central
Bank with a portfolio consisting largely of uncollectable loans—effectively
fictitious assets— while past borrowing leaves the Central Bank with real
liabilities. The result is that the monetary authority runs a substantial deficit
and must be supported by the Treasury.”
had to declare a debt moratorium: basically they announced to the world that the
Philippines could no longer pay its debts.
Since that announcement previous creditors did not want to touch the
Philippines with a 10-foot pole. It became extremely difficult to obtain more foreign
funds to finance our dollar needs. Only the International Monetary Fund (IMF)
was willing to lend us any money with restrictive conditions that gave priority to
paying foreign creditors instead.
Inflation, which measures how fast prices are rising, reached 50.4% in 1984,
at the same time that our economy entered a deep trough. Before that, inflation
rates in excess of 20% or even 10% were commonplace. Skyrocketing inflation
eroded the purchasing power of people and made life harder for millions of
Filipinos. At the same time, workers’ real wages—or wages adjusting for inflation—
fell dramatically and steadily from the late sixties through the early eighties. In
1984, the Philippines was forced by the IMF to implement structural reforms which
involved belt-tightening measures.
Spending on key social services also took a hit. Whereas government spent
37% of its spending on education, this dropped to around 8% in 1984. By contrast,
spending on national defense grew from 17% in 1965 to 23% in 1977. Marcos
prioritized the military and infrastructure spending at the expense of social services
like health and education.
THE ECONOMY DURING THE MARTIAL LAW ERA (1972-1986) 22
Filipinos’ overall picture health suffered. Back in the 1960s the Philippines
had lower infant mortality and higher life expectancy than Thailand. But right
in the eighties the two countries switched places. Moreover, just as the decline of
infant mortality slowed down for the Philippines, so the rise of life expectancy here
also slowed down. More studies need to establish the causal link here, though. But
the slew of fancy if luxurious hospitals that Marcos had ordered built catered mainly
to the rich dwellers of Metro Manila. Health in the countryside, by comparison,
deteriorated.
Millions were also subjected to poverty and hunger. The rice sector saw a
renaissance of sorts, for rice productivity doubled from the mid-sixties to the mid-
eighties, from 1.24 metric tons of palay per hectare to 2.48.24 However, this did not
eradicate poverty and hunger. Poverty in fact demonstrably increased during the
martial law years as real wages went down and inflation went up. But this finding
was based on subsequent economic studies because during that Marcos regime the
government withheld (or stopped publishing altogether) poverty statistics(Figure 6).
24
https://www.manilatimes.net/marcos-green-revolution/246377/
23 ESSENTIAL TRUTHS SERIES
Far from solving the country’s malnutrition problem Marcos did not solve it.
In 1982, two of three families were not consuming the recommended minimum daily
calorie intake, and a whopping 69% of pre-schoolers were underweight. The famed
Nutribun intervention, credited as a flagship nutrition project of Marcos, was in
fact a USAID25 brainchild, specifically its Food for Peace program. Meanwhile, the
famines in Negros Island at the height of the economic crisis led to such deplorable
cases as Joel Abong (see next page), whose sorry plight and emaciated figure drew
the attention of the global press at the time. His severe malnutrition was especially
made striking by the fact that the Marcos government had been portraying all along
a robust economic situation, boasting abundance and prosperity. The truth could
not be farther from that.
“Young malnutrition victim Joel Abong sits in a crib at the Corazon Locsin Montelibano Memorial Regional
Hospital in Negros Occidental. Joel was plagued by illnesses through his short life. His condition was not helped
when sugar cane prices fell to a near all-time low in the mid-1980’s, causing workers like Joel’s father to lose their
jobs. Dozens of children, including Joel Abong, died on Negros Occidental in 1985.”
-Burgess, Anika (2016)27-
25
United States Agency for International Development is an independent agency of the United States federal government
that is primarily responsible for administering civilian foreign aid and development assistance.
26
Komenich, K. as cited in Burges, Anika [2016], Stark Photos of the 1986 Philippine Revolution that Took Down
a Dictator, Atlas Obscura. Retrieved from https://www.atlasobscura.com/articles/stark-photos-of-the-philippine-
revolution-that-took-down-a-dictator
27
Burges, Anika [2016].
THE ECONOMY DURING THE MARTIAL LAW ERA (1972-1986) 24
VI. Conclusion
In sum, the Martial Law era was emphatically not the “golden age” of
our economy. The country experienced its worst postwar recession. Protectionism
failed to develop our industries. Growth was largely debt-driven. Debt accumulated
at shocking and unsustainable rates. The Central Bank became bankrupt. The
Marcoses and their cronies plundered both the public and private sectors. Inflation
reached an all-time high. Underemployment skyrocketed. Poverty increased.
Filipinos’ health outcomes deteriorated.
At the end of the Marcos Administration, it was the dark age of Philippine
economy.
25 ESSENTIAL TRUTHS SERIES
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Boyce, J. [1993] The political economy of growth and impoverishment in the Marcos era.
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27 ESSENTIAL TRUTHS SERIES
ACKNOWLEDGEMENTS
Special mention is given to Jan Carlo B. Punongbayan who primarily wrote
this piece in a very straightforward and understandable manner. JC Punongbayan
is a PhD candidate from the School of Economics, University of the Philippines,
Diliman (UPSE). He graduated summa cum laude and valedictorian from USPE in
2009 and was awarded the Jose Encarnacion Jr. Award for Excellence in Economics
and the Gerardo P. Sicat Award for the Best Undergraduate Thesis. He later ob-
tained his M.A. degree from the same school in 2013.