VII Economic Impact of Martial Law

A. Cronyism and Corruption

Corruption, cronyism and debt greatly contributed to the country’s economic problems especially since
the last years of the Marcos dictatorship. Corruption and cronyism kept enterprises inefficient, while
mounting debt servicing drained the government and the economy’s finances. The lingering crisis and
“lost decades” after were however most of all from how neoliberal policies wrought havoc on the
country’s production sectors.

The US-dominated IMF-World Bank and transnational commercial banks willingly lent to the dictatorship
knowing how this was going to the Marcoses, his cronies, and grand-scale corruption. They knew that
this debt would be fully repaid – as immediately affirmed by the subsequent Corazon Aquino
government – and supported the neoliberal restructuring of the economy by the Marcos regime.

There was clearly no contradiction between neoliberalism and crony capitalism. The monopolies Marcos
created for Cojuangco, Benedicto, Floirendo, Tan, Enrile, Alcantara and other cronies – in sugar,
coconut, bananas, tobacco, logging, mining, telecommunications, banking, construction, vehicle,
assembly, energy, shipping, pharmaceuticals, medical supplies, and elsewhere – were providing the raw
materials, cheap labor, markets and investment outlets ever sought by monopoly capitalism.

The Philippines was dubbed the ‘sick man of Asia’ after the Marcos dictatorship, and it has not gotten
any better as neoliberal policies only got worse.

Crony capitalism by various associates of both Ferdinand and Imelda Marcos, historically referred to
using the catchphrase "Marcos cronies", led to the creation of Monopolies in numerous key industries,
including sugar, coconut, logging, tobacco, bananas, telecommunications, broadcast media, and
electricity, among others.

B.Imposition of Economic Policies

Most of Marcos' first term continued the economic trends established by the Garcia and Macapagal
administrations. 128 The Asian Development Bank became headquartered in the Philippines in the
1970s. But the end of that first term in 1969 was marked by the 1969 Philippine balance of payments
crisis which was the result of heavy government spending linked to Marcos' campaign for his second
presidential term. As a result, economic policy began to reflect the preferences of the International
Monetary Fund and the World Bank.
The Balance of Payments crisis triggered broad social unrest. The first three months of 1970s were
marked by protests from different sectors, most notably students, which eventually became known as
the First Quarter Storm. This included "moderate" groups which called for political and economic
reforms within the existing system, and "radical" groups which included communist and socialist groups
which called for broad structural changes. Protests during the First Quarter storm and in the two
succeeding years sometimes became violent, as was the case of the January 30 Storming of Malacañang
Palace, and the Diliman Commune incident of February the following year. Marcos blamed this social
unrest on the still-new Communist Party of the Philippines, which had just been established the year
before. This period was also marked by a series of bombings, beginning with the Plaza Miranda bombing
and continuing for a year as the 1972 Manila bombings, whose perpetrators remain the subject of
debate to this day.

With the end of Marcos' last constitutionally-allowed term approaching, opposition senators exposed
the existence of "Oplan Sagittarius," a plan to declare martial law and extend Marcos's stay in office. He
did so a week later, issuing Proclamation No. 1081, a declaration that suspended civil rights and imposed
military rule in the country.

C.Long-Term Effects on the Philippine Economy

After experiencing years of positive growth, the Philippine economy between 1973 and 1986 suffered a
downturn due to a mixture of economic mismanagement and political instability amidst a global
economic recession. After the 1972 Martial Law declaration, Marcos continued his strategy of relying on
international loans to fund the projects that would support the booming economy, prompting later
economists to label this a period of "debt driven" growth. Massive lending from commercial banks,
accounting for about 62% percent of external debt, allowed the GDP of the Philippines to rise during
martial law. Much of the money was spent on pump-priming to improve infrastructure and promote
tourism. However, despite the aggressive borrowing and spending policies, the Philippines lagged
behind its Southeast Asia counterparts in GDP growth rate per capita. The country, in 1970–1980, only
registered an average 5.73 percent growth, while its counterparts like Thailand, Malaysia, Singapore,
and Indonesia garnered a mean growth of 7.97 percent. This lag, which became very apparent at the
end of the Marcos Regime, can be attributed to the failures of economic management that was brought
upon by State-run monopolies, mismanaged exchange rates, imprudent monetary policy and debt
management, all underpinned by rampant corruption and cronyism.

Income inequality grew during the era of martial law, as the poorest 60 percent of the nation were able
to contribute only 22.5 percent of the income in 1980, down from 25.0 percent in 1970. The richest 10
percent, meanwhile, took a larger share of the income at 41.7 percent in 1980, up from 37.1 percent in
1970.
According to the FIES (Family Income and Expenditure Survey) conducted from 1965 to 1985, poverty
incidence in the Philippines rose from 41 percent in 1965 to 58.9 percent in 1985. This can be attributed
to lower real agricultural wages and lesser real wages for unskilled and skilled laborers. Real agricultural
wages fell about 25 percent from their 1962 level, while real wages for unskilled and skilled laborers
decreased by about one-third of their 1962 level. It was observed that higher labor force participation
and higher incomes of the rich helped cushion the blow of the mentioned problems.

VIII Challenges and Legacy of Martial Law

A.Post-Martial Law Period: Transition and Reconciliation

Marcos Senior declared martial law as a necessary means to curb a “communist threat” and the
sectarian rebellion of the Mindanao Independence Movement. For people who understood the
situation, martial law was intended to extend the president’s term beyond the maximum two terms
allowed by the 1935 constitution.

The fall of the dictatorship during the People Power Revolution was the fruit of long years of
conscientization, organizing and mobilization of all social sectors. The dictatorship collapsed when the
anti-Marcos struggle reached its peak after the assassination of former Senator Benigno Aquino.

Thirty-seven years ago, the People Power Revolution took place. Showing the power of the people
against authoritarianism, people from all walks of life gathered at Epifanio de los Santos Avenue (EDSA).
For four days, nuns, priests and other Church people from other denominations took to the streets.
Chanting, singing, and praying for the dictatorship’s fall, they braved the threats of tanks, guns,
truncheons and teargas to attain the elusive freedom and much-avowed democracy.

While Marcos had declared victory during snap elections, the EDSA revolution thwarted the fake victory
and catapulted Corazon Aquino, widow of the assassinated senator to power.

A year later, the 1987 Constitution which emphasized a Bill of Rights and the establishment of the
Commission on Human Rights (CHR), was crafted. The CHR is tasked with investigating rights violations,
although its major limitation is its lack of fiscal autonomy and the absence of prosecutorial power.
It also failed to address the pressing structural problems of Philippine democracy. Not all provisions
guaranteeing the non-recurrence of dictatorial rule were implemented, so human rights violations were
not fully addressed and the military enjoyed political favors and remained a powerful bloc.

Early on in her administration, Aquino released all political prisoners, restored the writ of habeas corpus,
regained democratic space and significantly reduced the number of rights violations. She invited the UN
Working Group on Enforced or Involuntary Disappearances to visit in 1990, confirming enforced
disappearance cases during the Marcos regime and her administration. Human rights violations declined
but were not sustained. Aquino’s administration was marred by several coup attempts by the same
military that rebelled against Marcos.

The 37th EDSA anniversary is the first commemorated under Marcos Jr. Referring to the “time of our
history that divided the Filipino people,” he stated: "I once again offer my hand of reconciliation to those
with different political persuasions to come together as one in forging a better society — one that will
pursue progress and peace and a better life for all Filipinos."

Can there be reconciliation without truth and justice? Martial law victims and survivors are conducting
events during these days to remember what happened during the darkest moment of Philippine history
and to pay tribute to all those whose memory shall never be forgotten. Never again.

B.Historical Narratives and Memory of Martial Law

In his memoir, then Justice Secretary Juan Ponce Enrile recalled that on a late afternoon in December
1969, Marcos instructed him to study the powers of the President as Commander-in-Chief under the
provisions of the 1935 Constitution. Marcos made this instruction as he “[foresaw] an escalation of
violence and disorder in the country and [wanted] to know the extent of his powers as commander-in-
chief.” The President also stressed that “the study must be done discreetly and confidentially.”

At about the same time, Marcos also instructed Executive Secretary Alejandro Melchor and Jose
Almonte to study how Martial Law was implemented in different parts of the world. Marcos also wanted
to know the consequences of declaring Martial Law. The result of their study stated that, “while Martial
Law may accelerate development, in the end the Philippines would become a political archipelago, with
debilitating, factionalized politics.” Almonte recalled that their findings led to the conclusion that “the
nation would be destroyed because, apart from the divisiveness it would cause, Martial Law would offer
Marcos absolute power which would corrupt absolutely.”
By the end of January 1970, Enrile, with the help of Efren Plana and Minerva Gonzaga Reyes, submitted
the only copy of the confidential report on the legal nature and extent of Martial Law to Marcos. A week
later, Marcos summoned Enrile and instructed him to prepare the documents to implement Martial Law
in the Philippines.

In his January 1971 diary entries, Marcos discussed how he met with business leaders, intellectuals from
the University of the Philippines, and the military to lay the groundwork that extreme measures would
be needed in the future. On May 8, 1972, Marcos confided in his diary that he had instructed the
military to update its plans, including the list of personalities to be arrested, and had met with Enrile to
finalize the legal paperwork required.

On August 1, 1972, Marcos met with Enrile and a few of his most trusted military commanders to
discuss tentative dates for the declaration of Martial Law—to fall within the next two months. All of the
dates they considered either ended in seven or were divisible by seven, as Marcos considered seven his
lucky number.

“Never again”

After the declaration and imposition of Martial Law, citizens would still go on to challenge the
constitutionality of Proclamation No. 1081. Those arrested filed petitions for habeas corpus with the
Supreme Court. But Marcos, who had originally announced that Martial Law would not supersede the
1935 Constitution, engineered the replacement of the constitution with a new one. On March 31, 1973,
the Supreme Court issued its final decision in Javellana v. Executive Secretary, which essentially
validated the 1973 Constitution. This would be the final legitimizing decision with on the
constitutionality of Martial Law: in G.R. No. L-35546 September 17, 1974, the Supreme Court dismissed
petitions for habeas corpus by ruling that Martial Law was a political question beyond the jurisdiction of
the court; and that, furthermore, the court had already deemed the 1973 Constitution in full force and
effect, replacing the 1935 Constitution.

Martial Law would officially end on January 17, 1981 with Proclamation No. 2045. Marcos, however,
would reserve decree-making powers for himself.

Today, the 1987 Constitution safeguards our institutions from a repeat of Marcos’ Martial Law regime.
The Supreme Court is empowered to review all official acts to determine if there has been grave abuse
of discretion. Congress cannot be padlocked. Martial Law is limited in duration and effects, even if
contemplated by a president. Section 18 of Article VII of the current Constitution.
C.Lessons Learned and Continuing Struggles for Democracy

Martial law indeed impacted the whole country and the people. The majority of the peoplewere against
it and others believed perhaps martial law wasn’t as bad as we thought of it. Itwas highlighted in our
past history how brutal Marcos did to the Philippines and he was labeledas a dictator of the country. It
was no secret that the crisis was getting worse at that time,thousands of people suffered from this law
in which they experienced being imprisoned, arrested,executed, and was abused by the military forces,
no doubt, our history was more than a rollercoaster ride. Considering the fact that Marcos bribed some
of the officials by giving each of thema watch. 12 of them were bribed to support his top-secret
propaganda that was called the “OplanSagittarius”, and the people behind it were labeled as Marcos’
Rolex 12. Lol

On the first days of this proclamation, the country responded well. They also believe that thePhilippines
is sick, rebellion against the government has been in power in some rural places, andcommunist armed
forces are trying to invade the nation. But I also believed that FerdinandMarcos's authority during that
time exceeded his limitations as the head of state. Marcos amended the constitution several times
during Martial law, and I believe he used this for hisgood. Democracy has been ceased, and no news
opposing the Marcos administration can be seenin broadsheets and even in the broadcast media such as
radio and television; they also put intoclosure those media stations that attack the wrongdoings and
failures of the Marcosadministration. They put into prison those people whose only objective is to say
what they thinkis right and what they feel is best for the nation.

At first, knowing that a bright Filipino would take over the president’s position during thosetimes, I feel
contented because my impression regarding how he would rule the Philippines willbe in a good state.
However, as I continued watching the documentary, my contentment feelingturned into anger because
as he proclaimed that the Philippines will be under Martial Law, mygood impression of him was ruined.
Among 37 interviewees in the documentary, only 4 of themremain alive to this day; Satur Ocampo
(National Democratic Front founder, Bayan Munarepresentative), Bernabe Buscayno (New People's
Army founder), Imelda Marcos (First Lady ofthe Philippines from 1965 to 1986), and Fidel V.
Ramos(President of the Philippines from 1992to 1998, chair of the Philippine Constabulary during the
Marcos regime).

During the Martial Law era, I firmly believed that not to mention the benefits that thisannouncement
provided us, such as discipline, obedience, and allegiance to the ruler. The authorities have used the
declaration of martial law in such a way that the citizens of this countrywill despise them, violating their
constitution, corrupting the people's money, corrupting thecitizens' rights, and corrupting the minds of
the military whose primary goal is to defend thecountry, not to harm its citizens. Martial law
reawakened patriotism and a desire for democracy rather than dictatorship by those in control. Citizens'
minds were opened to move, join, and fight due to martial law.

Human rights should not be compromised to achieve a common aim. We must outline our goalsand
vision regarding citizens' rights and our constitution to move forward.