His Excellency Ferdinand E. Marcos
President of the Philippines
On the 9th Philippine Business Conference
[Delivered on November 10, 1983]
Mr. Prime Minister
Distinguished Chairman of the 9th Philippine Business Conference,
Ladies and gentlemen of the Philippine Business Community:
We meet today to keep our annual appointment with each other under the auspices of this National Business Conference, and to joint our efforts anew in the quest for national stability, recovery and growth.
It has always been the abiding purpose of this yearly conference to address itself to the paramount problems of economic life in the country, and to assist in shaping the nation’s response to them. Yet perhaps never more than now has it been more urgent and necessary for the government and the private sector to pull together in meeting the problems and challenges before us.
For we meet today in profound awareness of a new time of travail in our country, marked above all by difficulties and anxieties in the economic scene the features of this new period of national trial are clear enough to all.
In the short span of three months, extraordinary developments have taken place affecting the financial foundations of the country. The nervousness of present world capital markets reached our shores at a time of vulnerability, ironically just when the nation was beginning to recover from the global recession. Demands for the payment on short term obligations to foreign lenders have mounted and new investment and loan inflows abroad practically ceased the export buildup and import slowdowns that resulted from measures taken earlier in the year provided insufficient to compensate for the deterioration on capital flows. And all these have gravely affected the country’s balance of payments position. As a consequence, the peso was depreciated by 21.4 percent on October 5: major adjustments have been made in the pricing of oil products and various commodities and services as well as in wages; and on the whole the availability of capital for development activities has been affected.
Matching these developments on the economic front are the new issues that have arisen in our political life issues that relate to the very capability or our political system to effect change and reform and to ensure the continuity of democratic processes and institutions.
It does not need belaboring by anyone for us to recognize the gravity and urgency of the present situation grave as these problems are, however, our present travail is not rooted in any kind of collapse of our economic or political fortunes. Rather, it stems from a climate of uncertainty and doubt that reflects on the one hand the apprehensions of the International Financial Community about the country and underlines on the other anxieties of the nation as a whole under the shadow of one tragic event in our country, the nation has been torn by division at home and held in doubt abroad. And the impact of this climate of anxiety has been to sow major economic difficulties for the nation.
The time is past for recriminations and regrets on how the country has lurched overnight into the throes of this present travail, and how spectacular, panic and fear have deeply aggravated our problems and provoked false impressions abroad of national instability and chaos. We can only face and we must, the situation before us, and together address ourselves to the task of recovery and reform.
Let me say now, that it is the firm resolve of your government to lead the nation in this recovery and reform effort. It will seek from all — not least from our business community — their counsel and support. It will l not shirk the decisions and the action that the times impel.
Already you are well aware that I have endeavored to consult with all sectors of our society in order to shape what should be our national response to the problems before us, also, you are doubtless aware of the various actions which government has already taken to squarely meet the present situation.
All these form part of the comprehensive program for recovery and reform that government is resolved to undertake. So let us fake the time to see this program in both its totality and detail.
It is overwhelmingly clear that whatever we may do in the present situation is greatly dependent on essential progress being made with regard to the restructuring of our foreign debt, and to the availment of new financing for economic development efforts. The financial foundation of the economy consequently must be our first priority.
In a certain sense what we face in regard to our financial requirements is not new. And it is also temporary. Practically the entire developing world has had its share of problems in this regard, and the Philippines is only one of 35 countries seeking rescheduling of its foreign debts and new financing for its development efforts.
What is new is the impact of international uncertainty upon this process, and the various effects that this uncertainty has had on normal capital follows into the country. The crisis and instability perceived initially by the international community were more imagined than real, but the fact remains that serious damage was done to the confidence of international financial institutions in the country. And this in turn precipitated the wave of speculation, capital flight and gloom that eventually brought us to our present predicament.
Recognition of the basic falsity of this perception of the Philippines has taken some time, but at last we can say now that international confidence in the stability of our country and the fundamental soundness of our economy is returning. Mainly due to fact-finding visits made to the country by International Financial Missions and through the intensive consultations and discussions our government has undertaken with them. The broad program to relieve the financial crisis is now in the stages of finalization.
Over the weekend, I am sending Prime Minister Virata to the United States to finalize the various plans and agreements. It is expected that these plans will assure support to meet development and balance of payments target’s and effect the restoration of the international reserve to a reasonable level. These involve among others the new agreement with the international monetary fund for the availment of new credits, and the reopening of new financing facilities to the country by the world bank and other financing institutions.
The remaining financing gap is proposed to be closed with resistance from international banks, both in the form of rescheduling of loan payments due in the next few years and of the infusion of new funds, including a committed facility to assure growth in International Trade Transactions.
This expected development notwithstanding, however, we must press on with our program to conserve our foreign exchange for vital needs of the economy. And to stress production efforts at home our goal must be on the one hand to permanently strengthen the country’s financial foundations, and on the other to address ourselves to the challenge of living on what we have and can produce.
It is for this reason that government has moved swiftly to cope with the severe transition problems attendant to the present foreign exchange situation.
The first step has been to adopt the measures necessary to arrest the immediate adverse trends and to lay the policy groundwork for structural adjustment taking into account the present situation. These include the peso depreciation and the adjustment or oil prices, together with the consequent changes in transportation and electricity costs and in minimum wages, the measures represent this first steps in realigning our imports and investment plans with our Foreign Exchange Generating capability.
Some immediate-term measures have been taken. Luxury and unnecessary imports have been banned. Consignment imports have been allowed for the raw materials needs of electronics and garments exports. No dollar import policies have been relaxed. In order to facilitate the inflow of needed material where these can be financed without calling on banking system dollar resources. Other arrangements are considered on a case to case basis.
The banking system has been the need and has agreed to pool with the international reserve, for as long as the emergency situation lasts, 80 percent of all foreign exchange receipts from exports of goods and services. This will ensure the maintenance of oil imports and thus keep the wheels of industry turning. Provision is also being made for the import requirements of export industries and for the import requirements of the absolutely vital domestic industries.
Needless to say, this effort is bound to be painful in the transition period that is now underway and we are not insensitive to the plaint of business in the light of austerity measures we have urged. But the times call for the full cooperation and goodwill among all sectors of the country — whether exporter or importer. Producer or consumer public or private entity — in order to transform the difficulties of the present into lasting foundations for economic stability and growth.
With similar resolution we must now stress and promote production efforts, especially toward the task of generating foreign exchange to pay for our import needs. The slogan of shifting funds. Energy and time production has always been a popular political slogan. Sometimes more honored in word than in deed today. This has become an economic reality or if you prefer a grim necessity for economic survival. We must place a premium on production and penalty on imports.
The priorities in the use of limited foreign exchange that we may be able to obtain in whatever form must be clearly set. Oil will be the first priority. Of course second are the raw materials for the manufacturer of goods and spare parts.
Like other non-oil producing developing countries. The Philippines had to suffer from the oil shocks of 1973-1974 and 1979 which caused oil prices to spiral from $2 – $4 a barrel to the present level of $34 a barrel and consequently for the country’s oil bill to soar from $300 – $400 to the present $2.1 billion out of total imports of $7.5 billion estimated for 1983.
It is in this spirit that we propose to assign our priorities of our import program. We must henceforth make every dollar count and ensure that foreign exchange is used only for essential needs. In this manner, we can continue to support our industries and manufacturing ventures by bringing in vital raw materials and machineries and thus promote the further growth of our non-traditional or manufactured exports.
As of 1982, these exports brought in $2.5 billion in foreign exchange receipts — about half of total exports. And it is envisioned that these will increase three-fold in the next five years. If we but address ourselves to the challenge of producing more for exports.
In addition, we must also stress the need to lay a strong foundation for self-sufficiency in agricultural products, especially food supply for our people we are deeply disturbed by reports to the effect that our farmers and food producers are not getting what due them and that the old vice of many middlemen intervening and adding various surcharges which finally account for the untoward price increase of food items and prime commodities. This must immediately be stopped, if necessary, I will issue a decree making it illegal to the middlemen to impose unusually high premiums or costs for their services. Our policy henceforth will be to shorten the journey of goods from producers to consumers.
As an example, there is the action we have taken in regard to sugar. I have directed that we flood the market with sugar, in as much as we have plenty of this commodity. Those who have been hoarding sugar for the past several months and have been trying to manipulate its price will then be faced with losses in their inventories.
We are wholly confident that with the expected easing of the various financial stresses on the economy, we can fully hold line on inflation and at the same time fuel the broader process of economic recovery. We are in no doubt about the fundamental stability of the national economy, and that in time the engines of enterprise and production will revive and grow.
To our business community, let me assure you now that we fully realize the all-important role that you have in this recovery effort, we are mindful of your needs, and will do all we can to help, even as we also stress the need for a measure of austerity at this time the times are hard and require the application of strong medicine; but it is not our goal to achieve equilibrium in our balance of payments at the expense of our private sector and certainly we will move to avert any possible bankruptcies and mass layoffs of workers from happening.
Finally, I wish to turn briefly to certain political questions which I believe have been also a major concern of your present conference.
Let me say first of all that now more than ever there should be no reason to doubt the strength of our resolve to effect reforms in our political institutions and to ensure the continuity of democratic processes in our land. Where it is necessary to amend our fundamental laws, we shall amend where it is necessary to strengthen processes by decree, we shall write the same.
It has always been our resolve that the elections of a new parliament in 1984, as prescribed by our constitution, must take place to strengthen and make manifest the continuity of democratic government in our country. That resolve remains, and we will definitely hold elections next year.
For these elections, however, it is necessary that major reforms be undertaken in our election code in order to ensure the broadest participation in the electoral exercise. You will remember that this remember that this matter formed a substantive part of our message to the Batasan last July. In addition further reform measures have now been recommended among which is the change from the election of assemblymen by region to one by province, the elimination of bloc voting, an amendments relating to the preparation if necessary of new voter registration lists, and the provision of inspectors to the opposition. Likewise we have invited the opposition to nominate their representatives to fill two vacancies in the commission on elections,
These constitutes the earnest of government to hold clean orderly and democratic elections in 1984 and there should be no basis now not to participate in this electoral process for anyone and any group who truly desire parliamentary resolution of political questions in our national life.
Secondly, the question of succession has been raised, and it is felt by many that the device of succession provided for by the constitution is inadequate to avert turmoil in the fortuitous event of my inability to exercise the powers of the presidency. This extends far beyond the issue of the President’s health, which remains, thank god, good contrary to all the rumors you hear. But while the executive committee provision may have sufficed before to answer the question of succession, it may be that it no longer suffices now to answer public clamor for a fail-safe process of succession.
I believe that action we take on this matter should not precipitately returns to the presidential form of government and summarily sacrifice the move towards the parliamentary system that constitutions has provided for and which have taken.
The solution as I see it lies in investing the succession in the office of prime minister, and in preserving the provision that will require for the calling of presidential elections within a period of 60 days subsequent to his assumption of presidential powers. Whether an amendment is necessary and how it should be made, we must now resolve.
With regard to the so-called proposals for the revival of the Vice-Presidential Office, let me say now what I frankly think about this. Because of recent history. I’ve become allergic to the idea of the vice-presidency. Vice-Presidents have become instant and ardent cardiology experts while listening to the heartbeat of the president.
And while we are on me subject let us dismiss once and for all those fears about so-called threats of a military takeover of our government. You and I know that this has always been largely the figment of the imagination of zealous foreign media men and of some oppositionists who while not believing in it hope to profit from all the talk about it. The whole idea is repugnant to our traditions as a people and we dishonor our military in assigning such dark intentions to it
In the last analysis, burying this speculation can only come from the actual and demonstrated strength and continuity of our democratic processes and it is in this light that the elections of 1984 and other political reforms become so important and require the support of all of us.
We should not despair so soon of the political system we have instituted. Simply because of the rumors we hear or the challenges before us now. Indeed, we should remember that it was this very system — its resiliency and strength — that enabled us to surmount crisis after crisis in the past. It is a system open to reform and change, and it is open now to the kind of reform that the times truly require but it is a mistake to imagine that under the present situation we are called upon to return to the ways of the past, and to the recreation of offices that never served us well and are unlikely to serve us in future.
Applying ourselves to these twin tasks of economic recovery and political strengthening. I have no doubt that the nation will fully surmount the present time of trial.
There is no question that in the days ahead, we must all brace ourselves for self-sacrifices and burdens that will be for a time exacting and stringent. But this simply means that we all must exert ourselves more than we ever did before for it is not enough for the nation to surmount the adversities of the day. we must above all prosper.
This cannot be accomplished short of unity of action and resolve.
This government, let me repeat will lead in this effort of recovery and reform. It will not spare itself the austerity measures that the times demand. It will not relent in fundamental reforms necessary to the strengthening of our democratic institutions. It will not compromise in the tasks of reshaping the very machinery of government to make it more effective and responsive. It will be the first to practice and bear what it urges others to carry in this period of national trial.
But let us also recognize that the present situation is not helped by the actions of those who endeavor to manufacture an image of instability in the country. You in the business community know only too well how such actions have in the end gravely affected your sector and how the entire nation has reeled under the erosion of international confidence in the fundamental stability and health of our country.
In my meetings with various groups some weeks ago, I sought their support in desisting from such actions which I believed then would be injurious to international perceptions of the country. Unfortunately, my efforts were summarily taken as some sort of cover-up of the Aquino case and the complications it brought about.
There are real problems enough for us to face and resolve. There are tasks for everyone to bear in their respective sectors of our society. So there is no need to manufacture imaginary ones. That unfortunately are taken by others seriously even while it may be just a picnic for some of us.
As we face our problems and difficulties together, let us say in all realism that the task at the hand is formidable, and that recovery and stability cannot be the work of a single day or a single act, but of many. But let us also take heart from the sure and certain knowledge that united and working together, our nation will surely survive and prosper.
Thank you and good day.
Source: Presidential Museum and Library
Marcos, F. E. (1983). Speeches by President Ferdinand E. Marcos. [Manila] : Presidential Library.