Economic Changes

To hasten the economic development, President Marcos implemented a number of economic programs. These programs helped the country to enjoy the period of economic growth I the mid-1970's up to the early 1980's.

The farmers were given technical and financial aid and other incentives such as "price support". With the incentives given to the farmers, the country's agricultural sector grew. As a result, the Philippines became self-sufficient in rice in 1976 and even became a rice exporter.

To help finance a number of economic development projects such as soil exploration, the establishment of geothermal power plants, the Bataan Nuclear Plant, hydro-electric dams, the construction of more roads, bridges, irrigation systems and other expensive infrastructure projects, the government engaged in foreign borrowings.

Foreign capital was invited to invest in certain industrial projects. They were offered incentives including tax exemption privileges and the privilege of bringing out their profits in foreign currencies. One of the most important economic programs in the 1980's was the Kilusang Kabuhayan at Kaunlaran (KKK). This program was started in September 1981. Its aim was to promote the economic development of the barangays by encouraging the barangay residents to engage in their own livelihood projects.

The government's efforts resulted in the increase of the nation's economic growth rate to an average of six percent to seven percent from 1970 to 1980. The rate was only less than 5 percent in the previous decade. The Gross National Product of the country (GNP) rose from P55 billion in 1972 to P193 billion in 1980.

Another major contributor to the economic growth of the country was the tourism industry. The number of tourists visiting the Philippine rose to one million by 1980 from less than 200,000 in previous years. The country earned at $500 million a year from tourism. A big portion of the tourist group was composed of Filipino balikbayans under the Ministry of Tourism's Balikbayan Program which was launched in 1973.

Another major source of economic growth of the country was the remittances of overseas Filipino workers. Thousands of Filipino workers found employment in the Middle East and in Singapore and Hongkong. These overseas Filipino workers not only helped ease the country's unemployment problem but also earned much-needed foreign exchange for the Philippines.

FOREIGN-RELATIONS POLICY UNDER MARCOS REGIME

In 1976 President Marcos announced to the Filipino people his policy of establishing relations with communist countries such as the People's Republic of Chine (june 9, 1975) and the Soviet Union (June 2, 1976).

Relations with the United States was modified. It was no longer based on the "sentemental ties" but on mutual respect for each other's national interest. Thus, the military and economic agreements between U.S. and the Philippines were amended to reflect this new relationship. In the amendments to the RP-U.S. Military Bases Agreement of 1947, the U.S. acknowledged the sovereignty of the Philippines over the American military bases in the country (Subic and Clark). These bases would have a Filipino commander and would fly the Philippine flag. IN addition, the U.S agreed to pay rentals to the Philippines for the use of the bases.

Marcos established closer ties with the Asian countries. The Philippines became a leading member of the Third-World – the collective name for the developing countries at that time. The Philippines actively participated in such world conferences as the United Nations Conference on Trade and Development (UNCTAD) meeting held in Nairobi, Kenya, in 1976 and in the International Meeting on "Cooperation and Development held by the heads of 21 nations in Cancun, Mexico, in 1981.

Marcos took his oath of office on June 30, 1981 at the Luneta Park for a six-year term ending in 1987. On that occasion Marcos announced the establishment of a "New Republic of the Philippines". 
 

The lifting of Martial Law

After implementing the program of development, Pres. Marcos issued Proclamation NO. 2045 on January 17, 1981, lifting Martial Law. Martial Law lasted for eight years, 3 months and 26 days. Mr. Marcos lifted Martial law to show to the Filipinos and the world that the situation in the Philippines was already back to normal. The government had already been functioning smoothly under the 1973 Constitution. Despited the lifting of Martial law, however, Marcos remained powerful and practised authoritarian rule.
 

The Presidential Election of 1981

Marcos called for a presidential election to be held on June 16, 1981. In this election he had Alejo Santos of the Nacionalista Party as opponent. Former Senator Benigno Aquino, Jr. was then living in exile abroad and could not run for presidency. The Liberal Party did not take part in the election. It was a runaway victory for Marcos who obtained 88% of the total votes cast. It was believed that Marcos won in the 1981 election because he was in full control of the situation.

Marcos took his oath of office on June 30, 1981 at the luneta Park for a six-year term ending in 1987. On that occasion Marcos announced the establishment of a "new" Republic of the Philippines.

THE RETURN AND ASSASINATION OF BENIGNO S. AQUINO, JR.

When martial law was proclaimed, the first politician to be arrested by the military on order of Ferdinand Marcos was Benigno S. Aquino, Jr. Aquino, a popular political leader, spent nearly eight years in a military detention cell at Fort Bonifacio.

In 1980, Marcos allowed Aquino to leave the country to enable him to undergo an emergency heart bypass operation in the United States. When Aquino decided to come home in 1983, the government tried to stop him, claiming that there were some people who wanted to kill him. He was asked to postpone his return. But Aquino persisted, and by using fake travel documents, he was able to fly back to the Philippines.

When the China Air Lines jetliner carrying him landed at the Manila International Airport at about 10:00 p.m., on August 21, 1983, soldiers boarded the plane and took him away. As Aquino and his military escorts were going down a stairway, a shot was heard, followed later by more shots. After a while, Aquino laid dead on the airport tarmac. Nearby laid the body of Rolando Galman. Galman was pointed as Aquino's "assassin."

The assassination of Aquino was reported to have awakened the Filipinos to the evils of Marcos as a dictator. Millions of Filipinos who sympathized with Aquino bereaved family, joined the funeral march to mourn for the death of an intelligent leader and to express their feelings against Marcos.

The assassination transformed Ninoy Aquino into an "idol". The battlecry "Ituloy ang laban ni Ninoy!" and "Ninoy, hindi ka nag-iisa" were heard from anti-Marcos demonstrators that erupted in Metro Manila and other urban center in the country.

The demonstrations were participated by different sectores, namely students, workers, farmers, businessmen, professionals and religious (nuns, priests and seminarians).

Many militant and cause-oriented groups were the August Twenty-One Movement (ATOM), Justice for Aquino, Justice for All (JAJA), Bagong Alyansang Makabayan (BAYAN).

The Aquino assassination gave Marcos a bad image abroad, Public opinion in the United States went against Marcos. President Reagan of the United States cancelled his state visit to the Philippines.

On October 14, 1983, President Marcos issued PD 1886 creating a five-man independent body to investigate the Aquino assassination. Headed by Mrs. Corazon Juliano Agrava, a retired Court of Appeals Justice, the investigation body came to be known as the Agrava-Fact-Finding Board (AFFB). The other members of the board were businessman Dante Santos, labor leader Ernesto Herrera, lawyer Luciano Salazar, and educator Amado Dizon.

The members of the AFFB, however, identified 25 military men and a civilian as participants in the plot. Those identified include AFP Chief of Staff General Fabian C. Ver, Jam. General Prospero Olivas of the PC Metropolitan Command (METROCOM) and Gen. Custodio.

President Marcos referred the two reports to the Sandiganbayan for trial. The trial began in Feb. 1985, and was presided over by Sandiganbayan Presiding Justice Manuel Pamaran. This trial became known as "Trial of the Century".

On December 2, 1985, the Sandiganbayan handed down its decision. The tribunal ruled that the 26 accused were innocent and that it was Galman who was hired by the communist who killed Aquino.
 

THE DECLINE OF THE ECONOMY

As the investigation and trial of the Aquino Assassination was going on, the Philippine economy was having hard times. There was a slow down of economic activities caused largely by high price of oil. The Philippine traditional exports such as sugar and cocunut oil were experiencing a price decline in the world market. The government was forced to borrow more money from the International Monetary Fund to help keep the economy going. The foreign debt of the Philippines reached $26 billion. A big portion of the annual earning of the country was allocated to the payment of annual interest on loans.

The tourism industry suffered a great decline after the Aquino Assassination. The wave of anti-Marcos demonstrations in the country that followed drove the tourists away. In addition, the political troubles hindered the entry of foreign investments. Foreign banks also stopped granting loans to the Philippine government. Foreign creditors started demanding payment of the debts which were already past due.

Without an adequate supply of foreign exchange, the industry sector could no longer import raw materials needed in production. Many factories had to close shop of cut their production because of the difficulty of obtaining raw materials. Many workers were laid off.

Marcos tried to launch a national economic recovery program. He nogotiated with foreign creditors including the International Bank for reconstruction and Development, World Bank, and the International Monetary Fund (IMF), for a restructing of the country's foreign debts – to give the Philippines more time to pay the loans. Marcos launched the Sariling Sikap, a livelihood program, in 1984. He ordered the cut in government expenditure to be able to save money for financing the livelihood program.

Despite the recrovery program, the economy continued to decline. A negative economic growth was experienced in the country beginning in 1984. The failure of the recovery program was due to the lack of credibility of Marcos and the rampant graft and corruption in the government. Many officials went on stealing the people's money by millions through anomalous transactions. Marcos himself spent large sums of government funds to help the candidates of the KBL to win.