The Cory Administration: Challenges and Transitions

The Global Economy during the 80s

• The 1980s are referred to as the “lost decade” for the developing world (Boughton, 2002).
• The International Monetary Fund (IMF) established strict lending conditions due to the international debt crisis of 1982, which discouraged international banks from providing short-term loans to developing countries.
• Many nations adopted export-oriented policies to qualify for loans, with governments playing indirect roles.
• A drop in commodity prices negatively affected the exports of developing countries.

Philippine Exports (1984-1986)

The following table shows Philippine exports from 1984 to 1986:

The End of the Marcos Regime

• Increased deficit spending, failure of the sugar industry, and economic collapse occurred by 1984.
• Outstanding foreign loans increased from 2.6B in 1975 to 25B in 1983.
• Massive Overseas Filipino Worker (OFW) deployment began.
• The Moro National Liberation Front (MNLF) was weakened due to internal issues and a full-scale war from 1973-1977, which resulted in over 13,000 deaths.
• The New People's Army (NPA) gained strength, despite the capture of its leader, Sison, in 1977 (with approximately 25,000 combatants).
• The military became frustrated.
• Religious opposition, led by Jaime Cardinal Sin, grew.
• Marcos' health deteriorated, creating uncertainty about his successor.
• August 21, 1983: Ninoy Aquino assassinated.

1986 Snap Elections

• Refers to the 1986 Snap Elections, which were a key event leading up to the People Power Revolution.

EDSA People Power Revolution

• The EDSA People Power Revolution was preceded by a walkout of COMELEC (Commission on Elections) computer analysts during the 1986 snap elections, protesting the cheating they were being made a part of.
• It was followed by a coup led by Juan Ponce Enrile and Fidel Ramos, supported by the Reform the Armed Forces Movement (RAM) led by Col. Gringo Honasan, and a call to support them by Cardinal Sin.
• On February 25, 1986, Cory Aquino was inaugurated in Club Filipino and formed a revolutionary government.
• Marcos left upon request of the U.S., was rescued by a U.S. helicopter, and went into exile in Hawaii.

Negative Economic Growth

• Philippine GDP growth from 1960-1990 showed negative economic growth during certain periods.
• The source is PSA (Philippine Statistics Authority), and the data is visualized with red bars denoting Marcos's years in power (de Dios, Bautista, and Punongbayan, 2021).

External Debt

• In 1985, the Philippines had a 28.2 billion debt.
• The data represents total outstanding external debt, public share of external debt, and debt in relation to GDP from 1970-1986.
• The source is the World Bank (de Dios, Bautista, and Punongbayan, 2021).

Lagging Behind ASEAN Economies

*The Philippines lagged behind other ASEAN (Association of Southeast Asian Nations) economies in average annual GDP growth from 1972-1980 (martial law period).
*GDP Growth:
*Indonesia: 8.76
*Malaysia: 7.49
*Philippines: 5.98
*Singapore: 8.11
*Thailand: 7.11

• The source is the World Bank (de Dios, Bautista, and Punongbayan, 2021).

Government and Crony-Controlled Corporations in 1986

• San Miguel Corporation
• MERALCO (Manila Electric Company)
• National Waterworks and Sewerage Authority (NWSA)
• Philippine Airlines
• Petron
• Philippine National Oil Company (PNOC)
• Philippine Sugar Corporation (PhilSuCom)
• ABS-CBN
• Philippine Long Distance Telephone Company (PLDT)
• Fortune Tobacco Corporation

The Mendiola Massacre

• On January 22, 1987, 12 protesting farmers were killed in what is known as the Mendiola Massacre.

Group Activity: The Transition to Democracy

The transition to democracy involved the following:

1. Each group must assess the assigned problem and come up with a policy proposal with the following:

   • 2-3 main challenges
   • Specific goals
   • Proposed policies to address those issues (short term)

2. Explain how this policy will benefit the nation.

3. Share your proposals with the class after 10 minutes.

   • Agriculture and agrarian reform
   • Foreign debt and weak investor confidence
   • Hidden wealth and assets held by cronies and the government
   • Weak political institutions
   • High population growth rate

Democratic Institutions Under Cory

• 1987 Constitution
  • Set a presidential limit of a single 6-year term
  • Restored the two houses of Congress
  • Elected legislators acted like “mini-presidents”
  • Limited foreign investments to 40%
• Local government code
  • Empowered local politicians (e.g. Binay, Ampatuan, Duterte)
• Held peace talks with the MNLF (endorsed the creation of the ARMM - Autonomous Region in Muslim Mindanao).
• Freedom of the press restored.

Comprehensive Agrarian Reform Program (CARP)

• CARP was introduced through Republic Act (RA) 6657, also known as the Comprehensive Agrarian Reform Law of 1988.
• Implemented by the Department of Agrarian Reform (DAR), it included both developmental and redistributive programs.
• Coverage:
  • All private and public agricultural lands
  • Tenants and regular farmworkers
• Retention Limit:
  • Land ownership of agricultural lands must not exceed 5 hectares (ha).
  • Additional 3 ha are allowed for each heir of at least 15 y/o and actually tilling the land or directly managing it.
• Qualifications of Agrarian Reform Beneficiaries (ARBs):
  • Landless as defined by RA 6657
    • agricultural lessees and share tenants
    • regular farmworkers
    • seasonal farmworkers
    • other farmworkers
    • actual tillers/ occupants of public lands
    • collectives/cooperatives of the above beneficiaries
    • others directly working on the land.
  • Filipino citizen
  • Permanent resident of the barangay/municipality where the land is located
  • At least 15 y/o
  • Willing, able, and equipped with the aptitude to cultivate and make the land productive

Challenges of CARP

• The usual issues:
  • Resistance from landowners
  • Slow implementation
  • Lack of inter-agency coordination
  • Insufficient support for farmers
  • Land conversion to non-agricultural use
• The Stock Distribution Option (SDO) gave landowners the option of distributing stock instead of land.
• The exemption of Hacienda Luisita.

Other Economic Issues

• Cory was committed to honoring all debts, which sometimes consumed up to 40% of the national budget.
• Recovery of Marcos loot – created the Presidential Commission on Good Government (PCGG) by virtue of Executive Order No. 1.
• Initiated a program for economic liberalization to open the economy to international competition (e.g., tariff reform).
• Enacted the Omnibus Investment Code in 1987 to attract foreign capital by means of tax exemptions and the encouragement of labor-intensive industries.
• Established the Asset Privatization Trust to dispose of inefficient and unprofitable government-owned or controlled corporations.

Government and Crony-Controlled Corporations in 1986

• San Miguel Corporation
• MERALCO (Manila Electric Company)
• National Waterworks and Sewerage Authority (NWSA)
• Philippine Airlines
• Petron
• Philippine National Oil Company (PNOC)
• Philippine Sugar Corporation (PhilSuCom)
• ABS-CBN
• Philippine Long Distance Telephone Company (PLDT)
• Fortune Tobacco Corporation

Thomas Malthus

• Malthus argued that populations inevitably expand until they outgrow their available food supply, causing the population growth to be reversed by disease, famine, war, or calamity.
• The Malthusian Theory explains other challenges during Cory's Administration via population issues.

Other Challenges During Cory's Administration

• Power Problems
• Baguio Earthquake (1990)
• Mount Pinatubo Eruption (1991)