Philippine call center
1. IS THE PHILIPPINES A GLOWING SUCCESS STORY?

The administration of President Gloria Macapagal-Arroyo regularly touts the economic success achieved during her tenure:

Children in Cebu City
...OR A BASKET CASE?
glass of water
SO IS THE GLASS HALF-FULL OR HALF-EMPTY?
walnut
2. MY THESIS IN A NUTSHELL

These sets of seemingly contradictory information are well explained by the idea that the Philippines is a neocolonial state:

(Thanks to Walden Bello for introducing me to the concept of neocolonialism as a critical tool for understanding the Philippines.)

 

The rest of this page expands upon these ideas.

Colonialism
3. DEFINITIONS

Colonialism is "the extension of a nation's sovereignty over territory beyond its borders by the establishment of either settler colonies or administrative dependencies in which indigenous populations are directly ruled or displaced. Colonising nations generally dominate the resources, labor, and markets of the colonial territory, and may also impose socio-cultural, religious and linguistic structures on the conquered population." In the 19th century, England was considered the premier colonial power, with a truly global empire.

 

neocolonialism graphic

Neocolonialism describes the control of formerly colonized countries through economic, cultural and military power.
It is sometimes called economic (or ‘dollar’) imperialism, but can also take a cultural form (as in the worldwide prevalence of US films and television). Even ‘aid’ from the West may be seen as neo-colonial from this perspective. Today many developing countries, heavily dependent on the leading industrial nations, are subject to this type of imperialism, with large proportions of their national product being used for the payment of interest on accumulated international debts.
During the late 20th century the USA was considered the dominant neocolonial power, but with the emergence of the global financial system since 2000, neocolonial states function within the context of a world financial and political milieu.

 

1663 Philippines map
4. A HISTORY OF THE PHILIPPINES

 

1521-1898 Spanish Colony
The Spanish colonial era was characterized by....

 

McKinley cartoon

1898-1946 American Colony
"When I next realized that the Philippines had dropped into our laps I confess I did not know what to do with them... And one night late it came to me this way...
1) That we could not give them back to Spain - that would be cowardly and dishonorable;
2) that we could not turn them over to France and Germany - our commercial rivals in the Orient - that would be bad business and discreditable;
3) that we not leave them to themselves - they are unfit for self-government - and they would soon have anarchy and misrule over there worse than Spain's wars; and
4) that there was nothing left for us to do but to take them all, and to educate the Filipinos, and uplift and civilize and Christianize them, and by God's grace do the very best we could by them, as our fellow-men for whom Christ also died."

- U.S.President William McKinley.

 

Thomasite teacher with Filipino students

The American period was characterized by:

Philippine flag

1946 Independence

Formal independence arrived on July 4, 1946, with the signing of the Treaty of Manila between the governments of the United States and the Philippines. The treaty provided for the recognition of the independence of the Republic of the Philippines and the relinquishment of American sovereignty over the Philippine Islands.

 

Philippine and US flags

1946 Bell Trade Act (Philippine Trade Act)
The was passed as a precondition for receiving war rehabilitation grants from the United States. It exacerbated the dependency by further tying the economies of the two countries. Provisions:

 

Japan map

1946 Dodds Report

In 1944 as the Pacific war came to a close, the U.S. decided to use Japan in the postwar period as the base from which to project U.S. military power in the region.
In 1946, the Truman administration adopted the recommendation of the Dodds report which proposed that Japan be developed as the primary industrial powerhouse in the Asia-Pacific region and that countries like the Philippines should be preserved as raw material economies, to service the requirements of Japan's factories (Japan was basically bereft of natural resources.).
Claro Recto described this as "America's anti-industrialization policy for the Philippines."

 

Subic Bay Naval Base

1947 U.S.-Philippine Military Bases Agreement.
The Roxas Administration signed this pact granting the United States a 99-year lease (later reduced to 25 years) on military bases, guaranteeing "the right to retain the use, free of rent, of sixteen bases, an indeterminate number of cemeteries and historical sites, and the option to use seven other bases as the United States determines to be required by military necessity." Included were Subic Bay Naval Station (photo), Clark Airbase, Cubi Point Naval Air Station, Zambales Training Area, San Miguel Naval Communications Station and U.S. Naval Station Sangley Point.
The agreement also allowed the U.S. Military Advisory Group to advise, equip, and train the country's military officers and forces.

 

Ferdinand Marcos

1965-1986: Marcos Administration

 

Bataan nuclear power plant

The Bataan Nuclear Power Plant was a pet Marcos project. Construction began in 1976 and was completed in 1984 at a cost of $2.3 billion. The project was eagerly embraced by the World Bank which arranged funding, with the majority of the loan coming from the U.S. Export-Import Bank. A Westinghouse light water reactor, it was designed to produce 621 megawatts of electricity. This huge project was situated on an earthquake fault line, badly designed, unsafe, extremely overpriced (which EXIM knew), and a magnet for corruption. Because of these safety and other concerns, the plant never became operational.
The plant was finally paid off in 2007, following 41 years of Filipino taxpayer payments, and presently sits mothballed, having never produced a single kilowatt of electricity. For the World Bank, the Westinghouse Corporation and Marcos cronies, the fate of the plant is almost irrelevant: huge profits were generated by its construction.

 

Corazon Aquino

1986-1992: Aquino Administration

The Aquino administration was notable for:

 

Fidel Ramos

1992-1998: Ramos Administration

Under the banner of "Philippines 2000", President Ramos pursued an ambitious economic reform program based on trade liberalization, privatization and deregulation, as mandated by the IMF and World Bank.

 

Metropolitan Waterworks and Sewerage System

The second big privatization of Ramos was that of Manila's Metropolitan Water Works and Sewerage System (MWSS) in 1997. One of the largest privatizations anywhere in the world, the formerly public utility was broken into two concessions: East Concessionaire Manila Water Company Inc. (owned by the Ayala family with foreign partners), and West Concessionaire Maynilad Water Services, Inc. (owned by the Lopez family and also with foreign partners.) The privatization resulted in 500%-plus water rate increases for Manila residents.
The case has been publicized by privatization critics as demonstrating that the process leads to increased rates for poorer service; they suggest that cost-recovery and profit-making are the primary goals of privatization, even at huge economic and social costs to consumers and citizens.

 

Joseph Estrada

1998-2001: Estrada Administration

President Joseph Estrada, a former Marcos loyalist, vowed to help the poor ride the wave of economic development through an ambitious synthesis of being pro-poor and pro-market.

 

President Gloria Macapagal-Arroyo

2001-2008: Macapagal-Arroyo Administration

President Gloria Macapagal-Arroyo is a Georgetown-educated neoliberal economist who has been a complete blessing for the financial triumvirate of the IMF-WB-WTO, for transnational corporations (TNCs) doing business here, and for the Philippine elites who desire maintenance of the social status quo so they can continue to live in luxury far from the squalid slums. Her accomplishments include:

5. THE PLAYERS

Who sits at the Philippines poker table?

 

President Gloria Macapagal-Arroyo

President of the Philippines

The President plays the crucial role of high-stakes brokering between the various parties. The role of President in the Philippine requires a skilled player, and Gloria Macapagal-Arroyo is a true master.
Filipinos apparently agree: a 2007 nationwide survey by independent pollster Pulse Asia found that 42% of Filipinos believe President Gloria Macapagal-Arroyo is the most corrupt leader in Philippine history.

 

Zobel de Ayala family

Philippine Oligarchy

Although the roots of their socioeconomic power can be traced to the development of landed elites in the 19th century, it was in the American colonial period that major families emerged as the national oligarchy, able to dominate the country's political and administrative apparatus and shape it to their own ends.

 

Bejamin Abalos Sr. and Miguel Arroyo

Philippine politicians

The Philippine political elite are usually either members of, or else are backed by, the oligarchy. They are virtually a class, whose prime goal is to win elections and to assure that the interests of their families and/or oligarchic patrons are protected. To protect the family welfare, powerful families transform their electoral offices into lasting family assets, building "political dynasties." Whether they are members of the elite or not, throughout their political career politicians need to build, maintain and expand their network with elite families in their city, province and other parts of the archipelago.

An excellent example of Philippine politicians benefitting from the neocolonial status of the Philippines is the recent NBN-ZTE scandal. The $329 million project (which has since been cancelled due to allegations of corruption involving the President) was to have been funded by a loan from the Chinese government, with $130 million of the total as a 'commission' to Commission on Elections chair Benjamin Abalos, Sr. (left) and $70 million to First Gentleman Mike Arroyo (right.) The $329 million was to have been paid off by Philippine taxpayers.

 

World Bank logo

IMF-WB-WTO Triumvirate

The global financial institutions International Monetary Fund, The World Bank and the World Trade Organization are substantially controlled by the US Government, the European Union, and the international banks. These agencies work closely together to "manage" countries like the Philippines.
The World Bank benefits directly from loans by charging interest; the Philippine oligarchy benefit by using these loans to make even more money; and the long-suffering Filipino people, through a regressive taxation system that hits the poor relatively hardest, pay it back.
Is it mere coincidence that the Philippines, which has been under the continuous supervision of the IMF for 40 years, is one of the few countries in the region that has not industrialized?

 

 

 

Export-Import Bank of the United States

International banking sector

Although they have only a small number of branches in the Philippines, International banks are nevertheless making large profits through the loans they provide to the Philippine Government and to foreign investors in the country.

 

Nestle logo

Transnational Corporations (TNCs)

Although the Philippines offers limited investment opportunities compared to many of its neighbors, hundreds of multinational corporations operate successfully here. Investment is facilitated by locating manufacturing and business processing outsourcing (BPO) facilities in special economic zones (SEZ) where tax rates are low and there are no limitations on capital repatriation.
Sectors and sample corporations:

 

United States flag

United States Government

The United States gave its former colony nominal independence in 1946, but the relationship remains close and the power balance lopsided. The Philippines modeled its governmental institutions on those of the U.S. (in some respects they are virtual carbon copies.) Deftly wielding a combination of sticks and carrots, the US Government generally gets what it wants (with a few exceptions, most notably the abrogation in 1992 by the Philippines Government of the 47-year Bases Agreement.)
While the Philippines' financial importance to the United States has receded, the country retains a vital strategic function as an offshore outpost in the "Global War on Terror" and as a military bulwark against China.

 

US Ambassador Kristy Kenny

United States Embassy

The US Embassy in Manila coordinates American political, administrative, economic, public diplomacy, and consular affairs. The current US Ambassador Kristie Kenney appears a consummate master of her trade: presenting an always-smiling face to represent the world's biggest stick.
The Embassy's Defense Attaché’s office handles bilateral military affairs.

 

United States Green Beret in the Philippines

United States Military

 

AFP Special forces troops

Armed Forces of the Philippines (AFP)

 

Overseas Foreign Workers

Overseas Foreign Workers (OFWs)

This group of about eight million Filipinos (nearly ten percent of the entire population) who live and work abroad plays two increasingly important roles:

 

Manila slum

The Poor

 

CONCLUSION

The Philippines has been unable to follow many of its East Asian neighbors in achieving significant economic development and a more equitable distribution of wealth. Blindly following the advice and dictums of the US Government and the IMF-WB-WTO triumvirate have not helped the country to prosper; somehow Filipinos must find a way to create a new society, blazing a new path to find their own solutions to deep-seated problems. The United States Government and the international "development agencies" (sic) can help by ending their historic and destructive meddling.

 

Please share your thoughts on this subject with me: chrispforr@hotmail.com

 

ADDITIONAL LINKS