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Archbishop Cruz Backs “Save the Nation” in the Philippines


Archbishop Cruz Backs “Save the Nation” in the Philippines
July 19, 2013 (LPAC)–Philippines Archbishop Oscar Cruz, who spoke on April 20 at the founding conference of the “Save the Nation” movement founded by Philippines LaRouche Society leader Butch Valdes, posted the following on June 28:

“SAVE THE NATION MOVEMENT — It is timely in emergence. It is nationalist in spirit. It is an imperative advocacy for the common good and public welfare of the People of the Philippines. It is not really hard to notice and understand its emergence, its persistent existence, and now progressively stronger in influence upon thinking people. There is something wrong — many things wrong about the socio-economic standing of the country notwithstanding all contrary declamations of the administration plus repeated heavenly surveys at the expense of the Filipinos themselves.”

The Archbishop reviews the horrendous conditions in the country — wages, unemployment, increasing taxes and fees for everything, “even burials.” He notes that President Aquino (whose only “accomplishment” has been passing birth control measures), “While hating the birth of people, people are precisely the export industry of the Philippine Government — with or without Filipino’s women being sold to the highest foreign bidders.”

“Until something quite novel and promising is done for the honest-to-goodness socio-economic development of the Philippines the country has nowhere to go; the people have no future to look forward to. The Save the Nation Movement presents and submits the following three signal interlocking proposals that may be challenging to accomplish but not only logical but also imperative in content and intent:

“One: The science driven double or even threefold food production…

“Two: Nuclear Power …for use in the Philippines as in other places in Asia itself.

“Three: The postponement of the payment of external debts that grew in huge and insurmountable amount simply by the devalued exchange rate of the poor Philippine peso courtesy of the IMF. Such continuous manipulations of exchange rates at the expense of poor countries are unconscionable. The postponement will help finance the first two proposals.”

Can the Philippines Be Saved?


Can the Philippines Be Saved?
JANUARY 27TH, 2011

by Mike Billington
This article appears in the February 11, 2011 issue of Executive Intelligence Review.
PDF version of this article

Jan. 25—“There is a pervasive feeling of helplessness among our population as a series of price increases are being announced in nearly all sectors—i.e., food, transportation, electricity, tollways, water, fuel, and medicine.” Thus begins a memo from Antonio “Butch” Valdes, leader of the Philippines LaRouche Society (PLS) in Manila, reporting on the recent founding of a new national organization called Save the Nation, or SANA, which means “hope” in Tagalog. The Philippines, like every nation on Earth, is being hit with the full impact of hyperinflation, driven by the past three years of money printing in the U.S. and Europe to bail out the trillions of dollars in worthless gambling debts, known as derivatives, held by the major Western financial institutions.

The Philippines, however, unlike the other nations of Southeast Asia, was already at a point of social and economic breakdown, brought on by 25 years of leaderless submission to dictates from precisely these international financial institutions.

Before 1986, the Philippines was emerging as one of the rare success stories among former colonies, transforming itself into a modern nation-state, with self-sufficiency in agriculture, nuclear-power-driven industrialization, and the development of education and health care capable of transforming a poverty-stricken population. Most of that potential had been guided by Ferdinand Marcos, who served as President from 1965, until he was overthrown in a military coup in 1986, orchestrated from Washington by Secretary of State George Shultz and his Deputy Paul Wolfowitz—one of the early cases of “regime change” run by the neoconservative imperial interests in London and their allies in the U.S.

The destitution of the Philippines today must be viewed primarily as the intentional result of that coup. The country was an early trial-run of what became known as the “color revolutions” in the past decade—popular demonstrations against “authoritarian governments,” openly sponsored and financed by London and Washington, with the support of the Western press whores, who serve as a cover for “regime change” dictated from abroad. The “crime” for which Marcos was overthrown was not the corruption and human rights offenses which filled the world’s headlines, but the crime of freeing his nation through development, from the control of the London-centered financial oligarchy.
SANA: Food, Nuclear Power, Debt Moratorium

The Declaration of the Save the Nation movement (see calls for “Three Urgent Steps”: a new Green Revolution to restore food self-sufficiency; the restoration of the Bataan nuclear plant, and the rapid construction of other nuclear power facilities; and a moratorium on the usurious and illegitimate foreign debt of the nation, freeing resources for development.

Signing the Declaration, in addition to Valdes of the PLS, were the presidents of societies representing such diverse institutions as mechanical engineers, electrical engineers, inventors, radio broadcasters, and journalists.

The concept underlying SANA is the restoration of the historic mission of the Philippines, both for its own people, and as a nation which embraces both Eastern and Western culture, a crucial bridge in creating the alliance of sovereign nations, required to pull the world out of the current descent into a new dark age.

In a 2004 interview on Philippine radio station DZAR, Lyndon LaRouche expressed his own identification with this historic mission of the Philippines: “The Philippines has a very important pivotal role, some people would say geopolitically, in the entire region, of trying to bring together, on a global scale, for the first time, a world system, which is capable of accommodating both the European cultural heritage and Asian culture. This is the great barrier, the great frontier, of a hopeful future for this planet: to bring together the cultures of Asia—which are different than those of Western Europe generally—with European culture, to get a global culture based on a system of sovereign nation-states, which understands that this unresolved cultural question has to be addressed, with a long-term view, of several generations, of creating an integrated set of sovereign nation-states as the system of the planet. So the Philippines is a very special country, with a unique importance for the people of Asia, in particular, in playing a key role in bringing about this kind of general integration of Asian and European civilizations.”
The Three Urgent Steps

Each of SANA’s Three Urgent Steps also serves to identify a crucial aspect of the destruction of the Philippines, since the coup against Marcos. In regard to food, Marcos launched a Green Revolution in May 1973, under the name of Masagana 99. Masagana means “bountiful” in the Tagalog language, while 99 represented the goal of producing 99 sacks of rice (almost 5 tons) per hectare, which was necessary to make the Philippines self-sufficient in rice production. Working with the International Rice Research Institute in the Phillipines (IRRI, one of the global Green Revolution centers inspired by Franklin Roosevelt and his Vice President Henry Wallace), Marcos built irrigation systems, provided fertilizer, pesticides, and cheap agricultural credits, 85% guaranteed by the government, as well as a network of agriculture extension stations across the country, while introducing high-yield varieties of seed. Mechanization became widespread, replacing carabaos (water buffaloes). Fertilizer usage doubled, irrigation use tripled to one-half of the arable land, and 81% of the rice planted was so-called “miracle rice”—up from zero in the 1960s.

Productivity doubled, and by 1977, the Philippines was self-sufficient in rice for the first time in its modern history. Similar government support made the country self-sufficient in corn, and one of the world’s leading coconut oil producers.

In the early 1980s, the Third World debt crisis (largely created by manipulated spikes in oil and other commodity prices, as well as sky-high interest rates set in London and Washington) forced Marcos to sign agreements with the IMF, which included the slashing of agricultural subsidies and tariffs on imported food. When Marcos was deposed, this destructive assault on the nation’s sovereignty took off, such that, by the 1990s, food production was back to 1960s levels.
The Bataan Nuclear Power Plant

Without question, the primary target of the coup against Marcos was the nuclear power plant built by Westinghouse in Bataan—the first commercial nuclear power facility in Southeast Asia. Not only would this plant, together with two others scheduled to be completed by 1991, end the nation’s chronic energy shortages, but they also would have served as the driver for the 11 major industrial projects sponsored by Marcos, including steel, petro-chemicals, pulp and paper, copper smelting, aluminum, phosphate fertilizer, diesel engines, and gas and oil development. The Philippines was to be transformed, to stand as a model for the rest of Southeast Asia and the developing countries elsewhere.
One of the “Three Urgent Steps” proposed by the Philippines LaRouche Society and the Save the Nation Movement, is the restoration of the Bataan nuclear plant, initiated under President Ferdinand Marcos, and shut down by Corazon Aquino.

Shown: LaRouche Society leader Butch Valdes (third from right), with members of the Philippines LaRouche Youth Movement, at the Bataan nuclear plant, in May 2008.

The nuclear plant was completed in 1985, but Shultz and his allies wanted to make an ugly example of Marcos and the Philippines. Shultz represented the forces which systematically took over the United States following the assassination of John F. Kennedy—British- allied neoconservative interests, intent on keeping the former colonial nations of the world undeveloped, to serve only as a source of raw materials for the West. The first act of Corazon Aquino, who was placed in the Presidency to replace Marcos, was to permanently shut down the completed Bataan nuclear power plant, before it was even turned on. She then pledged to her controllers on Wall Street, that the Philippines would pay every penny of the inflated costs of the nuclear plant, despite the fact that it never produced a single watt of electricity.

The results can be seen clearly today, in this power-starved nation, nearly devoid of industry, with a population facing widespread hunger, and with almost no access to health care for the poor.
Debt, and the Export of Citizens

The third Urgent Step of the SANA Declaration, for a debt moratorium on the illegitimate foreign debt, is the most urgent of the three, for without ending the usury and financial looting, the revival of the nation’s historic mission is impossible. The debt accumulated under Marcos was primarily for the transformation of the productivity of the nation and its population, but once his development projects were scrapped, the debt could no longer be sustained through production. The looting of the population began in earnest.

The energy sector was turned over to Enron and related thieves by President Fidel Ramos in the 1990s. (Ramos, as head of the police in the 1980s, had been the proud agent of Shultz and his cohorts, in running the military coup against Marcos.) While the nuclear plant decayed, the cost of electricity quickly became the highest in all of Asia. As for food, the Philippines went from self-sufficiency in rice to becoming the largest importer of rice in the world.

Then, in the speculative binge against the Asian currencies in 1997-98 by George Soros and his hedge fund allies, the Philippine peso was driven down to less than half its 1997 value. In 2005, an EIR study of the effect of this looting process showed that the foreign debt in 1998 was $46 billion. Over the next six years, the government paid $47 billion in debt service, forced to exchange increasingly devalued pesos for dollars in order to pay that foreign debt. EIR calculated that, if the peso equivalent of the debt paid in those six years were calculated at the 1997 exchange rate, before the forced devaluation, the nation would have paid $89 billion in debt service—i.e., nearly twice the total debt owed. And yet the nation ended up owing more than it had in 2007!

This illegitimate debt has been paid, on time, by subservient governments right up to today, through two primary means: the virtual enslavement of the brightest of the Philippine youth, including many college graduates, as service workers for the imperial powers, doing 12-hour overnight shifts in “call centers,” serving the customers of Western banks, computer companies, and other corporate structures. In the past such persons were called “house slaves.”

The country’s second source of foreign exchange income is the export of its skilled and unskilled work force, in most cases forcing men and women to leave their families to work abroad as maids, nurses, drivers, and so on. Their remittances provide about $17 billion annually for servicing the foreign debt. While millions of nurses have been sent abroad (and even doctors who switch to nursing abroad to make enough money to support their families), over 100 hospitals have been closed in the Philippines due to lack of staff and adequate resources. Most poor Filipinos never see a doctor or a hospital in their entire lives.
The Future

The President elected last year, the son of Corazon Aquino, has given every indication that he will follow in the footsteps of his mother, following orders from the international financial powers. The existing political forces, clueless about how to deal with a crisis which is global, rather than local, are ignoring the crisis and making plans to re-arrange the deck chairs on the Titanic.

Valdes and a small number of youth who work with him in the LaRouche Society, have served as a lightning rod for the effort to restore the nation to its former noble mission, in cooperation with the international campaign led by LaRouche to break the back of the British imperial system, and launch an economic and cultural renaissance, based on a new global cultural paradigm. The founding of the Save the Nation movement provides a concrete platform for that effort.

The FDR Tradition in Philippines


Originally published by the Schiller Institute with the page title Salvador Araneta.

“ The following article was left unpublished when the author, John Morris (b. June 7, 1960), was tragically killed in an automobile accident on June 16, 2008. While John intended to add a few finishing touches, the conceptual framework was complete. I have added a few sentences to the last draft left by John, for clarity, without changing the content.

John is well known, including within the Philippines (see the obituary by the head of the Philippines LaRouche Movement Butch Valdes), for his groundbreaking essay on the founding father of the Philippines nation, Jose Rizal, focused on Rizal’s collaboration with Renaissance circles in Europe. John intended to follow this work with a study of another great leader in the republican tradition in post-World War II Philippines, Claro Recto. That study will have to be taken up by another, but the impulse and the intention is provided in this report.

The intense battle waged by the protagonist in this article, Philippine nationalist economist Salvador Araneta, against the ravages of neo-colonial “free trade” policies, are of singular importance today, as the free-trade ideologues of the British Imperial system have now succeeded in imposing their will upon the world under the guise of “globalization.” Araneta saw his nation, and the world, being dragged into hell by the globalizers of his day, and fought to revive the American System designed by Alexander Hamilton — which also guided the policies of President Franklin Roosevelt — as the only means to gain full independence for his nation, and establish productive relations with truly sovereign nations everywhere. Nothing less than such a dedication is required in the collapse of the world financial and strategic system facing us today. ”
—Mike Billington


The FDR Tradition in Philippines
by John D. Morris
June 2009


On July 4, 1946, in the immediate months following the defeat of the Japanese in the Pacific, the long awaited declaration of Philippine Independence was made. Nearly half a century of American government oversight and control was nominally coming to an end, fulfilling the dream of the Philippine people for nationial sovereignty. This historic event had also long been the personal concern of President Franklin D. Roosevelt, dating from at least the time in 1901, as a senior at Groton School in Massachussetts, when he argued in a public affairs debate that the Philippines, then under U.S. military government, should be given independence.
FDR’s life encompassed the era in which the United States confronted the role that it would play as a world power. Even before the Second World War, Roosevelt’s foreign policy as President was not isolationist, nor was it imperialist, but rather the anti-colonial orientation of the American system, as opposed to the British System of free trade, cheap labor and natural resource control. In the minds of Philippine patriots, FDR’s legacy lived on after his passing in their effort to fulfill his intention for Philippine independence. However, they learned quickly that national sovereignty and economic development do not come without a price.
Foremost among those Philippine patriots who understood and embraced the American System tradition represented by Franklin Roosevelt was Salvador Araneta. This report will trace Araneta’s fight for Philippine independence and for the adoption of the American System of Political Economy — but it will also show that Araneta recognized that American policy, especially after the death of FDR, was often the opposite of the American System — in fact, it was often closer to the British system of colonialism which FDR was committed to abolishing forever.
Roosevelt’s vision of an end to colonialism

Shortly after assuming the Presidency in 1933, Roosevelt appointed the Mayor of Detroit, Frank Murphy, a close collaborator in the New Deal struggle against depression conditions in the U.S., to be the Governor General of the Philippines. Reversing years of stagnation in U.S.-Philippine affairs during Republican administrations, Roosevelt and his allies in Congress organized the Hawes-Cutting Act to address the issue of Philippine independence. This was initially opposed by Philippine Nationalist Party leader, Manuel Queson, on the issues of the continued basing of U.S. forces and unjust tariffs, and was voted down by the Philippine Legislature.
On March 2, 1934, President Roosevelt communicated to Congress a request that the Hawes-Cutting Act be amended. His message characterized the history of U.S.-Philippine relations, and his perspective for the future.
“Over a third of a century ago, the United States, as a result of a war which had its origin in the Caribbean Sea, acquired sovereignty over the Philippine Islands, which lie many thousands of miles from our shores across the widest of oceans. Our Nation covets no territory; it desires to hold no people against their will over whom it has gained sovereignty through war.
“In keeping with the principles of justice and in keeping with our traditions and aims, our Government for many years has been committed by law to ultimate independence for the people of the Philippine Islands whenever they should establish a suitable Government capable of maintaining that independence among the Nations of the world. We believe that the time for such independence is at hand.
“A law passed by the seventy-second Congress over a year ago was the initial step, providing the methods, conditions and circumstances under which our promise was to be fulfilled. That Act provided that the United States would retain the option of keeping certain military and naval bases in the Islands after actual independence had been accomplished.
“As to the military bases, I recommend that this provision be eliminated from the law and that these bases be relinquished simultaneously with the accomplishment of final Philippine independence.
“As to the naval bases, I recommend that the law be so amended as to provide for the ultimate settlement of this matter on terms satisfactory to our own Government and that of the Philippine Islands.
“I do not believe that other provisions of the original law need be changed at this time. Where imperfections or inequalities exist, I am confident that they can be corrected after proper hearing and in fairness to both peoples.”
The U.S. Congress then successfully passed the Tydings-McDuffie Act, in March 1934 (known as the Philippine Independence Act), establishing a ten-year transition period beginning in 1936, with independence to be established in 1946. US naval bases were to be permitted only through 1947. The bill found favor among the Philippine leadership.
On Dec. 9, 1935, the University of Notre Dame sponsored a special convocation in honor of the new Commonwealth of the Philippines, and awarded President Roosevelt an honorary degree. During his acceptance speech, Roosevelt stated that America had “chosen the right course with respect to the Philippine Islands. Through our power we have not sought more power. Through our power we have sought to benefit others.”
War, Truman, and the Curse of British Colonial Thinking

The interval that followed the Tydings-McDuffie Act was meant to strengthen the institutions of government. “The prewar period was characterized by an effort to free ourselves from foreign domination, during which was born the Philippine National Bank that freed us from the dominance of such foreign banks as Bank of America, National City Bank and Hong Kong Shanghai Bank. Every effort was made to be economically self sufficient with the birth of the National Development Company and its subsidiaries — National Coconut Corp., National Food Corp., National Textile Corp., Rice and Corn administration, among others, liberating us from the monopoly of Proctor and Gamble, Unilever, and importers of food and clothing.” (Araneta)
Sadly, the clouds of war intervened. General Douglas MacArthur had been deployed to organize the defense of the islands, but only days after the Japanese attack on Pearl Harbor, Manila was under air attack, and shortly thereafter the Japanese invaded, and the Philippines were overrun.
On December 28, 1941, Franklin Roosevelt made a radio broadcast to the Filipino population:
“I give to the people of the Philippines my solemn pledge that their freedom will be redeemed and their independence established and protected. The entire resources, in men and in material, of the United States stand behind that pledge. It is not for me or for the people of this country to tell you where your duty lies. We are engaged in a great and common cause. I count on every Philippine man, woman, and child to do his duty. We will do ours.”
American and Philippine forces united over the next five years. Guerrilla forces from among the Filipinos under occupation resisted the Japanese and prepared for liberation. When the Allied military forces commanded by MacArthur returned to drive the Japanese out of the islands, the date for independence was quickly set. But, on April 12, 1945, Roosevelt died, replaced by Harry S Truman. Filipinos had good reason to be concerned that their independence would be in name only.
As Lyndon LaRouche has repeatedly stressed, FDR’s policies began to be reversed before his body was cold. While FDR had told Winston Churchill to his face that the US was not fighting the war to preserve the British Empire, and that the post war period would see sovereign states and US-led economic development in the former European colonies, Truman proved to be an asset of the Empire, helping the British, French, Dutch and Portugese colonial forces reassert their control over their former colonies in Asia and Africa.
With respect to the Philippines, Truman appointed Paul V. McNutt to take up the position that he had held before the war as U.S. High Commissioner to the Philippines. Many Filipinos questioned the wisdom of a new High Commissioner so near to the date of independence, especially McNutt, a factional adversary to Roosevelt and someone well known to be backed by American commercial interests in the Philippines.
The Truman Administration quickly set the stage for chaos with a series of official directives concerning the Philippines, intended to outline the conditions for aid and assistance to the American protectorate. The two most controversial of them related to agrarian unrest and collaboration with the Japanese during the war. “Agrarian unrest” was a reference to the indigenous guerrilla formation that fought the Japanese known as the Hukbalahap1. The Huks were based in the countryside and, along with other representatives of the rural populations, became effective advocates for the poor and disenfranchised.
The Truman directive stated: “During the war the tenants organized a guerrilla army which reportedly did good work against the enemy. After the enemy was defeated on their localities, they did not disband and today constitute a special problem which threatens the stability of government. On the other hand their legitimate claim to fair treatment and the assistance they rendered in the resistance to the enemy require that they be not dealt with in a ruthless manner.”
The preparations for the first post-war elections to be held in 1946 were seriously confused by the issue of rehabilitating Filipino leaders who had held positions in the Japanese occupation government. Both Roosevelt and Truman had made clear to Sergio Osmena, the successor to the deceased Manuel Queson as head of the exile Philippine government, that those persons shown to have aided the Japanese must not hold positions in the newly independent Philippines. However, the process by which collaboration was to be determined was contentious, especially because one of those under suspicion was Manuel Roxas, the leading candidate challenging Osmena in the race for president. Roxas had been involved with the Occupation government, but was unilaterally exculpated by General Douglas MacArthur when the Allied Forces regained control of the Philippines in 1945. This case created the legal ambiguity whereby the collaboration issue remained unresolved. Roxas went on to win the presidential elections, and become the first president of the new Philippine Republic.
Further policy problems were documented in a 1987 book length study by the Analysis Branch of the U.S. Army Center for Military History on counter-insurgency operations against Huk guerrillas in post-war Philippines:
“American insensitivity to internal Philippine problems continued into 1946 when the U.S. Congress passed two measures that strained Philippine relations and fueled Huk propaganda fires. In February, the Congress addressed the issue of Filipino veteran rights. In a move that shocked people across the Philippines, Congress, initially at least, denied them GI Bill benefits, breaking a promise made to them by General MacArthur as he retreated from Bataan. The American decision also denied back-pay, hospitalization, mustering-out pay, and burial benefits. In the Philippines, this decision met widespread opposition and anger. The U.S. Congress readdressed the veteran issue over the following five years, finally approving money for Philippine veteran hospitals in 1948, burial benefits in 1951, and later paid some Filipino veterans $473 million in backpay and allowances.” [note: Several categories of veterans were denied their promised benefits, however, and the battle to gain those benefits rages still today.2
“A second action that inadvertently aided Huk calls for a Philippines free of U.S. domination was the Philippine Trade Act (or Bell Act) of 1946. Introduced by Missouri Representative C. Jasper Bell in September 1945, the highly controversial act underwent five revisions before being passed in April 1946. Designed to stabilize economic ties with the United States and help Philippine recovery, the act formalized pre-war economic trading patterns and ensured U.S. economic hegemony over the country. Provisions of the 1946 act fixed the Philippine peso to the dollar and prevented the Philippine government from changing the value of the peso without U.S. consent. As a final insult, the act legislated a twenty-eight year extension for duty-free trade between the nations and mandated equal and free access to Philippine markets by American businessmen and companies. The Trade Act was the subject of hot debate in the Philippine legislature before being ratified on 18 September 1946, primarily due to the efforts of a coalition of local merchants, businessmen, and politicians (those most likely to benefit from a return to the old status quo). Huks seized upon this legislation as just another example of the United States acting through the Philippine government to maintain a neo-colonial relationship for the benefit of Filipino landlords, rich businessmen, and corrupt government officials.”
The Bell Trade reconfirmed the former relations between the two countries, under which independence would mean next to nothing. This was emphasized by the testimony of Assistant Secretary of State Will Clayton testifying in front of the Senate Finance Committee on April 5, 1946:
“Those provisions (on equal rights and others) are not reciprocal. We cannot give the same rights to the Filipinos. The Bell Bill would require that the Philippines permit Americans free access to enterprises. It would permit them to engage in many activities in the Philipine Islands from which Filipinos, as aliens, would be barred in the United States.”
Economic crisis came quickly to post-war Philippines. Earnings from exports of raw materials to the United States, along with modest development assistance and reparations for war damages did not provide enough capital for needed government operations, let alone investments to rebuild the war torn country. In the midst of this crisis, a public debate over the Bell Trade Act ensued that would capture the imaginations of postwar Filipinos, and rally the population toward a revival of President Franklin Roosevelt’s pro-growth, anti-colonial, nation building policies.
Salvador Araneta – Protectionist

A principal protagonist in this debate would be Salvador Araneta. He was the son of a Philippine founding father, Gregorio Araneta, and educated both in the Philippines (Ateneo, Santo Tomas) and in the United States (Harvard). Araneta’s political career began as an elected delegate to the convention that produced the 1935 Commonwealth Constitution. He was instrumental in organizing many governmental institutions in conjunction with circles that had grown up around the National Economic Council, an economic coordinating body established in the wake of the 1935 Commonwealth Constitution.
The mobilization against the Bell Trade Act was the beginning of Araneta’s clash with the financial establishment, those persons who had come under the influence of American vested interests in the Philippines, centered chiefly around the sugar industry. Araneta polemisized against the subserviant status in which the Bell Trade Act kept his country, while he advanced an aggressive program for the industrialization of the Philippines. The issue was Philippine sovereignty; the right to tariff protection, currency autonomy and taxing authority. This position placed Araneta in direct opposition to the newly elected President of the Philippines, Manuel Roxas.
In a study published in 1948, entitled, ‘Basic Problems of Philippine Economic Development’, Araneta is blunt in his assessment of Roxas. “On his election to the Philippine Presidency in April 1946, the late Manuel Roxas had to act one way or another in respect of the Trade Act. Partly because of pressure from the Island’s sugar interests, which saw in the Act their economic salvation, and partly because he wished both to obtain American financial assistance for his government and to retain the friendship of American officials who had helped to whitewash him of charges of wartime collaboration with the Japanese, President Roxas became the foremost Filipino champion of the Act.”
Araneta described the political environment of that period in a 1953 speech. “For my views on the Trade Agreement, I was referred to by Pres. Roxas as a prophet of disaster, and you well know how many of my American friends were rather disappointed at the attitude that I had taken…… To advocate then, a policy of protection for local production even as against imported American goods was anathema, was un-patriotic, was anti-American.”
But Salvador Araneta was far from being anti-American. In a speech before the Manila Rotary Club in January, 1947, entitled ‘Precepts We Can Not Surrender,’ he laid out a detailed critique of free trade, taking a few pages from U.S. history.
“There is no country (with the exception of England which was the first to turn to industrialization) which has been able to become industrialized without having had to protect its industries. The United States, with all its natural resources, had to protect its industries with high tariff barriers. From the time of its first Secretary of Treasury, the great Alexander Hamilton, to the present time, the United States has in fact consistently been a highly protectionist country.”
On the subject of National Banking. “In this connection, it will be interesting to note, that the financial problems that the United states of America had to face during the first years of its independence were quite similar to those of our present government. And to solve them, Alexander Hamilton created a National Bank, with a capital of $10,000,000….”
Araneta’s arguments were comprehensive and, in the end, he refers, as he does in many other speeches, to the ‘high ideals of President Roosevelt,’ by revisiting the famous passage from Eliot Roosevelt’s wartime memoir, “As He Saw It:”
“In the conversation between Roosevelt and Churchill that gave rise to the Atlantic Charter, Roosevelt indicted the colonial policies of the British Empire. He said: ‘Those Empire trade agreements are a case in point. It is because of them that the people of India and Africa, of all the colonial Near East and Far East, are still as backward as they are……’ Will America permit that the high ideals of President Roosevelt should be scuttled; that India should attain a more complete independence than the Philippines?“
Araneta’s courage and optimism were also clear in another 1947 address to visiting American Publishers. “The Filipino people have to be emancipated from the strait-jacket of colonial economy. The fetters and inhibitions to our industrialization programme must be removed, so that we may rapidly increase our national production, our per capita income, and thereby in the long run become among the best customers of the United States, to rank perhaps with Canada, a highly industrialized country, which is today America’s best customer. The economic problems of the world at this time will not be solved by the universal application of the formula of free trade, but through the application of a formula of diminishing protection for the industries of a country in proportion to her industrial development.”
“We hate to have to talk this language of the competitive man. We would rather prefer to talk the language of the cooperative international man, nay the language of the cooperative world citizen.”
“We expect that the United States, who ushered on August 6, 1945, the new atomic age, will soon harness its fabulous power for human progress and plenty, on a world scale, and that the clouds threatening a new world war, brought about by the fear of possible annihilation under an atomic bomb, will disappear once man discovers the fact that the atom power is humanity’s liberation from the fear of want, the fear of unequal competition, and the fear of war.”
Although there was decisive political opposition to the Bell Trade Act, it was ratified nonetheless under very disturbing circumstances. In the elections of 1947, a coalition known as the Democratic Alliance, which included leaders and supporters of the Hukbalahap, were elected to the Senate and the Legislature. They held the balance which would have prevented passage of the Trade Act. Brutal intervention was made by the newly elected President Roxas, with General MacArthur and Ambassador McNutt lending tacit support, to challenge the validity of the election of three senators and nine congressmen who rejected ratification. Criminial indictments claiming they had gained election through the intimidation of voters prevented the seating of these senators and congressmen long enough for the Act to be pushed through.
Public Credit

Exactly because of his outspoken views, Araneta was appointed as Secretary for Economic Coordination in the Cabinet of President Elpidio Quirino, who came to power with the death of Manuel Roxas. From this position, Araneta would be a visionary and prophetic voice for an FDR-style New Deal in the Philippines.
In 1950, he wrote a detailed study submitted to the annual meeting of the Philippine Economic Association entitled, ‘A Development and Financing Program For Our Total Economic Mobilization,’ in which he concluded, “…..To make rapid development possible through full employment, we need funds and credit, we need the invigorating effect of a generous blood transfusion of public credit to flow into the veins of our economic system, and we need new instrumentalities comparable in daring to the New Deal measures conceived and implemented during the so-called Third American Revolution under the great American President Franklin Delano Roosevelt.”
‘Total Economic Mobilization’ became the slogan of the Quirino Government, and Salvador Araneta worked tirelessly to educate and inform his fellow citizens about the principles of political economy so that this program might have a chance to be more than just a slogan.
As financial conditions worsened, Araneta faced strong resistance to his policies. His toughest critics were within the Quirino Cabinet itself, specifically Miguel Cuaderno, the Secretary of Finance, and later the Governor of the Philippine Central Bank. Both men had worked together to successfully organize the U.S. Truman administration to accept import controls, the establishment of a Central Bank, and for the application of a tax on foreign currency transactions. These measures did prevent chaos, but as Araneta made clear, they did not slow the growth of unemployment, nor meet the needs of a growing population.
Araneta and Cuaderno clashed over the methods by which to address the crisis, and thus revived the public war of ideas as to which direction the Philippine economy should take. Cuaderno, the central banker, preached conservative monetarist theory, and a limited role of government. His relationships with European and New York banking interests helped to advance the Philippines standing as a new nation, yet strengthened the international private financial institutions which sought to administer the Philippines economy.
In late 1950, the Bell Trade Mission issued a progress report, meant to redress the grievances unresolved from the Bell Trade Act of 1946. Araneta recieved the report favorably, but in a speech in January 1951 in front of the Economics Club of the University of the East, he appealed for effective and timely implementation:
“At this time, it is enough for me to say that if something along the lines of the two bills above-mentioned is enacted, we will be making a great headway in the solution of our age-old problem of lack of credit for the economic development of our country.
“…..My friends, we are indeed facing a grave crisis, although many of us do not seem to realize it. This crisis could only be solved by bold measures and great sacrifices. I fully agree with the Bell Mission when it counsels that positive measures must be undertaken ‘promptly’. This we have failed to do. This is no time for mutual recriminations. We are all guilty in this regard, both the people and the Governments of the Philippines and the United States.”
Araneta resigned from the Quirino Cabinet on January 18, 1952, primarily over disagreements with the administration’s sugar policy after Philippine sugar was sold to Japan despite his protests. Now free to voice his views as a private citizen again, Araneta lost no time in publicly confronting his philosophical adversary, Miguel Cuaderno, on the subject of the monetary, gold and foreign exchange policies of the Philippine Central Bank. In a series of articles in the Manila Times in late 1953, Araneta challenged Cuaderno to respond to his programatic alternatives. Cuaderno stated his objections in a lengthy written response, part of which follows:
“Mr. Araneta’s proposals, while they appear attractive, particularly to specific sectors which will benefit therefrom, are bound to lead the economy to a disastrous condition of inflation, high cost of living and speculative activities, and ultimately the total breakdown of our currency, and thus the cessation of all productive activities. This indictment holds true for all his proposals: deficit spending, multiple currency rates, dollar retention system, and the purchase of gold at premium prices. Although apparently different measures, there is one unifying principle behind all, viz., the progressive cheapening of the currency, and conversely, the spiraling of prices. Such a condition would give the illusion of progress, as witness the feverish commercial activity during the Japanese occupation, when it was not worth one’s while to hold his money even for one day. This may be desirable for speculators and profiteers, but never for genuine producers who need to plan their output, or for the masses of consumers whose incomes cannot keep pace with the mounting costs which cheap money policies inevitably generate.”
Araneta replied to Cuaderno’s letter in the form of a printed monograph which starkly presents the nature of the American System of protection and public credit against British free trade monetarism:
“These proposals of mine, have been branded by Gov. Cuaderno, as being at variance with the opinion of most monetary and economic authorities ‘as dangerous and irresponsible experimentations on the people’s livelihood…..’ It is true that there is one unifying principle behind my proposals. But Gov. Cuaderno is mistaken when he believes that they will lead to ‘the progressive cheapening of the currency,’ ‘the spiraling of prices,’ ‘to disastrous conditions of inflation, high cost of living and speculative activities,’ ‘the total breakdown of our economy, and thus the cessation of all productive activities.’
“My proposals may be ‘undesirable in principle’ much as protectionism is undesirable in principle to free traders. But protectionism and multiple rates are being practiced today by force of necessity, and the sooner we ceased dillydallying on this matter, and implement a genuine protectionist policy- protecting producers, with due regard for the needs of the public for essential commodities, the sooner we will be on the road to full employment, and higher standards of living.
“As long as we have a black market and an unconvertible currency, it is much too boastful to claim that we have a stable currency. A stable currency does not need exchange restrictions and can stand its own ground. It may be a long way before we achieve a balance of payments, without the help of restrictions and controls. But controls and restrictions alone and by themselves cannot attain it. In our case what we need, is the protection and the incentives of a selective devaluation of our currency, a more liberal credit policy, and great and wise leadership in the government to stimulate production, and more production and more production.”
To his credit, Miguel Cuaderno resisted pressure by New York and London interests to decontrol Philippine currency and financial markets in exchange for International Monetary Fund loans. Even more important, when the vice president of the Philippine National Bank Leon Fernandez brought the notorious former Nazi finance minister and Bank of England asset, Hjalmar Schacht, to advise Cuaderno, the Central Bank head firmly rebuffed Schacht, stating that his monetary schemes were hardly appropriate for an economy needing capital investment in basic industry and infrastructure.
Salvador Araneta went on to be the Secretary of Agriculture and Natural Resources for the Magsaysay Administration in 1953. He and a circle of government and business leaders, especially Alexander Lichauco and Hilarion Henares who associated with him, fought to gain momentum for Philippine industry and agriculture despite crippling trade and currency policies. These leaders continued to outline protectionist policies and deconstruct the free traders, referencing capital budgeting and the urgent need for productive economy vs. consumer society. Araneta castigated the naysayers and the self-appointed advisors amoung the high and mighty. His New Deal vision and planning is an indispensible insight into the mind of a Filipino patriot inspired by the global impact of Franklin Roosevelt’s leadership.
Jose Rizal
Philippine LaRouche Society
1. The Hukbalahap Insurrection: A Case Study of a Successful Anti-Insurgency Operation in the Philippines, 1946-1955. by Major Lawrence M. Greenberg. Analysis Branch, U.S. Army Center of Military History. Washington, D.C., 1987
2. The battle to get the US Congress to live up to President Roosevelt’s pledge to Philippione soldiers who responded to his call to arms in 1941 is not over. Roosevelt issued his executive order on July 26, 1941, bringing the Philippine Commonwealth Army into the service of the United States Armed Forces of the Far East under the command of Lieutenant General Douglas MacArthur; with Filipino soldiers toserve uner the US flag, entitled to full soldier and veterans benefits. A bill before the US Congress in July 2008, sponsored by Democrat Filner and Republican Issa, to finally live up to that pledge, is being undermined by Republican minority leader Boehner, and by sophistry from Democratic Leader Pelosi. The number of surviving Filipino veterans is dropping rapidly, to the disgrace of US. [MOB]

For Further Research:
‘Economic Re-Examination of the Philippines. A Collection of Speeches and Studies on the Subject 1947-1953’ By Salvador Araneta

Shultz and the ‘Hit Men’ Destroyed the Philippines


This article appears in the December 24, 2004 issue of Executive Intelligence Review.

PDF version

Shultz and the ‘Hit Men’ Destroyed the Philippines

by Mike Billington

Editor’s Note: This is the third in a series of features on the assault against the Third World by the “Economic Hit Men.” We examine here first the case of the Philippines, and then Mexico.

The U.S.-orchestrated coup which overthrew the government of Philippines’ President Ferdinand Marcos in 1986 was a classic case study of what John Perkins describes in his recent book, Confessions of an Economic Hit Man, as the post-World War II preferred method of imposing colonial control under another name. In the Philippines case, George Shultz performed the roles of both the economic hit man, destroying and taking full control of the Philippine economy, and the coup-master, deposing the Philippine President in favor of an IMF puppet—while calling the operation “people power.”

Throughout this process, from the late 1970s through the February 1986 coup, and beyond, Lyndon LaRouche and his collaborators were fully engaged in the fight to expose and reverse this subversion and destruction of one of America’s most important allies, by the supranational financial institutions which Shultz and his ilk represent. By mobilizing support from patriots of both the United States and the Philippines, the LaRouche effort put a spotlight on the crimes of the Shultz cabal, as will be shown below. Although the effort failed to stop the process at that time, the crimes thus exposed in the Philippines can and must serve today as a nemesis to Shultz and his neo-conservative operatives, who are in an endgame in their effort to impose a new fascist order over the planet.

In a Nov. 16 interview on radio station DZAR in Manila, LaRouche described his own view of the special mission of the Philippines nation: “The Philippines has a very important pivotal role, some people would say geopolitically, in the entire region, of trying to bring together on a global scale for the first time, a world system, which is capable of accommodating both the European cultural heritage and Asian cultures. This is the great barrier, the great frontier, of a hopeful future for this planet: to bring together the cultures of Asia—which are different than those of Western Europe generally—with European culture, to get a global culture based on a system of sovereign nation-states, which understands that this unresolved cultural question has to be addressed, with a long-term view, of several generations, of creating an integrated set of sovereign nation-states as the system of the planet. So the Philippines is a very special country, with a unique importance for the people of Asia, in particular, in playing a key role in bringing about this kind of general integration of Asian and European civilizations.”

The lesson of the subversion of the Philippines in the 1980s for today is clear. Shultz is the eminence gris behind the neo-conservatives running the Bush Administration, which has brought the world to the current disastrous circumstance. It is also the case that the Philippines, although currently lacking any national leadership comparable to that of Marcos, is nonetheless facing a new coup threat, orchestrated by the same neo-conservative circles in Washington who were responsible for the 1986 coup.

The popular memory of Ferdinand Marcos today, in the U.S. and in the Philippines, is largely shaped by the massive disinformation campaign created in the early 1980s by the circles around then-Secretary of State Shultz, and his deputy Paul Wolfowitz. Marcos was accused of corruption, human rights violations, plunder, and even the murder of a political opponent, Benigno Aquino—and this caricature is repeated ad nauseam still today. While Marcos was not without faults, he was by far the last Filipino head of state to have understood the challenge of true leadership in a world slipping towards chaos. His overthrow by the Shultz cabal had nothing to do with the charges issued publicly, but were intended to stop his national development policies, and his international collaboration with LaRouche and others in countering the genocidal policies of the IMF, and bringing into being a new world economic system based on development and justice.
Marcos’s True Legacy

Marcos was elected President in 1965, just as the United States launched the disastrous and futile war in Indochina. The fact that the United States used its bases in the Philippines, Subic Bay and Clark Airfield in Luzon, as launching pads for the Indochina War, fed a domestic insurgency by the Maoist New People’s Army (NPA). Marcos was then treated as a close friend and ally of the United States. Even when he declared martial law in 1972, with the Indochina War still raging, the Administration of President Richard Nixon raised no objections.

But Marcos was not only concerned about “counterinsurgency” in declaring martial law. When he was elected President in 1965, the Philippines was still essentially a colonial economy, although the United States had granted full independence on July 4, 1946, as had been promised by President Franklin Roosevelt in 1934. Productivity was low in both agriculture and industry: agriculture lagged as the Philippines relied on special access to U.S. food exports, and industry was confined to process industries, rather than the development of basic industries.

Marcos set out immediately to establish Philippine food self-sufficiency in rice and corn. This also required breaking the control of the landed aristocracy left over from the Spanish imperial era. Marcos was the first President of the Philippines who did not rise from this elite class, but was a “commoner” trained as a lawyer.

As President, he focussed on basic agricultural infrastructure, especially irrigation, in the major food-producing regions of Luzon and Mindanao. Credit facilities, mechanization, and the introduction of high-yield rice varieties, which needed irrigation, resulted in the elimination of rice imports by 1968.

Land reform, primarily a political problem, remained illusive. However, when Marcos imposed martial law in 1972, among his first acts was a proclamation that the entire nation was to be considered a “land reform area,” and a declaration that all tenants working land devoted primarily to rice and corn were to be the owners of that land, up to a specified limit. Despite the enraged opposition of the oligarchy, the program proved to be extraordinarily successful. Coupled with the infrastructure and mechanization improvements, a quarter of a million peasants became land owners, and grain productivity increased by half.

Another major step after the declaration of martial law was to contract with Westinghouse for the Bataan Nuclear Power Plant—which was to be the first (and would still be the only) commercial nuclear power plant in Southeast Asia. While nuclear power is clearly the only sane solution to the energy requirements across the region, the sad saga of the Bataan Nuclear Plant symbolizes the pure evil of the policies enforced by the “economic hit men.” As originally contracted, the plant should have cost about $1 billion, and produced 1,200 MW of electricity by 1984. However, after the hysteria generated by the anti-nuclear “Nuclear Club of Wall Street” (see EIR, Dec. 3, 2004) following the 1979 accident at the Three Mile Island Nuclear Plant in Pennsylvania, the Carter Admistration imposed retroactive safety regulations which contributed to more than doubling the cost of construction. Then, after the overthrow of Marcos in 1986, one of the first acts of the new Presidency of Corazon Aquino was to mothball the fully completed, but never used, Bataan Nuclear Plant. The Philippines has been forced to pay countless billions in debt service, and pays still today over $155,000 per day, for this nuclear facility, without having drawn one watt of electricity from the state-of-the-art facility. Two further nuclear power facilities which were planned to provide 1,880 MW of electricity by 1991, were also scrapped.

Nuclear energy was not the only innovation of the Marcos regime. In 1979 Marcos announced a plan for 11 major industrial projects, with the intention of shifting the focus of the nation’s industrial economy from consumer goods to basic heavy industry. Included in the plan were steel, petro-chemical, pulp and paper, a copper smelter, aluminum, phosphate fertilizer, diesel engines, gas and oil, a coconut industry, and the nuclear power program.

The Marcos Administration, during the 1972-81 martial law period, tripled the country’s road network, doubled the electrification of the country’s homes, increased irrigated cropland eight-fold, and achieved rice and corn self-sufficiency.

Minimum daily wage rates tripled, although inflation, driven by international oil price hikes and exploding U.S. interest rates, more than wiped out these wage increases.
Enter the Economic Hit Men

This level of development—especially the capacity to free the nation from dependence on the international oil and raw materials cartels—was not to be tolerated by the international financial institutions. The contrived oil shortages of the 1970s left the Philippines, like all non-oil-producing nations, with huge debts. This was followed by the 20%-plus interest rates imposed by U.S. Federal Reserve Board Chairman Paul Volcker in 1979, which doubled and tripled the debts of most Third World nations within a few years.

In 1981, Marcos lifted martial law. Also in that year, he attended the North-South Summit in Cancun, Mexico, organized by Mexican President José López Portillo (see accompanying article) where he spoke out for a “new world economic order,” and denounced the destructive “conditionalities” imposed by the IMF in exchange for financial assistance in a crisis. Then, in September 1981, Marcos pushed through the Philippine Congress nearly $4 billion worth of priority infrastructure projects, including irrigation, drainage and flood control programs, highways, telecommunications, and airports.

This was answered in 1982 (the year George Shultz became Secretary of State) by an IMF report which attacked Marcos’s projects, demanding debt payment instead: “In the Philippines situation, restraint on public investment could be an effective instrument for securing an improvement in the current account deficit.” IMF Director Jacques Delarosière lectured that the country had set “unrealistic growth targets,” while the World Bank denounced the Marcos government for supporting national industries.

These “softening up” raids were not adequate to control the Marcos government. Shultz visited Manila in the Summer of 1983, overseeing another 20% devaluation of the Philippine peso, thus further increasing the costs of financing the already-illegitimate foreign debt.

The full-scale assault began in the Fall of 1983, with the murder of Benigno Aquino. Aquino, an opposition leader whom Marcos had allowed to leave prison in order to get medical treatment in the United States (despite facing a death sentence for murder and subversion), chose to return to the Philippines in August 1983 after three years in the United States. He was gunned down as he emerged from his plane in Manila.

Although the actual conspirators were never officially discovered, the assassination was immediately blamed on Marcos, and the economic hit men called in the “jackals” (as Perkins called those whose job was to depose or even kill world leaders who resisted the demands of the economic hit men like himself). In the Philippines, Shultz and Wolfowitz doubled as economic hit men and jackals.

As to Aquino’s view of the pending threat to his life, he had been asked by the U.S. magazine Mother Jones in January 1983, while contemplating his return to the Philippines: “What do you think Marcos will do?” Aquino replied: “He will keep me alive, because he knows the moment I die, I am a martyr, like Martin Luther King, and he wouldn’t want that. Another possibility, he lets me out, and the communists knock me off. They blame Marcos. They have a martyr and they have eliminated a stumbling block.” Aquino also understood the actual cause of the economic disaster striking the Philippines: “If you made me President of the Philippines today, my friend, in six months I would be smelling like horseshit. Because there is nothing I can do. I cannot provide employment. I cannot bring prices down.”

Within two months of the assassination, the remaining credit lines to the Philippines were drastically cut, and another 21% devaluation was imposed. The nation was bankrupt. Finally, on Oct. 15, 1983, Marcos was allowed to declare a moratorium on the unpayable debt, but only on condition that the big projects he had backed to modernize the nation be scrapped, while many of the industries supported by the state were turned over to domestic and international vultures (this was done under the guise of accusing the owners of these industries of being corrupt “cronies” of Marcos).

The LaRouche movement, meanwhile, was sponsoring conferences in Bangkok, Thailand, one in October 1983, and another in October 1984, on the subject of the proposal authored by Lyndon LaRouche for “Development of the Pacific and Indian Ocean Basins.” Philippines Deputy Foreign Minister Pacifico Castro attended the 1984 Conference, speaking on “Regional Economic Cooperation and Security,” joined by government and business leaders from across the region. The conferences proposed such “Great Projects” as the Kra Canal in Thailand, and the physical transformation of Asia, as the driving force behind a new world economic order.

The opponents of Marcos were soon being wined and dined in Washington, by both the right wing (Shultz and Wolfowitz) and the left wing (Rep. Stephen Solarz, Sen. Ted Kennedy, and Princeton’s Richard Falk) of the “Project Democracy” apparatus, which performed the subversive tasks assigned by the synarchist banking institutions. Salvador Laurel, the son of the quisling President of the Philippines under the Japanese occupation, headed the opposition after Aquino’s assassination, and in February 1984, visited Washington, where he was greeted by Vice President George H.W. Bush and Secretary of State Shultz. Representative Solarz introduced legislation into the Congress to abdicate the treaty regulating the U.S. bases in the Philippines, cutting the agreed aid to the Philippines by two-thirds. At the same time, a nest of anti-nuclear and anti-development NGOs in the United States took up the cause of overthrowing the “Marcos dictatorship,” including a gathering of anti-nuclear forces in Manila, including Richard Falk and representatives of the West German Green Party. Stephen Bosworth, a close collaborator of Henry Kissinger, was appointed Ambassador to the Philippines, and from that position he would subsequently orchestrate the coup against Marcos.

By October 1984, the Philippines was forced to submit to an IMF refinancing package that included an end to price controls on rice and other staples, a float of the peso, unrestricted foreign exchange speculation, import reductions, domestic austerity, and yet another devaluation—making a total of a 63.3% devaluation in one year, nearly doubling the cost of financing the foreign debt. Ironically, the opposition, fully supported and sponsored by the IMF-related institutions, rallied support among the population by denouncing Marcos for “acceding to the oppressive conditions of the IMF.”

Throughout 1985, President Ronald Reagan defended the American relationship with the Philippines and with President Marcos, despite the fact that Secretary of State Shultz and Deputy Secretary Wolfowitz openly disagreed with that assessment, instead demanding Marcos’s head. The crisis came to a head in July 1984, when the U.S. Congress adopted the Solarz proposal to rip up the Bases Agreement, not only slashing the financial commitments, but insisting that the remaining aid be distributed not by the Philippine government, but by the Church, which, under Cardinal Jaime Sin, had openly called for insurrection against the government.

By November, the plans for insurrection were unveiled publicly, as the Washington-based Center for Strategic and International Studies (CSIS), the home of Henry Kissinger and Zbigniew Brezezinski, carried out a “war game” against the Philippines, based on a scenario in which President Marcos is assassinated, Soviet “spetsnaz” commandos join the New People’s Army in taking over the Philippines, and the U.S. military goes into action to “save” the country.

The CSIS’s work in Asia was largely financed at that time by the C.V. Starr insurance empire, run by Maurice “Hank” Greenberg. Greenberg and C.V. Starr owned most of the insurance industry in the Philippines, and a number of Philippine politicians as well, and served as the crucial “on the ground” economic hit man in the Marcos coup.

Marcos continued fighting for the principle of a new world economic order. In November 1985, EIR and the Schiller Institute, the international association directed by Lyndon and Helga LaRouche, invited Gen. Edgardo Mercado Jarrin (ret.), the head of Peru’s Institute of Geostrategic and Political Studies, to tour Asia, promoting the partial moratorium on foreign debt then being implemented by the Peruvian government. In addition to conferences in Thailand and India, General Mercado Jarrin and the EIR/Schiller Institute delegation met with President Marcos in Manila. Marcos told the delegation: “Third World Asian and South American countries should get together and push through the condonation of part of their loans. How can Third World countries pay their loans, amounting to $900 billion?” Marcos estimated that the paying capacity could not exceed $300 billion.

The Aug. 16 EIR published a story entitled “Plotting the Fall of an American Ally,” which reported that U.S. Ambassador Bosworth was plotting a military coup against the Marcos government. The article reported: “Bosworth now meets up to two hours every day with Acting Chief of Staff Lt.-Gen. Fidel Ramos, a West Point graduate whom the United States is attempting to groomn as a leader of a new civilian-military junta, despite his loyalty to President Marcos.” The story was based on information from reliable sources both in the Philippines and in Washington, where certain patriotic layers within the government, intelligence, and the military did not accept America’s transformation into an imperial power serving the synarchist financial interests.

The EIR exposée forced a public denial by General Ramos and by Ambassador Bosworth. As events proved, the warning was deadly accurate.

Marcos was finally coerced by Washington into calling new elections for February 1986, even though the Constitution mandated elections only in 1987. The opposition, in constant coordination with U.S. Ambassador Bosworth and the Shultz State Department, chose to run Aquino’s widow, Corazon Aquino, as the Presidential candidate, with Laurel for Vice President.

As still seen today in such neo-con-controlled “people’s power revolutions,” such as in Georgia and Ukraine, U.S. intelligence agencies financed and controlled the “citizen” electoral monitor organization, the National Movement for a Free Election (Namfrel), and prepared to declare “vote fraud” if the election did not go the way intended. Paul Wolfowitz in November 1985 told the U.S. Congress that there would be a “complete collapse of political confidence” if the elections were not perceived as “fair”—i.e., if Marcos were not defeated.

Indeed, on election day, the opposition was ahead in the early returns from Manila—which was expected—and Aquino was instructed to declare herself the winner. However, when the rural votes came in, where Marcos was still loved for the development he had brought to the nation, Marcos overtook Aquino and won the election.

In an astonishing public admission, former U.S. Ambassador to the Philippines William Sullivan (who had also been Ambassador to Iran when the Shah was overthrown by similar means in 1979), told CBS News on Feb. 9, two days after the Philippines election: “The facts as they emerge are becoming increasingly irrelevant, because it’s the perception that prevails both in the Philippines and, I think, internationally, that Mrs. Aquino won the election as far as the polling places were concerned, but the government, in the tabulation, changed the vote counts.”

As EIR had warned, General Ramos then led a military revolt against President Marcos, calling for crowds to surround the military base in the center of Manila, to create an image of “people’s power,” while the masses of the population were disenfranchised by the overthrow of their elected President. By the end of February, President Reagan had been convinced by Shultz to give up his defense of President Marcos, and endorse the military coup; Marcos and his family were sent to Hawaii.
IMF Carnage

The results of this subversion are still evident today in the decay of the economic and social fabric of the Philippines. Corazon Aquino fulfilled every IMF request, from the closure of the completed nuclear power facility to the deregulation and privatization of much of the economy. It was a surprise to some of Aquino’s supporters, but not to LaRouche, when the pro-IMF members of the Marcos Cabinet were retained in the new government. General Ramos took over directly in the next Presidential election in 1992, selling the nation to the Enrons of the West through corrupt, unequal contract agreements, especially in the energy sector, which left the country in absolute bankruptcy after the speculative assault on the Asian economies in 1997-98. Joseph Estrada, another “commoner,” was elected President in 1998, but was allowed only two years in office before another “economic hit man”-orchestrated-coup (again with General Ramos doing the bidding for his foreign controllers) brought him down in January 2001.

The current President, Gloria Macapagal-Arroyo, has generally done what was demanded of her by the neo-conservatives in power in Washington. However, when she pulled the token Philippine military force out of Iraq, and then upgraded the country’s relations with China, she won the ire of her patrons, and is now facing the threat of yet another coup—with General Ramos again the neo-cons’ man on the scene.

LaRouche, together with his collaborators in the Philippines, intends to use this history of the economic hit men, in the Philippines and elsewhere, as a necessary part of the fight to end such criminality forever. As LaRouche concluded in his address to the Nov. 16 radio show quoted above: “I have had a long-standing special attachment to the Philippines, and I am very much concerned for its integrity and sovereignty and well-being today. I would be very happy, and the Philippines would make me very happy, by being truly sovereign, successful, growing, and peaceful again today. And you may expect that wherever I am and whatever I am doing, that commitment is very active within me, for very special reasons that I won’t bother going into, on this question of the Philippines. I am concerned. The sovereignty of the Philippines and the success of the Philippines as a sovereign Presidential republic is, to me, one of the necessary ingredients of a future for the whole Pacific area of the world.”

Ramtanu Maitra and Gail Billington contributed to the research for this report. The author can be reached at