The Philippines' Economic Nationalists

...enterprises might be restricted in the absence of specific statutes...

...What Filipinos seem to fear is an endless perpetuation of parity-derived American commercial rights in the Philippines...

...policies as much as what is locally called "parity"—the right of Americans to engage in various types of economic activity on the same terms as Filipinos...

...It is the Laurel-Langley Agreement's extension of parity to all business activities that most concerns the emergent Filipino industrial class...

...But free trade ended in 1955, the year the Laurel-Langley Agreement revised economic relations between the two countries...

...And Henares was backed by significant numbers of Filipino businessmen when a joint petition was presented to the National Economic Council by three of this country's most important economic groups: the Chamber of Industries, the Chamber of Commerce of the Philippines, and the National Economic Protectionism Association...

...When the United States granted independence to the Philippines in 1946—the first Western power to free a former Asian or African RICHARD BUTWELL is a visiting Professor of Political Science at the University of the Philippines...

...But economic nationalists will not allow him to content himself with such a beginning step and, if reelected in November (as many here now believe he will be), he will be under pressure to heed the demands of his aroused countrymen...

...In the view of Philippine economic nationalists, therefore, the revised policy sentenced their nation to a semi-permanent term of pre-industrial subordination to the U.S...

...President Macapagal may have greeted Bundy's remarks with enthusiasm as a beginning step toward the desired American attitude...

...Yet only two days later the Chairman of his National Economic Council strongly attacked Bundy...

...That agreement altered the schedule of reduction of trade preferences for Philippine products entering the U.S., and accelerated Philippine imposition of import duties on American goods...

...REPORT FROM MANILA The Philippines' Economic Nationalists By Richard Butwell MANILA The Philippines has always been a most valuable ally of the United States in the western Pacific, and it would become all the more important in the event of Communist advances in Southeast Asia...

...Assistant Secretary of State for Far Eastern Affairs William P. Bundy's statement in Manila that the United States was not interested in an extension of parity beyond the expiration of Laurel-Langley in 1974...

...Henares took vigorous exception to Bundy's apparent position that the United States intended to insist on full application of its parity privileges until 1974...

...Henares was also critical of Bundy's statement that "rights acquired prior to 1974 will be protected in accordance with the Philippine Constitution...

...And President Johnson wrote directly to Macapagal, reminding him of the pledge of a past Philippine President that the act did not encompass American-owned properties...

...The recent failure of the "first Filipino oil company" to remain Filipino-controlled supports such fears...

...The question was raised, accordingly, of whether or not American firms also had to be wholly American-owned, a practical impossibility in view of the open sale of stocks to persons of all nationalities on American exchanges...

...His National Economic Council issued a statement on March 10, two days after Bundy's remarks, which said that no United States citizen would enjoy any parity rights after July 3, 1974, when the Laurel-Langley Agreement expires (and when the parity provisions of the Philippine Constitution lapse...

...Filipinos contend that if parity is allowed to continue for another decade, even with the understanding that it will not be extended beyond 1974, U.S...

...An example of the tenacity with which the U.S...

...Macapagal termed the Bundy remarks "a concrete example of American understanding and desire to cooperate in every way possible in strengthening the foundation of our policy and the enlargement of freedom in this part of the world...

...However, it also extended U.S...

...corporations...

...There are many irritants in the complex Philippine-American relationship, such as the question of jurisdiction over various types of criminal acts committed on American military bases in the islands...

...colony after World War II—it made extension of badly needed rehabilitation assistance dependent upon amendment of the Filipino Constitution to accord Americans equal rights with Filipino nationals in the exploitation of natural resources and the operation of public utilities...

...American firms, concerned about the act's extension to their holdings, went to court—perhaps precipitously, since President Macapagal subsequently attempted (unsuccessfully) to get the courts to disown jurisdiction because the question was "political' Macapagal also vainly sought enactment of a law "clarifying" the definition of retail trade in the 1954 act (which already seemed clear enough to Filipino businessmen...

...A Filipino firm had to be fully Filipino-owned to qualify for exemption from the act...

...The Philippines, as a consequence, would remain (in Henares' words) a "vegetable garden" of the U.S...

...A second contention is that if American commercial interests are to be "protected in accordance with the Philippine Constitution" after 1974, as Bundy put it, Filipino firms will remain at a permanent disadvantage in relation to the superior resources of American firms, most of which are overseas extensions of giant U.S...

...Henares explained that the Council had passed a resolution on February 18 to the effect that all leases and contracts of American firms functioning under parity would expire with the Laurel-Langley Agreement—that is, there would be no "vested rights" extending beyond the pact itself...

...parity rights, according Americans equal opportunity with Filipinos in all business activities in the country...

...The act was passed in 1954 as a means of ending Chinese domination of retail trade in the Philippines, but it provided for a 10-year adjustment period before it became wholly operative...

...This is why the political attack is focused on the parity provisions of the Laurel-Langley Agreement rather than on the Constitution, which now accords Americans equal rights only to exploit natural resources and operate public utilities until 1974...

...The result, say the Filipinos, will be that Americans will become so dominant, and will be performing so many important economic functions, that it would be extremely costly to replace them...

...This feeling is strongly reflected in the position of youthful industrialist Hilarion M. Henares Jr., the vocal and assertive Chairman of the important National Economic Council under President Diosdado Macapagal, who was recently nominated to contest a Senate seat in the November elections under the banner of Macapagal's Liberal Party...

...If American firms did not have to be completely American-owned, Filipino nationalists argued, then the effect of United States parity rights (as only too quickly invoked by the involved American firms) would be to make Americans "more economically equal" than Filipinos in the latter's own country...

...firms will take advantage of the decade's grace to exploit their rights to the fullest extent...

...Exploitation of natural resources and operation of public utilities would clearly fall within the prohibition of the Philippine Constitution, but it is not clear how other U.S...

...The petition demanded that U.S...

...No other nation in the whole world accords such a privilege to only one foreign country...

...business community apparently intends to keep its economic privileges was shown in its response to the full enforcement of the Retail Trade Nationalization Act on June 19 of last year...

...The U.S., of course, demanded no such special economic privileges as a condition for rehabilitation aid to either Germany or Japan, both defeated enemies in World War II...

...The Constitution, which inaugurated what was supposed to have been 10 years of internal self-government in 1935 (later interrupted by Japanese occupation), had, before 1946, restricted these two privileges to firms 60 per cent Filipino-owned...

...The reaction of Philippine President Diosdado Macapagal to the Bundy statement appears to have misled some Americans about Filipino feelings...

...So it is not surprising that many Filipinos s e r i o u s l y q u e s t i o n ed whether Washington had really granted them full economic freedom...

...But increasing numbers of Filipinos seem to feel the United States still regards their country as a colony, and for the most part they are led to believe this by a vigorously articulate, new Filipino elite of industrial managers...

...parity rights be ended at the earliest possible date...

...They have some justification for their fears...

...Henares called for the early negotiated elimination of parity last March, on the heels of U.S...

...The Bell Trade Act of 1946, which was passed by the American Congress prior to Philippine independence and embodied the much criticized parity demand, also provided for reciprocal free trade between the two countries until 1954 (and the subsequent staggered elimination of such preferences)— a continuation of a policy inaugurated in 1909 by the Payne-Aldrich and Philippine Trade Acts...

...No issue, however, symbolizes Filipino resentment with past and present U.S...