The Multinational Monitor


T H E   P H I L I P P I N E S

The More Things Change, the More they Stay the Same

An interview with Benigno Aquino, Philippine opposition leader

Philippine president Ferdinand Marcos is in trouble. The nation's economy is faltering, and internal dissent has grown to include middle- and upper-class Filipinos who resent Marcos' economic strategies favoring multinationals over domestic business. Marcos also faces continued opposition from Muslim separatists in the south, and the urban and rural poor.

As an alternative to Marcos, many Filipinos look to his longtime political opponent, former senator Benigno Aquino.

One of the first to feel the brunt of Marcos' imposition of martial law, Aquino was jailed in 1972 on charges of subversion, illegal possession of firearms, and murder. Five years later, he was convicted in a sham military trial.

Temporarily released last May for heart surgery in the United States, Aquino has remained in this country as a teaching fellow at Harvard University. He expects to return to Manila in June, partly as a test of Marcos' commitment to restore political rights.

Even from the United States, Aquino has exercises a vital role in galvanizing the middle class opposition to Marcos; indeed, he was widely accused of masterminding the bombings that racked Manila last summer and fall.

Multinational Monitor's Patricia Perkins and Matthew Rothschild interviewed Aquino when he was in Washington for a mid-January press conference, held jointly with representatives of the Anti-Martial Law Coalition. The purpose of the press conference was to denounce Marcos' "lifting" of martial law as merely a publicity act by the beleaguered president, and to express unity among wide-ranging Filipino political groups in their conviction that Marcos must go.

In the following interview, Aquino provides a rare glimpse of what the Philippines may have in store if, as many hope he eventually becomes head of state.

MONITOR: One of the reasons a lot of multinationals entered the Philippines in 1972 was because martial law brought about so-called "labor stability"; it outlawed strikes and gave businesses the right to dismiss workers. Marcos- just lifted the ban on strikes in "nonvital sectors, " but, you yourself pointed out in today's press conference that his action is just a "paper lifting. " Why won't Marcos completely lift the ban on strikes?

AQUINO: The very reason why Marcos refuses to lift the ban on strikes is because of the multinationals. I think there's a secret agreement. When they came in, I think Marcos assured them there'd be labor stability.

MONITOR: The Journal of Commerce reported in early January that the multinationals urged Marcos not to lift the ban on strikes in vital sectors.

AQUINO: I can believe that; I can believe that.

MONITOR: So this puts multinationals hand in hand with Marcos' rule, doesn't it?

AQUINO: Oh, always. Well, let's face it. Multinationals are apolitical. They don't give a damn what form of government it is as long as they can make money. And sometimes they are happier dealing with a dictator because they can have a deal with the dictator. They are very happy with a situation like Marcos and the corporate state.

MONITOR: Where are the multinationals now in regard to their support for Marcos? Are they firmly behind Marcos now, or do they see him slipping so badly that they are going to look elsewhere?

AQUINO: The real big multinationals in the Philippines just dread the opposition. First, capital is the biggest coward: they say, "I prefer the devil I know to the devil I don't know." Marcos they know; they've dealt with him for eight years. They already have a sort of track record with him; they have precedents with him; they know what buttons to press. "And this guy Aquino - Jesus, he's at Harvard, I don't know what kind of ideas those bleeding liberals at Harvard place in his head. Going with him, that'd be a new ball game altogether." They don't like that. So I think they're behind Marcos.

MONITOR: Do you see them as a big obstacle to change,' then, in the near future in the Philippines?

AQUINO: No, I don't think so because the multinationals -as much as possible - would not like to be involved in politics. However, if you accept that, they have two options. They can try to cash in as fast as they can and take off, and if they cannot cash in, they will back up the guy who will give them the time to cash in. But they won't dig in. No, they'll look at the balance sheet and say, "Well, it's too messy, just write it off as a loss."

Mind you, there is no multinational in the Philippines where its operation is more than one or two percent of its portfolio. So you're not really talking big here. It may be big in terms of the Philippine economy, but not in terms of the total portfolio of these multinationals.

The multinationals are not scared. I'm not scared of the multinationals. The only thing I'd like to prevent in the country is giving a multinational a lock on a major portion of the economy. Then you're in trouble.

MONITOR: And they have those locks now?


MONITOR: In what industries?

AQUINO: Pharmaceuticals. Tires. Oil. Banks. Insurance.

MONITOR: Could you give us specific examples of how this condition affects the Philippines?

AQUINO: Rubber companies. They control us. Goodyear, Goodrich, and all of them. The tires in the Philippines are 20 years old. We don't have these radials, these spirals; ah, we're a throwback. They give us hand-me-downs; they transfer obsolete technology or equipment that's already been discarded, and they enter it in our books as brand new. And then after that, their profit remittances are based on all these capital transfers.

The worst violators, the most predatory, are the oil companies. They control all phases of the business, from the time they drill that oil in Saudi Arabia to the time they sell it to the pump man. They drill; they produce; they hit you with production price. They ship; it's on their ship; they hit you with transport prices. They refine; it's their refinery. They sell to the retailers; it's their retailer.

So, now they juggle the books. They can jack up the price of transport to make it appear as if they're losing money in their Philippines operation, or they jack up the prices of refining. And there is no way to control this, because they control all phases.

MONITOR: How does the Philippines fit into the multinationals' global marketing strategies?

AQUINO: For example, the Japanese came to the Philippines and encouraged us to plant bananas. The strategy of the Japanese was plainly to play us against Ecuador, or against Central America, where they had their supply of bananas. Like fools we came in; geez, we planted thousands. Now we have bananas growing out of our ears, and we are going bananas because the Japanese refuse to buy, or they say, "Well, since your banana is rotting, I'll pay you a dollar a box."

The whole Third World is so large, that they could make us fight each other. So, when you really come down to brass tacks - and I'm being very sang-froid - we need them more than they need us, because we are so many begging. It's like a strike situation when there are so many scabs.

MONITOR: If and when Marcos'opposition comes to power, it is going to face the problem of unlocking the hold of multinationals. Yet you said in today's press conference that "Marcos is the beginning and the end of our problems." Doesn't your description of multinationals in the Philippines make it appear as if there are other things besides Marcos that are part of the problem?

AQUINO: The beginning and the end of our major problem is Marcos. Then we might have problems, but they're solvable.

I don't give a darn how these multinationals are; you can crack them.


AQUINO: All right. Number one, multinationals today are not as predatory as United Fruit before. The new thinking on multinationals is, it is to their long-time interest not to be predatory. I mean, I've gotten this at Harvard Business, at Wharton, at Sloan.

I don't see any problems with multinationals that I can't control. The multinationals are willing to play any scenario, provided: a) it is fair and applied equally to all, and b) you don't change the rules in the middle of the game.

I've dealt with these guys. You know, among my family, my inlaws once upon a time were one of the biggest bankers' in the country. I know these guys. And I've met them not _only at cocktail parties, not only on the polo fields; I've dealt with t}-rein in a few joint ventures. Never any hassles.

MONITOR: Could you give some specific examples of the policies you think should be instituted for multinationals in the Philippines?

AQUINO: OK, you approach them by incentives. They must be convinced they'll get a fair return for their money. Meaning, if they're making 10 percent on their home ground, they must make at least 12 percent to make it worth their while to go to you.

But that is not to say that you have to give them the entire kitchen, the whole shebang. 1 do not believe you should allow multinationals 100 percent ownership. Fin against that except in very high technology things, like IBM in computers for instance. But Coca-Cola, I don't see any reason why you can't insist on it; I mean, Filipinos aren't going to die if you oust Coca-Cola.

MONITOR: Are you for more state-owned enterprises?

AQUINO: I am for state ownership of all basic industries, that's number one: power generation, mass transit, air, railways, telecommunications. Number two, I am not committed a priori to national ownership like the socialists, but 1 will approach it with a very pragmatic formula.

For example, if industry's timid to move into a certain area because it requires tremendous finances - like a steel mill - then I'll go in. The moment it's ongoing, and I can find takers, then I unload.

At the same time, I do not accept the free enterprise concept where everybody just goes scot-free. Because of our meager resources, you have to allocate. You must have a national planning authority. You cannot just let go, and then everybody overlaps, and you have under-capacity for your products.

MONITOR: Are you worried about losing foreign investment if you impose stricter guidelines on the operations and ownership of multinationals?

AQUINO: I believe that the multinationals will come to a country, sometimes not because of immediate income, but because of the stability. In other words, they go in on the long-run, on the political stability.

MONITOR: Would you continue along the kind of path that Marcos is travelling. now - the export-oriented one - or would you go more for domestic industry, and more agricultural than industrial development?

AQUINO: The first target is, we must be self-sufficient in agriculture, so that whatever happens in the world, we are not held hostage to inflation.

MONITOR: Do you think Marcos has sacrificed that sector?

AQUINO: No, but he followed the wrong strategy. For example, he went on a capital-intensive rather than labor-intensive route.

Number two, he went on a wage-depression strategy, thinking that if you de press wages and you're the cheapest in Asia, the multinationals will crowd in as foreign investors. But that's not true, because wages is only part of the component of the entire package. The wage strategy of Marcos has failed because what happened was, when he depressed industrial wages; by consequence, you have to subsidize the food of these laborers, otherwise they'd never be able to make ends meet, right? So the net effect is depressing everybody.

MONITOR: So you 'd be in favor of more agricultural development?

AQUINO: Improve it, going about it in two ways. One, basic infrastructure, irrigation. Two, credit. Three, technology. These must be inputs of government.

MONITOR: And this development is for domestic consumption or export markets?

AQUINO: First, you have to satisfy your domestic consumption. And then you must let go industry, but not at the expense of domestic consumption. For example, you can't buy shrimps anymore now in Manila because they opened up the export of shrimps.

MONITOR: And also rice, no? Marcos has cut down on the production of rice.

AQUINO: What happened is, they're selling first-class Philippine rice and they're importing third-class Thai rice.

MONITOR: And a lot of Filipinos are going hungry because they just don't have the money to buy it?'

AQUINO: You are correct. There's not enough food to go around, not because there's not enough food, but because there's no money to buy that food. -

MONITOR: What are your plans for local industrial development?

AQUINO: First, I'd go labor-intensive. They've put up, or are going to put up, a copper smelter at a cost of US $500 million. This smelter will employ at the most 600 people. I know of a guy who brought in microchips. For $20 million, he supplied 8,000 girls with jobs. Now, you don't have to be a genius to find out what really gives employment. So, go to these labor-intensive areas, maximize this, even if they just break even, you are actually now putting money into the pockets of the people; you are employing them.

MONITOR: Would you follow Marcos' strategy of lowering tariff barriers, creating tax havens for multinationals, cutting out incentives for local businesses?

AQUINO: This is where I disagree with some of our critics. I believe that you lower tariff barriers, not because you want to favor multinationals but because you want to develop an industry that can survive competition.

MONITOR: So you are in favor of lowering tariff barriers?

AQUINO: I do not believe in pampering our industries. I would keep tariffs on five years to give them a head start, but I'm not going to pamper them in such a way that I will penalize my people to pay high prices for commodities which these guys are producing inefficiently.

MONITOR: How do you view the role of the World Bank in the Philippine economy?

AQUINO: I know that the World Bank has been manipulating some of our economies. But it is not a basic World Bank mistake. It's our mistake. We allow them to manipulate us.

MONITOR: But they set up certain strategies and certain development policies they want to see followed. They impressed upon Marcos an industrial development strategy which has largely failed.

AQUINO: But why did this plan go on? Simply because Marcos mismanaged the economy. Simply because Marcos overborrowed. And when he overborrowed, he lost his leverage, you see.

MONITOR: But if your agricultural projects are for primarily domestic consumption, and if some of the industrial plans are to build up local industry as a way of making the economy less vulnerable to the changes in the international terms of trade, that goes against the prevailing World Bank development strategy. Then if you want to go to the World Bank for money, and they say, "Do only export development, " and you say, "No, I want to do these projects more for self-sufficiency, " then it doesn't seem the problem lies just with the Philippine government.

AQUINO: Well, then it's just a matter of shopping around. You just have to go out and pay a higher interest.

The Transition to a post-Marcos Philippines

MONITOR: How do you see political changes taking place over the next few years in the Philippines? What is your scenario for a post Marcos Philippines?

AQUINO: Right now, we are in a dictatorship. If Marcos dies tomorrow, we'll be in the soup because that would unleash all the forces that are now jockeying for position.

One scenario is, that if he kicks the bucket tomorrow, Mrs. Marcos takes over. Mrs. Marcos, in my estimation, can last about six months to a year. Then there'll be forces under Mrs. Marcos who will be grabbing for power and she'll end up like Isabella Peron. That's number one.

Secondly, Marcos' own party will fragment into four other groups. Meanwhile, the opposition that is now united against Marcos again will splinter: the liberals will go their way; the nationalists will go their way, these people will go that way, you know, because the common mortar holding us together - Marcos - is gone. Then you'll really" have a freefor-all in the Philippines.

MONITOR: Some indications of those splits have already been shown, haven't they?

AQUINO: Oh, they're there. We're papering over them, but they're there. Therefore, the best thing that can happen in the Philippines is to negotiate with Marcos a programmed return, involving in the process a majority that can come to agree upon a common agenda, so that whatever happens to Marcos, there is a substantial majority that may fill the vacuum.

MONITOR: What are the major components of that majority?

AQUINO: Center, and left and right of center, but 20-20. In other words, there is no room for the extremes here. You are talking of the church; the business interests; the old politicians; the bureaucrats; the middle class; plus fringes from the labor elements.

Then you have the radical labor out here and the conservative church and the predatory Philippine entrepreneurs on the other extreme. But even this will eventually slide in with the majority, when they find the chips are down. They're not going to go down and fight.

MONITOR: How is Marcos going to agree to this?

AQUINO: He has no choice. Because if he continues with his repressive measures now, the situation is so deteriorating that it'll explode in his face.

So now he wants to throw the ball to somebody who will catch it, and it, will explode in his face instead. In fact, when Mrs. Marcos saw me last December, she floated the notion of me coming back as prime minister. Ah, I have no desire in becoming another Bakhtiar; I'd be crazy at this stage of the game.

MONITOR: Mrs. Marcos offered you the prime ministership?

AQUINO: She said it very nicely. "You know, Nino, we have to get together. The president really has no quarrel with you; if you want to join, he said you'd be welcome." And then Holbrooke came in and said, "And why -shouldn't you talk to him. H= respects you so much I think he'll even give you the prime ministership." Now that didn't come from Holbrooke's idea; it was planted.

MONITOR: So the U.S. Assistant secretary of State for East Asia and the Pacific, Richard Holbrooke, also extended the offer?

AQUINO: Oh, yeah. So I said, "No, no, no. Dick, I'm out of the ball game." He said, "What do you mean?" "I'm out of politics," I said. "I don't want to touch it. I'm through. The moment martial law's dismantled, I'm through. OK?" Dick asked me, "How could you be through? You're young, 48, you're still active now." "All right, I'll' give you a very pragmatic reason," I said. "I've had it. And I promised my wife after martial law is dismantled, I'll quit."

But I won't belabor that point. I am intimidated by the problem. I sincerely believe that if I take over, in six months I'll be blown out of the water. No way.

MONITOR: So you really think you'd be the Bakhtiar of the Philippines?

AQUINO: Look, you have a situation where Marcos falls, you come in, the communists back off, and people expect you to make miracles. How do I put back three million jobs? How do I bring down the price of gasoline, for Pete's sake?

So people will say, "Jesus Christ, you're the guy we waited eight years for? You're even worse!" You know? So, no way.

MONITOR: Don't you see yourself ever going back into politics?

AQUINO: The thing that I can say now is, the first guy that will come in will be blown out in six months. Then a second guy will come in and he'll be blown out in six months. Then, in the third round, people will just say, "Well, what do we do?" So they reach out.

If I'm still alive at that point, I'll go back to them and say,' "O.K. Here's my formula. It's a bitter pill, and I don't want a job, but if you want me to take the job, these are the conditions." And if they say, "We'll accept that," then well go into a plebiscite. I want a mandate to implement my formula, Then, I'll be in a stronger position, you see.

If I present myself now, then I'll be begging, and they'll be demanding. But if I turn it around, 171- be the one demanding sacrifices. So you just have to wait your turn; you have to let this fever go down, otherwise you're going to get blown out of the water.

MONITOR: Did you tell Holbrooke this?

AQUINO: Yeah, I told him. I said, "Dick, I don't want the job anymore, but I keep myself in reserve. I might be able to keep the anti group together.

MONITOR: Were you surprised that Assistant Secretary of State Holbrooke suggested you take the prime ministership?

AQUINO: No, America's interest is to find a peaceful solution. With Afghanistan, with Iran, with Poland, I mean, Jesus, they don't need one more. You see?

Holbrooke's main concern is to work out a peaceful, transition where democracy could be returned to at least blood. But I told him, "Dick, at this stage of the game, I believe that Marcos is beyond redemption. He's in a holding pattern. And I said, "until and unless the American economy puts itself together and starts moving again, no way."

MONITOR: What do you mean?

AQUINO: You see, when the American economy starts moving forward again with a three percent growth rate, you guys pull all of us up. But when you stagnate, all of us sink in the water. As long as your people have an 18 percent or 19 percent interest rate, we're finished.

Our exports, they are basic: lumber, sugar, and all of these. You know, when your candy factories start slowing down, your sugar imports stop; when your housing goes down, your lumber imports go down. Our handicrafts - who wants to buy handicrafts in a period of recession? For Pete's sake, I mean, you buy handicrafts when you have extra money. But in a period of recession you're putting all that money in food, so none of it's going to buy Philippine embroi dered stuff. Forget it.

MONITOR: What do you think the role of the U.S. government is going to be in this transition period? Do you think for a long time they 11 back Marcos, or do you think it's going to shift?

AQUINO: I would like to believe that there is now enough input in the United States policy planning group and enough experience triggered by Iran and Nicaragua that the knee-jerk reactions are over.

MONITOR: o Even in the Reagan State Department?

AQUINO: I think so; I think so. Mind you, Haig is a very savvy guy. I mean, he's been there; he knows power. He knows that you cannot isolate yourself and be the last word. lie has a lot of inputs. He's getting input from the CIA; he's getting input from the National Intelligence Board and from the State Department's Intelligence Board. And then standing behind him is a core of professionals.

Your State Department is not so bereft of talents. Now I can tell you, in Manila, they put some of the best available guys there in the political office. I've talked to all these guys; they're savvy boys, you know. They've come from the best schools; they've got good track records.

So I'm not afraid of the Reagan administration, because I do not believe Reagan will be making .the decisions. I think Reagan will be the chairman of the board who will cross the t's and put the periods, you know, and then sign his name but then nothing else. Now I may be wrong, but that's my hope.

MONITOR: Are you worried that the US. is going to lean on you more and more to be their ally?

AQUINO: No, no, I don't think the U.S. will ever lean on me that much. I mean, they know me better than that. And that's one way I'm not too popular with the United States.

I suppose they'll support me only when there's no choice, you see. I've had many relations with them; I've worked with your CIA on many operations - they know I can be very stubborn.

MONITOR: Your work with the CIA dates back how far?

AQUINO: 'S8-'S9. You know, I was assistant to three Filipino presidents. And once upon a time I headed our own equivalent to the CIA. We had joint operations in Indonesia; we had joint operations in Laos; we were in Cambodia.

MONITOR: How's the United States perceived in the Philippines?

AQUINO: We over-magnify America's strength; we over-magnify America's intervention; we over-magnify America's power to influence .�,vents. Now that's the Filipino perception.

So if, for example, the perception is, "Washington is backstabbing me," even if it is not true, it gives me a fantastic prop, you see.

MONITOR: You mean, you personally?

AQUINO: Me: personally. Say the rumor now goes that America is supporting Aquino, then, by George, Filipinos are going to buck it to be back with Marcos. But if my status stands, it counts 50. All of a sudden, people who were defensive, they'll say, "Hey, he's got to be a winner." Therefore, the perception is very important.

MONITOR: Do you see support from the United States as being necessary for the kinds of changes you favor in the Philippines?

AQUINO: America can now help the Philippines, tide their economic situation over by indicating to the consortium of creditors to please extend and roll over our loans.

MONITOR: So you would be in favor of rolling over the loans?

AQUINO: It's the only way. The moment Marcos can't roll over his loans, he's finished. o

MONITOR: But if you want Marcos to leave power, wouldn't the best request be to ask the creditors not to roll over the loans?

AQUINO: Well, the fundamental question is, do I want him to leave power and bring my country ruin? I would rather keep him there than ruin the country.

MONITOR: So how do you see him falling from power, if you see his crutches still there?

AQUINO: Number one, Marcos is 63, 64. He's not that healthy. How long can he last? But I can tell you this, if we ruin the economy, for the next 20 years we won't be around. That would be a graveyard. So it's a very pragmatic acceptance of realities. I want to remove him, yes, but not at the expense of my country.

In other words, if I could have an arrangement where he would stay three more years and then exit and keep that situation and the economy going, I would hope for that rather than go to a violent confrontation or try to shake him up and get him out like Nicaragua.

MONITOR: But don't you see yourself in a precarious position? There are a lot of opposition forces now in the Philippines that are so disenchanted with Marcos that they're not going to be willing to wait three years. Don't you risk getting swept along?

AQUINO: I know that. It's a reality that I have to face. But there's no other choice. I have to take that risk. I have to continue moderating these radical elements.

When Mrs. Marcos met me in December, she said, "I'm not saying you're the mastermind of all these bombings, but every time you open your mouth in New York, bombs explode in Manila. So I'd like to appeal to you. Ferdie [Marcos] will never, never leave martial law as long as bombs are exploding in Manila. It's a matter of face. And you know him, he'd rather die than lose face. So you have to give him a moratorium of 90 days."

And so I said, "And what's the quid for the quo?" "He'll lift martial law." I said, "Done. But remember this: 90 days. If nothing happens in 90 days, we're not going to talk again. Ever. Because by that time I'll be irrelevant. When I go and give my own appeal to these guys and say, `give me 90 days,' and then I don't deliver, well, you've just blown your last bridge." She said, "I understand." .

MONITOR: Do you have that kind of suasion with the local business people who have been held responsible for the summer bombings?]

AQUINO: The local bombers, at the moment, were not' too happy, because they thought they had the momentum. But I argued, "You cannot use this as a permanent strategy. When the message has been delivered, back off. Because," I said, "the next escalation will be even worse. So give him a chance. What's three more months? What's 90 days?"

And he lifted it. Now, we're not happy. I mean, Imelda [Marcos] told me on December 29, she said, "Nino, he is going to lift martial law, but you are not going to be 100 percent happy, please understand that. It has to be gradual. He can't throw the door open," she said, "he'll be cautious. But if you will have more understanding and patience, I can assure you that by June, depending on how you people react, we can meet halfway." So far, she has delivered.

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