The Philippines Revolution

What are the alternatives to neoliberalism?

by James Petras

Z magazine, March 1999

Nearly 100 years ago, U.S. Marines invaded the newly independent Philippines and killed anywhere from a quarter of a million (U.S. military estimates) to a half million Filipinos in the course of colonizing the archipelago. The legacy of 50 years of U.S. colonial rule is palpable in the slums and streets of Manila, the misery and poverty of the countryside, and the three million Filipinos forged to migrate abroad in search of a livelihood.

During a visit to the Philippines to participate in a conference on "Alternatives to Neoliberalism" I talked with peasant and trade union activists and leaders, as well as intellectuals, academics, and leaders of the major left-wing movements. The picture that emerged was a far cry from a recent headline in the Wall Street Journal (WSJ), "Philippines Economy is Bright Spot in Southeast Asia." The Philippines we are told hasn't experienced the economic meltdown that has occurred in neighboring Southeast Asian countries. It will supposedly experience a 1 percent growth in 1998 (with a 2.5 percent population growth).

What the WSJ failed to mention is that, unlike the rest of Southeast Asia, the Philippines has been in crisis for several decades: the reason there isn't a boom to bust cycle is that there never was a boom to begin with. In the Philippines over 65 percent of the population was mired in poverty before the so-called Asian Crisis took hold.

For a brief period in the early to mid l990s the Philippine economy seemed (at least to Wall Street pundits) to be on its way to becoming an Asian Tiger. Growth rates of 5 percent in 1994-1995 and substantial increases in exports accompanied a large influx of foreign investment. The "boom" was predictably short-lived, collapsing by 1997-1998. The reason was quite simple; the bulk of the foreign investment capital (over 75 percent) was "portfolio investments," unproductive investments in the stock market and short-term, high interest T notes. With the collapse of Asian markets, the speculators fled. Most exports were really re-exports of semi conductors, electronics and garments with little value added-products assembled with cheap labor.

Middle class consumerism was fueled by cheap imports that led to huge balance deficits covered by foreign loans that resulted in debt service payments that exceed $5 billion, close to 40 percent of total export earnings. The Ramos and Estrada Governments cover the deficits by slashing the social budget and selling off valuable public mining, energy, and transportation enterprises.

The Philippine economy is largely floating on the $6 billion dollars that Filipino workers send home. If it wasn't for overseas remittances, the Philippine economy would crash into a major recession or worse and families living in poverty would be starving.

The second major growth sector of what the WSJ calls the "bright spot" is tourism-the bulk of which is linked to sexploitation-with over 100,000 prostitutes in Manila. With politicians, police officials, and local entrepreneurs deeply implicated, Manila and adjoining towns have become a pedophile's paradise: young boys and girls from 7 to 12 years old are a principle source of foreign exchange earnings and sexual abuse. The promotion of tourism, a pet project of newly elected President Estrada, has other insidious effects: scarce farmlands cultivated by poor peasant families are being seized and converted to golf courses. The Philippine National Inquirer (November 14, 1998) reported, "200 families have for decades tilled farms within a 500 hectare (zone in Central Luzon) that is being groomed as the next Jet Ski and golf destination." I visited peasants working plots averaging less than one acre. They were well organized and engaged in highly intensive and productive farming raising a few pigs, growing basic staples, while producing a small surplus of pineapples and mangoes for sale to cover their everyday needs. They are being threatened with expulsion to expand "export production." Already a nearby country club had drawn off water from an adjoining river eliminating fish from their diet and making irrigation difficult. Organized by the KMP, the leftist peasant union, they mobilized to defend their meager plots. The military police assassinated one of their leaders, accusing him of being a member of the guerrilla group the New Peoples Army.

The "reconversion of farmland" and the massive displacement of peasants has led to violent confrontations and the massive exodus of peasants into what are probably the worst slums in Asia-and perhaps the world.

Over the past decades multinationals have set up assembly plants and invested in mining and timber, while local Philippine owned businesses and light consumer goods industries have emerged. However, most industry is heavily dependent on machine imports and semi finished goods. Most foreign investment is based on extracting raw materials and exploiting cheap labor producing semi finished goods. Most of the urban poor are employed in the so-called informal sector: in construction, services, commerce where they are paid far below the minimum wage and are subject to the harshest exploitation by Filipino sweatshop owners. This new "national bourgeoisie" is of

- ten subcontracted to U.S. and Japanese garment and toy manufacturers. The ranks of the urban poor grow daily as the Asian export markets collapse and thousands of factory workers are laid off weekly. While some of the Southeast Asian regimes are questioning some of the basic tenets of the free market dogma, Philippine President Estrada has plunged ahead with ever more comprehensive trade liberalization measures, bigger reductions in social expenditures, and more lucrative privatizations. To curry favor with the U.S. at the November APEC (Asian Pacific Economic Conference) meeting, Estrada was the only head of state that echoed Vice President Gore's attack on Malaysian Prime Minister Mahathir Mohamed, ostensibly over the human rights issue but in reality directed at the Malaysian regime's imposition of capital controls on the movements of profits.

Agrarian Reform

Despite the growth of urban sprawl, traffic jams and giant malls, the Philippines still remains a largely agricultural society, in the sense that over 60 percent of its 75 million people live in rural areas. It has been the agrarian question which has been the center of political and social struggle and military confrontation since the Spanish conquest, the U.S. colonization, the Japanese occupation and the more recent counter insurgency conflicts.

Despite presidential pronouncements from McArthur to Marcos and from Aquino to Estrada, declaring the need for agrarian reform, the great bulk of the rural labor force remains without land or without adequate land to provide for their families. Almost 70 percent of the rural labor force is landless. Among rural cultivators, approximately 67 percent own three hectares or less accounting for 20 percent of the total land. On the other hand, .5 percent owns 50 hectares or more, accounting for 20

percent of the cultivatable land. The problem for small holders is not only land ownership but also land leasing. Most peasant cultivators are basically tenant sharecroppers who are obliged to hand over from 60 to 80 percent of their crop to the landowners. Since most tenant farmers cannot subsist between sowing and harvesting because of low rates of return, they borrow money from usurers at an average rate of 20 percent per month and sell their crops in advance to merchant landowners for one-tenth the price that the final consumer purchases it in the city.

While in the past century and into the early part of this century, the large landed estates were run by rent collecting landlords, that some analysts described as "semi feudal," in recent years the land has been taken over by real estate speculators, commercial plantation enterprises, tourist and development operators, and merchant-usurer notables with urban ties. The problem is not only exploitation, but also eviction and destruction of livelihoods, families and communities, and forced relocation to the festering slums of the city. This new bourgeoisie is basically Filipino and while it may utilize some of the earlier techniques of feudal exploitation it has diversified investments into lucrative urban endeavors, particularly financial speculation and real estate investment. They also engage as sub contractors in assembly plant operations. The past distinctions between a "comprador" or commercial bourgeoisie and a national industrial bourgeoisie have by and large vanished. Filipino capitalists convert rural rents into industrial capital to exploit assembly plant labor or to buy urban property, evicting urban squatters in order to build high rise office buildings to collect urban rent.

The neoliberal arguments of "efficient" use of land to justify evictions of peasants are not convincing. Orlino Mercado, a regional Department of Agriculture research division chief, pointed out that "economic reconversion" means that Central Luzon farmers stand to lose a research laboratory for upland farming technology and an inland fishpond, nurseries for upgraded stocks of sheep, goats, and carabso and a source of high-grade saplings for cashews, mangoes, and other fruit crops. In the province of Tarlac San Vicente farming families would be without land, their productive activities halted, their future unsure.

Increasingly, foreign multinational corporations are becoming dominant, not only in the traditional mining and plantation export sector, but also in the domestic market. U.S. licensed soft drink consumption is one of the highest per capita in the world. U.S. "cultural" media products saturate the Philippine market. U.S. retail subsidiaries, from fast food outlets to department stores, are ubiquitous, alongside overseas Chinese and Japanese banking and assembly plant operations. In 1995 domestic capital accounted for only 41 percent of total equity investments. Multinationals got 30 percent of total sales and almost 20 percent of total profits among the top 2,000 corporations in the country.

The story of modern foreign economic domination of the Philippines has its origins in the gory chapters of military occupation. In 1899 when the U.S. Iaunched its invasion of the Philippines by sending 21,000 soldiers and officers, they expected a quick and easy victory over their "dark skinned" adversaries. Instead they found that the "rag tag" revolutionaries had the support of the immense majority of the peasants and laborers and that they could not be easily defeated. Early on General Shafter, a field commander, declared, "It may be necessary to kill half of the Filipinos in order that the remaining half of the population may be advanced to a higher plane of life than this semi barbaric state of affairs."

After President Ferdinand Marcos declared martial law in the early 1970s, the country gradually polarized between the Communist-led anti-Marcos opposition and the supporters of the dictatorship. Washington provided massive military and economic aid to sustain its client dictator and the peasants provided able recross for the NPA and local militias.

By 1985 the NPA and its political expression, the National Democratic Front (NDF), had established parallel governments in 10,000 of the 41,000 barrios on the country. The NPA numbered 20,000 in arms and the Communist Party was growing into the tens of thousands.

For the U.S. the fusion of the anti-dictatorial and anti-imperialist movement under Communist leadership posed a serious problem. Marcos had been a loyal client for almost 20 years, yet he was increasingly a liability as more and more sectors of the moderate middle class was joining the leftist-led underground organizations and semi legal movements. Washington pursued the policy of dumping the dictator to save the state, a policy pursued earlier in Latin America and subsequently throughout Asia. Essentially, this involved driving a wedge between "radical" and "moderate" opposition to the dictatorship by facilitating negotiations for the restoration of elections and the departure of the dictatorship on terms that preserved U.S. strategic military and economic relations. Washington's strategy found the ideal formula in Cory Aquino, anointed by conservative Cardinal Sim, as the repository of democratic values. Widow of an assassinated opponent of the Marcos dictatorship (Benigno Aquino), a novice to politics, highly touted by Cardinal Sim and the U.S. Embassy, Cory Aquino ran against Marcos in the Presidential elections of 1986. Marcos's fraudulent victory, however, provoked a massive outpouring of dissent and civic opposition, later dubbed a "people's power" movement, despite the fact that Aquino and her closest economic advisors were tied to the old and new business landowner elites. The massive popular protest caught the left off guard. They expected the fraud, boycotted the election, and played a marginal role in the subsequent protest, expecting the populace to turn from electoral to revolutionary politics. They were wrong. With the defection of several key Generals, the backing of the U.S. Embassy and the Catholic hierarchy, civic protests successfully ousted Marcos and Aquino was installed in power.

The anti-dictatorial movement organized in BAYAN and the NDF splintered. Some sectors of the middle class joined the Aquino administration; others retired from the radical movements and became active in NGO's, working with the agrarian reform agencies of the new government. At the other extreme, elements of the NPA with visions of urban insurrections launched a series of urban attacks on political and military targets. The Aquino regime, after going through the motions of a cease-fire with the NPA, set down conditions that effectively dismissed their socioeconomic and nationalist program. Despite early promises of an agrarian reform, very little land was actually expropriated, squatters' titles were questioned and evictions increased. Where land was distributed to small holders, the payments exceeded their ability to pay, driving many into bankruptcy.

The most retrograde aspect of what the U.S. National Endowment for Democracy (which bankrolled Aquino's campaign) decried as the democratic transition, was the regime's organization of dozens of paramilitary groups throughout the country. The paramilitary groups, according to a detailed study at the time by the New York-based Lawyers Committee for Human Rights, included criminals, as well as fanatical religious sects, the most notorious of which was the Tadtad (which means "chop-chop"), a reference to their practice of slashing their victims to death with bolo knives or machetes. Armed vigilante groups (over 200 between March and October 1987) sprang up throughout the country, sponsored by the Aquino-backed Armed Forces and local landlords. And the targets were guerrillas or guerrilla sympathizers, but also trade unionists, peasant activists, human rights workers, and whoever questioned the democratic credentials of the regime.

While the first two years of the Aquino regime actually surpassed the last years of the Marcos dictatorship in human rights violations, the left went through a series of splits over tactics. An "insurrectionist faction" launched a series of violent assaults, including assassinations that undercut middle class support and offered a pretext for the regime to further clamp down on popular struggles. The end of the Aquino regime in retreat and a new round of elections led to the election of former Marcos crony General Ramos.

The main features of the three elected presidents, Aquino, Ramos, and Estrada, are a profound commitment to corruption, corporations, and collaboration with Washington. Hundreds of millions of dollars annually leak overseas to the bank accounts of overseas entrepreneurs and politicians, creating an artificial lack of capital, an invitation to submit to the IMF and World Bank. Liberalization of trade has turned the Philippines, an agrarian country, into a net importer of what were previously basic staples- rice and sugar, as cheap imports drive peasant producers bankrupt.

Despite Aquino's backsliding on the U.S. military bases, the Pentagon's leases at Subic Bay and its air bases were finally canceled. With the collapse of capitalism in Asia and mounting popular protest in Indonesia, Washington is angling for a new base of operation.

As expected, the current Philippine President Joseph Estrada offered his services. Washington and Estrada are in the process of signing a Visiting Forces Agreement (VFA) which in effect would be the functional equivalent of a U.S. military base, giving Washington a strategic jumping off location to intervene if and when the Asian economic crises turns into a social upheaval. Estrada, in order to cover up his servility to U.S. strategic interests argued that the VFA would align the U.S. with the Philippines in its dispute with China over the Spratlys, uninhabited reefs off the northern coast. The U.S. undercut Estrada by indicating no disposition to enter into the dispute: lackeys take orders they don't give them.

After almost a decade of decline and division, the major left-wing movements appear to be regaining support. The NPA has gone through a period of rectification and self-criticism and while continuing to engage in sporadic military actions has concentrated its efforts in reorganizing support in the villages. Political and social organizing against the thousands of daily abuses has once again brought it back into contact with villages that were NPA strongholds. While most of their gains are in more remote areas, distant from the major cities, and military installations, their increasing support has led the military to discard the idea that the NPA is simply a "police problem" to be handled by the military police. Likewise the NDF seems to have regained some of its public recognition through its various campaigns particularly in the anti-VFA movement, as well as its efforts to form multi-sectoral opposition to neoliberalism, IMF policy prescriptions, and to work with a plurality of international groups that are not Maoists.

Probably the most significant emerging forces are found in the KMU and the KMP, the urban trade union and peasant movement. The KMU is a social political trade union, which combines a struggle over day-to-day issues at the workplace with a broader opposition to imperialism and capitalist exploitation. I was impressed by the way in which all the workers pitched in to prepare the meals during the convention, brought their own sleeping bags, and engaged in informal discussion. It was an egalitarian and comradely climate. With the exception of some construction workers' unions in Japan and the Brazilian Landless Workers' Movement, the KMU did not seem to have significant international ties with other militant confederations, as in South Korea, India, Italy, etc. Whether this was mainly a problem in communication or a deeper problem of its Maoist legacy, I cannot tell.

The KMP is probably the single most important mass organization on the left in the Philippines. Led by a peasant organizer, Rafael Mariano, the KMP through its regional affiliates has been in the forefront of the struggles fighting land grabbers, speculators, government agencies, and their military cohorts who are forcibly evicting peasant producers. With close to 500,000 affiliates and sympathizers through regional or local organizations the KMP represents the best hope that the Filipino peasants have in resisting the growing encroachment of capitalist land speculators, real estate developers, tourist operators, plantation owners, and landlords.

The NDF like the NPA continues to recycle a Maoist view of Philippine society as "semi feudal" and "semi colonial" at a time when capitalist relations have reconverted landed estates into international tourist havens and landlord investors bankroll speculative ventures of every sort. While rents and interests continue to be paid by indebted tenants, the merchant landowners now channel these rents into new exploitive business ventures or bank their earnings overseas through international capital networks. The idea of fighting "semi feudalism" has also served as a bridge for many ex-leftist leaders, including NPA commanders, to join "modernizing" capitalist enterprise or become part of the Aquino, Ramos, and Estrada regimes, which have their own brand of " anti-feudalism, turning landed estates into upscale country clubs.

Apart from the traditional left, the Catholic Church is deeply divided. Cardinal Sin represents the Vatican line of collaboration with the neoliberal regimes and rigid opposition to birth control, nationalism, and social transformation. On the other hand, the rank and file nuns and priests are active in the barrios, schools, and in the countryside working with leftist social movements. At a meeting at the University of the Philippines over half of the 1,000 students attending (topic "Imperialist Globalization and Alternatives") were from Catholic high schools and private colleges, in many cases accompanied by their teachers and principles.

There is today a vast array of active movements fighting in barrios, plantations, factories, schools, and campuses. The fundamental problem is their fragmented nature and sporadic activity. With the breakdown of the radical umbrella movements in the mid 1980s, no single organization has emerged capable of bringing the groups together. While the struggles against neoliberalism and globalization seem to brook consensus, there is not the same level of emotional energy that linked forces against the personal dictatorship of Ferdinand Marcos. The imperial dictates of the market are omnipresent, the cruel consequences of land foreclosures are visible in the ugly slums of Manila. What is needed is a revitalized Philippine road to socialism free from the baleful consequences of outdated dogmatic formulas.

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