CHAP 8 - THE PRESIDENCY OF MARCOS

• 1. The first two decades of the postwar republic, no Philippine president succeeded in winning reelection.
• 2. This popular rebuke spoke to the ineffectiveness of presidential policies in the face of persistent economic problems, including inequality and uneven development.
• 3. The mid-1960s, the nation that prided itself on being the most "advanced" in the region faced new problems as well.
• 4. Land planted to the traditional export crops, sugar and coconut, was expanding at the expense of rice land.
• 5. This was in response to higher U.S. demand for Philippine sugar and the pesos's devaluation following currency decontrol in 1962.
• 6. While the sugar bloc enjoyed high commodity prices, the cost of food staples increased, causing the real income of urban consumers to decline.
• 7. Neither did small rice farmers benefit: their plots were too small and their productivity stagnant because of underdeveloped rural infrastructure, insufficient access to credit, and inefficient agricultural services. As rice and corn production declined, the Philippines became a rice-importing country and the rural unemployed were pushed off the land.
• 8. But industry could not absorb the growing numbers seeking work in the cities. Manufacturing growth had slowed considerably. This was not because of decontrol-high tariffs had immediately been erected to protect domestic industry- but because important substitution industrialization (ISI) had inherent limitations as a development strategy.
• 9. Early-stage industrialization depended on imported capital inputs, for which entrepreneurs had enjoyed privileged access to dollars- this had encouraged capital-intensive rather than labor-intensive production.
• 10. ISI promoted "light industry," which had a limited domestic market. These and other factors meant import substitution had run it course as a source of employment growth and stimulus to economic development.
• 11. The entry of a new wave of unskilled, unorganized labor into the market therefore brought wages down, and these workers contributed to the formation of a new urban proletarian underclass.