Social Science 4th Quarter || LG 1.2

• The Philippines is viewed as the oldest Asian ally of the United States and considered to be

  among the latter’s friendliest non-NATO nations. Relations with the United States have been extremely

  good since the end of the Second World War.
• These relations further intensified during the height of

  the Cold War as the Soviet Union and the United States battled for world supremacy.
• However, some analysts have viewed this relationship as a form of neocolonialism that resulted

  from the Philippines’s desperate need for economic aid as it recovers from the war and the United

  States’ interests to project power abroad and secure world superiority.
• Neocolonialism is another form of control of a powerful state on weaker state. It is mainly

  focused on imposing indirect control or influence over the politics, economy, society, or the military of

  a sovereign state through treaties and agreements.
• Bell Trade Act of 1946 (Philippine Trade Act of 1946)

  Article XII of the then existing 1935 Philippine Constitution limited the access of foreigners to

  exploit the natural resources of the Philippines. They can only utilize the country’s natural resources

  and own and operate public utilities only if they tie up their business interests with companies owned

  by Filipinos or whose 60% of assets are Filipino-owned and controlled. However, these limitations were

  abolished and extended to all natural resources by virtue of amendments made in the 1935 Philippine

  Constitution.
• Through the Tydings-McDuffie Law of 1934, which became the guiding act of the ten-year

  transition period (called the Commonwealth) prior to the US grant of Philippine independence, all

  Americans and their corporations had access to all Philippine resources and public utilities, up until the

  inauguration of Philippine independence in 1946.
• Moreover, the Tydings-McDuffie Law provided that

  one year prior to the independence grant, a conference should be held between American and Philippine

  government representatives to discuss the trade relations of the two countries.
• Hence, prior to the grant of Philippine independence, the US Congress approved the Bell Trade

  Act on April 30, 1946 to guide the trade relations with the Philippines. This was subsequently approved

  by the Philippine Congress on July 2, 1946 – just two days prior to the July 4 inauguration.
• The law

  was intended to facilitate the rebuilding of the Philippine economy which was ravaged by the Second

  World War. The means to achieve this were the following: 1) free trade relations between the United

  States and the Philippines until 1954, after which, tariffs would be imposed on each other’s goods by

  5%, gradually increasing yearly by 5% until the full 100% should have been reached in 1974; 2)
• A P2:$1 fixed exchange rate between the Philippines and the United States, which could not be changed

  without the US President’s approval; 3) removal of currency transfer restrictions from the Philippines

  to the United States; and 4) "parity rights," which granted U.S. citizens and corporations rights to

  Philippine natural resources and public utilities like those of Philippine citizens.
• The last one was

  contrary to Article XIII of the 1935 Philippine Constitution, therefore, necessitating a constitutional

  amendment.
• The Bell Trade Act was a bitter pill to swallow. Its provisions had tied the Philippines to

  American control, especially the parity rights provision. In fact, the then 1935 Philippine Constitution

  had to be amended to include that provision – and amending the Constitution was not an easy process.
• The Philippine Congress had to accept the amendment, and if accepted, it had to call for a plebiscite to

  present to the Filipino people such amendment for the latter’s approval.
• There was heated debate in the

  Philippine Congress back then, as some lawmakers saw the adverse implications of the Bell Trade Act

  to the Philippine economy.
• In fact, there were some political maneuverings done in the august halls of

  Congress to eliminate dissent to the Bell Trade Act.
• Unfortunately, acceptance of the Bell Trade Act had been a condition of, and attached to, the

  implementation of the Tydings Rehabilitation Act (which was also passed in the US Congress on April

  30, 1946 - the same time as the passage of the Bell Trade Act) which provided for a US $620 million

  compensation for war damages.
• According to Title VI, General Provisions, Sec. 601 – “No payments

  (under Title I of this Act) in excess of $500 shall be made until an executive agreement shall have been

  entered into between the President of the United States and the President of the Philippines, and such

  agreement shall have become effective according to its terms, providing for trade relations between the

  United States and the Philippines.”
• Hence, the “assistance” extended by the United States had “strings attached.” The free trade

  provisions, for example, became an open gate for American products that flooded the Philippine market,

  thereby defeating local manufacturers. Local markets also became heavily dependent on US import

  demand.
• Moreover, parity rights gave unhampered access for the Americans to explore, exploit, and

  utilize natural resources and to own and operate public utilities in the Philippines to the detriment of the

  national patrimony provision of the Philippine Constitution.
• Add to these the provision that the peso

  exchange rate could not be changed without the approval of the US President – are these consistent with

  the “grant of Philippine independence in 1946?” The answer to this question points to a new form of

  US control over the Philippines – that of being a “neocolony.”
• The United States was no longer

  physically sovereign but its control over the politico-economic sphere was much present. Such control

  became the foundation of the Philippines, a country that was still crawling from the damages brought

  by the war.
• In the years to come, there had been clamor to review this trade act. In 1954, a renegotiation on

  the terms of the Bell Trade Act was pressed by the Magsaysay presidency. Changes were the result,

  with the removal of the US control of the peso exchange rate as one of its accomplishments.
• However,

  parity rights still remained – still serving as a thorn to Philippine economic independence that had

  implications to the country’s political independence as well.
• Philippines-United States MILITARY AGREEMENTS

  1947 Military Bases Agreement

  The 1947 Military Bases Agreement was signed by the late President Manuel Roxas on March

  14, 1947 – just three days after the parity rights plebiscite. This was ratified by the Philippine Senate

  on March 26, 1947.
• The agreement gave the US military an unhampered right to operate bases in

  Philippine territory for free for 99 years (amended in 1966 to 25 years, hence until 1991). In exchange,

  the United States would give the Philippines military assistance to counter insurgencies in the provinces,

  especially those that were locations of large sugar estates.
• When the United States presented a draft proposal for the military bases agreement, then

  President Manuel Roxas expressed support for most of its provisions: the agreement would be good for

  99 years, with Clark Air Base alone to cover close to 540 sq. km. of land; that Olongapo would be under

  Subic Naval Base; and that US authority would also cover the “vicinity” of the bases.
• However, two

  provisions were quite hard to swallow: United States insistence on a military facility in Manila and US

  jurisdiction over erring US military personnel regardless of any underlying circumstances.
• The friction in the two provisions were ironed out when the United States decided that it would

  only operate a naval and air base outside of Manila as it had already secured military facilities in Japan,

  Korea, and Europe.
• Moreover, expenses in operating another military base proved costly. As to US

  jurisdiction over erring US military personnel, such was finalized in February 1947. However, a new

  issue was raised by the Philippines as a final demand to ratify the agreement: US military assistance to

  the country .
• 1947 Military Assistance Pact

  It went clear that the insistence on military assistance was to be used for internal conflicts rather

  than external threats (as the Philippines was in no clear external threat in 1947).
• As mentioned in the

  earlier paragraphs, military assistance would be for the purpose of counter in surgencies especially in

  provinces where there were large sugar plantations. A case in point was Central Luzon.
• This area had

  large tracks of land dedicated to sugar but was infested by internal unrest due to the radicalization of

  the impoverished farmers who had seen the government doing little (or nothing) to address poverty and

  domestic oppression from elite landlords.
• In effect, the assistance would revive the domination of

  landlords in the region that was disrupted by the Japanese occupation and would help the elite revive

  and maintain their power. .
• Moreover, this Military Assistance Pact also created a Joint United States

  Military Advisory Group (JUSMAG) that would advise and train Philippine military personnel. It also

  provided for the transfer of military aid and materials to the Philippines
• Roxas told US chargé d’affaires Nathaniel Davis that the Philippines would

  allow US naval and air base operations so long as military assistance flows in – that is for 99 years

  according to the agreement.
• Three senators were absent and three other senators were

  barred from voting due to allegations of election fraud, charges that were allegedly plotted by Roxas to

  prevent them from voting against the bases agreement and on the incoming parity amendment then.
• The Senate vote sealed the agreement: 18 affirmative votes with no opposition. Even opposition

  senators voted in favor of the agreement.
• 1951 Mutual Defense Treaty

  The 1951 Mutual Defense Treaty supplemented the 1947 Bases Agreement.
• It called for a

  mutual commitment between the Philippines and the United States to peacefully resolve international

  disputes, to separately or jointly develop capacity to resist attacks from foreign invaders, and to

  undertake discussions when the territorial integrity, political freedom, or security of the United States

  or the Philippines would be under threat of attack.
• These three agreements (Military Bases Agreement, Military Assistance Pact, and the Mutual

  Defense Treaty) between the United States and the Philippines were among the first and major

  agreements in the Asia-Pacific.