Throwback to 1946, strengthening US stranglehold on the Philippines

Bulatlat perspective

The Aquino government has been rushing two things in time for the visit of US Pres. Barack Obama: the “Framework Agreement on Enhanced Defense Cooperation” between the US and the Philippines that would provide US troops, warships, submarines, fighter planes and war materials greater access to military camps and other facilities such as airports, ports, warehouses; and moves to amend the economic provisions of the 1987 Constitution to allow 100 percent foreign-owned corporations to have the same privileges as local corporations to own land and property, and to engage in business in otherwise restricted sectors of the economy such as exploitation of natural resources, operation of public utilities, media and education, among others.

Malacañang has been denying that it is rushing the agreement but the actions and statements of the Department of Foreign Affairs show otherwise. Likewise, President Aquino has been issuing statements distancing himself from moves to amend the 1987 Constitution but the actions of the ruling party and its allies in Congress, and the ease by which the resolution regarding the amendments has been passed belie claims that Malacañang has got nothing to do with it.

Why is it so important for the Aquino government to at least show its determination to pass the two measures when US President Obama arrives? Because the US pivot to Asia is the main agenda of the trip of Pres. Obama, and this pivot not only involves increasing US military presence in the region but more important is pushing US economic interests, especially trade and investments, in the resource and market-rich Asia-Pacific region. That is why the US entered, or rather hijacked, the Trans-Pacific Partnership Agreement in the first place.

The Aquino government has been claiming that the increased US military presence and access in the Philippines would protect the country in case the opposing claims to islands and shoals in the West Philippine Sea between the Philippines and China escalates into armed clashes and would help the government achieve a “minimum credible defense posture.”

Progressive groups, on the other hand, are saying that while the country should assert its sovereign right over the disputed islands and shoal, it should not surrender its national sovereignty to another foreign power, the US at that, to be able to do so. And besides, the US has not made any categorical statement supporting Philippine claims and committing itself to come to the country’s aid if armed clashes would happen. With regards the modernization of the Armed Forces of the Philippines, having US military bases in the country from 1901 to 1991 and so many US-RP military agreements such as the Mutual Defense Treaty of 1951, the Joint US-RP Military Advisory Group, the Visiting Forces of Agreement and the Mutual Logistics Support Agreement did not help the AFP modernize.

“If the intention of the original Mutual Defense Treaty was to modernize the AFP, then it has utterly failed,” Prof. Roland Simbulan told in an interview. “The AFP is lagging behind even compared to Brunei in terms of defending external stability.”

According to Bayan Muna’s Satur Ocampo: “This treaty and the US have not really helped in AFP modernization. It only enhanced its dependence and derogated Philippine sovereignty.”

The Aquino government has also been claiming that amending the economic provisions in the 1987 Constitution to remove restrictions on foreign corporations doing business in the country would attract more foreign investments, which, in turn, would spur economic growth, generate employment, and enable the country to catch up with its neighbors. Progressive think tank group Ibon Foundation, on the other hand, has come up with studies showing the contrary.

In its report to the House Committee on Constitutional Amendments, Ibon said that “despite lamentations that the country is a regional laggard, foreign direct investments (FDI) have increased by every possible measure. Annual FDI inflows increased fifteen-fold and the cumulative stock twenty-fold between 1981 and 2013. Inflows have tripled as a percentage of gross domestic product (GDP) and doubled as a percentage of gross fixed capital formation.”

Jose Enrique Africa, Ibon executive director, said “despite the continuing rise in foreign direct investments, government’s own data show that there has been a rise in the country’s unemployment rate and forced migration, as well as chronic poverty and severe inequality.

Flashback 60 to 70 years ago.

Then Senate President Manuel Quezon objected to the Hare-Hawes Cutting Law, which would have granted ‘independence’ to the Philippines after a 10-year Commonwealth period, because of the provision that “gave the U.S. president unilateral authority within two years of Philippine independence to retain military and naval bases for the United States.” (Why and How the US-Philippine Military Bases Agreement of 1947 Got Approved by Stephen R. Shalom, republished by the Filipino Mind, November 28, 2012)

Quezon was quoted as saying that he was “absolutely and unqualifiedly opposed to all kinds of United States reservations in the Philippine Islands after independence shall have been granted. But it does mean that I will never give my consent to any law that gives this discretionary power to the President of the United States.”

However, on the eve of the bombing of Pearl Harbor, Quezon changed his position, which he expressed in a cable to a US newspaper (to William Philip Simms, Scripps-Howard Newspapers, 4 Dec. 1941) “It is not true that I have ever objected to having American naval stations in the Philippines after independence. All I wanted was that their establishment should be with the consent of the Government of the Philippines. I did object to military reservations and still do object now because your having military reservations everywhere in the Philippines after independence would in effect nullify independence.”

Forward a few years later, Quezon was already dead and Manuel A. Roxas was elected as president. Roxas reportedly did not object to most of the proposals of the US regarding the retention of US military bases, which included that the United States would acquire the bases for ninety-nine years (article 29), that Clark Air Base alone was to cover 130,000 acres, that the city of Olongapo was to be totally part of Subic Naval Base, that U.S. authority would extend to the “vicinity of the bases” (article 3), that the United States would be permitted to use public utilities and all other facilities under conditions no worse than those applicable to the Philippine armed forces (article 7), that the Philippines could not give third nations base rights without U.S. approval (article 25), or that Filipinos were to be permitted to volunteer to serve in the U.S. armed forces (article 27).

Roxas merely objected to two provisions: the establishment of military facilities in Manila and the provision granting the US military jurisdiction over all criminal offenses committed by US Armed Forces personnel.

However, a few senators objected to the proposed military bases agreement.

Senator Tomas Confesor declared that the bases were “established here by the United States, not so much for the benefit of the Philippines as for their own.” He warned his colleagues that “We are within the orbit of expansion of the American empire. Imperialism is not yet dead.” “Parity” and the bases agreement.”

Confesor said parity rights and the bases agreement, “complement one another. In the first, we deliver into the hands of the nationals of the United States the natural resources of the country. In the second, we relinquish our sovereign rights over practically every portion of the Philippines, to the end that the United States may properly protect the investments of her citizens in this country.

Senator Alejo Mabanag stated that:Fundamentally and in principle, I am opposed to the establishment of bases in our country because it constitutes an encroachment on our sovereignty. Not only that, while years ago military bases were considered good defenses, [in] this age of the atomic bomb, such bases are no longer sufficient defense. On the contrary, they are an invitation to attack.

The US-RP military bases agreement of 1947 was nevertheless passed by the Philippine Congress. The only concession the US gave was that it did not establish a military installation in Manila. The US dangled military aid to have the agreement approved. The Roxas government used this aid against the peasant unrest in Central Luzon.

In the United States, the administration decided to consider the bases pact an executive agreement, thus requiring no Senate approval. (sounds familiar?)

The author of the article Why and How the US-Philippine Military Bases Agreement of 1947 Got Approved Stephen R. Shalom* noted: “That the United States had rushed massive amounts of military equipment to its bases in the Philippines in the six months before Pearl Harbor to no avail or that the impregnable British
base at Singapore was quickly overrun by the Japanese Imperial Army might have suggested that foreign bases were hardly a guarantee against invasion and conquest. “

On the other hand, the Philippines sent troops to Korea in the 1950s and Vietnam in the 1960s.

Parallel to the negotiations for the retention of US military bases is the push for the enactment of the Bell Trade Act of 1946, which, among other things, contained the controversial “Parity rights” provision, which grants US citizens the same rights as Filipinos in doing business in the country, including the right to exploit the country’s natural resources and to operate basic utilities. The Roxas government then used the argument, which is still being used now, that granting parity rights to US citizens would attract more foreign investments and therefore, result in economic development.

One of the most consistent in opposing “parity rights” was the late Sen. Claro M. Recto. The following are some of his arguments lifted from the Recto Reader and published by The Filipino Mind.

This parity clause, it need not be said, is grossly unfair. This is, indeed, the first instance in history where an independent nation has granted to citizens of another rights equal to those enjoyed by its own citizens.”

“Parity opens the door to foreign direct investment. In fact, foreign investment constitutes the very motivation for parity rights.”

“With foreign direct investments financing our industrialization, and with the economy passing gradually into foreign hands, not only shall we be poorer than ever but even our political independence would dwindle into insignificance.”

“Inasmuch as profits and savings therefrom are the only sources of capital formation, those profits that belong to foreign capital can not help promote our own capital formation; consequently, there is no increase in our capacity to produce. “

“We remain, in the end, poor and underdeveloped, When foreign investors send home their income, capital, and savings, then we shall be back where we were before they were ‘attracted,’ perhaps in a worse condition, where we might even have to beg the foreign investors to keep their investments in the Philippines not to enrich us but just to be able to give some employment to our laboring class.”

Well, the rest is history. The Philippines lagged behind its neighbors in economic growth, in real terms. The Philippines could not even build a decent bicycle out of materials produced in the country.

The debate over the “Framework Agreement on Enhanced Defense Cooperation” would not only bring back the US military bases that the Filipino people were able to kick out in 1991. Worse, it will allow the establishment of US military installations in and expand access of US troops, aircraft carriers, warships and submarines, fighter jets and drones, and war materiel to every corner of the country, including what the late president Roxas objected to, in the capital. In fact, reports reveal that the US has a military installation inside Camp Aguinaldo, the headquarters of the Armed Forces of the Philippines.

Likewise, the moves to amend the economic provisions of the 1987 Constitution to allow foreign-owned corporations to penetrate every sector of the economy practically brings the country back to the time when US businesses enjoyed “parity rights” in the country under the Bell Trade Act of 1946. The Laurel-Langley Agreement of 1955, which replaced it, made parity rights reciprocal, effectively limiting the rights that American businesses could enjoy in the Philippines. When the Laurel-Langley Agreement expired in 1974, the Marcos dictatorship replaced “parity rights” with investment incentives such as tax holidays, tariff-free importation, freedom to repatriate profits, among others. With the current push to remove the economic restrictions in the 1987 Constitution, the Aquino government is bringing the country back to 1946. Worse, “parity rights” would be practically granted to ALL foreign corporations and citizens, not only Americans.

There is truth in what a political economist once said: History does repeat itself, first as tragedy, second as farce.

-Stephen R. Shalom got his Bachelor’s degree from M.I.T., his Master’s from Northeastern, and his Ph.D. in Political Science from Boston University. He began teaching at William Paterson in 1977. He is the author of The United States and the Philippines: A Study of Neocolonialism (1981); editor of Socialist Visions (South End Press, 1984); author of Imperial Alibis: Rationalizing U.S. Intervention After the Cold War (South End Press, 1993); co-editor of The Philippines Reader (South End Press, 1987), Bitter Flowers, Sweet Flowers: East Timor, Indonesia, and the World Community (Rowman & Littlefield, 2001); author of the text Which Side Are You On? An Introduction to Politics (Longman, 2003); and editor of Perilous Power: The Middle East &U.S. Foreign Policy. Dialogues on Terror, Democracy, War, and Justice by Noam Chomsky and Gilbert Achcar (Paradigm Publishers, 2007). He is one of the co-editors of New Politics. He is the director of the Gandhian Forum for Peace & Justice.

-Also do read It is very informative. (

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