Economic-Nationalism.pptx chapter 123456

Econimic nationalism

1. ECONOMIC NATIONALISM by Ariola, Mira & Rodriguez BSABE 2 CHAPTER XIV

2. 1935 The Philippine Commonwealth was Inaugurated TIMELINE 1934 The Tydings-McDuffie Law was approved in the Philippines 1933 The Hare-Hawes Cotting Act was enacted

3. 1955 The Laurel Langley agreement amended the Trade Act of the Philippines TIMELINE 1954 Enactment of the Retail Trade Nationalization Law 1946 Bell Trade Act

4. 1964 The Retail Trade Nationalization Law took effect TIMELINE 1960 Third State of the Nation Address of President Carlos P. Garcia where he laid down his Filipino First Policy 1957 Claro M. Recto delivered his speech on Economic Natonalism

5. TIMELINE 1975 EXPIRATION OF THE LAUREL LANGLEY AGREEMENT

6. Different problems were faced by the postwar Philippines. The postwar presidents faced a of critical issues such as the issue of collaboration and lot the problem of rehabilitating the Philippines after the war. The collaboration issue was resolved by President Roxas in 1948 by issuing an Amnesty Proclamation for all the "collaborators" and war criminals. On the other hand, in solving the issue of damages sustained by the Philippines during the war, the postwar presidents turned to the Americans for economic aid. The Bell Trade Act and Rehabilitation Act of 1946 were the answers given by the Washington government to the appeal of the Philippines for economic aid.The Bell Trade Act and Rehabilitation Act of 1946 were the answers given by the Washington government to the appeal of the Philippines for economic aid. The Rehabilitation Act provided the establishment of a commission that would facilitate the transfer of the economic aid amounting to approximately $800 million in cash and in kind. In relation to the economic aid promised by the Washington government, the Philippine Congress must approve the Philippine Trade Act otherwise known as the Bell Trade Act which was sponsored by Missouri Congressman Jasper Bell and passed by the US Congress in 1946. One of the most controversial content of Economic Nationalism

7. the Bell Trade Act was the inclusion of the so-called "parity rights" of the Americans granting the US citizens and corporations equal rights with the Filipinos in exploiting the natural resources of the country. The main argument of the oppositionists to the Bell Trade Act was its violation of the 1935 Philippine Constitution. President Manuel Roxas and Vice President Elpidio Quirino had no choice but to accept the acts and amend the 1935 Constitution in order to facilitate the rehabilitation of the Philippine society. In 1955, the Bell Trade Act was revised by the Laurel-Langley Act which provided full parity rights to the Americans to own corporations and businesses in the Philippines. The Laurel-Langley Agreement expired in 1975. The economic climate after the war was characterized by the predominance of the foreigners especially the Americans. Initially the oppositionists to this economic climate were coming from a small group of politicians. The criticism of the opposition like Senator Claro M. Recto and Carlos P. Garcia were looked down upon by some Filipinos including President Magsaysay himself. President Ramon Magsaysay who succeeded

8. to the American. The crocians of Senator Recto in his speeches and the awakening of the Americans. The cried ad coactment of the Retail Trade Nationalization a of in 1964. 1954 which took effect in 1968 catapulted to the presidency because of the death President Magsaysay in a plane crash. President Garcis ushered in an era of the President Magsaysas in a pthe "Filipino First Policy" which tried to assert the nit of the Filipinos in the economic sphere. this chapter provides diferent reading materials pertinent to the debate over the resurgence of the economi, nationalism. The reading materials in this chapter provide holisuc view in looking at the economic issue faced by the postwar Philippines. Primary sources in this chapter vary from speeches, State of the Nation Addresses, laws, and policies

9. The Tydings-McDuffie Law provided that the Philippines would be granted, absolute independence after a ten-year Commonwealth transition period. Part of the articles of the law was the formulation of a constitution for the Philippines. In 1934, a Constitutional Convention was summoned. It lasted for almost a year. In 1935, a new constitution was ratified through a national plebiscite. The 1935 Constitution provided an article for the economic independence of the Philippines. It also limits the ownership of land, businesses, corporations, and exploitation of natural resources to Filipino citizens. The passage of the Bell Trade Act and later on the Laurel-Langley Act would force the government to amend the 1935 constitution. The reading material on the next page is the Article XII of the 1935 Constitution. ECONOMIC INDEPENDENCE ACCORDING TO THE 1935 CONSTITUTION

10. ARTICLE XII-CONSERVATION AND UTILIZATION OF NATURAL RESOURCES PRIMARY SOURCE Section 1. All agricultural, timber, and mineral of the public domain, waters, minerals, coals, petroleum and other mineral oils. all forces or potential energy and other natural resources of the Philippines belong to the state, and other deposition, exploitation, development, or utilization shall be give to the citizens of the Philippines , or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease or concession at a period exceeding twenty-five years, except as to water rights for irrigation, water supply, fisheries, or measure and the limit of the grant. Elpidio Quirino SIXTH PRESIDENT

11. ARTICLE XII-CONSERVATION AND UTILIZATION OF NATURAL RESOURCES PRIMARY SOURCE SEC 2. No private corporation or association may acquire, lease, or hold public agricutural land excess of one thousand and twenty-four hectares, nor may any individual acquire such ands by purchase in excess of one hundred and forty-tour hectares, or by lease in excess of one thousand and my-four nectans, or by homestead in excess of twenty-four hectares. Lands adapted to grazing, not moeding two thousand hectares, may be leased to an individual, private corporation, or association SEC 3. The National Assembly may determine by law the size of private agricultural land which viduals, corporations, or associations may acquire and hold, subject to nights existing prior to the anactment of such law. SEC 4. The National Assembly may authorize, upon payment of just compensation, the expropriation flandis to be subdivided into small lots and conveyed at cost to individuals SEC, 5. Save in cases of hereditary succession, no private agricultural land shall be translated or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines. SEC. 6. The State may, in the interest of national welfare and defense, establish and operate industries and means of transportation and communication, and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government

12. ECONOMIC NATIONALISM THROUGH THE RETAIL TRADE NATIONALIZATION ACT OF 1954 The growing criticism to the predominance of the Americans and other foreigners in the Philippine economy during the postwar period led to the passage of the Retail Trade Nationalization Act of 1954. However, the law took effect ten years later, in 1964. It must be noted that the Bell Trade Act and the Laurel-Langley Agreement were still in effect until 1975. The reading material below is an excerpt from the Act. It provided protection to the Filipinos engaged in retail business. It also provided that any license given to foreigners to engage in retail business would be forfeited once the law takes into effect. Primary Source REPUBLIC ACT NO. 1180-AN ACT TO REGULATE THE RETAIL BUSINESS Section 1. No person who is not a citizen of the Philippines, and no association, partnership, or corporation the capital of which is not wholly owned by citizens of the Philippines, shall engage

13. of indirectly in the retail business Provided. That a person who is not a citizen of the Philippines, an association, partnership, or corporation not wholly owned by citizens of the Philippines, which i actually engaged in the said business on May, fifteen, nineteen hundred and fifty-four, shall be entitled to continue to engage therein, unless its license is forfeited in accordance herewith, until his death or voluntary retirement from said business, in the case of a natural person, and for a period of ten years from the date of the approval of this Act or until the expiration of the term of the association or partnerstis or of the corporate existence of the corporation, whichever event comes first, in the case of juridic persons. Failure to renew a license to engage in retail business shall be considered voluntary retirement Nothing contained in this Act shall in any way impair or abridge whatever rights may be granted citizens and juridical antities of the United States of America under the Executive Agreement signed on THE PHILIPPINES ASSEMBLY OF 1907

14. July fourth, nineteen hundred and forty-six, between that country and the Republic of the Philippines The license of any person who is not a citizen of the Philippines and of any association, partnership or corporation not wicily owned by citizens of the Phillippines to engage in retail business shall be forfeited for any violation of any provision of laws on nationalization, economic control, weghes and measures, and labor and other laws relating to trade, commerce and industry. No licerise shall be issued to any person who is not a citizen of the Philippines and to any велоспо partnership or corporation not wholly owned by citizens of the Philippines, actually engaged in the business to astabilish or open additional stores or branches for retail business

15. Carlos P Garcia was born on November 4, 1806. He was the eight president of the Philippines. Before assuming the highest office in the land. Garcia was practicing lawyer, poet, teacher, orator, and a millitary leader during the Commonweath governement. Hewas also a guerilla leader during the Second World War

16. In 1957, after the untimely death in a plane crash of President Ramon Magsaysay. of the Carlos P. Garcia was catapulted to power to succeed Magsaysay. President Garcia was one of those voices in the wilderness who opposed the idea o foreigner dominating the economic sector of the Philippess who comic sector of the Philippines. As a response, Garcia proposed what he called as the " First Filipino Policy". This economic policy would prioritize and protect Filipino. In his third State of the Nation Address on January 25, 1960, he called for the Congress to help him implement his policies. The reading material below is an excerpt tom his speech where he explained and outlined the ideas and motivations behind his "Filipino First Policy." ECONOMIC NATIONALISM THROUGH THE FILIPINO FIRST POLICY" EXCERPT FROM PRES. CARLOS P. OF THE NATION ADDRESS ON GARCIA'S THIRD STATE JANUARY 25, 1960

17. The Filpino First" policy of this administration received a resounding popular endorsement in the last election Politically we became independent since 1946 but economically we are stil semi-colonial. This especially true in our foreign trade. This policy is therefore designed to regain economic independence tanational effort to the end that Filipinos obtain major and dominant participation in their own national soonomy. This we will achieve with malice towards none and with famess to all. We will accomplish this full understanding of our international obligations towards our friends of the Free World. We will sary this out within the framework of our special relations with the United States to whose citizens we granted until 1974, by Constitutional provision, equal rights as Filipinos in the exploitation of our natural esources and public utilities, and to whom we also granted trading parity rights under the Laurel Langley Agreement. Under this policy we will welcome friendly and understanding foreign capital willing collaborate with us in the exploitation of our vast natural resources preferably on joint venture basis. it is my hope that legislations under this orientation will be enacted this year. PRIMARY SOURCE SE FLIPINO FIRST POLICY The" Filpino First"policy

18. In vital matters related to the national economy, at the start of last year, we were facing serious dificulties. The international reserve stood at a dangerously low level and the financial position of the emment was weak. So when I came before Congress to speak on the state of the nation, I proposed pold and decisive moves to stabilize the economy Congress in a historic special session patriotically responded by exacting a stabilization program the principal feature of which is the imposition of a margin fee on the sale of foreign exchange. In the ddle of July, a 25 per cent margin was put into effect. speaks highly of the courageous statesmanship of this Congress that in spite of a stormy postion accompanied by gloomy predictions of the prophets of doom, it passed the measure even an election year Now after barely five months of implementation thereof, we find that we were able not only to halt the ys deteriorating balance of payments, but also to reverse it for the first time in postwar years from us to plus. The 25 per cent margin on foreign exchange sales combined with the other disinflationary and crede retrend creasures such as new tax laws, the cutback in bond financing, and such tary instruments as the raising of reserve requirements, the raising of rediscount rates, selective ECONOMIC PROGRESS

19. rediscounting, the imposton of porti celings, and the corted fity of Cena Bark Co utary sttects upon our national socce sengthening of the peso, the songthening of cut international to the tref $1629 (1) the consolidation of the governments fencial poetion (4) the cutting down of excessive money supply (5) the hanging down of excess bene nerves and crede, and (6), worthy of repeater mention the attainment for the best sme in postwar nazory of a favorabile balance of trade and balance of payments to the tune of $46-4 milion. Moreover, we paid in 1950, $54 million of our foreign loans and obligacione What corsesences followed the overall strengthening of our national economy resulting kom stabilization measures? They are visible and tangible. First and foremost, we have signaled away forced devilluation which would have been inescapable under a runaway inthation. By achieving this, we saved the masses of our people-by preventing the ruimation of theit wages and salaries, their savings, pentions and insurance, and other social security benefits. Secondly, the Republic gained in credit and confidence abroad arid this is evidenced by many offers to us of credit lines and loans by governments and gue banking and financial institutions all over the world. Thirdly, production on all fronts-manufacturing meng and agriculture-has pushed on to new heights. Fourttily, we have succeeded to establish a climate for bigger investment of domestic and friendly foreign capital and know-how needed to utilize and explot our national resources, especially the oil mines and the laterite mines ECONOMIC PROGRESS

20. Incidentally there are loose talks of repealing the dollar margin law on me alleged ground ther prices have zoomed up owing to it. We found, however, that, in general, prices have risen slower than costs. This indicated that business profit margins absorbed a sizeable share of the tax burden. The Increase in prices for prime commodities consumed by the masses was not due to the dollar margn lave, but to certain tax laws, the higher tariff rates on United States goods, and principally the genera upward trend of production costs and prices at the sources of these imported commodities The latter is beyond our control On the other hand, while retail prices for domestically produced commodities Increased by 5:1 per cent from June to November, they still stood below their levels the previous year, owing largely to increased output in agriculture and the domestic industries Be that as it may, may I state as emphatically as I can that, if the stabilization measures Congress enacted last year did not hall the increasing momentum of last year's inflation, the ravages of the then impending run-away inflation would have exacted from us not 25 per cent, not even 100 per cent but perhaps from 500 to 1000 per cent rise in prices. That would have been a national catastrophe. ECONOMIC PROGRESS

21. Claro M. Pecite was born on February 8, 1800. He was a well-known Filipino stated esman who served the Philippine Congress. He also served as the head of the Constitutional Convention which drafted the 1935 Constitution. He is well-known for his idea of economic hatonalism CLARO M. RECTO AND ECONOMIC NATIONALISM

22. Incidentally there are loose talks of repealing the dollar margin law on me alleged ground ther prices have zoomed up owing to it. We found, however, that, in general, prices have risen slower than costs. This indicated that business profit margins absorbed a sizeable share of the tax burden. The Increase in prices for prime commodities consumed by the masses was not due to the dollar margn lave, but to certain tax laws, the higher tariff rates on United States goods, and principally the genera upward trend of production costs and prices at the sources of these imported commodities The latter is beyond our control On the other hand, while retail prices for domestically produced commodities Increased by 5:1 per cent from June to November, they still stood below their levels the previous year, owing largely to increased output in agriculture and the domestic industries Be that as it may, may I state as emphatically as I can that, if the stabilization measures Congress enacted last year did not hall the increasing momentum of last year's inflation, the ravages of the then impending run-away inflation would have exacted from us not 25 per cent, not even 100 per cent but perhaps from 500 to 1000 per cent rise in prices. That would have been a national catastrophe. ECONOMIC PROGRESS

23. Incidentally there are loose talks of repealing the dollar margin law on me alleged ground ther prices have zoomed up owing to it. We found, however, that, in general, prices have risen slower than costs. This indicated that business profit margins absorbed a sizeable share of the tax burden. The Increase in prices for prime commodities consumed by the masses was not due to the dollar margn lave, but to certain tax laws, the higher tariff rates on United States goods, and principally the genera upward trend of production costs and prices at the sources of these imported commodities The latter is beyond our control On the other hand, while retail prices for domestically produced commodities Increased by 5:1 per cent from June to November, they still stood below their levels the previous year, owing largely to increased output in agriculture and the domestic industries Be that as it may, may I state as emphatically as I can that, if the stabilization measures Congress enacted last year did not hall the increasing momentum of last year's inflation, the ravages of the then impending run-away inflation would have exacted from us not 25 per cent, not even 100 per cent but perhaps from 500 to 1000 per cent rise in prices. That would have been a national catastrophe. CLARO M. RECTO AND ECONOMIC NATIONALISM Claro M. Pecite was born on February 8, 1800. He was a well-known Filipino stadesman who served the Philippine Congress He also served as the head of the Constitutional Convention which drated the 1935 Constitution He was a well-known for his idea of economic hatonalism

24. Primary Source ECONOMIC NATIONALISM The propulsive force that will take us to our economic goal is nationalism. We achieved political independence, or the restoration of our sovereignty as a people, by asserting consciously, fearlessly and unceasingly, our aspiration to become a free and independent nation, until the foreign sovereign power. America finally agreed on the restoration of our independent political status. In other words we asserted the prerogatives of our nationalism. Today we are free politically, but we are far from free economically A nation that has been a colony for a long time cannot and does not, on the day of it's political independence , achieve simultaneously it's economic independence. But we have had ample tire to be wall past the first stages of transformation, and we would be to were not for the stubborn insistence of past administrations to cling to the That transformation can still be worked out by the people themselves, under the quidance and inspiration of their leaders, through the stimulus of wise and farsighted policies, perhaps with calculated sacrifices, and perhaps also with the advice and suggestions of disinterested foreign trends.

25. That transformation can still be worked out by the people themselves, under the guidance and inspiration of their leaders, through the stimulus of wise and farsighted policies, perhaps with calculated sacrifices, and perhaps also with the advice and suggestions of disinterested foreign friends. It is people, through their leaders, who must achieve economic freedom, or the change from a colonial pattern of economy into an independent one. Only economic nationalism will enable us to achieve basic and lasting solutions to our problems of mass poverty, unemployment, underproduction, perennial trade imbalance, and misery and backwardness in the midst of rich natural resources and abundant manpower. My program of industrialization is a logical outgrowth of my stand on Philippine nationalism. Nationalism in the economic field is the control of the resources of a country by its own people to insure its utilization primarily for their own interest and enjoyment. Its political expression is independence and sovereignty, the desire to be treated with respect by all nations, and to decide, without bowing to outside pressure, the most advantageous course of action for a country vis-a-vis these powers The political aspect of nationalism becomes a dynamic mobilizing force which insures the realization of the economic objectives. In turn, the economic objectives lend practical reality to the fight for sovereignty. What does economic nationalism mean for us Filipinos? Economic nationalism means the control of the resources of the Philippines so that they may be utilized primarily in the interest of the Filipinos. What course does this economic self-interest indicate for the Philippines at the present time? I have demonstrated by means of facts and figures that a raw-material exporting nation, that is, an agricultural nation, is always dependent on a manufacturing nation. In any relation between the two, the industrial nation is the gainer, the agricultural nation, the loser. This is implicit in the fact that we export our raw materials cheaply, because we cannot use them as such; and we import the finished products at high prices, because we need them in our daily lives. Clearly under this setup, we are not in control of our natural resources for our best interest.

26. But if we industrialize, we shall no longer be at the mercy of manufacturing nations, and, in more and more instances, as we thoroughly industrialize, our own people shal become the beneficiaries of the values added to the raw materials by the manufacturing process. There is no question, therefore, that conomic self-interest demands that we industrialize The simple meaning that may be given to economic nationalism is a nation's aspiration, desire. andelingness to improve its material and cultural conditions through its own talents, resources, and sulained labor, and for the benellt of the whole national community Its manspring is a strong sense of togetherness of the people in a common desire to progress, to mprove livelihood, to achieve worthy and noble things, to enhance the good name, even the glory, of the rational community, of the country which is the homeland, of the flag that symbolizes country, nation and the nation's history and ideals. Without that dominant and ever-present will to achieve the enhanced well-being of the langs community, rather than merely one's own selflich interest, any econornic effort or activity, however large or impressive, is not nationalistic in character.

27. WHY FILIPINO OWNERSHIP IS NECESSARY Now you may ask, why the insistence on Filipino ownership or control of such variegated industries? The answer is unless it were so, it would be impossible to place the benefits to be derived from these Industries within the means of enjoyment of the largest majority of the Filipinos. We must remember that findustries of such variety and scope were actually existing, they would be creating enormous amount of wealth annually If the wealth created were to remain in the Philippines and be reinvested again and again in other productive enterprises which would creste, in turn, new wealth, then all that wealth could sustain an ever-spreading and rising standard of living But if the industries were allen or foreign-owned, then much of the wealth created would have to leave the country, what remains would never be enough to cope with the ever-increasing needs of an expanding Filipino population and this is precisely the circumstance in which we have found ourselves through many decades the few rich would merely continue becoming richer, and most of them would be alleris and foreigners, and an ever-increasing number of the poor would be getting poorer. It is a similar circumstance, we may note, which brought about the Fidel Castro revolution in Cuba not long ago. To expect non-Filipinos engaged in large-scale enterprises in our country to have a nationalistic orientation in their economic activities is, as they say in Indonesia, like expecting lizards to grow feathers. We have no choice: it has to be Filipinas themselves, through the nationalistic aspiration of their economic endeavors, who must bring about a truly industrialized Philippines

28. CHAPTER SUMMARY Economic aid and rehabilitation were some of the issues faced by the presidents of the postwar Philippines. Independence was given to the Philippines by the Americans on July 4, 1946, The 1935 Constitution provided that only Filipino citizens were allowed to own corporations and exploit natural resources but the Filipino leader, in exchange of the promised rehabilitation aid from the United States had no other choice but to accept the Bell Trade Act which provided parity rights for the Americans As a form of reaction to the growing predominance of the foreigners in the economy of the Philippines, the Retail Trade Nationalization Law was enacted. It provided protection to the business interests of the Filipinos President Carlos P. Garcia and Senator Claro M. Recto espoused their programs and ideas for economic independence. Garcia presented his Filipino First Policy while Recto proposed what he called economic nationalism

29. THANK YOU