The Marcos Diary : A Lust for Power, an Eye on Glory

 WILLIAM C. REMPEL and RICHARD E. MEYER

"If we do not prepare measures of counteraction, (Communist subversives) will not only succeed in assassinating me but in taking over the government. So we must perfect our emergency plan."

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Martial Law and its Aftermath, (1972-86)

The Philippines found itself in an economic crisis in early 1970, in large part the consequence of the profligate spending of government funds by President Marcos in his reelection bid. The government, unable to meet payments on its US$2.3 billion international debt, worked out a US$27.5 million standby credit arrangement with the International Monetary Fund (IMF) that involved renegotiating the country's external debt and devaluing the Philippine currency to P6.40 to the United States dollar. The government, unwilling and unable to take the necessary steps to deal with economic difficulties on its own, submitted to the external dictates of the IMF. It was a pattern that would be repeated with increasing frequency in the next twenty years.

In September 1972, Marcos declared martial law, claiming that the country was faced with revolutions from both the left and the right. He gathered around him a group of businessmen, used presidential decrees and letters of instruction to provide them with monopoly positions within the economy, and began channeling resources to himself and his associates, instituting what came to be called "crony capitalism." By the time Marcos fled the Philippines in February 1986, monopolization and corruption had severely crippled the economy.

In the beginning, this tendency was not so obvious. Marcos's efforts to create a "New Society" were supported widely by the business community, both Filipino and foreign, by Washington, and, de facto, by the multilateral institutions. Foreign investment was encouraged: an export-processing zone was opened; a range of additional investment incentives was created, and the Philippines projected itself onto the world economy as a country of low wages and industrial peace. The inflow of international capital increased dramatically.

A general rise in world raw material prices in the early 1970s helped boost the performance of the economy; real GNP grew at an average of almost 7 percent per year in the five years after the declaration of martial law, as compared with approximately 5 percent annually in the five preceding years. Agriculture performed better that it did in the 1960s. New rice technologies introduced in the late 1960s were widely adopted. Manufacturing was able to maintain the 6 percent growth rate it achieved in the late 1960s, a rate, however, that was below that of the economy as a whole. Manufactured exports, on the other hand, did quite well, growing at a rate twice that of the country's traditional agricultural exports. The public sector played a much larger role in the 1970s, with the extent of government expenditures in GNP rising by 40 percent in the decade after 1972. To finance the boom, the government extensively resorted to international debt, hence the characterization of the economy of the Marcos era as "debt driven."

In the latter half of the 1970s, heavy borrowing from transnational commercial banks, multilateral organizations, and the United States and other countries masked problems that had begun to appear on the economic horizon with the slowdown of the world economy. By 1976 the Philippines was among the top 100 recipients of loans from the World Bank and was considered a "country of concentration." Its balance of payments problem was solved and growth facilitated, at least temporarily, but at the cost of having to service an external debt that rose from US$2.3 billion in 1970 to more than US$17.2 billion in 1980.

There were internal problems as well, particularly in respect of the increasingly visible mismanagement of crony enterprises. A financial scandal in January 1981 in which a businessman fled the country with debts of an estimated P700 million required massive amounts of emergency loans from the Central Bank of the Philippines and other government-owned financial institutions to some eighty firms. The growth rate of GNP fell dramatically, and from then the economic ills of the Philippines proliferated. In 1980 there was an abrupt change in economic policy, related to the changing world economy and deteriorating internal conditions, with the Philippine government agreeing to reduce the average level and dispersion of tariff rates and to eliminate most quantitative restrictions on trade, in exchange for a US$200 million structural adjustment loan from the World Bank. Whatever the merits of the policy shift, the timing was miserable. Exports did not increase substantially, while imports increased dramatically. The result was growing debt-service payments; emergency loans were forthcoming, but the hemorrhaging did not cease.

It was in this environment in August 1983 that President Marcos's foremost critic, former Senator Benigno Aquino, returned from exile and was assassinated. The country was thrown into an economic and political crisis that resulted eventually, in February 1986, in the ending of Marcos's twenty-one-year rule and his flight from the Philippines. In the meantime, debt repayment had ceased. Real GNP fell more than 11 percent before turning back up in 1986, and real GNP per capita fell 17 percent from its high point in 1981. In 1990 per capita real GNP was still 7 percent below the 1981 level.

Source: http://countrystudies.us/philippines/57.htm

They remember Macliing but not his grave

By Analyn Salvador-Amores
Philippine Daily Inquirer

BAGUIO CITY—Every April 24 since 1985, Cordillerans mark People’s Day to honor Macliing Dulag, a pangat (village elder) of Barangay (village) Bugnay in Tinglayan, Kalinga. 

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What’s wrong with the Philippines?

By Benigno S. Aquino Jr.
Philippine Daily Inquirer
First Posted 00:39:00 08/21/2010

(Editors note: The following essay, written by the assassinated father of President Aquino, appeared in the Solidarity quarterly journal in 1985. The President’s father was murdered at the Manila International Airport on Aug. 21, 1983, upon his return from voluntary exile in the United States. The Inquirer obtained the permission of Solidarity to reprint this on the occasion of the 27th anniversary of his martyrdom.)

MANILA, Philippines—A diplomat, after a seven-year tour of duty in the Philippines, once christened the islands as an “enchanting archipelago.” Whether he was merely being polite, or had succumbed to government pitchmen, or had himself become enchanted by the lush tropical beauty of the islands, he should also have seen a country wracked by afflictions, some common to all countries engaged in the desperate race to develop, some peculiar to the Philippines.

Purveyors of the rosy picture continue to roll out endless statistics and charts to depict a growing economy, a country on the move. A portion of this view may even be accepted, considering that the Philippines, with all its imperfections, is only 21 years old as a free republic. The trouble is that there is one vital natural resource that has not been properly developed: the people.

Beneath the outpourings of self-serving government data, hidden underneath the trappings of the good life in the big cities, there remains a depressed and dispirited people. Against the yardstick, not of statistics but of quality of life, the Filipino people as a whole are a melancholy—if patient—mass. Their daily diet is monotonous (rice, fish, vegetables), their clothes are threadbare and their homes primitive and crowded. What could they hope to build on a daily per capita income of just over 25 cents? In sum, the blessings of liberty do not include liberation from poverty.

Foreign gadgetry and other luxury goods continue to flood the cities, and more people travel, despite current government restrictions. But this only serves to dramatize the great disparities and chronic inequities of Filipino society. Indeed, the Philippines is a land of traumatic contrasts. Here is a land in which a few are spectacularly rich while the masses remain abjectly poor. Gleaming suburbia clashes with the squalor of the slums. Here is a land where freedom and its blessings are a reality for a minority and an illusion for the many. Here is a land consecrated to democracy but run by an entrenched plutocracy. Here, too, are a people whose ambitions run high, but whose fulfillment is low and mainly restricted to the self-perpetuating elite. Here is a land of privilege and rank—a republic dedicated to equality but mired in an archaic system of caste.

Caste spells bondage. Of this the contemporary Filipino is well aware. And to break through—to rise out of this bondage into the next higher social stratum—is the ambition of the tao, the Filipino common man. For him, education appears at first the ticket to his aspirations, and parents sell their last worldly possessions, even go deep into debt, to see a son or a daughter through college. But each year, no less than 65,000 swell the ranks of this army of the discontented, educated unemployed. Unemployment runs up to a million, while the under-employed represent 20 to 25 percent of the population, largely in the rural areas. The upsurge of the communist Huks in Central Luzon is but one chilling manifestation of peasant disillusionment. Another is the recent wave of crime which has converted the country into a land of terror in time of peace.

Add to this a government which is financially almost bankrupt, state agencies ridden by debts and honeycombed with graft, industries in pathetic distress, prices in a continuing spiral and there is good reason for the Filipino to feel sapped of confidence, hope and will. The new, young Filipino leaders who exhort their peers to be activists, and not to give up, are greeted with apathy and indifference.

In the early thirties, Manuel L. Quezon, as he led the fight for independence, once raged: “I would rather have a country run like hell by Filipinos than one run like heaven by the Americans.” The father of his country did not live to see this preference realized, but his political heirs have. Since independence, Philippine presidents have logged a grand total of 14 national plans and all they have to show for them is a nation that looks, sounds, and feels discouraged. It is confused by the multiplicity of its cravings, and concerns, floundering in haphazard attempts to modernize and innovate.

Government apologists predictably will disagree with these conclusions. Great strides have been made, they will maintain, and they can indeed produce the required statistics to back up their claims. But the assertion that development is accelerating is only partly correct. “Orderly growth and evolution require delicate synchronization,” Filipino economist Sixto K. Roxas has cogently argued. And this is precisely what is wanting in Philippine economic planning.

Champagne taste on beer income

The truth is that there has been no organized, no methodical over-all economic planning. At best, all that our previous planners have trotted out have been limited programs which, tragically for the people, have bred individual hustling and pushing while the overall economy ran inconclusively in every direction. The result has been impasse in the development of critical sectors of the economy, such as the metal, chemical, wood, plastics and food industries.

For a people who at independence set out to pursue the American way of life as the ideal, the Filipinos—21 years later—are nowhere near the mark. “We are,” one Filipino declared in self-reproach, “a people with champagne taste, operating on a beer income.” Actually quite a number of Filipinos cannot even afford beer.

The annual per capita income is less than $100, less than Communist China’s today and equal to Japan’s only way back in 1910. The gross national product grows between 5 and 6 percent per year, but it is offset by a ballooning population increasing at a rate of 3.4 percent per year, one of the world’s highest. The GNP growth, in fact is hardly enough to absorb the backlog of unemployed and underemployed, to say nothing of improving the people’s standard of living.

Who’s to blame?

Fault, if it must be fixed, belongs not to any single man or people. It lies in the fabric of the society—and in what went into its making. Too many Filipinos are without purpose and without discipline. They profess love of country, but love themselves individually—more. When then Senate President Jose Avelino, in an expansive mood, exclaimed, “What are we in power for?” and when much later President Carlos P. Garcia defended a Cabinet member’s right to “prepare for his future,” these leaders were articulating a common outlook.

Without a soul

The responsibility belongs also to those who came, conquered, and ruled—to America as much as to Spain. For all the good they did (Spain welded and Christianized the people, America democratized them), they are responsible for the worst in the Filipino. While bleeding them, they molded the Filipinos in their own images, Spain Hispanizing, and America Americanizing the natives. Almost half of a century of American rule bequeathed to the Asian Filipino a trauma by making him uncomfortably American in outlook, values and tastes. What was left was a people without a soul.

Filipinos are bewildered about their identity. They are an Asian people not Asian in the eyes of their fellow Asians and not Western in the eyes of the West. They are in Asia, but they know more about the Statue of Liberty than about Angkor Wat in Cambodia; more of the lyrics of Whitman than of Tagore or of their own Nick Joaquin; more of Patrick Henry’s soul-stirring liberty-or-death oratory than of the ageless wisdom of Confucius or Lao-tze. Lately, they have taken to insisting they are Asian but they are so American-oriented that—by reflex—they still react and respond like little brown Americans.

Except for the hyper-nationalists, the Filipinos actually take pride in their community—if not identity—with the Americans. When President Johnson applauded President Marcos as his “right arm in Asia,” there was some derisive reaction from nationalist quarters but, in the main, the people took it as a badge to wear proudly on their sleeves. GI Joe at Clark, at Mactan, at John Hay, at Subic and at Sangley, America’s military bases in the Philippines, remain a symbol of American protection. Herein lies the bigger Filipino problem.

Legacy of the West

Too many Filipinos are given to dodging their responsibilities, running to others for help when they should be on their own feet. This, too, is a legacy of the West. The writer Renato Constantino has put it well: “As a people, we have been deprived for centuries of responsibilities for our destiny. Under the Americans, while ostensibly we were being prepared for self-government, for self-reliance, actually we were being maneuvered by means of political and economic pressures to defer to American decisions (and) being conditioned by our American education to prefer American ways.’’ The result is a people habituated to abdicating control over basic areas of their national life, unaccustomed to coming to grips with reality, prone to escape into fantasies.

Some conjecture that a more tragic fate might have overtaken the Filipinos if Spain had not stumbled upon them in 1521—a fate perhaps, some shudder, like that which befell Indonesia, Indochina, or the Congo. There is nothing to support this speculation; the fact is, the navigator Fernando Magallanes found on these islands well-ordered societies with their own culture. He was slain on Mactan island by a Filipino, Lapu-Lapu, the first Asian to fight and defeat a Western invader. But the Spanish king and Cortez were bent on empire and, in historian Arnold Toynbee’s words, “The Philippines was held for Spain by a handful of soldiers, administrators, and friars after the fashion of the Spanish empire of the Indies.”

With the cross and the sword, Spain stamped out the native culture, commerce and government. The people’s codes and laws, their weights and measures, their literature and even their alphabet were destroyed. There were, of course, periods in Spain’s 377 years of domination when liberal governors ruled, but in the main, Spanish rule was oppressive. No less than two hundred revolts marked the Spanish rule; the last—the Katipunan Revolution of 1896—finally broke Spain’s reign with American military help.

Frying pan into the fire

Filipino jubilation was short-lived, however. A republic was proclaimed by the victorious revolutionaries on June 12, 1898, but the Spanish-American War had already cast its shadow over the Filipino destiny. In the Treaty of Paris of 1898, defeated Spain ceded the Philippines to the United States for $20 million over vociferous but futile Filipino protests. “The Filipino freedom fighter,” comments Toynbee, “now found that they had fallen out of the frying pan into the fire.”

From the very beginning, Washington officials denied any ambition of empire. They rationalized their Pacific acquisition as a humane and civilizing job. President McKinley, so it is recorded, dropped on his knees and prayed to God for guidance. “And one night,” he said, “it all came to me this way—that there was nothing left for us to do but to take them all, and to educate the Filipinos, and uplift and civilize and Christianize them.”

Hokum or truth? A good number of Filipino patriots rejected America’s proclaimed benevolence and kept up the guerrilla fight for independence not only in the mountains but also in their newspapers and literature. In their struggle, they drew moral backing from diverse foreign powers including Imperial Japan, which gave sanctuary to fleeing Filipino rebels.

After “pacifying” the islands (except the hinterlands of Muslim Mindanao), America set out to refashion the Filipinos. In this there was method as well as design. American teachers came first, followed by American missionaries, then by American public officials. So successful were they that the Filipinos were soon thinking, acting, and living American. And so proud was the United States, it was soon calling the country America’s “showcase of democracy” in Asia. The Filipinos liked the label too, such had been the degree of their Americanization.

Filipinos, indeed, have much to thank the United States for. With “the happiness, peace and prosperity” of the Filipinos as the official colonial policy, America gave the Filipinos a new language, schools, free trade, government and laws. It strove to curb disease. It also gave the Filipinos a vigorous journalism, something Filipinos point to with pride. Branded as irresponsible at times, the Philippine press nonetheless has been the unofficial loyal opposition, the strongest deterrent to unbridled graft. And most important, perhaps, the United States kept the regionalistic and volatile Filipinos from breaking up.

Mentor’s neuroses

What if the United States had not come and the First Republic in 1898 had not been aborted? Philippine Ambassador to Washington Salvador P. Lopez, who, as foreign secretary, charted the Philippines’ dramatic turn away from the United States and back toward Asia, answered “... the Philippines would have developed a political system resembling, on the one hand, the self-perpetuating oligarchies of Latin America and, on the other the ‘guided democracy’ of Indonesia. In addition, the young republic would have been confronted almost immediately by challenges to its authority, in particular by serious separatist movements in the Visayas and in Moslem Mindanao and Sulu.” American colonial rule, he affirmed, moderated all these and permitted a new “Philippine society to develop along more democratic lines.”

What the United States fashioned, in fact, is a democratic plural society, a society that finds unity in its diversity. It is a society, some say, as American as the United States itself. It may not have the dollars, but it certainly has the tastes and habits, the wheelings and dealings, the idiosyncracies and neuroses of its recent mentor. And it is —or has been—committed four-square to America, to what America stands for—more than the United States itself, perhaps. In its anticommunism, for example, Manila is more rigid than Washington.

In three wars, the Philippines has stepped forward and fought with the United States—against the Japanese in the epic holding battles of Bataan and Corregidor, against the North Koreans and Communist Chinese in Korea, against the Viet Cong and North Vietnamese now. Clearly, President Marcos voiced the Filipino sentiment when he explained why he brought the Philippines into the Viet Nam war: because, he said, the United States was already in the fray.

Increasingly, however, there are signs of disaffection from the United States. Where it was almost unthinkable to criticize America 10 years ago, more and more Filipinos speak out today against the Americans, if not America itself. The change is seen in anti-American demonstrations and in the search for new partners in Asia and in Europe. Behind it, too, is a renaissance of Filipino nationalism and a growing awareness of where the country is—in Asia. But the main reason is the failure of the United States —in Filipino eyes—to give meaning to the vaunted special relationship; American performance falls short of the promise.

Built-in strings

In this atmosphere, the negative aspects of US policy are surfacing. Approval of parity—equal rights for Americans in the exploitation of Philippine natural resources—is now seen as imposed by the United States on a people left prostrate by World War II, as a condition for American War-damage funds. “The net effect of parity,” Education Undersecretary Onofre Corpus warned the United States, “has been an erosion of the Filipinos’ belief in the United States’ capacity for fair dealing with her friends and allies.”

Filipinos in growing numbers now believe that the independence granted by the United States in 1946 had built-in strings designed to perpetuate American economic dominance—or “colonialism,” as the ultra-nationalists call it. And they point to the trade agreement which has kept the Philippines a supplier of raw materials for American’s mills and a market for American goods. Of course, the onerous provision of the original agreement was rewritten in the Laurel-Langley pact of 1956, but very few Filipinos understand this refinement.

A few Filipino ultra-nationalists, well-positioned and very articulate, would sever all special relations with the United States, putting the Philippines on the path of non-alignment. This of course, is foolhardy. With the nuclear-armed and power-minded Communist China casting a covetous shadow over all of free Asia, the Philippines needs the United States more than ever; the only other choices left to her are to go Red or fall dead.

One truth persists here: the Philippines like the rest of Free Asia, needs America’s continued military presence in the area. Like the others, she needs America as a dam and shield against the Chinese Communists. This need has never been more urgently felt than since President Johnson’s dramatic announcement at the end of March and the beginning of negotiations with the North Vietnamese. Will the United States pull out, as the French and the British have done? This is the common fear of free Asians. For the Filipinos, with a million Chinese unassimilated in their midst, it is more than a fear; it is a spectre.

Breaking the fetters

The Philippines today needs to make bold efforts to break away from the fetters of the past. She must review and revise her so-called special relationships with the United States, taking into account the world as it is, and ceasing to live on the myths and heroics that so welded and so sustained her in the past. The Filipinos ask simply for dignity in their relations with the United States and equality with others in the American-led community of nations. They resent the fact that Japan, a former enemy, has obtained more from the United States than has the Philippines, and that Spain, a totalitarian state, has a more favorable military bases agreement with the United States.

The Filipinos must purge, now and with finality, the cause of their past shame: US puppetry. What they must seek is partnership with the United States, not wardship. If a fresh viability can be forged out of the old tissues of past kinship, so much the better. But this should be farthest from both the Filipino and American minds. A New Spirit must be infused into the Filipino and American relations of today. And it must be applied to the new mutual defense and military bases agreements. These are the main problems that have vexed Filipino-American relations so much in the sixties; approached with a fresh outlook, they could yield a more durable Filipino-American relationship.

Happily, despite the growing swell of anti-American criticism in the Filipino press, there is no hatred for whites on the islands. This is because, it would seem, Americans neither tyrannized nor brutalized the Filipinos in their 48-year rule. In fact, Filipinos, in the main, fondly remember the Big Brother gestures and kindnesses of the GI who liberated the islands in 1945. Out in the country especially, the Americano is still as much a symbol of help, friendship and good will as ever. As before, this is a good augury.

Much to be done

There is much to be done at home. In addition to breaking away from America’s economic dominance, the Filipinos themselves must outgrow the colonial attitude which now impedes the modernization process. Fortunately, there are many latent forces which can be energized. Anyone who has lived in the Philippines will attest to the flexibility of the Filipinos and, most of all, to their great social mobility. There is, on the whole, an openness in the society, the creation no doubt of the egalitarian ideals of the Revolution of 1896 that have slowly seeped into the whole fabric of Philippine life during the last six decades. And this can be ascribed to the public school system which the Americans installed but which the Filipinos have molded to fit their own psyche and needs. We have, after all, been having democratic elections since 1911; many governments have come and gone without the chaos and bloodshed of revolutions and coups d’etat.

There are perhaps more trained technicians in the Philippines today than anywhere else in Southeast Asia, but the industrial growth that can absorb these technicians has not come. Moreover, the Philippines’ natural resources are among the richest in Southeast Asia, yet we are fast falling behind such countries as Malaysia and Taiwan in industrial development. Here, again the oligarchs must be made to move, to invest, to industrialize. They can be captains of industry, but instead they have elected to dig in their heels on the land.

Stirring the entrenched oligarchs into accepting the urgency of land reform is also one of the aims of the younger leadership which wants the Philippines to surge upward. Up to now, however, forces of reaction have made government efforts in this direction largely meaningless. What a few years ago was a mere revolution of rising expectations has grown to the point where some fear revolution itself. It could be sparked, not by the left, the communist-inspired Huk ideologue, but by the disillusioned, depressed and dejected educated unemployed. Clearly, the Filipino elite—the corrupt and corrupting, the irresponsible and unresponsive old leadership—must face up to the need for reform or be swept away.

The new-generation Filipino must also shake and awaken the Catholic Church, which has long ignored the need for social reform and become flabby in its position of revered irrelevance. Because the Church has grown remote from the masses, quasi-religious fanatics have banded together and prospered in the countryside. Last year 31 of them—members of the Lapiang Malaya (Freedom Party) sect—were slaughtered when they demonstrated in Manila and charged the constabulary dispatched to contain them. This was as much a failure of the Church as of the government.

The government itself must be made to respond to the demands of the middle class for a mass market. The archaic and regressive tax structure must be revamped. The wealth that the oligarchy rapaciously covets and hoards must get down to the masses in the form of roads, bridges and schools; these are what the tao understands as good or bad government.

Where salvation lies

Philippine democratic institutions, President Marcos feels, are on trial. “And they may not,” he has warned, “have a second chance to prove and sustain themselves.” The Filipino, he stressed, “must realize his salvation lies with himself.” With this, the opposition cannot disagree. Indeed, great dedication and great labor are demanded of the new Filipino.

All these are Filipino aspirations and frustrations that the Americans must clearly understand. It is they, after all, to whom the Filipinos have always turned for guidance and assistance. In handling the Philippine problem, it will be well for the United States to remember that methods and postures that have repeatedly failed in contemporary Asia cannot any longer work in the new Philippines either. Equally, the Filipinos will do well to keep in mind that invoking the dead—if epic—past will no longer work in this age of rapid revolution. For them sentimentally to rest their future and fortune on the special Filipino-American bonds and other myths of the past is likely to be fatal.

Source: http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20100821-287978/Whats-wrong-with-the-Philippines

The truth shall feed us too

By Hilarion M. Henares Jr.

     THE truth shall free us, says the Bible, but Alejandro Lichauco in his new book, Nationalist Economics, says that the truth shall feed us too -- liberate us from the politics of poverty…
      The students are beginning to find the answers in Alejandro Lichauco’s newest book, Nationalist Economics, copies of which were being distributed during the symposium, with a demand that it be made required reading by the school authorities alongside books by such “free-trade” economists as Gerardo Sicat and Bernardo Villegas.
     The UP School of Economics was financed by Japan, and such CIA conduits as Asia Foundation, Rockefeller and Ford Foundations. Gerry Sicat while an obscure economics professor in this school, was financed by Rockefeller to formulate a “theory” of development based on labor-intensive export-oriented industries. With the help of the US Embassy and the IMF, Gerry was thereafter appointed by Marcos as Chairman of the National Economic Council, afterwards renamed NEDA upon martial law.
     Martial Law was declared with the knowledge and support of the USA and the IMF which welcomed “an effective economic management under constitutional authoritarianism.”
     Three months after the declaration of martial law, on New Year’s Day in 1973, NEDA chief Gerardo Sicat announced that the new official policy of the dictatorship was “Trade Liberalization,” identical to Cory’s IMF-imposed “Import Liberalization.”
     Ding Lichauco’s book, Nationalist Economics, recounts without mincing words or avoiding the mention of names, how the labor-intensive export-oriented policy proved to be the undoing of Marcos (while other dictators in Asia achieved economic miracles).
     Lichauco who disagreed with Sicat from the beginning, meticulously shows that Sicat’s theory was nothing more than an elaborate justification for an anti-industrialization program, repudiating the basic industries which Taiwan and South Korea were then constructing for themselves in the 1970s.
     It also justified the policy of Trade Liberalization that worked havoc on our domestic industries and our poor farmers, and still continue to do so even now. It was a theory which fitted with the strategy of the IMF-WB group and US imperialists… 

     It is an absorbing story that Lichauco tells with cold heartless precision -- the story of high treason, the deliberate sabotage by Filipino officials whom we shall name later in this series, of the national economic policy enunciated by Congress before martial law, mandating full industrialization for our country.
     Lichauco reminds us that in 1936, after analyzing the causes of the Great Depression, the legendary Lord John Maynard Keynes, father of modern economics, wrote his magnum opus, The General Theory of Employment, Interest and Money, which debunked Free Trade (Laissez Faire) economics, and acknowledged the role of Economic Protectionism (Mercantilism) in protecting the nation's domestic industries, sources of employment and international reserves.
     Keynes described his former colleagues in the Free Trade School as “orthodox economists whose common sense has been insufficient to check their faulty logic…”

Source: http://www.philippinefolio.com/contdetail.php?id=21&id_app2=290&id_app3=01350

Henares, Hilarion Jr. Wear and Tear: Make My Day Book - 21

88% of Foreign Investment, sourced here

By Hilarion M. Henares Jr.

     SINCE the end of World War II, a whole generation of national leaders and economic planners, especially of the Third World, have proceeded on the assumption that foreign investment is a sine qua non in the economic development of nations.
     A whole mass of US-inspired propaganda published internationally, and re-echoed by Third World opinion makers on US travel grants, conspired to convince the rest of the world that foreign investment holds forth three advantages for host countries: managerial know-how, technology, and above all, large amounts of new capital.
     It became obvious, as the years went by, that managerial know-how can be learned and technology can be bought, and that the only real advantage to be derived from foreign investment is that it brings the enormous capital needed but sorely lacking.
     That foreign investment is the source of capital in enormous quantities is the conventional wisdom accepted as an article of faith by most national leaders and economic planners, especially rightwing economists of Opus Dei CRC like Bernie Villegas.
     Yet no satisfactory proof has been presented. No detailed study was ever made. It was accepted on faith alone. And the only subject under discussion became: How to encourage foreign investment.
     A pamphlet by Professor Wilson Schmidt of the George Washington University issued and widely distributed in the early 1960s by the United States Information Services (USIS) claimed that the USA itself was developed by foreign investment.
     It turned out that by foreign investment, Schmidt meant “immigrant capital” and repayable “foreign loans,” NOT the foreign owned and controlled “direct investment,” which the US authorities were eager to foist on other countries.
     On Dec. 6, 1960, I read a paper before the IXth CAFEA-ICC Session (International Businessmen's Conference) in Karachi, Pakistan, in which I made distinctions between types of foreign investments: 1) foreign loans, 2) immigrant capital, 3) joint ventures, 4) foreign owned and controlled direct investment, and 5) “colonial investments” that entered the host country in bygone colonial days, “whose original capital had been fully repatriated many times over, and which prospered under conditions repugnant to the host country.”
     Needless to say, I was applauded by Third World representatives, shouted down by Western representatives, and never again invited to a similar gathering.
     Soon thereafter during the latter part of the 1960s, in the Decade of Development as decreed by the United Nations, Third World nations began to perceive that the contribution of foreign direct investments was minimal.
     For instance, the Five-Year Socio Economic Development Plans of both Macapagal and Marcos showed that out of the total capital expenditures required, only three percent were to be contributed by foreign direct investment, 11 percent by foreign loans, and 88 percent by local sources.
     Not only that, foreign corporations were bringing into the host country a minimal amount of capital and raising an inordinately large proportion of their capital needs from local sources.
     In Latin America, where there is an accumulated history of American investment dating back to the turn of the century, a UN study by Fernando Fajnzylber showed that US-based multinationals financed 83 percent of their Latin American investments from reinvested profits and domestic borrowings, so that only 17 percent therefore represents a real transfer of capital from the United States to the poor countries of Latin America.
     In the Philippines, when the effects of the Laurel-Langley Agreement came up for study, an NEC Report by BG Bantegui on 108 American corporations doing business in the Philippines, covering a period from 1956 to 1965, showed that out of a total capital expenditure of $489.7 million, fully 88 percent or $431.1 million was generated from reinvestments and domestic borrowings, and only 12 percent or $58.6 million came from abroad as loans and new investment.
     In June 1975, in my speech before the Second Businessmen's Conference sponsored by the Chamber of Commerce of the Philippines and held at the Central Bank, I said that foreign companies do bring in minimal capital and do resort to massive domestic borrowings to finance their local operations, citing specifically Ford Philippines and Levi Strauss.
     Since then, an interagency committee of the government has studied the financial structure of foreign firms, confirmed my findings, and decreed that henceforth within three years, foreign firms must maintain certain debt-to-equity ratios before being allowed to borrow from local sources. 

Source: http://www.philippinefolio.com/contdetail.php?id=19&id_app2=262&id_app3=01220

3M made 352% profit; Pepsi gave 110% dividends

By Hilarion M. Henares Jr.

     HOW many times were Filipino pioneers discriminated against by the CB in the allocation of dollars?
     This happened in the paint industry when two pioneers, Elizalde and Henares, were given niggardly allocations compared to Johnny-come-lately Sherwin Williams, Connell Bros. (Dutch Boy), Fuller Paints, and many others.
     Connell Bros. and Theo. H. Davies (which previously imported Sherwin Williams) were allowed to keep their previous allocations for use in importing other products, in addition to the enormous allocations given them for the manufacture of paint.
     This happened in the tire industry, in which Marcelo Rubber Co., pioneered and were refused dollar allocations which were given instead to Goodrich, Goodyear and Firestone.
     This happened in the drug industry and in many others. And to be sure that Americans get what they want, an American official by the name of Ed Milans sat on a desk beside Ms. Virginia Yaptinchay in the Central Bank, as she took charge of import allocations in the early days of Control.
     Thus did US companies continue to preempt the most profitable businesses in the Philippines. In 1973, Professor Vicente Valdepeńas of the Ateneo University (Undersecretary of Trade at the time of this study) stated that in the wholesale and retail trade, in mining sectors, and in four industry groups, foreign controlled companies predominate.
     In the wholesale trade foreign operators accounted for 60.7 percent of the output and 59.4 percent of the input.
     In industry they accounted for 52.1 percent of the metal products; 57.6 percent of rubber products; 68.9 percent of chemicals and chemical products; and 100 percent of the petroleum and coal products.
     How profitable are US companies and what do they do with their profits?
     According BG Bantegui (opus cited), in a study of 108 out of a total of 157 registered US companies over a period of ten years from 1956 to 1965 (roughly covering the period of Control and Decontrol:
     1) Out of a paid-in capital of $74.2 million in 1956, they generated $389.3 million in profits in ten years, 524.66 percent in ten years, or an average of 52.5 percent per year on original capital.
     2) Of these $398.3 million profit, $369.0 million or 95 percent was remitted back to the parent company, and only 20.3 million or 5 percent was reinvested in the local company.
     During the Martial Law era covered by this study (1971-76) on only 31 registered foreign companies, mostly American, the following may be noted:
     1) Out of a paid-in capital of P380.7 million at the end of 1971, they generated P1,159 million profit or 305 percent in five years, or an average of 60.1 percent years on original paid-in capital. Original paid-in capital in this case refers to the capital stock outstanding as of the end of 1971, which is equivalent to original investment and stock dividends declared in previous years.
     2) Of this P1,159.6 million profit, P537.7 million or 46 percent, was given out as cash dividends, and the balance of P621.9 million. or 54 percent was reinvested.
     The biggest profit making firms are 3M Philippines, which averaged 351.8 percent profit per year on original paid-in capital; Rohm & Haas Philippines, 319 percent profit per year; and Pepsi Cola Far East Trade, 202.2 percent profit per year.
     Of those who declared cash dividends, the biggest are Pepsi Cola Far East Trade, which declared cash dividends exceeding its profits, P40.98 million cash dividends out of profits totaling P36.98 million, or 110 percent of profits; Globe MacKay Cable and Radio, which declared P45.78 million out of P555.44 million profit, or 82 percent of profits; Ford Philippines, which declared P1.19 million dividends even as it incurred a loss of P7.88 million; and Weyerhauser Phil. Inc., which declared cash dividends also exceeding its profits, P36.1 million cash dividends out of only P30.9 million, or 116 percent of profits.
     The profitability during first years of Martial Law (60.1 percent) was higher than in previous years (52.5 percent) and such was the confidence of the US businessmen in Marcos that much more of the profits were reinvested in the local subsidiaries during Martial Law (54 percent) than in previous years (5 percent).
     It is hard to believe that from 1956 to 1965, 108 American firms actually declared cash dividends equivalent to 95 percent of their profits. From 1971 to 1976, in spite of the rise of oil prices and the world recession, the 31 firms, mostly Americans, declared only 46 percent cash dividends, and reinvested the rest, as a sign of their approval and endorsement of the Marcos regime. 

Source: http://www.philippinefolio.com/contdetail.php?id=19&id_app2=262&id_app3=01219

The Philippines: A New Voice in Asia

TIME Magazine

Friday, Oct. 21, 1966

The guerrillas struck at breakfast time, catching the American infantrymen unarmed and off guard. One U.S. sergeant was decapitated at the mess table: his head tumbled neatly into his plate of hash. Others fought back and were later found dead with bloody forks clenched in their fists. Of the 74 officers and men of C Company, 9th U.S. Infantry, only 26 survived. As one of them raged with tears in his eyes: "Damn the infernal Googoos!'

Googoos? That was the contemptuous label which American fighting men applied to an earlier enemy in Southeast Asia, a guerrilla army as fierce and feisty as any elite Viet Cong unit, and twice as bloodthirsty. The ambush of C Company took place on Sept. 28, 1901, on the Philippine island of Samar. The guerrillas were Filipino insurrectos inspired by General Emilio Aguinaldo, tough little "bolomen" whose razor-sharp cane knives and captured Krag-Jorgensen rifles killed 4,165 Americans before the three-year insurrection was quelled. In turn, some 20,000 Filipinos died in the struggle.

Asian Democracy. Last week, 65 years after the slaughter on Samar, Filipinos and Americans were the staunchest of Asian allies. Descendants of the bolomen—1,200 soldiers from the Philippine Civic Action Group—were setting up camp beside U.S. troops in the South Vietnamese jungles of Tay Ninh. American wounded, airlifted from Saigon, were being treated at hospitals outside of Manila, and U.S. fighting ships —back on rotation from the Tonkin Gulf—lay at anchor in the palm-fringed Philippine harbor of Subic Bay. B-52 bombers from Guam swept past the Philippines before making their bomb runs over North and South Viet Nam.

More important than its value as a fighting ally and a site for American bases was the fact that—after 48 years of American occupation and two decades of independence—the Philippine Republic endures as Asia's freest democracy. It is no "showcase," to be sure, but it stands as a model of hope for all of non-Communist Southeast Asia: from the introverted Burma of Neutralist General Ne Win to the bankrupt chaos of Suharto's Indonesia; from royalist Thailand through Malaysia to trifurcated Laos; and certainly to South Viet Nam itself.

Quest for Identity. The custodian of those hopes, and of 33 million Filipinos, is a short, perpetually grinning man who walks with a military spring, drives a golf ball with the tense fury of Ben Hogan, and spends 20 hours a day on the job. As the sixth President of the Philippine Republic,* Ferdinand Edralin Marcos, 49, has been in office only ten months, but in that time he has taken significant steps toward providing the Philippines with the dynamic, selfless leadership it needs to cope with the Southeast Asian burdens of poverty, lawlessness, Communist insurgency and —most important—the quest for national identity after centuries of colonial occupation.

Last week Marcos was busy with preparations for his most ambitious foreign-policy move to date: the seven-nation Manila Conference of Asia's non-Communist allies, which opens next week. Marcos released $190,000 to patch Manila's perennially potholed roads, and the city throbbed to the passing of earth movers and dump trucks. Paintbrushes slapped and lawn mowers clattered up and down stately Roxas Boulevard as hotels and nightclubs indulged in a hasty face lifting. U.S. Presidential Press Secretary Bill D. Moyers bustled from airport to embassy to Malacanang Palace (the Filipino White House) making arrangements for everything from protocol dinners to a Lyndon-and-Lady Bird tour of nearby Corregidor. Marcos' aides wrote hurried position papers, while his First Lady, lovely Imelda Romualdez Marcos, supervised a hurry-up renovation of the palace itself. The twittering of sparrows in the upper reaches of the palace reception hall was drowned in the rattle of hammers and snarl of saws.

Articulate Ambivalence. Though the Manila Conference will deal mainly with the war effort in Viet Nam, it symbolized the rebirth of a 15-year-old Asian desire for concerted unity that has long eluded the region. The Baguio Conference of 1950, called by Philippine President Elpidio Quirino and held in the craggy, cool highlands north of Manila, brought together such disparate neighbors as Australia, Ceylon, India, Indonesia, Pakistan and Thailand, and ended with agreement on joint action for the region. The principle of "Maphilindo," endorsed by Marcos' predecessor, Diosdado Macapagal, idealized the hope of Asia's Malay nations (Malaysia, the Philippines, Indonesia) to regroup ethnically after ages of European-imposed fragmentation. Marcos himself has led the Philippines into a new Asian grouping, the nine-nation ASPAC— and simultaneously he has revived the long dormant Association of Southeast Asia (an economic union of Malaysia, Thailand and the Philippines).

During his visit to Washington last month, Marcos articulated the ambivalence of many non-Communist ex-colonials who now stand on their own. "The challenge to America is to extend to Asia the defensive shield of American power in forms consonant with Asian freedom and self-respect," Marcos told a joint session of the U.S. Congress. "The challenge to Asia is to discard the dry, meatless bone of mysticism and fatalism."

The surge of new nationalism throughout Asia is aimed at precisely that second challenge. "The young Filipino looks around him," says one old Manila hand, "and remembers that his grandfather spoke Spanish; yet his parents and he speak English better than Tagalog. He sees the conglomeration of Spanish and native architecture, spruced up with American modern. His system of government is tailored after that of the U.S.; yet he does not feel truly American. So he stands there, bewildered, asking himself: 'What am I? Do I belong to Asia, the Pacific? Or am I closer to the West than either of these?'"

Great Experiment. American colonialism in the Philippines was a novel exercise in "enlightened imperialism." When the former Spanish colony dropped suddenly into Admiral Dewey's hands on May 1, 1898, President William McKinley was so surprised that, as he later said, "I went down on my knees and prayed Almighty God for light and guidance." He needed it, for the Aguinaldo bolomen would have tried the patience of the most saintly President. Like the Viet Cong, the Filipino terrorists were experts at ambush, using bamboo cannon loaded with scrap iron in place of Charley's captured Claymore mines. Hatred for the "Flips" was reflected in a popular Army marching song, set to the tune of Tramp, Tramp, Tramp:

Damn, damn, damn the Filipinos!

Cut throat khakiac ladrones!

Underneath the starry flag

Civilize 'em with a Krag,

And return us to our own beloved homes.

Fortunately, that phase of "civilization" gave way quickly to the foresighted civil rule of such Governors General as William Howard Taft and Francis B. Harrison. "Colonialists with a conscience," as they have been called, Taft and his successors brought the tools of self-government to the Philippines: literacy (72% of all Filipinos can read and write, the highest percentage in Southeast Asia), medicine (Filipino life expectancy in 1900 was 14 years, today it is 60), civil liberties (the Filipino press is the freest in Asia, if not the world). At the same time, the great experiment in self-liquidating colonialism was planting seeds that would sprout into the problems Marcos faces today.

The U.S. colonizers did nothing to alter the compadre system under which a Filipino bureaucrat was permitted to skim the cream from his tax collections and distribute it to his poor friends and relations; as a result, graft and corruption are still the Manila way of life. Nor did the Americans break up the vast estates of the principalia, the Filipino elite; peasants today still pay up to 30% of their crop to absentee landlords, and the rest often goes to local loan sharks. By granting free tariffs to Philippine producers of sugar, lumber and hemp, the U.S. reinforced a backward primary-product economy; today, a major irritant between Washington and Manila is the Laurel-Langley Trade Agreement of 1956, which perpetuates that error. Still, when the date came for Philippine independence, the U.S. kept its word. On July 4, 1946, for better or worse, the philophilic strains of the Filipino national anthem rang out over war-battered Luneta Park, and the child of America's great experiment walked free.

"It's Classy." Twenty years later, the Philippines are an odd melange of American, Spanish and Asian influence, all edged with a ferocity and fecundity that is uniquely Filipino. The crooning of a tuko lizard in the night forests of Cavite is counterpointed by the rattle of gunfire as a cigarette-smuggling speedboat runs a customs blockade offshore. The big beat of jukeboxes in Manila's waterfront dives does not quite drown out the clink of cocktail glasses at the opulent Army-Navy Club. Manila newspapers splash crime news in Hechtian hyperbole across their front pages.

The high-wheeled horse-drawn calesas of old Manila, with their tasseled canopies and courtly cocheros, have given way to the ubiquitous Jeepney, a freelance taxicab that typically sports a high-gloss enamel finish in rainbow hues, Playboy-bunny mudguards, pink-fringed roof, and a sign that reads "God Is My Copilot." Crammed with such passengers as pigs, chickens, guitarists and call girls, and plagued with an absence of brakes and springs, the Jeepney needs celestial guidance.

So does Manila (pop. 1,300,000), where the polarities of the nation are reflected in microcosm. Sprawled on both sides of the sluggish Pasig River, the city straddles a grey-green current that carries both sewage and water lilies into Manila Bay. Many of its streets are potholed; rats chitter behind the wainscoting of its finest restaurants; street urchins peddle everything from lottery tickets to fragrant sampaguita garlands —all at outrageous prices. The current craze requires shops to have a D apostrophe preceding the English names, as in D'Artland Gallery, D'Elegant Theater, D'Stag Cocktail Lounge and D'Best Furniture Store. Why? "It's classy," explains a Filipino. "It's French."

"Little Viet Nam." Forbes Park, in Manila's southern suburbs, is known as the "millionaires' barrio"; here curved streets wend gracefully beneath towering acacia trees, and deep-piled lawns run down to Rorschach-shaped swimming pools. Armed guards stop every car without a Forbes Park sticker, and the suburb's residents—mostly Americans and Filipinos who earn more than 5,000 pesos ($1,250) a month—have their own golf course and polo club.

In stark contrast is the Tondo slum on Manila's northern waterfront — a maze of alleys, mud-floored huts, hovels built from packing cases. Some 8,000 pushcarts roll through Tondo in search of trash and scrap paper, the collection of which is the district's principal occupation. Tondo's kids are a combination of the worst in American and Asian street gangs: the "Canto Boys," with their distinctive madre tattoos, would as soon knife a stranger as zip-gun a passing police car.

Penchant for Violence. Behind broad Roxas Boulevard, where young hot-rodders zigzag furiously among the Jeepneys, is Manila's commercial heart: boutiques, which attract American wives all the way from Hong Kong, stand side by side with gun shops that sell everything from matchbox-sized pistols to M-16 automatic rifles. Manila's private citizenry owns more weapons (365,000) than the entire military and police forces, and it is a rare Filipino whose frilly barong tagalog shirt does not bulge with hardware. Nightclubs, bars, and even the Supreme Court mount signs reading: "Check Your Firearms Before Entering." No self-respecting lawless Filipino would think of complying.

All that firepower is bound to lead to trouble, as the Philippine crime rate proves. According to the National Department of Investigation, crime in the Philippines jumped 51% last year, There were 8,750 murders (more than in New York), 5,000 rapes and 6,519 armed robberies. The national penchant for violence is reflected in Manila's thriving Tagalog-language movie industry. Currently packing them in at the Rialto is Fernando Poe Jr. in Switchblade, a film in which "the sacred treasures of a church and a dozen lives rest on the courage of one man and his skill with a blade made from the heart of a heavenly meteorite." Last week the 14 exuberant Manila dailies were bannering a real-life movie murder: two young toughs were gunned down while dining in the home of Actor Eddie Fernandez, who plays a James Bond type in such films as When I Am Still Alive and Living with Danger.

The Men from Esso. The real power in Manila—and the Philippines—is never so embarrassingly garish. In the leather-upholstered interior of the Casino Español, under the flutter of ceiling fans, the talk is of sugar prices and the new timber-cut in Mindanao as the members of Manila's power elite discuss their endeavors. Polished ilustrados in dark Italian suits and handsome women in bright mestiza dresses nod politely to aging Carmen Soriano and her 39-year-old son José Maria, heirs of the Soriano fortune (Cebu copper mines, Samar iron, Mindoro cattle and dairy, Mindanao mahogany and San Miguel beer). American businessmen from Esso and Caltex, Hawaiian Dole and General Foods, are prominent in the Manila Polo Club; the Phil-Am Life Insurance Co., with its filigreed, high-pillared headquarters in downtown Manila, symbolizes U.S. and Filipino cooperation.

The Catholic Church, which claims 84% of all Filipinos, is still a vast landholder and, despite a few far-sighted reformers, remains a bulwark of the ancien regime. As a result, a new church, the Iglesia ni Kristo (Church of Christ), is making inroads: since its founding in 1914 by an uneducated Manila hatter, it has acquired 3,000,000 members, who voted en bloc last year for Ferdinand Marcos.

Fierce & Naughty. It would take a hero to rule so complex a society, and the hardest thing to accept about Ferdinand E. Marcos is that any mortal could have tucked into 49 years as much action, adventure, heroism, devotion to duty, romance, singleness of purpose and accomplishment as he has. Born in the farming town of Sarrat, in Ilocos Norte province on Luzon's craggy northwest slopes. Marcos grew up under a code of spartan self-reliance. His father, Mariano Marcos, was a stern, humorless politician who refused comfort to any of his four children if they cried over injuries. "Don't start a fight," he advised brusquely, "until you know you can win it."

Marcos' grandfather taught the boy how to track wild animals in the mountains of Luzon. By the age of twelve, Ferdie was an expert pistol and rifle shot, and at 16 he became national champion in small-bore competition.

When Marcos entered the University of the Philippines in 1934, he had gained enough scholarship support to ensure his education without parental help. As a sophomore, he not only proved a top student, but found time to star on the wrestling, boxing and swimming teams, and become captain of the rifle and pistol squad as well as cadet battalion commander in the ROTC. He also got his first taste of political activism. Ferdie took to the soapbox to comment acidly on everything from the curriculum to the policies of the Philippines' first President, Manuel Quezon.

White for Innocence. In September 1935 occurred an incident that still haunts Marcos' career. His father had been defeated in a congressional election by Julio Nalundasan, a sharp-tongued Nacionalista who had insulted Mariano fiercely during the course of the campaign. To Filipinos, insults cannot go unanswered. On a stormy, wind-whipped night shortly after Pistol Champion Ferdie Marcos had returned to Ilocos on vacation, Nalundasan rose from his dinner table and walked to a washbasin. He was starkly silhouetted in the lighted window. A single .22-cal. bullet cracked in the banana tree outside, and Nalundasan dropped dead, shot through the heart. The shadow of suspicion was heavy: Mariano had been defeated and insulted; Ferdie was the best small-arms shot in the Philippines.

Justice works slowly in the islands, and not until Dec. 7, 1939, was Marcos arrested for the murder. He was then within five months of graduating with honors from law school. From his jail cell, Marcos successfully petitioned for his release on bail, then succeeded in winning his degree (two cops accompanied him to his graduation). In the subsequent bar examination, he scored the highest average ever (98.01%). When the puzzled judges accused him of cheating on the exam, Marcos demanded that he be tested orally—and scored 92.35%, the second highest average in history. Then, clad in a white sharkskin suit and white shoes to emphasize his innocence, Marcos pleaded his own case before the Supreme Court on the murder charge. He was exonerated on grounds of conflicting evidence.

Years later, however, his guilt or innocence was to be raised again—both by political opponents and his own son. "Little boys have amazing minds," Marcos said recently. "Just the other day our nine year old, Bongbong, came to me and said: 'Hey, Dad, what's this about you having murdered a man once?' And I said: 'Well, if that had been so, I wouldn't be standing here with you now, would I?' Bongbong said: 'O.K., who did kill him then?' We just left it there."

In the Oldsmobile. When the Japanese invaded the Philippines after Pearl Harbor, the stage was set for another leap in the Marcos legend. Called to duty as an intelligence officer, 2nd Lieut. Marcos required only a few weeks to become a hero. His idea of intelligence duty was to prowl behind the Japanese lines—often in his personal Oldsmobile sedan—probing for weak spots. He found one on Bataan's Mount Natib: a Japanese military battery that was lobbing 70-mm. shells into U.S. General Jonathan Wainwright's beleaguered defenders. Marcos and three privates scouted the battery, trailing two bearded Japanese artillerymen to it, then cut loose. They killed more than 50 Japanese, spiked the guns, and escaped with only one casualty. Marcos won the first of a brace of Silver Stars for the operation, and a few weeks later was recommended for the U.S. Medal of Honor for his part in the defense of the Salian River. But the recommendation was never filed with Washington, and Marcos failed in becoming the only Filipino to win America's highest military award.

Hit by shrapnel and rifle fire in the last days of Bataan's defense, Marcos was captured by the Japanese and began the infamous Death March half dead already. He was imprisoned at Camp O'Donnell, where Filipinos and Americans died at the rate of 300 a day. There, he says, "I learned to hate." At Manila's Fort Santiago, where the Japanese Kempei Tai (secret service) tortured him in the hope that he would reveal the whereabouts of Filipino guerrilla groups, Marcos refused to talk. The Japanese pumped him full of water and jumped on his stomach. After eight days of "the water cure," he agreed to lead a patrol to a suspected guerrilla camp south of Manila. In the course of the march, he led the Japanese into a prearranged ambush—his captors died and he escaped into the hills.

Marcos' guerrillas were among the most effective in the islands. When Douglas MacArthur made good his promise to return to the Philippines, Marcos won his second Silver Star. Singlehanded, he stood off a 50-man Japanese patrol; when his submachine-gun fire drove them off, Marcos pursued them alone for two miles—despite the fact that he had taken a bullet in the leg.

Graft & Huks. War's end left the Philippines with wounds even more painful than those Marcos had suffered. Filipinos had learned a way of life that centered on murder, thievery and revenge. Every Filipino had a gun—or soon acquired one from the vast caches of armaments left behind by the Japanese and American armies. Though graft had its roots in the Spanish period, the postwar inundation of the Philippines with large stocks of U.S. military surplus turned black-marketeering into a national pastime. "First you became a small businessman," recalls one observer, "then a crook, then a big businessman."

Those who failed to follow that route often found themselves siding with a new force in Philippine politics: the Huks. Originally known as the Hukbong bayan laban sa Hapon (People's Army Against Japan), the Huks turned quickly to the Communist antidemocratic guerrilla warfare that their brothers in China and Indo-China were fostering. By the late 1940s, the Huk menace was massive: it claimed 14,000 fighting men under arms, and controlled by terror and taxation some 4,000,000 Filipino peasants, mainly in central Luzon. President Roxas, who died in office of a heart attack, was succeeded by Elpidio Quirino, a well-meaning but weak lawyer who was unable to come to grips with either government corruption or the Huks.

Fortunately for the Philippines, a hero arrived in the form of Ramon Magsaysay, a tall (5 ft. 11 in.), tough blacksmith's son from Zambales province, who took over as Defense Secretary in 1950. A principal backer in the Cabinet reshuffle: Freshman Congressman Ferdinand Marcos. Magsaysay tackled the Huks with double-barreled dynamism: his green-clad, rubber-booted troops rooted them out of the Luzon jungles and killed them without quarter; defectors were offered land in islands not infested by Huks. By 1954 Magsaysay had quelled the Huks, and won himself the presidency. Then in 1957, Magsaysay died in a plane crash, and the government passed into the hands of yet another weakling, Carlos Garcia.

Foul Shape & Fair. Magsaysay had gone a long way toward curing the Philippines' ills before his untimely death. His successors, however, were either uninterested in putting an end to graft and lawlessness or simply did not have the strength to cope. Ferdie Marcos did. As the youngest Liberty Party Congressman ever elected, his name was attached to legislation that ranged from civil rights to land reform. Off the floor, Bachelor Marcos had a reputation as a sportsman and Lothario: when he wasn't blasting quail and ducks with his 20-gauge Browning over-under, he was breaking hearts in Forbes Park. That ended one day in 1954 when he wooed and won the daughter of one of the islands' wealthiest families. Sugar-rich Imelda Romualdez, cousin of House Speaker Daniel Z. Romualdez, was crunching watermelon seeds as she listened to Marcos orate in the House. When Marcos finished, he went up to the erstwhile Miss Manila (a proudly packaged 36-23-35) and asked: "Would you mind standing up, please?" Back to back, Marcos determined that Imelda was an inch shorter than his 5 ft. 7 in., then turned to an onlooker and said: "Fine. I'm getting married." Eleven days later, he was.

Singing with Imelda. After Magsaysay's death, Marcos felt that he was in line for the vice-presidency on the Liberal ticket. It went instead to Diosdado Macapagal, who won the presidency in 1961. Embittered and disgusted with Macapagal's inability to cope with the nation's ills, Marcos in 1964 decided to shift his loyalty from the Liberal Party to the opposition Nacionalistas—a maneuver common in Philippine politics. The Nacionalistas could not have found a better man to lead their party against Macapagal in the 1965 elections.

Imelda joined him on the campaign; the two sang duets and applied her corn-padre family connections on his behalf. The Marcos-Macapagal encounter produced some of the fiercest infighting ever seen in a nation that averages 60 murders every election. Macapagal's supporters spread rumors that Imelda had posed in the nude for magazines and blue movies; Marcos accused Macapagal of everything from corruption to ineptitude. When the votes came in last November, Marcos had won by 660,000 votes, out of a total of 7 million.

A Call for Heroes. Marcos' inaugural speech sounded a refreshing tone that had been missing from the Philippines since Magsaysay's death. "The Filipino has lost his soul and his courage," he said. "Our people have come to a point of despair. Justice and security are as myths. Our government is gripped in the iron hand of venality, its treasury is barren, its resources are wasted, its civil service slothful and indifferent. Not one hero alone do I ask, but many."

From the standpoint of the U.S., Marcos' concern was well-founded. The issue in the Philippines was neither ideological nor anti-American: both candidates had been pro-American. Here it was a question of character, personality and ability, and Washington left no doubt that Marcos was favored. In his ten months of command, Marcos has already defined and come to grips with the major problems outlined in his inaugural. Manila is overcentralized: the bulk of the nation's nascent industries (oil refineries, cement factories, textile mills, steel mills) are clustered around the city. Only half of the Philippines' 38,000 miles of roads are in drivable condition, and the Bureau of Public Works estimates that 5,400 miles more are needed to give the nation a minimal service network. Telephones are rare—and even more rarely do they work. Travel is sheer adventure, and the only vehicle that can negotiate the muddy tracks of the bundoks (the Tagalog origin of the American boondocks) is the groaning carabao.

Tuberculosis and pneumonia still kill the bulk of Filipinos; teachers are in surplus in Manila, in short supply in the countryside. With 70% of the population engaged in subsistence, peasant-style farming, the average annual income is a scant $140 a year—far less than that of Japan and Formosa. Population growth is among the world's highest: Catholic-dominated Filipinos add 1,000,000 mouths a year to the rice bowl (3.2%). Simultaneously, the economic-growth rate is a minimal 4.2% . The rice yield is scandalously low. Of the world's top 20 major rice-producing nations, the Philippines rank ahead of only Cambodia, Laos and Nepal.

Rugged IR-8. Marcos has taken the first steps toward defining and defeating these problems. His new Four-Year Plan, which won $21 million worth of support from Washington last month, envisions self-sufficiency in rice and corn production by 1969. His expedients: a combination of improved irrigation systems and more fertilizer plus such superior strains of rice as the rugged IR-8, developed by the Rockefeller Foundation (TIME, Oct. 7) at the rice institute at Los Baños.

The Washington visit also managed to quell some of the voices from the Philippine left, which argues against further U.S. involvement in the Philippines. Marcos won a pledge from the U.S. to cut its lease on bases (Clark Field and Subic Bay) from 99 years to only another 25. The complex demands of parity and tariff arrangements set up by the Laurel-Langley Trade Agreement have provoked dissension among Filipinos and Americans engaged in developing the country: Marcos reached one of the first accommodations on that thorny issue in a decade. Lyndon Johnson agreed to open negotiations for a new trade instrument that would ease both Filipino fears and American appetites.

As for the Huks, who remain in small but noisy numbers around the U.S. bases and in the ricelands of central Luzon, Marcos ignores them. He is more concerned with such Red-backed outfits as Masaka (Free Federation of Farmers), which provoke vociferous demonstrations and pose a long-range threat to the government. Of the thousands of armed Huks who once terrorized the islands, only a few hundred remain. Bandits with a profit motive, on the other hand, still thrive. Pirates roam at will through the Sibuyan Sea and even in Manila Bay itself. The U.S. promise to equip ten Filipino battalions (at a cost of $20 million) may help to cut bandit operations over the next two years—or so Marcos hopes.

"It's All There." The U.S. is more than willing to back the Philippines' new leader. "In less than a year," says one White House authority, "he did well enough for us to decide that it was worthwhile to underwrite him a little more." By sending a brigade to Viet Nam (albeit in a "noncombat" role), Marcos lost a lot of support from anti-American critics whose nationalism he had hoped to convert to political power. He did not get the $250 million stabilization loan he had hoped for to back the peso (which Washington considers stable enough); he did, however, get the Manila Conference, which should win him both regional recognition and a great deal of popular support at home.

No one in Washington considers Marcos a lackey; indeed his words before the cheering throngs at Manila airport on his return from Washington still ring clear in State Department ears. "America must realize," he said, "there are conditions she must accept in Asia. The first is a diversity of Asian cultures, governments, economic and political systems; the second, that to run against the tide of Asian nationalism is worse than impractical—it is also highly dangerous."

In a nation that never had to win its independence by force of arms, there is a perennial need for heroes. With his unmatched war record, his dazzling political success, and his stern insistence on an Asian solution to Asian problems, Marcos—with luck—could meet that need. "It's all there," says a Washington admirer. Whether the full potential is ever realized depends on Marcos.

* His predecessors: Manuel Roxas (1946-48), Elpidio Quirino (1948-53), Ramon Magsaysay (1953-57), Carlos Garcia (1957-62), Diosdado Macapagal (1962-65). * The Asian and Pacific Council, whose members are Australia, Formosa, Japan, Malaysia, New Zealand, the Philippines, South Korea and South Viet Nam.

Source: http://www.time.com/time/magazine/article/0,9171,836502-1,00.html

1976 Amendments of the 1973 Constitution

1. There shall be, in lieu of the interim National Assembly, an interim Batasang Pambansa.  Members of the interim Batasang Pambansa which shall not be more than 120, unless otherwise provided by law, shall include the incumbent President of the Philippines, representatives elected from the different regions of the nation, those who shall not be less than eighteen years of age elected by their respective sectors, and those chosen by the incumbent President from the Members of the Cabinet. Regional representatives shall be appointed among the regions in accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratio, while the sectors shall be determined by law. The number of representatives from each regions or sector and the manner of their election shall be prescribed and regulated by law.

2. The interim Batasang Pambansa shall have the same powers and its Members shall have the same functions, responsibilities, rights, privileges, and disqualifications as the interim National Assembly and the regular National Assembly and the Members thereof.

3. The incumbent President of the Philippines shall, within 30 days from the election and selection of the Members, convene the interim Batasang Pambansa and preside over its sessions until the Speaker shall be the Prime Minister and he shall continue to exercise all his powers even after the interim Batasang Pambansa is organized and ready to discharge its functions, and likewise he shall continue to exercise his powers and prerogatives under the 1935 Constitution and the powers and prerogatives under the 1935 Constitution and the powers vested in the President and the Prime Minister under this Constitution.

4. The President (Prime Minister) and his Cabinet shall exercise all the powers and functions, and discharge the responsibilities of the regular President (Prime Minister) and his Cabinet, and shall be subject only to such disqualifications as the President (Prime Minister) may prescribe. The President (Prime Minister), if he so desires, may appoint a Deputy Prime Minister or as many Deputy Prime Ministers as he may deem necessary.

5. The incumbent President shall continue to exercise legislative powers until martial law shall have been lifted.

6. Whenever in the judgment of the President (Prime Minister), there exists a grave emergency or a threat or imminence thereof, or whenever the interim Batasang Pambansa or the regular National Assembly fails or is unable to act adequately on any matter for any reason that in his judgment requires immediate action, he may, in order to meet the exigency, issue the necessary decrees, orders, or letters of instructions, which shall form part of the law of the land.

7. The barangays and sanggunians shall continue as presently constituted but their functions, powers, and composition may be altered by law.

Referenda conducted through the barangays and under the supervision of the Commission on Elections may be called at any time the Government deems it necessary to ascertain the will of the people regarding any important matter, whether of national or local interest.

8. All provisions of this Constitution not inconsistent with any of these amendments shall continue in full force and effect.

9. These amendments shall take effect after the incumbent President shall have proclaimed that they have been ratified by a majority of the votes cast in the referendum-plebiscite.
 

[The afore-quoted amendments were ratified in the referendum-plebiscite held on October 16-17, 1976, and were proclaimed in full force and effect as of October 27, 1976, under Proclamation No. 1595 issued by President Ferdinand E. Marcos].

  

Source: http://www.chanrobles.com/1976amendments.htm

1973 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES

Preamble

    

    We, the sovereign Filipino people, imploring the aid of Divine Providence, in order to establish a government that shall embody our ideals, promote the general welfare, conserve and develop the patrimony of our Nation, and secure to ourselves and our posterity the blessings of democracy under a regime of justice, peace, liberty, and equality, do ordain and promulgate this Constitution. 

ARTICLE I

The National Territory

    Section 1. The national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all the other territories belonging to the Philippines by historic or legal title, including the territorial sea, the air space, the subsoil, the sea-bed, the insular shelves, and the submarine areas over which the Philippines has sovereignty or jurisdiction. The waters around, between, and connecting the islands of the archipelago, irrespective of their breadth and dimensions, form part of the internal waters of the Philippines.
 

ARTICLE II

Declaration of Principles and State Policies

 
    Section 1. The Philippines is a republican state. Sovereignty resides in the people and all government authority emanates from them.

    Section 2. The defense of the State is the prime duty of government, and in the fulfillment of this duty all citizens may be required by law to render personal military or civil service.

    Section 3. The Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land, and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations.

    Section 4. The State shall strengthen the family as a basic social institution. The natural right and duty of parents in the rearing of the youth for civic efficiency and the development of moral character shall receive the aid and support of the government.

    Section 5. The State recognizes the vital role of the youth in nation-building and shall promote their physical, intellectual and social well-being.

    Section 6. The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits.

    Section 7. The State shall establish, maintain, and ensure adequate social services in the field of education, health, housing, employment, welfare, and social security to guarantee the enjoyment of the people of a decent standard of living.

    Section 8. Civilian authority is at all times supreme over the military.

    Section 9. The State shall afford protection to labor, promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the relation between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work. The State may provide for compulsory arbitration.

    Section 10. The State shall guarantee and promote the autonomy of local government units, especially the barrio, to ensure their fullest development as self-reliant communities. 

ARTICLE III

Citizenship

    Section 1. The following are citizens of the Philippines:
 

(1) Those who are citizens of the Philippines at the time of the adoption of this Constitution.

(2) Those whose fathers and mothers are citizens of the Philippines.

(3) Those who elect Philippine citizenship pursuant to the provisions of the Constitution of nineteen hundred and thirty-five.

(4) Those who are naturalized in accordance with law.

    Section 2. A female citizen of the Philippines who marries an alien retains her Philippine citizenship, unless by her act or omission she is deemed, under the law, to have renounced her citizenship.

Section 3. Philippine citizenship may be lost or reacquired in the manner provided by law.

Section 4. A natural-born citizen is one who is a citizen of the Philippines from birth without having to perform any act to acquire or perfect his Philippine citizenship. 

ARTICLE IV

Bill of Rights

    Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

    Section 2. Private property shall not be taken for public use without just compensation.

    Section 3. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and whatever purpose shall not be violated, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined by the judge, or such other responsible officer as maybe authorized by law, after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched, and the persons or things to be seized.

    Section 4. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety and order require otherwise.

    (2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any purpose in any proceeding.

    Section 5. The liberty of abode and of travel shall not be impaired except upon lawful order of the court, or when necessary in the interest of national security, public safety, or public health.

    Section 6. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, shall be afforded the citizen subject to such limitations as may be provided by law.

    Section 7. The right to form associations or societies for purposes not contrary to the law shall not be abridged.

    Section 8. No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof. The free exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever be allowed. No religious test shall be required for the exercise of civil or political rights.

    Section 9. No law shall be passed abridging the freedom of speech, or the press, or the right of the people peaceably to assemble and petition the government for redress of grievances.

    Section 10. No law granting a title of royalty or nobility shall be enacted.

    Section 11. No law impairing the obligation of contracts shall be passed.

    Section 12. No ex post facto law or bill of attainder shall be enacted.

    Section 13. No person shall be imprisoned for debt or non-payment of a poll tax.

    Section 14. No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted.

    Section 15. The privilege of the writ of habeas corpus shall not be suspended except in cases of invasion, insurrection, or rebellion, or imminent danger thereof, when the public safety requires it.

    Section 16. All persons, shall have the right to a speedy disposition of their cases in all judicial, quasi-judicial, or administrative bodies.

    Section 17. No person shall be held to answer for a criminal offense without due process of law.

    Section 18. All persons, except those charged with capital offenses when evidence of guilt is strong shall, before conviction, be bailable by sufficient sureties. Excessive bail shall not be required.

    Section 19. In all criminal prosecutions, the accused shall be presumed innocent until the contrary is proved, and shall enjoy the right to be heard by himself and counsel, to be informed of the nature and cause of the accusation against him, to have a speedy, impartial, and public trial, to meet the witnesses face to face, and to have compulsory process to secure the attendance of witnesses and the production of evidence in his behalf. However, after arraignment, trial may proceed notwithstanding the absence of the accused provided that he has been duly notified and his failure to appear is unjustified.

    Section 20. No person shall be compelled to be a witness against himself. Any person under investigation for the commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him. Any confession obtained in violation of this section shall be inadmissible in evidence.

    Section 21. Excessive fines shall not be imposed nor cruel or unusual punishment inflicted.

    Section 22. No person shall be twice put in jeopardy of punishment for the same offense. If an act is punished by a law and an ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act.

    Section 23. Free access to the courts shall not be denied to any person by reason of poverty. 

ARTICLE V

Duties and Obligations of Citizens

    Section 1. It shall be the duty of the citizen to be loyal to the Republic and to honor the Philippine flag, to defend the State and contribute to its development and welfare, to uphold the Constitution and obey the laws, and to cooperate with the duly constituted authorities in the attainment and preservation of a just and orderly society.

    Section 2. The rights of the individual impose upon him the correlative duty to exercise them responsibly and with due regard for the rights of others.

    Section 3. It shall be the duty of every citizen to engage in gainful work to assure himself and his family a life worthy of human dignity.

    Section 4. It shall be the obligation of every citizen qualified to vote to register and cast his vote. 

ARTICLE VI

Suffrage

    Section 1. Suffrage shall be exercised by citizens of the Philippines not otherwise disqualified by law, who are eighteen years of age or over and who shall have resided in the Philippines for at least one year and in the place wherein they propose to vote for at least six months preceding the election. No literacy, property or other substantive requirement shall be imposed on the exercise of, suffrage. The Batasang Pambansa shall provide a system for the purpose of securing the secrecy and sanctity of the vote.
 

ARTICLE VII

The President and Vice-President

    Section 1. The President shall be the head of state and chief executive of the Republic of the Philippines.

    Section 2. There shall be a Vice-President who shall have the same qualifications and term of office as the President and may be removed from office in the same manner as the President as provided in Article XIII, Section 2 of this Constitution.

The Vice-President may be appointed as a member of the Cabinet and may be nominated and elected as Prime Minister.

The Vice-President shall be elected with and in the same manner as the President.

The President shall be elected from among the Members of the National Assembly by a majority vote of all its Members for a term of six years from the date he takes his oath of office, which shall not be later than three days after the proclamation of the National Assembly, nor in any case earlier than the expiration of the term of his predecessor. Upon taking his oath of office, the President shall cease to be a Member of the National Assembly and of any political party. He shall be ineligible to hold any other elective office during his term.

    Section 3. No person may be elected President unless he is at least fifty years of age at the day of his election as President, and a resident of the Philippines for at least ten years immediately preceding his election. However, if no Member of the National Assembly is qualified or none of those qualified is a candidate for President, any Member thereof may be elected President.

    Section 4. (1) The President shall have an official residence and shall receive a compensation to be fixed by law, which shall not be increased or decreased during his term of office. He shall not receive during his tenure any other emolument from the government or any other source. Until the National Assembly shall provide otherwise, the President shall receive an annual salary of one hundred thousand pesos.

    (2) The President shall not during his tenure, hold any appointive office, practice any profession, participate directly or indirectly in the management of any business, or be financially interested directly or indirectly in any contract with, or in any franchise or special privilege granted by, the government or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations.

    Section 5. In case of permanent disability, death, removal from office, or resignation of the President, the Speaker of the National Assembly shall act as President until a successor has been elected for the unexpired portion of the term of the President.

    Section 6. The President shall have the following duties and functions: 

(1) Address the National Assembly at the opening of its regular session.

(2) Proclaim the election of the Prime Minister.

(3) Dissolve the National Assembly and call for a general election as provided herein.

(4) Accept the resignation of the Cabinet as provided herein.

(5) Attest to the appointment or cessation from office of Members of the Cabinet, and of other officers as may be provided by law.

(6) Appoint all officers and employees in his office in accordance with the Civil Service Law.

(7) Perform such other duties and functions of State as may be provided by law.

    Section 7. The President shall be immune from suit during his tenure.
 

ARTICLE VIII

The National Assembly

    Section 1. The Legislative power shall be vested in a National Assembly.

    Section 2. The National Assembly shall be composed of as many Members as may be provided by law to be appointed among the provinces, representative districts, and cities in accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratio. Each district shall comprise, as far as practicable, contiguous, compact, and adjacent territory. Representative districts or provinces already created or existing at the time of the ratification of this Constitution shall have at least one Member each.

    Section 3. (1) The Members of the National Assembly shall be elected by the qualified electors in their respective districts for a term of six years which shall begin, unless otherwise provided by law, at noon on the thirtieth day of June next following their election.

    (2) In case the National Assembly is dissolved, the newly elected Members shall serve the unexpired portion of the term from the time the Prime Minister convenes the Assembly, which shall not be later than thirty days immediately following the elections.

    Section 4. No person shall be a Member of the National Assembly unless he is a natural-born citizen of the Philippines and, on the day of the election, is at least twenty-five years of age, able to read and write, a registered voter in the district in which he shall be elected, and a resident thereon for a period of not less than one year immediately preceding the day of the election.

    Section 5. (1) Unless otherwise provided by law, the regular election of Members of the National Assembly shall be held on the second Monday of May every six years thereafter.

    (2) In case a vacancy arises in the National Assembly one year or more before a regular election, the Commission on Elections shall call a special election to be held within sixty days after the vacancy occurs.

    Section 6. The National Assembly shall convene once every year on the fourth Monday of July for its regular session, unless a different date is fixed by law, and shall continue to be in session until thirty days before the opening of its next regular session, exclusive of Saturdays, Sundays, and legal holidays. It may recess for periods not exceeding thirty days each, and not more than ninety days during the year. However, it may be called to session at any time by the Prime Minister to consider such subjects or legislation as he may designate.

    Section 7. (1) The National Assembly, shall, by a majority vote of all its Members, elect its Speaker from the Members thereof. It shall choose such other officers as it may deem necessary.

    The election of the President and the Prime Minister shall precede all other business following the election of the Speaker.

    (2) A majority of the National Assembly shall constitute a quorum to do business, but a smaller number may adjourn from day to day and may compel the attendance of absent Members in such manner, and under such penalties, as the National Assembly may provide.

    (3) The National Assembly may determine the rules of its proceedings, punish its Members for disorderly behavior, and with concurrence of two-thirds of all its Members, suspend or expel a Member, but if the penalty is suspension, this shall not exceed sixty days.

    (4) The National Assembly shall keep a Journal of its proceedings, and from time to time publish the same, excepting such parts as may, in its judgment, affect national security; and the yeas and nays on any question shall, at the request of one-fifth of the Members present, be entered in the Journal.

    Section 8. (1) Unless otherwise provided by law, each Member of the National Assembly shall receive an annual salary of sixty thousand pesos. The Speaker of the National Assembly shall receive an annual salary of seventy-five thousand pesos. No increase in salary shall take effect until after the expiration of the term of the Members of the National Assembly approving such increase.

    (2) The records and books of accounts of the National Assembly shall be open to the public in accordance with law, and such books shall be audited by the Commission on Audit which shall publish annually the itemized expenditures for each Member.

    Section 9. A Member of the National Assembly shall, in all offenses punishable by not more than six years imprisonment, be privileged from arrest during his attendance at its sessions, and in going to and returning from the same; but the National Assembly shall surrender the Member involved to the custody of the law within twenty-four hours after its adjournment for a recess or its next session, otherwise such privilege shall cease upon its failure to do so. A Member shall not be questioned or held liable in any other place for any speech or debate in the Assembly or in any committee thereof.

    Section 10. A Member of the National Assembly shall not hold any other office or employment in the government, or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations during his tenure except that of Prime Minister or Member of the Cabinet. Neither shall he be appointed to any civil office which may have been created or the emoluments thereof increased while he was a Member of the National Assembly.

    Section 11. No Member of the National Assembly shall appear as counsel before any court inferior to a court with appellate jurisdiction, before any court in any civil case wherein the government, or any subdivision, agency, or instrumentality thereof is the adverse party, or before any administrative body. Neither shall he, directly or indirectly, be interested financially in any contract with, or in any franchise or special privilege granted by, the government, or any subdivision, agency, or instrumentality thereof, including any government-owned or controlled corporation, during his term of office. He shall not intervene in any matter before any office of the government for his pecuniary benefit.

    Section 12. (1) There shall be a question hour at least once a month or as often as the rules of the National Assembly may provide, which shall be included in its agenda, during which the Prime Minister or any Minister may be required to appear and answer questions and interpellations by Members of the National Assembly. Written questions shall be submitted to the Speaker at least three days before a scheduled question hour. Interpellations shall not be limited to the written questions, but may cover matters related thereto. The agenda shall specify the subjects of the question hour. When the security of the State so requires and the Prime Minister so states in writing, the question hour shall be conducted in executive session.

    (2) The National Assembly or any of its committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure. The rights of persons appearing in such inquiries shall be respected.

    Section 13. (1) The National Assembly may withdraw its confidence from the Prime Minister only by electing a successor by a majority vote of all its Members. No motion for the election of such successor shall be debated and voted upon until after the lapse of three days from the submittal of such motion.

    (2) The Prime Minister may advise the President in writing to dissolve the National Assembly whenever the need arises for a popular vote of confidence on fundamental issues, but not on a matter involving his own personal integrity. Whereupon, the President shall dissolve the National Assembly not earlier than five days nor later than ten days from his receipt of the advice, and call for an election on a date set by the Prime Minister which shall not be earlier than forty-five days nor later than sixty days from the date of such dissolution. However, no dissolution of the National Assembly shall take place within nine months immediately preceding a regular election or within nine months immediately following any general election.

    (3) In case of dissolution of the National Assembly or the termination of its regular term, the incumbent Prime Minister and the Cabinet shall continue to conduct the affairs of government until the new National Assembly is convoked and a Prime Minister is elected and has qualified.

    Sec. 14. (1) Except as otherwise provided in this Constitution, no treaty shall be valid and effective unless concurred in by a majority of all the Members of the National Assembly.

    (2) The National Assembly, by a vote of two-thirds of all its Members, shall have the sole power to declare the existence of a state of war.

    Section 15. In times of war or other national emergency, the National Assembly may by law authorize the Prime Minister, for a limited period and subject to such restrictions as it may prescribe, to exercise powers necessary and proper to carry out a declared national policy. Unless sooner withdrawn by resolution of the National Assembly, such powers shall cease upon its next adjournment.

    Section 16. (1) The Prime Minister shall submit to the National Assembly within thirty days from the opening of each regular session, as the basis of the general appropriations bill, a budget of receipts based on existing and proposed revenue measures, and of expenditures. The form, content, and manner of preparation of the budget shall be prescribed by law.

    (2) No provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particular appropriation therein. Any such provision or enactment shall be limited in its operation to the appropriation to which it relates.

    (3) The procedure in approving appropriations for the National Assembly shall strictly follow the procedure for approving appropriations for other departments and agencies.

    (4) A special appropriations bill shall specify the purpose for which it is intended, and shall be supported by funds actually available as certified to by the National Treasurer, or to be raised by a corresponding revenue proposal included therein.

    (5) No law shall be passed authorizing any transfer of appropriations; however, the Prime Minister, the Speaker, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from saving in other items of their respective appropriations.

    (6) If, by the end of the fiscal year, the National Assembly shall have failed to pass the general appropriations bill for the ensuing fiscal year, the general appropriations law for the preceding fiscal year shall be deemed re-enacted and shall remain in force and effect until the general appropriations bill is passed by the National Assembly.

    Section 17. (1) The rule of taxation shall be uniform and equitable. The National Assembly shall evolve a progressive system of taxation.

    (2) The National Assembly may by law authorize the Prime Minister to fix within specified limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts.

    (3) Charitable institutions, churches, personages or convents appurtenant thereto, mosques and non-profit cemeteries, and all lands, buildings and improvements actually, directly, and exclusively used for religious or charitable purposes shall be exempt from taxation.

    (4) No law granting any tax exemption shall be passed without the concurrence of a majority of all the Members of the National Assembly.

    Section 18. (1) No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.

    (2) No public money or property shall ever be appropriated, applied, paid, or used, directly or indirectly, for the use, benefit, or support of any sect, church, denomination, sectarian institution, or system of religion or for the use, benefit, or support of any priest, preacher, minister, or other religious teacher or dignitary as such, except when such priest, preacher, minister, or dignitary is assigned to the armed forces, or to any penal institution, or government orphanage or leprosarium.

    Section 19. (1) Every bill shall become a law unless it has passed three readings on separate days, and printed copies thereof in its final form have been distributed to the Members three days before its passage, except when the Prime Minister certifies to the necessity of its immediate enactment to meet a public calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken immediately thereafter, and the yeas and nays entered in the Journal.

    (2) No bill except those of local application shall be calendared without the prior recommendation of the Cabinet.

    Section 20. (1) Every bill passed by the national Assembly shall, before it becomes a law, be presented to the Prime Minister. If he approves the same he shall sign it; otherwise, he shall veto it and return the same with his objections to the National Assembly. The bill may be reconsidered by the National Assembly and, if approved by two-thirds of all its Members, shall become a law. The Prime Minister shall act on every bill passed by the National Assembly within thirty days after the date of receipt thereof; otherwise, it shall become a law as if he had signed it.

    (2) The Prime Minister shall have the power to veto any particular item or items in appropriation, revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object.
 

ARTICLE IX

The Prime Minister and the Cabinet

    Section 1. The Executive power shall be exercised by the Prime Minister with the assistance of the Cabinet. The Cabinet, headed by the Prime Minister, shall consist of the heads of ministries as provided by law. The Prime Minister shall be the head of the government.

    Section 2. The Prime Minister and the cabinet shall be responsible to the National Assembly for the program of government and shall determine the guidelines of national policy.

    Section 3. The Prime Minister shall be elected by a majority of all the Members of the National Assembly from among themselves.

    Section 4. The Prime Minister shall appoint the members of the Cabinet who shall be the heads of ministries at least a majority of whom shall come from the National Assembly. Members of the Cabinet may be removed at the discretion of the Prime Minister.

    Section 5. (1) The Prime Minister shall appoint the Deputy Prime Minister from among the Members of the National Assembly. The Deputy Prime Minister shall head a ministry and shall perform such other functions as may be assigned to him by the Prime Minister.

    (2) The Prime Minister shall also appoint the Deputy Ministers who shall perform such functions as may be assigned to them by law or by the respective heads of ministries.

    Section 6. The Prime Ministers and the Members of the Cabinet, on assuming office, shall take the following oath or affirmation : 

"I do solemnly swear (or affirm) that I will faithfully and conscientiously fulfill my duties as (name of position) of the Philippines, preserve and defend its Constitution, execute its laws, do justice to every man and consecrate myself to the service of the Nation. So help me God."

(In case of affirmation, the last sentence will be omitted)

    Section 7. The salaries and emoluments of the Prime Minister and the Members of the Cabinet shall be fixed by law which shall not be increased or decreased during their tenure of office. Until otherwise provided by law, the Prime Minister shall receive the same salary as that of the President.

    Section 8. The Prime Minister and the Members of the cabinet shall be subject to the provisions of sections ten and eleven of Article Eight hereof and may not appear as counsel before any court or administrative body, or participate in the management of any business, or practice any profession.

    Section 9. The Prime Minister or any Member of the Cabinet may resign for any cause without vacating his seat in the National Assembly.

    Section 10. The Prime Minister shall, at the beginning of each regular session of the National Assembly, and from time to time thereafter, present the program of government and recommend for the consideration of the National Assembly such measures as he may deem necessary and proper.

    Section 11. The Prime Minister shall have control of all ministries.

    Section 12. The Prime Minister shall be commander-in-chief of all armed forces of the Philippines, and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion, insurrection, or rebellion. In case of invasion, or rebellion, or imminent danger thereof when the public safety requires, it he may suspend the privilege of the writ of habeas corpus, or place the Philippines or any part thereof under martial law.

    Section 13. The Prime Minister shall appoint the heads of bureaus and offices, the officers of the armed forces of the Philippines from the rank of brigadier general or commodore, and all other officers of the Government whose appointments are not herein otherwise provided for, and those whom he may be authorized by law to appoint. However, the National Assembly may by law vest in members of the cabinet, courts, heads of agencies, commissions, and boards the power to appoint inferior officers in their respective offices.

    Section 14. The Prime Minister may, except in cases of impeachment grant reprieves, commutations, and pardons, remit fines and forfeitures after final conviction, and with the concurrence of the National Assembly, grant amnesty.

    Section 15. The Prime Minister may contract and guarantee foreign and domestic loans on behalf of the Republic of the Philippines, subject to such limitations as may be provided by law.

    Section 16. All powers vested in the President of the Philippines under nineteen hundred and thirty-five Constitution and the laws of the land which are not herein provided for or conferred upon any official shall be deemed, and are hereby, vested in the Prime Minister, unless the National Assembly provides otherwise. 

ARTICLE X

The Judiciary

    Section 1. The Judicial power shall be vested in one Supreme Court and in such inferior courts as may be established by law. The Batasang Pambansa shall have the power to define, prescribe and apportion the jurisdiction of the various courts, but may not deprive the Supreme Court of its jurisdiction over cases enumerated in Section five thereof.

    Section 2. (1) The Supreme Court shall be composed of a Chief Justice and fourteen Associate Justices. It may sit en banc or in two divisions.

    (2) All cases involving the constitutionality of a treaty, executive agreement, or law shall be heard and decided by the Supreme Court en banc, and no treaty, executive agreement, or law may be declared unconstitutional without the concurrence of at least ten Members. All other cases, which under its rules are required to be heard en banc, shall be decided with the concurrence of at least eight Members.

    (3) Cases heard by a division shall be decided with the concurrence of at least five Members, but if such required number is not obtained, the case shall be decided en banc: Provided, that no doctrine or principle of law laid down by the Court in a decision rendered en banc or in a division may be modified or reversed except by the Court sitting en banc.

    Section 3. (1) No person shall be appointed Member of the Supreme Court unless he is a natural born citizen of the Philippines, at least forty years of age, and has for ten years or more been a judge of a court of record or engaged in the practice of law in the Philippines.

    (2) The Batasang Pambansa shall prescribe the qualifications of judges of inferior courts, but no person may be appointed judge thereof unless he is a natural-born citizen of the Philippines and a member of the Philippine Bar.

    Section 4. The Members of the Supreme Court and judges of inferior courts shall be appointed by the President.

    Section 5. The Supreme Court shall have the following powers: 

(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

(2) Review and revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of court may provide, final judgments and decrees of inferior courts in:
 

(a) All cases in which the constitutionality or validity of any treaty, executive agreement, law, ordinance, or executive order or regulation is in question.

(b) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty imposed in relation thereto.

(c) All cases in which the jurisdiction of any inferior court is in issue.

(d) All criminal cases in which the penalty imposed is death or life imprisonment.

(e) All cases in which only an error or question of law is involved.

(3) Assign temporarily judges of inferior courts to other stations as public interest may require. Such temporary assignment shall not last longer than six months without the consent of the judge concerned.

(4) Order a change of venue or place of trial to avoid a miscarriage of justice.

(5) Promulgate rules concerning pleading, practice, and procedure in all courts, the admission to the practice of law, and the integration of the bar, which, however, may be repealed, altered or supplemented by the Batasang Pambansa. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights.

(6) Appoint its officials and employees in accordance with the Civil Service Law.

    Section 6. The Supreme Court shall have administrative supervision over all courts and the personnel thereof.

    Section 7. The Members of the Supreme Court and judges of inferior courts shall hold office during good behavior until they reach the age of seventy years or become incapacitated to discharge the duties of their office. The Supreme Court shall have the power to discipline judges of inferior courts and, by a vote of at least eight Members, order their dismissal.

    Section 8. The conclusions of the Supreme Court in any case submitted to it for decision en banc or in division shall be reached in consultation before the case is assigned to a Member for the writing of opinion of the Court. Any Member dissenting from a decision shall state the reasons for his dissent. The same requirement shall be observed by all inferior collegiate courts.

    Section 9. Every decision of a court of record shall clearly and distinctly state the facts and the law on which it is based. The Rules of Court shall govern the promulgation of minute resolutions.

    Section 10. The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of judges of inferior courts shall be fixed by law, which shall not be decreased during their continuance in office. Until the Batasang Pambansa shall provide otherwise, the Chief Justice shall receive an annual salary of seventy-five thousand pesos, and each Associate Justice, sixty thousand pesos.

    Section 11. (1) Upon the effectivity of this Constitution, the maximum period within which a case or matter shall be decided or resolved from the date of its submission, shall be eighteen months for the Supreme Court, unless reduced by the Supreme Court, twelve months for all inferior collegiate courts, and three months for all other inferior courts.

    (2) With respect to the Supreme Court and other collegiate appellate courts, when the applicable maximum period shall have lapsed without the rendition of the corresponding decision or resolution, because the necessary vote cannot be had, the judgment, order, or resolution appealed from shall be deemed affirmed except in those cases where a qualified majority is required and in appeals from judgments of conviction in criminal cases, and in original special civil actions and proceedings for habeas corpus, the petition in such cases shall be deemed dismissed, and a certification to this effect signed by the Chief Magistrate of the court shall be issued and a copy thereof attached to the record of the case.

    Section 12. The Supreme Court shall, within thirty days from the opening of each regular session of the Batasang Pambansa, submit to the President, the Prime Minister, and the Batasang Pambansa an annual report on the operations and activities of the Judiciary. 

ARTICLE XI

Local Government

    Section 1. The territorial and political subdivisions of the Philippines are the provinces, cities, municipalities, and barrios.

    Section 2. The Batasang Pambansa shall enact a local government code which may not be thereafter amended except by a majority vote of all its Members, defining a more responsive and accountable local government structure with an effective system of recall, allocating among the different local government units their powers, responsibilities, and resources, and providing for the qualifications, election and removal, term, salaries, powers, functions, and duties of local officials, and all other matters relating to the organization and operation of the local units. However, any change in the existing form of local government shall not take effect until ratified by a majority of the votes cast in a plebiscite called for the purpose.

    Section 3. No province, city, municipality, or barrio may be created, divided, merged, abolished, or its boundary substantially altered except in accordance with the criteria established in the local government code, and subject to the approval by a majority of the votes cast in a plebiscite in the unit or units affected.

    Section 4. (1) Provinces with respect to component cities and municipalities with respect to component barrios, shall ensure that the acts of their component units are within the scope of their assigned powers and functions. Highly urbanized cities, as determined by standards established in the local government code shall be independent of the province.

    (2) Local government units may group themselves, or consolidate or coordinate their efforts, services, and resources for purposes commonly beneficial to them.

    Section 5. Each local government unit shall have the power to create its own sources of revenue and to levy taxes, subject to limitations as may be provided by law. 

ARTICLE XII

The Constitutional Commissions

A. Common Provisions

    Section 1. The Constitutional Commissions shall be the Civil Service Commission, the Commission on Elections, and the Commission on Audit.

    Section 2. Unless otherwise provided by law, the Chairman and each Commissioner of a Constitutional Commission shall receive an annual salary of sixty thousand pesos, and fifty thousand pesos, respectively, which shall not be decreased during their continuance in office.

    Section 3. No Member of the Constitutional Commission shall, during his tenure in office, engage in the practice of any profession or in the management of any business, or be financially interested directly or indirectly in any contract with, or in any franchise or privilege granted by, the government, or any subdivision, agency, or instrumentality, thereof, including government- owned or controlled corporations.

    Section 4. The Constitutional Commissions shall appoint their officials and employees in accordance with the Civil Service Law. 

B. The Civil Service Commission

    Section 1. (1) The Civil Service embraces every branch, agency, subdivision, and instrumentality of the government, including every government- owned or controlled corporation. It shall be administered by an independent Civil Service Commission composed of a Chairman and two Commissioners who shall be natural-born citizens of the Philippines, and at the time of their appointment, are at least thirty-five years of age and holders of a college degree, and must not have been candidates for any elective position in the election immediately preceding their appointment. The Chairman and the Commissioners shall be appointed by the Prime Minister for a term of seven years without reappointment. Of the Commissioners first appointed, one shall hold office for seven years, another for five years, and the third for three years. Appointment to any vacancy shall be only for the unexpired portion of the term of the predecessor.

    (2) The Commissioner shall, subject to such limitations as may be provided by law, established a career service and adopt measures to promote morale, efficiency, and integrity in the Civil Service.

    Section 2. Appointments in the Civil Service, except as to those which are policy-determining, primarily confidential, or highly technical in nature, shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination.

    Section 3. No officer or employee in the Civil Service shall be suspended or dismissed except for cause provided by law.

    Section 4. (1) No elective official shall be eligible for appointment to any office or position during his term of office.

    (2) No candidate who lost an election shall be eligible for appointment or reappointment to any office in the government, or in any government-owned or controlled corporation, within one year following such election.

    Section 5. No officer or employee in the Civil Service, including members of the armed forces, shall engage directly or indirectly in any partisan political activity or take part in any election, except to vote.

    Section 6. The National Assembly shall provide for the standardization of compensation of government officials and employees, including those in government-owned and controlled corporations, taking into account the nature of the responsibilities pertaining to, and the qualifications required for, the positions concerned. 

C. The Commission on Elections

    Section 1. (1) There shall be an independent Commission on Elections composed of a Chairman and eight Commissioners who shall be natural-born citizens of the Philippines and, at the time of their appointment, at least thirty-five years of age and holders of college degree. However, a majority thereof, including the Chairman, shall be Members of the Philippine Bar who have been engaged in the practice of law for at least ten years.

    (2) The Chairman and the Commissioners shall be appointed by the Prime Minister for a term of seven years without reappointment. Of the Commissioners first appointed, three shall hold office for seven years, three for five years, and the last three for three years. Appointments to any vacancy shall be only for the unexpired portion of the term of the predecessor.

    Section 2. The Commission on Elections shall have the following powers and functions: 

(1) Enforce and administer all laws relative to the conduct of elections.

(2) Be the sole judge of all contests relating to the elections, returns, and qualifications of all Members of the National Assembly and elective provincial and city officials. provincial and city officials.

(3) Decide, save those involving the right to vote, administrative questions affecting elections, including the determination of the number and location of polling places, the appointment of election officials and inspectors, and the registration of voters.

(4) Deputize, with the consent or at the instance of the Prime Minister, law enforcement agencies and instrumentalities of the Government, including the Armed Forces of the Philippines, for the purpose of ensuring free, orderly, and honest elections.

(5) Register and accredit political parties subject to the provisions of Section Eight hereof.

(6) Recommend to the National Assembly effective measures to minimize election expenses and prohibit all forms of election frauds and malpractices, political opportunism, guest or nuisance candidacy, or other similar acts.

(7) Submit to the President, Prime Minister, and the National Assembly a report on the conduct and manner of each election.

(8) Perform such other functions as may be provided by law.

    Section 3. The Commission on Elections may sit en banc or in three divisions. All election cases may be heard and decided by divisions, except contests involving Members of the National Assembly, which shall be heard and decided en banc. Unless otherwise provided by law, all election cases shall be decided within ninety days from the date of their submission for decision.

    Section 4. The Commission may recommend to the Prime Minister the removal of, or any other disciplinary action against, any officer or employee it has deputized, for violation or disregard of, or disobedience to its decision, order, or directive.

    Section 5. The enjoyment or utilization of all franchises or permits for the operation of transportation and other public utilities, media of communication, all grants, special privileges, or concessions granted by the government, or any subdivision, agency or instrumentality thereof, including any government-owned or controlled corporation, may be supervised or regulated by the Commission during the election period for the purpose of ensuring free, orderly, and honest elections.

    Section 6. Unless otherwise fixed by the Commission in special cases, the election period shall commence ninety days before the day of election and shall end thirty days thereafter.

    Section 7. No pardon, parole, or suspension of sentence for violation of the law or rules and regulations concerning elections be granted without the recommendation of the Commission.

    Section 8. A political party shall be entitled to accreditation by the Commission if, in the immediately preceding election, such party has obtained at least the third highest number of votes cast in the constituency to which it seeks accreditation. No religious sect shall be registered as a political party and no political party which seeks to achieve its goals through violence or subversion shall be entitled to accreditation.

    Section 9. (1) Bona fide candidates for any public office shall be free from any form of harassment and discrimination.

    (2) No party or candidate shall have membership in the registration board, board of election inspectors, board of canvassers, or other similar bodies.

    Section 10. No elective public officer may change his political party affiliation during his term of office and no candidate for any elective public office may change his political party affiliation within six months immediately preceding or following an election.

    Section 11. Any decision, order, or ruling of the Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from his receipt of a copy thereof. 

D. Commission on Audit

    Section 1. (1) There shall be an independent Commission on Audit composed of a Chairman and two Commissioners who shall be natural-born citizens of the Philippines and, at the time of their appointment, at least forty years of age and certified public accountants or members of the Philippine Bar for at least ten years.

    (2) The Chairman and the Commissioners shall be appointed by the Prime Minister for a term of seven years without reappointment. Of the Commissioners first appointed, one shall hold office for seven years, another for five years, and the third for three years. Appointment to any vacancy shall be only for the unexpired portion of the term of the predecessor.

    Section 2. The Commission on Audit shall have the following powers and functions:

(1) Examine, audit, and settle, in accordance with law and regulations, all accounts pertaining to the revenues and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned and controlled corporations; keep the general accounts of the government and, for such period as may be provided by law, preserve the vouchers pertaining thereto; and promulgate accounting and auditing rules and regulations including those for the prevention of irregular, unnecessary, excessive, or extravagant expenditures or use of funds and property.

(2) Decide any case brought before it within sixty days from the date of its submission for resolution. Unless otherwise provided by law, any decision, order, or ruling of the Commission may be brought to the Supreme Court on certiorari by the aggrieved party within days from his receipt of a copy thereof.

(3) Submit to the President, the Prime Minister, and the National Assembly, within the time fixed by law, an annual financial report of the government, its subdivisions, agencies, and instrumentalities, including government-owned and controlled corporations, and recommend measures necessary to improve their efficiency and effectiveness. It shall submit such other reports as may be required by law.

(4) Perform such other duties and functions as may be prescribed by law.

ARTICLE XIII

Accountability of Public Officers

    Section 1. Public office is a public trust. Public officers and employees shall serve with the highest degree of responsibility, integrity, loyalty, and efficiency, and shall remain accountable to the people.

    Section 2. The President, the Justices of the Supreme Court, and the Members of the Constitutional Commissions shall be removed from office on impeachment for, and conviction of, culpable violation of the Constitution, treason, bribery, other high crimes, or graft and corruption.

    Section 3. The National Assembly shall have the exclusive power to initiate, try, decide all cases of impeachment. Upon the filing of a verified complaint, the National Assembly may initiate impeachment by a vote of at least one-fifth of all its Members. No official shall be convicted without the concurrence of at least two-thirds of all the members thereof. When the National Assembly sits in impeachment cases, its Members shall be on oath or affirmation.

    Section 4. Judgment in cases of impeachment shall be limited to removal from office and disqualification to hold any office of honor, trust, or profit under the Republic of the Philippines, but the party convicted shall nevertheless be liable and subject to prosecution, trial, and punishment, in accordance with law.

    Section 5. The National Assembly shall create a special court, to be known as Sandiganbayan, which shall have jurisdiction over criminal and civil cases involving graft and corrupt practices and such other offenses committed by public officers and employees, including those in government-owned or controlled corporations, in relation to their office as may be determined by law.

    Section 6. The National Assembly shall create an office of the Ombudsman, to be known as Tanodbayan, which shall receive and investigate complaints relative to public office, including those in government-owned or controlled corporations, make appropriate recommendations, and in case of failure of justice as defined by law, file and prosecute the corresponding criminal, civil, or administrative case before the proper court or body. 

ARTICLE XIV

The National Economy and the Patrimony of the Nation

    Section 1. The National Assembly shall establish a National Economic and Development Authority, to be headed by the Prime Minister, which shall recommend to the National Assembly, after consultation with the private sector, local government units, and other appropriate public agencies, continuing, coordinated, and fully integrated social and economic plans and programs.

    Section 2. The State shall regulate or prohibit private monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.

    Section 3. The National Assembly shall, upon recommendation of the National Economic and Development Authority, reserve to citizens of the Philippines or to corporations or associations wholly owned by such citizens, certain traditional areas of investments when the national interest so dictates.

    Section 4. The National Assembly shall not, except by general law, provide for the formation, organization, or regulation of private corporations, unless such corporations are owned or controlled by the government or any subdivision or instrumentality thereof.

    Section 5. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines at least sixty per centum of the capital of which is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period then fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the National Assembly when the public interest so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in the capital thereof.

    Section 6. The State may, in the interest of the national welfare or 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.

    Section 7. In times of national emergency when the public interest so requires, the State may temporarily take over or direct the operation of any privately owned public utility or business affected with public interest.

    Section 8. All lands of public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State. With the exception of agricultural, industrial or commercial, residential, or resettlement lands of the public domain, natural resources shall not be alienated, and no license, concession, or lease for the exploration, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than development of water power, in which cases, beneficial use may by the measure and the limit of the grant.

    Section 9. The disposition, exploration, development, exploitation, or utilization of any of the natural resources of the Philippines shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital which is owned by such citizens. The National Assembly, in the national interest, may allow such citizens, corporations or associations to enter into service contracts for financial, technical, management, or other forms of assistance with any foreign person or entity for the exploration, or utilization of any of the natural resources. Existing valid and binding service contracts for financial, technical, management, or other forms of assistance are hereby recognized as such.

    Section 10. Lands of the public domain are classified into agricultural, industrial, or commercial, residential, resettlement, mineral, timber or forest, and grazing lands, and such other classes as may be provided by law.

    Section 11. The National Assembly taking into account conservation, ecological, and developmental requirements of the natural resources shall determine by law the size of lands of the public domain which may be developed, held or acquired by, or leased to, any qualified individual, corporation or association, and the conditions therefor. No private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area; nor may any citizen hold such lands by lease in excess of five hundred hectares or acquire by purchase or homestead in excess of twenty-four hectares. No private corporation or association may hold by lease, concession, license, or permit timber or forest lands and other timber or forest resources in excess of one hundred thousand hectares; however, such area may be increased by the National Assembly upon recommendation of the National Economic and Development Authority.

    Section 12. The State shall formulate and implement an agrarian reform program aimed at emancipating the tenant from the bondage of the soil and achieving the goals enunciated in this Constitution.

    Section 13. The National Assembly may authorize, upon payment of just compensation, the expropriation of public lands to be subdivided into small lots and conveyed at cost to deserving citizens.

    Section 14. Save in cases of hereditary succession, no private land shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.

    Section 15. Any provision of paragraph one, Section 14, Article VIII and of this Article notwithstanding, the Prime Minister may enter into international treaties or agreement as the national welfare and interest may require. 

ARTICLE XV

General Provisions

    Section 1. The flag of the Philippines shall be red, white, and blue, with a sun and three stars, as consecrated and honored by the people and recognized by law.

    Section 2. The Interim National Assembly may by law adopt a new name for the country, a national anthem, and a national seal, which shall all be truly reflective and symbolic of ideas, history, and traditions of the people. Thereafter the national name, anthem, and seal so adopted shall not be subject to change except by constitutional amendment.

    Section 3. (1) This Constitution shall be officially promulgated in English and in Pilipino, and translated into each dialect spoken by over fifty thousand people, and into Spanish and Arabic. In case of conflict, the English text shall prevail.

    (2) The National Assembly shall take steps towards the development and formal adoption of a common national language to be known as Filipino.

    (3) Until otherwise provided by law, English and Pilipino shall be the official languages.

    Section 4. All public officers and employees and members of the armed forces shall take an oath to support and defend the Constitution.

    Section 5. No elective or appointive public officer or employee shall receive additional or double compensation unless specifically authorized by law, nor accept, without the consent of the National Assembly, any present, emolument, office or title of any kind from any foreign state.

    Section 6. No salary or any form of emolument of any public officer or employee, including constitutional officers, shall be exempt from payment of income tax.

    Section 7. (1) The ownership and management of mass media shall be limited to citizens of the Philippines or corporations or associations wholly owned and managed by such citizens.

    (2) The governing body of every entity engaged in commercial telecommunications shall i all cases be controlled by citizens of the Philippines.

    Section 8. (1) All educational institutions shall be under the supervision of and subject to regulation by the State. The State shall establish and maintain a complete, adequate, and integrated system of education relevant to goals of national development.

    (2) All institutions of higher learning shall enjoy academic freedom.

    (3) The study of the Constitution shall be part of the curricula in all schools.

    (4) All educational institutions shall aim to inculcate love of country, teach the duties of citizenship, and develop moral character, personal discipline, and scientific, technological, and vocational efficiency.

    (5) The State shall maintain a system of free public elementary education and, in areas where finances permit, establish and maintain a system of free public education at least up to the secondary level.

    (6) The State shall provide citizenship and vocational training to adult citizens and out-of-school youth, and create and maintain scholarships for poor and deserving students.

    (7) Educational institutions, other than those established by religious orders, mission boards, and charitable organizations, shall be owned solely by citizens of the Philippines, or corporations or associations sixty per centum of the capita;l of which is owned by such citizens. The control and administration of educational institutions shall be vested in citizens of the Philippines. No education institution shall be established exclusively for aliens, and no group of aliens shall comprise more than one-third of the enrollment of any school. The provisions of this subsection shall not apply to schools established for foreign diplomatic personnel and their dependents and, unless otherwise provided by law, for other foreign temporary resident.

    (8) At the option expressed in writing by the parents or guardians, and without cost to them and the government, religion shall be taught to their children or wards in public elementary and high schools as may be provided by law.

    Section 9. (1) The State shall promote scientific research and invention. The advancement of science and technology shall have priority in the national development.

    (2) Filipino culture shall be preserved and developed for national identity. Arts and letters shall be under the patronage of the State.

   (3) The exclusive right to inventions, writings, and artistic creations shall be secured to investors, authors and artists for a limited period. Scholarships, grants-in-aid, or other forms of incentives shall be provided for specially gifted children.

    Section 10. It shall be the responsibility of the State to achieve and maintain population levels most conducive to the national welfare.

    Section 11. The State shall consider the customs, traditions, beliefs, and interests of national cultural communities in the formulation and implementation of State policies.

    Section 12. The State shall establish and maintain an integrated national police force whose organization, administration, and operation, shall be provided by law.

    Section 13. (1) The armed forces of the Philippines shall include a citizen army composed of all able-bodied citizens of the Philippines who shall undergo military training as may be provided by law. It shall keep a regular force necessary for the security of the State.

    (2) The citizen army shall have a corps of trained officers and men in active duty status as may be necessary to train, service, and keep it in reasonable preparedness at all times.

    Section 14. The National Assembly shall establish a central monetary authority which shall provide policy direction in the areas of money, banking, and credit to achieve national economic objectives. It shall have supervisory authority over the operation of banks and exercise such regulatory authority as may be provided by law over the operations of finance companies and other institutions performing similar functions. Until the National Assembly shall otherwise provide, the Central Bank of the Philippines, operating under existing laws, shall function as the central monetary authority.

    Section 15. The separation of the church and the State shall be inviolable.

    Section 16. The State may not be sued without its consent. 

ARTICLE XVI

Amendments

    Section 1. (1) Any amendment to, or revision of, this Constitution may be proposed by the National Assembly upon a vote of three-fourths of all its Members, or by a constitutional convention.

    (2) The National Assembly may, by a vote of two-thirds of all its Members, call a constitutional convention, or by a majority vote of all its Members, submit the question of calling such a convention to the electorate in an election.

    Section 2. Any amendment to or revision of this Constitution shall be valid when ratified by a majority of the votes cast in the plebiscite which shall be held not later than three months after the approval of such amendment or revision. 

ARTICLE XVII

Transitory Provisions

    Section 1. There shall be an Interim National Assembly which shall exist immediately upon the ratification of this Constitution and shall continue until the Members of the regular National Assembly shall have been elected and shall have assumed office following an election called for the purpose by the Interim National Assembly. Except as otherwise provided in this Constitution, the Interim National Assembly shall have the same powers and its Members shall have the same functions, responsibilities, rights, privileges, and disqualifications as the regular National Assembly and the Members thereof.

    Section 2. The Members of the Interim National Assembly shall be the incumbent President and Vice-President of the Philippines, those who served as President of the nineteen hundred and seventy-one Constitutional Convention, those Members of the Senate and the House of Representatives who shall express in writing to the Commission on Elections within thirty days after the ratification of this Constitution their option to serve therein, and those Delegates to the nineteen hundred and seventy-one Constitutional Convention who have opted to serve therein by voting affirmatively for this Article. They may take their oath of office before any officer authorized to administer oaths and who qualify thereto, after the ratification of this Constitution.

    Section 3. (1) The incumbent President of the Philippines shall initially convene the Interim National Assembly and shall preside over its sessions until the interim Speaker shall have been elected. He shall continue to exercise his powers and prerogatives under the nineteen hundred and thirty-five Constitution and the powers vested in the President and the Prime Minister under this Constitution until he calls upon the Interim National Assembly to elect the interim President and interim Prime Minister who shall then exercise their respective powers vested by this Constitution.

    (2) All proclamations, orders, decrees, instructions, and acts promulgated, issued, or done by the incumbent President shall be part of the law of the land, and shall remain valid, legal, binding, and effective even after the lifting of the Martial Law or the ratification of this Constitution unless modified, revoked, or superseded by subsequent proclamations, orders, decrees, instructions, or unless expressly or implicitly modified or repealed by the regular National Assembly.

    Section 4. The interim Prime Minister and his Cabinet shall exercise all the powers and functions, and discharge the responsibilities of the regular Prime Minister and his Cabinet, and shall be subject to the same disqualifications provided in this Constitution.

    Section 5. The Interim National Assembly shall give priority to measures for the orderly transition from the Presidential to the Parliamentary system, the reorganization of the government, the eradication of graft and corruption, programs for the effective maintenance of peace and order, the implementation of declared agrarian reforms, the standardization of compensation of government employees, and such other measures as shall bridge the gap between the rich and the poor.

    Section 6. The Interim National Assembly shall reapportion the Assembly seats in accordance with Article Eight, Section two, of this Constitution.

    Section 7. All existing laws not inconsistent with this Constitution shall remain operative until amended, modified, or repealed by the National Assembly.

    Section 8. All courts existing at the time of the ratification of this Constitution shall continue and exercise their jurisdiction, until otherwise provided by law in accordance with this Constitution, and all cases pending in said courts shall be held, tried, and determined under the laws then in force. The provisions of the existing Rules of Court not inconsistent with this Constitution shall remain operative unless amended, modified, or repealed by the Supreme Court or the National Assembly.

    Section 9. All officials and employees in the existing government of the Republic of the Philippines shall continue in office until otherwise provided by law or decreed by the incumbent President of the Philippines, but all officials whose appointments are by this Constitution vested in the Prime Minister shall vacate their respective offices upon the appointment and qualification of their successors.

    Section 10. The incumbent Members of the Judiciary may continue in office until they reach the age of seventy years, unless sooner replaced in accordance with the preceding section hereof.

    Section 11. The rights and privileges granted to citizens of the United States or to corporations or associations owned or controlled by such citizens under the ordinance appended to the nineteen hundred and thirty-five Constitution shall automatically terminate on the third day of July, nineteen hundred and seventy-four. Titles to private lands acquired by such persons before such date shall be valid as against other private persons only.

    Section 12. All treaties, executive agreements, and contracts entered into by the government or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations are hereby recognized as legal, valid and binding. When the national interest so requires, the incumbent President of the Republic or the interim Prime Minister may review all contracts, concessions, permits, or other forms of privileges for the exploration, exploitation, development, or utilization of natural resources entered into, granted, issued, or acquired before the ratification of this Constitution.

    Section 13. Any public officer or employee separated from the service as a result of the reorganization effected under this Constitution shall, if entitled under the laws then in force, receive the retirement and other benefits accruing thereunder.

    Section 14. All records, equipment, buildings, facilities, and other properties of any office or body abolished or reorganized under this Constitution shall be transferred to the office or body to which its powers, functions, and responsibilities substantially pertain.

    Section 15. The Interim National Assembly, upon special call by the interim Prime Minister may, by a majority vote of all its Members propose amendments to this Constitution. Such amendment shall take effect when ratified in accordance with Article Sixteen hereof.

    Section 16. This Constitution shall take effect immediately upon its ratification by a majority of the votes cast in a plebiscite called for the purpose and, except as herein provided, shall supersede the Constitution of nineteen hundred and thirty-five and all amendments thereto. 

[The 1973 Constitution was ratified on January 17, 1973 in accordance with Presidential Proclamation No. 1102 issued by President Ferdinand E. Marcos]

Source: http://www.chanrobles.com/1973constitutionofthephilippines.htm