THE ILL FATED 11 MAJOR INDUSTRIAL PROJECTS UNDER MARCOS

By Philip M. Lustre Jr.

(Author's Note: I wrote this piece three years ago, but I have to put on my blog for posterity reasons. This is to prevent efforts to revise history and present the Marcos dictatorship as the best thing that had ever happened in our history. Historical revisionism is a course of action for a possible Marcos comeback. No way ...)

This is an answer to a friend, who asked if it was true that the Americans talked to Marcos that they did not want the Philippines to industrialize. I have no personal knowledge about his indication that Marcos was urged by no less than President Ronald Reagan to forget industrial development.

Re his question about industrial development, I do not know specifically if that incident happened. It must be one of the numerous stories of unknown authorship and sources that have kept on circulating for ages. It would be speculative on my part to give credence to that story, but I know that it has basis.

The Americans never wanted us to industrialize because our country has been a perfect source of natural resources. US policy on the Philippines has been based on keeping us underdeveloped. Nationalist writers like Lichauco, Almario, Constantino, among others had written extensively about this issue.

I could understand their contempt for the US policy that has kept us underdeveloped. Even US political economists like Hutchcroft, Broad, Chomsky, et. al. have indeed sustained that perception. I would not be surprised if that incident had happened although it was the first time that I have heard of it.

Re the Eleven Major Industrial Projects, or MIPs, I happen to know details about them. As an upstart in journalism, I covered and wrote stories about them. I have some intimate knowledge because I saw their evolution.

The MIPs were the brainchild of Bobby Ongpin, the former SGV top honcho, who correctly saw that the Marcos martial law government did not have a showcase for industrial development.

At that time, technocracy was vogue as educated men and women with varying technical expertise were recruited to bring in their knowledge and technical expertise to the bureaucracy. Hence, the word “technocracy” was coined.

Marcos knew he could not rely solely on politicians and bureaucrats, who hardly had the technical expertise on many issues, particularly the national economy. Although the country was under martial law, Marcos also felt he could not rely on military men, who had the guns but not the brains and technical expertise either.

Hence, the technocrats became a major segment of the martial law coalition composed of politicians, moneyed cronies and businessmen, bureaucrats, military people. They became a class within the ruling class.

Marcos had an eye for recruiting technocrats in government. He started with the likes of Rafael Salas, uncle Leonides Virata and nephew Cesar Virata, Gerardo Sicat, Jaime Laya, among others, and soon brought Bobby Ongpin in government for the purpose of developing a showcase program for industrial development.

The problem with Bobby Ongpin was that he started big, absolutely big programs. The 11 MIPs required tons of money. Marcos knew Ongpin, an investment banker by training, could bring in the funds to push them.

Ongpin convinced Marcos he could get the necessary financing for those projects. He sweet talked Marcos that foreign project proponents could provide suppliers' credit for these projects and the government did not necessarily shell out funding for them. Ongpin had an ace, so to speak. 

Moreover, foreign countries could provide official development assistance (ODA) for these projects, he told Marcos.

The MIPs included copper smelting plant, aluminium smelting plant, “rationalization” (integration is the right word) of the coconut industry, “rationalization” of the cement industry, upstream and downstream steel mill, and several others.

I remember watching Marcos sometime in the 1980s in our Nivico black and white TV set delivering a speech before the UP College of Law Alumni Association to bare this program. It was a classic speech for a landmark program, if you would ask me.

Apparently conscious of what critics would say, Marcos immediately answered the essentials of that program, particularly funding support. He criticized the country’s timidity on the issue of foreign debt, stressing that the lack of audacity to go to foreign creditors was one of the major reasons for our underdevelopment.

Hence, the country would seek foreign debts to push through with those grandiose, ambitious 11 MIPs program.

At that juncture, the US and European banking systems were awash with petrodollars coming from Middle East countries, which earned a windfall from the three oil price shocks that put the world economy on a spin.

Marcos took advantage of the available petrodollars, borrowing heavily not from multilateral and bilateral lending institutions that provide official development assistance (ODA) at concessional rates and longer repayment period.

Marcos borrowed from commercial banks, which extended loans at commercial rates. Hence, they were more expensive with shorter repayment period. This was about this time that the nation’s foreign debts rose sharply.

Nationalists somewhat rejoiced by what they had heard from Marcos. The dictator finally saw the light; he was finally following what other dictators did. Park Chung Hee led South Korea’s industrial development; the same with Lee Kuan Yew of Singapore, and the father and son Chiang in Taiwan.

It would have been fine with Marcos had he pursued a genuine industrial development program because this is what the country requires for so long. But he had a hidden agenda, a sinister scheme.

Marcos gave enormous power and leeway to Ongpin to pursue those MIPs. Ongpin was probably the most powerful man after Imelda.

Not even Virata or Juan Ponce Enrile could dictate on Marcos, but Bobby Ongpin knew how to get what he wanted from Marcos.

But this was not without rhyme or reason. Marcos empowered his cronies to pursue those projects, allowing them to earn fat commissions from them. Marcos had crony Roberto Benedicto, who subsequently dealt with Marubeni, a big Japanese trading firm, or sogo shosha, which functioned as a major supplier for those projects.

Marcos had Danding Cojuangco, who did not spearhead the rationalization of the coconut industry, but led the creation of a coconut monopoly.

The documents, which Marcos left in Malacanang after he and his family fled during the waning hours of the EDSA Revolution, provided the clues and paper trail that Marcos enjoyed pecuniary interest on those projects.

We have a term for that in Tagalog: “pinagkitaan.”

Marcos used the technocratic skills of Bobby Ongpin to earn shiploads of money, which would not run dry even if he had lived like a king for 20 lifetimes. Our inability to pursue the MIPs explains our continued underdevelopment.

Pity our nation...