By Ba Ipe
DISCUSSIONS of the Marcos dictatorship would be incomplete without mention of Cesar Virata, who served as its prime minister, chief financial officer, and economic guru. Virata raised state funds by borrowing heavily from official, bilateral, and commercial sources and charted the economic policies of the Marcos dictatorship, which relied heavily on foreign investments to create an export-oriented Philippine economy.
Virata reputedly facilitated the cultivation of the Philippines as a laboratory of the IMF-WB neoliberal classicist economic doctrines to create an economic miracle and convert the Philippines into a export oriented powerhouse like Taiwan, South Korea, and Singapore. The much ballyhooed economic experiment, nevertheless, had failed dismally as the Philippine had never developed its export sector into competitive levels.
Virata built his network of technocrats within the Marcos dictatorship and created his own indispensability and importance to the extent that without him and his faction, the dictatorship would collapse. In fact, the Marcos dictatorship depended on Virata and his network because of their unparalleled ability to raise the funds for the dictatorship.
But Virata, who was often viewed as apolitical and less ambitious, knew his politics well. He set himself different from the other factions within the dictatorship– the faction of politicians led by Imelda Marcos, or the other half of the maligned “conjugal dictatorship,” and the military faction led by Gen. Fabian Ver, the chief of staff of the Armed Forces of the Philippines.
His unquestioned integrity, professionalism and dedication for work at the height of the Marcos dictatorship was noticed by the foreign financial institutions, endearing Virata to them. The International Monetary (IMF), World Bank, bilateral financial institutions, and commercial banks trusted him and his faction. In brief, Virata cultivated an enviable role as the vital cog in the Marcos dictatorship.
According to Teresa Encarnacion-Tadem of the University of the Philippines’s Department of Political Science, the technocratic influence in the country had centered in Virata, as Ferdinand Marcos used his links with the United States and the IMF-WB networks to gains ODA funds to prop up his regime. Marcos invariably exploited Virata’s close links to social, academic, US, and business community networks to gain a semblance of acceptability for his martial law regime, which was but a dictatorship, or a one-man rule.
Virata and Marcos shared the same belief in the economic doctrines to attract foreign investments to build an export-oriented economy. According to Tadem, Marcos put Virata in charged to obtain IMF and World Bank loans, enjoining Virata’s network to Marcos as the “principal political hub.”
But Virata contended with the networks of Imelda and Marcos “chief cronies” like businessman Eduardo “Danding” Cojuangco Jr., who controlled the coconut industry, and then Ambassador Roberto Benedicto, who had control of the sugar industry. “While IMF and World Bank support offered Virata some leverage, his network could not control Imelda Marcos’s profligacy or the cronies’ sugar and coconut monopolies.” Tadem said. Citing Virata’s own assessment, Tadem said his network was weakened considerably when Marcos’s health failed during an economic crisis in 1981 and after opposition leader Benigno Aquino Jr. ’s assassination in 1983.
In those crisis situations, Imelda’s faction and AFP chief of staff Gen. Fabian Ver’s military network took power amid the rise of a nationwide anti-dictatorship movement. The US switch of support from Marcos to then opposition leader Corazon Aquino, Ninoy Aquino’s widow, sealed the demise of Virata’s network until the fateful EDSA People Power uprising in 1986. It was a downhill slide for Virata during those fateful years after 1981.
Virata’ education
Born in Cavite, Cesar Virata has turned 92 last December 12. He is a grandnephew of Gen. Emilio Aguinaldo, the president of the stillborn First Philippine Republic, or the “Malolos Republic,” and a nephew of Leonidas Virata, who served as trade and industry secretary and chair of the Development Bank of the Philippines (DBP). Virata earned an engineering degree at the University of the Philippines and went to the U.S., where he earned an MBA at the Wharton School of the University of Pennsylvania. He is married to stage actress Joy Gamboa. They have three children.
Since his father was a mathematics teacher there, Virata got an education at UP, where he taught at its College of Business Administration. Henceforth, it was an uphill climb for Virata in his professional career. Virata gained access to the university network of academics, enabling him to link to another important network of US government fellowships. He had a fellowship from the Mutual Security Administration, a forerunner of the US Agency for International Development (USAID), which sent him to pursue a master’s degree in business administration, majoring in industrial management at the Wharton School. This opened up another vital network for Virata, which was the US academe, according to Tadem.
When he returned, Virata added another important network to his social, academic, and US networks. He was recruited into SGV, which brought him into the business community network, according to Tadem. He worked full time in SGV until he was called back to teach at UP in December, 1965. He went on to become a professor and a dean at the UP College of Business Administration. Virata then combined two networks that complemented each other, academe and the business community, Tadem said. His experience at SGV allowed him to go to different nations, enabling him to observe their development models. He saw how Japan and Taiwan have become export powerhouses in the 1960s, posting unprecedented economic growths. He had become their staunchest believer of their developmental models, according to Tadem.
Virata in government service
It was Virata’s academic network that ushered his recruitment in public service. Rafael Salas, vice president of then UP president Carlos P. Romulo, recruited Virata in December, 1965 to join the finance transition committee and the agriculture transition committee after Marcos defeated incumbent Diosdado Macapagal in a bitterly fought presidential elections. Soon, Virata became a member of the Presidential Economic Staff (PES), which gave inputs for Marcos.
At that point, Salas was reputed to have become a point man, or a major influence on Marcos when it came to the recruitment of technocrats, or persons, who had special education and skills when it came to governance and public service. Virata initially worked at the PES, but when Salas left the Marcos government to join the United Nations to become a key official, Virata became an undersecretary of the Department of Finance, who handled liaison with members of Congress to work for the enactment of the pivotal Investment Incentive Act of 1967.
His liaison works in Congress pushed Virata to learn the
nationalists’ bloc in both government and private sectors, which believed in
economic protectionism to propel economic growth and development. The bloc, led
by Hilarion Henares, former chair of the National Economic Council, predecessor
of the National Economic and Development Authority (NEDA), rejected the entry
of foreign investments and batted for the policy of import substitution to
propel the country’s industrialization. Virata had clashes with Henares and
other nationalist economist like Alejandro Lichauco. Besides, he had to deal
with senators who adhered to economic protectionism – Jose Diokno, Lorenzo Tanada, and Gil Puyat, all members of the
Nacionalista Party, the same party of Marcos. But Virata had his way as he was
non-confrontational. Marcos helped him to weather the economic storm.
Virata in martial law years
Virata claimed Marcos did not consult him or any of those technocrats in his group about the declaration of martial law on September 21, 1972, a decision that led him to extend his stay in power beyond the constitutionally mandated end of his term on December 30, 1973. Marcos did not see fit to ask their inputs, as he chose to keep his political cards closed to his chest and limited the consultation process to the so-called “Rolex 12,” composed of military generals and civilian components in the defense sphere. They had such name, as Marcos allegedly gave them each a Rolex watch for their role in the planning and implementation of the martial law regime. This was not true but Marcos gave them watches of another brand.
The Rolex 12 group was composed of Juan Ponce Enrile, Marcos defense secretary; Gen. Romeo Espino, AFP chief of staff; Gen. Fabian Ver, chief of National Intelligence Security Authority (NISA); Eduardo Cojuangco Jr., governor of Tarlac; Fidel Ramos, chief of the Philippine Constabulary; Gen. Rafael Zagala, chief of the Philippine Army. Others were Gen. Jose Rancudo, chief of the Philippine Air Force; Gen. Hilario Ruiz; flag-in-command of the Philippine Navy; Brig. Gen. Tomas Diaz, vice chief of the Philippine Constabulary; Brig. Gen. Romeo Gatan, PC chief in Rizal; Brig. Gen. Alfredo Montoya, chief of the PC Metrocom; and Brig. Gen. Ignacio Paz, chief of the Intelligence Services of the AFP (ISAPF).
Had Marcos consulted Virata and his network of technocrats, they would have opposed the martial law declaration because they felt Marcos got what he wanted from Congress, as the technocrats aptly argued the Executive Department’s position in economic policies. According to Tadem in her interview of Virata for her study on the technocrats’ roles during the martial law years, Virata was quoted as saying: “Nobody among us said we wanted martial law... I had not heard any of my colleagues say that they wanted martial law.” Nevertheless, Tadem asserted, the U.S. supported it and it gave the go-signal to the IMF and World Bank to continue giving loans to the Philippines through Virata.
Virata and Marcos dictatorship
Virata and his faction of technocrats had thrived in the Marcos-led authoritarian environment, where they pushed and pursued without much obstacles state policies on trade and investment liberalization in an essentially free market regime. With Marcos unilaterally getting support from the factions of politicians led by Imelda Marcos, top military officials led by Gen. Ver, and technocrats headed by Virata, and the ensuing dissolution of Congress, the IMF and World Bank freely pushed their economic doctrines and gave enormous loans to the Marcos dictatorship. This led to the decline of the nationalist bloc in Congress, as they were eased out of power.
Virata and his faction did not raise howls about the political maneuvers by Marcos to convert his martial law regime to an eventual dictatorship, or one-man rule. They got what he wanted and Marcos did not raise qualms about the economic policies they pushed him to sign, adopt, and pursue. Virata and his faction conveniently used the lawmaking powers of Marcos, as many proposed economic measures that earlier got stalled in Congress became economic realities by mere signature of Marcos.
The amendments of the Tariff Code was a case. By amending the Code during the early months of the martial law regime, the Philippines joined the 1974 Tokyo Round of negotiations for a new global trade order. Marcos, through Virata and the technocrats’ initiatives, pursued throughout the 1970s economic policies that ensured the entry of foreign investors into the country. These included the establishment of export economic zones, where relocating foreign investors were ensured infrastructure support, cheaper rates to operate here, among others.
It was a nagging question why Marcos had kept Virata and the network of technocrats in his dictatorship. For Marcos, Virata and the technocrats served him a major purpose. Marcos used them as his leverage in dealing with the other major factions in the coalition that comprised and propped up his dictatorship. They were most useful, as Marcos pitted these factions against each others. Marcos kept them like prized possessions.
Virata and other technocrats
As an astute political manipulator, Marcos was never happy with a single faction in his martial law coalition. Virata’e network of technocrats had the likes of Gerardo Sicat, Vicente Paterno, Placido Mapa Jr., Manuel Laya, and eventually Jaime Laya. Since they controlled the major levers of power in the dictatorship, Marcos had his other groups of technocrats, notably the groups of Roberto Ongpin and Geronimo Velasco.
Hence, it was not always a bed of roses for Virata and his ilk. Marcos was politically adroit to keep him away from Ongpin and Velasco. In 1979, Marcos launched the 11 Major Industrial Projects (MIPs), which had a combined cost of $6 billion. It was Marcos’s own version of nationalist industrialization. Virata earlier opposed the MIPs because he and his network felt they were not subjected to sufficient vetting. But Marcos proceeded mainly on Ongpin’s support and push, who felt that his dictatorship would be perceived positively by the launching and implementation of these projects.
The projects included the projects on integrated steel mill, copper smelter, expanded cement industry, heavy machinery, diesel engine plant, phosphate fertilizer plant, alcogas, coconut chemical plant, integrated pulp and paper mill, and petrochemical. As later events showed, none of these projects were successfully completed and launched. They were among the major sources of Marcos ill-gotten wealth, which were placed at between $5- $10 billion by political leaders who ruled the country after the fateful 1986 EDSA People Power Revolution that toppled the Marcos dictatorship.
Virata and Marcos cronies
There is sufficient basis to accuse Marcos of crony capitalism. His dictatorship nurtured cronies, whom Virata and his network could hardly contain. Marcos became increasingly dependent on his stable of friends to develop a vibrant Philippine economy. By creating agricultural monopolies, he thought the country would take off. But as later events proved, his cronies did not help him to push the national economy.
The coconut monopoly under crony Eduardo Cojuangco, Jr. and the sugar monopoly under then Ambassador Roberto Benedicto hardly lifted the Philippine economy. They only created other problems, which Marcos himself did not anticipate. Virata could hardly take moves to lessen the crony capitalism despite pressures from the credit institutions and the US.
Neither Virata could contain the profligacy of Imelda Marcos and the wildness of the alleged technocrats under Imelda’s wings like Conrado Benitez Jr., nicknamed “Jolly,” younger brother Benjamin “Cocoy” Romualdez, and Roman Cruz Jr., GSIS president. These guys provided inputs to enable Imelda to spread her wings in the dictatorship.
Virata and his network of technocrats definitely exerted enormous influence to the Marcos dictatorship. But it did not succeed Marcos from his world class corruption. Neither did they stop the cronies from their raid of the national economy. It did not stop Imelda from her damaging profligacy. Virata and his allies of technocrities provided the veneer of honest and rightful leadership, but they still failed and could in any way influence the fateful people’s revolution to dismantled the Marcos dictatorship.
