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 You are in: Under Secretary for Public Diplomacy and Public Affairs > Bureau of Public Affairs > Bureau of Public Affairs: Office of the Historian > Foreign Relations of the United States > Johnson Administration > Volume XXVI
Foreign Relations 1964-1968, Volume XXVI, Indonesia; Malaysia-Singapore; Philippines  
Released by the Office of the Historian


Documents 319-340

319. Telegram From the Embassy in the Philippines to the Department of State/1/

Manila, December 14, 1965, 1259Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 15-1 PHIL. Secret; Priority. Repeated to Saigon, CINCPAC for POLAD, CHJUSMAGPHIL, CINCPACREPPHIL, 13th AF CAB.

1161. Ref Embtel 1159./2/ Subj Dec 13 meeting with Marcos--various subjects.

/2/In telegram 1159 from Manila, December 14, Blair reported on other aspects and topic of his meeting with Marcos. (Ibid.)

1. Phil aid to Vietnam. I said to Marcos this meeting of course not time talk in detail about Phil aid to SVN, but I did want to convey him utter seriousness of my government's hope that Phils as free-world power and country whose interests vitally at stake would increase assistance to Vietnam. He would undoubtedly want to consult with Phil Congressional leaders about sending specific units or elements and mention these might be premature. My govt hoped however would be possible make statement in inaugural address about seriousness Communist aggression Vietnam and his intention do what is necessary and possible that Communism not prevail there. I said US Govt and people would be most favorably impressed if he could do this. Marcos interjected to say he certainly would. I then said US Govt continues hope that Phils will be able to provide at least engineer task force with integral security element, indicating another occasion would be proper time talk about possible specific forces.

Marcos told me he had intended take up question of additional Phil assistance to Vietnam with NP leaders as urgent matter, but problem of Vice-Presidency in Dec 14th session Congress to proclaim winners/3/ and other problems had intruded and he had not been able to do so yet. Accordingly it had to wait but he intended to get at it in next week or two.

/3/The separate election for Vice President, also held on November 9, was much closer than the Presidential contest. Nationalist candidate Fernando Lopez defeated Liberal candidate Gerardo Roxas by 3,531,550 to 3,504,826 votes.

2. R&R. I said I wanted mention this because of much exaggerated and erroneous speculation in press. I then reviewed rest program at level of about 136 servicemen from Vietnam we have in mind noting no hotels to be leased and that delay in starting is due to completion arrangements on immigration and aircraft clearance procedures. I pointed out Manila only one of several R&R sites in Far East. Told him no decision yet about separate R&R program for Seventh Fleet involving perhaps 200 Navy personnel at any given time. I said of course if US strength in Vietnam increases might well be increase in 136 for Phils but not "thousands" to which columnists now referring.

This is only subj on which Marcos took notes. He wanted know, before I explained, what is holding up initiation of the program, and seemed surprised at small number we propose bring here from Vietnam. He indicated he had no objections to R&R program and made disparaging remarks about press coverage of matter and about Phil press in general.

3. Nuclear-powered ships. I told Marcos I wanted mention arrangements I had with Pres Macapagal regarding visits these ships to Subic Bay. Emphasizing tremendous importance of these ships to free-world deterrent power in Far East, and noting visits not frequent, I told him of arrangement under which I informed only Pres Macapagal or SecDef in advance of arrival. I said if he agreed I propose continue this arrangement, keeping information oral rather than written. I said if he wanted I would give the info also to FonSec and SecDef to be closely held, but not to members of staff those departments.

Marcos said he would like me to continue present arrangement and perhaps give it also to SecDef, mentioning at this point that he had not yet decided who would be his Defense Secretary.

[1 paragraph (5 lines of source text) not declassified]

In closing I invited him visit Enterprise next time it in, perhaps Jan, and he said he hoped very much visit ship but Jan might be too soon. Marcos indicated in course this discussion he fully comprehended the significance of these ships for free-world defense in Far East area.

4. Base-land relinquishments. I informed Marcos we seem to have reached agreement with DFA on relinquishments agreement and that since we have negotiated it over many months with Macapagal administration we would be prepared, if present administration wants do so, go ahead and finalize agreement.

Marcos nodded his assent and indicated he had no objection to our signing the agreement before his inauguration. (See septel for his comments to press bearing on this topic and subsequent message to me through Ben Romualdez that he had reconsidered and would like us to drag our feet on this.)/4/

/4/Not further identified.

5. Koreans at Clark Hospital. Referring to large Korean contingent in Vietnam, and US support of these forces including medical assistance, I told him some Koreans being evacuated to Korea through hospital at Clark. Said battle casualties sometimes arrive within hours after being wounded and under circumstances passport and visa formalities obviously not feasible, said knowing humanitarian instincts Phil people I was sure no objection to evacuating Koreans through Clark. I told him that to assist in translation and other matters, a Korean army medical officer is working at Clark Hospital with our people.

Marcos indicated he had no objection to this, but said firmly that he preferred we should not talk about the presence of the Koreans at Clark--that we should avoid any publicity on this.

6. Tour of US bases. Recognizing he would be extremely busy in next weeks, I said nevertheless our base commanders would be honored if he would visit the bases so that we could brief him about US military activities there. I suggested he might want to take along the FonSec and SecDef and perhaps chairmen of pertinent Congressional committees.

Marcos replied that he would like to do this but was not sure how soon it would be possible because of his busy schedule.

Blair

 

320. Telegram From the Executive Secretary of the National Security Council (Smith) to President Johnson in Texas/1/

Washington, December 31, 1965, 1526Z.

/1/Source: Johnson Library, National Security File, International Meetings and Travel File, Vice President's Trip, Far East, 12/27/65. Top Secret; Eyes Only. Also sent for information to Bill Moyers.

CAP 65968. Eyes only to President Johnson from Vice President Humphrey./2/ White House pass eyes only to Secretary Rusk. No distribution except eyes only Secretary Rusk. Interim report meetings Prime Minister Sato and President Marcos.

/2/Humphrey was attending Marcos' inauguration.

[Here follows an account of Vice President Humphrey's meeting with Japanese Prime Minister Sato.]

2. Philippines discussion/3/

/3/A memorandum of conversation of this meeting, apparently prepared by Valenti, is in the Johnson Library, Office of the President Files, Valenti, Jack, Memoranda of Conversation, Japan, Philippines, Taiwan, Korea, 12/65-1/66. According to this memorandum, the meeting took place in the Presidential Palace in Manila and lasted from 11:50 a.m. to 1 p.m. Humphrey's own brief summary of his discussion with Marcos is ibid., National Security File, Name File, Vice President, Vol. I.

Marcos' response on discussion additional commitments South Vietnam strongly encouraging. Providing US can help in equipping at least one engineering construction battalion plus supporting forces, Marcos virtually assured battalion and supporting forces could be sent. His primary interests are modernization of his armed forces, especially outfitting seven engineering construction battalions, plus using Filipino skilled labor pool for South Vietnam housing needs.

I assured Marcos our closest cooperation, and that if he had the will we would find the means. He said he has the will and that "we will place ourselves squarely in the fight against Communism." Believe intensive discussions can commence immediately to work out details. However, Marcos obviously has ticklish Parliamentary situation in getting authority for combatant forces to South Vietnam through Senate. He appears optimistic and will proceed to seek Congressional approval.

I had frank discussion with him regarding importance of maintenance of military equipment. His response was he has been appalled at previous administration's record in this respect and said any equipment will be maintained.

Marcos suggested Philippine housing program for Vietnam. I suggested US will be more interested when Phil more committed to struggle in South Vietnam. Pointed out that Korea had combat division in Viet and thereby had claim on US procurement opportunities. Marcos understood. Following meeting Marcos PressSec released statement indicating strong consideration being given by Marcos to troop commitment and his plans to take matter to Phil Congress.

Marcos is strong, confident and competent. Clearly a good bet as a reliable friend of the US and has potential to become strong leader in Asian world. He is responsive to plain friendly direct talk and I would encourage invitation to visit you latter part of 1966.

Ambassador Blair and I had very private discussion with Marcos and his FonMin concerning your special instructions regarding bombing, Rome and Warsaw.

During visit Manila have stressed importance of Asian friends speaking up on danger of Communist aggression to them. Held such discussions with FonMin Thanat of Thailand and Genl Pham Xuan Chieu of Vietnam's Armed Forces Council.

Will prepare more details these and subsequent discussions immediately upon return Washington. Summary of discussions in Taipeh and Seoul will be cabled immediately direct to you.

 

321. Telegram From the Department of State to the Embassy in the Philippines/1/

Washington, December 31, 1965, 3:29 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 27 VIET S. Secret; Exdis; Flash. Drafted in the White House, cleared by William Bundy, and approved by Read. Repeated to the White House.

1176. For the Vice President only from McGeorge Bundy. There are press reports here that you asked Marcos to "immediately" step up his country's aid to Vietnam./2/ It is very important that we avoid all appearances of pressure on Marcos during his inauguration and we hope that you can find a way of setting the press record straight before your departure. We assume Marcos himself was eager to join the statement on this subject which appeared after your meeting with him but it is essential here that there be no appearance of crude U.S. pressure now. Moreover what we hope for from Marcos may be substantially larger than the items discussed in your conversation with him and it is desired here that there be an open track for very serious talks later.

/2/In a conversation with McNamara on December 31 at 10:33 a.m., the President expressed concern about Humphrey's raising the issue of Philippine troops for Vietnam. (Johnson Library, Recordings and Transcripts, Recording of a telephone conversation between Johnson and McNamara, December 13, 1965, 10:33 a.m., Tape 6512.05, PNO 3)

You will know better than we what the exact form of any statement should be. My suggestion is that your farewell comments at the airport you might wish to make it clear that your purpose was to attend the inauguration, to explain U.S. policy of peace, and to ask for nothing, and that what you found is a friend who will make his own decisions as we make ours in the light of interests and purposes of his own people. We believe emphasis on peace would be helpful also to make clear that our trip is major element in President's far-flung effort to move in that direction./3/

/3/Humphrey cabled Johnson from Korea that Marcos had inserted the word "immediately" into the statement about Philippine intentions to associate more closely with the "Free World" in the region. Marcos' press secretary then gave the correspondents the impression that Marcos would ask for immediate Congressional approval for the Philippines' contingent. Humphrey stated that there was "no conceivable element of pressure" in his talk with Marcos, and both he and Marcos emphasized "our relentless search for, and devotion to peace." Humphrey promised that he would stress that fact again when providing background to U.S. correspondents traveling with him. (Telegram from Smith to the President, CAP 66008, undated; Johnson Library, National Security File, International Meetings and Travel File, Vice President's Trip, Far East, 12/27/65)

Rusk

 

322. Memorandum From the President's Special Assistant (Valenti) to President Johnson/1/

Washington, January 4, 1966.

/1/Source: Johnson Library, National Security File, International Travel and Meetings File, Vice President's Trip, Far East, 12/27/65. No classification marking. There is no indication on the memorandum that the President saw it, but Valenti wrote "Bundy" on the first page.

SUBJECT
Suggestions Emerging from trip to Japan, the Philippines, Taiwan and Korea/2/

/2/Valenti accompanied Vice President Humphrey on his Far East trip.

Suggestions

1. We need Asians to take the lead in Asian affairs. Best asset to US is strong Asian leader, who is our friend, who understands us, and is prepared to weld Asians together toward objectives that coincide with our aims.

Suggest we bet on Ferdinand Marcos of the Philippines as having good potential for this kind of tough, charismatic leadership.

2. Let Asians take up the burden we have been carrying--on the battlefield--and in the farm fields.

a. Equip two or more Korean divisions, and send them to Vietnam. They could easily take the place of 30-40,000 Americans.

The price we pay for this is cheap--for the equipping Koreans is at the ratio of 5-1 to 10-1 for the same equipment of the same number of Americans. Moreover, the Koreans are competent jungle fighters--and are ready to fight.

b. Through program grants to the Chinese on Formosa, let them carry to Africa and parts of Asia, the program we have been burdened with: --technical assistance in agriculture primarily. The cost of doing this through Chinese instead of Americans is, again, a ratio of 3 to 1 to 5 to 1. Moreover, the Chinese are competent agronomists--in the area of giving self-help to less developed countries, they can do the job at less cost and equal efficiency.

Explanations

1. Asians take the lead in Asian affairs.

--It makes sense to put our money on Asian leaders who have already built their base as a democratic leader, and not have to prop up either a dictator, or a chief of government who is on shaky domestic ground. Marcos is no puppet. In fact, he needs to be a little independent of us in order to make rational and credible his leadership.

--Some of the people in the Manila Embassy are skeptical--as well they should be. Macapagal came into office with the same glittering hopes only to dash them with the usual ineptness later.

--Marcos could be different. He's exceptionally bright (he set an all-time record for the bar exams); one of the most inspiring orators in Asia; and toughly realistic. I suspect he wants to be a great president, and is willing to do unpalatable things in order to achieve that greatness (i.e. stop smuggling and corruptness, as well as put his fiscal house in order).

--If we can work with him, and give him what help we can within reason, Marcos could become a rallying point in Asia.

--In any case, the problems of Asia must be solved by Asians, and Marcos has the gifts of brain and courage to do those things that need to be done, but which need an Asian cover to be done.

Note: Marcos invited me and Lloyd Hand through his brother-in-law, Ben Romualdez (who possibly will be the closest man to him, and the one to whom he will listen with more credibility than any other) to play golf with him on his first day in office. We teed off at 6:30 am!

He obviously wanted to let me know his regard for President Johnson; and to emphasize his aims of putting the Philippines in apple-pie order. He is a professional politician, with all the sure-footed instincts of a pro.

He mentioned he was going to re-organize the Army, establish the Constabulary (police force) as an independent arm (it is now part of the Defense Department); and try to bring fiscal order out of the wildly porous financial structure now existent. Without being sychophantic he made it clear he wanted to cooperate with U.S.

I recommend that we invite him to come to the States for an official visit sometime this year. Obviously he can't come right now, but sometime after June, he could be ready.

He never brought this up--but I find it persuasive that the President ought to size him up personally; take his measure so we can determine how and what we need to do to get leadership among non-communistic Asian nations.

[Here follows discussion of Korea, Taiwan, and Japan.]

 

323. National Intelligence Estimate/1/

NIE 56-66

Washington, February 17, 1966.

/1/Source: Department of State, INR/EAP Files: Lot 90 D 165, NIE 56-66. Secret; Controlled Dissem. A table of contents and a map are not printed. A note on the covering sheet indicates the estimate was prepared by the CIA and the intelligence organizations of the Departments of State and Defense and the NSA. The USIB concurred with it on February 17, with the exception of the FBI and AEC representatives who abstained on the grounds that the topic was outside their jurisdiction.

PROSPECTS FOR THE PHILIPPINES

The Problem

To estimate the prospects for the Philippines for the next two or three years.

Conclusions

A. Though its problems are not critical in the short term, the Philippines confronts many of the same underlying difficulties that beset other states of Southeast Asia--land hunger in the countryside; unemployment in the cities; and a grinding poverty for the overwhelming majority of the people. The situation is aggravated by widespread violence and lawlessness, and by corruption in government. (Paras. 1-12)

B. Hopes for change are now focussed on the incoming President Marcos, a capable and forceful man. Marcos seems aware of the country's problems, but it is not yet clear how effectively he will cope with them. If he fails to reduce economic discontent and to achieve greater honesty and efficiency in governmental affairs, public disillusionment is likely to grow and political stability could be seriously undermined. (Paras. 13-19)

C. Though lawlessness is pervasive, Communists do not constitute a major subversive threat to the Philippines, and are not likely to do so over the next few years. (Paras. 20-23)

D. Marcos is an anti-Communist and supports the US on most issues respecting the Communist world. He is also a strong nationalist and will seek greater equality for the Philippines in its dealings with the US, particularly on those issues involving US military bases and special US economic privileges. However, Marcos is unlikely to hamper effective US use of its bases so long as he is satisfied that such uses do not run counter to Philippine national interest. He will press the Congress to dispatch a proposed Philippine engineer contingent to South Vietnam and can probably gain its approval, though he may have some trouble in the Senate. (Paras. 24-32)

Discussion

I. Domestic Problems and Prospects

1. Introduction. The Republic of the Philippines has many problems, though few are as immediately critical as those facing other Southeast Asian states. There is no present external threat to its independence. There is no serious internal subversion or insurgency, and the authorities are sensitive to potential dangers of this sort. There is virtually no chance of an attempted coup; democratic elections are the accepted method of achieving political power. No major economic crisis is on the horizon. All of these assets are reinforced by feelings of military, political, and economic security derived from a "special relationship" with the US.

2. For all of its present advantages, however, the Philippines faces, in the long run, many of the same underlying difficulties and limitations that confront its less fortunate neighbors. The key problem is a deep and growing economic cleavage between upper and lower classes, and the failure of successive administrations to carry out programs adequate to remedy this situation. The situation is aggravated by the prevalence of widespread violence and lawlessness in the cities and in the countryside, and longstanding and pervasive corruption in government. Hopes for change are now focussed on Ferdinand Marcos, the newly-elected President. Should he fail to deal adequately with these problems during his four-year administration, Philippine political stability and democratic institutions could be seriously undermined.

3. Problems. Discontent among the peasants, who comprise almost two-thirds of the Philippine population, stems primarily from a feudalistic system of land tenure and unsatisfactory landlord-tenant relations. About 40 percent of the farmers in the Philippines--and a much higher proportion in the densely-settled central lowland of Luzon--are tenants, most of whom customarily pay at least one-half of their crop to wealthy absentee proprietors. The rapid rise in population over the past 60 years has led to increased tenancy and to a reduction in the size of the average owner-operated farm. The peasant lives only a little above a bare subsistence level, and his annual income has not increased over the past decade. The financial insecurity of both tenant and small-holder is aggravated by chronic indebtedness at high interest rates. The farm population is further handicapped by the persistence of one of the world's lowest levels of agricultural productivity; yields per acre of rice and corn, the principal crops, have not increased significantly over the past century.

4. In the urban areas, the major problem is unemployment. There are an estimated 750,000 unemployed and at least two million underemployed in the country's work force of 11.5 million. Each year an additional 375,000, including 25,000 college graduates, seek employment, normally exceeding the number of new jobs being created. In the cities, the pressure of a large unproductive manpower pool is manifested in low wages, poor working and living conditions, high crime rates, and other serious social problems. Among the educated unemployed, radical causes tend to flourish.

5. These problems have been intensified in recent years by a general upward trend in living costs and lags in wages which have widened earlier inequalities in the distribution of wealth. Although Philippine real national income per capita generally rises slightly each year, the gains tend to accrue to the wealthy, while among the rural and urban poor, real wages and living standards usually decline. In Manila, real wages for skilled and unskilled industrial workers have declined about 20 percent over the past decade, and the luxury consumption of the wealthy contrasts most markedly with the extreme poverty of the general population. Offsetting this picture to some extent is the steady rise of a middle class entrepreneurial group.

6. Philippine governments have been largely ineffective in efforts to ameliorate these basic problems. In the field of land reform, for example, a modest legislative start was made under President Magsaysay (1954-1957), but soon bogged down in administrative indifference. President Macapagal's land reform program, passed in 1963, was designed to abolish share tenancy in favor of lease-holds, to control agricultural rents, and to raise the wages of agricultural workers. The basic law itself is a good one. But the Congress has subsequently provided only very limited budgetary support for the program, landowners have impeded its implementation, and wage minimums have not been enforced by the government.

7. The Philippine political system does not lend itself to bold initiatives or sustained performance by the government in the fields of economic development and social welfare. There are two major parties--Nacionalistas and Liberals--and both are representative of the same conservative landed and commercial interests. Other elements of the population have few channels through which to influence the workings of the government. Third parties which occasionally emerge to espouse reform have so far lacked the grass-roots organization necessary to achieve electoral strength and a major voice in government.

8. Conservative forces in the Philippines, by tradition and interest, favor a very limited governmental role in economic affairs. In facing problems of economic development, succeeding administrations have adopted a relatively passive role, seeking to create a climate favorable to the growth of domestic--as opposed to foreign--private enterprise. Their concepts have not included major government investment in those items of infrastructure--transport, communications, electric power, water supply, and irrigation facilities--essential to increased agricultural and industrial output. Annual capital outlays by the government have not increased over the past five years, and whatever small direct contribution has been made to economic development has been largely dissipated in individual "pork-barrel" projects.

9. There are other built-in handicaps to any broad-gauge governmental attack on economic problems. Foremost is the insufficiency of government revenues because of a narrow tax base, poor tax administration, and wholesale evasion and smuggling. Smuggling costs the government an estimated $100 to $200 million annually in revenue. Government operations are also severely handicapped by a system of social values which accepts graft, corruption, and nepotism as normal in government. Most politicians and officials act mainly in the pursuit of financial benefits to themselves, their kinsmen, and their associates.

10. In consequence, the burden of economic improvement has fallen on private interests. Private domestic investment in manufacturing, stimulated by favorable foreign exchange and import controls, was the principal force behind the growth of the national economy during the 1950s when real output increased by an average of 6 percent annually. In recent years, growth has slowed to 4 to 5 percent annually, a pace that only narrowly exceeds the rate of population increase. This stands at about 3.5 percent, one of the world's highest.

11. Prospects for a return to earlier industrial growth rates are poor. Expansion in the 1950s focussed on production of consumer goods for the home market. The costs of the expansion were borne by raw material exporters, who were forced to exchange their hard currency earnings for overvalued pesos, and by domestic consumers paying higher prices. Exchange reforms in 1962 (whereby export earning could be converted into pesos at a free-market rate almost twice the earlier official rate) led to increased import costs for raw materials and capital goods and, indirectly, to a tightening of domestic credit to defend the value of the peso. Moreover, tightened domestic credit, which is still in effect, has come at a time when the most profitable industrial opportunities are in capital-intensive ventures requiring large initial outlays. The government contributes to the credit squeeze by financing its deficits through the same handful of public institutions that normally provide capital to the private sector. The resulting competition for loans has denied credit and expansion opportunities for many enterprises which got their start in a more protected atmosphere.

12. In agriculture, the picture is even less promising. The average peasant lacks the incentive, knowledge, and funds required to improve his crop yields. Landowners and others with enough capital to improve their land or open up new acreage have generally found real estate, moneylending, and other commercial ventures more profitable, though landowning families increasingly are channeling capital into productive industrial enterprises. Agriculture today provides one-third of Philippine national income, but only 6 to 7 percent of the Philippines' annual capital investment is devoted to it. Low crop yields and a rapidly increasing population have over the years forced the country into costly subsidies and imports of rice, the principal food staple.

13. Prospects. President Macapagal failed of re-election in November 1965 essentially because he had not brought about the improvements in living standards which he had led the voters to expect. President Marcos has recognized the necessity for prompt action to improve economic conditions. To assist industry, he proposes to ease credit arrangements, to crack down on smuggling of manufactured goods, particularly cigarettes and textiles, and to re-examine the tariff structure. At the same time, he advocates new incentives for foreign investment. He also proposes an extensive program of public works, including power and water supply facilities, and roads. He has established a task force to prepare the necessary legislation for the present session of Congress.

14. Marcos' proposals indicate that his will be the traditionally conservative approach to economic problems. The emphasis is on improvement within the constraints of existing revenues. There are only vague bows in the direction of tax reform, and he is pledged above all to balance the budget and defend the peso. He is relying on governmental "austerity" and greater bureaucratic efficiency and honesty to cut expenditures, and upon improved collection of taxes, particularly import duties, to increase national revenues. In these ways, Marcos hopes also to reduce the government's requirements for domestic credit so that private needs can more easily be met.

15. Marcos has expressed some interest in putting more teeth in the existing land reform code and in improving agricultural credit facilities. However, his immediate focus in the agricultural sector appears to be increased production of rice and corn. By reorganizing governmental agencies involved in stimulating the production and marketing of these commodities and by adopting more realistic pricing policies, he seeks to provide some new production incentives. There are also proposals to build irrigation facilities, tapping foreign sources of funds if possible.

16. Marcos' economic program will face the same opposition that has stymied earlier reform efforts. Marcos, however, has certain assets not available to Macapagal or even to the revered Magsaysay. One is his outstanding legislative experience; he has served in both houses of Congress and has held the powerful office of President of the Senate. Another asset is his connections in both major parties; until becoming the Nacionalista presidential candidate in 1964, he was a lifelong Liberal. His administration has gotten off to a promising start with the election of a Nacionalista as Senate President and a friendly Liberal as House Speaker. Finally, Marcos is considered to be extraordinarily effective in the government process--intelligent, self-confident, and forceful to the point of ruthlessness, yet a "team man" capable of accepting a useful compromise.

17. Nevertheless, Marcos will undertake his program with certain handicaps. His Nacionalista party does not presently hold a majority in either the Senate or the House of Representatives./2/ And even among Nacionalistas, many old-line politicians are not particularly enthusiastic about Marcos' proposals. To carry out his program, therefore, he must win over Liberal congressmen plus the reform-minded senators of the small Party for Philippine Progress (PPP). The traditional lack of party discipline makes it likely that at least some Liberals will defect "permanently" to the administration party and that many more will break ranks on specific issues. However, Liberal support is likely to be costly in terms of patronage and favors, and may even require certain legislative sacrifices by Marcos.

/2/The Senate consists of 12 Nacionalistas, 9 Liberals, 2 members of the Party for Philippine Progress (PPP), and 1 Independent. In the 104-member House of Representatives, the Liberals hold a majority of about 20 seats. [Footnote in the source text.]

18. It is probable that in 1966, in the first flush of his electoral victory, Marcos will succeed in getting important parts of his economic legislation through the Congress and in effecting major administrative reforms. Some proposals may be dropped by Marcos himself in political horse-trading, while others may fail to pass the Congress. Experience indicates that implementation of certain measures, even if passed, would remain in doubt. And even if reasonably successful in implementation, his programs are unlikely to do more over the next few years than halt the current economic slippage and provide a mild stimulus to agricultural and industrial production. In the longer run, achievement of greater honesty and efficiency in the government could have a much more profound impact on the nation. Vigorous efforts to galvanize the Congress and the discredited bureaucracy into effective action would help restore public faith in the democratic process. Success in carrying through present plans might also embolden the dynamic Marcos to attempt more far-reaching and difficult reforms, particularly those tax measures which would increase the funds available to the government for economic development.

19. On the other hand, if Marcos proves ineffective in gaining congressional approval for most of his economic program or in restraining venality in the bureaucracy, the public esteem which he now enjoys would rapidly evaporate. Reformist parties might succeed in deflecting some of the resulting discontent into legitimate political channels, but there would obviously be opportunities for groups with extremist solutions, including the Communists. The Philippines could probably continue in a condition of inefficiency and immorality in public life for several more years without political upheaval, provided that there are no unusual economic stresses. In the longer run, however, it is likely that far more comprehensive remedies than those so far suggested by Marcos, and a greater degree of direct government investment in the economy, will be necessary to satisfy the aspirations of the mass of Filipinos. Unless the major parties can adjust to these needs, other more radically inclined political parties or organizations are likely to emerge.

II. Internal Security

20. The government has had very little success in coping with widespread violence and lawlessness. There is a general disrespect for law and order, a strong tendency toward violence as a way of settling personal and political disputes, an easy availability of firearms, and inadequate and often dishonest local police and judiciary. Marcos has expressed an intention of reducing lawlessness, and a vigorous attack on these conditions might have some success in certain areas, e.g., Manila. In general, however, these conditions are too pervasive and deep-rooted to permit much improvement in the short term.

21. Despite this general lawlessness, there has been no major subversive threat to the integrity of the state since Magsaysay suppressed the Communist-led Huk rebellion about 10 years ago. However, the Philippine Communist Party (PKP) has managed to survive as a small, loosely-organized, underground movement. It emphasizes nonviolent subversive activities in Manila and other urban areas. There are probably fewer then 1,000 hard-core active Communists compared to about 10,000 in 1950. They have concentrated on infiltrating non-Communist organizations and setting up various front organizations, particularly among youth and students, and have had considerable success in capturing the upper echelons of several labor federations. Through the agency of sympathetic newspapers and journalists, they have supported and exploited ultra-nationalistic candidates and causes to assist their own anti-US objectives. Among the peasants of central Luzon, the Party has helped to organize some small left-wing peasant groups and is actively recruiting members. It is in contact too with the remnants of the Huk guerrilla force--the People's Liberation Army (HMB)--estimated at 150 active members plus 2,000 supporters concentrated in Pampanga Province, site of Clark Air Base. The HMB is now chiefly engaged in sporadic terrorism and banditry, including the murder of active opponents and informers and other acts designed to intimidate local authorities and the population.

22. The threat of subversion from Indonesia has become of less concern with the recent waning of Communist influence in Djakarta. Some 10,000-12,000 Indonesian migrants--legal and illegal--in the Mindanao-Sulu area provide a potential transmission belt for Djakarta-inspired subversion addressed especially to the Philippine Muslim (Moro) minority there. Until recently, more serious Indonesian influence was exerted through the embassy in Manila and the consulate in Davao, where agents of the Indonesian Government and the Indonesian Communist Party had established close contact with ultranationalist and leftist Philippine elements. Chinese Communist subversive activity among Filipinos is exceedingly meager at this time, but may increase with the slackening of Indonesian Communist efforts. Among the Philippines' 600,000 ethnic Chinese residents, the number of Communists has been estimated at anywhere from 200 to 2,000. Their primary objective is probably to influence the Chinese community against the Nationalist regime on Taiwan, but they are a potential source of funds for the PKP and a possible link between it and Peking.

23. Neither Chinese, Indonesian, or domestically-inspired Communists constitute a major subversive threat to the Philippines at this time nor are they likely to do so over the next few years. Their activities influence a very small though vocal element of Philippine society. Internal security forces are probably capable, despite the inroads of politics and corruption, of coping with the existing situation. Primary responsibility in this field rests with the Philippine Constabulary, a 16,000-man national police force operated as a component of the armed services. Local police forces are relatively ineffective. The Constabulary is handicapped by inadequate funds, poor training and equipment, low morale, and a widespread reputation for incompetence and corruption. Any significant acceleration in the growth of lawlessness would severely tax its capabilities. The mission of the 14,400-man Philippine Army and the smaller Air Force and Navy includes assistance to the Constabulary in maintaining internal security.

III. Foreign Relations

24. The US. Marcos is an anti-Communist and a firm supporter of the US on most issues respecting the Communist world. He is, however, a strong nationalist who has been publicly critical of the US when he believed that its actions conflicted with Philippine interest. On the other hand, he is less concerned than Macapagal with the Philippine image among other Afro-Asians and is unlikely to indulge in as many gestures to assert "independence" of the US.

25. Marcos has stated that the Philippine-US relationship would be strengthened by a revision of existing treaties in the direction of greater Philippine equality. In this connection, he will probably be more insistent than Macapagal on consultation concerning the US use of Philippine bases in support of the Vietnam war. He will base any such representations on the 1959 Bohlen-Serrano understanding./3/ (Most Philippine politicians consider this understanding to be binding although it has not yet been formalized.) Marcos is also likely to press for settlement of other irritants connected with the operation of US bases in the Philippines. Under Macapagal, settlement was reached on such important base issues as land relinquishments, criminal jurisdiction, and military cooperation. Remaining base-related problems include: entry of nuclear-powered ships and related nuclear issues; entry of US and third-country personnel through the bases; labor disputes; and the applicability of Philippine law on the bases. We believe that such problems are unlikely to hamper effective US use of the bases so long as Marcos is satisfied that the proposed uses do not run counter to Philippine national interest.

/3/The memorandum of understanding signed by Ambassador Bohlen and Foreign Minister Sorreno on October 12, 1959, provided for prior consultation concerning operational use of bases for "military combat operations." For a summary of those and related negotiations, see Foreign Relations, 1958-1960, vol. XV, pp. 946-957.

26. Marcos supports US policy in Vietnam and has given qualified endorsement to Macapagal's commitment to provide a contingent of about 2,000 Philippine combat engineers to South Vietnam. In general, the Philippine Congress and public also support the US role in Vietnam, and there is widespread approval for the economic and technical assistance which Manila has provided to the Saigon government. However, there is significant opposition to any direct Philippine military participation in the war. There is relatively little feeling that Philippine security interests may be bound up with those of Saigon. There is also a desire to avoid any costly involvement in what appears to be an inconclusive struggle. In the last months of the previous administration, Senate opposition to an appropriation to support the dispatch of the engineer contingent was strong enough to persuade Macapagal not to force the issue. Since the election, congressional opposition may have diminished. Marcos can probably gain congressional approval for the proposed expeditionary force, though he may have some trouble in the Senate. In pressing the Congress for action, Marcos would be motivated more by the need to maintain credit with the US than by any conviction that Philippine troops are needed in Vietnam.

27. The course of the war in Vietnam will also have an impact on US relations with the Philippines. Any conspicuous failure of US policy in handling the Communist threat there would shake the faith of Philippine leaders in US determination to oppose Communist China. US advocacy of a neutralist solution in Laos in 1962 had a depressing effect on Philippine confidence which lasted for some time. On the other hand, the success of US policies in Vietnam would reaffirm Philippine faith in the alliance.

28. Marcos will also be called upon to adopt positions on a variety of bilateral economic issues. While he is not sympathetic to the rabid form of economic nationalism which held sway during the Nacionalista administration of President Garcia (1957-1961), Marcos will almost certainly not attempt to act counter to prevailing Philippine sentiment for reduction of foreign--including US--economic influence. The main areas of commercial tension involve differences over the so-called "parity" issue and over the Retail Trade Nationalization Law.

29. "Parity," as expressed in the Philippine Constitution and reaffirmed in the Laurel-Langley agreement, gives US investors certain rights equal to those of Philippine nationals. In early 1965, a US spokesman stated that the US does not intend to seek renewal beyond 1974 of parity rights for enterprises exploiting natural resources or operating public utilities. Nevertheless, for Philippine nationalists, "Laurel-Langley" remains a symbol of US economic imperialism and, as frictions arise in its interpretation, Marcos will probably find it expedient to uphold the antiparity position.

30. A more immediate issue between the Philippines and the US arises from the application of the Retail Trade Nationalization Law. This law, originally aimed at Chinese, requires all enterprises engaged in retail trade to be "wholly-owned" by Filipinos and/or US citizens. In recent years, Philippine courts have interpreted "retail trade" as encompassing normal wholesale operations, and "wholly-owned" to mean 100 percent owned by Filipinos or Americans. Few US corporations with publicly held stock can meet this qualification. Some 90 US firms with investments totalling over $250 million are involved and several cases are pending. In light of his strong belief that increased foreign investment is required, Marcos may offer some temporary administrative relief to permit US firms to adjust their operations. However, he will probably not attempt to negate judicial decisions or Congressional enactments.

31. Another potential source of friction is the recurrent issue of Philippine veterans' claims on the US. In addition, it can be anticipated that further substantial Philippine requests for military assistance will be advanced.

32. Philippine nationalism will continue to grow, further removing the nation from the tutelage of the US. So far, this nationalism has been relatively responsible and has helped to create a somewhat distinctive Philippine foreign policy while maintaining friendship, cooperation, and military and economic links with the US. However, the pace of progress toward full independence has not satisfied all Filipinos. A chauvinistic strain among some elements in government, the press, labor, and students and intellectuals completely rejects American influence and favors economic nationalism and neutralism. In time, as the generation of Filipinos which experienced World War II passes and is replaced by younger men lacking emotional attachments to the US, such sentiments will grow. The majority of present-day Filipinos, however, do not want to discard the security afforded by the traditional association with the US. It is unlikely, therefore, that Philippine nationalism will assume a strident anti-American tone, at least so long as the US continues to consider Philippine sensitivities in bilateral dealings.

33. Other Countries. Marcos is personally hostile toward Sukarno and is less likely than Macapagal to seek close relations with Indonesia. Should an anti-Communist leadership emerge in Djakarta, Marcos would probably welcome friendly relations with it, however, it is doubtful that he would seek to revive the Maphilindo grouping--the informal linkage of Malaysia, the Philippines, and Indonesia--which Indonesia would probably dominate.

34. Marcos sees Philippine regional interests as best served by closer ties with Malaysia and Thailand, its likeminded partners in the now dormant Association of Southeast Asia (ASA). He is likely to establish full diplomatic relations with Malaysia soon and with Singapore shortly thereafter. In part, Marcos' rapprochement with Malaysia will be designed to gain Malaysian cooperation in suppressing smuggling operations between Sabah and the southern Philippines. It is unlikely that Marcos will drop the Philippine claim to parts of Sabah, but he will be more reasonable in seeking a settlement. Marcos will probably attempt to revive ASA by means of frequent political, economic, and cultural exchanges. SEATO will continue to receive his support, especially since a Filipino general is presently serving as Secretary-General of the organization.

35. The Philippines under Marcos will continue its policy of refusing to establish political relations with Communist China, the USSR, or other Communist countries. Pressures for change on this issue are unlikely to be great. However, the search for new markets for agricultural products may lead the Philippines to establish economic relations with the USSR and at least some Eastern European states within a year or two. Cordial relations with South Korea, Australia, and New Zealand will continue. Marcos strongly supports Nationalist China and will make efforts to remove minor irritants in relations with that government. Relations with Japan are also likely to improve.

 

324. Telegram From the Embassy in the Philippines to the Department of State/1/

Manila, February 22, 1966, 1124Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL PHIL-US. Secret; Immediate; Exdis-VP. Repeated to Seoul for Lloyd Hand and passed to the White House. Humphrey and Harriman were in the Philippines to explain the results of the Honolulu Conference on Vietnam.

1761. VP-Marcos meeting.

1. Following is uncleared summary report of meeting.

2. In substantive portion of meeting Vice President was accompanied by Governor Harriman, Ambassador Blair, Ambassador Hand, Mr. Valenti and Messrs. Connell, Thomson, Rielly and DCM Service. President Marcos had with him FonSec Ramos and FonUnderSec Collantes. Most of time two military aides, Brig. General Menzi and Captain Palafox, were in attendance and three civilian aides sat in back of room.

3. In summary, 90-minute discussion commenced with expression by VP of warm appreciation courage and initiative shown by President Marcos in presenting Vietnam bill, reiteration of feelings of respect and deep friendship of President Johnson and American people for the Filipino people and description of Honolulu Conference (HC), its objectives and accomplishments. HC described as turning point marking commencement of new historical period in our Vietnam experience. US and its allies adhere to limited objectives Vietnam "halting aggression and giving SVN people opportunity for own choice."

4. In addition to fighting war against aggressor, SVN people and Government and their allies are determining how to rebuild devastated areas in the wake of murder and pillage by VC and North Vietnamese forces. This is the second part of major decisions taken at HC: social and economic development. Meeting of President Johnson with two Vietnamese leaders extremely useful and VP emphasized significance of excellent statement made by Prime Minister Ky and fact that he and his government have themselves drawn up major planning for economic and social progress. VP pointed out that PriMin Ky has seized initiative for his government in leading revolution for betterment of his country.

5. Impressions of discussions in Thailand, Australia and New Zealand were summarized with particular stress on discussions in Thailand. President Marcos mentioned imminent three-day visit of Thai PriMin Thanom Kittikachorn and favorable impressions of SEATO SecGen Jesus Vargas. Marcos and Ramos said they will keep in close touch with Thais and intend to hold first meeting ASA in March.

6. In brief discussion conditions in Laos VP spoke of determination of Souvanna Phouma to continue fighting.

7. After VP noted that Communists in Asia are attacking wherever they can President Marcos said Philippines can feel it here now. He said cadres are being reorganized, intellectuals are quite active and leftists elements are agitating. Expressed his confidence that Communists here will not get very far. He said if they were able to do so they would try to mount an active military effort. Practically all of the members of the Politburo of the Philippine Communist Party had been caught in the early fifties and were nearing completion of 14 or 15-year prison terms and their supporters are preparing for their release. President Marcos noted that two members of Indonesian Embassy here had been quite active and singled out Indon Press Counselor (Rudi Gontha) as having been involved in encouragement of demonstrations recently. Also noted increased activity Radio Peking Tagalog broadcasts.

8. Excellent performance Koreans SVN described by VP and Governor Harriman who also lauded Australian and New Zealand contingents SVN. Good example of these foreign forces, together with US forces, given credit for improving behavior of South Vietnamese forces which are now actively participating in civic action. With improved SVN morale and military success, defections from Viet Cong and North Vietnamese forces have risen to average of 79 a day this month.

9. In acknowledging that Filipinos may have their problems at this time, President Marcos said that his country will extend all possible aid to SVN./2/ He said he hopes that the partnership of Philippines and US will become more meaningful and said that under attack he will stand firm. Had originally wanted to send combat troops but GVN had asked for engineer battalion. Gov. Harriman noted that President Johnson and American people will always remember courage and wisdom of President Marcos. Marcos said 10,000 or 12,000 volunteers had offered themselves from army in no time at all and he had ordered army to discontinue listing volunteers.

/2/In a telephone conversation with Humphrey before the Vice President left for his mission, President Johnson discussed with him the Philippines' potential troop contribution to Vietnam. The President said: "the Filipinos promised me 4500. They welched on it a little bit--they're down to 2500 when they talked to you. Now they are trying to get a little bit less. We may have to get some economic things, look at some of our hole cards there, and take another look at them." (Johnson Library, Recordings and Transcripts, Recording of Telephone Conversation between Johnson and Humphrey, February 5, 1966, 10:15 a.m., F66.04, Side B, PNO 2)

10. President Marcos stated his belief that West could now permit Asian leaders to take more initiative and become more involved in affairs in this part of world. He said that strings on aid present problems and if strings at least are not apparent it is better. He said that newly independent underdeveloped nations are particularly sensitive now regarding manner in which aid is extended to them. He said it is better when Asian problems can be decided by Asians themselves "with your backing." He cited Asian Development Bank as excellent example of this, noting that US had furnished $200,000,000 to Bank. He said Bank is "very good because it is Asian." He said "let Asians decide and solved their own problems. We want to do it ourselves."

11. Vice President stated that a principle of Honolulu Conference was along these lines. President Marcos said he had studied letter to him from President Johnson/3/ and felt this point is most important. Thai FonMin Thanat Khoman agrees with him that ASA should be enlarged. Said Embassy will be established Kuala Lumpur very soon and this may have to be accelerated because of Sukarno's action against Nasution in last few days.

/3/Apparent reference to an advance copy of a letter of February 25. (Johnson Library, National Security File, Special Head of State Correspondence, Philippines) For the letter as sent, see Document 326.

12. VP said that Japan PriMin Sato says privately he wants us to stay in Vietnam but won't say so publicly. Marcos said "I am afraid the Japanese will outsmart themselves." He said that GOP relations with Japanese are getting closer and said only Asians can do what must be done to face up to situation in this part of world. Indons will respond properly when approached in Asian way, Marcos said. Reverting to ASA Marcos said that UnderSecretary Ingles now in Bangkok laying groundwork for ASA meeting in March. FonSec Ramos said that Republic of China should join and Japan, also.

13. President Marcos said Philippines will attend economic conference in Japan. He said that Japanese peace corps commencing work here. Work on trade and navigation treaty proceeding and GOJ has agreed accelerate reparations payments. In addition, GOJ apparently ready to make terms of $250,000,000 loan less onerous. GOP will send Japanese-speaking Sotero Laurel as new Ambassador to Tokyo.

14. Conference closed with discussion of emphasis which must be placed on rural development in countries in this area. President Marcos voiced his concern, remarking that "Communists make no bones the target is rural areas." He said AID is doing good work here in rural development and he hopes work can continue and expand. Philippines needs help with irrigation problems. VP said it is pity to use precious foreign exchange to import food stuffs and USG will offer full encouragement to best of our ability to solve this problem. President Marcos said he believed it will help if we could cut red tape in both AID and JUSMAG. One of his targets, he said, is to reorganize army construction battalions for rural reconstruction.

15. In final comment regarding aid to Vietnam President Marcos told Vice President Humphrey "decision has been taken and we will hold on to it. We will do it whether we can balance our budget or not. We are paying insurance on our future. We know our friends are behind us. Aid to Vietnam reflects feelings of great majority of our people."/4/

/4/In telegram 1758 from Manila, February 22, eyes only from Valenti to the President, Valenti informed Johnson that Marcos had made a statement before the press and television that the Philippines was sending an engineer construction battalion to South Vietnam not only to help Vietnam, but because it was in the Philippines' national interest. Valenti described it as a "forthright declaration by a courageous Asian leader." (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 27 VIET S)

Blair

 

325. Action Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to Secretary of State Rusk/1/

Washington, February 23, 1966.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 1 PHIL-US. Secret. Drafted by Kattenburg on February 17 and cleared by Rostow.

SUBJECT
National Policy Paper for the Philippines

Attached (Tab B)/2/ for your approval is Part One (U.S. Policy) of the National Policy Paper on the Philippines. All agencies with a major interest in our relations with the Philippines have cleared this document.

/2/Neither Tab is printed.

The Paper points out that by almost every criterion for policy development, the Philippines constitutes an area of key interest of the US in Asia. While the Philippines since independence has achieved much, it again faces some very serious problems. In essence, the future depends on whether it can evolve within the next few years enough responsible and dynamic leadership to overcome the stagnation that has beset the country in recent years, and to bring about the economic growth required to keep pace with the population explosion.

Filipinos are, to an extent, coming to doubt the wisdom of our prescriptions for Philippine-American relations. The growth of Philippine nationalism is inevitable. We must ensure that we do not appear to oppose its legitimate expression, while taking steps calculated to keep it positive and constructive.

Our over-all objective as spelled out in this Paper is to preserve the Philippines as an independent and democratic nation, friendly to the US and maintaining a foreign and defense policy in general alignment with our own. The thrust of the strategy set forth in this Paper is to preserve for the longer range the best possible environment in which to protect and uphold those US interests which really count. Anachronistic positions, or those which in any case we cannot count on maintaining in the future, should be gradually abandoned.

In essence, over the next three to five years, the courses of action set forth in the Paper will:

(1) promote motivated and dynamic Filipino leadership, which is dedicated to serve the Philippine national interest and which is convinced of the abiding interest of the US in the survival of a free and democratic Philippines;

(2) persevere in helping Philippine efforts to achieve self-sustaining economic growth;

(3) work toward a revised and modernized bilateral trade and investment relationship with the Philippines, in which the element of partnership replaces that of outworn special consideration or advantage for either side;

(4) encourage and assist development of greater Philippine capabilities for external and especially for internal defense; and

(5) seek to make the presence of our military bases more palatable and secure for the longer term.

Recommendation:/3/

That you approve this National Policy Paper by signing the attached memorandum (Tab A) which will be incorporated into the Paper as a preface.

/3/A note on the memorandum indicates that Rusk signed the National Policy Paper on the Philippines on March 3.

 

326. Telegram From the Department of State to the Embassy in the Philippines/1/

Washington, February 25, 1966, 5:47 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL PHIL-US. Confidential; Nodis. Drafted by Rusk and cleared by McGeorge Bundy.

1564. Eyes only for the Ambassador. Deliver letter below from the President to President Marcos. Please brief Bill Bundy but handle this matter in great confidence until actual announcement of visit can be made.

"Dear President Marcos: I have just had a full report from Vice President Humphrey about his recent visit with you. I was very glad that he had a chance to give you a full account of the meeting in Honolulu and additional measures which are being taken to assure success of the effort in South Viet-Nam.

I was especially interested in his report of your views of your own situation in the Philippines and on the problems we all face in Southeast Asia and in the Pacific. I was impressed by what you said about the need for Asian leaders themselves to take a greater degree of leadership in such matters and I want you to know that you would have our fullest support in the suggestions you have made in that direction. With a strong mandate from your own people and with an assured period of leadership ahead of you, you are in an excellent position to play an active role in building greater solidarity among the free nations of Asia and the Pacific.

Your stirring recent address on Viet-Nam and your private remarks to the Vice President have been a source of great encouragement and inspiration to us here. Your decision to place some of your own fine units alongside your allies in South Viet-Nam is a courageous one and will guarantee the solidarity between our two countries which is so important to the peace and prosperity of the Philippines as well as to the stability of the entire area.

I know that your schedule is heavily burdened as you assume your great responsibilities but I want you to know that I would personally warmly welcome you if you could find a time to visit Washington. I would try to adjust my schedule to meet yours and I would understand if you wished to get certain matters behind you before you come. Perhaps you and Ambassador Blair could be in touch with each other on a most private basis about possible dates, if the idea appeals to you. I do think it important that the matter remain private until we can make a joint announcement about your visit.

May I, in closing, express my respect for the way in which you have taken hold of the reins of government and for the policies which you have so responsibly and clearly set forth to guide your great country."

Rusk

 

327. Memorandum From the Central Intelligence Agency to the 303 Committee/1/

Washington, March 2, 1966.

/1/Source: National Security Council, Special Group/303 Committee Files, Subject Files, Philippines. Secret; Eyes Only.

SUBJECT
[less than 1 line of source text not declassified]

1. [less than 1 line of source text not declassified]

[9-1/2 lines of source text not declassified]

The proposal also involves a direct frontal attack against the deteriorating political situation and internal security problems facing the Philippines, making possible a viable movement channeling legitimate Filipino nationalism along Christian-Democratic lines. General reform must find its beginnings and impetus in the broad bases of a society. Among the more evident bases in the Philippines are the peasant and the Church: the peasant because he is the mass and the ultimate focal point of meaningful reform; the Church because it is uniquely equipped to act as a catalyst between the government, vested interests, and the Filipino peasant, who is in a sense the land.

The land tenure system in the Philippines is a basic cause of rural poverty, a major obstacle to agricultural development and a main source of agrarian unrest which, though traditional, is the root of the internal security situation in the Philippines today. In order to focus attention on the land reform problem, educating the peasant to his rights and responsibilities, demonstrating enlightened need for reform to politicians and vested interests and influencing the government to implement reform aggressively, a fairly dramatic action is called for. [2-1/2 lines of source text not declassified]

[2 paragraphs (11 lines of source text) not declassified]

2. Problem

There have been more than adequate attempts made in the Philippines towards legislating land reform. During the Commonwealth period the United States moved energetically and with imagination into land reform and land distribution, including the purchase and redistribution of "friar" lands representing large holdings by the Church. Since independence, various presidents and governments have recognized the need for reform, notably under Magsaysay, to some extent Garcia, and most recently Macapagal. The problem in the Philippines is not to begin anew, but to improve on progress already made, to moderate the influence of forces traditionally opposed to reform and finally to create a demand on the government for reform from the end-user, the peasant, by "popularizing" his rights under existing legislation.

The Agricultural Land Reform Code, promulgated on 8 August 1963, has the stated purpose of redefining the relationship of the cultivator to the land. Essentially an adequate law, it unfortunately has built-in complexities, in deference to political and economic self-interest groups, which prevent aggressive implementation. The Armed Forces of the Philippines are heavily engaged in national civic action work having ultimate effect on land reform in general. In addition, the Presidential Assistant for Community Development and the private Philippines Rural Reconstruction Movement have recently agreed to coordinate overall civic action/reform programs, rather than continue the competition of the past. A central point in the reform problem, besides inherent opposition and endemic inertia, has been to approach it by governmental decree rather than from a popular base. [less than 1 line of source text not declassified] should provide the impetus necessary to get underway constructive land reform and with it the beginnings of general reform. Without some such action, the dilatory approach to reform in the Philippines can be expected to continue.

[3 headings and 8 paragraphs (39 lines of source text) not declassified]/2/

/2/A note on the memorandum indicates that this proposal was "approved telephonically by the 303 Committee principals on 11 April 1966."

 

328. Telegram From the Department of State to the Embassy in the Philippines/1/

Washington, April 9, 1966, 5:01 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 27 VIET S. Secret. Drafted by Flanegin; cleared by Kattenburg, William C. Hamilton of DOD/ISA, and Moore; and approved by Bundy. Repeated to JCS, CINCPAC, Saigon, COMUSMACV, CHJUSMAGPHIL, CINCPACREPPHIL.

1872. Joint State/Defense message.

1. In order reassure Marcos we are actively moving ahead to meet our commitment on equipping and financing the Phil Engineer Task Force, and that we are responsive to other urgent military requirements he has raised, you may now convey the following to him in the nature of a Status Report:

2. We wish to reaffirm our commitment (FYI as defined in prior cables end FYI) to equip and support the Philippine Engineer Battalion and security troops for Vietnam. We will be ready to move on these items promptly to mesh with troop arrivals in Vietnam.

3. We are actively engaged in calculating how best we can shape our response to the President's needs in field of military and military-related equipment. Assuming dispatch of Phil Task Force to VN, we will be able to provide up to four additional swiftcraft, M-14 rifles and machine guns for one constabulary BCT, and equipment to start bringing three engineer battalions to full strength.

4. U.S. Defense Department conducting itemized review of these items and of funding and delivery arrangements. These examinations take time, and Marcos should understand that, particularly in view of VN requirements, ultimate deliveries will of necessity be staggered and some probably delayed.

5. If, as seems probable, Marcos raises question of equipping further engineer battalions, you may tell him that we wish to be forthcoming regarding his civic action project, which we favor in principle, but indicate that our present thinking is along lines para 4(c) in immediately previous telegram./2/

/2/Paragraph 4 (c) of telegram 1871, April 9, reads: "With respect to equipping further engineering battalions, we wish to be forthcoming regarding a project which we favor in principle. But (1) we do not now concur in agreeing to replace Japanese equipment of additional Phase I bns; (2) if Marcos civic action plan effectively implemented, further U.S. investment should take place within normal MAP totals and as result of normal MAP planning and programming procedures; and (3) we would want first to join in conducting a coordinated appraisal of the current mission and structure." (Ibid.)

Rusk

 

329. Memorandum From James C. Thomson, Jr., of the National Security Council Staff to the President's Special Assistant (Rostow)/1/

Washington, May 4, 1966.

/1/Source: Johnson Library, National Security File, Country File, Philippines, Vol. II, 6/64-6/66 [1 of 2]. Secret.

SUBJECT
A Marcos Visit: The Plot Thickens

You should know (and at some point the President should know) that the problem of a Marcos visit is becoming more complex. In this regard, next week will be preliminary Philippines Week: we will have in town both Ambassador Blair (who hopes to see the President--see the attached memorandum from State)/2/ and Marcos' brother-in-law and confidential aide, Benjamin Romualdez.

/2/Not attached; a copy of the May 3 memorandum is in the National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 PHIL.

The dimensions of the Marcos visit's new complexity are revealed in Blair's two lengthy conversations with Marcos, reported in Manila's 2323 and especially Manila's 2326 and 2327./3/ These cables are long and somewhat depressing. To the cynic they reveal that Marcos is acting more and more like a Philippine President than the tough and far- sighted New Dealer/pragmatist that he appeared to be earlier this year.

/3/Telegram 2323 is dated April 29; telegrams 2326 and 2327 are both dated May 3. (Ibid., DEF 9 PHIL and POL 15-1 PHIL)

In brief, Marcos does not want to come to Washington unless he can return with some highly tangible goodies. He fears the juxtaposition of Philippine troops to Vietnam with a Washington visit, as this might tag him with the label of "American errand boy". In order to avoid such a label, he wants to extract from his Washington visit U.S. responsiveness on a number of new and old items: specifically, Philippine omnibus claims (a matter which we officially decreed a closed book under the Eisenhower Administration), base negotiations, veterans benefits (on which a joint U.S./Filipino Commission will be negotiating in the next few months), U.S. procurement for Vietnam, a stabilization fund, aid for the construction of a thermal power plant, more school houses, and a long new list of military equipment. This is not quite an all-or-nothing proposition, although obviously the Fils want as much as they can get.

The upshot of the above is that an early and simple Marcos visit is probably out of the question. Despite the fact that his early appearance here might do us some political good on Vietnam, etc., it would not do him good, in his view, unless he comes back with his hands very full.

Blair and Romualdez will both be carrying this message to State and the White House next week. This should give us a chance to weigh more precisely our needs versus Fil needs regarding a Marcos visit. As you know, State has previously urged that Marcos' visit be put off until much later in the year; the new evidence of Fil thinking on the subject should strengthen State's convictions.

I attach a possible memorandum for the President about State's request for an appointment for Bill Blair./4/

/4/Not found, but in a May 5 memorandum to the President, Rostow suggested that it would be "useful" for the President to meet Blair who was "fresh from two long talks with President Marcos and has a clear view of the potential problems surrounding a Marcos visit. At the moment, Marcos is worried about coming here too soon after final passage of the Philippine Vietnam Aid Bill; he is also beginning to attach to the visit some large-scale economic and military requests which will require some sorting and negotiation prior to his arrival." The President approved the meeting with Blair. (Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. VII, 4/2/66-5/26/66)

Jim

 

330. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/

Washington, May 11, 1966, 7:20 p.m.

/1/Source: Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. 2, May 1-15, 1966. Confidential.

SUBJECT
Appointment With Ambassador William McC. Blair, Jr.

You have agreed to receive Ambassador Blair, Chief of Mission at Manila, at 11:30 a.m. tomorrow, May 12.

This additional information concerns the two matters that he may wish to raise with you: the timing of President Marcos' State Visit; and the status of Philippine Senate action on the Vietnam Aid Bill.

State Visit

Marcos has informed Blair that he feels there should be fairly clear "areas of agreement" between the two Governments before he undertakes the State Visit. He is also worried that too early a visit following Philippine legislative approval of the Vietnam Aid Bill might cause him trouble at home. He is inclined toward an end of August date, which would also enable him to accept an invitation to address the American Legion convention. But he wishes Blair to test the atmosphere here on whether tangible results might be possible by then on the economic and military aid requests that he is attaching to the visit.

State considers it important to our future economic relations that his State Visit result in meaningful exchange of views and hopefully some measure of agreement on such major issues as post-1974 US investment in the Philippines, impact of the Retail Trade Nationalization Law, and US aid in Philippine economic development. However, we will not be prepared to reach these "areas of agreement" until much later this year after more extensive economic dialogue. State, accordingly, would prefer the visit in late October or November./2/

/2/As recommended in a memorandum from Rusk to the President, May 10. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 PHIL)

Aid to Vietnam Bill

State believes final Philippine Senate action is now anticipated at the end of this week, with perhaps no more than five negative votes. One possible ramification is a proviso that Marcos consult with Congress before sending troops. We are assured, however, that this is only a gesture designed to satisfy the sensitivities of Senators who might otherwise find it difficult to vote for the bill.

President Marcos' brother-in-law, whom I saw, believes it will be much closer, but will pass.

Ambassador Blair's Future Assignment

Secretary Rusk at one time suggested that Ambassador Blair be considered for one of the positions in the Department now vacant. However, no further consideration is being given to this suggestion because:

1. Ambassador Blair will not have completed the normal tour of two years until next December.

2. Ambassador Blair has let it be known that he prefers to remain in the field and that, after his completion of his tour in the Philippines, he would like to have another Ambassadorial assignment in preference to a Washington post.

Walt

 

331. Memorandum of Conversation/1/

Washington, May 12, 1966.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL PHIL-US. Secret. Drafted by Kattenburg (who did not attend) on May 23 and cleared by the White House on May 19.

SUBJECT
Philippine-US Relations

PARTICIPANTS
The President
William McC. Blair, Jr., Ambassador to the Philippines
William P. Bundy, Assistant Secretary of State for Far Eastern Affairs
Walt W. Rostow, Special Assistant to the President
William J. Jorden, National Security Council Staff

Participants in this meeting with the President have indicated that the following major topics were discussed, and the following decisions reached:

1. Review of Situation

Ambassador Blair reviewed the situation in the Philippines, some of President Marcos' problems and his progress, and requests made for our help. The assessment was cautiously optimistic. The President indicated his sympathy for the Philippines and for President Marcos.

2. US Panel, Joint Philippine-US Commission on Philippine Veterans Benefits

The President approved an immediate press announcement on the formation and composition of the US panel and said he had been in touch with Senator Long who had agreed to serve.

3. Marcos State Visit

The President expressed his hope that Marcos could come over soonest. He was ready to receive him "today, tomorrow, or next day." The President stated he was impressed with what he had heard of Marcos. The President expressed a deep personal interest in the Philippines and noted the special interest most Americans have in that country based on history and our special role there in the past. Ambassador Blair and Mr. Bundy pointed out and explained some of the problems involved in a state visit, particularly an early one, and described Marcos' need for "areas of agreement" in terms of what the US could help him achieve on a visit here.

The President expressed understanding and authorized Ambassador Blair to work out dates which would allow both for the finding of reasonable "areas of agreement" and as prompt a state visit as possible./2/

/2/Blair and Kattenburg met with Benjamin Romualdez on May 13; a record of that meeting is in telegram 2122 to Manila, May 14. (Ibid., POL 7 PHIL) Blair also met with Assistant Secretary of Defense McNaughton and Deputy Assistant Secretary of Defense Adam Yarmolinsky on May 12. A record of those two separate meetings is in a combined memorandum of conversation, May 12, I-23466/66; Washington National Records Center, RG 330, OASD/ISA Files: FRC 70 A 6648, Philippines 000.1--333.

 

332. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/

Washington, June 27, 1966, 5:30 p.m.

/1/Source: Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. VIII, 5/26/66-6/29/66. Confidential.

SUBJECT
Letter to President Marcos Regarding Veterans Benefits

President Marcos of the Philippines has sent you an unexpected letter regarding the old and complex issue of Philippine World War II claims./2/ His letter comes as the U.S. Panel (chaired by General Decker) prepares to depart for the Manila talks of the Joint Commission on Veterans Benefits--now scheduled for July 4-8.

/2/Dated June 23. (Ibid., Special Head of State Correspondence, Philippines, Vol. I)

In essence, Marcos' letter seeks to re-open the long-closed issue of the so-called "Omnibus Claims"--assorted claims by the Fil Government against the U.S. Government dating back to World War II and the pre-war period. As you are aware, four of these 19 claims were settled by U.S. Congressional action between 1959 and 1963, including $73 million in additional war damage compensation. The remaining Omnibus Claims (which may amount to as much as $900 million) were carefully examined and formally rejected by the U.S. Government in 1959, at which time the Fil Government was told that we regarded this issue as closed once and for all. Both Macapagal and Marcos, however, have been under periodic domestic pressure to re-open the issue.

State proposes--and Mr. Rusk concurs from Canberra--that your reply to Marcos be courteous but firm on two counts: a) we are always willing to listen to the Fils on any bilateral grievances, including the Omnibus Claims; but b) the present U.S. Panel on Veterans Benefits, established on the basis of your October 1964 Communiqué with Macapagal, is simply not empowered to make recommendations on such issues as the Omnibus Claims.

I recommend that you approve State's draft./3/ We want to keep the atmosphere favorable for a Marcos visit in August, and Rusk may be discussing the visit when he sees Marcos July 3rd; but we can't settle this kind of issue between now and August--and should not raise false expectations. (The entire U.S. Panel, including its Congressional members, has been fully briefed on this matter.)

/3/Attached but not printed. The letter was sent to Manila in telegram 2483, June 28. (Ibid.)

W. W. Rostow/4/

/4/Printed from a copy that bears this typed signature.

Approved/5/
Disapproved
See Me

/5/This option is checked. A handwritten note indicates that the approved "message LDXed to S/S, 6/28/66."

 

333. Memorandum From James C. Thomson, Jr., of the National Security Council Staff to the President's Special Assistant (Rostow)/1/

Washington, August 1, 1966.

/1/Source: Johnson Library, National Security File, Country File, Philippines, Vol. III, Memos, 7/66-7/67 [2 of 2]. Confidential.

SUBJECT
Your Meeting at 4:30 Today With Philippine Finance Minister

Finance Minister Eduardo Romualdez is here to push for more money, in one form or another, as icing for the Marcos State Visit. His appearance coincides with that of at least two other Filipinos in pursuit of the same thing: Ben Romualdez (Marcos' brother-in-law and probable ambassador to the US) who has just arrived to do some high level pushing, and Mapa-&-Melchor, who are key financial advisors.

The fundamental problem is one of Fil expectations: Marcos has been led to believe, both by visiting Americans and by his own people, that a) his dynamic potential as a leader and b) his success on aid to Vietnam/2/ will assure him a very big pay-off when he comes to Washington. (The figures we have heard tend toward $100 million in economic aid in the coming year, and $500 million over five years.)/3/

/2/Marcos signed the Aid to Vietnam bill on July 14.

/3/After his meeting with Marcos following the SEATO and ANZUS meetings, Rusk sent the President the following assessment: "Although Marcos was very friendly and obviously has highest esteem for you, I have no doubt he will make an effort to parlay his visit and the troops for Vietnam into pretty tangible returns. On other matters such as MAP, economic aid or even war claims, he will be sending a mission to Washington shortly to discuss such questions and we might wish to defer the firming up of a date for his visit until it is quite clear that he will not arrange to change his plans as a result of some inevitable disappointment in the levels of our generosity." (Telegram Secto 108 from Kyoto, July 6; National Archives and Records Administration, RG 59, Central Files 1964-66, POL PHIL-US)

Fact of the matter is that Marcos does have promise, and that he did belatedly deliver on Vietnam aid (and at considerable political cost)--but also that the Fil economy is in dreadful condition and Fil performance has been terrible.

Our line, therefore: We are deeply appreciative, want to be helpful, and can make progress on quite a few items in conjunction with the State Visit; but it would be foolhardy, for both countries, if we were to leap into high-priced specific aid commitments until a lot more joint planning has been done to provide for effective use of that aid.

In his conversation with Rusk this afternoon, the Finance Minister emphasized land reform and rural development assistance, possibly through PL 480, and this may be his pitch with you.

FYI: On the basis of Barnett's negotiations with Mapa, I would guess that the best we can do in the economic aid field at the moment will be some aid in the field of irrigation rehabilitation (totalling about $8 million). The Marcos Visit package will be fattened, however, with some real gains on Veterans Benefits, Special Fund for Education, Bohlen-Serrano agreement (on base tenure), and DOD/MAP support of Fil defense capabilities. So Marcos will come away looking good--though not as good as he would like to look.

I attach a copy of the agreed memorandum which resulted from the Barnett-Mapa talks./4/

/4/Not attached; an undated summary is in the Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. 11, 8/12/65-8/31/65.

Jim

 

334. Memorandum From Donald W. Ropa of the National Security Council Staff to the President's Special Assistant (Rostow)/1/

Washington, August 11, 1966.

/1/Source: Johnson Library, National Security File, Country File, Philippines, Marcos Visit Papers, Memos, 9/14-16/66. Secret. Bromley Smith wrote the following note on the memorandum: "Mr. Rostow. For 3 p.m. meeting today, BKS." For a summary of this meeting, see Document 335.

SUBJECT
State Visit--President Marcos

Setting Marcos' state visit continues an established ritual for a Philippine president during his term of office. Its two major elements:

1. Ceremonial reaffirmation of friendship ties developed during the colonial period and second world war.

2. Confirmation of a "special relationship" with the U.S.

In return for their loyal support, Phils expect special consideration for their material needs. Every Philippine president feels he must bring home tangible evidence of the benefits of our association.

Special factors in this visit

1. We pressured Marcos to commit Filipino troops to Vietnam. He put his prestige on the line, expended much personal political capital, and at the expense of important domestic legislation pushed the bill through Congress. The troops probably will reach Vietnam while Marcos is here. Marcos' performance accentuates his expectations for our assist- ance on measures he has given high priority.

2. The visit will set the tone for our future dealings with Marcos and can be a launching mechanism for a new and more fruitful relationship between our countries. Marcos is a genuine war hero (with a beautiful wife), forceful, energetic and ambitious to develop his nation. His materials at hand are generally unsatisfactory, progress in nation building has been sporadic, and the economy is floundering. However, priorities set by Marcos make sense. The familiar litany of past failure should not deter us from giving Marcos the tools he needs. He may well be the last Philippine president to offer us all-out collaboration.

Philippine Objectives

1. Marcos wants to come as the representative of an Asian nation enjoying a successful and dignified relationship with us. He is sensitive to charges the Philippines is a mendicant, will want to eliminate any justification for them.

2. Specifically, he wants to avoid any implication that new U.S. assistance he may receive is a payoff for committing Phil troops to Vietnam.

3. He looks primarily to expanded bilateral assistance to finance his development plans rather than to IBRD, IMF, ADB--multilateral institutions which unfamiliar to him.

4. He seeks firm commitments (promises or assurances) of our extensive financial support during his tenure for irrigation, roads, power, rural electrification, land reform.

5. He will likely agree that the availability of new U.S. aid be conditioned on certain actions on the part of his government, e.g. increased revenue, management reform, etc., but he will want to say on return that he has received specific new aid commitments provided Phils do their part.

6. More immediately, Marcos wants defense support assistance to contain the resurgence of Huk-inspired violence in Central Luzon. Specifically: our support of seven more engineer battalions with civic action capability and the equipping of three now formed. Other short-term requirements: a program loan package to begin rehabilitating irrigation work and underwrite land banks and agriculture credit; quick resolution of veterans benefits and claims; PL-480 rice, cotton and corn; a civil air agreement; formalization of the 1959 Bohlen-Serrano agreement on base tenure; movement toward revising the Laurel/Langley Treaty of Friendship, Commerce and Navigation after its 1974 expiration.

7. Marcos will want to give a spirited reaffirmation of free world solidarity and militant anti-Communism.

Our Objectives

1. To gain maximum domestic and international benefit from Philippine commitment, as a free Asian nation, to the effort in Vietnam and broader U.S. policy objectives in Asia. (Advance information is Marcos' address to the joint session of Congress will be panegyric in supporting President Johnson and our Asian policies.)

2. To come up with an aid package that meets Marcos' minimum desiderata as opposed to the maximum requests he has made.

3. To lay the groundwork for rationalizing Philippine development plans geared to multinational support.

4. To limit new bilateral assistance to essential areas consistent with longer term stress on multilateral aid.

5. To be forthcoming in giving Marcos what he needs to put down resurgent Huk activity.

Groundwork and Preparations

We have talked here over the past several weeks with a Philippine technical aid mission and the Phil reps on a joint panel to resolve veterans benefits and claims. Informal understanding with the technical aid mission has gone far toward gaining Phil acceptance of the necessity for multilateral aid and placing Marcos' requests for large-scale aid within a context of further consultation (a copy of the understanding is attached)./2/

/2/Not attached, but see footnote 3, Document 335.

The joint veterans panel has harmoniously resolved the benefits issues, but two legitimate claims were developed that still require resolution.

We have yet to complete action on most items in the minimum aid package--support for the 10 engineer battalions, PL-480, the program loan package, civil air agreement, plus Bohlen/Serrano and Laurel/Langley. Prods to Defense, AID and Agriculture are probably required.

Scheduling

Major events fixed, in addition to ceremonies and events for usual two and half days Washington activities, are:

1. Address to joint session of Congress September 15.
2. National Press Club address September 16.
3. Meet the Press interview September 18.
4. University of Michigan honorary degree September 19.
5. UNGA address September 21.

I understand the Vice President is considering the possibility of other public appearances for Marcos, specifically relating to Vietnam, prior to his September 24 departure.

Communiqué

Draft joint communiqué language has been requested from Embassy Manila based on a summary of all substantive aspects of the visit which has gone to Ambassador Blair (copy attached)./3/

/3/Telegram 26023 to Manila, August 11. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 PHIL)

Don Ropa

 

335. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/

Washington, August 12, 1966.

/1/Source: Johnson Library, National Security File, Country File, Philippines, Marcos Visit Papers, Memos 9/14-16/66. Confidential.

We have been dealing here for the past two weeks with a Filipino technical aid mission as part of advance preparations for the Marcos visit. It came with inflated expectations of new U.S. bilateral aid for the new Philippine development plan and implied that a worthwhile Marcos State Visit hinged on fulfillment of their expectations.

I wanted you to know that these talks concluded satisfactorily, paving the way for a successful State Visit. Our people managed to:/2/

/2/Rostow's information is based on a memorandum from Read to him, August 10. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 PHIL)

1. Deflect advance commitment of sizable new bilateral economic aid pending further close study, while agreeing to be forthcoming on assistance in important areas of defense support.

2. Gain Phil recognition that self-help is necessary if their economy is to realize its considerable potential.

3. Persuade the Phils that the external financing they require can better be met through multilateral sources.

4. Agree with the urgency of coping with resurgent Huk violence in Central Luzon through economic development of infected areas.

I attach a summary of the Informal Memorandum of agreement reached by both sides. The Memorandum and a more detailed expression of our positions on the matters covered therein are available in my office./3/ I will send them along if they interest you.

Walt

/3/The summary, the memorandum, and an annex to the summary giving more details were attached to Read's August 10 memorandum.

 

336. Memorandum From the Officer in Charge of Philippine Affairs (Kattenburg) to the Assistant Secretary of State for Far Eastern Affairs (Bundy)/1/

Washington, August 15, 1966.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL PHIL-US. Confidential. Kattenburg sent Bundy another memorandum on August 15, entitled "Detailed Status Report on Marcos State Visit, August 15." (Ibid.)

SUBJECT
White House Interest in the Success of the Marcos State Visit

FYI: The following is the gist of views expressed by Walt Rostow at a White House meeting on August 11. Mr. Jorden and his staff have told me that it may be interpreted as constituting an emphatic statement of White House interest in the full success of the Marcos state visit. End FYI.

1. Unique ties and a special relationship continue to bind us to the Republic of the Philippines. At the same time, Marcos and the Filipinos desire to emerge as more than a US favorite, and we too wish to see them as an Asian power in their own right. Marcos has laid his prestige on the line to secure passage of the Philippine aid-to-Viet-Nam bill in a record period of six months, and has done so at some political cost. Two thousand Philippine troops will begin arriving in Viet-Nam in September.

2. We have the beginnings of a very important administration in the Philippines. The character of the relations we are able to establish with Marcos during his visit will set the tone of our partnership for a long time, and during a critical period, both for us and for the Philippines, in that part of the world.

3. Marcos is a genuine war hero, a very attractive personality, and a great public speaker. We have in his visit a large amount of capital, centering around the image he can project about Viet-Nam and, as President Johnson has said, about "the vitality of the new Asia."

4. Marcos has major problems, including the recent revival of Communist armed activity in Central Luzon, and he needs our help. He is not, and does not want to appear, a mendicant. We want to help him, and we want to develop an assistance package which, while meeting his needs, remains consistent with our desire to emphasize multilateralism in aid to the developing nations and with the new aid techniques we are developing worldwide.

5. At the head of the list of specific actions we are working on for the visit are: (a) the provision of equipment for five additional Engineer Construction Battalions, bringing the total for delivery to 10;/2/ (b) settlement of two of the Philippine war claims issues;/3/ (c) economic assistance activities. The latter bear mainly, at the moment, on our agreeing to finance via project or program loans, or a combination of the two, three major projects in the agricultural field, and our willingness to begin negotiations after the visit on a new PL-480 agreement which may have to include some rice.

/2/In a letter to McNamara, August 11, Ball stated: "There is nothing more important to Marcos in connection with his State Visit to Washington September 14-16 than these additional battalions." (Ibid.)

/3/See Document 338.

Recommendation/4/

/4/There is no indication on the memorandum of Bundy's approval or disapproval.

I recommend:

(a) that you inform the members at the next IRG meeting of the substance of the above as representing your understanding of White House views on the visit, and of our immediate objectives as set forth in paragraph 5.

(b) Alternatively, you may wish to recommend that the Secretary transmit these views and objectives to the members of the SIG at their next meeting, which I understand may take place August 23. If you prefer the second alternative, I will prepare a staff study for the Secretary.

 

337. Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to William J. Jorden of the National Security Council Staff/1/

Washington, August 22, 1966.

/1/Source: Department of State, Bundy Files: Lot 85 D 240, Philippines, eyes only. Top Secret. Drafted by Bundy and cleared by G/PM. This memorandum was originally drafted by Kattenburg and then was revised by Bundy. Kattenburg's draft is ibid.

SUBJECT
Possible Use of Philippine Bases for B-52 Operations

You have asked for an assessment of political factors affecting this possibility,/2/ and I am providing this preliminary view.

/2/In an undated memorandum, Jorden informed Bundy that the President asked for an informal study of the feasibility of shifting B-52 operations against targets in Vietnam from Guam to the Philippines since the President was "struck by the obvious geographic and logistic advantages." Jorden asked Bundy to provide a political appraisal of the idea. (Ibid.)

1. From the legal standpoint, the 1959 Bohlen-Serrano Memorandum of Understanding, which we expect to make legally binding in the form of the Rusk-Ramos Agreement to be signed during the Marcos visit, obligates us to consult with the Philippine Government before we use U.S. bases for "combat launch" operations, unless these are directly related to the defense of the Philippines under our bilateral Treaty, or to our engagements under SEATO. While it could be argued that B-52 operations in South Viet-Nam fell under the latter heading, we have in fact consulted with Marcos, and Macapagal before him, on any operational base problem whatever, including even the overflight of the Philippines by B-52's. Obviously, regardless of the precise legal obligation, we could not in this instance conduct the proposed operations, or even prepare visibly for them, without prior agreement with Marcos.

2. We are inclined to believe that Marcos personally would be favorable to conducting the proposed operations from the Philippines. However, there is no doubt that he would consider that he was taking a step involving possibly great political costs at home, and that he would require a very substantial quid pro quo in the form of additional assistance of some type. Almost certainly, he would feel that he had to obtain a formal resolution of approval by the Philippine Congress, particularly in the light of various public statements he has made that he would take no further steps in regard to Viet-Nam without thorough consultation with the Congress.

3. Marcos' experience with the Viet-Nam aid bill does not lead to an optimistic forecast of how the Philippine Congress would react. In all probability, the same vocal elements, particularly in the Philippine Senate, would oppose the direct use of Philippine bases, stressing the argument that this would expose the Philippines to the possibility of swift and direct retaliation, and even questioning the validity of the U.S. commitment in the event of such retaliation. If the issue were introduced at the present moment, it would be our judgment that Marcos would have a long and bloody fight on his hands, and that he would sacrifice the possibility of successful action on at least some vitally needed domestic measures.

4. However, this rather gloomy prognosis would easily change markedly in the next month or two. If the Marcos visit is a success, and if the arrival of the Philippine contingent in September leads to favorable publicity and, above all, a sense of engagement in Viet-Nam by the Philippine people--which had really been lacking hitherto--the atmosphere could be quite different by early October. There is the further possibility, although it cannot by any means be counted upon, that we may by then be squared away on a much more realistic economic program that would furnish a reasonable vehicle for a quid pro quo that would really be constructive in terms of Philippine needs.

5. For all these reasons, it would be our firm judgment that the matter should not be raised with Marcos prior to his visit, and that at most it should be reserved for possible direct mention by the President when he is absolutely alone with Marcos at a relaxed moment during the visit, and when the basic terms of the assistance we will undertake during the visit have been already worked out. More tentatively, we would be hopeful that with proper timing we could eventually get an affirmative answer with a not too exorbitant price; in some ways, the problem is like that of getting the second Korean force contribution--which could not have been done last October or November, but turned out to be possible in January.

The above summarizes our present political judgment. We believe that an examination of alternatives throughout the Far East should be urgently pursued in any case, including comparative military and political assessments of the feasibility of Okinawa and Thailand as possible alternatives to the Philippines.

One further operational point. We understand the Air Force here has a preference for the Mactan base, and it should be noted that this base is now a joint-use base that is in effect controlled by the Philippine Air Force. Moreover, the runway would require substantial lengthening. Nonetheless, in our political judgment Mactan's relatively isolated location near Cebu makes it a much better candidate than Clark, which is, of course, fully U.S. but also virtually saturated by various other supporting operations, and located in a much more visible, populated, and politically sensitive area. Any third choice, while conceivable, would involve construction virtually from scratch.

William P. Bundy/3/

/3/Printed from a copy that bears this typed signature.

 

338. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/

Washington, September 1, 1966, 9 a.m.

/1/Source: Johnson Library, National Security File, Country File, Philippines, Report of Joint Philippines-U.S. Committee, Veterans. Secret.

SUBJECT
Filipino Veterans Claims and Benefits

The Joint United States-Philippine Veterans Commission to evaluate problems of Filipino veterans benefits and claims has completed its findings and given its recommendations. The benefits and claims issue has been a long-standing irritant in our relations with the Philippines.

The U.S. Panel of the Joint Commission recommended (Tab 3)/2/ that we broaden and extend certain benefits for Filipino veterans. Congressman Teague has introduced appropriate legislation, which if enacted would cost about $17 million per year (total cost: approximately $425 million over the next 30-plus years until death of the last Filipino veteran).

/2/Not printed; Tab 3 is a letter from the Chairman of the Commission, General George H. Decker, USA (ret.) to President Johnson, August 22.

The Filipino Panel also raised the separate question of World War II claims. Our Panel found merit in two of the seven Filipino claims and referred these to Defense to determine both our moral obligation and the feasibility of payment.

Deputy Secretary Vance recommends in the accompanying memorandum (Tab 2)/3/ that these two claims be paid. They concern pay and allowances for approximately 100,000 recognized Filipino guerrillas and the refunding of erroneous deductions from back pay. It is estimated these would cost no more than approximately $42 million. Vance says funds are available without new legislation. Vance further recommends that the terms of settlement be embodied in an Executive Agreement.

/3/Not found.

In his memorandum (Tab 1),/4/ Secretary Rusk agrees the two claims have a substantial equitable basis and notes that settlement at this time would go far toward removing a long-standing irritant.

/4/Dated August 29. (Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. 12, 9/1/66-9/14/66)

He recommends we advise Marcos prior to his arrival that we are sympathetically considering settlement of the two claims, that in return Marcos should agree to drop the other five as not warranting further consideration, and that settlement details on the two claims should be worked out jointly following the State Visit. We are considering an offset arrangement to deal with the settlement's impact on our balance of payments.

There are indications, not confirmed, that Marcos may find it hard to drop the other five claims. He may seek instead an overall General Release agreement for all seven. If this develops, we will prepare a recommended course of action for your consideration.

General Decker, Chairman of the U.S. Panel, considers the task you gave him as completed and asks your instructions concerning the discharge of the U.S. Panel. Since Rusk and Vance believe settlement details on the two claims can be worked out jointly following the State Visit, it appears that the work of the U.S. Panel is completed.

I recommend:/5/

/5/The President approved the four recommendations. He revised the second recommendation to read: "That Ambassador Blair inform Marcos we are considering settlement of the two claims, that in return Marcos must drop the other five claims, and that details on the two may be able to be worked out jointly after the State Visit."

That you approve payment of the two claims.

That Ambassador Blair inform Marcos we are sympathetically considering settlement of the two claims, that in return Marcos should drop the other five claims, and that details on the two should be worked out jointly after the State Visit.

That the recommendations of the U.S. Panel and terms of settlement of the two claims be embodied in an Executive Agreement.

That the U.S. Panel be discharged from its responsibility.

Walt

 

339. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/

Washington, September 9, 1966.

/1/Source: Johnson Library, National Security File, Country File, Philippines, Marcos Visit Papers, Memos, 9/14-16/66. Secret.

SUBJECT
U.S. Assistance to the Philippines (Marcos Visit)

The attached memorandum from Acting Secretary George Ball/2/ submits two propositions for your approval:

/2/Not attached, but a copy, September 9, is in the National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 PHIL.

(1) That we give Marcos a firm commitment to supply equipment for 10 engineer construction battalions in the Philippine Army. They would be used on rural projects, mainly road-building.

(2) That we give Marcos a more general commitment to provide additional economic support for Philippine projects related to land reform, irrigation and food production.

Discussion:

We have agreed to supply equipment for 3 battalions--part of the quid pro quo for the Phil decision to send forces to Viet-Nam.

We can handle two more by readjusting MAP, deferring delivery of F-5's and other equipment.

Problem is the other five battalions Marcos wants us to supply. Cost is about $1.7 million per battalion--$8.5 million for the five.

State argues:

--10-battalion program is a personal project of Marcos; he wants them more than any other single item;

--project makes good sense because:

(a) it will orient Phil Army in direction of civic action and internal security;
(b) it will help meet one of the Philippines greatest economic weaknesses, i.e., lack of rural roads to bring crops to market;

--Ambassador Blair considers it essential we support the 10 battalions--to make the visit a success, to preserve Marcos' domestic prestige, and to help him counter critics who argue the Philippines (and he) are too close to the U.S. and too dependent on American cooperation.

Ball concludes:

This commitment is "essential to the success of the visit;"

funding should come from FY '67 appropriations, either AID or DOD;

necessary adjustments in FY '67 funds can be made "without serious damage to our other interests;"

part or all of the support might be offset in future years by adjustments within forecast MAP levels, but this should not be conveyed to Marcos.

Secretary McNamara (in memo attached)/3/ dissents from State's view.

/3/Not attached; dated September 9. A copy is ibid.

McNamara notes we are now funding three battalions. He has agreed to reprogram FY '67 MAP to support two additional battalions.

He opposes support for the other five, arguing:

(1) Support for five (plus equipment for one in Viet-Nam) is ample recognition of the Philippines' "very small contribution" in Viet-Nam;

(2) MAP money will be short; appropriations are being cut (probably $92 million from the requested $917 million) while we have additional claims (Thailand, Laos, Korea--NATO movements--loan guarantees due to higher interest);

(3) 10 battalions are not essential to the Philippine security;

(4) $22 million programmed for Philippine MAP in FY '67 is ample;

(5) Filipinos can finance five out of their own economy.

He suggests reviewing matter for FY '68 and deciding then whether support beyond the five proposed is desirable; but he would not give Marcos any commitment on support in future years.

My opinion:

It seems clear that this project is one most desired by President Marcos. In my judgement, failure to back him will adversely affect the atmosphere of his visit and his attitude toward us, as well as his position vs. his critics in Manila.

We are talking here of $8.5 million, small in the overall scheme of things.

Finally, it is clear that these battalions, if equipped and properly utilized, can make an important contribution to critical Philippine economic needs. They have a weak public works sector. It will take time to reorganize and develop. Marcos wants these battalions for a serious reason: to give him an efficient instrument, under his personal control, to build roads and perform other essential public works in the near future.

However, in view of Secretary McNamara's reservations, you might consider the following track:

(1) Have Blair tell Marcos we are funding three battalions and are prepared now to fund two more; we will agree to putting this in writing in the communiqué; we are prepared to consider funding five additional battalions in FY '68.

(2) If Marcos accepts gracefully, fine. If not, Blair could tell him that this is a matter you wish to discuss when he gets here.

(3) In your talks with Marcos, repeat the pledge on five and tell him you will arrange funding for five more next year. However, if he considers 10 this year absolutely vital to his interests, we will do it. But he must understand that this will mean trimming elsewhere.

Follow your recommended track/4/

/4/None of the options is checked, but see Document 340.

Agree to fund 10 and tell Marcos

Have DOD fund
Have AID fund

Agree to fund 5 now and 5 more in FY '68 and tell Marcos

Agree to fund 5 only

See Me

On State's second recommendation (economic aid), I see no problems.

The package (not fully developed yet) will look something like this:

PL-480 (Title IV)

$20,000,000

Development loan (irrigation)

4,500,000

PL-480 (Title II) (rural work projects)

4,500,000

Development loan (technical studies)

2,000,00

Technical assistance

1,000,000

Repaired equipment (excess)

1,500,000

(actual value about $10 million)

 

$33,500,000 (approximate)

We will have to negotiate some of these programs after the visit. However, State feels it essential to have your general approval to go forward on a program of this magnitude and to work out general communiqué language without specifying amounts.

We would talk with Congress--and on background with the press--along the above lines of magnitude. This would avoid the danger of the Phil delegation putting out a greatly exaggerated picture of what has been promised.

Approve general commitment as outlined/5/
See Me

Walt

/5/Neither of the options is checked.

 

340. Memorandum From the President's Special Assistant (Rostow) to Acting Secretary of State Ball/1/

Washington, September 11, 1966.

/1/Source: Johnson Library, National Security File, Country File, Philippines, Vol. III, Memos, 7/66-7/67 [2 of 2]. Secret. Drafted by Rostow on September 10. Rostow sent McNamara a similar memorandum (without the information on general economic assistance) on September 10. (Ibid.)

SUBJECT
Assistance to the Philippines

The President has read your memorandum of September 9/2/ on the above subject. He has also read Secretary McNamara's memo of the same date on one of the two subjects you discussed; namely, the supply of equipment for engineer construction battalions for the Philippine Army.

/2/See footnotes 2 and 3, Document 339.

The President has decided:

(1) To have Ambassador Blair tell President Marcos that we are funding three battalions and are now prepared to fund two more. We will agree to put this in writing in the joint communiqué. We are prepared to consider funding five additional battalions in FY 1968.

(2) If Marcos accepts gracefully, fine. If not, the Ambassador could tell him this is a matter the President wishes to discuss with him when he gets to Washington. He could make clear to Marcos that the door is not closed on this, but that it is something our President wishes to discuss with him in person.

(3) In his talks with Marcos, President Johnson will repeat the pledge on supporting five battalions and promise support for the other five in FY 68. He will also tell Marcos, however, that if the Philippine President considers it absolutely vital to his interests to have the 10 battalions immediately, we will give the necessary support. But he will make clear to Marcos that this will mean trimming elsewhere.

Points (1) and (2) above should be conveyed to Ambassador Blair.

State and Defense should work out appropriate handling of funding if we find it necessary to move to support for the full 10 battalions as outlined in (3) above.

On Point 2 of your memo (economic assistance), the President has approved the general commitment as outlined. However, the amount of total commitment or commitment to the individual projects specified in terms of the amounts involved should not be conveyed to Marcos or other Filipinos. The President prefers that these details be negotiated out when Marcos is here.

W. W. Rostow/3/

/3/Printed from a copy that bears this typed signature. The signed original is in the National Archives and Records Administration, RG 59, S/S-White House and Agency Files: Lot 70 D 217, White House/W.W. Rostow.

Volume XXVI Index


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