Economic changes under the Marcos Administration

To hasten economic development, President Marcos implemented a number of economic

programs. These programs helped the country to enjoy the period of economic growth from the
mid-1970s until the early 1980s. The farmers were given technical and financial aid and other
incentives such as "price support". With the incentives given to the farmers, the country's
agricultural sector grew. As a result, the Philippines became self-sufficient in rice in 1976 and
even became a rice exporter.

To help finance a number of economic development projects, such as infrastructure, the

government engaged in borrowing money. Foreign capital was invited to invest in certain
industrial projects. They were offered incentives including tax exemption privileges and the
privilege of bringing out their profits in foreign currencies. One of the most important economic
programs in the 1980s was the Kilusang Kabuhayan at Kaunlaran (Movement for Livelihood
and Progress). This program was started in September 1981. Its aim was to promote the
economic development of the barangays by encouraging the barangay residents to engage in
their own livelihood projects. The government's efforts resulted in the increase of the nation's
economic growth rate to an average of six percent to seven percent from 1970 to 1980. The rate
was only less than 5 percent in the previous decade.

The Gross National Product rose from P55 billion in 1972 to P193 billion in 1980. Tourism rose,
contributing to the economy's growth. The number of tourists visiting the Philippine rose to one
million by 1980 from less than 200,000 in previous years. The country earned 26 billion pesos. A
big portion of the tourist group was composed of Filipino balikbayans (returnees) under the
Ministry of Tourism's Balikbayan Program which was launched in 1973.

Another major source of economic growth of the country was the remittances of overseas
Filipino workers. Thousands of Filipino workers found employment in the Middle East,
Singapore and Hong Kong. These overseas Filipino workers not only helped ease the country's
unemployment problem but also earned much-needed foreign exchange for the Philippines. A
big portion of the annual earning of the country was allocated to the payment of annual interest
on loans.

Related Topics:
Middle East - Singapore - Hong Kong

The Philippine economy suffered a great decline after the Aquino assassination in August 1983.
The wave of anti-Marcos demonstrations in the country that followed scared off tourists. The
political troubles also hindered the entry of foreign investments, and foreign banks stopped
granting loans to the Philippine government.

In an attempt to launch a national economic recovery program, Marcos negotiated with foreign
creditors including the International Bank for Reconstruction and Development, World
Bank, and the International Monetary Fund (IMF), for a restructuring of the country's foreign
debts – to give the Philippines more time to pay the loans. Marcos ordered a cut in government
expenditures and used a portion of the savings to finance the Sariling Sikap (Self-Reliance), a
livelihood program he established in 1984.

Related Topics:
International Bank for Reconstruction and Development - World Bank - International Monetary
Fund

However, the economy experienced negative economic growth beginning in 1984 and continued
to decline despite the government's recovery efforts. The recovery program's failure was caused
by rampant graft and corruption within the government and by Marcos' lack of credibility.
Marcos himself diverted large sums of government money to the Kilusang Bagong Lipunans
campaign funds.