PHILIPPINE ECONOMIC PROBLEMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001600010047-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 23
• Document Creation Date: December 22, 2016
• Document Release Date: October 1, 2009
• Sequence Number: 47
• Publication Date: August 1, 1968
• Content Type: IM

Approved For Release 2009/10/06: ~
CIA-RDP85T00875R00160001
Approved For Release
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CIA-RDP85T00875R00160001
 Approved For Release 2009/10/06 :CIA-RDP85T00875R001600010047-9~g
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25X1
Confidential
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Philippine Economic Problems
Confidential
ER IM 68-98
August 1968
Copy No.
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WARNIi~TG
'This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or recclation of its contents to or re-
ceipt by an unauthorir.~d person is prohihited by law.
GROUP 1
ETCLUt)F.O PIIOM AUTOMATIC
OECI,AA. IFICAT ON
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.ONF ,NTiA ,
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
August 1968
INTELLIGENCE D4EMORANDUM
Philippine Economic Problems
Summary
The Philippines is not likely to make much
progress in solving its economic problems over the
next few years. Although the economy is expected to
grow about 5 percent a year, the average Filipino
will not benefit much. This is because the expected
growth is unlikely to substantially exceed the rate
of population growth, which is one of the most rapid
in the world, and because a disproportionate share
of any ~.rcre ase in per capita income probably will
continue -- as in the past -- to be siphoned off by
the small number of affluent landowners and
industrialists who control the country's economic
and political life. To make rapid progress the
government would have to come to grips successfully
with the problems of slowing the population growth,
rapidly increasing the output of agriculture a.nd
industry, and making some forward movement un land
rEform and other socioeconomic issues which now
stifle the production incentive of much of th~a
labor force.
Although the government is aware of the economic
cost of its rapidly increasing population, it has
yet to begin a birth control program. And even if
it did, a generation or so would elapse before the
results could become visible. A sharp increase in
agricultural production is highly improbable. In
the past decade or so, food production about kept
pace with population growth, thanks mainly to
Note: This memorandum mas produced soZeZz~ by CIA.
It raas prepared b~ the Office of Economic Research
and coordinated r~ith the Office of National Estimates
and the Office of Current Intelligence.
CONFIDENTIAL
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CONFIDENTIAL
bringing new land into cultivation. But suitable
unused land is about exhausted, ~snd future produc-
tion increases will have to come mainly from
higher crop yields. It is technically possible to
increase yields sharply -- especially since Philip-
pine yields are ~o low generally -- but a major
effort by the government to promote irrigation,
land reform, better farming methods, and improved
seeds would be needed first. Now, at least,
neither the funds nor the will for such an effort
seems to exist. Although "miracle" rice seeds have
been introduced, the~.r future widespread use is
far from certain, in part because they require
substantial and precise use of fertilizer, water,
and pesticides. Some progress has been made in
the direction of self-sufficiency in rice produc-
tion, but -- contrary to press reports -- this
has not yet been achieved, nor is self-sufficiency
likely to be won for the next several years at
least.
The growth of industry, which was rapid in the
reconstruction years following the end of World
War II and during the Korean War-induced boom, has
slowed considerably, and revival is not in sight.
Philippine industry is plagued with a number of
problems, many of which are self-induced, including
high production costs which preclude successful
competition in world markets, concentration
on assembly cperations which require substantial
imported components, and a domestic marlcet (espe-
cially in rural areas) which lacks effective
purchasing power. Industrial workers are now
worse off in terms of real income than they were
a few years ago. The protective wall built
around local industry by the government in the
form of tariffs is weakened b extensive smug-
gling that is facilitated by govern-
ment bureaucr