REPORT OF THE PHILIPPINES TASK FORCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88G01116R000901180004-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 22, 2016
• Document Release Date: December 13, 2010
• Sequence Number: 4
• Publication Date: May 7, 1986
• Content Type: MEMO

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MEMORANDUM FOR: Director of Central Intelligence
VIA: Deputy Director of Central Intelligence
Deputy Director for Intelligence's
Chief, Philippine 'ask Force
SUBJECT: Report of the Philippine Task Force
1. Action Requested. For your review. The report on the
longer term problems and prospeets~ e Philippines was to be
delivered to you in early May.
2. Background. In late December you requested an inter-
office, analytical task force t~ Iook at the "forces for change"
in the Philippines over the next four to five years. Despite the
revolutionary change of government that occurred in the
Philippines in February, the fundamental pressures and problems
that would have faced Marcos--or any Philippine leader--remain
largely unaltered. We believe these pressures make the
Philippines a subject of continuing concern to US policymakers,
intelligence collectors, and analysts.
3. The attached report represents the work of five officers
From the DI and one from the D0. The report has been read by key
officers in the DI, D0, and the NIC, but the judgments are solely
the responsibility of the Task Force.
Attachment:
As stated
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SUBJECT: Report of the Philippine Task Force
Distribution:
Original - Addressee (w/att)
1 - DDCI (w/att)
1 - D/Executive Staff (w/att)
1 - Executive Registry (w/o att)
1 - DDI (w/att)
1 - DDI Re istry (w/o att)
6MAY86)
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The Philippines:
5611 Cause for Concern
Report of the DCI
Philippine Task Force
May 198fi
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THE PHILIPPINES: STILL CAUSE FOR CONCERN
This report is the result of a four-month, DCI-commissioned
investigation into the underlying forces that are changing the
Philippines in ways critical for US interests. The report
represents our judgments about the pressures the Philippines
faces, how the country will evolve through at least 1990, what
this evolution means for US security and economic interests, and
what key intelligence gaps exist that demand the attention of
collectors, analysts, and policymakers.
Midway through the Task Force effort, the government of the
Philippines changed dramatically. In our judgment, that change
did not eliminate the underlying political, economic,
demographic, social, and insurgent pressures.
The Task Force recognized the necessity for an extensive
research agenda. This report represents the results of more
traditional standard research drawing on intelligence reports and
other documents, but more importantly, it reflects information
gathered directly from over 275 experts we consulted in the
United States and the Philippines, a number of whom had no
previous contact with the intelligence community.
The Task Force also used other research strategies. These
include a narrowly-focused conference of academic experts held
the week after Marcos' downfall, special analytical work
commissioned to the Office of Global issues and the Analytical
Support Group of the DI, several professionally-run gaming
exercises that brought collectors, analysts, and US policymakers
face-to-face to tackle longer-term Philippine issues, and a set
of public opinion polls administered in the Philippines before
and after the change of government.
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In our judgment, the chances are only slightly better than
even that a stable democratic government will evolve in the
Philippines over the next several years and that US security and
economic interests will be largely preserved. We base this
judgment on the diverse but centrist cast of the Aquino
government, the high level of political and technical skills
represented by most, though not all, of her cabinet and close
advisers, the moderating influence of the Church and the
military, the nearly unqualified support Mrs. Aquino has from
most Filipinos who want her government to succeed, and the
favorable relationship that is emerging with the United States.
Nonetheless, the euphoria that has accompanied the departure
of Ferdinand Marcos masks chronic problems -- and potential
dangers to US interests -- through the next several years. We
are not confident that the new Aquino administration will be able
to articulate clearcut policy directions, engineer sustainable
economic growth, reform military and government institutions, and
turn around the Communist insurgency quickly enough to enable US
policymakers to downgrade significantly their concern for the
Philippines. We believe that the Phili Ines will re uire
substantial and sustained attention
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The United States has new opportunities to preserve its
political, economic, and security interests in the Philippines.
While nascent, the Aquino government is substantially more
receptive than was the Marcos administration to the policies
needed to foster political stability, economic growth, military
reform, and control the insurgency. From the US perspective,
changes will take place frustratingly slowly amid loud and
sometimes threatening rhetoric from both the left and the right,
require substantial US economic aid, and frequently appear at
odds with US goals. US-Philippine relations will have to be
balanced delicately between US interests and resources, and the
Philippines' control over the pace and priorities of the
relationship. For example, we expect negotiations on the bases
agreement to be marked by hard bargaining as the Aquino
government tries to get the best deal for what it views as a
national resource, and to be filled with nationalistic rhetoric
as the principle of US access to the bases is debated by the new
government. Overall, however, we also expect Manila to bargain
in good faith.
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The Political Future
The Strengths... We see a somewhat better than even chance
that political stability will characterize the Philippines over
the next five years and more, during which power is attained and
transferred by constitutional and mostly democratic processes.
Although political activity is likely to remain at a fever pitch,
frequently exhibiting signs of distress, we expect an evolution
to a healthy competitive electoral system. Our guarded optimism
is founded in the strength of Filipino commitment to good
government and in the generally positive features we observe in
the actors involved.
o Filipinos have a widespread belief in and commitment
to democracy.
o Revulsion against the Marcos legacy has forged
common goals for social justice, political freedom,
and economic welfare.
o Filipinos describe themselves as patient people and
say they will give President Aquino considerable
time for her political honeymoon.
o Abroad convergence toward the political center has
isolated Communists at the fringe and increased the
likelihood that mainstream coalition politics, while
often contentious, can work.
o Despite its unorthodox arrival, the legitimacy of
Mrs. Aquino's government is accepted by most
Filipinos.
o The military is moving toward self-healing and
reconciliation with the civilian sectors and the
Church. With its reformist majority at the fore,
the military is well-positioned as a force for
moderation.
o Politically invigorated institutions -- Church
groups, NAMFREL, the media -- suggest that the
government will operate under a spotlight of
watchdog organizations.
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..and Vulnerabilities. The political strengths with which
Manila faces the future are but one side of the ledger. While we
think the Philippines can and likely will stabilize in ways that
complement US interests, we believe policymakers should be
concerned about the substantial downside risks.
o The government could become split and paralyzed as
divisions and competition within the ruling
coalition clash with traditional Philippine
patron-client politics. Signals of a rudderless
government are already emerging.
o Aquino may be too serene in her ultimate reliance on
people power, which with its undertones of anarchy
can become a dangerous source of authority.
o Reformists within the military may conclude that
Mrs. Aquino's efforts to incorporate the left in her
coalition and strike deals with the insurgents --
especially if it means an impotent counterinsurgency
program -- are naive and dangerous.
o The rebirth of the labor movement may be accompanied
by a rising number of strikes that will hinder
economic recovery, frighten foreign investors, and
provide easy entry into labor unions by Communist
organizers.
o Communist groups, currently in some disarray, may
turn to terrorism or economic sabotage; at the
least, the CPP/NDF may use the new, open political
climate and local elections as the first steps in a
program to eventually wrest control of the
government from the moderates.
The Economy and Society
The Aquino government recognizes that its survival depends
critically on its ability to deliver tangible economic benefits
throughout all sectors of society. The change of government has
eased but not eliminated the fundamental economic and social
problems of the Philippines that feed the Communist insurgency.
The economy has deteriorated in recent years; GNP has declined by
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15 percent since 1981; government services are unable to meet
demands in education, health, and other basic needs. Despite a
massive budget deficit, popular expectations for jobs, schools,
hospitals, and infrastructure are now high. These problems are
most severe in rural areas -- many that have been without an
effective government presence for years -- which have become
fertile breeding grounds for the insurgency.
In the short run, the dismantling of Marcos' crony economic
system, as some of Mrs. Aquino's advisers and foreign creditors
recommend, combined with political confidence, would likely lead
to a robust economic rebound next year, with as much as a
six-percent gain in national output. We are concerned, however,
that foreign and domestic bankers and businessmen are adopting a
"wait and see" stance before committing to new investments.
The longer term economic outlook is not optimistic; the
problems Manila faces are sobering. Analysts see little
likelihood of a turnaround in world prices for traditional
agricultural, mineral, and semi-manufactured goods that would
boost export growth and help close the foreign exchange gap of $1
billion annually -- including approximately $4 billion a year in
debt service -- that we project through 1990. The Philippines
has some potential for broadening its base of agricultural
production and export and for developing light manufacturing
industries, but does not have the resources, motivation, or world
economic environment to become another South Korean or Taiwanese
economic miracle.
Under very favorable economic and political circumstances,
the Philippine economy may achieve annual growth rates of five to
six percent by 1990. Such growth will go a long way toward
strengthening the government's position and undermining the
appeal of the Communist Party of the Philippines (CPP) and its
military arm, the New People's Army (NPA), but even so, by 1990
living standards will still fall short of levels achieved in the
early 1980s. The economy will have to expand by about five
percent annually and invest heavily in efficient but
labor-intensive activities to create the 700,000-800,000 jobs
that must be added each year just to absorb new labor force
entrants and prevent further erosion of living standards. In
addition, even with favorable overall growth, the rural economy
is likely to lag because of the time it will take to boost
agricultural productivity, develop rural-based processing
industries, and rehabilitate and expand infrastructure.
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Demographics is working against the Philippines and shows no
signs of easing. The population is growing nearly 2.8 percent
annually, adding 1.6 million people each year. The age structure
of the population is also a concern. For the next decade,
approximately 20 percent of the population will be between the
age of 15 and 24. This "youth bulge" not only demands jobs, but
also puts especially destabilizing political and social stress on
the country. Moreover, over 40 percent -- 25 million persons
this year and growing rapidly -- are in the under-15 age group.
The Insurgency
The insurgency itself has been weakened by Marcos'
departure, but in our judgment will not wither on its own.
Marcos' removal without violence and without the intervention of
radical leftists belied CPP/NPA propaganda that onl a peoples'
armed struggle could bring him down, an outcome that may lead
Filipinos to question other CPP/NPA propaganda as well. CPP
leaders recognize that they made serious mistakes in boycotting
the February presidential election and failing to anticipate the
"people power" revolution. In the view of many observers -- the
skeptical Armed Forces of the Philippines (AFP) is an exception -
-- Mrs. Aquino is making the right moves to emasculate the NPA
through her release of detainees, offers of amnesty, and
disarming of the abusive Civilian Home Defense Forces. Her
efforts are reinforced by the strengthening of moderate elements
in the Church, redirection of Church leftists toward cooperation
with the government, and prospects for reconciliation of the
military with the civilian population.
Nonetheless, the hardcore of insurgents apparently remain
committed to the violent overthrow of the Philippine government
and its replacement with a Communist state. CPP/NPA leaders are
smart and dedicated, and the insurgency has a number of factors
in its favor:
o Well-conceived guerrilla tactics and organization.
o A presence throughout most of the country.
o An acceptance by local inhabitants as the de facto
authority in many areas.
o A growing segment of the population that is exposed
and susceptible to radical propaganda.
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In our judgment, the insurgency will go through a phase of
retrenchment and rebuilding in search of tactical changes
required to undermine the government of Mrs. Aquino. Ironically,
democracy gives the Communists' sophisticated propaganda
apparatus better access to the Philippine populace through the
media and the education system. The Party now also has the
chance to participate -- probably covertly through front
organizations -- in the local elections that will follow the
adoption of a new Constitution later this year or in early 1987.
We also see the likelihood of frequent well-publicized bargaining
over ceasefires as a smokescreen for continuing violence in the
countryside aimed at undermining political, economic, and social
gains the Aquino government may make.
We cannot discount the Communists' resorting to increased
violence. At the least, the CPP/NPA leadership will be tempted
to experiment with alternative tactics. Up to now, moderates in
the CPP have successfully argued that the use of indiscriminate
terror and violence, attacks on US citizens, and bringing the war
to urban areas are counterproductive. According to several
insurgency analysts, the CPP/NPA might decide to turn its typical
strategy of eliminating corrupt local officials on its head by
targetting selected officials who are seen to be honest and
effective, while preserving for propaganda those who are corrupt
and malfeasant -- a strategy that insurgents adopted, for
example, in Vietnam and in E1 Salvador.
An especially dangerous move to the Aquino government would
be if the CPP/NPA decided to forego its sense of nationalist
independence and opted to seek substantial aid from the Soviet
Union and others. So far, the NPA has relied for its finances on
extensive taxation of Filipinos and local businesses and, less
so, on some funding from foreign sources, including brivatP and
Church groups in the United States
weapons are captured from the Philippine military or purchased
from the local arms market.
The CPP/NPA's relative autonomy could change. The CPP has
made no secret of its admiration for the Cuban and Sandinista
revolutions, and some CPP officials have been publicly linked
with Cuban and Nicaraguan Communist groups. Two recent
developments concern us:
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o Some evidence exists of newly established avenues
for laundering CPP funds through banks in Hong Kong.
5,000 weapons of unknown origin were delivered to
Manila for the NPA late last year. Furthermore,
other reports indicate that several NPA front groups
have recently taken delivery of new automatic
weapons.
reports that
We lack specific evidence of Soviet -- or Vietnamese -- military
support to the NPA, but we cannot dismiss the likelihood that
these countries would mount a supply effort if requested by the
CPP/NPA leaders.
While the prospect for violence could increase as the
CPP/NPA attempts to reassert itself, we doubt whether a stronger
NPA would engage in Khmer-Rouge-style tactics to consolidate
power. The NPA is, indeed, violent, and much of the bloodshed
that takes place in the countryside goes unreported.
Nonetheless, there are differences between the two Communist
groups that should moderate Khmer-Rouge style moves:
o The CPP/NPA represents a broad cross-section of
Philippine society. Nothing in the CPP's strategy
suggests that its goal is a leveling of Philippine
society upon a rural denominator.
o Philippine culture is family-oriented. Wholesale
killing would quickly put the Communists
face-to-face with family members.
o Khmer Rouge excesses were made easier by the massive
violence, destruction, and economic and social
dislocation already inflicted on Cambodia by all
sides in the Vietnam War, conditions that are not
likely to be replicated in the Philippines.
o The insurgents are small in number compared with a
Philippine population that is fundamentally
anti-Communist. The insurgents would have
difficulty mounting Khmer-Rouge-style terror
throughout the multi-island nation, though they may
be able to rain terror on one or more isolated
islands.
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We cannot dismiss, however, a worst case scenario in which
the threat of wholesale violence would be real. A combination of
an increasing rural bias to the insurgent leadership, the
collapse of the military effectiveness of the Philippine forces,
a deep global recession that left the Philippines bankrupt and
hungry, and universal abandonment of confidence in the
Manila-based government and other basic institutions could
portend a wave of violence and terror.
US Opportunities
In addition to providing traditional -- and vitally needed
-- economic and military aid, the United States has a number of
practical opportunities to influence the longer-term stability of
the Philippines and to encourage the government to adhere to
democratic principles. Philippine officials expressed several
key areas of concern:
o A deteriorating education system.
o Aid that specifically addresses the social and
economic problems of the youth.
o Recognizing, analyzing, and countering the highly
effective Communist propaganda system, and
specifically its anti-US themes.
o Infrequent interchanges between the US and
Philippine professional military.
o Inadequate counterinsurgency intelligence.
o Aid to specific components of the economy, such as
finance and banking, transportation, food processing
and post-harvest storage, village water supplies,
reforestation, and agricultural production services.
Significant downside risks accompany US economic and
military aid programs. The United States is probably going to be
blamed for Philippine problems if it does too much, or if it does
too little. Primarily, the Philippines will be looking for a
visibly less-dependent relationship with the United States, in
which Manila receives large aid levels, but not advice on its
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use. Moreover, US budget difficulties mean that over the next
several years Manila's expectations for aid flows are probably
not going to be met. In some areas -- including foreign debt
relief and increased access to US markets -- the United States
will face competing demands from other countries including Mexico
and the Caribbean Basin nations. Furthermore, an increased US
presence associated with aid programs could stimulate retaliation
against US citizens by the CPP/NPA.
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