SEMIFEUDALISM IN THE PHILIPPINES
The semifeudal mode of production in the Philippines in the light of international and national developments in the past three decades.
October 3, 2020
Dear Fellow Educators, Peasant Activists and All Webinar Participants,
Warmest greetings of solidarity to all of you! Thank you for inviting me to speak in this webinar on the semifeudal mode of production in the Philippines in the light of national and international developments. I appreciate most highly the Congress of Teachers and Educators for Nationalism and Democracy (CONTEND) and the Kilusang Magbubukid ng Pilipinas for co-sponsoring this webinar and inviting me as speaker.
It is timely and fitting to discuss the subject of semifeudalism and focus on the major role of the peasant masses and agriculture in the Philippine economy and society within the Peasant Month. The peasant masses are still the most numerous class in the Philippines and they work on the country’s principal means of production, the more than 13.5 million hectares of agricultural land. They are a decisive factor in the economic development and fundamental social transformation of the Philippines. The main democratic content of the new democratic revolution is the solution of the land problem, the satisfaction of the peasant hunger for land.
I propose to describe the semifeudal mode of production in the Philippines, the national and international factors that have caused this basic character of the Philippine economy, the crucial importance and consequence of describing this economy and the prospect of changing it through social and economic reforms or the revolutionary overthrow of the ruling system.
The question of semifeudalism is not a new one. Filipino national-democratic activists have been seriously studying the country’s basic problems of imperialism, feudalism, and bureaucrat capitalism since the late 1950s and early 1960s. Inspired and guided by Marxist-Leninist theory, particularly by Mao’s works on Chinese society and revolution, and being mindful of the Philippines’ own history and current circumstances, many of us undertook in-depth research and published essays on the country’s long-standing agrarian problem and its links with neocolonialism.
These were reflected in my essays compiled into the book Struggle for National Democracy, and later in Philippine Society and Revolution, which helped activists grasp the crucial role of semifeudalism and the peasantry as the main force in the people’s democratic revolution. Throughout the 1970s, this understanding was further validated and deepened through regional and rural social investigation reports, and thus served to guide the national-democratic movement in expanding and consolidating nationwide, especially among the peasantry.
But as the Philippines entered the decade of the 1980s, there emerged the erroneous line among certain CPP cadres that the Philippine economy was no longer semifeudal but industrial capitalist. Thus, although I was still in Marcos prison, Julie and I collaborated to update our knowledge of the Philippine economy, debunk the Marcos-inspired and Trotskyite-driven notions about the country being already industrial capitalist, and reaffirm the basic conclusions about the semifeudal mode of production.
I. The Semifeudal Mode of Production in the Philippines
We call the economy or mode of production in the Philippines semifeudal because it consists of certain forces and relations of production. The forces of production include the people in production and their means of production. The relations pertain to the ownership of the means of production, the organization of production and the distribution of the product.
As used by Marxists in the materialist study of history and political economy, these are precise terms and categories that describe the level of socio-economic development of particular societies. But as these are verifiable and measurable by social science, I am confident that many historians and political economists in the bourgeois academic milieu have also become familiar with these, and use them to some degree to better understand the Philippines’ historical and current conditions.
The agriculture, industry and service sectors of the Philippines are all dependent on the importation of capital goods as well as intermediate goods in varying degrees in order to operate. These include mechanical, electro-mechanical and electronic equipment, fuels, chemicals and agricultural inputs. They are required to optimize production in the semifeudal economy.
The importation of these capital goods is paid for by the exportation of certain agricultural crops, mineral ores, semi-manufactures and cheap labor in the form of live men and women. These exports are however never enough and there is a perennial and growing trade deficit which is paid for with mounting foreign debt and direct investments which only entrench and worsen the problem.
So long as the aforesaid capital goods at the core of the Philippine forces of production are not reconstituted and harnessed to produce capital equipment, regenerate themselves and build a robust domestic capital goods industry, then there could be no genuine industrialization that will emerge from the present neocolonial pattern of trade.
The Philippines lacks an industrial foundation and cannot be considered industrial capitalist, despite the baseless claim of bourgeois economists that it has become a newly-industrialized country. It has rich mineral resources but these are merely extracted and exported to industrial capitalist economies. It has not developed metallurgy beyond the stage of primary processing or the mere extraction of mineral ores and it has no capacity for producing steel and other basic metals, machine tools, precision instruments and other basic means of industrial production.
All subsectors of the industry sector (mining and quarrying, construction, refining of imported crude oil, assembly of cars and ships, electronic assembly, production of cement, chemicals and fertilizers, garments, industrial food and beverage processing, reshaping of imported plates, tubes and rods of steel and other metals, and so on) are grossly dependent on imported electro-mechanical equipment, fuel and components pre-fabricated abroad. In recent decades, imported industrial inputs began to include digital-tech tools dependent on expensive software and other heavily protected “intellectual property” such as patents, which are controlled by imperialist firms to prevent unauthorized technology transfer.
What is passed off as manufacturing in electronics and transport equipment (cars, trucks, motorcycles and ships) is merely assembly of finished parts and components from abroad. What is passed off as shipbuilding is mainly welding of parts prefabricated abroad. What is passed off as steel industry is merely the reshaping of imported metal plates, tubes and rods.
All these kinds of semi-manufacturing or processing are run by foreign monopoly firms. These are privileged to have export processing or special economic zones, which are used for tax evasion and for smuggling not only knockdowns but also complete products, especially cars and motorcycles. The tax privileges are granted to foreign investors as incentives for them to reexport their products and sell a certain amount of seconds to the local market.
The imperialists, their puppets and other apologists of neoliberal policy also make the superficial and false claim that globalization is opening up alternative paths to industrialization by allowing backward countries to jump-start economic growth by leveraging their local advantages in labor, services, strategic natural resources and location, and even as tourist and tax havens—all in partnership with imperialist countries.
Since the Asian financial crisis of 1997, there has been a sharp reduction in the assembly of semiconductors for reexport. Recently the so-called shipbuilding by Hanjin in Subic has been closed down. The reassembly of Japanese cars and motorcycles has also been drastically reduced. The crisis of overproduction in the entire world capitalist system is relentlessly assaulting this floating kind of industrial enterprises that have their foundation outside of the Philippines.
The imperialists have increasingly relied on digital speed-ups in product redesign, rapid retooling, and use of robotics in automated handling and containerization in endless attempts to reconfigure their “global supply chains”. But with the use of the digital equipment from the most developed countries the crisis of overproduction becomes worse on a global scale, further discouraging the Filipino puppet leaders and their leaders to take the path of national industrialization.
But conjure the illusion that the Philippines is a newly-industrialized country, the World Bank statistics for 2019 understate the GDP share of agriculture at 7.4 percent and its employment share at 22.9 percent, overstate the share of industry at 34 percent and its share of employment at 19.1 percent and shoot through the roof by overstating the share of the service sector at 58.6 percent and its employment share at 58 percent.
However, the GDP share of the industry sector has supposedly declined despite its rise relative to the GDP share of agriculture. This decline is due to the reduction of semi-manufacturing of semiconductors and assembly of vehicles as a result of global overproduction and stagnation, the rampant smuggling out of mineral ores and logs, and the smuggling of all kinds of manufactures through the export processing zones, customs and the Philippines’ long coastline.
The shares of GDP and employment of what are the basic productive sectors of agriculture and industry are supposed to have declined since 1980. But the shares of GDP and employment of the service sector are supposed to have grown rapidly due to increased activity in trading and finance, business processing operations, tourism, the export of cheap labor amounting to 12 million or 26 percent of the total labor force of 45 million and the “employment” or oddjobbing of 40 percent of the labor force in the informal sector of the economy.
The extremely bloated service sector of the Philippine economy is not the outcome of an industrial capitalist economy. Rather, it is the extension of an agriculture-based comprador capitalism exporting some commercial crops, mineral ores, prettified handicrafts and cheap labor by the millions and always begging for foreign loans to cover the deficits in trade and balance of payments due to the inadequate income from raw-material exports and the foreign exchange remittances of the documented and undocumented Filipino migrant workers.
In the other direction, the same comprador capitalism extends its import operations into consumer-driven local commercial and real estate operations, including tourism and travel. What we see is the grotesque image of an agriculture-based and big comprador-oriented economy with an extremely bloated service sector induced by imported consumer goods, neoliberal credit and public debt. This pattern of a semifeudal economy is not peculiar to the Philippines but is seen in many other backward countries as confirmed by UN statistics.
The share of agriculture is easily understated by the bourgeois economists and statisticians because the reactionary government does not take into account what the peasants and farm workers consume from their own labor and what they produce in handicrafts, forestry, swidden farming, hunting, backyard animal husbandry, fishing and other sideline occupations to augment their incomes from tilling the soil. The peasant products remain within the household or within informal local markets, and thus circulate beneath the radar of bourgeois statistics.
The number of peasants is also understated. Only the family heads and the children of 15 years and above are merely estimated, disregarding the fact that the entire family (except the toddlers) work as a productive force. In the statistics of the reactionary government, family members other than the family head are lumped together under the supra-class category of “unpaid family workers.” In fact, the traditional seasonal farm workers who are not attached to any degree of farm mechanization are still members of poor and lower middle peasant households even as they are discounted as peasants in the estimates of the reactionary government’s statisticians.
Despite the misrepresentation of the Philippines as a newly industrialized country and the deliberate understatement of the peasant population, the reactionary government’s bourgeois economists and statisticians admit that the rural population is more than 60 percent of the total Philippine population and that the Philippine economy is still agriculture-based but in the process of becoming newly-industrialized. The urban areas of Manila-Rizal, Central Luzon and Southern Luzon swell with most of the country’s oddjobbers either dwelling in urban slums or commuting daily from nearby rural villages.
This official estimate of the Philippine Statistics Authority that the rural population is 54.7 percent of the total population is most questionable and requires ground-level validation and recomputation, because the Philippine Statistics Authority uses a mechanical definition and superficial criteria for classifying barangays as “urban.” According to government guidelines, , for example, a barangay with at least five establishments employing at least 10 employees each—say, a rice mill, two agricultural supply stores, and two poultry farms—and at least five facilities (e.g. a trading post, a plaza, a chapel, a school, and cellphone signal) 2 kilometers or less from the barangay hall is already considered an “urban barangay.”
The gravity of the underdeveloped, agrarian, pre-industrial and semifeudal character of the Philippine economy is well manifested by the chronic severity of unemployment, underemployment, and overseas work as shown by official government statistics. Based on 2019 annual labor and employment estimates, 72.9 million of Filipinos are considered “of working age” (15 years old and over), but only 44.7 million is counted as the labor force. Thus, over 28 million are of working age but “not in the labor force”.
Among those excluded from the labor force are an estimated 9 million of these who are at school and another 19 million of working age and fully unemployed, including those working overseas, officially estimated at only 2.2 million. Most are out of school youth, housekeepers (mostly women), and others who have stopped looking for work for various reasons. In the formal labor force, some 2.23 million are fully unemployed, and another 5.9 million are underemployed (defined as “employed but looking for more hours of work”).
Thus, the total unemployment, including underemployment, reached more than 27 million as of 2019. This is 60.4 percent of the total labor force of 44.7 million. This is even worse than the other internationally circulated official figures of 10 million or 22 percent of the total labor force of 45 million are unemployed and another 12 million of documented and undocumented migrant workers or 26 percent, amounting to 48 percent. All types of unemployment have further spiked to higher levels this year due to the Covid-19 lockdowns.
The gravity of the underdeveloped and semifeudal character of the Philippine economy is underscored by the fact that a huge chunk of the labor force have to separate from their families to seek jobs abroad. It can be assumed that those who seek and take jobs abroad do so because of job scarcity in the Philippines. They are as much unemployed by the Philippine economy like those many employables who take odd jobs in the so-called informal economy or who have given up looking for a job in their own country.
If the Philippines were truly a newly-industrialized country, as South Korea and Taiwan and some Southeast Asian countries had been in the 1970s and 1980s, there would even be a labor shortage in the Philippines. It is not possible for the Philippines to have become industrial capitalist or newly-industrialized economy because never has the reactionary government implemented genuine land reform and national industrialization in any period, be it in the period of foreign exchange controls and acclaimed promotion of import-substitution industries in the 1950s or in any later period in which the economic policy would become even more adverse to national industrialization in the Philippines.
As the basic productive sectors, agriculture and industry, decline and the population grows, the reserve army of labor (the unemployed) grows and struggles for odd jobs in both rural and urban areas and those who can speak English hanker for jobs abroad. Frustrated with failure to get adequate employment, the growing mass of unemployed can also be an abundant source of revolutionary activists and Red fighters. The revolutionary movement can never run short of recruits in the face of the worsening crisis of the domestic ruling system and the world capitalist system and the declining opportunities for employment.
The relations of production describe best the semifeudal character of the Philippine mode of production. The chief ruling class is no longer the traditional rent-collecting landlord class of feudal times. It is the comprador big bourgeoisie, which is the chief financial and trading agent of foreign monopoly capitalism and owns the big banks, export-import companies, shopping malls, construction, real estate companies and the like. At the same time, it owns the largest haciendas and related agribusinesses, including livestock and poultry farms, fishing fleets, agro-forestry schemes and stocks in mining companies to assure itself of primary commodities for export in exchange for the manufactures that it imports.
The comprador big bourgeoisie is often called the big comprador-landlord class to emphasize its semifeudal character, its hybrid character as merchant capitalist and feudal owner of haciendas. It engages in manufacturing but it imports the majority of its means of production, the fuel and most major components of the total product. It uses some amount of mechanization in its haciendas but continues to use the cheap labor of seasonal farm workers and collects from the widespread traditional rent-collecting landlords a large amount of agricultural surplus for local processing, domestic trade and export. It has the biggest amount of bribe money to determine the big comprador character of the high bureaucrat capitalists as well as the results of elections at the national, regional, provincial and city levels.
According to the latest figures, the 30 biggest of the comprador big bourgeois in the Philippines are as follows with their corresponding amounts of wealth in billions of US dollars: 1. Sy siblings with 13.9, 2. Manuel Villar with 5, 3. Enrique Razon Jr. with 4.3, 4. Lance Gokongwei & Siblings with 4.1, 5. Jaime Zobel de Ayala with 3.6, 6. Andrew Tan with 2.3, 7. Lucio Tan with 2.2, 8.Ramon Ang with 2, 9.Tony Tan Caktiong with 1.9, 10. Lucio and Susan Co with 1.7, 11.Mercedes Gotianun with 1.5, 12.Ty Siblings with 1.4, 13.Vivian Que Azcona & Siblings with 1.34,14. Isidro Consunji & Siblings with 1.3, 15. Roberto Ongpin with 1.2, 16.Soledad Oppen-Cojuangco with 1.15, Ricardo Po, Sr. with 1, 18. Inigo Zobel with 990 M, 19.William Belo with 900 M, 20.Robert Coyiuto, Jr. with 890 M, 21. Edgar Sia II with 700 M, 22. Dennis Uy with 650 M, 23.Campos Siblings with 600 M, 24. Dean Lao with 500 M, 25. Jacinto Ng with 490 M, 26. Tan, Jr. with 350 M, 27. Delfin J. Wenceslao, Jr. with 340 M, 28.Tomas Alcantara with 300 M, 29. Manuel Zamora with 280 M and 30.Carlos Chan with 260 M. As individuals, the biggest compradors show only the tip of the immense wealth accumulated by their families and family-based business blocs. They have interlocking interests and interlocking directorates in the biggest comprador firms. They engage in syndicates, mergers, swaps and intermarriages.
The biggest of the comprador firms are as follows:1. SM Investments Corp. and Subsidiaries, 2. Ayala Corp. and Subsidiaries, 3. Top Frontier Investment Holdings, Inc. and Subsidiaries, 4. San Miguel Corp. and Subsidiaries, 5.Ayala Land, Inc. and Subsidiaries, 6. SM Prime Holdings, Inc. and Subsidiaries, 7.BDO Unibank, Inc. and Subsidiaries, 8.Aboitiz Equity Ventures, Inc. and Subsidiaries, 9. San Miguel Food and Beverage, Inc. and Subsidiaries, 10. JG Summit Holdings, Inc. and Subsidiaries, 11. Aboitiz Power Corp. and Subsidiaries, 12. Alliance Global Group. Inc. and Subsidiaries,13, Metropolitan Bank & Trust Co. and Subsidiaries, 14. Bank of the Philippines Islands and Subsidiaries, 15. Manila Electric Corp. and Subsidiaries, 16. Metro Pacific Investments Corp. and Subsidiaries, 17. Lopez Holdings Corp. and Subsidiaries, 18. Tangent Holdings Corp. and Subsidiaries, 19. LT Group, Inc. and Subsidiaries, 20. First Philippine Holdings Corp. and Subsidiaries, 21. DMCI Holdings, Inc. and Subsidiaries, 22. PLDT Inc. and Subsidiaries, 23. Globe Telecom, Inc. and Subsidiaries, 24. GT Capital Holdings, Inc. and Subsidiaries, 25. First Gen Corp. and Subsidiaries, 26. Land Bank of the Philippines and Subsidiaries, 27. Megaworld Corp. and Subsidiaries, 28. Filinvest Development Corp. and Subsidiaries, 29. International Container Terminal Services, Inc. and Subsidiaries and 30.Semirara Mining and Power Corp. and Subsidiaries.
While the big compradors are based in Metro Manila and other major cities, the far more numerous rent-collecting traditional landlords and related merchant-usurers, land speculators and promoters of contract growing are based in the countryside, including the minor cities and less urbanized poblaciones. The traditional landlords retain their dominance in the localities with their ownership of most of the agricultural land and related agri-based assets (e.g. rice mills, warehouses, trucking and the like), their command over the votes of their tenants. farm workers , other employees and their dependents and consequently their pre-eminence in the local reactionary governments. They are the base of most of the dynasties at the regional, provincial and municipal levels.
All land reform programs undertaken by the US colonial regime and by the Philippine semicolony or neocolony have proven to be bogus because of loopholes in the law for landlords to evade expropriation and because the redistribution price for the expropriated lands is unaffordable to the tenants because the reactionary government officials connive with the landlords to raise the expropriation price for their corrupt mutual benefit at the expense of the tenants. Eventually, the expropriated land falls into the hands of old-running or newly-rising landlords (from the ranks of bureaucrats, rich peasants, merchant-usurers and professionals) when the land is auctioned off.
At any rate, any kind of bourgeois land reform goes back to renewed land accumulation by a few in the absence of national industrialization as outlet for investing the landlord income from the agricultural surplus. In semifeudalism, there is a vicious cycle of comprador capitalism and feudalism in the absence of a determined and systematic policy of implementing genuine land reform and national industrialization in combination and coordination.
II. Factors against Industrial Capitalism in the Philippines
The natural economy of feudalism characterized by local or regional self-sufficiency was eroded in the 19th century, especially in the transition from the Manila-Acapulco galleon trade to the more expanded Philippine-European trade after the opening of the Suez Canal in 1869. The capitalist commodity system of production and exchange within the use money spread as result of crop specialization in either export crops (hemp, tobacco, sugarcane, coconut and the like) or food staples (rice and corn) for domestic consumption and the accelerated growth of towns and inter-island trade..
In the period of its direct colonial rule and with such devices as the Payne- Aldrich Act, the US made sure that the Philippines paid taxes for its colonial status and remained a profitable source of raw materials and market for surplus manufactures. It developed further the semifeudal character of the Philippine economy by expanding agricultural production for export, opening the mines, building more roads and bridges and establishing the public school system. It carried out land reform to break up the large Spanish friar estates but the poor tenants could not afford the redistribution price and these estates passed on to the native and mestizo big comprador-landlords and to the many more traditional landlords.
In the transition from feudalism to semifeudalism since the 19th century. It was inevitable for handicrafts and pre-industrial manufacturing based on the processing of local raw materials with the use of hand tools to develop further under the stimulus of inter-island trade. In the US colonial period, machinery for large scale production in food and beverages, textile and shoe manufacturing, cordage, paper and others were imported and inspired the small national bourgeoisie and its advocates to aspire for national industrialization and nationalization of the economy.
Up to the Commonwealth period, Quezon did not engage in genuine land reform but promoted the resettlement of the landless as well as the land speculators from the land-scarce regions to the frontier regions, especially Mindanao and the Cagayan Valley. There were merely token land expropriations where landlord-tenant conflicts were intense. Palliative laws against usury and excessive rents in tenancy on rice land were also enacted but carried loopholes or impossible requirements (e.g. the landlord-dominated municipal councils had to approve local application of the law) that prevented implementation and were easily circumvented.
Never has there been any serious plan or effort by the US colonial regime nor the semicolonial puppet Filipino regime, from Roxas to Duterte, to build the industrial foundation of the Philippines and complement it with genuine land reform. There has never been any plan to develop metallurgy, especially of iron and steel, beyond the level of extracting the mineral ores of the Philippines for export or to build the machine tool industry for the industrialization of the Philippines beyond the level of repairs, reconditioning and producing minor parts of imported machines. There has also been extremely limited processing of locally available materials to produce construction materials (aside from cement, logs and bricks), industrial chemicals and pharmaceuticals.
After World War II, the Philippines became a semicolony. The US made sure to grant nominal independence only if the Filipino puppet leaders headed by Roxas signed the US-RP Treaty of General Relations making the Philippines subservient to the US economically, politically, culturally and militarily. US corporations and citizens retained their property rights and were guaranteed so-called parity rights or equality with Filipinos in the exploitation of natural resources and in the operation of public utilities and all types of businesses. The US made the overt threat that it would not pay for war damage compensation if it did not get its so-called parity rights.
The reactionary government officials, academics and press pundits hoped that the Philippines would be rehabilitated and developed with the use of US and Japanese war damage payments. They spoke of building new and necessary industries especially under the auspices of the Rehabilitation Finance Corp. (RFC), other state banks, and the National Development Corporation. But the larger fact was that the US companies became the main beneficiaries of war damage payments and loans from the US Export-Import Bank which were used to rebuild their trading firms and their subsidiaries manufacturing household consumables from locally available raw materials.
The US monopoly firms swamped the country with its surplus goods and pushed the national bourgeoisie to the margins. When the rehabilitation funds were depleted by paying for the reconstruction of US firms and for imported consumption goods by 1949, the US allowed the Philippine puppet government to adopt a policy of foreign exchange controls within the framework and control of the International Monetary Fund (IMF), the World Bank, and the US Export-Import Bank.
The foreign exchange control was later prettified at best by President Garcia as an instrument for favoring Filipino businessmen in the name of developing the Philippine economy with “import-substitution” industries under the so-called “Filipino First” policy. He renamed the RFC the Development Bank of the Philippines in 1959. He had economic nationalists in his cabinet. However, the declared good intentions of Garcia did not result in the industrialization of the Philippines.
At best, the efforts of nationalist economists and business groups created some space for certain light and intermediate local industries to supply some domestic needs but were still dependent on imported machinery and subject to licenses and patent rights held by foreign companies. Even beyond the Garcia regime, the “Filipino First” policy also inspired the Filipino big comprador takeover of the Meralco in 1962 and the PLDT in 1967 from their American owners. But of course the equipment and fuel for generating power would continue to come from US companies.
Soon enough the US scrapped the foreign exchange controls by having Macapagal elected President in 1961 and using him to adopt the decontrol policy, reaffirm the Laurel- Langley Agreement and promote “free enterprise”. At the same time, Macapagal still wanted to present himself as being interested in the industrial development of the Philippines. Thus he launched his land reform program and the showpiece Iligan Integrated Steel Mills Inc. (IISMI) in northern Mindanao with funding mainly from Japanese banks and steel monopoly firms.
The Agricultural Land Reform Code of Macapagal was touted as surpassing the land resettlement programs and token expropriation of feudal estates undertaken by all previous regimes supposedly for the purpose of land reform. It was even hyped as the final death blow to feudalism. Despite the brave words of declaring land tenancy as anathema to public policy and economic development and formally abolishing land tenancy, the land reform program proved to be bogus as it carried loopholes, limited to rice and corn land, was underfunded by Congress and required the land reform beneficiaries to pay the redistribution price that they could not afford, especially when crop failure occurs due to natural disaster or serious illnesss hits the peasant family.
The Macapagal promoted the entry of foreign investments, especially in mining, logging and plantations for the purpose of export. The IISMI flopped eventually as the Japanese creditors and steel makers made the firm import finished steel plates, rods and tubes from Japan for mere reshaping. The Iligan project became known eventually as a beauty parlor that merely curled metal plates to make galvanized iron sheets for the roofs of Philippine buildings and homes.
The economic technocrats of Macapagal echoed the US economist Walt Rostow and boasted that the Philippines was already on the “take-off stage” of economic development. They were most enthusiastic about the designs and feasibility studies for infrastructure projects under the auspices of the World Bank. With Macapagal failing to win a second term, it would be Marcos taking advantage of the said designs and feasibility studies.
By the 1960s, Japan had recovered from the devastation of its industries and was enjoying an industrial boom. It was brimming over with surplus goods to dump on the Philippines, which received these, together with the surplus goods from the US. The reactionary wisdom then was not to industrialize the Philippines because its so-called comparative advantage was in selling mineral ores, logs and bananas to Japan. The same anti-industrial thinking persisted even when the US and Japan agreed in the 1970s to allow capitalist-style land reform and on that basis industrialize Taiwan and South Korea as front-liners and show windows against the socialist industrialization of China and North Korea.
The Marcos regime showed no interest in land reform but allowed the so-called reform program of Macapagal to run on until he put forward his own bogus agrarian reform program to replace it in 1971. Marcos made it appear that his program would also sweepingly transfer all the rice and corn land of the landlords to the tenants with the simple formula of determining the average production of the previous three years and letting the tenants pay by installment to the Land Bank 25 per cent of such average production for a number of years to acquire the land. But as in the Macapagal land reform program, the government bureaucrat and landlord connived in the computation of production values against the tenants.
The Marcos regime was blatantly against land reform and national industrialization. It was mainly interested in pork barrel corruption of unprecedented colossal proportions. It e seized on the neo-Keynesian line of the World Bank and the Asian Development Bank (ADB) to build roads, bridges and ports to enhance the infrastructure for exporting mineral ores, logs and plantation crops and importing construction equipment and materials and consumer goods. The infrastructure projects were overpriced and were contracted to Marcos crony corporations. The war damage payments from Japan were exhausted and huge amounts of foreign loans were incurred from Japan, the Asian Development Bank (ADB) and the World Bank.
The Marcos regime touted the infrastructure projects and some eleven corporations supplying financial and engineering services and some local construction materials like cement, rocks, wood products and the like as instruments and outcomes of national industrialization. Major banks were hyped as universal banks providing not only commercial credit but also loans for industrialization. In the late 1970s, the export processing zones for reassembly and fringe processing were also celebrated as the “cutting edge” of industrialization.
The Marcos regime started to fall into financial trouble in 1979 because of excessive spending and borrowing for infrastructure projects and tourist facilities. His crony construction companies were also scrambling for a share of contracts in the construction projects fuelled by petro-dollars in the Middle East. Exactly at this time, when Marcos was in trouble with his pork barrel economics, some elements headed by Ricardo Reyes within the leadership of the Communist Party of the Philippines (CPP) concurred with the Marcos propaganda misrepresenting the Philippine economy as industrial capitalist and spread the subjectivist line that the Philippine economy was no longer semifeudal.
This subjectivist line resulted in undermining the general line of people’s democratic revolution through protracted people’s war and in bringing about Right opportunism in the so-called New Katipunan program of the National Democratic Front of the Philippines (NDFP) and much worse in several Left opportunist lines which were pushed by Trotskyite elements in Metro Manila and Mindanao and touted urban insurrectionism as the lead factor in the armed revolution, without the necessity of protracted people’s war.
Where the biggest damage to the revolution occurred, the line of people’s strikes in urban areas and intensified city partisan warfare was pushed in combination with the premature formation of larger New People’s Army (NPA) units to serve as mere adjuncts of the urban actions in certain regions. The line prematurely and unnecessarily exposed the urban underground of the revolutionary movement and pushed the people’s army to create too many military companies and to neglect the deployment of enough platoons and squads for keeping and expanding the mass base.
After the downfall of Marcos in 1986, the Cory Aquino regime (1986-1992) was overburdened by the foreign debts that had been incurred by Marcos. And yet, following US and IMF diktat, it preserved the dictator’s onerous Presidential Decree 1177 imposing automatic appropriation for debt service payments and adopted the policy of paying for odious foreign debts, like those incurred for the showy but ill-conceived Bataan nuclear power plant that had been cancelled for gross anomalies in financial, technical and environmental calculations.
The Aquino regime shifted to increased domestic public borrowing. It also complied with the neoliberal policy of the US by adopting the policy of import liberalization; meaning to say, expanded importation of foreign manufactures. With much less foreign loans to finance grandiose infrastructure projects and conjure the illusion of development, the semifeudal character of the Philippine economy became more exposed than ever under the presidency of Cory Aquino.
Despite the strong clamor from an unprecedented alliance of peasant organizations with strong support from middle forces, the hacendera Cory Aquino preserved the reactionary tradition of imposing a bogus land reform law. The constitutional commission that she created put into the 1987 Constitution the provisions making expropriation of land subject to the prior voluntariness the landlord and offering stock options to farm workers in incorporated export-crop haciendas like her Hacienda Luisita.
And of course, as in the case of all reactionary regimes, the reactionary Congress of big landlords and comprador bourgeois, limited the appropriation of funds for land reform and worsened the exploitation of the masses of peasants and farm workers. Since the end of the Cory Aquino regime, there has been no substantially different land reform program initiated by any of her successors. Landgrabbing by agri-corporations, bureaucrat landlords and traditional landlords has become worse from year to year at the expense of the indigenous communities and poor peasants.
It was during the term of Ramos (1992 to 1998) when the US and its imperialist allies, especially Japan decided to loosen up commercial credit for financing private construction in an unprecedented way in the whole of Asia, including the Philippines. In the same period, the U.S. further ensured hostaging the Philippine central bank to the U.S.-dominated global private central banking cartel via Republic Act No. 7653, the New Central Bank Act in 1993.
The money flowed to the construction of high rise office and residential buildings and tourist facilities from 1994 onwards until the Asian financial crisis of 1997. In conformity with neoliberalism and with the supposed comparative advantage of the Philippines in raw-material production, the Ramos regime did not undertake any basic or heavy industrial project that had any semblance of building the industrial foundation of the Philippine economy.
Instead, in line with privatization under the neoliberal policy, he sold off the productive assets of state corporations,including the already decrepit Iligan Integrated Steel Mills to a Malaysian Chinese company, just to finance housekeeping operations of his government, increase military appropriations in the name of “modernization” and reduce the budgetary deficit. Public assets like the former US military bases (Clark, Subic and John Hay), the Fort Bonifacio reservation, and the Manila Bay reclamation projects were also thrown wide open to real-estate development for tourist and other non-industrial business facilities.
The Asian financial crisis of 1997 devastated not only the erstwhile private construction boom but even the semi-manufacturing of semiconductors and garments. These would be revived after a few years later but this time subordinated to China as the final platform of reassembly prior to the export of the products to the US and other Western markets. The “economic tigers” of Southeast Asia became emaciated kittens. The succeeding Estrada regime (1998-2001) was unstable for lack of public funds and was overthrown for raiding the social insurance systems for government and private employees in corrupt lending schemes to his cronies.
China became the main partner of US imperialism in promoting and taking advantage of the neoliberal policy of imperialist globalization. Once more there was a rising industrial capitalist country, a gigantic one at that, which made it easy for the reactionary policy makers and economists in the Philippines to invoke so-called comparative advantage as a reason to stay underdeveloped and semifeudal and to shun national industrialization. Sure enough Chinese manufacturing firms as well as US, Japanese and other foreign companies in China would enjoy dumping their manufactures in the Philippines.
The Arroyo (2001-2010) and Noynoy Aquino (2010-2016) regimes were bound by the neoliberal policy of imperialist globalization. They did not undertake any project for the industrialization of the Philippine economy. But they “improved” the financial standing of their administrations by benefiting from quantitative easing of credit by the US Federal Reserve System and the consequent flow of portfolio investments or speculative capital from the US and other foreign hedge funds, raising the value-added tax, by taking more foreign loans and of course by taking advantage of the growing foreign exchange earnings from overseas contract workers and call centers.
Since Duterte became president in 2016, the Philippine economy has deteriorated from year to year. And certainly no genuine land reform and national industrialization have been undertaken. Duterte has boasted that he can distribute land to the landless peasants all by himself but in fact landgrabbing by agri-corporations and landlords has worsened under his regime. Worse, the victims of landgrabbinbg are subjected to bombardments and violent eviction. At the same time, neitherthe US nor any other imperialist power has offered anything to the tyrant that would result in industrialization of the Philippines as was done decades ago in Taiwan and South Korea.
Duterte himself admits that he knows best how to kill people to solve problems and that he knows nothing about economics except the pork barrel kind of economics of which his idol Marcos had a mastery for plundering the economy. Thus, the center piece of Duterte’s economic plan is to beg China for high-interest loans for overpriced infrastructure projects to be undertaken by Chinese contractors, Filipino-Chinese subcontractors and a predominantly Chinese work force.
But now, wonder of wonders, there is a new campaign by counterrevolutionary elements, including Trotskyites and pseudo-socialist clerico-fascists, to claim that the Philippines is industrial capitalist rather than semifeudal or big comprador capitalist. Their ulterior motive shows when they claim that the people’s democratic revolution through protracted people’s war is a futile exercise and might as well be liquidated.
But the CPP and the entire revolutionary movement assure them that easily more than 60 percent of the Philippine population is still in the countryside. This is a far cry from the less than percent peasant population of a definitely industrial capitalist country. The poor and middle peasant masses as the big ally of the working class are still there to provide the widest possible social and physical terrain for maneuver in a
protracted people’s war.
III. The People’s Democratic Revolution or Reforms through Peace Negotiations
Since its founding on December 26, 1968, the CPP has put forward the Program for a People’s Democratic Revolution on the basis of the critique of the Philippine society as semicolonial and semifeudal. The US granted nominal independence to the Philippines in 1946 but retained it as a semicolony through the US-RP Treaty of General Relations and subsequent treaties, agreements and arrangements subordinating the Philippines to US hegemony economically, politically, culturally and militarily.
The Philippine economy remains semifeudal, dominated by US monopoly capitalism and its major allies and subordinated to the world capitalist system but run directly by the comprador big bourgeoisie, the landlord class and the bureaucrat capitalist class. The comprador big bourgeoisie is the chief financial and trading agent of the foreign monopolies but has its own landed, mining and manufacturing interests, keeps an alliance with the traditional rent-collecting landlords and casts its influence on bureaucrat capitalists that have never decided at any time to carry out genuine land reform and national industrialization.
The national bourgeoisie has weakened from its relatively stronger position before World War II. This is because of the flood of surplus consumer products from the US, dependence on US trade policies and the depletion of foreign exchange by 1949, the neo-Keynesian policy of foreign borrowing for infrastructure projects, the flood of surplus manufactures from Japan and the newly-industrialized countries elsewhere in East Asia, the neoliberal economic policy and another flood of surplus manufactures from China. The national industrialization of the Philippines has been effectively stopped within the framework of the IMF, World Bank, WTO, ADB, Asian Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN).
The Philippine Chamber of Industry (previously formed to promote the goal of industrialization) has been dominated by big compradors. The spokesmen of the national bourgeoisie in the Philippine Senate (like Senators Lorenzo Tanada and Jose W. Diokno) have disappeared. Both Houses of Congress have become entirely pork barrel-minded, limited to thinking of economic development only in terms of graft-laden infrastructure projects. With the enactment of laws favoring foreign investments since the late 1960s, the enterprises of the national bourgeoisie were squeezed out. They persevere to a limited extent in the processing of food, tobacco, cotton, plant fibres, wood, leather and other locally available materials.
On behalf of the Filipino working class, in basic alliance with the peasantry, the CPP has taken the lead in advocating agrarian revolution and national industrialization within the context of the people’s democratic revolution with a socialist perspective. This revolution seeks to break the grip of foreign monopoly capitalism on the Philippine economy and to deprive the exploiting classes of big compradors, landlords and bureaucrat capitalists of the power to control the economy.
It is timely and of decisive importance that the CPP and the revolutionary movement are underscoring the need for genuine land reform and national industrialization because the neoliberal policy of the imperialist powers and client states is unravelling. This policy has let loose the unbridled greed of the monopoly bourgeoisie of the imperialist powers and has subjected the proletariat and peoples of the world to the worst forms of exploitation and oppression and wars of aggression in certain parts of the world. This is generating one crisis of overproduction after another on a worsening scale.
The imperialist powers, their magnates and wizards have failed to solve the ever worsening crisis of overproduction and the prolonged stagnation of the world capitalist system that followed the global financial crash 2007-2008. Before they can solve this crisis, another one that is worse has come on top of it. It has been further aggravated by the COVID-19 pandemic.
This health crisis has triggered lockdowns and social panic across the world. It has devastated economies and has thrown people out of their jobs and other means of livelihood. And worst of all, counterrevolutionary states have taken advantage of the crisis to repress the people and the monopoly bourgeoisie to take multi-billion dollar giveaways from central banks, couched as “bail out loans” and “stimulus packages”, and evade responsibilities to their mass of employees.
The crisis of the world capitalist system has become so severe that the US and China, who were main partners in the implementation of the neoliberal policy of imperialist globalization, are increasingly at odds with each other. The US accuses China of having cheated it with its two-tiered economy of state capitalism and private capitalism, use of state planning to achieve strategic economic and military goals. The US also decries China’s use of state subsidies and currency manipulation to favor Chinese enterprises and the theft of US technology from US companies and research laboratories. The two biggest imperialist powers are in a process of decoupling and entering a new Cold War.
In all imperialist countries, the monopoly bourgeoisie is shaken by the worsening crisis of the world capitalist system. It is worried to death by its own inability to overcome the crisis and its fear of the rise of revolutionary mass movements among the workers and the people against escalating austerity measures and repression. Desperately, it is encouraging and supporting ultra-reactionary movements of fascist, chauvinist, racist, anti-migrant, misogynist, militarist and anti-environmentalist character. It is actively trying to coopt people’s initiatives and movements and even fleshing out a strategy of tension and distraction through its long-leash sleeper assets among the al-Qaeda/Abu Sayyaf/Daesh/ISIS-type terrorist cells to outflank, hijack, deflect and emasculate the growing revolutionary outrage of the world’s peoples.
Millions of Filipino migrant workers in more than 100 countries are now threatened by the worsening crisis of global capitalism and by the rising ultra-reactionary movements, especially in the imperialist countries. Many of them have already been thrown out of their jobs because of the tightening of rules by host governments against them and by the lockdowns and shutdowns due to the COVID-19 pandemic. There is now a drastic reduction in the foreign exchange earnings of the migrant workers and their repatriation in increasing numbers is becoming a major problem.
Meanwhile in the Philippines, the semifeudal economy is reeling from the decline of both the agriculture and industry sectors and the unsustainable bloating of the service sector and the public debt. The service sector and public debt bubbles are already in the process of implosion. The tyrannical Duterte regime aggravates the situation by mishandling its response to the COVID-19 pandemic and by taking advantage of it to grab more powers. Duterte and his fellow crooks in the top echelon of the bureaucracy and military engage in the most brazen and outrageous forms of plunder. Thus, the crisis of the ruling system has worsened rapidly and is generating the most favorable conditions for mass protests and the people’s war for national and social liberation.
As the inter-imperialist contradictions of the US and China are sharpening, the Duterte regime is desperately trying to serve two conflicting imperialist masters. It is still keeping the treaties, agreements and arrangements that make the US the most dominant imperialist power in the Philippines in an all-round way. In return, the US is relying on the Duterte regime to carry out an anti-communist military campaign of suppression against the revolutionary movement and to make a charter change to allow US corporations unlimited ownership of Philippine land, natural resources, public utilities and all types of businesses.
At the same time, Duterte has allowed China to build seven military bases in the exclusive economic zone of the Philippines in the West Philippine Sea in violation of the UN Convention of the Law of the Sea and the 2016 final judgment of the Permanent Arbitration Court in favor of the Philippines against China. It has allowed China to own a number of Philippine islands through Chinese casino operators, control the national power grid, erect cell towers in Philippine military camps and assist the reactionary armed services (AFP and PNP) in developing its communications system.
Duterte commits all these acts of treason in exchange for bribes for taking out high interest China loans for overpriced infrastructure projects to be undertaken by Chinese contractors and their own work force. He tries to benefit not only from official transactions with China and its state banks and corporations but also from shady relations with Chinese criminal syndicates engaged in the smuggling of illegal drugs and other contraband, in online gaming and casino operations and in illegal Chinese immigration under the cover of casino employment and tourism. Corrupt Chinese officials are also using these criminal operations of Chinese triads for laundering and stashing their bureaucratic loot abroad.
In the face of two conflicting imperialist powers trying to dominate the Philippines, with the collaboration of the exploiting classes of big compradors, landlords and bureaucrat capitalists, the CPP and the revolutionary movement of the Filipino people expect the chronic crisis of the semicolonial and semifeudal ruling system to to worsen at an accelerated rate. They are therefore more than ever determined to carry out the people’s democratic revolution through protracted people’s war. They are resolved that the people’s democratic revolution can be completed and the socialist revolution can be started only upon the overthrow of the imperialist-supported big comprador-landlord class dictatorship.
In the course of the people’s war, agrarian revolution can be carried out in substantial areas in the country. But the agrarian revolution and other socio-economic transition measures can be completed and the socialist transformation of the economy can be carried out in earnest only after the nationwide seizure of political power by the proletariat in alliance with the peasantry and other democratic social strata.
By wielding state power, the proletariat shall be able to take over the commanding heights of the economy; meaning to say, take out the Philippine central bank from the global private central banking cartel of the big banksters and transform it into a genuine public central bank, control the existing industries, the sources of raw materials and the communications and transport lines, carry out socialist industrialization and complete the agrarian revolution in conjunction with the collectivization and mechanization of agriculture.
But while the people’s democratic revolution through protracted people’s war is still in progress, the CPP has agreed with its revolutionary allies within the NDFP and with further allies and peace advocates outside of the NDFP frame to engage, whenever possible and advantageous to the people, in peace negotiations with the reactionary government to address the roots of the civil war with basic social, economic and political reforms in order to lay the basis for a just and lasting peace.
The main purpose of peace negotiations, the substantive agenda and the methods of negotiating and agreeing have been set forth in The Hague Joint Declaration of 1992. More than ten agreements have been mutually approved, including the Joint Agreement on Safety and Immunity Guarantees, the Joint Agreement on Reciprocal Working Committees and the Comprehensive Agreement on Respect for Human Rights and International Humanitarian Law (CARHRIHL). Even the GRP and NDFP versions of the Comprehensive Agreement on Social and Economic Reforms (CASER) have been fully drafted and have led to substantial tentative agreements by the Reciprocal Working Committees of both sides.
But the US imperialist officials and the most reactionary economic and military interests have been behind the scenes prompting the Philippine president to use the demand for indefinitely prolonged ceasefire in order to block the progress of the peace negotiations, to paralyze the revolutionary movement and to stop the negotiations altogether. It is now obvious that every president has used the peace negotiations to consolidate his or her political position within the first year of rule and to try to wangle an indefinitely prolonged ceasefire to paralyze the revolutionary movement and steer the wider public discourse away from addressing substantive issues.
But why do the CPP and NDFP continue to entertain the offer of peace negotiations by every incoming president of the reactionary government? Were the CPP and the NDFP to rebuff such offer they would appear as the bellicose party in the eyes of a great number of people and the broad range of peace advocates. They would be playing the role of the ultra-Leftist, infantile communist or the crazy Trotskyite who poses as pure and perfect proletarian revolutionary, isolated from the masses and helping the enemy appear as the lover of peace. It is the wise policy of the CPP and NDFP to avail of the peace negotiations as a way of presenting the program for a people’s democratic revolution, urging all patriotic and democratic forces to explore the paths to a just and lasting peace, and letting the enemy side unfold its anti-national, anti-democratic and anti-people character.
But is it entirely impossible for the adversaries in a civil war to negotiate and agree on a truce? It is not impossible. It has been demonstrated twice in the history of the Chinese revolution that the Chinese Communist Party (CCP) and the Guomindang (GMD)could negotiate and agree on a truce in order to fight a third party, first against the northern warlords and then against the Japanese invaders. The CCP and the GMD even tried to negotiate in order to avert the resumption of the civil war after the defeat of Japan. But goaded and backed by the US, the GMD reactionaries decided to carry out a civil war which they lost in 1949.
Is it possible for the Philippine reactionary government to be led by a president or party that is patriotic and progressive enough to engage in serious peace negotiations with the NDFP to address the roots of the armed conflict, agree on social, economic and political reforms and thereby lay the basis for a just and lasting peace? Such a possibility depends on the objective conditions (especially certain domestic and international factors that would hinder or enhance the peace process) and on the character and ability of said president to persuade the big compradors and landlords to take the chance of carrying out land reform and national industrialization as done previously in certain countries.
Among the presidents of the reactionary governments, Duterte was the most loud-mouthed about seeking a just peace with the revolutionary movement. But he was merely pretending. If not for his small-mindedness and short-sightedness, if not for his sheer stupidity and cowardice to stand his ground against a rabidly pro-US and anti-people AFP, he could have proceeded with the NDFP in forging the CASER in order to carry out land reform and national industrialization on a self-reliant basis with the further assurance of income from the oil and gas resources, with an estimated value of USD 26 trillion, in the exclusive economic zone of the Philippines in the West Philippine Sea.
But he has preferred to “lay aside” in his own words the 2016 judgement of the Permanent Arbitration Court in favor of the Philippines in accordance with the UN Convention on the Law of the Sea. His recent posturing at the UN General Assembly does not change this fact. Instead of playing his cards well to advance national sovereignty, he has acted as a traitor by letting China violate the sovereign rights of the Philippines and build seven artificial islands to serve as military bases, destroy the marine environment and claim the marine and mineral resources that belong to the Filipino people. He is still hoping to get huge amounts of bribes from the overpriced infrastructure projects and high-interest loans amounting to USD 24 billion, that were promised by China.
There are ultra-reactionaries, especially those with a militarist mind-set, who say that they do not need any peace negotiations with the NDFP to achieve peace and to develop the Philippine economy through genuine land reform and national industrialization. But indeed, if left to themselves, they will continue to follow the dictates of their imperialist masters and the local reactionary interests and they will only drive the broad masses of the Filipino people to wage armed revolution and overthrow the semicolonial and semifeudal ruling system.
The CPP and the NDFP have always given a fair chance to every reactionary government from that of Cory Aquino to that of Duterte to prove that the revolutionary movement is seriously interested in peace negotiations for the benefit of the Filipino people. Peace negotiations have always been broken because US imperialism and the local ultra-reactionaries have always wanted to turn these into surrender negotiations at the expense of the revolutionary movement and the people or at least to cause confusion among the ranks of the revolutionary movement and the people.
But they cannot break the revolutionary will of the CPP and the NDFP and the Filipino people. This will is well expressed in the Program of the People’s Democratic Revolution and is further applied in the documents and drafts already made in the interest of the Filipino people in the course of the GRP-NDFP peace negotiations. The CPP and NDFP are always open to joint agreements with any force so long as these do not violate revolutionary principles and they spell out mutually agreeable policies for basic social, economic and political reforms that improve the situation and lives of the Filipino people and lead to the goal of a just and lasting peace in a Philippines that is independent, democratic, socially just, developing in an all-round way, prosperous and in solidarity with the people of the world against imperialism and all reaction.###