Today in History: Carlos P. Garcia Made His MOST Important Contribution to the Philippines

High School Philippine History Movement

Yes, Carlos P. Garcia made his most important contribution to the Philippines--he died! It's sickening how schools condition students to believe in Pinoy Pride Economics aka the Filipino First Policy. If we're to talk about it, some people say, "Oh the Filipino First Policy is so good!" However, if I were to really address it, the Filipino First Policy advocates' list of favorite sources are:

1. The statements of any framers of the 1987 Constitution of the Philippines. They are put at high regard. For example, an old man I met say, "I will not believe anything if it's not from the framers, concerning the Philippine constitution." 
2. Faulty DepEd textbooks that are already notoriously known for factual error, even today!
3. The statement of any priest from the Catholic Bishops' Conference of the Philippines (CBCP). For example, cite the words of Archbishop Socrates Villegas.

Garcia is still hailed as a hero and buried at the Libingan Ng Mga Bayani (Heroes' Graveyard). It's only fitting for the late protectionist, Ferdinand E. Marcos Sr., to be buried near the founder of the Filipino First Policy. People keep thinking that the Filipino First Policy is the best thing to happen. Some even cite the late Alejandro Lichauco, whom the IBON Foundation likes to cite. Right now, I'm simply going to put aside allegations that the IBON Foundation is actually a legal front of the CPP-NPA, compared to other groups that mourned the passing of Jose Maria Sison last 2022. I'd focus on the arguments firsthand!

What then is the Filipino First Policy? It's described as:

The ”Filipino First” policy of this administration re­ceived a resounding popular indorsement in the last election. Politically we became independent since 1946, but econom­ically we are still semi-colonial. This is especially true in our foreign trade. This policy is therefore designed to regain economic independence. It is a national effort to the end that Filipinos obtain major and dominant participa­tion in their own national economy. This we will achieve with malice towards none and with fairness to all. We will accomplish this with full understanding of our inter­national obligations towards our friends of the Free World. We will carry this out within the framework of our special relations with the United States to whose citizens we granted until 1974, by Constitutional provision, equal rights as Filipinos in the exploitation of our natural resources and public utilities, and to whom we also granted trading parity rights under the Laurel-Langley Agreement. Under this policy we will welcome friendly and understanding foreign capital willing to collaborate with us in the exploitation of our vast natural resources preferably on joint venture basis.

What Garcia did with this "preferably on a joint venture basis" is overpriced rent. Can you imagine if you were renting a space but the lessor had to get 60% of your net income (read here)? Certainly not! No sane business owner will rent a space with that kind of condition. A simple accounting process will show that your Net Income After Taxes is barely half of your revenue! All the expenses include salaries, utility expenses, purchasing of materials, depreciation, interest, and rental (when applicable). Why should the profit of go to the workers or the landowner? They already had a payment of the salary and the rental! Of course, no one should make a profit at the cost of workers' wages. 

Mary Ann LL. Reyes writes this down at the Philippine Star: 

In terms of complexity of its products, the Atlas Economic Complexity report for 2021 ranked the Philippines 33rd globally in the complexity index and fourth in Southeast Asia, ahead of Vietnam and Indonesia. However, since the report was released, the Department of Trade and Industry has noted that Indonesia and Vietnam have made significant strides in diversifying into more complex product categories.

According to the DTI, while the Philippines between 2006 and 2021 ventured into 30 new export products, contributing $41 to the gross domestic product per capita, Vietnam has ventured into 41 new products that boosted its GDP per capita by almost $1,500.

The Philippines’ export volume of $74 billion also pales in comparison to Indonesia’s $231 billion, Thailand’s $266 billion, and Vietnam’s $355 billion.

What’s worse is that the trade balance of goods of the Philippines, which is the value of exported goods minus the value of imported goods, has consistently registered a negative value which signifies a trade deficit, meaning we import more than we export.

From 2013 to 2023, the trade imbalance has grown from negative $9.8 billion in 2013 to negative $66.94 billion in 2022 and minus $61 billion last year.

Sure, we must protect the local businesses, but not to the point they're sheltered from competition. It's to protect them from unfair competition. What I'd also like to emphasize is that Bernardo M. Villegas, ironically, one of the framers of the 1987 Constitution of the Philippines, wrote this down in Business World:

It was President Carlos Garcia who, in a State of the Nation Address, identified the Filipino First policy with economic independence when he declared “The Filipino First Policy is designed to regain economic independence. It is a national effort to the end that Filipinos obtain major and dominant participation in their own national economy.” This seed planted by President Garcia bore fruit in more modern times in the 1987 Philippine Constitution which was drafted by a body consisting of individuals the majority of whom were aged 50 years or above and, therefore, belonged to the generation literally brainwashed with the Filipino First mentality. I was among those 50 appointed by then President Corazon Aquino to draft the Constitution that was ratified by some 80% of Filipino voters in 1987. Unfortunately for the few of us who were in favor of a more open economy, even a good number of the younger Commissioners were affected by leftist anti-foreigner ideas. This explains why the Philippine Constitution of 1987 contains ultranationalistic economic provisions based on the following provisions:

Article II, Section 19: “The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.”

Article XII, Section 10: “…In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.”

Unwittingly, the majority of those who drafted the Philippine Constitution of 1987 were guilty of contradicting themselves. On one hand, they provided that among the goals of the national economy are “…a sustained increases in the amount of goods and services produced by the nation for the benefit of the people; and expanding productivity as the key to raising the quality of life for all, especially the underprivileged.” The Filipino First policy constrains these goals since it restricts investment capital to fuel economic growth to whatever Filipino capitalists can raise, even on a 60-40 basis. This will be especially true during the post-pandemic efforts to recover and to grow at 6-7% or, even better, at 8-10% which China and India were able to more than achieve in the last century when they were at a stage of development similar to where we are now.

As our ASEAN neighbors like Vietnam, Malaysia, and Singapore realized long ago, foreign investors do not bring in only investment capital. They also provide their global network and access to world markets. They provide training and technology transfer which increase domestic productivity. Foreign investments directed at the domestic market benefit consumers in terms of competitive prices, higher quality of goods and services, and wider choices. Foreign investors, by bringing long-term investment capital, create much needed jobs that address our perennial problem of high unemployment and even higher underemployment rates. The Filipino First policy comes at very high economic and social costs to the Philippine population, especially the poor.

Thankfully, Bernardo Villegas here (decided to write his full name, to avoid confusing him with Socrates Villegas, a die-hard, stubborn boomer) has advocated for reforming the 1987 Constitution of the Philippines! When I think about the mention of Cory, I always felt she should've been the president of a Parliamentary Philippines. Cory would've done better in representing the nation than leading the nation. True, businesses confiscated by Marcos should be returned. However, the Filipino First Policy was still a real problem. As Bernardo Villegas says, several framers created a contradiction. It's like having an operating system that would become so vulnerable to hackers, viruses, and would crash more frequently, because of a programming glitch. In fact, the 1987 Constitution of the Philippines should've been updated long ago. Seriously, is Article XVII just going to be there for decorative purposes? Since when was the 1987 Constitution of the Philippines meant to be some "infallible sacred text"?

That's why I've ceased listening to the Monsods and Davide, as valid sources. I wrote lessons one can learn from a "Bumbay" named Kishore Mahbubani. Filipinos should go beyond citing the late Lee Kuan Yew on the Marcoses. What's the use of citing LKY on the Marcoses while we refuse to follow his good advice on economics and discipline? I'd like to mention that Mahbubani is far more worth listening to Davide. Davide talks but where's his proof to prove his statements? Mahbubani grew up in an impoverished Singapore and saw it rise. Mahbubani is a highly esteemed person at the National University of Singapore. Filipinos would've a lot to learn (and to learn) from Mahbubani's experience.

Garcia is gone, but his policy lives on. Honestly, Garcia's policy should've died with him. Garcia may have a long track record of academic achievement. However, what good is academic achievement if the person clings on to them and causes failures later on? As the bitter truth that no amount of sugar can change it goes, "Filipino First Policy caused the Philippines to fail, one way or another."