Foreign Relations of the United States, 1950, East Asia and the Pacific, Volume VI

896.00/11–1750

Memorandum of Agreement, Between the Administrator of the Economic Cooperation Administration (Foster) and the President of the Philippine Republic¹

President Elpidio Quirino and the Hon. William C. Foster, as representative of President Harry S. Truman, have agreed to recommend to their respective Governments a program covering the nature and form of the assistance and cooperation which the Government of the United States would have to extend to the Government of the Philippines to assist the latter in the solution of age-old social and economic problems greatly aggravated by the last war, and to bring about a new Philippine era of progress and plenty.

1. It is realized that the Philippines must have greater production, a more diversified economy, and a higher family income for its industrial and agricultural laborers, all of which will greatly contribute to the enhancement of free institutions in the Philippines.

2. The President of the Philippines, highly appreciative of the proferred help on the part of the President of the United States, to bring about social and economic well-being in the Philippines, announces his determination to lead his country in the attainment of this great goal, through total economic mobilization and the bold implementation of measures that will bring about a higher degree of social justice in the Philippines.

3. The main recommendations of the Report to the President of the United States by the Economic Survey Mission to the Philippines² will be the basis for serious and immediate consideration by the Philippine Government in order to attain the objectives mentioned above, and may be considered a practical and sound point of departure in working out a program of social, economic and technical assistance and cooperation.

4. To this end, and considering that time is of the essence, the Council of State shall forthwith formulate a legislative program of the following measures for prompt consideration by the Congress of the Philippines:

A. Tax legislation of an equitable nature designed to balance the budget and build up a surplus to gradually eliminate previous deficits and at the same time to help in counteracting inflationary trends. It is estimated that, in order to be able to take advantage fully of U.S. aid, it will be necessary to fix as an immediate goal a total of not less than 565 million pesos in tax revenues. It is proposed that new and increased taxes go into effect January 1, 1951.

B. A minimum wage law for all agricultural workers as the first step towards labor and rural legislation designed to raise the level of wages especially in agricultural areas and to improve the living conditions of agricultural and industrial workers.

C. A joint resolution expressing the general policy of Congress to accelerate the carrying out by Congressional enactment of the social reforms and economic development measures recommended by the Economic Survey Mission to the Philippines.

5. The United States Government agrees, at the request of the Philippine Government expressed herewith, to furnish with the least possible delay technical assistance, particularly in the fields of taxation and revenue collection, social legislation and economic development, to act in an advisory capacity to the appropriate departments or agencies of the Philippine Government.

6. Both Governments will appoint their respective committees to resume the negotiations for a Treaty of Friendship, Commerce and Navigation. It is assumed that these negotiations will re-examine at the same time the provisions of the present Trade Agreement. It is realized that the Philippines needs special U.S. assistance in trade and privileges for several years.

7. Each government will be represented in matters of social and economic assistance and cooperation by its own commission, as follows:

A. A Philippine Council for U.S. Aid will represent the Philippine Government in its relationship with the agency selected by the United States Government (the ECA) to represent the assistance and cooperation program.

B. The ECA will be the agency of the United States Government to collaborate with the Philippine Council for U.S. Aid. Its functions will be to advise with the Philippine Government, through the said Philippine Council, in planning the use of American social, economic and technical assistance and cooperation, and in advising and assisting the Philippine Government in carrying out the general aims and recommendations of the Economic Survey Mission to the Philippines.

8. In consideration of the determination of the Philippine Government to act boldly and promptly on the major program designed to fulfill the aspirations of the Filipino people, the President of the United States intends to recommend to the United States Congress the appropriation of the necessary funds that will be required for a social, economic and technical assistance program which will require several consecutive years of substantial aid, envisioned in the report of the Economic Survey Mission at 250 million dollars.

9. It is understood that, subject to such modifications as may be agreed upon by the two countries, the operation of the ECA in the program in the Philippines will be along general lines already established by the ECA in its relationships with other sovereign states.

10. A bilateral agreement will be negotiated between the two governments to give force and effect to the pertinent paragraphs above.

Done at the City of Baguio, November 14, 1950.

William C. Foster

Representative of President Harry S. Truman

Elpidio Quirino

President of the Philippines

1. The source text was transmitted to the Department of State as an enclosure to despatch No. 708, November 17, from Manila, not printed. The text had previously been transmitted in an unnumbered telegram of November 14, from Manila, not printed (896.00R/11–1450).

   Regarding the nature of Foster’s mission to the Philippines, see telegram 1200, November 8, from Manila, and footnote 1 thereto, p. 1512.

   This agreement was worked out in negotiations held in Manila from November 9 to 13 between a committee of Philippine representatives headed by Presidential Adviser Yulo and a team of United States representatives including R. Allen Griffin, Chief of the Far East Program Division of the Economic Cooperation Administration, Vinton Chapin, the Chargé in the Philippines, and Vincent Checchi, Assistant Administrator for Programs of the Economic Cooperation Administration.

2. Of October 9, p. 1497.