U.S. Policy Toward The
Philippines
The National Security Council, the Secretary of the Treasury, Assistant
Secretary of Commerce Anderson and the Acting Director, Bureau of the
Budget, at the 191st Council meeting on April 1, 1954 adopted the
statement of policy on the subject contained in NSC 5413, subject to the changes therein which are set
forth in NSC Action No. 1084.
The President on April 1 approved the statement of policy contained in
NSC 5413, as amended and adopted by
the Council and enclosed herewith; directs its implementation by all
appropriate executive departments and agencies of the U.S. Government;
and designates the Operations Coordinating Board as the coordinating
agency. The Financial Appendix and NSC
staff study5 originally enclosed in NSC 5413 are also transmitted herewith for Council
information.
[Enclosure]
Statement Of Policy By The National Security
Council On U.S. Policy Toward The Philippines
general considerations
- 1.
- The Philippine Republic is important to the United States and
the free world.
- a.
- Strategically, it forms a principal link in the Far
East defense perimeter, of special value at this time
because of its geographic relation to Communist China,
Japan, Formosa, Indonesia and Indochina.
- b.
- Its independence and progress are daily reminders to
other Asians of the value of Western democratic systems,
and concrete evidence of the U.S. attitude toward
progress from colonial status to
self-determination.
- c.
- It is our principal source of copra and hemp, and an
important source of sugar and chrome.
- 2.
- Political power in the Philippines now rests with a coalition
of parties, in which the Nacionalista Party under the leadership
of President Ramon Magsaysay is the major factor. Magsaysay,
like the majority of Filipinos, is strongly pro-American. Some
influential Nacionalista Party leaders are seeking to reduce
cooperation with the United States under the guise of promoting
closer association with other Asian states. However, these
leaders are not likely to bring about a significant change from
the basic Philippine pro-U.S. and pro-free world position
recently restated by Magsaysay. It is important that the
Filipinos act to the maximum extent possible on their own
initiative and that other countries, particularly in Asia,
recognize that the Philippines are truly independent.
- 3.
- Although the Communist Party has never been outlawed by
legislative action, it has been declared illegal by the courts.
The Communist Party apparatus was badly impaired following the
arrest and conviction of a number of Communist leaders in 1950
and 1951. Communist influence in the labor movement is now of
relatively minor importance. The estimated strength of the
Communist-led Hukbong Mapagpalayang Bayan (HMB) has been reduced from about
12,000 in 1950 to 2,500 today.
- 4.
- The principle of gradual transition to complete economic and
commercial independence of the Philippines from the United
States was established by the Independence Act of 1934 and is
inherent in the 1946 Trade Agreement, which was based on the
1946 Trade Act. The request of the previous Philippine
Administration on May 5, 1953, for reconsideration of the terms
of the present arrangement, contained proposals implying a
review of this principle. The United States has now rejected
these specific Philippine proposals, but has agreed to consider
with the Philippines possible modification of all aspects of the
1946 Trade Agreement, as well as commercial matters not covered
by the Agreement. At the request of the Philippine Government,
it has also been agreed to seek Congressional approval of
deferment of the imposition of tariffs on a reciprocal basis for
a period of 18 months.
- 5.
- The Philippine economy is not developing fast enough to meet
the needs of the growing population. Increased production and
diversification in agriculture and industry are essential to
provide employment and increase living standards. Substantial
mineral deposits exist on which development work is in progress.
Agricultural production is restricted by outmoded practices, by
the limited area under cultivation, and by other factors which
reduce incentive. Industrial production is restricted by
insufficient investment and low worker productivity. Major
expansion of government efforts to improve the economy and
provide public services is handicapped by insufficient revenues.
U.S. economic and technical assistance is designed to encourage
and assist the Philippine Government in its efforts to meet
these problems.
- 6.
- Since assuming office Magsaysay has reiterated his
determination to improve the status of the peasant and steps
have already been taken to raise the level of political morality
in the government. It is in the U.S. interest that these efforts
be successful. However, government action can be effective only
if clearly taken on Philippine initiative. American agencies
have so far limited their role on social reform measures to
technical assistance in the preparation of plans and the
administration of approved measures.
- 7.
- External threats to the Philippines appear to be relatively
remote at this time. Under the terms of a Mutual Defense Treaty
[Page 593] (signed August 30,
1951, effective August 27, 1952), the United States and the
Philippines recognized that an armed attack in the Pacific area
on either country would be dangerous to the peace and safety of
the other, and each agreed to act to meet the common danger in
accordance with its own constitutional processes. The further
development of United States naval and air force installations
in the Philippines will be the subject of negotiations to begin
shortly. Although an increase in the combat effectiveness of
Philippine military forces would be desirable, no appreciable
increase in the present level of such forces would be advisable,
under current conditions, in view of the present projected
economic development program in the Philippines.
- 8.
- President Magsaysay has stated that while first concentrating
on domestic problems he will also work to promote closer
relations with Southeast Asian states. Through improved
diplomatic relations with Asian countries, the Philippines could
assist in improving economic and cultural cooperation in the
area, but its leadership in a regional political or defense
arrangement does not appear likely in the near future. However,
even though the obstacles to development of a strong regional
non-Communist community of interest in East Asia are formidable,
it is clearly in U.S. interests to encourage the eventual
emergence of the Philippines as a major force in the creation of
such a community, bearing in mind that success of this idea
depends in large part upon its indigenous nature.
- 9.
- An intense Filipino animosity toward the Japanese, kept alive
by the failure to reach a reasonable agreement on reparations,
acts to the detriment of the economies of both countries.
Reduction of this animosity could be expected to lead to better
trade relations and to an atmosphere favorable to Asian
non-communist unity.
objectives
- 10.
- An effective government which will preserve and strengthen the
pro-American and democratic orientation of the country, and
serve as an example to the Far East of the application of
Western ideas and institutions to Asian problems.
- 11.
- An expanding and diversified economy capable of furthering
domestic stability and progress and of competing successfully in
the world market.
- 12.
- A military establishment capable of providing internal
security, and of contributing to the defense of the country and
of the free world.
- 13.
- A foreign policy which is based upon the traditional close
relationship with the United States and which at the same time
draws the country into a position of influence in non-Communist
Asia.
[Page 594]
courses of action
Political
- 14.
- Support the present government so long as it remains friendly
to the United States and seek to ensure that any successor
government is effective, friendly and non-Communist.
- 15.
- Conduct U.S. relations and activities in the Philippines in a
friendly and helpful manner, while avoiding actions which appear
to “direct” or “control” Philippine activities or
leaders.
- 16.
- Encourage Magsaysay’s expressed desire to carry out reforms
which will strengthen his domestic position and contribute to
the growth of his prestige in Asia.
- 17.
- Encourage closer relations among the non-Communist Asian
nations, leading to the eventual emergence of the Philippines
under Magsaysay as a major force in the creation of a
cooperative community among them, bearing in mind that success
of this idea depends in large part upon its indigenous
nature.
- 18.
- For the present, encourage the Philippines to:
- a.
- Increase the size and improve the quality of
Philippine diplomatic representation in non-Communist
Asia and establish missions where none now exist.
- b.
- Recognize the Associated States of Indochina.
- c.
- Reach a solution of the reparations problem with Japan
and conclude a peace treaty with that country looking
toward increased trade and friendly relations.
- d.
- Develop a better appreciation among the Philippine
people of the value to them of the struggle being
conducted against Communist imperialism by other nations
of East Asia.
- 19.
- When it becomes appropriate, consider encouraging Magsaysay to
call or participate in conferences of some or all of the
countries of non-Communist and anti-Communist Asia to examine
matters of common interest in political, military, economic and
cultural affairs.
- 20.
- Foster an expanded program of educational exchange between the
Philippines and other free Asian countries by means of improved
facilities and increased scholarships at the University of the
Philippines and other qualified institutions.
- 21.
- Develop an improved program for educational exchange, with
emphasis on bringing Filipino students and leaders to the United
States.
- 22.
- Continue information programs to combat communism and furnish
advice and support to Philippine and indigenous Chinese
organizations combating communism.
- 23.
- Encourage and assist, particularly through USIA, public and private
organizations working toward a stable democracy in the
Philippines.
. . . . . . .
Economic
- 25.
- Encourage the Magsaysay Administration to prepare and carry
out plans for the development and diversification of the
Philippine economy. To this end provide economic and technical
assistance and encourage private investment for the purpose of
facilitating (a) light industrial development, (b) increased
production of strategic and basic raw materials useful to the
free world, and (c) increased agricultural production.
- 26.
- Encourage and support with technical assistance realistic
Philippine programs to reduce the social and economic inequities
which encourage the development of Communism.
- 27.
- Encourage and support with technical advice revision of the
tax system and other measures to increase Government revenues
and draw foreign and domestic capital into useful
investment.
- 28.
- Consult with the Philippine Government on possible
modification of all aspects of the 1946 Trade Agreement, as well
as commercial matters not covered by the Agreement which may be
of mutual interest to both countries.
- 29.
- Attempt to negotiate a treaty of Friendship, Commerce and
Navigation, and a double taxation agreement with the
Philippines, to clarify commercial relations between the two
countries and encourage American private investment.
Military
- 30.
- Continue military aid, training and advice necessary to assist
in maintaining the Philippine armed forces at approximately
present levels and to improve their combat effectiveness.
- 31.
- Endeavor to acquire land needed for the expansion of our
military bases under terms which satisfy U.S. defense
requirements with due regard to Philippine nationalist
sensibilities. Be prepared to relinquish lands under U.S.
control for which no need is foreseen.
- 32.
- In the event of overt attack on the Philippines the U.S.
should take military and other appropriate actions to fulfill
U.S. obligations under the Mutual Defense Treaty with the
Philippines.
- 33.
- Seek under circumstances compatible with paragraph 15, to
improve the arrangements which provide for unrestricted access
by [Page 596] the United States
to military bases in the Philippines for its own and allied
forces.6
Financial Appendix
summary
- 1.
- Estimated expenditures for FY
1954 through FY 1957 total $175
million. (Table I)
- 2.
- At the beginning of FY 1954,
there was an unexpended carryover of $84
million available for proposed programs. Based on the current
programming of appropriations already made for FY 1954 and requested for FY 1955, new funds of $62 million
would be provided in these years, compared with expenditures of
$104 million. There would be an unexpended balance of $42 million at the end of FY 1955 available for future
expenditure. (Table II)
Special Notes: (a) All estimates are subject
to the following assumptions, footnotes and detailed comments.
(b) In order to cover the lead time required for many Military
Assistance items, sums must be made available well in advance of
expenditures.
assumptions on which estimates are
based
- 1.
- The pacification campaign against HMB will be successful.
- 2.
- No further payments by the U.S. on Philippine war
claims.
- 3.
- No further collections by the Philippines on reparations from
Japan.
- 4.
- In order to permit the Philippine Government to implement its
projected economic development program, the present level of
Philippine military forces will not be increased during the
period of this program.
- 5.
- The Philippine Government will increase its efforts to expand
the Philippine economy, with the result that U.S. economic aid
can accordingly be reduced.
- 6.
- Amounts shown as funds available are subject to future
Executive decisions to transfer funds from one program to
another, and to Congressional decisions on current appropriation
requests.
[Page 597]
estimated cost of proposed
policies
Table I. Expenditures by Programs
FY
1952–FY 1957
|
(Millions of
Dollars)
|
|
Actual Expenditures
|
Estimated
Expenditures
|
|
1952
|
1953
|
1954
|
1955
|
1956
|
1957
|
Total
|
| Military Assistance7
|
$12.0 |
37.4 |
31.7 |
27.0 |
23.9 |
4.6 |
87.2 |
| Economic & Technical Assistance8
|
12.0 |
24.1 |
22.0 |
20.0 |
20.0 |
20.0 |
982.0 |
| Information Services |
1.9 |
2.2 |
1.4 |
1.3 |
1.1 |
1.1 |
4.9 |
| Educational Exchange |
.5 |
.4 |
.3 |
.3 |
.3 |
.3 |
1.2 |
| Totals |
26.4 |
64.1 |
55.4 |
48.6 |
45.3 |
26.0 |
175.3 |
Table II. Availability of Funds in Relation to
Expenditures
FY
1953–FY 1955
|
(Millions of
Dollars)
|
|
Total
|
Military Assistance
|
Economical & Technical
Assistance
10
|
Information Activities |
Exchange Activities
|
| Unexpended Carryover into FY 1954 |
84.0 |
54.5 |
28.8 |
.7 |
.0 |
| Plus: FY 1954 Funds |
30.6 |
13.9 |
15.0 |
1.4 |
.3 |
| Equals: Total available for expenditures |
114.6 |
68.4 |
43.8 |
2.1 |
.3 |
| Less: Estimated expenditures FY 1954 |
55.4 |
31.7 |
22.0 |
1.4 |
.3 |
| Equals: Unexpended Carryover into FY 1955 |
59.2 |
36.7 |
21.8 |
.7 |
.0 |
| Plus: FY 1955 Funds |
32.1 |
10.5 |
20.011
|
1.3 |
.3 |
| Equals: Total available for expenditures |
91.3 |
47.2 |
41.8 |
2.0 |
.3 |
| Less: Estimated expenditures FY 1955 |
48.6 |
27.0 |
20.0 |
1.3 |
.3 |
| Equals: Unexpended Carryover into FY 1956 |
42.7 |
20.2 |
21.8 |
.7 |
.0 |
[Page 598]
comments on programs listed in
table i
Military Assistance
1. The United States is assisting in the equipping of Philippine
military forces, detailed in the Staff Study (paragraph 31).12
2. Military aid currently programmed for the Philippines from
military assistance funds appropriated through FY 1954 should, if deliveries are
completed in FY 1956 as presently
planned, essentially provide the initial equipment required for the
JCS recommended forces (except
for maritime aircraft) as well as limited attrition equipment for
these forces, limited maintenance for equipment on hand, and a
90-day war reserve of ammunition for the Philippine Army. The
question of providing a squadron of maritime aircraft, as originally
recommended by the Joint Chiefs of Staff, is being restudied.
[Page 599]
Economic and Technical
Assistance
3. The Economic and Technical Assistance Programs include activities
in the fields of agriculture, health and sanitation, education,
transportation, mineral development, and public administration.
- a.
- In FY 1954 Economic and
Technical Assistance total approximately $22 million. The
Agricultural Assistance Program is aiding the Philippines to
increase food production, to improve rural conditions, and in
training agricultural leaders. The Health and Sanitation Program
is assisting the Philippines to control malaria, establish rural
health units, increase well construction, and improve health
training. The Educational Program is assisting the Philippines
to establish vocational, professional, and teacher-training. The
Transportation Program is aiding in the construction of roads,
harbor improvement, and in the making of a comprehensive
transportation survey. The Mineral Resources Program is aiding
in the development of the country’s basic mineral resources and
providing technical advice to prospective investors and
government officials. The Public Administration Program is aimed
at increasing the government’s ability to operate effectively.
Provision has been made for a budget and accounting survey and a
government-wide wage and classification survey. A
Labor-Management Relations Center has been established by the
Government Institute of Public Administration.
- b.
- In FY 1955 Economic and
Technical Assistance will total approximately $20 million. The
Programs will continue and expand the development and
improvement in the fields mentioned above.
Information Services
The Information Services Program includes the following:
4. 4 Information Services centers employing 13 Americans and 111
local inhabitants are maintained. The estimated annual attendance at
these centers is 230,000, 80% of whom are students.
5. During FY 1954 the lack of funds
made it necessary to reduce the services of the libraries by 40% and
caused elimination of 2 or 3 libraries as well as the dismissal of
some library personnel.
6. Press material is furnished daily and weekly to 122 newspapers and
magazines, 18 radio stations, and 65 government officials. During
FY 1954 these services were
reduced by approximately 65% because of lack of funds.
7. USIA has contracts with
Philippine motion picture companies to produce anti-Communist
pictures which present positive democratic themes. These films are
shown throughout the Philippines by commercial theaters, mobile
units, and television stations. Television is a young industry in
the Philippines but the USIS films
are a major source of its programs. During FY 1954 a reduction in the USIS film program by 50% will be necessary because of
lack of funds.
[Page 600]
8. USIS utilizes approximately 80 to
90 hours monthly to each of 18 radio stations. 10 hours of this time
is devoted to materials in Chinese. All of the programs are in
native dialect and produced locally. A new Voice of America
transmitter has begun both medium and short-wave transmission in
northern Luzon. The general program has been reduced during 1954 to
keep within the available funds.
Educational Exchange
9. The Educational Exchange program is authorized under Public Law
584 (Fulbright Act) and Public Law 402 (Smith–Mundt Act). Under this
program 344 Philippine nationals have come to the United States and
81 Americans have gone to the Philippines. The Fulbright Act
provides for an exchange of lecturers, teachers, students, and
research specialists. The Smith–Mundt Act provides for an exchange
of civic leaders from the Philippines. Under the latter Act, 54
Philippine civic and industrial leaders came to the United States
and 8 American specialists went to the Philippines.
10. Expenditures under the Fulbright Act are financed from local
currency derived from the surplus property agreement with the
Philippines. Under this Act the amount of the program is limited to
a maximum of $1,000,000 annually and the total period is limited to
20 years. Expenditures under the Smith–Mundt Act are financed by the
United States dollar appropriations made available by Congressional
action.
