296. Memorandum From Secretary of State Rusk to President Johnson 1




  • Your Meetings with President Macapagal 2

A. President Macapagal

Macapagal is both pro-American and a Philippine nationalist.

At 54, he has led his country for almost three years during which he has shown greater interest in regional and international affairs than any of his predecessors. He has supported us in the important areas (operation of our bases in the Philippines, Vietnam) but at times his nationalism has led him to follow less constructive lines (his earlier Indonesian policy, claim to Sabah or North Borneo). In the past year, he has shown considerably more responsibility than in his first years in office.

He has been only moderately successful with his domestic programs, which emphasize economic and social reform, and he must cope with an uncooperative Congress, resistance from powerful vested interests and poor public support.

Of very humble origin, he is extremely sensitive and prestige conscious and is not particularly warm or genial. His wife wields considerable influence over him.

He visited the United States as Vice President in 1960. You met him in 1961 on your world trip and at President Kennedy’s funeral. Mrs. Macapagal was here last month to place their daughter, Gloria, (17) in Georgetown University.

B. His Objectives

To establish for domestic Philippine consumption that he is a close friend of, well regarded by, and an equal partner with the United States [Page 652]President. To bear this out, he requires some tangible signs of our trust and esteem. He will attach importance to the commitment from us to supply P.L. 480 rice next year.
To reiterate his support for United States policies in Asia and to volunteer new support.
To explain his disillusion and apprehension regarding Sukarno and obtain increased military assistance to bolster Philippine southern defenses against potential Indonesian subversion.

C. Our Objectives

To reassure him as to our policies, purposes and determination.
To promote close U.S.-Philippine cooperation in defense and world affairs, especially toward Communist China, Indonesia, Malaysia, Vietnam and Laos.
To express our concern over the threat to established American investment in the Philippines posed by the Retail Trade Nationalization Law.
To indicate explicitly our commendation for Philippine efforts to introduce social reform in their society. To suggest discreetly our friendship for Macapagal.

D. Major Topics of Your Talks Are Expected To Be:



A memorandum on this subject will be submitted separately.3


Indonesia and Military Assistance

Macapagal may stress the Philippines has recently undergone a dramatic shift in attitude toward Indonesia and describe the importance he attaches to increasing Philippine military strength in Mindanao, the large southern island, to discourage known Indonesian penetration. He may ask for a sizeable increase in our military assistance program to support his southern defenses.

You should express our concern regarding Indonesian expansionism, and note our efforts to restrain Sukarno and the determination of the British to retaliate if mainland Malaysia is again attacked. Our bilateral defense agreement with the Philippines serves to insulate the Philippines from overt attack from Indonesia, and we agree the Philippines should improve their military posture in the south to withstand and control subversion. His defense advisers are in touch with ours on this and we are prepared to re-examine the existing military assistance program and consider specific Philippine suggestions or requests. We would be interested in knowing what the chances are of increased Philippine budgetary support for its armed forces.



Macapagal may explain his latest efforts to resolve the dispute between Malaysia and Indonesia through the medium of an Afro-Asian Conciliation Commission, and describe his claim to Sabah (or North Borneo).

You should express appreciation for his efforts and the hope the Philippines will soon restore diplomatic relations with Malaysia. You should also mention that the Malaysians will understandably insist that attacks against them cease and Indonesian guerrillas be withdrawn before they accept the Afro-Asian Conciliation Commission. Suggest you not comment on the North Borneo claim, a dispute between two of our friends.

United States-Philippine Relations


Macapagal will raise his need for P.L. 480 rice.

You should reply that despite limited availabilities of rice, we are prepared, on the basis of Philippine need, to extend to him in 1965 100,000 tons of rice under P.L. 480, Title I, on same basis as the 1964 transaction except for certain minor changes (such as in the handling of freight charges) required by recent legislation.


Operation of Our Military Bases

Macapagal may suggest a revision of the military base agreement be undertaken quietly, through diplomatic channels.

You should tell him that we are prepared to consider this suggestion and that we are making every effort to assure that he is informed regarding the use of our bases in this critical period.


Civil Aviation

Macapagal may express both concern over this and the hope that Philippine Air Lines be permitted to fly a route from Manila through Tokyo to California or Seattle.

You should state that we share Macapagal’s concern over the unresolved aviation problems between our two countries and we are prepared to sit down with the Philippines to negotiate. If agreement could be reached on general principles (on rates, capacities and undertakings not to apply unilateral restrictions) and if a Manila-Tokyo-Seattle route—in addition to the route currently operated by Philippine Air Lines—is acceptable to the Filipinos, we believe a successful negotiation is possible.



Macapagal may ask for a larger sugar quota.

You should be noncommittal, noting congressional legislation is required.


Veterans Claims; Omnibus Claims

Macapagal may propose a Joint Committee to look into the level of payment of veteran benefits. You should discourage him if he specifically [Page 654]mentions the Omnibus Claims. (FYI: We would not get congressional support for these, particularly after the history of the War Damage legislation.)


Special Fund for Education

Macapagal may propose that the fund be used in support of the training aspects of the land reform program.

You should explain that the full amount of this fund will not be known until the end of the year and express your interest in having it used in the Philippines for projects which will reflect credit on both Presidents—who are specifically responsible for it—and which will leave a lasting mark on Philippine society. We are prepared to examine a proposal that the fund be used to support training in land reform and perhaps devote a portion of the fund to this purpose.

You should also note that we would welcome Philippine suggestions as to how expenditures under the fund can be audited so as to satisfy the reasonable interest of both the Philippine and American Congresses.


Threat to American Investment from Retail Trade Nationalization Law

(You should raise this if Macapagal does not.)

You should observe that American marketing operations in the Philippines are valued at hundreds of millions of dollars and express your appreciation for his personal efforts to prevent the Retail Trade Nationalization Act from interfering with them. You should also state for the record our concern regarding this continuing threat to long-established United States business operations in the Philippines posed by the application of this legislation, and our confidence that the Philippine Government will abide by its long-standing commitments to us. It would be politically difficult for the Executive Branch to sponsor any major legislation favorable to the Philippines (sugar, coconut oil) in the United States Congress until this problem is resolved. We hope that this matter will soon be resolved so that it will not disrupt the mutually beneficial trading relations between our countries.

Laurel-Langley Agreement (also known as the U.S.-Philippine Trade Agreement of 1955)4

Macapagal may raise this and give Philippine views regarding its future and a possible extension.

You should note the importance this agreement has to commercial relations between the two countries, mention you are aware a possible renegotiation of the Agreement has been considered by various groups in the United States and the Philippines. The matter needs further study before we [Page 655]can take a position, but we are always willing to discuss with his representatives any proposals they wish to make.

I am prepared to brief you further on this visit at your convenience, perhaps on Saturday.

Dean Rusk 5
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 7 PHIL. Secret. Drafted by Ballantyne and cleared by Green, Barnett, Cuthell, and Miller; also cleared with DOD/OSD/ISA, AID, Commerce, L/FE/SPA, and E/OR and E/AN.
  2. In telegram 394 from Manila, September 11, the Embassy provided its view of what a Macapagal visit to Washington should accomplish. In general, the Embassy suggested, it was “an opportunity for the two Presidents to know each other better,” to reaffirm their countries’ close relationship, and to demonstrate to the world, especially the rest of Asia, their identity of interests. (Ibid.)
  3. Not found.
  4. Signed in Washington on September 6, 1955. (6 UST 2981)
  5. Printed from a copy that bears this typed signature.