333. Memorandum From James C. Thomson, Jr., of the National Security Council Staff to the President’s Special Assistant (Rostow)1

SUBJECT

  • Your Meeting at 4:30 Today With Philippine Finance Minister

Finance Minister Eduardo Romualdez is here to push for more money, in one form or another, as icing for the Marcos State Visit. His appearance coincides with that of at least two other Filipinos in pursuit of the same thing: Ben Romualdez (Marcos’ brother-in-law and probable ambassador to the US) who has just arrived to do some high level pushing, and Mapa-&-Melchor, who are key financial advisors.

The fundamental problem is one of Fil expectations: Marcos has been led to believe, both by visiting Americans and by his own people, that a) his dynamic potential as a leader and b) his success on aid to Vietnam2 will assure him a very big pay-off when he comes to Washington. (The [Page 734]figures we have heard tend toward $100 million in economic aid in the coming year, and $500 million over five years.)3

Fact of the matter is that Marcos does have promise, and that he did belatedly deliver on Vietnam aid (and at considerable political cost)—but also that the Fil economy is in dreadful condition and Fil performance has been terrible.

Our line, therefore: We are deeply appreciative, want to be helpful, and can make progress on quite a few items in conjunction with the State Visit; but it would be foolhardy, for both countries, if we were to leap into high-priced specific aid commitments until a lot more joint planning has been done to provide for effective use of that aid.

In his conversation with Rusk this afternoon, the Finance Minister emphasized land reform and rural development assistance, possibly through PL 480, and this may be his pitch with you.

FYI : On the basis of Barnett’s negotiations with Mapa, I would guess that the best we can do in the economic aid field at the moment will be some aid in the field of irrigation rehabilitation (totalling about $8 million). The Marcos Visit package will be fattened, however, with some real gains on Veterans Benefits, Special Fund for Education, Bohlen-Serrano agreement (on base tenure), and DOD/MAP support of Fil defense capabilities. So Marcos will come away looking good—though not as good as he would like to look.

I attach a copy of the agreed memorandum which resulted from the Barnett-Mapa talks.4

Jim
  1. Source: Johnson Library, National Security File, Country File, Philippines, Vol. III, Memos, 7/66–7/67 [2 of 2]. Confidential.
  2. Marcos signed the Aid to Vietnam bill on July 14.
  3. After his meeting with Marcos following the SEATO and ANZUS meetings, Rusk sent the President the following assessment: “Although Marcos was very friendly and obviously has highest esteem for you, I have no doubt he will make an effort to parlay his visit and the troops for Vietnam into pretty tangible returns. On other matters such as MAP, economic aid or even war claims, he will be sending a mission to Washington shortly to discuss such questions and we might wish to defer the firming up of a date for his visit until it is quite clear that he will not arrange to change his plans as a result of some inevitable disappointment in the levels of our generosity.” (Telegram Secto 108 from Kyoto, July 6; National Archives and Records Administration, RG 59, Central Files 1964–66, POL PHIL–US)
  4. Not attached; an undated summary is in the Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. 11, 8/12/65–8/31/65.