338. Memorandum From the President’s Special Assistant (Rostow) to President Johnson 1

SUBJECT

  • Filipino Veterans Claims and Benefits

The Joint United States-Philippine Veterans Commission to evaluate problems of Filipino veterans benefits and claims has completed its findings and given its recommendations. The benefits and claims issue has been a long-standing irritant in our relations with the Philippines.

The U.S. Panel of the Joint Commission recommended (Tab 3)2 that we broaden and extend certain benefits for Filipino veterans. Congressman Teague has introduced appropriate legislation, which if enacted would cost about $17 million per year (total cost: approximately $425 million over the next 30-plus years until death of the last Filipino veteran).

The Filipino Panel also raised the separate question of World War II claims. Our Panel found merit in two of the seven Filipino claims and referred these to Defense to determine both our moral obligation and the feasibility of payment.

Deputy Secretary Vance recommends in the accompanying memorandum (Tab 2)3 that these two claims be paid. They concern pay and [Page 744]allowances for approximately 100,000 recognized Filipino guerrillas and the refunding of erroneous deductions from back pay. It is estimated these would cost no more than approximately $42 million. Vance says funds are available without new legislation. Vance further recommends that the terms of settlement be embodied in an Executive Agreement.

In his memorandum (Tab 1),4 Secretary Rusk agrees the two claims have a substantial equitable basis and notes that settlement at this time would go far toward removing a long-standing irritant.

He recommends we advise Marcos prior to his arrival that we are sympathetically considering settlement of the two claims, that in return Marcos should agree to drop the other five as not warranting further consideration, and that settlement details on the two claims should be worked out jointly following the State Visit. We are considering an offset arrangement to deal with the settlement’s impact on our balance of payments.

There are indications, not confirmed, that Marcos may find it hard to drop the other five claims. He may seek instead an overall General Release agreement for all seven. If this develops, we will prepare a recommended course of action for your consideration.

General Decker, Chairman of the U.S. Panel, considers the task you gave him as completed and asks your instructions concerning the discharge of the U.S. Panel. Since Rusk and Vance believe settlement details on the two claims can be worked out jointly following the State Visit, it appears that the work of the U.S. Panel is completed.

I recommend:5

That you approve payment of the two claims.

That Ambassador Blair inform Marcos we are sympathetically considering settlement of the two claims, that in return Marcos should drop the other five claims, and that details on the two should be worked out jointly after the State Visit.

That the recommendations of the U.S. Panel and terms of settlement of the two claims be embodied in an Executive Agreement.

That the U.S. Panel be discharged from its responsibility.

Walt
  1. Source: Johnson Library, National Security File, Country File, Philippines, Report of Joint Philippines-U.S. Committee, Veterans. Secret.
  2. Not printed; Tab 3 is a letter from the Chairman of the Commission, General George H. Decker, USA (ret.) to President Johnson, August 22.
  3. Not found.
  4. Dated August 29. (Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. 12, 9/1/66–9/14/66)
  5. The President approved the four recommendations. He revised the second recommendation to read: “That Ambassador Blair inform Marcos we are considering settlement of the two claims, that in return Marcos must drop the other five claims, and that details on the two may be able to be worked out jointly after the State Visit.”