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

SUBJECT

  • U.S. Assistance to the Philippines (Marcos Visit)

The attached memorandum from Acting Secretary George Ball 2 submits two propositions for your approval:

(1)
That we give Marcos a firm commitment to supply equipment for 10 engineer construction battalions in the Philippine Army. They would be used on rural projects, mainly road-building.
(2)
That we give Marcos a more general commitment to provide additional economic support for Philippine projects related to land reform, irrigation and food production.

Discussion:

We have agreed to supply equipment for 3 battalions—part of the quid pro quo for the Phil decision to send forces to Viet-Nam.

We can handle two more by readjusting MAP, deferring delivery of F–5’s and other equipment.

Problem is the other five battalions Marcos wants us to supply. Cost is about $1.7 million per battalion—$8.5 million for the five.

State argues:

  • —10-battalion program is a personal project of Marcos; he wants them more than any other single item;
  • —project makes good sense because:
    (a)
    it will orient Phil Army in direction of civic action and internal security;
    (b)
    it will help meet one of the Philippines greatest economic weaknesses, i.e., lack of rural roads to bring crops to market;
  • —Ambassador Blair considers it essential we support the 10 battalions—to make the visit a success, to preserve Marcos’ domestic prestige, and to help him counter critics who argue the Philippines (and he) are too close to the U.S. and too dependent on American cooperation.

[Page 746]

Ball concludes:

This commitment is “essential to the success of the visit;”

funding should come from FY ’67 appropriations, either AID or DOD;

necessary adjustments in FY ’67 funds can be made “without serious damage to our other interests;”

part or all of the support might be offset in future years by adjustments within forecast MAP levels, but this should not be conveyed to Marcos.

Secretary McNamara (in memo attached)3 dissents from State’s view.

McNamara notes we are now funding three battalions. He has agreed to reprogram FY ’67 MAP to support two additional battalions.

He opposes support for the other five, arguing:

(1)
Support for five (plus equipment for one in Viet-Nam) is ample recognition of the Philippines’ “very small contribution” in Viet-Nam;
(2)
MAP money will be short; appropriations are being cut (probably $92 million from the requested $917 million) while we have additional claims (Thailand, Laos, Korea—NATO movements—loan guarantees due to higher interest);
(3)
10 battalions are not essential to the Philippine security;
(4)
$22 million programmed for Philippine MAP in FY ’67 is ample;
(5)
Filipinos can finance five out of their own economy.

He suggests reviewing matter for FY ’68 and deciding then whether support beyond the five proposed is desirable; but he would not give Marcos any commitment on support in future years.

My opinion:

It seems clear that this project is one most desired by President Marcos. In my judgement, failure to back him will adversely affect the atmosphere of his visit and his attitude toward us, as well as his position vs. his critics in Manila.

We are talking here of $8.5 million, small in the overall scheme of things.

Finally, it is clear that these battalions, if equipped and properly utilized, can make an important contribution to critical Philippine economic needs. They have a weak public works sector. It will take time to reorganize and develop. Marcos wants these battalions for a serious reason: to give him an efficient instrument, under his personal control, to build roads and perform other essential public works in the near future.

However, in view of Secretary McNamara’s reservations, you might consider the following track: [Page 747]

(1)
Have Blair tell Marcos we are funding three battalions and are prepared now to fund two more; we will agree to putting this in writing in the communiqué; we are prepared to consider funding five additional battalions in FY ’68.
(2)
If Marcos accepts gracefully, fine. If not, Blair could tell him that this is a matter you wish to discuss when he gets here.
(3)
In your talks with Marcos, repeat the pledge on five and tell him you will arrange funding for five more next year. However, if he considers 10 this year absolutely vital to his interests, we will do it. But he must understand that this will mean trimming elsewhere.

Follow your recommended track4

Agree to fund 10 and tell Marcos

  • Have DOD fund
  • Have AID fund

Agree to fund 5 now and 5 more in FY ’68 and tell Marcos

Agree to fund 5 only

See Me

On State’s second recommendation (economic aid), I see no problems.

The package (not fully developed yet) will look something like this:

PL–480 (Title IV) $20,000,000
Development loan (irrigation) 4,500,000
PL–480 (Title II) (rural work projects) 4,500,000
Development loan (technical studies) 2,000,00
Technical assistance 1,000,000
Repaired equipment (excess) 1,500,000
(actual value about $10 million)
$33,500,000 (approximate)

We will have to negotiate some of these programs after the visit. However, State feels it essential to have your general approval to go forward on a program of this magnitude and to work out general communiqué language without specifying amounts.

We would talk with Congress—and on background with the press—along the above lines of magnitude. This would avoid the danger [Page 748]of the Phil delegation putting out a greatly exaggerated picture of what has been promised.

Approve general commitment as outlined5

See Me

Walt
  1. Source: Johnson Library, National Security File, Country File, Philippines, Marcos Visit Papers, Memos, 9/14–16/66. Secret.
  2. Not attached, but a copy, September 9, is in the National Archives and Records Administration, RG 59, Central Files 1964–66, POL 7 PHIL.
  3. Not attached; dated September 9. A copy is ibid.
  4. None of the options is checked, but see Document 340.
  5. Neither of the options is checked.