Foreign Relations of the United States, 1964–1968, Volume XXVI, Indonesia; Malaysia-Singapore; Philippines

370. Telegram From the Embassy in the Philippines to the Department of State ¹

Manila, October 2, 1968, 0947Z.

15828. Sabah: U.S.-Philippine relations. Ref: Manila 15756.²

1. It is a truism that U.S.-Philippine relations are in many ways unique. With no other nation in Asia do we share the same closeness of sentimental and emotional ties. Nowhere else in Asia do we have such a visible and overwhelming political, military and economic presence. Only Thailand rivals the Philippines as a base of support for our military effort in Vietnam. All these factors create a network of ties which makes it impossible to divorce actions of the GOP from its relations with the U.S. The Philippine dispute with Malaysia over Sabah has, therefore, an unavoidable effect on our bilateral relations.

2. As reported reftel, there has been a strong emotional reaction to what many Filipinos view as a rejection and repudiation by the U.S. The reflex reaction was a desire to punish the U.S. expressed in demands for PHILCAG withdrawal, modification or termination of the bases agreement and renegotiation of the defense treaty. While the British and Malaysia got their lumps, the focus of most of the demonstrations was against the U.S. The demonstration Sept 30 at Clark Air Base, the restriction of military overflights and landing rights, customs harassment in the port of Manila are further manifestations of GOP displeasure.

3. If President Marcos should decide to follow a more active course in pressing the Philippine claim to Sabah it is almost inevitable that the established American position of impartiality will be interpreted as opposition to the Philippines (if we are not with them we’re against them).³ The negative aspects of Philippine nationalism have traditionally focused on the U.S., and the Philippine claim could easily become more anti-American than anti-Anglo Malaysian. Philippine youth does not have the built-in restraint of memories of wartime cooperation with the U.S. Once Congress has reconvened we can expect its more vocal members to join the effort to get political benefit from attacks on the U.S. If this should be the course of events, we will be in for a dicey time. The extent of our exposure in this country produces a multitude of targets, and life could be made most unpleasant without outright violation of the letter of any of the network of agreements linking our two countries.

4. Our military relations are particularly sensitive. We have outstanding commitments to discuss a number of provisions of the bases agreement and of course general commitments in Bohlen-Serrano to discuss “any question of particular interest” to either government. A formal demand by the GOP for renegotiation, followed by a tough approach and protracted talks, could have a serious adverse effect on military planning for the whole of the Western Pacific and Southeast Asia. The pending Smith case could be used as the basis for a request to renegotiate the bases agreement or could be combined with other general harassment of U.S. interests. The GOP may also seek formal renegotiation of the defense treaty in an effort to extract a more categorical commitment to immediate defense of the Philippines should it come under attack. There is also a broad range of other harassments which might include any combination of the following:

A. Stimulate labor troubles on the bases.

B. Over-bureaucratize customs procedures to point of stoppages—insist on customs control at Subic and Clark.

C. Take away our military radio frequencies (or harassment short of complete denial).

D. Institute clearance procedure of various degrees of cumbersomeness for all, or various categories, of U.S. and military flights (in country-out of country).

E. Deliberate slowness on visas for contractor employees and technical representatives.

F. Harass our military personnel with criminal actions.

G. Insist on taxation of MAC charter flights.

H. Insist on having Philippine customs, tax, immigration people on base.

I. Tax sealand shipments-vehicle registration, income tax, etc.

J. Licensing of on base contractors.

5. Philippine economic nationalism and individual greed, already making life difficult for American business, is certain to intensify as the GOP uses this technique of getting at the U.S. by vicarious punishment of American business. Following is a recap of existing or possible additional moves in this field.

A. Delay action on applications of American businessmen for treaty-trader-investor visas.

B. Postpone Senate consideration of ratification of U.S.-GOP double taxation agreement (already ratified by U.S. Senate).

C. Institute further court actions against U.S. business under Retail Trade Act.

D. Push through Oil Commission bill in next special session of Congress to detriment of U.S. oil companies.

E. Approval by President of anti-discrimination bill (equal pay for equal work).

F. Customs harassment on clearance of goods (including remnants) from U.S.

6. In the political field, the GOP apparently still feels that it can hurt us by opening diplomatic and trade ties with the Communist world. Plans are going ahead for a govt-sponsored company for trading with Communist bloc. The presence of a Soviet ambassador in Kuala Lumpur could now take on heightened significance, and as some Congressmen have suggested, there have been feints at seeking to obtain military equipment from the Communist world.

7. PHILCAG is an obvious target, and Marcos has the relatively graceful out of pleading insufficient funds to maintain it in Viet-Nam. He may, however, decide to go slow in a Philippine withdrawal since it would cancel his claim to a place at the peace table and, perhaps even more important, a chance to share in the post-war division of American military equipment. Rotation of PHILCAG to maintain the existing 1,500 strength level is now in progress and if the lift remains on schedule rotation will be completed on Oct 15. Several options short of complete withdrawal are open to Marcos including further across the board scaling down or selected withdrawal of engineer troops.

8. U.S. interests in the broader context of regional cooperation are also bound to suffer. The ASEAN Commerce and Industry Council met on schedule in Manila with a brave show of regional harmony, but the relentless logic of a consistent stand for and against the claim will tend to force the Filipinos and Malaysians into head-on collision in every common regional body, with a consequent disruptive effect on the whole framework of regional cooperation.

9. The foregoing bleak picture of a possible course of Philippine-U.S. relations is based on a pessimistic projection of events. Marcos in the coming days will be weighing carefully the advantages and disadvantages of the options open to him. In the third message in this series we will discuss courses of action which might help to shape his decisions.⁴

Williams

1. Source: National Archives and Records Administration, RG 59, Central Files 1967–69, POL 32–1 MALAYSIA–PHIL. Secret; Priority; Limdis. Repeated to Bangkok, Canberra, Djakarta, Kuala Lumpur, London, Singapore, Wellington, USUN, and CINCPAC.
2. In telegram 15756, October 1, the Embassy presented its “best current estimate on the Phil attitude towards Sabah.” It believed the issue was in danger of becoming a “national cause,” exacerbated by the widespread public perception that the United States favored Malaysia’s claim. The Embassy suggested that Sabah provided Marcos with a potential issue to distract attention from his domestic problems and distance himself from the United States, but he was not considering a military showdown with Malaysia. (Ibid.)
3. Rusk and Foreign Secretary Ramos met at the United Nations on October 8 and discussed the Sabah dispute. Ramos reiterated more than once that the Philippines had no intention of going to war over Sabah. Rusk stressed that the dispute should not be settled by force and observed that there is a distinction between the United States acting on the basis of the status quo and taking sides in a territorial dispute. Rusk told Ramos: “Don’t draw us into this; we have a basketful already.” (Telegram 252294 to Manila, October 9; ibid., POL 7 PHIL)
4. In telegram 15956 from Manila, October 4, the Embassy suggested the following ways to influence Marcos to take a serious look at the Sabah issue and the future of U.S.-Philippine relations: persuade him that the United States was looking for bases elsewhere in Asia, send personal messages from key Congressmen like Mansfield or Zablocki, arrange for hints from New York bankers that the United States was concerned, and suggest that the United States could reduce the Philippines sugar quota. (Ibid., POL 31–1 MALAYSIA–PHIL)