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246. Talking Points Prepared by the Director of the Office of Philippine Affairs, Bureau of East Asian and Pacific Affairs, Department of State (Usher)1



Re. Assessment that U.S. interests in the Philippines are not seriously imperiled by anticipated political and economic evolution in the Philippines over the next five or six years.

It should be heavily stressed that this assessment is based on an assumption that the U.S. will allocate resources required for the courses of action called for in Section II of this paper as needful to achieve objectives numbers 3, 4, and 5 under part D of Section I.
It is also based on an assessment that needed social reform will proceed by evolutionary processes. If this process is frustrated by disruption of the Philippines open democratic institutions, then the country could be plunged into a deepening chaos in which all constructive interests would suffer. The danger of such a disruption is more likely to arise from right wing (oligarchs) attempts to arrest the evolutionary process or from a Philippine President’s attempt to perpetuate himself in power by illegal means than from left wing attempts to accelerate or preempt the evolutionary process through violent revolution.
A major problem for the U.S. will be to avoid being identified, because of our military and business interests in the Philippines, as the bulwark of the oligarchy.

There are two special factors which may help us to avoid such identification. These are the fact that the oligarchs are the chief advocates of anti-American nationalism—a pseudo nationalism which they use as a device to harass American business competition. Thus, the oligarchs themselves tend to have an image as tormentors of American interests rather than as the protected favorites of American power. The U.S. need not be regarded by the discontented masses of people as allied with their oppressors.

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The second of the two factors is that there exists still among the people of the Philippines a great affection for the United States and an image of Americans as friends who would like to help them improve their prospects in life. In the Philippines there is no need for the United States to wind up on the wrong side of social evolution or even of revolution, should that, however defined, ultimately occur.


Status of Base Talks

Except for some technical matters relating to exemption from the Philippine taxes and exit and entry procedures for American personnel on the bases, the principal issues remaining for negotiation are the tenure of the agreement and criminal jurisdiction arrangements (particularly the extent of Philippine participation in duty determination). Another possible issue is the relinquishment of additional areas of base land. However, Ambassador Byroade’s instructions already authorize substantial land relinquishment, and we do not anticipate any significant difficulty with this issue.


Military Assistance Program

Dangerously low politically, particularly now when we are trying to complete base negotiations. Ambassador Byroade has been warning us for a year that we would need “some blue chips” to wind up the MBA revision negotiations on the hard issues. Filipinos will think we are walking away from unspoken understanding that MAP is in return for bases. Marcos will think that we are walking away from what he, at least, had thought to be the Nixon Doctrine concept that we would provide increased MAP to help the Philippines prepare for increased self-reliance.

MAP is dangerously low too in terms of AFP need for improved capability to deal with internal security problems. As a practical matter, the cuts which we have already received in FY 1972 will eliminate all of the capital improvement element of MAP.

The problems inherent in this situation will be almost inconceivable compounded by the new requirement that the Philippines reimburse us in local currency for 10% of the MAP. We have no idea where the Philippine Government would get the money. Some 80% of the Philippine military already goes just for payment of salary and allowances. The prospect of Marcos asking the Philippine Congress for an appropriation to pay this 10% at a time when MAP has already declined to the lowest when he may also find himself faced with the necessity of seeking Philippine Senate approval of revisions in the base agreement is bewildering to say the least.

Such a combination of events coupled with the exemption in the U.S. legislation for countries whose MAP is explicit base rent, makes it almost inevitable that the Philippines will demand explicit rent for our bases there. Perhaps anticipating that the MBA revisions may be [Page 524]hard to sell in the Philippines in any event, Marcos has been publicly emphasizing the “continued need for an American military umbrella over the Philippines for some time to come.” But the unveiling of the 10% peso payment provision in our declining MAP will probably be more than Philippine public opinion can take.

In fact this 10% reimbursement requirement (which is contrary to the courses of action prescribed in Section II of PARA) could be of such serious dimensions as to undermine the first premise set out in the issues paper.


Trade and Investment Relationship

The latest statement of our strategy is contained in the joint State/Commerce message of last January 1972.


Are the Philippine Military Bases Essential?

Judging from NISM 69 and the circular telegram now in clearance process, one deduces that our bases in the Philippines are essential to the U.S. posture in the Western Pacific and that they will become more valuable to us in the future.

Not only is this eventuality being taken into consideration in our current MBA negotiations, it is the principal reason why the current negotiations are being undertaken. If we foresaw the diminishing need for the bases we could probably have lived with the existing MBA, enduring for a few years longer the increasing harassment and friction we had been experiencing before the MBA talks were undertaken.

The objective of the current talks is to put the MBA on an up-to–date basis which takes cognizance of new Philippine sensitivities about their sovereignty and which will make for improved U.S.-Philippine relations on base issues, thereby making it easier and pleasanter to operate our bases in the Philippines over the long pull.

The fact is that since we began the base talks last February, base relations have been much improved. The only and glowing exception is the trouble we are having with Judge Gaddi’s challenge of the validity of the custody receipt. Gaddi has not been supported by the Philippine Government in this. In fact, the Philippine Executive Branch has supported us against Gaddi. The Philippine Government itself is being harassed by Gaddi’s almost fanatical preoccupation with the august dignity of his court. He has harassed us by citing our base commanders and unit commanders for contempt and ordering their arrest whenever an American serviceman subpoenaed or charged in his court was late to or missed a scheduled court appearance. Early in February Gaddi cited the Philippine Secretary of Justice for contempt and ordered his arrest and imprisonment because no one from the Justice Department appeared in Gaddi’s Angeles City court in response to a subpoena of the Justice Secretary.

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However, if the MBA talks fail, we can expect a recrudescence of the kind of general harassment and press and public hypersensitivity on base incidents involving Filipinos which had plagued us in the past; and by a practical matter rendered our use of the bases increasingly difficult and our tenure increasingly insecure.


Various Proposals for Consolidated Use of U.S. Inputs as Leverage to Obtain Protection of U.S. Interests

There are two basic dangers in this concept. The first of these is that each U.S. input already has a specific purpose which is being accomplished. If we try to make an existing input into a bargaining lever to achieve some secondary or tertiary objective unrelated to the basic purpose, we run the risk of undermining or sacrificing the basic purpose. Therefore, the concept would be valid only if the secondary or tertiary objective was so closely intertwined with the basic objective that all could be accomplished with the same leverage.

The second and perhaps far greater danger in the concept is that where the proposal is to combine all U.S. inputs into a single lever to compel the Philippine oligarchy to extend benefits of concessions to direct U.S. interests such as bases or business interests, we may:

Make our interests and inputs hostage to the Philippine oligarchy (if we can lever the oligarchy, they can by the same device put the squeeze on U.S. interests in order to get more U.S. input—and, as a matter of fact, the oligarchy has for a long time been smarter at this than we have);
Use up resources which we could otherwise use to improve the chances for a peaceful social evolution in the Philippines and diminish the danger of chaos and explosive revolution—objectives 3, 4 and 5;
Lock ourselves in with the oligarchy (which is protecting our interests in response to our leverage) as the enemies of the people.

One example of a type of leverage which we might use on the oligarchy would be a requirement for social and economic benefits to sugar estate workers as a condition for the Philippine sugar quota.

An example of a type of leverage we should not use would be economic aid as a lever to obtain protection of vested rights after the expiration of Laurel–Langley.

Note that the implication of such a leverage approach would be that if the vested rights were not protected the economic aid would be reduced or eliminated, thus reducing or eliminating many of our courses of action designed to achieve objectives 3, 4, and 5 in the PARA.

  1. Source: National Archives, RG 59, EA/PAB 1972–73 Letters and Memos File: Lot 74 D 471. Secret. Drafted by Usher and attached to a February 8 covering memorandum to Green, in which Usher noted that the talking points “are related to the issues paper which S/PC has prepared in coordination with me,” and that both had been done in preparation for the East Asian Interdepartmental Group meeting on the Philippine Policy Analysis Resource Allocation (PARA) scheduled for February 23.