Rebuilding the economy post-EDSA Revolution
BY EARLY 1986, after a popular revolt ousted a dictator who ruled the country for 21 years, the newly installed government of Corazon C. Aquino inherited an economy that was in shambles. For three years running since 1983, it was already at a downtrend, with the economy even contracting rather than growing in the years 1984 and 1985.
The Aquino administration, which was legitimized not by election but by a Supreme Court decision, faced many challenges during its time, economically and politically, and both locally and abroad. Its effort to fully restore democratic institutions was just one of many concerns that hounded it from 1987 until 1992.
And this, in a way, appear to have stymied its initiatives towards economic takeoff. Perhaps President Aquino didn’t really stand a chance, not with several bloody attempts by military adventurists to grab power, her Cabinet resigning en masse, political infighting and factionalism, failed efforts to renegotiate or repudiate the Marcos government’s substantial foreign debt, and three major natural calamities in 1990 and 1991 that severely impacted on agriculture’s growth.
This is not to say that Aquino didn’t have her own successes. Just a year after the revolt of 1986, a new Philippine constitution was ratified in a referendum with a vote of 76.37% in favor. Ratification of the charter was the culmination of the period of jubilation that began with the ouster of Ferdinand E. Marcos.
The new charter was seen as the start of political, economic, and social recovery. It was envisioned to guide the rebuilding of the nation and serve as the catalyst for the national effort to establish strong institutions that would pave the way for a market-driven economy. This was seen to industrialize the agriculture-based Philippine economy and bring it to prosperity in the 21st century.
The charter provided, among others, for more limits on presidential power, including the prohibition on reelecting a Chief Executive; the restoration of political institutions like the presidential system and a bicameral Congress; and, the opening of the economy to more foreign capital and investments.
By early 1987, the country was all set, it seemed. In fact, the mere assumption of the Aquino government was enough impetus to overturn the economic downtrend experienced since 1983, soon after the assassination of Marcos’s political nemesis, former senator Benigno S. Aquino, Jr.
By the end of 1986, the economy, as measured by its gross domestic product (GDP), already showed early signs of recovery by growing 3.42%. The trend continued in 1987, with GDP expanding by 4.31%, and in 1988 by 6.75%. Consistency was seen in 1989, with a growth of 6.21%.
In 1986, the Aquino administration initiated a tax reform program that saw the introduction of the value-added tax ( VAT) system. In 1988, the Comprehensive Agrarian Reform Law was enacted to provide land or Filipino farmers, and to overhaul the system of farm land ownership and tenancy.
Ms. Aquino, also in 1988, enacted the Generics Act, to promote the production of adequate supply and distribution of drugs and medicines. And, in 1989, she enacted the law creating the Autonomous Region for Muslim Mindanao — a culmination of an effort to promote greater self-rule in the troubled Southern Philippines.
Ms. Aquino, that year, also approved the government’s compromise settlement with a number of Marcos cronies who allegedly acted as dummies for the former strongman and who at the same time enriched themselves by cornering business concessions and favorable regulatory policies during his rule.
However, two bloody but unsuccessful attempts by factions of the military to oust Ms. Aquino — one in mid-1987 and another in late 1989 — were enough to put things in a tailspin. Couple this with external factors beyond government control, like natural calamities in 1991 and a power shortage, and the economy was back in the red.
The BusinessWorld headline of Sept. 2, 1987 seemed ominous: “Coup effect on business climate starts to be felt.” Just as new bicameral Congress opened in July 1987, a military putsch takes place which ended with 50 dead and 200 wounded as government troops quelled the effort.
A consequence of this was a government revamp that August that saw the en masse resignation of the Aquino Cabinet, prompting foreign observers to worry that political developments were going to threaten democracy and set back economic recovery. This was exacerbated by the worldwide stock market crash in October 1987.
And as the Philippines grappled with political instability locally, and struggled to boost its image abroad while addressing waning business and investor confidence, there was the death from a selfinflicted gunshot wound, in an apparent suicide, of Ms. Aquino’s resigned Finance Minister, Jaime