1969 Philippine balance of payments crisis

The 1969 Philippine balance of payments crisis was a currency crisis experienced by the Philippine economy as a result of heavy government spending linked to Ferdinand Marcos' campaign for his second presidential term in 1969.^[1][2][3] It was notable for being the first major economic crisis of the Marcos Administration, and for triggering the social unrest which was the rationalization for the proclamation of martial law in 1972.^[3][4][5]

Background

See also: 1969 Philippine presidential election

Main article: Ferdinand Marcos 1969 presidential campaign

Ferdinand Marcos had been inaugurated as 10th President of the Republic of the Philippines on December 30, 1965. In 1969, he was eligible to run for a second term. However, no post-independence president of the republic had ever been elected to a second term.^[6][7][8] Although deficit spending during his first term already created an impression of success, making Marcos a very popular president at the end of his first term,^{[9]: 128–129} his desire to be the first to win a second term led to the launch of US$50 million worth in infrastructure projects in 1969 and create even more of an impression of progress for the electorate.^[10]

This campaign spending spree was so massive that it caused a balance of payments crisis,^[1][2] so the government was compelled to seek a debt rescheduling plan with the International Monetary Fund.^[4] The IMF mandated stabilization plan which accompanied the agreement included numerous macroeconomic interventions, including a shift away from the Philippines’ historical economic strategy of import substitution industrialization and towards export-oriented industrialization; and the allowing the Philippine Peso to float and devalue.^[1]

Impact

Main article: First Quarter Storm

Marcos was proclaimed winner of the election in November 1969, and was inaugurated to his second term just before the new year, on December 30, 1969. The social impact of the 1969–1970 balance of payments crisis very quickly led to social unrest – so much so that Marcos went from winning the elections by a landslide in November to dodging effigies by protesters just two months later, in January 1970.^[9][11] The five student-led protest rallies of the first quarter of 1970 were so massive that they later became popularized as the "First Quarter Storm". The social unrest would continue beyond which was the rationalization for the proclamation of martial law in 1972.^{[1][2][3][4][5]}

References

1. Balbosa, Joven Zamoras (1992). "IMF Stabilization Program and Economic Growth: The Case of the Philippines" (PDF). Journal of Philippine Development. XIX (35). Archived from the original (PDF) on 2021-09-21. Retrieved 2021-07-02.
2. Cororaton, Cesar B. "Exchange Rate Movements in the Philippines". DPIDS Discussion Paper Series 97-05: 3, 19.
3. Diola, Camille. "Debt, deprivation and spoils of dictatorship | 31 years of amnesia". The Philippine Star. Archived from the original on 26 June 2017. Retrieved 2 May 2018.
4. Balisacan, A. M.; Hill, Hal (2003). The Philippine Economy: Development, Policies, and Challenges. Oxford University Press. ISBN 9780195158984.
5. Dohner, Robert; Intal, Ponciano (1989). "Debt Crisis and Adjustment in the Philippines". In Sachs, Jeffrey D. (ed.). Developing country debt and the world economy. Chicago: University of Chicago Press. ISBN 0226733386. OCLC 18351577.
6. Boudreau, Vincent (2004). Resisting dictatorship: repression and protest in Southeast Asia. Cambridge University Press. p. 7. ISBN 978-0-521-83989-1.
7. Hedman, Eva-Lotta E. (2006). In the name of civil society: from free election movements to people power in the Philippines. University of Hawaii Press. p. 70. ISBN 978-0-8248-2921-6.
8. McCoy, Alfred W. (2009). Policing America's empire: the United States, the Philippines, and the rise of the surveillance state. University of Wisconsin Press. p. 52. ISBN 978-0-299-23414-0.
9. Magno, Alexander R., ed. (1998). "Democracy at the Crossroads". Kasaysayan, The Story of the Filipino People Volume 9:A Nation Reborn. Hong Kong: Asia Publishing Company Limited.
10. Burton, Sandra (1989). Impossible Dream: The Marcoses, the Aquinos, and the Unfinished Revolution. Warner Books. ISBN 0446513989.
11. Conrado., De Quiros (1997). Dead aim : how Marcos ambushed Philippine democracy. Foundation for Worldwide People Power (Manila, Philippines). Pasig: Foundation for Worldwide People's Power. ISBN 9719167033. OCLC 39051509.