402. White House Staff Notes No. 3241

[Here follows item 1 concerning an unrelated subject.]

2. Conditions in Philippines. 2 —Embassy Manila, appraising the two and a half months of the Garcia administration, regards the present situation of the country as gloomy, characterizes Garcia’s leadership as weak and hesitant, and describes his administration as slow to the point of paralysis in acting on critical programs. Corruption is creeping back into the government to the extent that business interests say it is becoming virtually impossible to operate without payoffs throughout the bureaucracy. The political and economic gains of the Magsaysay period are being lost, and the Embassy fears that the failure of the administration to halt the economic deterioration may create discontent which could be exploited by dissident elements. Rural conditions are unsatisfactory and may be deteriorating seriously in many areas. There is large scale unemployment, prices are rising, and in some regions there is a real shortage of rice and other consumer goods. The country also faces a serious foreign exchange situation which will be aggravated by the necessity for importing rice.

[Here follow the remaining items.]

  1. Source: Eisenhower Library, Whitman File, DDE Diaries. Secret. Eisenhower’s initials appear in the margin of the source text.
  2. Information contained in this paragraph is a summary of telegram 3456 from Manila, March 6. (Department of State, Central Files, 796.11/3–658)