Foreign Relations of the United States, 1958–1960, South and Southeast Asia, Volume XV

409. Special National Intelligence Estimate¹

SNIE 66–58

Washington, May 27, 1958.

OUTLOOK FOR THE PHILIPPINE REPUBLIC

The Problem

To estimate the outlook for the Philippines over the next year, with particular reference to the character of the Garcia administration and the major trends in US-Philippine relations.

Conclusions

1. Government in the Philippines is in process of reverting to the levels of corruption, opportunism, and irresponsibility that characterized the pre-Magsaysay period. A drastic decline in foreign exchange reserves and inflation have become major economic problems, largely as a result of governmental indecision and toleration of illegal practices to curry the political favor of special interest groups. Moreover, President Garcia has failed to demonstrate a capacity for principled and vigorous leadership. (Paras. 6, 7, 11)

2. It is within the power of the Philippine government to go a long way toward rectifying the economic situation. However, thus far Garcia has shown little willingness or ability to exercise the determined leadership necessary to carry out an effective program for the solution of the country’s economic problems. He probably believes that he can avoid politically difficult courses of action by appealing to the US for large-scale financial aid. (Paras. 12–14)

3. We believe that the military will remain relatively free of political manipulation and corruption and that it will continue as an important force for national stability over the next year at least. By 1960 armed force capabilities will be substantially increased as a result primarily of current programs to reorganize the army and modernize the airforce. However, the armed forces are dependent upon continued US aid and assistance. (Paras. 15–17)

4. There is a genuine and growing nationalist sentiment in the Philippines, which is thus far not generally identified with anti-Americanism. However, a small but important group has attempted to exploit resentment of Philippine political and economic dependence upon the US by emotional and chauvinistic appeals. The extent to which Philippine nationalism takes on an increasing anti-American coloration depends largely upon successful settlement of outstanding issues between the two countries. We believe that in any event, within the framework of the overall alliance with the US and a generally pro-American attitude there will be increased pressure for a more independent foreign policy (Paras. 19–20)

5. However, we believe it unlikely that the Philippines will take action which will jeopardize US military base rights over the next year or so. The Philippines will continue in the foreseeable future its present active participation in SEATO. (Paras. 21, 23)

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1. Source: Department of State, INR–NIE Files. Secret. Prepared by the Central Intelligence Agency and the intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, and The Joint Staff. It was distributed by the Director of the Central Intelligence to appropriate officers at the White House, National Security Council, Department of State, Department of Defense, Operations Coordinating Board, Atomic Energy Commission, and Federal Bureau of Investigation.