414. Memorandum of a Conversation, White House, Washington, June 18, 1958, 10:45 a.m.1
SUBJECT
- Philippines—Need for Economic Assistance
PARTICIPANTS
- United States
- President Eisenhower
- Secretary Dulles
- Assistant Secretary Robertson
- Ambassador Charles E. Bohlen
- Mr. John Gordon Mein
- Republic of the Philippines
- President Garcia
- Ambassador Romulo
President Eisenhower, referring to his press conference that morning,2 stated that among his announcements he had expressed his satisfaction over the presence in Washington of President Garcia. The President asked President Garcia if he had anything he specifically wished to discuss.
President Garcia stated that he had come to the U.S. to discuss with President Eisenhower a few matters of great importance to the Philippines. He said that the Filipinos want to make their country a real showcase of democracy in the Far East but they are still facing some serious social and economic problems. The President believes the only way of convincing the masses that they should support democratic institutions is to give them a certain measure of economic stability. After independence the Philippines had undertaken an extensive rehabilitation program. This had been followed by the Huk rebellion which, happily, they had been able to suppress. After the rebellion the Government had instituted certain social programs. All this had involved expenditures in excess of their resources. One of the greatest things President Magsaysay had done was to win back the confidence of the masses, but in doing so he had overstrained Philippine resources. At the present time there are only pockets of Huks left, but there is a danger of recurrence unless something can be done for the masses. The President said he wished to continue the social amelioration program. The Philippine agrarian economy, however, cannot provide for the economic needs of the people, so they have felt it necessary to industrialize. The President said he felt that this industrialization program must continue and that the Philippines must maintain what he chooses to call an agro-industrial economy.
[Page 871]President Eisenhower asked whether any progress had been made since independence in giving the people better hand tools and better homes. President Garcia said that after the war it had been necessary to rebuild the houses destroyed during the military campaigns but that this had now been completed. As to hand tools and improvements in methods of cultivation, he indicated that some progress had been made over the past ten years. In reply to another question, President Garcia said that the average wages are higher today than they were several years ago, with minimum wages in the cities of 4 pesos and in the rural areas 2.50 pesos. In his opinion these are adequate wages, but he added that there are not sufficient jobs. Women are paid the same wages as men. It is important, therefore, that the economy be maintained and that there be sufficient jobs for all.
President Garcia stated that the Philippines have vast natural resources, most of them still untapped. His Government desires to develop these resources but to do so it must at the same time develop the industrial capacity of the country. He commented in reply to a question that the Philippines have potential water power resources which also need developing.
The Secretary asked whether Japanese reparations were going to be of assistance to the Philippines in carrying out their program. President Garcia said that in some ways they would but that $25 million a year is not a very great amount for this purpose.
President Garcia, in reply to a question, discussed also some of the difficulties being encountered in combatting certain diseases which have been affecting the hemp and copra crops, and thereby reducing production. He said that efforts to fight these diseases are being made with ICA assistance.
President Eisenhower asked about Philippine plans for industrialization. President Garcia mentioned the plans for the construction of a steel mill, which would produce primarily tools and small machinery for agricultural purposes. He said that a loan application had been submitted to the Export-Import Bank and that a firm of engineering consultants had recently submitted to the Bank a favorable report. He confirmed that the steel mill would be constructed by the Government adding that eventually it would be sold to private investors. President Eisenhower said that we would study with the Philippine representatives their industrialization plans and consider them carefully, pointing out that we favor such a program in principle.
President Garcia said that another important problem they have is that of food production, primarily the production of rice. The Secretary commented that the U.S. Government had sold some rice to the Philippines under P.L. 480 but that the surplus supply in this country was not great and that therefore we were not in a position to sell as much [Page 872] rice to the Philippines as they would like to acquire from us. President Garcia said that the aim of the Filipinos is to become self-sufficient in rice production and that they hope to increase the production by improved irrigation. For that reason he said many of the projects being submitted to the U.S. Government were for irrigation projects and that the Minister of Public Works had come with him as a member of his party.
President Garcia said that another important matter which they face is the improvement of their harbors. The Manila Harbor, for example, cannot accommodate ships of more than 35 foot draft. They are planning a program of reclamation and the construction of a foreign shipping section which would easily accommodate ships of up to 45 feet draft. For this purpose they hope to get a development loan for dredging, but since they expect to share with the dredging companies the reclaimed areas, he did not think that the reclamation itself would be expensive. He said that emphasis would also be placed on the construction of harbors in Mindanao. President Garcia discussed briefly some of the developments which have taken place in Mindanao, such as increase in population, construction of highways, and development of new cities.
President Garcia said these were the most important economic development plans and that it was of great importance that the 836 new industries be maintained. He said that the Philippine Government was finding it difficult in view of its depleted dollar reserves to acquire spare parts and replacements and to purchase raw materials. Since most of the industries have not as yet reached the production stage, the Government feels that it needs a breathing stage during which the dollar-earning industries may be fully developed. He said that the Government was attempting to encourage cottage industries and for that reason the power projects were of great importance. He said that the rural electrification program is probably the Government’s largest undertaking in its program for the social amelioration of the rural areas.
President Eisenhower said that the interested people in the U.S. Government should have an opportunity to examine the projects. He emphasized that nothing of this magnitude could be done over night and also that the financial resources available were limited. The Secretary pointed out that we were at the end of a fiscal year and that next year’s appropriations have not as yet been approved by Congress, which was an added difficulty in considering the Philippines’ requests. The Secretary added that we could undoubtedly work out a schedule, however, taking account of all the probabilities and that we wished to be helpful.
[Page 873]President Eisenhower said that we were not as much interested in helping the large land owners as we were in raising the standard of living of the masses. He reiterated that we were anxious to be helpful to the Philippines and that we would study carefully the plans which they were submitting and discussing with us.
At the conclusion of the visit President Eisenhower signed Public Laws No. HR 6908 and HR 7251.3
- Source: Department of State, Secretary’s Memoranda of Conversation: Lot 64 D 199. Confidential. Drafted by Mein on June 23 and approved by the White House.↩
- For the transcript, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1958, pp. 478 ff.↩
- The actual numbers of these signed bills were Public Law 85–461 and Public Law 85–460, respectively. (72 Stat. 200)↩