Office of the Historian

367. Memorandum of Conversation0

Washington, February 20, 1962.

SUBJECT

  • Philippine Sugar

PARTICIPANTS

  • Ambassador Abello of the Philippines
  • The President
  • Mr. Angier Biddle Duke, Chief of Protocol
  • Mr. Bell, Director, Office of Southwest Pacific Affairs

During a conversation at the time Ambassador Abello was presenting his credentials, the President said that he had noted a news report some days ago that the Japanese were planning to buy 300,000 tons of Cuban sugar and asked the Ambassador if the Philippines could not provide the sugar to Japan.

Ambassador Abello explained that the Philippines did not produce enough sugar to sell 300,000 tons in the open market after fulfilling their quota to the United States. The President asked if the Philippines could increase their production. The Ambassador said he was sure the Philippines [Page 795] could and would be glad to increase production but pointed out that it would take 12 to 15 months. He also noted that sugar sold in the Japanese market would be for the world price while the Filipinos would obviously prefer to sell sugar at a premium price in the United States. The President told the Ambassador of the proposal now under consideration whereby the difference between the premium prices and the world price for Latin American sugar would be put back into the Alliance for Progress. He said that as far as the premium price was concerned the Philippines should not worry as the United States had no intention of denying the Filipinos the premium price.

The President suggested the Philippines might be prepared to sell 300,000 tons of its 980,000 ton U.S. quota to the Japanese with the United States paying the Filipinos the difference between the price paid by the Japanese and the U.S. premium price. He pointed out that this was not a U.S. Government proposal but an idea he had been thinking of.

Ambassador Abello thought this was an interesting suggestion and said that he would report it to his Government. The President asked Mr. Bell to have the State Department prepare a memorandum for him on this subject.1

Note: Although not stated explicitly, the President apparently had in mind payment to the Philippines for the difference between the world price and the U.S. premium price on 300,000 tons of sugar for Japan until the Philippines could increase their production so that they could satisfy the Japanese market as well as fulfill their U.S. quota.

  1. Source: Department of State, Central Files, 896.235/2–2062. Secret. Drafted by Bell and approved by the White House on February 22. A separate memorandum of conversation covers the discussion between the President and Abello of a potential Corregidor-Bataan memorial. (Ibid.) Another memorandum of conversation contains a brief account of the discussion on the question of the Philippines’ prohibition of importation of U.S. tobacco, Abello suggested if the Philippine Supreme Court did not rule favorably on the question, President Macapagal would make proposals to solve the issue satisfactorily for American business interests. The President said that the War Damage Bill and the tobacco issue should not be tied together. (Ibid.)

    Abello also discussed the issues of sugar, a Corregidor-Bataan memorial, and tobacco with Bell on February 21. (Memorandum of conversation, February 23; ibid., 896.235/2–2162)

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  2. In a March 7 memorandum to the President, Rusk stated that it did not appear practical to ask the Philippine Government to divert sugar to Japan because Japan had already concluded its purchases from Cuba and had filled its 1962 requirements for sugar. The Philippines had no sugar to sell on the world market and was unable to meet its quota in the U.S. market. (Kennedy Library, National Security Files, Countries Series, Philippines, General, 8/61–4/62)↩