Official Gazette for January 11, 1971: President Marcos held a two-hour joint conference with the leaders of Congress and the executive committee of the Foreign Policy Council, in Malacañang in the morning.
During the meeting, he took up with the leaders of Congress the following:
1. The legislative program for the current year, and 2. A preview of the report and recommendations which he would submit to Congress, at the opening of its regular session.
The President also set a meeting of the Foreign Policy Council to discuss the issue of establishing trade and diplomatic relations with Socialist countries. Upon instructions of the President, Secretary of Foreign Affairs Carlos P. Romulo furnished the meeting with background materials on the proposed establishment of trade and diplomatic relations with Socialist countries. The President opened the conference by emphasizing two persistent demands brought about by the series of natural calamities which hit the country, namely: 1. The liberalization of credit and release of funds to reinvigorate economic activity. 2. The need for balancing the budget. He said there was a need to balance the two demands with the release of money without causing a runway inflation at the same time increasing agricultural productivity. The President emphasized that the agricultural recovery program in the typhoon-ravaged provinces would need ₱35.5 million, and that the total damage caused by the floods and typhoons had been placed by the National Economic Council at over ₱600 million.
The President also asked the financing institutions to consider the possibility of recalling money that had been lent out or all maturing-loans to support productive enterprise, thus reorienting the financing system. He also asked Congress leaders to study the proposals of the United Coconut Association to continue without the reglamentary annual reduction the export tax on coconut products so that the proceeds could be used to rehabilitate the coconut industry.
The President also called for: 1. Restructuring of the country’s educational system. 2. Restudy of the tariff structure with the view to its simplification. 3. Revision of the provisions in the Special Highway Fund Act and the National Internal Revenue Code regarding the distribution and allocation of shares of cities and provinces in the special highway fund and the excess income tax collections. The President said that under the present system the students are trained to go to the higher class but not to productive pursuits. Thus, he added, they cannot get employed.
The President called for a study of the tariff structure and suggested that a foreign exchange tax be imposed on the sale of foreign exchange. The proceeds from this tax, the President said, could then be utilized to further economic development activities. He also proposed a total ban on the importation of luxuries, and, with the concurrence of the leaders of Congress, directed Secretary of Finance Cesar E. A. Virata and Central Bank Governor Gregorio S. Licaros to draft the necessary bill for submission to the next regular session of Congress.
Governor Licaros gave the Congress leaders a briefing on the effects of the stabilization program. He said that four significant developments had been quite overlooked by analysts which are favorable and had come from Congress and are of permanent character. The Central Bank Governor said these are:
1. The Export Tax Law, Sec. 5 of which provides restrictions on Central Bank credit to government, thereby establishing’ exchange restrictions to prevent the printing of money, etc. 2. The Foreign Borrowing Act, which limits to 20 percent the amount that could be used for servicing debts, thus automatically restricting the volume of external debt. 3. The Export Incentives Law which gives stronger impetus to the export policy adopted with the floating rate. 4. The tax on securities.
Governor Licaros said these provided the necessary guidelines for the proper implementation of the Investment Incentives Act which are of legislative origin and of permanent nature.
The President and the Congress leaders also explored the possibility of further increasing the tourist trade and exploring market possibilities for Philippine products in the United States and Canada.
Present at the conference were Vice President Fernando Lopez, Senate President Gil J. Puyat, Speaker Jose B. Laurel, Jr., Senate Majority Floor Leader Arturo M. Tolentino, Speaker Protempore Jose Aldeguer, House Majority Floorleader Marcelino Veloso, Rep. Natalio P. Castillo; Secretary Virata, Secretary Romulo, Secretary of National Defense Juan Ponce Enrile, Jr., Secretary of Justice Vicente Abad Santos,
Open house for the diplomatic corps and the public officials at 9:00 AM.
Then a meeting of the legislative leaders and the cabinet on the legislative program, the state of the nation address, the monetary policy, and diplomatic relations with Russia.
I asked the leaders of both houses to first meet on a legislative program and then see me but they agreed on a development tax (tax on foreign exchange purchase) and a restructuring and simplification of tariff.
We agreed that I would not include any constitutional reforms in the State of the Nation Address.
They agreed to the steps taken to stimulate economic activity by non-inflationary methods. Gov. [Gregorio] Licaros explained that there can be no fear of excessive expenditure and borrowing by the government as claimed by Sen. Pres. [Gil] Puyat and Speaker [Jose B.] Laurel because there are legal constraints.
On relations with Russia, we decided to meet in bipartisan caucus with the Chief Justice invited before the 18th. Sen. Pres. Puyat will call the Liberals and set the date.
Secretary of Labor Blas F. Ople, Executive Secretary Alejandro Melchor, Jr., Undersecretary of Agriculture Arturo R. Tanco, Jr., Budget Commissioner Faustino Sy-Changco, Governor Licaros, Board of Investments Chairman Vicente Paterno, Presidential Economic Staff Director General Apolinario Orosa, Presidential Executive Assistant Jacobo C. Clave, and Press Secretary Francisco S. Tatad.
Earlier, the President and the First Lady, Mrs. Imelda R. Marcos, received government officials and members of the diplomatic corps at the traditional reception held at Malacañang for the new year.
Well-wishers included former President and Mrs. Carlos P. Garcia, and former President Diosdado Macapagal. The reception started promptly at 9 a.m. when Vice President Fernando Lopez and his lady arrived to head long line of members of the Cabinet. Then followed members of Congress led by Senate President Gil J. Puyat and Speaker Jose B. Laurel, Jr., members of the judiciary headed by Chief Justice Roberto Concepcion, and ranking officials in the executive department, and their wives.
In the traditional exchange of toasts between the President and members of the diplomatic corps, Msgr. Carmine Rocco, Papal Nuncio, congratulated the President and the Filipino people, in behalf of the chiefs of missions, for achievements during the year just ended. The dean of the Diplomatic Corps also cited Mrs. Marcos for her sustained charity and beautification drives which, he said, had contributed to the progress of the nation. In his response, the President offered the following prayer: “May God grant us the serenity to accept the things we cannot change, the courage to change the things we can, and the wisdom to know the difference.” The reception lasted up to. 11 a.m.
Later in the afternoon, the President met with J. J. Wolahan of Caltex and Ramon V. del Rosario of Filoil, during which he appealed to oil companies to reduce their margin of profits and keep the prices of gasoline at an acceptable level. The President said that the country was itself undergoing sacrifices to surmount temporary difficulties. He said oil companies could share with the country some of the burdens of development while still operating with a reasonable return on their investments. The President asked the Price Control Council to sit down with oil company executives on his appeal. After the meeting, the Chief Executive received Lupiño Lazaro, president of the striking Pasang-Masda, and informed him of his talk with the oil executives.
They agreed that we must give priority to the agricultural recovery program for which P35 million has been allocated.
I met Atty. Lupiño Lazaro, the leader of the bigger faction of Pasang-Masda [Pangkalahatang Samahan ng Maynila at Suburbs Drivers Associations] that is striking as he asked to see me on an urgent matter. He revealed to me that some men claiming to be NPA [New People’s Army] had offered guns to some of the Drivers Asso[ciation]. Presidents of Bulacan—that one man had accepted four Armalites and twelve had grenades. These men were allegedly brought to a house in Apalit—a house allegedly full of guns.
One of the drivers presidents was going to be picked up this afternoon at 4:00 PM to be brought to Tabang then to Bahay Pare.
When I informed Gen. [Manuel] Yan of this for transmittal Gen. [Felizardo] Tanabe, he recalled that Gen. Tanabe had disarmed the civilian guards of the mayor of Apalit.
I directed the relief of Commodore [Remo] Lavadia of the National Defense College for fermenting insubordination among his staff asking them to get any lecturer with or without the clearance of J-2 [Deputy Chief of Staff for Intelligence] and not to fear Gen. Yan or Malacañang [and] if there is no academic freedom he will close the college.
I transmitted the information that the Ilocos Sur local police had been infiltrated by NPA (probably Vigan through Chavit [Luis] Singson’s uncle, Mayor Singson).
An Aniceto Ramos reports that Lt. Victor Castro (sic) [Corpus] has been sighted in San Guillermo, Isabela, then Jones on the way to Palawan where there is allegedly a training ground.
Then a former CIS [Criminal Investigation Service] agent Majusay claims one of our agents, a Francisco Zabala, was with the Castro (sic) [Corpus] raiding party and that Castro [Corpus] was brought down from Baguio to Tarlac by the helicopter of Sen. [Benigno] Aquino [Jr.], then in the senator’s car to Manila, and in the smuggler Delfin Tan’s fast kumpit “Erlinda” from Manila to Brookes Pt., Palawan. They are supposed to go (he has 12 armed men with him) to Balabac, then to Borneo then to China.
These reports may be misleading as Lt. Castro [Corpus] was definitely located in Quezon City sometime on the 4th of January. A Lt. Vila was brought by Lt. Ferronil (?) and a hippie-looking young man to the Kamias Road area, he (Vila who is a classmate of [Victor] Corpus as well as Ferronil of class 1967) being blindfolded. When his blindfold was removed, they were in a house of Castro, Jose Maria Sison, [Ernesto] Macahiya and others. Corpus claimed he left the AFP [Armed Forces of the Philippines] because he was discriminated against (not allowed to take the Intelligence Course) the Floring [Floro]
Vigan mayor during this time was Jose Singson, Luis Singson’s father (not uncle).
Crisologo incident when he was berated openly for saying that the only solution to the peace and order program in Ilocos Sur would be the killing of Floring Crisologo, and his cavalier treatment in the PMA [Philippine Military Academy].
Vila revealed the meeting with Corpus to Gen. [Mariano] Ordoñez as he could not sleep with the secret. But Lt. Ferronil was not informed of the revelation and when he was asked, he denied the meeting with Corpus.
But the assessment is that Vila is telling the truth. A Lt. Enriquez and Lt. Sibal are also vocally in favor of the action taken by Corpus and may be in touch with him.
I have asked the Price Control Council to bring down the Villegas rate or increase of 2 centavos per liter of standard gasoline to 1 centavo. I asked Atty. Lupiño Lazaro to move for reconsideration of the decision of the Price Control Council to uphold the Villegas rate and to thus have the credit of this victory for the drivers. He has agreed. The arrangements are being made with USec. Bung [Arturo] Tanco [Jr.].
But the striking drivers and the students supporting then (among them the Kabataan Makabayan and Father [Jose] Blanco’s SKIT) are going to march around the city and start violence.
Tonight they have started to stone even private cars. It is expected that it will be worse tomorrow.
But the Metrocom [Metropolitan Command], reinforced by three companies, are ready for any eventuality.
This is probably the beginning of the intensified activities of the K[abataan] M[akabayan]’s and N[ew] P[eople’s] Army]’s and C[communist] P[arty of the] P[hilippines] for 1971.
We will keep watching for the need of the use of emergency powers.
I have a report of Customs anomalies which have been confirmed. I attach it.
So I must expedite the Customs reorganization.
Activists, radicals, rioters, demonstrators and the HMB’s [Hukbong Mapagpalaya ng Bayan] and NPA’s do not now constitute a serious threat to our society. This is the sober judgment that I arrive at after long and serious study.
Even if the government were to help them mount a rebellion, they would still be nothing but harassing groups incapable of taking over government.
But they pose in the minds of businessmen and prospective investors a fear of rebellion and a consequent insecurity of investment and economic activity. The fear must be dissipated.