Our basic strategy with respect to Malaysia is to impress her with our credible defense posture and capability. Thus the announcement on Phil. Air Force Day of the plan to increase our armed forces first to 100,000 then to 256,000. I did not announce that including the local police of about 100,000 and private security groups of 40,000 this would total 396,000 by the end of 1976.
Today we sign the Memorandum of Agreement with the U.S. through Amb. [William] Sullivan for the setting up of the Colt M-16 rifle factory in Bataan. It costs about $30 million. We borrow from FMS [Financial Management Systems?] a total of $15 spread over two years at 7 5/8% interest
This is why I have insisted on at least two squadrons of A-4 (Sky Hawk) attack bombers from military assistance, radar as well as APC’s [armored personnel carrier] (20 were delivered this quarter) and light armor, as well as mortars and navy units.
The most important is the Nike missile (ground to air) which I pressed on Amb. Sullivan yesterday. He agreed.
But he asked for a clearer statement on the real estate rights of American and a one year extension.
No Official Gazette entry for this day.