The longest relationship between the United States of America and a Southeast Asian country has been the US military involvement in the Philippines. For almost a century, the US military had use of two major bases in the Philippines, Clark Air Force Base, and Subic Naval Station. It took a strong anti-nuclear, anti-imperialist mass movement and a majority vote in the Philippine Senate to finally end the long US military occupation.
The 1991 US military withdrawal from the Philippines was expected to cause a “power vacuum” that would have adverse economic and political effects on the former US colony. Was this really the case in the Philippines? Did the U.S. pull out cause economic havoc and wide spread political unrest or was the Philippine government able to compensate for this great economic and security loss?
This paper will examine how the American Military presence influenced the politics and economy of the Philippines and what affect the eventual withdrawal had on the country. It will also examine what the Philippine government has done to compensate for the power vacuum caused by the US Base closures. Though I will rely primarily on outside sources, I will also present my own observations having lived in the former base area (Central Luzon) for two years (1994-1996) immediately following the U.S. base withdrawal.
Historical Background to US Bases
After the United States “liberated” the Philippines from Spanish rule, Subic Bay was designated as principal US naval station in the Philippines in 1901. A naval base was constructed and became operational in 1907. It became the largest training facility for the US Marines prior to World War I. In 1902, Fort Stotsenberg, renamed Clark Air Base in 1947, was established in Pampanga province.
After World War II, US and Philippine authorities signed a military bases agreement in March 1947, eight months after the Philippines obtained nominal independence. That same year, the Truman Doctrine was proclaimed and the US campaign to “contain Communism” began. Clark Air Base became the headquarters of the 13th Air Force and Subic became a forward station for the Seventh Fleet.
Clark and Subic played a key logistical role in support of the US forces in the Korean War from 1950 to 1953. From 1965 to 1975, the US bases served as logistical fulcrums of the US war of intervention in Indochina. Air traffic at Clark reached as high as 40 transports per day, all bound for Vietnam . In 1966, the duration of the bases agreement was reduced from 99 to 25 years, with the treaty to expire on September 16, 1991.
During the oil crisis of the ’70s, regular deployment of Subic-based naval units to the Indian Ocean began. Carrier task forces from Subic were deployed to the Indian Ocean and Arabian Sea during the Iranian revolution and North Yemen-South Yemen border war in 1979 and Soviet intervention in Afghanistan in late 1979 and 1980 .
In August 1983, former Senator Benigno Aquino was assassinated and the country was in crisis. The anti-dictatorial movement was gaining strength and was led by the slain senator’s widow, Cory Aquino. Marcos called a snap election in 1986. The opposition led by Aquino called for the withdrawal of the US bases.
After Marcos was deposed in a popular uprising led by Aquino, Ramos, Enrile and Cardinal Sin in February 1986, a new constitution was adopted a year later. It stated that after expiration of the bases treaty in September 1991, “foreign military bases, troops or facilities, shall not be allowed” in the country unless a new treaty was ratified by a two-thirds vote of the Senate . In 1991, President Aquino broke her election promises and campaigned for the bases’ extension but on September 16, hundreds of thousands marched outside the Senate as it voted 12-11 to reject the new treaty .
Economic Effects of the Bases
The Economic impact of the US Bases on the Philippine economy was undoubtingly significant. The US military spent over $500 million a year in the country on salaries, the purchase of supplies and services, and other military and economic aid given to the Philippine government. One estimate claimed that the total amount of economic contribution amounted to as much as US$ 1 billion annually . In March of 1987 the Philippine News reported that the bases employed 23,168 full-time workers, 22,834 contract workers, and 444 concessionaires for a total of 46,446 Filipinos with annual salaries totaling $96 million . The US Information Service claimed that, “The U.S. facilities create a great deal of indirect employment by doing business with Philippine companies – over 900 had contracts with the bases in 1985….” The Bases seemed to be pumping in millions of U.S dollars into an impoverished economy.
Yet these figures can be quite misleading. Direct Filipino employment on the U.S. bases only amounted to some 5% of the total 1.18 million Filipinos employed by the Philippine government at that time . Patricia A. Paez calculated that the bases only actually employed less than 1% of the total Philippine “non-agriculture workforce” . These statistics make the U.S. claim that it was the largest employer in the country, apart from the Philippine government, appear rather weak.
Furthermore, the Philippines’ Jose W. Diokno Foundation (named after a well known Filipino nationalist) makes the point that bases’ contribution to the Philippine economy was actually consumption of “commodity items” and not “capital investment”. “The bulk of base contribution are spent on labor – both legitimate labor and labor for entertainment purposes. Thus Filipino men, women and Children are transformed into commodity items” . In effect, base contributions did not actually assist in development of the Philippine economy. Also, U.S. Economic assistance regularly demands that the Philippines purchase only U.S. goods, which forced the Philippines into buying often higher priced goods than could have been bought on the world marketplace.
The Philippine Government Response
Although some Government officials argued that the economic benefits of the bases warranted their retention, others argued that more productive uses could be found for the bases after the U. S withdrawal. The only question was how this conversion was to take place. As a result the Legislative-Executive Bases Council (LEBC) was created to formulate a comprehensive program to convert former and existing facilities into alternative productive civilian uses .
The LEBC Mapped out the following alternatives to the economic activities that would suffer upon the removal of the U.S. Bases:
? In Subic Naval Base, Filipinos could build and repair ships, cars, jeeps, buses, small boats, tricycles, utensils, hand tools and even build pre-fabricated housing.
? The huge jungle area of Subic could become a national park with its natural resources and wild creatures.
? Camp John Hay (a recreational USAF base in the Philippine mountains) could be converted into a tourist area.
? San Miguel Communications Station could be converted into a national and international communications enterprise, greatly contributing to the upgrading of the Philippine telecommunications network.
? Portions of Clark Air Base could be distributed into an international airport for passengers and cargo, and into an industrial center.
The estimated implementation cost of the programs was P158.5 billion for a ten-year period . It was purported that the private sector would finance half of this amount. It was then the active private sector participation was first conceived as crucial to the programs success.
When the U.S. Bases pulled out, there was some initial upheaval as expected in North and Central Luzon. Not only did the withdrawal affect the economic life of the area, the 1990 earthquake and 1992 eruption of Mt. Pinatubo had laid waste too much of the area. About 42,000 people lost their jobs; not counting the estimated 79,000 additional jobs off base that depended on the US facility. Business slowed down. Revenues dropped from US$13.8 million in 1991 to $5.8 million in 1992, reaching a low of $2.4 million in 1993. Subic and its adjacent city, Olongapo, were at a standstill. About a third of the city’s population packed up and moved to other parts of the country. Severe depression swept the area . It was in this turbulent time that the Bases Conversion Development Authority came into being by virtue of Republic Act No. 7227 signed by president Corazon Aquino on march 13 1992. The Sole Aim of the BCDA was to accelerate the development of the base conversions.
Today, the former naval base has become the country’s first Freeport, hosting more than 170 companies dealing in manufacturing, retail, warehousing, transshipment, recreation and tourism. Next to Philippine firms, most of the investors are from Taiwan, followed by the US and Europe. As of September 1995, investments poured into the Freeport reached $1 billion, with companies employing about 30,000 people .
A number of factors account for Subic’s turnaround. The Americans left good infrastructure, including one of the best airstrips in Asia. Subic also has an excellent
deep-water harbor, reliable power and communication facilities. Filipino workers in the area are skilled; they speak English and are easy to train.
Clark Air Base, a sprawling 28,041-hectare prized property in the heart of central Luzon, was a major casualty of Mount Pinatubo. After the volcano erupted in 1991, a large part of the air base was covered with ash, roofs caved in and all the eye could see was a vast stretch of gleaming, silver-gray land. The disaster hastened the departure of the US forces from America’s largest overseas air base. But it definitely slowed down the transformation of Clark into a civilian enterprise.
Today, the former Clark Air Base-renamed Clark Special Economic Zone-is rising from the ashes, catching up with Subic Freeport. The government has since rehabilitated the power plant and telecommunications facilities and cleared the runways. Offered incentives such as duty-free importation and waived local and national taxes, local and foreign businesses have set up shop with investments now reaching over $500 million. Most of these are industrial and commercial ventures; the rest are aviation-related and tourism projects. Holiday Inn, guest cottages and a golf course are among the early tourist amenities. Apart from these, construction of an international airport has begun and part of it will be open for daytime landing in a few months. From a virtual wasteland four years ago, Clark has also become a job center. More than 16,000 workers have been employed, half of the 32,000 base workers displaced in 1991.
The Political Effects of the U.S. Military in the Philippines
All This great economic revival seems to have been downplayed by the political insecurity that the base withdrawals brought. The termination of the Military Base Agreement (MBA) devastated the bilateral security ties with the U.S. Throughout the MBA’s existence security ties have been linked to the terms of the treaty. As a result, the U.S. withdrawal forced the limelight on the Armed forces of the Philippines (AFP) and its capacity to protect the country from external as well as internal threats. This has become the most significant concern affecting the security ties between the two countries.
Form the inception of the MBA; the United States underwrote much of the security of the Philippines, clearly establishing a dependency relationship on defense. Former National Security Advisor Rafael Ileto warned that the country’s policy-makers took it for granted that someone else would always be there to defend the country. This attitude established the groundwork for the stagnation of the external defense capability of the AFP. Department of Defense and AFP officials have called attention to the weak capacity of the AFP to defend the country against external threats, including intrusions by smugglers and illegal fishermen. Philippine Navy statistics show that between 1986 and October 1990, there were 819 incidents of illegal incursions involving 1,617 Taiwanese vessels. Only a few of these were actually apprehended. Philippine Air Force records also show that there were 231 incursions into the Philippine Air Defense Identification Zone (PADIZ) made by non-friendly aircraft in the same period. The neglect of the external defense capability of the AFP has bred political repercussions. A fact-finding commission report showed that it was partly responsible for demoralization within the AFP and, indirectly, is one of the causes of the series of coup d’ etat that have taken place in the country.
This dependency on the U.S assistance has another aspect to it. Aside from external security, the Philippines have also relied on the United States for assistance in the development of the AFP’s internal capabilities. National concerns relating to the Communist Party of the Philippines (CPP), the Moro National Liberation Front (MNLF), and recently the military renegades of the RAM-KSP focused these development efforts on the counter-insurgency and the Philippine Army. As a result of U.S. assistance, AFP gains in the field and joint negotiations diminished the threat that these groups posed. As an example, the CPP-NPA has had its regular forces reduced from 25,200 in 1987, to 13,500 by 1992, infiltrating only 18% (down from up to 26% a year before) of the barangays (local villages). The insurgency, however, had proven resilient in the past and remains a major threat to the stability of the state.
The focus on the insurgency, however, and the capability of the AFP to fight it also had its long-term consequences. The external defense capabilities of the AFP were neglected and the Philippine Navy and Air Force, the services reared for external security, amounted to almost nothing when dealing with external defense. As a result, theses two services are also the most affected by the fallout from the U.S. withdrawal.
The Philippine Navy has 21 patrol ships, 22 transport and service vessels, and about 64 small craft with an average of 41 years in service to protect the country’s 1.29 million square kilometers of territorial waters and its 1.69 million square miles of exclusive economic zone (EEZ). It is the only naval force in the ASEAN region without any missile capability. Many of the Philippine Navy’s ships have limited patrol radius and are not even considered seaworthy. The termination of the MBA puts it on more uncertain footing since 28% of its operational requirements were within the bases compensation package.
The Philippines Air Force (PAF) is in an even worse state, having relied on the United States for as much as 61% of its operational needs. The PAF retired its aging F-5A fighters from service in 1992, leaving the country with virtually no air defense. Modernization plans for the AFP are being held back by financial shortages. The AFP is trying to appropriate funds for a 10-year modernization program costing US$7 billion. The program banked on American military assistance when it was initiated in 1990, but when the bases withdrew these funds were reduced drastically. The only alternative has been U.S foreign grants and loans that require the recipients provide counterpart funds. In 1992 it was reported that as much as 63% of the PAP fund’s pledged US$5.8 Billion in 1989 and 1991 remain unused because of the unavailability of such counterpart funding.
The Philippines-U.S. security relationship remains in place because of the Mutual Defense Treaty signed in 1951. The Philippines was guaranteed US. Military intervention if any situation arose that affected the Philippine national security . During a 1992 Mutual Defense Meeting, Philippine and American military officials agreed that no radical change in the bilateral defense and security relationship would be made . Despite this agreement the US commitment has come under some question with the emergence of the Philippine claim to the Spratlys.
The Spratly Islands is a generally uninhabited island chain covering 800,000 square kilometers of the South China Sea. It is believed to contain significant reserves of oil in addition to its rich marine resources, minerals and hydrocarbon deposits. The Philippines claims a total are of 93,000 square kilometers, which it collectively calls the Kalayaan (Freedom) Islands. The Spratlys are also claimed wholly or partly by Brunei, China, Taiwan, Vietnam, and Malaysia. Presently the dispute over the Spratlys has become the principal test of the MDT’s importance to the Philippine’s defense need.
The U.S., however, believes that the Spratlys and any conflict arising from it falls outside the jurisdiction of the MDT. Morton Smith, spokesperson of the U.S. Embassy to the Philippines, said that the Kalayaan Islands are excluded from the scope of the treaty because they were not part of the country’s territory when the MDT was signed. The Philippines had only raised its claim in 1987. The United States, however refuses to take the side on the issue, and does not recognize the claim of any country on the disputed islands. Because the U.S. does not recognize the Philippine claim it is not obliged to come to its aid in the event of armed conflict in that area.
The Philippines, however, believes that the United States is bound under the MDT to come to its defense in case of an attack on territory it claims in the South China Sea. During a 1992 Senate hearing, Philippine Secretary of Foreign Affairs Roberto Romulo stated that he United states was treaty-bound to support the Philippines in the event of an attack on Philippine – claimed territory into the South China Sea.
The Spratly debate is still going on today. This casts some light on the relationship between the MBA and the MDT. Before the termination of the MBA, the U.S. military and naval presence provided the Philippines with the physical guarantee of the commitment embodied in the MDT. The U.S. pull out, however removed this physical evidence. At the same time, the weakened defense establishment of the Philippines made this commitment even more critical. As a result the Philippine government has sought to establish a new agreement that would bring back the U.S. Military presence.
The current agreement (signed by President Ramos in 1998) is the Visiting Forces Agreement (VFA) allowing U.S. Military to conduct temporary joint exercises and training with the AFP. However, the VFA has been the topic of much controversy in current Philippine politics. In addition to the wide spread student protests, many militant nationalist groups have already warned that should the VFA be implemented all past peace negotiations with their groups are void. The future of Philippine-American Military relations’ remains to be seen, but the certainty that these relations are vital to Philippine security, has drawn the support of the past three Presidents, Aquino, Ramos and the current day Estrada.
The U.S. Military presence in the Philippines has had a profound impact on Philippine politics and economy. Economically, it was thought that the U.S. pull out would have devastating effects on the already impoverished economy. However, through the quick thinking and ingenuity of the Filipino economists and Technocrats put in charge of the base conversion projects, the Philippine economy not only recovered from the initial economic crisis but also has experienced phenomenal growth. Economically, the removal of the U.S. Bases was a step in the right direction. However, the same cannot be said about the impact the U.S. withdrawal has had on politics, especially on the issue of Philippine security.
Even today, the Philippine government is plagued with the problem of internal strife against the countless rebel groups dissatisfied with the current political agenda that appears to only benefit the political elite. The great economic growth has had minimal effect on the masses of Filipino poor who flock to these groups for redemption. In addition, the Armed Forces of the Philippines have proven to be too ill equipped and trained to deal with both the internal and eternal threats to their country. In light of this, I feel the Philippines would do well to consider agreements such as the VFA that would allow the U.S. Military to aid them while keeping Philippine soil free of U.S. Bases. If such a compromise cannot be reached there is certainly the option of building better relations with neighboring South East Asian nations, an option that, in the past, has not been fully addressed.