PRESIDENCY
In the 1961 presidential election, Macapagal ran against Garcia's re-election bid, promising an end to corruption and appealing to the electorate as a common man from humble beginnings. He defeated the incumbent president with a 55% to 45% margin. His inauguration as the president of the Philippines took place on December 30, 1961.
Major Legislation Signed
On September 12, 1962, during President Diosdado Macapagal's administration, the territory of eastern North Borneo (now Sabah), and the full sovereignty,title and dominion over the territory were ceded by the then reigning Sultan of Sulu, HM Sultan Muhammad Esmail E. Kiram I, to the Republic of the Philippines.The cession effectively gave the Philippine government the full authority to pursue their claim in international courts. The Philippines broke diplomatic relations with Malaysia after the federation had included Sabah in 1963.It was revoked in 1989 because succeeding Philippine administrations have placed the claim in the back burner in the interest of pursuing cordial economic and security relations with Kuala Lumpur.To date, Malaysia continues to consistently reject Philippine calls to resolve the matter of Sabah's jurisdiction to the International Court of Justice.Sabah sees the claim made by the Philippines' Moro leader Nur Misuari to take Sabah to International Court of Justice (ICJ) as a non-issue and thus dismissed the claim.
Maphilindo
Economics
In his inaugural address, Macapagal promised a socio-economic program anchored on "a return to free and private enterprise", placing economic development in the hands of private entrepreneurs with minimal government interference.
Twenty days after the inauguration, exchange controls were lifted and the Philippine peso was allowed to float on the free currency exchange market. The currency controls were initially adopted by the administration of Elpidio Quirino as a temporary measure, but continued to be adopted by succeeding administrations. The peso devalued from P2.64 to the U.S. dollar, and stabilized at P3.80 to the dollar, supported by a $300 million stabilization fund from the International Monetary Fund.
To achieve the national goal of economic and social progress with prosperity reaching down to the masses, there existed a choice of methods. First, there was the choice between the democratic and dictatorial systems, the latter prevailing in Communist countries. On this, the choice was easy as Filipinos had long been committed to the democratic method. With the democratic mechanism, however, the next choice was between free enterprise and the controls system. Macapagal stated the essence of free enterprise in layman parlance in declaring before Congress on January 22, 1962 that "the task of economic development belongs principally to private enterprise and not to the government.
Before independence there was free enterprise in the Philippines under Presidents Manuel Quezon, Sergio Osmeña and Manuel Roxas. In 1950 President Elpidio Quirino deviated from free enterprise launching as a temporary emergency measure the system of exchange and import controls. The controls system was carried on by President Magsaysay and Garcia.
The first fundamental decision Macapagal had to make was whether to continue the system of exchange controls of Quirino, Magsaysay and Garcia or to return to the free enterprise of Quezon, Osmena and Roxas. It had been his view since he was a Congressman for eight years that the suitable economic system for Filipinos was free enterprise. So on January 21, 1962 after working for 20 straight hours he signed a Central Bank decree abolishing exchange controls and returning the country to free enterprise.
During the 20 days available to make a decision on choice between controls and free enterprise, between his inauguration as President and before the opening of Congress, Macapagal's main adviser was Governor Andres Castillo of the Central Bank.
Further reform efforts by Macapagal were blocked by the Nacionalistas, who dominated the House of Representatives and the Senate at that time. Nonetheless, Macapagal was able to achieve steady economic progress, and annual GDP growth averaged at 5.15% for 1962–65.
Socio-economic program
The removal of controls and the restoration of free enterprise was intended to provide only the fundamental setting in which Macapagal could work out economic and social progress. A specific and periodic program for the guidance of both the private sector and the government was an essential instrument to attain the economic and social development that constituted the goal of his labors.
Such a program for his administration was formulated under his authority and direction by a group of able and reputable economic and business leaders the most active and effective of which was Sixto Roxas III. From an examination of the planned targets and requirements of the Five-Year program – formally known as the Five-Year Socio-Economic Integrated Development Program – it could be seen that it aimed at the following objectives.
Free enterprise was restored with decontrol. The Five-Year Economic Program had been prescribed. Land reform abolishing tenancy had been launched. These were essential foundations for economic and social progress for the greatest number.
The essential foundations having been laid, attention must then be turned to the equally difficult task of building the main edifice by implementing the economic program. Although the success of Macapagal's Socio-Economic Program in free enterprise inherently depended on the private sector, it would be helpful and necessary for the government to render active assistance in its implementation by the citizens.
Such role of the government in free enterprise, in the view of Macapagal, required it (1) to provide the social overhead like roads, airfields and ports that directly or proximately promote economic growth, (2) to adopt fiscal and monetary policies salutary to investments, and most importantly (3) to serve as an entrepreneur or promote of basic and key private industries, particularly those that require capital too large for businessmen to put up by themselves. Among the enterprises he selected for active government promotion were integrated steel, fertilizer, pulp, meat canning and tourism.
Land Reform
Like Ramon Magsaysay, President Diosdado Macapagal came from the masses. He savored to call himself the "Poor boy from Lubao".Ironically, he had little popularity among the masses. This could be attributed to an absence of charismatic appeal of his stiff personality. But despite this, Macapagal had certain achievements. Foremost of these was the Agricultural Land Reform Code of 1963 (Republic Act No. 3844) which provided for the purchase of private farmlands with the intention of distributing them in small lots to the landless tenants on easy term of payment. It is a major development in history of land reform in the Philippines,
In comparison with the previous agrarian legislation, the law lowered the retention limit to 75 hectares, whether owned by individuals or corporations. It removed the term "contiguous" and established the leasehold system. The share-tenancy or the kasama system was prohibited. It formulated a bill of rights that assured agricultural workers the right to self-organization and to a minimum wage. It also created an office that acquired and distributed farmlands and a financing institution for this purpose. The major flaw of this law was, however, that it had several exemptions, such as ort (big capital plantations established during the Spanish and American periods); fishponds, saltbeds, and lands primarily planted to citrus, coconuts, cacao, coffee, durian, and other similar permanent trees; landholdings converted to residential, commercial, industrial, or other similar non-agricultural purposes.
It was viewed that the 75-hectare retention limit was just too high for the growing population density. Moreover, this law merely allowed the transfer of the landlordism from one area to another.This was because landlords were paid in bonds, which he could use to purchase agricultural lands. Likewise, the farmer was free to choose to be excluded from the leasehold arrangements if he volunteered to give up the landholdings to the landlord.
Within two years after the law was implemented, no land was being purchased under its term and conditions caused by the peasant's inability to purchase the land. Besides, the government seemed lacking of strong political will, as shown by the Congress' allotment of only one million pesos for the implementation of this code. At least Php200 million was needed within a year from the enactment and implementation of the code, and Php300 million in the next three years for the program to be successful. However, by 1972, the code had benefited only 4,500 peasants covering 68 estates, at the cost of Php57 million to the government. Consequently, by the 1970s, the farmers ended up tilling less land, with their share in the farm also being less.They incurred more debts, depending on the landlord, creditors, and palay buyers. Indeed, during the administration of Macapagal, the productivity of the farmers further declined.
Anti-Corruption Drive
One of Macapagal's major campaign pledges had been to clean out the government corruption that had proliferated under former President Garcia.
The administration also openly feuded with Filipino businessmen Fernando Lopez and Eugenio Lopez, brothers who had controlling interests in several large businesses. The administration alluded to the brothers as "Filipino Stonehills who build and maintain business empires through political power, including the corruption of politicians and other officials". In the 1965 election, the Lopezes threw their support behind Macapagal's rival, Ferdinand Marcos, with Fernando as Marcos' running mate.
Stonehill Controversy
The administration's campaign against corruption was tested by Harry Stonehill, an American expatriate with a $50-million business empire in the Philippines. Macapagal's Secretary of Justice, Jose W. Diokno investigated Stonehill on charges of tax evasion, smuggling, misdeclaration of imports, and corruption of public officials. Diokno's investigation revealed Stonehill's ties to corruption within the government. Macapagal, however, prevented Diokno from prosecuting Stonehill by deporting the American instead, then dismissing Diokno from the cabinet. Diokno questioned Macapagal's actions, saying, "How can the government now prosecute the corrupted when it has allowed the corrupter to go?" Diokno later served as a Senator of the republic.
Independence Day
Macapagal appealed to nationalist sentiments by shifting the commemoration of Philippine independence day. On May 12, 1962, he signed a proclamation which declared Tuesday, June 12, 1962, as a special public holiday in commemoration of the declaration of independence from Spain on that date in 1898. The change became permanent in 1964 with the signing of Republic Act No. 4166. For having issued his 1962 proclamation, Macapagal is generally credited with having moved the celebration date of the Independence Day holiday. Years later, Macapagal told journalist Stanley Karnow the real reason for the change: "When I was in the diplomatic corps, I noticed that nobody came to our receptions on the Fourth of July, but went to the American Embassy instead. So, to compete, I decided we needed a different holiday."
Foreign Policies
North Borneo Claim
In July 1963, President Diosdado Macapagal convened a summit meeting in Manila in which a nonpolitical confederation for Malaysia, the Philippines, and Indonesia, Maphilindo, was proposed as a realization of José Rizal's dream of bringing together the Malay peoples, seen as artificially divided by colonial frontiers.
Maphilindo was described as a regional association that would approach issues of common concern in the spirit of consensus. However, it was also perceived as a tactic on the parts of Jakarta and Manila to delay, or even prevent, the formation of the Federation of Malaysia. Manila had its own claim to Sabah (formerly British North Borneo), and Jakarta protested the formation of Malaysia as a British imperialist plot. The plan failed when Sukarno adopted his plan of konfrontasi with Malaysia. The Konfrontasi, or Confrontation basically aims at preventing Malaysia to attain independence. The idea was inspired onto President Sukarno by the Partai Komunis Indonesia (PKI), or literally the Indonesian Communist Party. The party convinced President Sukarno that the Formation of Malaysia is a form of neo-colonization and will later affect tranquility in Indonesia. The subsequent development of ASEAN almost certainly excludes any possibility of the project ever being revived.
Vietnam War
Before the end of his term in 1965, President Diosdado Macapagal persuaded Congress to send troops to South Vietnam. However this proposal was blocked by the opposition led by Senate President Ferdinand Marcos who deserted Macapagal's Liberal Party and defected to the Nacionalista Party.
The U.S. government's active interest in bringing other nations into the war had been part of U.S. policy discussions as early as 1961. President Lyndon Johnson first publicly appealed for other countries to come to the aid of South Vietnam on April 23, 1964–in what was called the "More Flags" program. Chester Cooper, former director of Asian affairs for the White House, explained why the impetus came from the United States instead of from the Republic of South Vietnam: "The 'More Flags' campaign ... required the application of considerable pressure for Washington to elicit any meaningful commitments. One of the more exasperating aspects of the search…was the lassitude …... of the Saigon government. In part ... the South Vietnam leaders were preoccupied with political jockeying. ... In addition, Saigon appeared to believe that the program was a public relations campaign directed at the American people."
1963 Midterm Election
The senatorial election was held on November 12, 1963. Macapagal's Liberal Party (LP) won four out of the eight seats up for grabs during the election – thereby increasing the LP's senate seats from eight to ten.
1965 Presidential Campaign
Towards the end of his term, Macapagal decided to seek re-election to continue seeking reforms which he claimed were stifled by a "dominant and uncooperative opposition" in Congress.[4] With Senate President Ferdinand Marcos, a fellow member of the Liberal Party, unable to win his party's nomination due to Macapagal's re-election bid, Marcos switched allegiance to the rival Nacionalista Party to oppose Macapagal.
Among the issues raised against the incumbent administration were graft and corruption, rise in consumer goods, and persisting peace and order issues. Macapagal was defeated by Marcos in the November 1965 polls.
Major Legislation Signed
- Republic Act No. 3512 – An Act Creating A Fisheries Commission Defining Its Powers, Duties and Functions, and Appropriating Funds Therefor.
- Republic Act No. 3518 – An Act Creating The Philippine Veterans' Bank, and For Other Purposes.
- Republic Act No. 3844 – An Act To Ordain The Agricultural Land Reform Code and To Institute Land Reforms In The Philippines, Including The Abolition of Tenancy and The Channeling of Capital Into Industry, Provide For The Necessary Implementing Agencies, Appropriate Funds Therefor and For Other Purposes.
- Republic Act No. 4166 – An Act Changing The Date Of Philippine Independence Day From July Four To June Twelve, And Declaring July Four As Philippine Republic Day, Further Amending For The Purpose Section Twenty-Nine Of The Revised Administrative Code.
- Republic Act No. 4180 – An Act Amending Republic Act Numbered Six Hundred Two, Otherwise Known As The Minimum Wage Law, By Raising The Minimum Wage For Certain Workers, And For Other Purposes.
On September 12, 1962, during President Diosdado Macapagal's administration, the territory of eastern North Borneo (now Sabah), and the full sovereignty,title and dominion over the territory were ceded by the then reigning Sultan of Sulu, HM Sultan Muhammad Esmail E. Kiram I, to the Republic of the Philippines.The cession effectively gave the Philippine government the full authority to pursue their claim in international courts. The Philippines broke diplomatic relations with Malaysia after the federation had included Sabah in 1963.It was revoked in 1989 because succeeding Philippine administrations have placed the claim in the back burner in the interest of pursuing cordial economic and security relations with Kuala Lumpur.To date, Malaysia continues to consistently reject Philippine calls to resolve the matter of Sabah's jurisdiction to the International Court of Justice.Sabah sees the claim made by the Philippines' Moro leader Nur Misuari to take Sabah to International Court of Justice (ICJ) as a non-issue and thus dismissed the claim.
Maphilindo
Economics
In his inaugural address, Macapagal promised a socio-economic program anchored on "a return to free and private enterprise", placing economic development in the hands of private entrepreneurs with minimal government interference.
Twenty days after the inauguration, exchange controls were lifted and the Philippine peso was allowed to float on the free currency exchange market. The currency controls were initially adopted by the administration of Elpidio Quirino as a temporary measure, but continued to be adopted by succeeding administrations. The peso devalued from P2.64 to the U.S. dollar, and stabilized at P3.80 to the dollar, supported by a $300 million stabilization fund from the International Monetary Fund.
To achieve the national goal of economic and social progress with prosperity reaching down to the masses, there existed a choice of methods. First, there was the choice between the democratic and dictatorial systems, the latter prevailing in Communist countries. On this, the choice was easy as Filipinos had long been committed to the democratic method. With the democratic mechanism, however, the next choice was between free enterprise and the controls system. Macapagal stated the essence of free enterprise in layman parlance in declaring before Congress on January 22, 1962 that "the task of economic development belongs principally to private enterprise and not to the government.
Before independence there was free enterprise in the Philippines under Presidents Manuel Quezon, Sergio Osmeña and Manuel Roxas. In 1950 President Elpidio Quirino deviated from free enterprise launching as a temporary emergency measure the system of exchange and import controls. The controls system was carried on by President Magsaysay and Garcia.
The first fundamental decision Macapagal had to make was whether to continue the system of exchange controls of Quirino, Magsaysay and Garcia or to return to the free enterprise of Quezon, Osmena and Roxas. It had been his view since he was a Congressman for eight years that the suitable economic system for Filipinos was free enterprise. So on January 21, 1962 after working for 20 straight hours he signed a Central Bank decree abolishing exchange controls and returning the country to free enterprise.
During the 20 days available to make a decision on choice between controls and free enterprise, between his inauguration as President and before the opening of Congress, Macapagal's main adviser was Governor Andres Castillo of the Central Bank.
Further reform efforts by Macapagal were blocked by the Nacionalistas, who dominated the House of Representatives and the Senate at that time. Nonetheless, Macapagal was able to achieve steady economic progress, and annual GDP growth averaged at 5.15% for 1962–65.
Socio-economic program
The removal of controls and the restoration of free enterprise was intended to provide only the fundamental setting in which Macapagal could work out economic and social progress. A specific and periodic program for the guidance of both the private sector and the government was an essential instrument to attain the economic and social development that constituted the goal of his labors.
Such a program for his administration was formulated under his authority and direction by a group of able and reputable economic and business leaders the most active and effective of which was Sixto Roxas III. From an examination of the planned targets and requirements of the Five-Year program – formally known as the Five-Year Socio-Economic Integrated Development Program – it could be seen that it aimed at the following objectives.
- immediate restoration of economic stability;
- alleviating the plight of the common man; and
- establishing a dynamic basic for future growth.
Free enterprise was restored with decontrol. The Five-Year Economic Program had been prescribed. Land reform abolishing tenancy had been launched. These were essential foundations for economic and social progress for the greatest number.
The essential foundations having been laid, attention must then be turned to the equally difficult task of building the main edifice by implementing the economic program. Although the success of Macapagal's Socio-Economic Program in free enterprise inherently depended on the private sector, it would be helpful and necessary for the government to render active assistance in its implementation by the citizens.
Such role of the government in free enterprise, in the view of Macapagal, required it (1) to provide the social overhead like roads, airfields and ports that directly or proximately promote economic growth, (2) to adopt fiscal and monetary policies salutary to investments, and most importantly (3) to serve as an entrepreneur or promote of basic and key private industries, particularly those that require capital too large for businessmen to put up by themselves. Among the enterprises he selected for active government promotion were integrated steel, fertilizer, pulp, meat canning and tourism.
Land Reform
Like Ramon Magsaysay, President Diosdado Macapagal came from the masses. He savored to call himself the "Poor boy from Lubao".Ironically, he had little popularity among the masses. This could be attributed to an absence of charismatic appeal of his stiff personality. But despite this, Macapagal had certain achievements. Foremost of these was the Agricultural Land Reform Code of 1963 (Republic Act No. 3844) which provided for the purchase of private farmlands with the intention of distributing them in small lots to the landless tenants on easy term of payment. It is a major development in history of land reform in the Philippines,
In comparison with the previous agrarian legislation, the law lowered the retention limit to 75 hectares, whether owned by individuals or corporations. It removed the term "contiguous" and established the leasehold system. The share-tenancy or the kasama system was prohibited. It formulated a bill of rights that assured agricultural workers the right to self-organization and to a minimum wage. It also created an office that acquired and distributed farmlands and a financing institution for this purpose. The major flaw of this law was, however, that it had several exemptions, such as ort (big capital plantations established during the Spanish and American periods); fishponds, saltbeds, and lands primarily planted to citrus, coconuts, cacao, coffee, durian, and other similar permanent trees; landholdings converted to residential, commercial, industrial, or other similar non-agricultural purposes.
It was viewed that the 75-hectare retention limit was just too high for the growing population density. Moreover, this law merely allowed the transfer of the landlordism from one area to another.This was because landlords were paid in bonds, which he could use to purchase agricultural lands. Likewise, the farmer was free to choose to be excluded from the leasehold arrangements if he volunteered to give up the landholdings to the landlord.
Within two years after the law was implemented, no land was being purchased under its term and conditions caused by the peasant's inability to purchase the land. Besides, the government seemed lacking of strong political will, as shown by the Congress' allotment of only one million pesos for the implementation of this code. At least Php200 million was needed within a year from the enactment and implementation of the code, and Php300 million in the next three years for the program to be successful. However, by 1972, the code had benefited only 4,500 peasants covering 68 estates, at the cost of Php57 million to the government. Consequently, by the 1970s, the farmers ended up tilling less land, with their share in the farm also being less.They incurred more debts, depending on the landlord, creditors, and palay buyers. Indeed, during the administration of Macapagal, the productivity of the farmers further declined.
Anti-Corruption Drive
One of Macapagal's major campaign pledges had been to clean out the government corruption that had proliferated under former President Garcia.
The administration also openly feuded with Filipino businessmen Fernando Lopez and Eugenio Lopez, brothers who had controlling interests in several large businesses. The administration alluded to the brothers as "Filipino Stonehills who build and maintain business empires through political power, including the corruption of politicians and other officials". In the 1965 election, the Lopezes threw their support behind Macapagal's rival, Ferdinand Marcos, with Fernando as Marcos' running mate.
Stonehill Controversy
The administration's campaign against corruption was tested by Harry Stonehill, an American expatriate with a $50-million business empire in the Philippines. Macapagal's Secretary of Justice, Jose W. Diokno investigated Stonehill on charges of tax evasion, smuggling, misdeclaration of imports, and corruption of public officials. Diokno's investigation revealed Stonehill's ties to corruption within the government. Macapagal, however, prevented Diokno from prosecuting Stonehill by deporting the American instead, then dismissing Diokno from the cabinet. Diokno questioned Macapagal's actions, saying, "How can the government now prosecute the corrupted when it has allowed the corrupter to go?" Diokno later served as a Senator of the republic.
Independence Day
Macapagal appealed to nationalist sentiments by shifting the commemoration of Philippine independence day. On May 12, 1962, he signed a proclamation which declared Tuesday, June 12, 1962, as a special public holiday in commemoration of the declaration of independence from Spain on that date in 1898. The change became permanent in 1964 with the signing of Republic Act No. 4166. For having issued his 1962 proclamation, Macapagal is generally credited with having moved the celebration date of the Independence Day holiday. Years later, Macapagal told journalist Stanley Karnow the real reason for the change: "When I was in the diplomatic corps, I noticed that nobody came to our receptions on the Fourth of July, but went to the American Embassy instead. So, to compete, I decided we needed a different holiday."
Foreign Policies
North Borneo Claim
In July 1963, President Diosdado Macapagal convened a summit meeting in Manila in which a nonpolitical confederation for Malaysia, the Philippines, and Indonesia, Maphilindo, was proposed as a realization of José Rizal's dream of bringing together the Malay peoples, seen as artificially divided by colonial frontiers.
Maphilindo was described as a regional association that would approach issues of common concern in the spirit of consensus. However, it was also perceived as a tactic on the parts of Jakarta and Manila to delay, or even prevent, the formation of the Federation of Malaysia. Manila had its own claim to Sabah (formerly British North Borneo), and Jakarta protested the formation of Malaysia as a British imperialist plot. The plan failed when Sukarno adopted his plan of konfrontasi with Malaysia. The Konfrontasi, or Confrontation basically aims at preventing Malaysia to attain independence. The idea was inspired onto President Sukarno by the Partai Komunis Indonesia (PKI), or literally the Indonesian Communist Party. The party convinced President Sukarno that the Formation of Malaysia is a form of neo-colonization and will later affect tranquility in Indonesia. The subsequent development of ASEAN almost certainly excludes any possibility of the project ever being revived.
Vietnam War
Before the end of his term in 1965, President Diosdado Macapagal persuaded Congress to send troops to South Vietnam. However this proposal was blocked by the opposition led by Senate President Ferdinand Marcos who deserted Macapagal's Liberal Party and defected to the Nacionalista Party.
The U.S. government's active interest in bringing other nations into the war had been part of U.S. policy discussions as early as 1961. President Lyndon Johnson first publicly appealed for other countries to come to the aid of South Vietnam on April 23, 1964–in what was called the "More Flags" program. Chester Cooper, former director of Asian affairs for the White House, explained why the impetus came from the United States instead of from the Republic of South Vietnam: "The 'More Flags' campaign ... required the application of considerable pressure for Washington to elicit any meaningful commitments. One of the more exasperating aspects of the search…was the lassitude …... of the Saigon government. In part ... the South Vietnam leaders were preoccupied with political jockeying. ... In addition, Saigon appeared to believe that the program was a public relations campaign directed at the American people."
1963 Midterm Election
The senatorial election was held on November 12, 1963. Macapagal's Liberal Party (LP) won four out of the eight seats up for grabs during the election – thereby increasing the LP's senate seats from eight to ten.
1965 Presidential Campaign
Towards the end of his term, Macapagal decided to seek re-election to continue seeking reforms which he claimed were stifled by a "dominant and uncooperative opposition" in Congress.[4] With Senate President Ferdinand Marcos, a fellow member of the Liberal Party, unable to win his party's nomination due to Macapagal's re-election bid, Marcos switched allegiance to the rival Nacionalista Party to oppose Macapagal.
Among the issues raised against the incumbent administration were graft and corruption, rise in consumer goods, and persisting peace and order issues. Macapagal was defeated by Marcos in the November 1965 polls.