Part Four
Balanced agro-industrial economy
THE socioeconomic program has become the total answer to our problems. Progress must not be measured merely by the cold, impersonal statistics of the gross national product, but by the individually meaningful and tangible improvement of everyone’s well-being. This is the driving philosophy behind the economic program that the Four-Year Development Plan translates into specific, operational terms.
Our objective is the establishment of a balanced agro-industrial economy. But the pursuit of this objective goes hand in hand with the efforts to achieve our social goals. Thus, while agricultural development has been concerted and unrelenting on three fronts—land reform, food production and cooperatives’ development—we have with equal energy taken firm steps to meet the long semiprocessed goods industry through the establishment of more factories and industries.
As a counterpart of the Land Reform Program, the cooperative system, national electrification, cottage industries, national irrigation systems, rural credit, compact farming and other agricultural projects, I have directed an emphasis on the establishment of small- and medium- scale industries in the countryside.
The potential for the rapid growth of small- and medium-scale enterprises is decidedly great. One need only compare our industrial activity at these scales to those of other countries that are similarly situated to see the importance of these industries. Small- and medium-scale enterprises, for instance, form the backbone of Taiwan’s export-oriented manufacturing activities.
To finance this important part of our industrialization effort in the rural areas, P500 million has been set aside by the Development Bank of the Philippines. The purpose has been to spread technology, financing and industrial development to the provinces and the barrios.
We are likewise giving new importance to other programs. Under the program for basic and resource-based industries are mineral exploration and processing, and wood-based industries. The next four years, covered by the current development plan, will witness the release of more lands. The establishment of a copper smelter-refinery plant is also to be undertaken within the period. The program for wood-based industries emphasizes greater processing of domestic logs for exports and gradual reduction of log exports over the next four years. To sustain the wood requirements, intensified reforestation will be undertaken on more than 120,000 hectares all over the country.
Greater interdependence between agricultural and manufacturing industries will also be actively promoted. This will set in motion a two-way flow; agriculture supplying industry with its raw materials, as in the case of food processing; and industry supplying agricultural inputs, such as fertilizers and farm machines.
The promotion of engineering industries is another important aspect of our industrialization program. This calls for a progressive increase of domestic content in engineering products. Thus, in the progressive car- and motorcycle-manufacturing programs, domestic manufacturing of components will be encouraged through subcontracting arrangements with small- and medium-scale manufacturing enterprises.
In addition, a 10-year shipbuilding program has been adopted to meet the needs of domestic coastal commerce. At the same time, the government itself participates in the intensive search for oil, gas and other sources of energy, although in the drilling for oil, service contracts with the oil majors, as well as the independents, are preferred.
From late-1973 to the early months of 1974, the energy crisis and the worldwide inflation posed a grave challenge to Philippine resources and ingenuity. Owing to the sudden rise of the price of crude oil, our national oil cost leaped, from $200 million to $700 million. This additional cost of $500 million, plus another $500 million representing the additional cost of all our imported requirements for development, increased the overall cost of importation of our entire requirement, from $1.3 billion to $2.3 billion.
To meet this problem, I considered it imperative that we maintain the existing level of our foreign-exchange reserves—$1 billion—so as to maintain monetary stability. For this purpose, we geared our new planning to the necessity for additional export earnings and for loans from foreign sources.
We are preventing further migration to the urban centers, if not actually reversing the trend and decongesting them instead, by making the provinces as attractive to investors, industrialist and workers as the cities, if not more so.
I have created the Zoning and Human Settlement Commission to mark out areas for new towns and plan not only the infrastructure for comfortable living, such as housing, schools, markets, roads, parks and amusement areas, but also employment and sources of income.
To be continued
To reach the writer, e-mail cecilio.arillo@gmail.com.