Part One
WHEN former President Ferdinand E. Marcos declared martial law on September 21, 1972, the business community generally cheered. Martial law rid the streets of paralyzing mass-protest actions; it ended labor strikes in factories and in the public-transport industry; and it sent some misguided students either back to school or off to the mountains to join the communist guerrillas.
Terrorist bombings of power and water utilities and public and private buildings stopped. Business returned to normal once more and, in fact, it became lucrative after some four years of anarchy.
When Marcos started using martial law to undertake economic reforms, the oligarchs balked after he diagnosed political unrest as symptomatic of the social disease of economic inequities and saw underdevelopment as a consequence of the opportunistic orientation of businessmen who cared for neither patriotism nor efficiency for as long as they continued raking in large profits.
He also noted some oligarchs, particularly those with mass-media enterprises, pursued political agenda that hewed to the destabilization, if not subversion, of his administration. Worse, some of them had actually invested in conspiracies to assassinate him and other officials.
Exactly 45 years ago tomorrow (November 24), the country marked in history its humiliation of the lords and ladies of Philippine business who trooped to the Maharlika Hall in Malacañan Palace. The President had invited them not to a party or a ball, but to a “dialogue,” less than three months after he declared martial law.
“In that period,” recalled historians Salvador Escalante and J. Augustus Y. de la Paz in their book published in 2000, The Five-Percent Revolution (Edsa in Retrospect), “no invitation could be treated with levity. If rivals among them brushed shoulders, it was unavoidable, for part of the plan was to bring the disparate factions of the oligarchy together and to reduce them to common submission.”
Indeed, Marcos was in no mood to humor the country’s billionaires and millionaires. They were made to disembark from their chauffeured limousines at the gates, some distance from the hall, and had to walk with no exception the rest of the way when their drivers and bodyguards could have taken them up the driveway.
When seated, and everything was ready, President Marcos set the tone of the dialogue and delivered his extemporaneous speech, explaining why they were made to undergo the humbling experience of walking from the gates to the hall:
“Everybody was treated in the same manner at the gates of Malacañang. All of you were asked to alight from your cars and take a little walk…I am certain you immediately reacted with the old habits—the consciousness of rank, consciousness of wealth, consciousness of power and the consciousness of unusual attention to which you were accustomed or entitled in the past.”
With that, the President served notice that things would have to change. Inequities would have to undergo leveling to “eradicate the social causes of rebellion.”
“He talked of raising taxes and wages, of levying additional taxes and duties and of imposing price controls on 15 basic commodities.
“He talked of the need for the private sector and the government to coordinate to achieve convergence for development, of housecleaning at the Bureaus of Customs and Internal Revenue and of social-justice programs like land reform and socialized housing.
“He told the business sector to dump practices like smuggling, tax evasion, corruption of public officials and price manipulation through cartels—practices that had enabled them to amass wealth at the greater expense of society.”
Then, Marcos told them that the government had already taken over the operations of several strategic industries and utilities, among them were: the Iligan Integrated Steel Mills of the Jacintos, the Philippine Long Distance Telephone Co. the Philippine National Railways and Elizalde & Company, and allowed the sale of the Manila Electric Co. (Meralco) by the Lopezes. He explained that industry “must be salvaged from self-indulgent stagnancy.”
The President’s bottom line was that: “business must become more socially responsible. The government, for its part, would clearly define economic-policy directions, to enable the private sector to engage in the business of national and regional development.”
However, in imposing reforms on the private sector, Marcos unavoidably alienated some oligarchs and their foreign partners or principals.
And, in taking over some conglomerates, he became vulnerable to a host of unsavory changes, from being a “robber” to being a socialist.
The takeover of the strategic companies was neither whimsical nor vindictive; nor was it entrusted to plundering incompetents. In the case of the Meralco, an interagency committee was created on November 22, 1972, by Executive Secretary Alejandro Melchor, to undertake a management and financial audit.
The team was tasked under Memorandum Order 318 to “recommend corrective measures to rationalize the operations/expansion of the Meralco to achieve cost savings to reduce the price of power to the public.”
The team was led by Juan Matutina, corporate auditor of the state-owned National Power Corp. One of the members, Roberto de Ocampo of the National Electrification Administration, would eventually become Finance Secretary in former President Fidel V.
Ramos’s Cabinet.
The Jacinto companies, on the other hand, were entrusted to the Ministry of National Defense. Before the declaration of martial law, this family, led by the patriarch Ramon P. Jacinto, had some 25 companies. The biggest of these was CCS Enterprises Inc., which owned the Mindanao Steel Corp. and its Iligan Integrated Steel Mills.
The takeover of the Jacinto firms started on October 28, 1972. Armed Forces Chief of Staff General Romeo C. Espino was designated chairman of Mindanao Steel, and among those named to the firm’s board as directors were Colonels Hamilton Dimaya, Roland Pattagulan, Rolando Abadilla, Thelmo Cunanan and the writer Adrian Cristobal.
To be continued
To reach the writer, e-mail cecilio.arillo@gmail.com.