NATIONAL INTELLIGENCE SURVEY 99; PHILIPPINES; THE ECONOMY

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• Collection: NIS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP01-00707R000200090003-3
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11
CONFIDENTIAL
99/GS/E
Phili ippnes
December 1973
NATIONAL INTELLIGENCE SURV--
CONFIDENTIAL
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P4iiippiaedo
CONTENTS
This chapter supersedes the economic cover-
age in the General Survey dated October 1968.
A. Economic appraisal 1
B. Structure of the economy 3
d. Forestry 9
CONFIDENTIAL
1. Agriculture, forestry, and fisheries 4
a. Crops 5
(1) Rice 5
(2) Corn 5
(3) Fruits and vegetables 6
(4) Sugar 6
(5) Coconut products 7
(6) Abaca and other fibers 7
(7) Tobacco 8
b. Livestock 8
c. Fisheries 8
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FIGURES
Page
Page
Page
2. Fuels and power
9
4. Manufacturing and construction
13
a. Petroleum
9
S. Domestic trade
15
b. Solid fuels
10
C. Economic policy and finance
15
c. Electric power
10
1. Policy and development
15
3. Minerals and metals
10
a. National budget
16
(map)
b. Money and banking
17
a. Copper
12
2. Manpower
18
b. Gold
12
D. International economic relations
19
c. Iron ore
12
1. Foreign trade
19
d. Chromite
13
ore
2 Foreign aid
gn
20
e. Nickel
13
3. Balance of payments
21
f. Others
13
Glossary
23
FIGURES
ii
Page
Page
Fig. 1
Net domestic product at factor costs,
Fig. 10
National government revenue and
by origin (chart)
2
expenditures (table)
16
Fig. 2
Land utilization and major crops
Fig. 11
Revenue and expenditures, by sources
(map)
3
and functions (chart)
17
Fig. 3
Land use chart)
4
Fig. 12
Distribution of the labor force
Fig. 4
Production, areas, and yields of major
(chart)
18
crops table)
6
Fig. 13
Value and composition of exports
Fig. 5
Fish catches, by type table)
8
(chart)
19
Fig. 6
Production of forest products (table)
9
Fig. 14
Value and composition of imports
Fig. 7
Major electric power plants (map;
11
Fig. 15
(table)
Direction of foreign trade chart)
19
20
Fig. 8
Production of selected minerals and
Fig. 16
Balance of payments table)
21
metals (table)
12
Fig. 17
Structure of the Philippine external
Fig. 9
Industry and mining map)
14
debt table)
22
ii

7: 7�
El
The Economy
A. Eccmomic appraisal (U /OU)
Although the Philippine economy grew at a rale of
only 3.5% in FY72, a the annual average rate of growth
between 1965 and 1971 was 6.35b, compared to about
5.6',' per annum in 1960 -65. Because of the rapid rate
of population growth (about 3% annually), however,
the economic growth rate per capita has [.cell
considerably lower, and per capita income in 1972 was
probably still below US$200 in current prices. The
modern sector of the economy is relatively small.
Agriculture is the predominant economic activity, but
much of the agricultural sector is characterized by
subsistence -type fanning. 'file Philippines is fairly well
endowed with natural resources, but attempts to
develop them have been hampered by the presence of
a ;mall but strong economic oligarchy, consisting of
relatively few wealthy families who are more
concerned with promoting their own interests than
with promoting the economic development of the
country. As a result, ihere is extreme maldistribution of
wealth between the oligarchs and the mass of the
population.
Agriculture is the backbone of the economy. Over
half the total labor force is engaged in farming, and
agriculture accounts for the hulk of Philippine export
earnings. The sector still is dominated by traditional
farming techniques, however, and modernization
efforts have not been vigorously pushed. Irrigation is
limited, and most farmers do not use fertilizer or
pesticides regularly. Use of high- yielding variety seeds
has increased in recent vears but it remains limited.
Because of these problems, yields of most major crops
"I'he I'hilippine fiscal year ends 30 June of the sLited year
are low, and farm output in general has expanded
slowly.
A variety of factors continue to hamper develop-
ment of the agricultural sector. Most peasants arc
reluctant to adopt new production techniques, and at
the same time the government has been unwilling or
unable to make necessary inputs available at
reasonable prices. The government did initiate a
program in the mid- 1960's aimed at achieving self
sufficiency in rice and substantial gains were made by
1970. Since then, the government has relaxed its
efforts to stimulate production, and output, affected
by poor weather conditions, rose marginally in 1971
and actually declined in 1972. As a result, the
Philippines has again become one of the world's
largest rice importing countries. The government has
just begun to implement the land reform program that
was announced a decade ago, and many Philippine
farmers are still sharecroppers. After declaring martial
law in September 1972, President Marcos announced
plans to initiate a new, wide, ranging land reform
program, but as of mid-1973 the effectiveness of the
new program was still in doubt.
The manufacturing sector is fair!v large and well
developed compare to those of most less developed
countries. Besides food processing, Philippine
manufacturing consists primarily of import-substitu-
tion industries established as a consequence of the
government's high tariff policies introduced in the
1950's. These tariffs were aimed at providing a
protected market for local business, but one result has
been the formation of an inefficient industrial sector
that suffers from substantial overcapacity. Although
the government is moving to rationalize some sections
of industry, progress has been slow, and only a few
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export- oriented firms have been established in recent
years. The performance of the manufacturing sector
has improved over the past half- decade or so, however,
and since the mid- 1960's manufacturing output has
increased by about ff/' annually.
Growth of the Philippine ecOnomy has not been fast
enough to absorb the rapid increase in the labor force,
and unemployment and tinderemploym, ent remain
serious problems. Unemployment is particularly
serious among young urban workers, and tul-
deremplovment is especially pronounced among rural
workers. In spite of the high level of unemployment,
inflation also has been serious since the start of the
1970's. In 1971, average consumer prices rose an
estimated IW' Austere fiscal and monetary policies
were adopted to control inflation, but the emergence
of rice shortages helped boost prices by 105:r in 1972.
Food shortages and other damage caused by the
serious floods in tilt' summer of 1972 brought an
acceleration in government spending to rehabilitate
devastated areas and industries. Recover from the
flood was rapid, and the increased supply of food
coupled with government efforts to increase tax
revenues through higher levies and improved
COIICctiOrl, minimized the inflationary impact of
higher government spec diner.
Domestic economic problems are reflected ill
recurring balance of payments difficulties. In the late
1960's the balance of payments situation deteriorated
because exports stagnated while imports rose 41arply
in response to heavy govt �nment spending. To help
reverse these trends, the government initiated a major
financial reform program in early 1970 that includeu it
sharp devaluation of the peso and restrictive fiscal and
monetary policies. This program helped reduce the
trade deficit to manageable proportions, but the
country still is burdened with a foreign debt that
amounted to over $2.2 billion at the end of 1972.
Much of the payments problem reflects the
Philippine export structure, Which is characterized by
heavy product and market concentration. Four
commodity groups s(igar, coconut )roducts. I-)gs and
lurnher, art(] copper concentrates account for over
70% of total exports, and the United States and Japan
purchase about 75% of all exports. Dependent almost
exclusively on primary products, export earnings have
fluctuated Widely. Furthermore, an overvalued peso
throughout the last decade reduced the Philippines'
comrmtitiveness in World markets. After improving
sorn.!What in 1970 and 1971, the trado balanct'
deteriorated sharply in 1972 as imports rose rapidly
and exports declined. Meanwhile, with foreign
borrowing increasing, the debt service ratio (ratio of
debt payments to foreign exchange earnings) reached
an alarming 36c( in 1972. Due in part to large
increases in foreign I and credits, the overall
balance of payments in 1972 was favorable and the
international reserves rose.
Public disorder and the threat of insurrection prior
to September 1972 had it deterrent effect of the infloxy
of private investment capital from abroad. Uncer-
tainty over the governments attitude toward foreign
capital, embodied in the trend "Filipinization"
implied in various Suprenw Court decisions affecting
foreign ownership of land and natural resources,
further deterred private capital inflo%vs. The
imposition of martial laxv in September 1972 restored
order in most of the country, and the adoption of it
new constitution in January 1973 reassuiecl foreign
investors against adverse changes in rules governing
foreign investments, and foreign investment inflow
has apparently ctcceierated.
The Philippines continues to he heavily dependent
on the United States in its foreign economic relations.
"Tariff preferences and quota arrangements under the
Laurel- Langley Agreement of 1955 encouraged
Philippine concentration on the U.S. market.
Preferential treatment of U.S. trade and investments
tinder that agn.rement also encouraged heavy U.S.
investments in Philippine industries and resources; the
�l00%�
Other
services
Wholesale and
retail trade i
Construction
Transportation,
communication,
storage and
utilities
Manufacturing
Mining and
1.3 quarrying 2.4
m
Agriculture.
forestry, and
fishing
NOTE:
1965 Data are based on 1967 prices. 1971
FIGURE 1. Net domestic product at factor costs, by
industrial origin (U /OU)
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F.
Major fishing part
C Cultivated land
Comn,wcial forest
Fishpond development
Uncultivated land
PRINCIPAL CROPS
R Rice
C Corn
N Coconut
S Sugarcane
A Abaca
T Tobacco
i
t3
502061 1273
C
O
0 cues
P
Asa
Q
oCZ)
e
daludl/
O
9
D
i
FIGURE 2. Land utilization and major crops (U /OU)
i
impending termination of the agreement in July 1971 into the U.S. sales to the Philippines in recent years,
has created Uncertainty anions U.S. investors in but the United Stites still supplies about 2Wi of all
Philippine lane anal resources (mineral and logging Philippine imports. U.S. Occnomic aid to (lie country
concessions), insofar as investments in those assets arc between 19.16 and 1972 totaled over U S$I.S billion..
to be restricted to 40% foreign ownership. The Uniteo
States is tits largest foreign investor in the country, the
B. Structure of the economy
largest source of foreign aid, and the largest trading
a
partner. The United States takes 40 �0 of Philippine The str:icture of the Philippine econorn has
t e xports. incluoitig all of its sugar exports plus a major changed little in recent vears, and agriculture has
part of its exports of primary products. Japan has cut retained its position as the dominant sector. As shown
,z
3 n
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in Figure 1, agriculture, forestry, and fisheries showed
a slight decline in their percentage contribution to net
domestic product (NDP) in 1972, which reached in
that year approximately US-96.7 billion. The decline in
that sector in 1972, however, was probably due to
adverse effects of inclement weather on production of
several major crops; the trend in the sector's
contribution to NDP between 1965 and 1971 had been
generally upward. The manufacturing sector showed a
slight increase in relative importance. The services,
including trade, transportation, comma: ;ications,
I storage, and utilities, and other services all declined
i
slightly in relative mportance. (U /OU)
1. Agriculture, forestry, and fisheries (U /OU)
Agriculture is by far the :lost important sector of the
economy (Figure 2). The hulk of the population is
engaged in farming, and about one -half of the
country's exports consist of agricultural products;
exports of agricultural products ill 1972 amounted to
about USS330 million. The major exports of
agricultural origin are sugar, coconut products,
pineapples, abaci, and tobacco. Rice and corn are the
major food crops. The bulk of the food crops are
produced by subsistence farmers, whert.as most of the
export crops, especially sugar and pineapples, ire
produced by it few large plantations.
Agricultural output grew at an average annual rate
of about J %7So during the decade of the 1960's, but the
growth was heavily concentrated in the second half of
the decade, during which period the government
actively encouraged the sector to expand its
production� largely through the widespread plantin
of high- vielding varieties of grain and increased
application of fertilizers. In 1971, folloxvinl; a
relaxation in government efforts, and partly in
response to rising prices of imported fertilizer following
the devaluation in 1970 and increasing incidence of
tungro disease in rice areas, agricultural growth slowed
perceptibly; typhoons .,nd drought also appear to
have affected the sector's ')utput that vear. In 1972,
the sector was further affected b severe floods in
several major crop areas, but as of mid 197:3,
rehabiliiation and recovery from the flood damage
were reportedly about complete, and government
planners anticipated a resumption of growth in the
sector.
Yields of several major crops improved perceptibly
during I-I'c period of rapid growth between 1965 -69,
but they are still below regional and world norms.
Government efforts to raise v ?clds have met only.
limited and temporary success. Public investment in
agriculture has traditionally been lo%v and has al%vays
been among the first items cut during the frequent
periods of belt- tightening. New methods of farming
introduced by the government have been adopted
half- heartedly by farmers, and they have generally
reverted to traditional methods Nvhen government
pressure lapsed. An antiquated system of land tenancy
exists, reducing the incentive for private investment
except in the else of a. fexv majo, export crops.
Philippine agriculture is strongly influenced by a
tropical, humid climate. Rainfall is abundant
throughout much of the country, but a pronounced
dry season occurs is the Central Luzon Valley, on be
flows coast in northwest Luzon, in parts of Negros,
and on Panay and Cchu. In these major producing
areas, vear -round cultivation requires irrigation.
About 305'j. of the total land area is arable -22 ;n
seasonal crops and 8 in permanent crops hut
double cropping on the area planted to seasonal crops
raises the harvested area about 7i annually (Figure
3). Most of the cultivated area is on coastal plains and
several inland plains. TYPItoons, floods, and droughts
affect agricultural production; -'ed ;,aye caused major
crop losses in recent years.
Most Philippine farmers are sharecroppers engaged
primarily in growing rice and corn. The government
has initiated several land reform programs aimed at
eliminating sharecropping, but so far little has he�en
"ecomplis" 'd because of opposition from the powerful
Permanent
meadows
pasture
Land in
permanent crops 8
1 i4
Philippines
a
FIGURE 3. Land use, 1970 (U /OU)
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TOTAL LAND AREA
29,801,000 hectares

economic and political oligarchy. Attempts at 11111(1
reform go hack at least to the 1950 'khen. Congress,
under prodding frorn then: President Nlagsaysay,
approved a program requiring 1 that harvests be
u-
apportioned 7 1W(' to the tenant and 305 to the
landowner. instead of the 50 -30 division that had been
6:.
common. That re(Inirement was never fully enforced,
however, and the program was virtuall scrapped
following
ilagsaysay's death in 1957. In 1963 it new
program was I)egun under which tenants were to
become leaseholders and eventually landowners, with
the government providing financing and technical
assistance. That program, however. never got mach
heyond the exile imental stage.
The most recent land reform) proposal syus
aunouneed if) late 1972, when President Marcos
imposed martial law. While some significant details of
the reform program are still ender consideration, its
h
general airn is to turn over title io all land under rice
and corn to the tenants presently tilling it. h
tenants would he required to pa} for the land a sum
k
equivalent to two and one -half times the average
t`
:11nnual harvest in three normal years inunediately
I;
Preceding the umunnncemc'rnt of the reform decree; the
g 'J
'fits are to be spread over a period of 1.5
y ears.
About 2 million hectares -1.7 million in rice nd 0.3
a
Million in corn �ancl more than 1 million tenant
families reportedly wooId he irwolved in the program.
Opposition to the reform remains strong, however,
particularly among; the small landlords. As of n)id-
1973, however, the government had made consider-
able progress in breaking up large estates, i.e., those
50 hectares or more in size.
\""le the tenancy sy hampers modernization
of this agricultural sector, other factors in the poor
perforniancr of recent years have been the inciciccluate
irrigation system and the lack of credit facilities.
Despite numerous government programs aimed at
t
expanding the area under cultivation, most major
crops are grown on foul With little or no depen(Iul)Ic
irrigation. Aln)ost ali the land devoted to sugar, for
example, is unirrigated. Farmers lack sufficient -redit
to finance expansion or improvement of the existing
irrigation systern. The government extends credit to
the agricultural sector through the Philippine National
Bank, the Development Bank of tilt� Philippines, the
Agricultural Credit Administration, and numerons
rural hanks, but by and large the funds extended to
the farm sector have increased only slowly and are not
B
sufficient to finance any significant development
effort.
a. Crops
(1 Rice� ilic�e is by far the most important crop.
Over if third of the total crop area and almost 5ffi of
all farms are dex -)led to c�ultkation of rough rice
(palay). Rcrnghly 2051 of the rice is harvested frcrn
upland cultivation, -ith the balance coming mainly
from nonirrigated lowland culti y
vation. '1'hc main lowland crop is planted during the rainy season,
mostly in June, and harvested in December and
January. Although rice is grown throughout the
c�ountr, the island of Luzon accounts forayer half the
total crop area: the (ventral Luzon Valley is the
naLon's single most important rice producing region.
Between 1965 and 1970, rice production increased
rapidly as it result of government efforts to make the
country self sufficient in rice (Fignre 4). The
government promoted the use� of high yielding seeds,
and by 1970 about Y' of tile a
e creage Planted to rice
in; central Luzon %vas planted to high- yicldiicg
y: The government also increased the supply of
funds available to finance irrigation and increased the
yolunx' of rinral credit to fi nce purchases of
fertilizers and pesticides. Xlorc import,nntly, i)owever,
the government raised the price of rice to stinnnlatc
production. As if result of these treasures� rice owput
in 1968 rose mer that of 1967, and by 1 971
output reached an all tin)(� peak of approximately 5.3
Million tons, making the Philippines nearly srlf-
>nlfficienl in rice that year. In 197 production de-
clincd to 5. I million tons doe inn large part to danrnge
canlscd by tungro disease; if further decline occurred
in 1973 as it result of extensive Ilooding in nraior
producing areas. Other factors affecting production
since 1971 were civil disorders in the country crud the
decline in .application of fertilizers a pesticides, the
latter probably doe to rising prices of imparted
materials follMying the 1970 devaluation. In 1970 tine
government also adopted a tight fiscal and man1ary
),olicy, sharply cutting the funds available to finwic�e
purchases of fertilizers and seeds. 'I'hc decline in
production since 1971 has created suhstantial
shortages in the nations rice supply, and the
Philippines again has became one of the major
importers of rice.
(2) C �'I'hc second most important food crop is
corn, which is planted on about 27 of the total crop
area. Production exceeded 2 million tons annually in
1970 72. Corn is the staple food for about 20 '0 of the
population and is also used as livestock feed.
Production is concentrated in the Visayan Islands and
in the lower elevations of Mindana Although groi n
as a rotation crop in many places, corn is commonly
5
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FIGURE 4. Production, area, and yields of major crops (U /OU)
(Production in 1,000 tons; area in 7,000 hectares; yields in tons per hectare)
CROP YFea*
1965
1966
1967
1968
1969
1970
1971
1972
Production (rough
basis)
3,99
4,073
4,094
4,561
4,445
5,233
5,343
:1,168
Area
3,200
3,109
3,096
3.304
3,332
3,113
3,175
3,246
Yield
1.15
1.31
1.32
1.38
1.33
1.68
1.68
1.59
Corn:
Production...........
1,313
1,380
1,490
1,610
1,733
2,008
2,005
2,0:39
Area
1,923
2,016
2,158
2,248
2,256
2,420
2,437
2,4:32
Yield
0.6s
0.68
0.69
0.72
0.77
0.83
0.82
0.84
Sugar:
Production...........
1,557
1,402
1,560
1,595
1,596
1,927
2,058
1,997
Area
351
315
:309
318
321
366
400
4:37
Yield
4.49
4.45
5.05
5.02
4.97
5.27
5.07
4.07
Coconut:
Production...........
1,534
1,557
1,660
1 �593
1,560
1,726
1,679
2,100
Arer
1,6705
1,611
1,820
1,800
1,846
1,884
2,049
nn
Yield
0. 9(i
0.97
0.91
0.89
0.85
0.92
0.82
nn
A baca:
Production....
134
135
118
103
106
122
105
95
Area
199
198
1867
171
176
178
105
nn
Yield
0.67
0.68
0.63
0.60
0.60
0.69
0.68
na
Tobacco:
Production...........
46
58
51
65
57
61
56
4:5
Area
76
85
83
94
89
87
76
na
Yield
0.60
0.68
0.61
0.69
0.64
0.70
0.74
7111
na Data not available.
*Crop years end 30 June of years shown
for all crops, except sugar, which ends 30 September
"Preliminary.
*Estimate.
double cropped, and in parts of the Visayans a third
crop is pl inted. The government maintains a price
support program for corn.
The government has tried to raise corn production
through a program similar to but less intensive than
that applied to rice. Production rose by almost 9Si
annually between 19G5 and 1970, but it Icvcled off in
1971 and 1972. About half the 1965 -70 increase was
attributed to expansion of the area devoted to the crop
and the rest to greater productivity. Fields remain
extremely logy by international standards, however,
with auverage yields in 'I'haililn -1 and Taiwan being
more than three times greater. Despite production
gains, the country s'ili depends ono imports to rneet
more than 5S( of its reyuirenients.
(3) Fruits and veger lh!,:,, -Other food crops,
including fruits, nuts, roots, tuhers, legiunes, and other
vegetables, are grown throughout the islands,
primarily for local consumption. 1'ielcls of these
secondary food crops generally are low compared to
those obtained in other Southea..t Asian countries. 'I'll(-
chief exceptions are the crops raised in 'he La 'Trinidad
6
a
area of Luzon. This srnall area produces about .3 1' of
the cabbage, about 4Wr' of the potatoes, and almost
all of the c�anliflovyer, celery, and shawberries gro%yn in
the Philippines. Labor- intensive cultivation. combined
With hcayy application of fertilizers. herbicides, and
insecticides, results in high yields from the area's truck
farms, many of which are operated by families of
Japanese or Chinese extraction. Most of the produce
from La Trinidad is marketed through nearby Baguio
or is trucked to Manila. Pineapple yields on the
Bukiclnon plantation, wbic�h accounts for almost half
Of the total Philippine production, are about four
limes higher than the average for other pineapple
producing areas in the country. Exports of cmined
pineapple products from Bukiclnon are an increasingly
important source of foreign exchange.
(4) Sugar -Sugar is the Philippines' principal export
of agricultural origin; exports in 1972 were valued at
USS209 million. Virtually all of the sugar crop is
processed in the country's sugar mills. Production of
c�cntrifugal sugar averaged about 2 million tons
annually during 1970 -72, about one -third of which
was consumed domestically and the renminder
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IL J
M
allocated to the export market. Production of
sugarcane is highly concentrated, with over 60% of the
crop being grown in Negros Occidental Province and
most of the remainder oil L.uzon in Batangas and
Tarlac provinces. Most of the production of sugarcane
is done on large plantations. Cane yields are generally
low and the sugar content of the cane is low; thus,
sugar produced in the Philippines is high -cost sugar
which cannot compete effectively against sugar from
other producing areas in the international market.
Production of sugar is no longer controlled by the
government, but sugar marketing is regulated. The
g::v ^rnment, through the Sugar Quota Administra-
tion, determines and allocates the quantity of sugar
that can be sold in each crop year in the export market
,md in the domestic market, the main purpose of the
0ocations being to insure adequate domestic
supplies. Sugar is highly protected in the domestic
market, and all sugar exports go to the United States
under the U.S. sugar quota at relatively high prices.
The Philippines has had it basic quota in the U.S.
market slightly in excess of 1.1 million short tons (raw
value) of sugar, plus a significant share of the deficit in
the U.S. supply arising from the inability of other
countries to fill their share of the total quota. The
increasing difficulty of the Philippines in meeting its
total quota (basic quota plus deficit share) has led in
very recont vears to it reduction in its deficit share and
therefore in its total quota. In part, the difficulty in
expanding production to fill its export and domestic
market requirements is due to the lack of irrigation
facilities in most of the cane growing areas. Poor
weather conditions in any growi�,g season also affect
output adversely. In spite of the indicate problems,
however, the Philippines is still s--cond only to Cuba as
a sugar exporter.
(5) Coconut products �The Philippines is the
world's leading producer and exporter of coconut
products. Coconut production in 1972 exceeded 2.1
million tons, an increase of about 20% over the
preceding years output. Most of the output was
processed into copra, coconut oil, desiccated coconu',
coconut charcoal, and coir. Coconuts are grown
throughout the Philippines, but most of the
coinunercial crop comes from southern Luzon, the
eastern Visayan Islands, and along the coast of
Mindanao. Coconuts, whose cultivation requires less
labor than other major Philippine crops, are grown
both on plantations and on smallholdings. Over 1VC'
of the area planted to coconuts is in small farms, and
the remainder is On large plantations.
Coconut production had generally stagnated from
the mid- 1960's until 1971, and output actually
declined in the latter year because of poor weather
conditions and typhoon damage to bearing trees. In
1972, however, the number of bearing trees rose about
7%, as trees planted in the mid- 1960's began to come
into production. The increase in tilt: number of
bearing trees, which are located la.gely in the Visayas
and Mindanao where yields are higher than average,
coupled with adequate ruinfali, resulted in the sharp
increase in the coconut harvest in 1972. Further
increases in the number of trees coming into
production within the nest few veers are expected to
result in still greater output.
Copra, coconut oil, desiccated coconut, and copra
meal are among the Philippines' major exports.
Exports of these products reached USS227 million in
1972 almost a quarter of total exports. Their relative
importance, however, has declined steadily since 1965,
wile i they accounted for over a third of export
earnings. World market prices for coconut products
tend to fluctuate widely, largely in response to changes
in Philippine supplies, since the country accounts for
such a large share of total world exports. Since 1970,
when Philippine production and exports reached
record levels, world prices had tended to decline, but
as of early 1973, coconut product prices had reportedly
risen sharpl
(6) Abaca and other fibers� Abaca, known
commercially as Manila hemp, is the country's mast
important ibcr crop, but it accounts for only about
2% of the total crop arc� harvested. Although abaca
ranks among the top 10 exports of the nation, it
accounts for less than 25 of the total annual value of
exports; in 1972 exports of ahaca and abaci products
were valued at USS13 million. Nevertheless, more
than 90% of the world's supply of abaci fiber comes
from the Philippines. Used in the manufacture of rope
and regarded as ar excellent fiber for marine cordage,
ahaca has encountered stiff international competition
from lower priced sisal ant! from synthetics such as
nylon. As a result. production has fluctuated widely
since the early 1960's, generally remaining; above
100,000 tons annually. Domestic usage of abaci,
including the manufacture of cordage, cloth, and a
variety of other products, accounted for one- fourth of
the 1971 output.
The Davao provinces cm Mindanao and the I;icol
River area of southeastern Luzon together account for
over 70% of total ahaca production. The leaves of the�
banana -like ahaca plant are stripped to make ahaca
fiber, which is then shipped to market. Maintenance
Of the ahaca stand and the handstripping process
common in southeastern Luzon and in the eastern
Visayan Islands require considerable labor. Lack of
in
1. :E
1 S
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experience among many of the smallholders who
entered abaci farming after the war and neglect of the
plantings during the war contributed to the spread of
damaging plant disease: and insects.
Other fibers produced include cotton, ramie, kapok,
jute, kenaf, and sisal. None of these accounts for it
significant share of total agricultural production,
however, and cotton and jute must be imported to
satisfy the demand of the domestic textile industries.
Most of the small annual output of ramie is exported.
(7) Tobacco Production of leaf tobacco has
stagnated since the mid 1960'x, and it dropped sharply
in 1972 due to market uncertainty and to extensive
`loud damage to the crop. Of the total output of
45.300 tons in 1972, about one -half was Virginia
tobacco to be used principalh' in the domestic
production of cigarettes. The remainder was native
leaf for use in the manufacture of cigars. The
Philippines exported about USS15 million worth of
mostly raw tobacco in 1971.
Commercial production of tobacco occurs
principally on small Luzon farms. The Cagavan
Valley is an important center of production of native
leaf, and most Virginia tobacco is grown on the llocos
coast. Native tobacco is aircnred before marketing;
Virginia tobacco is flue cured. Government support
prices have had little effect, since market prices have
teen above the support prices. The poor qualit of
domestic cigarette tobacco has meant continued
imports of U.S. tobacco �sonic USS5 million worth in
1971 �and has left the government %with large
stockpiles of Icw -grade leaf.
b. Livestock
In spite of steady rises in the number of livestock,
the Philippines remains dependent on imports to
satisfy it small portion of its meat requirements and the
majority of its dairy needs. Total livestock population
in early 1972 was estimated at over 20 million head.
Hogs constituted two thirds of this total and the
largest single source of nonpoultry meat. Major
deterrents to greater hog output include a lack of
efficient transportation facilities betWeen the principal
producing areas and the Manila market and a scarcity
of quality feeds. Cattle and carahou, which nrlmberccl
over 2 million and 4 million, respectively, in early
1972, are. used as draft animals as well as a source of
meat. The output of animal products has increased in
recent years, but not enough to satisfy domestic
demand. imports have grown faster.
c. Fisheries
Fish provide a majorshare of the protein consumed,
and fishing is an important economic acti,ity for the
rural population. The fish catch increased by more
than 8 annually between 1965 and 1970 and
exceeded 1 million tons in 1971 (Figure 5). 111 1970.
suhsistcnce fishing, including fishing from small
vessels licensed 1>v municipalities, accounted for 525
of the total catch as opposed to W in 1965.
Commercial fishing lagged, gro\\ing at only 5c
annually, and in 1970 accounted for '395i of tile' total
catch. Harvests from fishponds provided jus under
of the total catch in 1970, little changed since
1965. A small quantity of fish mainly shrimp �is
exported, while imports of fish and fish products
principally canned mc: �have averaged about
US$20 million annually in recent years. Introduction
of ncvV fish varieties, improved management,
expansion of the inland fishpond area, and
motorizt of small fishing craft in mu
fisheries arc among the measures that have
FIGURE 5. Fish catches, by type (U /OU)
(Quantity in thousand metric tons and value in millions of U.S. dollars)
1965 1960 1 vu 7 1968 1969 1970
965
Commercial fishing:
Quantity
Value
Fishponds�:
Quantity
Value
Subsistence fishing:
Quantity
Value
Total:
Quantity
Value
8
300
315
331
407
:367
382
76.7
93.8
107.9
139.4
143.9
95.6
133
64
64
87
95
96
16.1
33.3
34.4
46.3
48.5
39.3
304
320
351
444
477
51,
77.7
84.6
102.3
106.8
180.2
133.4
667
705
746
938
940
989
170.5
211.7
244.6
346.5
372.6
268.3
t
i
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-Irmo me In c.
F2
t
i
=�r,'
`f
3p!
ro=
t
s,
j
.trv"ry3+:Lj`'Cs ritu�"t.
contributed to the increased catch. Nevertheless, yet been discovered in the Philippines. Manila,
much of the fishing industry still relies on antiquated hc,.vever, is trying to encourage major l,etrolcum
methods and equipment. companies to undertake: more vigorous exploration in
d. Forestry offshore areas. (U /OU)
The PI lippines is a major producer and exporter of
tropical wood products, but years of wasteful logging
practic:s and recent government conservation
rneas,;ros have resulted in declining production. Ali
but about 3S of the forest area of the Philippines is
government owu.ed. Forests arc concentrated on
Mindanao, Luzon, wid Negros. Logging operations
are conducted by individnals and corporations under
timber licenses that must he renewed periodically and
have a maximum tenure of 50 years. Log production
grew rapidly through 1969, when output reached
nearly 5 pillion board feet, but has declined steadil
since; 1972 production 11110 (111411 to only about 3.6
billion board feet (Figure 6).
The Philippine wood industry is basically oriented
to the export of unprocessed timber. In 1970, for
example, only 225 of the total timber harvested was
processed locally, and the balance was exported as
logs. About 905i of the lumber produced is consumed
locally, while 90% of the veneer and 65% of the
plywood are exhorted. Export earnings have been
dec�!;n."ng in recent years, but timber and timber
products still account for J)out 20% of total exports. A
9% decline in receipts from log exports in 1971 was
attributable chiefly to a 25% decline in the volume of
exports to Japan. The bulk of exports consists of
hardwoocJ logs.
2. Fuels and power
As much as 90Sb of the commercial energy supply of
the Philippines is derived from petroleum, all of which
is imported. Domestic supplies of fuelvood and
bagasse (sugarcane residne) are used primarily as
noncommercial fuels. Donustic� coal output is small,
and no coin nercially exploitable oil or gas fields have
a. Petroleum W100
The demand for petroleum has increased steadily in
recent vears, the rate of incre averaging about 9%
per year in 1966 -71. Petrole(m imports increases] at
about the same rate, and in 1971, petroleurn and
petroleum products (fuel, lubricants, and related
products) accounted for about 12% of total imports.
The composition of petroleum imports has changed
little, and in 1971 crude oil imports of almost 9 million
metric tons comprised abon, 989 of :ill petroleum and
petroleum products imported, compared to about 91
in 1966.
The Philippines' four oil refineries (Figure 9, below,,
which are predominantly foreign owned, have it
coo,bined capacity of 272,200 barrels per day (b.p.d.
'I'hc largest refinery, the Bataan refinery, has it
100,000- b.p.d. capacity and is owned jointly by Esso
told Mobil, holding 57 S an(] 43% interest,
respectively. The Caltex refinery at Batangas is owned
by C alifornia "Texas Company and has a 74,000- b.p.d.
capacity. The Shell refinery at Tabangao, which has a
7 10,000 b.p.d. capacity, is a joint venture, with Shell
owning 75 and Philippine private interests 25 /r. The
smallest refinery is the Filoil refinery at Rosario,
Cavite Province, with a 28,200- b.p.d. capacity.
'nterest in oil exploration has varied over the
but in spite of past failures it has been revived once
again under prodding from President Marcos. The
President has outlined tentative plans to set aside 1.5
million hectares offshore and 750,000 hectares onshore
for exploration. Foreign participation will he
encouraged through incentives. Heretofore, major
foreign oil companies have peen deterred from
investment in oil exploration because of an
unfavorable exploration law. A further deterrent to
FIGURE 6. Production of forest products (U/OU)
(Million board feet)
196715 1966 196717
19658
1969
1970
1971*
1972
LoR; 2,(7118 :3,412 3, 325
Lumber... 531 397 322
Plywood 57197 .540 522
Veneer 7 786 831
4,711
433
695
1,206
4,911
67121
524
627
4,(if6
568
573
305
4,528
370
nn
na
3,577
y 3
nn
na
na Data not available.
*Preliminary.
t)
f
n
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yi@rn -1121 Offc
i
expansion %vas the government's pricing police for oil
products, which froze prices at unremunerative levels.
b. Solid fuels (U/OU)
Solid fuels generally are used where they are
produced and have little commercial significance. The
primary solid fuel is fuel%vood, most of which is used
for household cooking. Some is used by bakeries and
restaurants and by tobacco fanners for flue curing.
Bagasse is used by sugar mills to generate steam for
mill machinery. The country's small output of coal is
consumed almost exclusively by several cement plants
and electric power facilities on Cebu, %where
practically all coal production is concentrated.
c. Electric power (C
The electric %ver industry in the Philippines is
poorly developed. The (list rubution of installed
capacity is extremely uneven, being concentrated
around a few principal industrial and urban areas
(Figure 7). Over four fifths of the total generating base
is on Luzon; most of the remainder is on Mindanao
and on several larger islands of the Visayan group.
Only about one -fifth of the population has access to
electric power.
Na'ionai installed capacity totaled almost 2.9
millic-I kilowatts (k%v.) at the end of 1972, about three
fourths of which was in thermal plants and the
remainder in hydroelectric stations. I'roducti(m of
electricity in 1972 amounted to approximately 10
billion kilowatt -hours (k"-.-hr.). More than three
fourths of the national capacity is concentrated in t%vo
major utility companies, the privately -owned Manila
Electric Company (MI ERALCO) and the state -owned
National Power Corporation (NP(:). The remainder is
in a large number of small private and municipal
enterprises and industrial powerpla tits. MERALCO
produces and distributes electricity within its franchise
area, comprising Manila and nearby communities.
NI'C is it predominantly hydroelectric utility with
exclusive rights over the development of all national
public water resources.
The electric power industry is under strict
governmental control, which includes supervision of
operations, determination of rates, and approval of
plans. The private and public sectors are supervised by
the E'ublic Service Commission, %vhich is also
responsible for granting operational franchise The
state owned facilities are controlled I,y the National
I'mver Board. 13ural electrification is largely the
responsibility of the National Electrification
Administration, created in 1969 to stimulate and
accelerate development of rural power supply. In
order to provide ceniral coordination, the Power
Development Council was established in 1970 to
supervise all aspects of power development.
The bulk of electric power capacity is concentrated
in seven major plants. Four of these are MERALCO-
o%wned thermal installations in the Manila met-
ropolitan area: the 550,000 -kw. Snyder plant,
completed in 1972; the adjacent 385 ,000 -k%v. Gardner
plant; the 315,000 -kw. Rockwell plant; and the
220,000 -k%v. Tegen plant. Together they account for
about two thirds of the total thermal capacity. The
remaining three large powerplants are NPC- o%vned
hvdroclectric installations: the 212,000 -k%v. Angat
plant and the 100 ,000 -k%v. Binga plant, supplying
most of their output to the capital city; and the
150,000 -k%v. Maria Cristina plant, which %vas
expanded to its present capacit\1 in 1971. The Maria
Cristina plant is locoed on Mindanao and is the on!\-
large generating facility outside: Luzon.
Transmission facilities are poorly developed and are
confined to it net%vork serving the Manila met-
ropolitan area and a small tor.,; grid on Mindanao. in
areas other than those included in the networks,
electricity is sopplicd by numerous small, isolated
powerplants.
Scheduled development of the power industry
through 1976 calls for expansion of the MEIIALCO
system by 660,000 kw. and the NPC by 380.000 kw.
MERALCO's major project will he the construction of
the Montelibano thermal powerplant near Manila,
which will include t%vo :310,000 -k%v. units. The NI'C
development program calls for expanding the Bataan
thermal po%verplant on Luzon by 130,000 k%w. and
adding 875 miles of high- tension lines to the Luzon
net%vork. Financial assistance for these t%vo projects
includes it U.S. US$22 million loan and'a $10 million
credit from the International Bank for Reconstruction
and Development (113131)). The NPC also plans to
expand the Maria Cristina hydroelectric po%verplant
bw 50,000 kw. and the Mindanao transmission
network by over 00 miles. The 113131) will provide a
$23.-1 million loan to help finance� these projects. 'I'll(
113131) is also to provide $21 million in loans to help
finance construction of the 130,000 -k%%. Agus If
hvdroelect.ic po%verplant on Mindanao.
:3. Minerals and metals (U /OU)
Mining accounted for only 2.4(') of net domestic
product in 1972, but it is an important source of
foreign exchange. Mineral exports %worth US$217
million accounted for almost 20'0 of total exports in
1971. Although a %vide variety of metallic and
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11 i :n..y. -n r rr� ;s-
5
f I
120 124 128 qE
4`
D
Major Plants. o
SATAN
SLANDS
uic
Thermal o
9
t
FIGURE 7. Major electric power plants (C)

-Irmo me rn c.
I
I.1,"'.:
nonmetallic minerals are produced (Figure 9 below),
copper accounts for two thirds of the total value of
mineral output, and copper concentrates are the
principal mineral export. Between 1965 and 1971,
mineral output increased by about 15 per year
(Figure 8), making mining the fastest growing
economic sector; in 1972, however, the rate of growth
declined to 1.7 Most mines now employ modern
technology and equipment, and the Philippines
mineral reserves are beginning to attract substantial
amounts of foreign investment. Furthermore, much of
the country remains unexplored, and the government
is optimistic about potential mineral resources. The
Surigao Mineral Reservation, which comprises part of
the northeast coast of Mindanao and the offshore
islands is one mineral -rich area soon to be tapped for
nickel Reserves there are estimated at 48.5 million
tons of iron, 1.4 million tons of nickel, and 99,060 tons
of cobalt.
a. Capper
The volume of copper metal production increased
by an average of slightly over 18% annually between
1965 and 1971 and approached 200,000 metric tons in
the latter vear, in 1972, output rose to 21 1,000 tons, or
by 7.1 e r. The principal copper mining companies are
Atlas Consolidated, Marcopper, Lepanto, and
Marinduque Mining. Atlas is controlled by U.S.
interests, but in 1972 the firm was in the process of
reducing its American equity to 4W r' to meet legal
requirements before termination of the Laurel
Langley Agreement in slid -1974. Copper smelting
and refining have been accorded preferred status
under the Investment Incentives Act, and the
government is studying plans to set up a copper
smelter with industrywide }participation. Practicall all
Philippine copper production is exported; in 1971
copper concentrate exports were valued at USS186
million. about 171r of total exports. About 85 >c' of
copper exports went to Japan and most of the rest to
the United States.
b. Gold
The Philippines' second most important metallic
mineral, gold, accounts for 4bout 8% of total mineral
output by value. The country remains among the
werld's top gold producers, with total production of
about 637,000 fine ounces in 1971, compared to
4 fine ounces in 1965; in 1972 gold production
declined about 5.4%. Although sonic mines produce
gold as a primary product, much of the gold output
cones as a byproduct of copper mining. Prior to 1971,
most of the gold was sold to the Central Bank at the
Official subsidized price, but in 1972 the producers
waived their subsidy rights and sold their gold in the
world free market.
c. Iron ore
Iron ore, the third most important metallic mineral,
accounts for about 5% of the gross value of mineral
production. Output since 1965 has increased by about
6% annually, and in 1971 2.2 million metric tons of
ore (55 -60 r Fe) were mined. The most important
producing deposits are located in the Provinces of
Camarines Norte, in southern Luzon, and Zamboango
dvi Stir, on Mindanao. Philippine Iron Mines, Inc.,
based on the Larap Peninsula of Luzon, produces
almost 40% of the iron ore, with the remainder being
produced by a number of smaller operations.
Practically all of the ore produced is exported, most of
it to Japan.
FIGURE 8. Production of selected minerals and metals (U/OU)
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1965
1966
1967
1968
1960
1070
1071
1972*
Coal (thousand nnctric tons
94
90
70
32
53
42
4o
22
Iron ore (.55 -60 (thousand metric tons)
1,438
1 475
1,478
1 353
1,561
1,870
2,248
1,692
Chrornite ore (thousand metric tons)
555
560
420
439
�169
566
430
286
Copper metal (thousand metric toms)
6:3
74
86
110
131
160
197
163
Manganese ore (thousand metric tons)
52
58
80
66
20
5
5
3
Zinc metal (thousand meP is tons)
2.1
1.6
1.5
2.2
3.3
3.2
3.9
3.1
Gold (thousand fine ounces)
437
454
498
527
571
603
637
4.18
Silver (thousand fine ounces)
934
1,163
1,384
1,775
1,561
1,702
1,940
1,360
Mercury (thousand fl asks
2.4
2.4
2.6
3.5
3.5
4.6
5.0
;3.1
Gravel and sand (thousand cubic, meters)
1.3
1.3
2.7
3.3
4.3
4.6
3.7
no
Salt (million cavans)**
5.1
:3.7
2.:3
4.3
4.6
4.2
5.1
an
Silica (thousand metric, tons
280
235
311
429
638
02
498
na
no Data not avaiiable.
*January- September.
*One Cavan equals 2.13 bushrls.,,
12
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W
im d. Chromite
The Philippines is a distant fourth in world output
of chromite. Most of the Philippine ore is refractory
rather than metallurgical grade. Total production of
all grades of chromite ore was about 430,000 metric
tons in 1971, down almost 15 from the average
annual output between 19f5 and 1970. In 1972 the
index of chromite produ -,ion declined nearly 21%
from 1971. Virtually all chromite output is sold
abroad, and the country is a substantial supplier to the
U.S. market. In 1'- 71 the Philippines accounted for
nearly 10% of total U.:). chromite imports, compared
to nearly 20 in 1965.
P. Nickel
Nickel is likely to become a major metallic mineral
product of the Philippines. In 1958 a contract was
awarded to a Philippine- Canadian combine to
establish the country's first nickel mine and refiner at
the Surigao Mineral Reservation. Financing for the
operation was not secured until late 1972, however,
when the Philippine Development Bank and two other
government financial institutions agreed to take
equity positions in the venture. Foreign loans will
finance about two- thirds of the US$245 million cost of
the project. Nickel production is expected to begin in
mid -1974 and to generate net foreign exchange
earnings of about $20 million by 1976 and $62 million
annually by 1986. Annual output is proje to reach
75 million pounds by 1975. Long -term contracts have
been negotiated for the sale to the United States and
Japan of a major part of the expected output.
f. Others
The Philippines produces a variety of other
minerals, but in very small quantities. Silver extracted
mainly in the Baguio region on Luzon, is the moat
t
important of these. Silver production has increased
steadily since 1965, reaching almost 2 million fine
r ounces in 1971. Production of mercury and zinc also
has been increasing fairly rapidly in recent vears,
1 though the Philippines remains an insignificant world
producer. Production of manganese ore, on the other
hand, dwindled from 52,000 tons in 1965 to only 5,000
tons in 1971. The Philippines also produces salt, silica,
gg and sand and gravel in large quantities for domestic
j risers.
4. Manufacturing and construction (U /OU)
P Manufacturing (Figure 9) accounted for about 20%
of net domestic product in 1972; its share of NDP has
changed little in recent years. Manufacturing output
expanded at an average rate of about 65c a year during
the 1960's; in 1972, the index of output in
manufacturing rose 5.8 The sector is heavily
weighted in favor of import substitution industries,
reflecting high tariff policies aimed at providing a
protected market for local business interests. The net
result of these policies, however, has been the
formation of many inefficient industries and an
industrial sector with considerable overcapacity. In
addition to these problems, the manufacturing sector
has been adversely affected by the country's past
political instability. All but a few firms in the
manufacturing sector are privately owned, and direct
government involvement in manufacturing is
minimal.
Production of nondurable goods is by far the most
important part of PhOlippine manufacturing,
accounting for about three fourths of the value added
by manufacturing. Several industries in this group,
notably thy� food and beverage industry (including the
export sugar and rice processing industries) and some
of tuc intermediate goods industries utilize domestic
raw materials, and their contribution to the value of
th.; finished products is relatively large. The largest
manufacturing industry by far is the food and
beverage industry, ..�hick includes some 6,000 rice
mills, 600 corn mills, and 26 sugar mills. The
efficiency of these plants varies widely. Most sugar
mills are large and relatively modern, while the
milling of domestically grown grains is for the most
part a small -scale operation performed by crude and
inefficient methods. A large percentage of the rice ti
hulling and polishing and corn milling and grinding is
.lone at the farm sites by manual labor, using stone or
wooden mortars, wooden pestles, and stone handmills.
The most important categories of durable goods
manufactured are metal products, transport equip-
ment, and electrical machinery. Many of the plants in
these industries engage in simple assembly operations
.which add little to the value of the finished products.
Typical is motor vehicle manufacturing. In 1967, the
motor vehicle industry had 40 assembly plants which
produced 80 to 100 different models for it market that
absorbed only abort 20,000 units a yea Most of the
plants utilize some form of assembly line, but because
of the widely differing makes and models produced,
tools and equipment tend to be general and much
ha. is required. The government has been
trying to rationalize the industrial sector,
a
ApA
d
and a rapid rise in imports resulted in trade deficits
but in I'01 it widened again to $42 million, and in
averaging $250 million annually in the late 1960'x.
1972 it reached $122 million. The deterioration in the
The net services account also worsened in those years,
trade account in 1972 was attributed to depressed
largely because of growing outflows of investment
prices of some Philippine exports in world markets,
r
income and heavy debt- service payments. The basic
reduced shipments of others resulting from weather I
balance was kept from deteriorating further by large
damage to major crops, and 'a probable deterioration
d
inflows of long -term capital mainly on private
in Philippine terms of trade following the currency
account. Short -term private capital also flowed into
realignments of Decembe. 971. Nonmerchandise
the country in relatively large amounts during the
g
(invisible) trade transactions, however, with .let
period, reflecting large net receipts of trade (supplier)
positive balance of $107 million, offset a large part of
credit.
the 1972 trade deficit. Other net inflows included $81
In an attempt to cope with its rapidly deteriorating
million in private transfers, $170 million in official
balance of payments situation, and under th
grants and long -term capital movement, and $56 1
prodding and guidance of the International Monetary
million in private short -term capital movements, all of
Fund, the Philippines in February 1970 initiated a
which more than compensated for the deficit on the
number of corrective measures, including restrictive
combined trade and services account. With the I :F's
monetary and fiscal policies and a floating exhange
allocation of $16.4 million of SDR's in 1972 and the
rate. The exchange rate initially went from 3.90 pesos
net inflow of capital on other balance of payments
to the U.S. dollar to 5.80, and in March 1970 it settled
transactions, Philippine international reserves rose to
at 6.43. Following the Smithsonian realignment in
$281.9 million in December 1972, from $244.2 million
December 1971, the peso's par value was reduced to
at the end of 1971.
$0.1475 (6.78 per dollar), and it was still at that level
The Philippine external debt rose about 370%
as of mid 1973.
between 1965 and 1972, reaching a level slightly over
The reform brought quick improvment, although it
$2.2 billion in the latter year (Figure 17). Although the
was temporary. The trade deficit shrank in 1970 as
magnitude of the debt has imposed a serious burden
imports declined and exports registered a healthy gain,
on the country (servicing the debt in 1972 required .t
9
FIGURE 17. Structure of the Philippine external debt* (U /OU)
(Millions of U.S. dollars)
1985
1989 1970 1971 1972
Short- term:
Public sector 73.3
198.4 82.8 38.5 31.5
Private 51.2
278.4 288.9 301.1 308.3
Total....... 124.5
472.8 349.7 339.8 339.8
Medium-
term-Public sector 135.9
224.1 248.4 239.8 254.2
Private 100.4
399.4 388.9 259.9 214.7
Total 238.3
623.5 817.3 499.7 488.9
Long- term:t
Public sector 149.8
255.8 490.0 523.4 853.0
Private 80.1
559.8 880.2 719.8 788.5
Total 238.7
815.4 1,170.2 1,248.2 1,421.5
Total:
Public sector 358.8
878.1 801.2 808.7 938.7
Private sector 240.7 1,235.8
1,338.0 1,280.8 1,291.5
Grand total 599.5 1,911.7
2 2,087.5 2,230.2
*All data are on a disbursements basis as of year -ends
*Less than 1 year to maturity.
*1 to 5 years maturity.
tOver
a
5 ,years maturity.
,r
22
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F
t
a
&t �Jr of exchange earnings from trade and services), the
structure of the debt has probabl been more
troublesome. The high proportion of the debt
represented by short -term Obligations (25% of the total
in 1969) left little leeway for debt managers to service
the maturing obligations. Efforts to modifv the
structure of the debt were part of the economic reforms
CONFIDENTIAL
initiated in 1970. New foreign borro%vings were
subjected to Central Bank approval, and emphasis %vas
placed on credits of more than 5 years' maturity. The
effects of the reforms are shown in a decline in sbort-
term external Obligations to 15% of total external
obligations and a rise in the proportion of long -term
obligations to nearly 64% of the total in 1972.
Glossary
ABBREVIATION
ENGLISH
ACA
Agricultural Credit Administration
DBP..................
Development Bank of the Philippines
IBI:D
International Bank for Reconstruction and
Development
IMF
International Monetary Fund
MERALCO...........
Manila Electric Company
NEDA
National Economic Development Authority
NPC
National Power Corporation
PNB..................
Philippine National Bank
CONFIDENTIAL
23
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