COUNTRY REPORT ON THE PHILIPPINES, JUNE 23, 1947

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002900070002-1
• Release Decision: RIFPUB
• Original Classification: T
• Document Page Count: 3
• Document Creation Date: December 27, 2016
• Document Release Date: July 31, 2013
• Sequence Number: 2
• Publication Date: July 25, 1947
• Content Type: MEMO

Declassified and Approved For Release 2013/07/31 : CIA-RDP78-01617A002900070002-1
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Serial No. 000544
25 July 1947
TO: "CRET
WOW
COPY 1',TO. 2
TEEI,MANDUM FOR THE STATE-WAR-NAVY COORDINATING SUBCOP2AITTEE FOR THE FAR EAST
Subject: Country Report on the Philippines, June 23, 1947
1. The enclosed Appendix to the subject paper is circulated for
consideration by the Subcommittee. Upon approval by the/ Subcommittee
this Appendix should be attached to subject report on the Philippines.
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DOCUMr-'770Ti,t0
No C4-1.A;--IG-F-. IN CLASS. 0
E DEC;ifnS59ED
CLASS. CHAED TO: IS S 6)
NEXT FIEVITWI DATE: tqf 0
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AUTi?i: HT. 7O-
OAT: _ 7 A REVIEWER: ' 029804
*IL
J. B. CRESAP
Comander, USN
Secretary
WEEK
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Declassified and Approved For Release 2013/07/31 : CIA-RDP78-01617A002900070002-1
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? APPENDIX
SUlpf.TARY
1. Relative political stability and generally favorable economic -
conditions now prevail in the Philippine Islands. The pro-American,
liberal democratic Roxas administration has firm control of the internal
political situation. The Hukbalahap, a leftist organization of armed
peasants on Luzon, are no longer a.potential threat to government authority
and dissident minorities offer no serious difficulties, While the two
major economic problems of the Republic, repair of the extensive war damage
and financing government operating costs, still have to be solved, the
living conditions of the population, except for housing, approximate pre-
war. The most favorable aspect of the present Philippine economic situation,
is the country's strong dollar position. From 1947 through 1951 Philippine.
dollar receipts, largely from US Government outlays, will aggregate roughly
.2.4 billion and on an yearly basis will be approximately two and a half
times the 1938-40 annual average.
' 2. The US has been furnishing substantial direct and indirect assist-
ance to .the Philippines since independence. This assistance is based pri-
marily .on American preWar and wartime promises "to assist in making the
Philippines as an independent nation, economically secure," and on legal
Obligations continuing from the period of US sovereignty. Direct aid pro-
vided through fiscal' year 1947, including the $70 million budgetary loan of
the Reconstruction Finance Corporation, is valued at $323.3 million, Aid
pending or contemplated comprises principally payMents of $532 million
which will be made between July 1, 1947 and June 30, 1950 under the'terms-
of the Philippine Rehabilitation Act. In addition, the VS will turn over
to the Philippines military and naval equipment with a procurement cost of.
66.8 million. Indirect aid consists principally of army and navy expend-,
itures and veterans' benefits which will aggregate approximately $300 million
in 1947 and $700 million through 1951.
3. US assistance to the Philippines has had important political and
economic effects. Budgetary loans have helped the government bridge the
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Appendix
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period of postwar financial disorganization. Surplus property transfers
have facilitated the restoration of essentialtransportation facilities
and industry and agriculture. Large. US military expenditures: have provided
the principal means of paying for imports. Politically US aid has increased
popular support for the pro-American administration.
4. US policy Objectives in. the Philippines are.. directed toward en-.
couraging the creation and maintenance .of a'strong independent, democratic,
and friendly Republic. No additional US financial aidl in addition to
that already given or authorized, is necessary to ensure the accomplishment
of these objectives. Philippine ,dollar receipts if effectively employed
should be adequate to finance importS'cf essential consumer goods and equip-
ment and supplies required for economic reconstruction and development
purposes. With the adoption of needed fiscal reforms, the Philippine
Government can balance' its budget using domestic financial resources,
'However, the US Gov ernment should be prepared to assist the. Philippines
in preparing and administering a program to effectively mobilize the ? -
countryls financial resources. -
Politically it is important that the US pass legislation at an
early date granting Philippine army veterans benefits More comparable to
those received by 11116rican veterans.. This action would eliminate an out-
standing cause of anti-American sentiment in the PhilippineS. Also the US
should continue to encourage Philippine participation in the United Nations
and its specialized agencies,
5. No .adverse economic consequences will result from US failure to
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grant additional aid to the Philippines, provided the Philippine Government
institutes nedded financial, reforms. The granting of additional benefits
to Philippine army veterans will probably offset any which may
arise out of US refusal to give further economic aid.
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Appendix
Declassified and Approved For Release 2013/07/31 : CIA-RDP78-01617A002900070002-1