![]() No president could have survived such an economic catastrophe. The GDP collapsed by an unprecedented 7 percent in 1984, and in 1985, the peso’s value crumbled from P9 to P20 to the dollar, and inflation surged by a riot-in-the-streets rate of 50 percent in 1984. Our trade with the world would become on a cash-basis only. In October 1983, the country ran out of dollars to service its loans and defaulted on its debts, financially isolating it from the world. The political instability in the wake of the Aquino assassination accelerated the economy’s collapse. Interest rates were going through the roof, eating into the country’s dollar reserves so fast that the Central Bank falsified data to conceal their low levels. US and European banks panicked, jacked up their interest rates, which eventually led to the Philippines’ 1983 debt default.Īquino’s return to the Philippines in August 1983 couldn’t have been made at a worse time - and he was keenly aware of this. The second global oil crisis broke out at roughly the same time and in 1982, Mexico and several other Latin American countries defaulted on their loans, creating the global debt crisis. These triggered an oil crisis that pushed up interest rates worldwide. For the first time, poor countries such as those in Latin America and in Asia were deluged with easy loans purportedly needed to finance their development.īut then, the Iranian Revolution broke out in 1979 and the Iran- Iraq War in 1980. Western bankers recycled this new money into quick and cheap loans to Third World countries. The spark of the eventual economic conflagration actually began in the 1970s, and halfway around the world from the Philippines: In the 1970s, the Arabs took back their oil fields from the Western “imperialists” and found themselves awash in what would be dubbed “petrodollars.” There was, of course, cronyism but the magnitude of this phenomenon didn’t account for the recession that broke out in 1983. ![]() Quite ironically, it was Marcos’ technocrats - whom the business community had praised to high heavens - who were responsible for kowtowing to the International Monetary Fund-World Bank economic policies that led to the economy’s collapse many years later. It was during martial law that S圜ip’s brainchild, the Asian Institute of Management, established in 1968, grew as a center for Philippine technocrats and big business executives. Ongpin, who would be the strongman’s very effective trade and industry head. Philippine business’ revered “Yoda,” Washington S圜ip, recommended to Marcos his protégé, Roberto V. They were given almost full authority and autonomy in running the economy. ![]() Marcos plucked from the University of the Philippines academe Finance Secretary Cesar Virata and Budget Secretary Jaime Laya, who would lead a corps of technocrats in the bureaucracy.
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