Carlos P. Garcia

“ Meaning of Austerity — Austerity as a policy means temper­ate spending. It signifies more work, more thrift, more pro­ductive investment, and more efficiency. It means less im­ports and less extravagant consumption. It is a challenge to our resiliency as a people to change our past habits and make thrift and economy our everyday way of living. Im­posed on us by harsh realities; the exercise of austerity in our everyday life is a desirable end in itself. ”

“ We must try to get the optimum advantage out of our limited foreign exchange resources by funnelling them to these industries that can contribute most to our national income. Overcrowding in many industries needing imported capital equipment, investing in many lines of production not basic to our development, and importation of non-essential consumption goods are unnecessary drains on our foreign exchange. We should bring existing industries to their efficient productive capacity before going ahead with any but the most necessary new ventures. ”

“ I am now exploring ways of promoting export expansion to bolster our international reserve. Arrangements for the receipt and distribution of Japanese reparations have been advanced.
These measures we have adopted so far to relieve the mounting strain on our scare resources, may be drastic in certain respects. They are however, necessary to provide economy with a breathing period. Meantime, we are changing the phase of our economic program on a more selective basis to ensure that our efforts and resources, instead of being dissipated, are devoted first to the most important economic pursuits. ”

“ The fact that the Philippines is still far from producing all the needs of the country underscores the continuing im­portance of foreign trade to our economy. There are certain consumer goods which we cannot now produce or hope to produce in the near future, but are nevertheless basic to maintain standards of living and public health. Among these are medicine and certain essential foodstuffs. We also have to import an increasing volume of machinery and raw materials required by our growing domestic industries. ”

“ That the proceeds from the sales of capital goods from reparations should constitute a perpetual source of funds for investment in our economic development. To this end, the establishment of an Economic Development Bank capitalized with these proceeds is indicated. This is perhaps the only way to bring our people not only of this generation but of those yet to be born the benefits of reparations. ”

“ The aroused desires of our masses for improving their lot and the threat of communism left no choice to the Administration but to take the calculated risk inherent in the generous use of national credit for financing economic development. The risk that the program might generate inflationary pressures was taken after a careful appraisal of the situation and with the firm determination on the part of the Administration to retrench in its budgets and adopt safeguards whenever pressures would develop that would produce adverse effects on the economy. ”

“ It is clear that we cannot continue to draw on our international reserve at the present rate. But a slackening for a time of our consumption of dollars would mean either cutting down our imports of machinery and raw materials—or sacrificing more of our consumer imports in favor of the industrial. The cause of economic progress constrains us to take the latter course, while efforts are being exerted to explore sources of new capital from abroad. ”

“ Sacrifice of International Reserve — Without resorting to substantial foreign assistance, we achieved our economic progress at some sacrifice of our international reserve. The question of why the country’s international reserve has con­tinued to decline in spite of controls finds an answer in our committed policy of development within a framework of monetary stability. ”

“ Today, with our total trade expanded from P1.8 billion in 1954 to P1.9 billion, we have channelled 42 per cent of it to Europe, Asia, and Central and South Amer­ica. This geographical broadening of our trade is an en­couraging feign of growing stability and lessened dependence on a single country us the source of our imports and the market for our exports. ”

“ Calculated Risk — The Magsaysay Administration fully real­ized that the problem of mobilizing the resources necessary to implement the policy of accelerated development would be a difficult and complex task. It was, nevertheless, a task that had to be done if the country was to attain an economic independence compatible with its political sovereignty. Accordingly, the Administration boldly resorted to the liberal use of national credit to cover the inevitable gap inherent in our underdeveloped country, between the growth of needed investment and voluntary savings. ”

“ Many of the proposed tax measures failed to get congressional approval while outlays for essential government services increased in response to the demands of a growing population, thus aggravating the inflationary pressures generated by the development spending. On the other hand, the private sector responded enthusiastically to the impulse policies of the development program which included tax incentives, subsidies, protection, and easy credit. As a result, private investment expanded at a rate beyond what was allocated in the budget of real resources. ”

“ Research may enable us to raise all the cotton and ramie we need for our textile industry, kenaf for our bags, and the rubber for our tire and rubber industry. It may lead to the discovery of new uses, as raw materials or food or medicine or chemicals, of our crops, plants, and other pro­ducts, and to the invention of machines and equipment suited to our farms, forests, and other needs. ”

“ With respect to unemployment, our program of economic development will precisely produce increased job opportuni­ties. While we believe that we are in some measure taking care of the annual additions to the employable labor force the backlog of unemployment is expected to be absorbed by the accelerated pace of our industries as well as their logical expansion consistent with our resources. ”

“ Positive encouragement must be extended to private industry and the universities to enable them to cooperate to their fullest capacity with the Govern­ment to the end that they may ultimately take over the burden of such research work. The reduction of production costs, for instance, perhaps by simplified and more scientific procedures and by increased utilization of by-products, may save many of our export industries from adverse effects of the liquidation of the free trade with the United States. ”

“ There has been no let-up in the steady development of our agriculture. The country’s cultivated area increased from 6 million hectares in 1953 to 7 million in 1957. Of this area, 5.5 million hectares are devoted to food crops and 1.6 million hectares to commercial crops. It is estimated that agriculture contributed about P3.5 billion or 40 per cent of the national income.
The greater flow today of income from construction, trade, transportation, and communications activity is added testi­mony that we have travelled a long and vigorous way from the ruins of war. ”

“ The masses of our people came to enjoy the fruits of a determined effort to improve their lot. Our people were reaping the benefits of schools and sanitation, expanded irrigation systems, increased credit facilities, and improved transportation. Our businessmen and industrialists were reacting with understanding to the coordinated efforts to promote the general economic development. The entire nation faced the future with increasing hope and confidence. ”

“ We cannot expect to bring about the degree of economic improvement which we have set for our country without diverting a higher proportion of the national income to cap­ital investment. Such a course inescapably entails our fore­going of less essential consumption and wasteful investment. This implies a policy of voluntary austerity on the part of our people since we are a democratic nation. Sacrifice and a policy of austerity will have to be adopted temporarily on many fronts. ”

“ While adhering to the long-range overall goal of a balanced agro-industrial economic development, we have short-range targets that require our immediate and urgent attention if we are to surmount our present difficulties. ”

“ In spite of the substantial gain shown by the economy during the last four years, the country still has to increase production with greater diversity at a pace faster than the rapid population growth Increased production for increased export and increased volume of domestic trade is the key to the solution of our problems of unemployment and unfavorable balance of payments. ”

“ It is time to gear our educational system to our economic development program. Since up-to-date textbooks and modern equipment essential to efficient instruction are not being supplied adequately to our schools, their acquisition through sufficient appropriation should be given serious con­sideration. ”

“ We must define in clear terms our foreign investment policy. It is my considered opinion that foreign invest­ments, through welcome, should be admitted on a selective basis in order that legitimate Filipino business may be protected, particularly in fields already being fully exploited by our own nationals. ”

“ Life after all is a blend of sunlight and shadows, of successes and failures, of joys and sorrows. We do have problems and serious ones that challenge the best in us to solve them. Self-denial and even some sacri­fices may be needed. ”

“ I am sure that with the guidance of the Divine Providence and the unstinted cooperation of Con­gress, which counts among its members some of the finest minds and talents in our country, we shall in this crucial year begin our tenure by meeting the great expectations of our people with decisiveness, swiftness, boldness, and patriotism. ”

“ Rural Development Program — As a dynamic answer to Communism and a positive boost to economic progress, the Administration launched a greatly expanded and bold program of social and economic development aimed at rural amelioration and at advancing industrial and agricultural productivity. ”

“ In line with the economic development program of the Administration, vocational education has been receiving in­creased emphasis. Home industries are being fostered as a means of enabling our people to have a supplementary source of income. ”

“ As we reached this limit, in drawing on our international reserve as the inflationary effects of the heavy spending for development became correspondingly greater on the domes­tic economy as indicated by recent spiraling of prices. No one in this country considers inflation compatible in our democratic system. Aside from its manifest social in­justices, it creates social unrest. The Government and our citizenry are determined to insure economic and monetary stability even if this means a temporary retrenchment in our program. ”

“ It has been increasingly put to use to purchase the machinery and the tools of our industrialization without which no satis­factory solution to the problems of poverty and unemploy­ment would ever be possible. In addition to the increased requirements of our growing industries, we dipped into our reserve for the expanding needs of our growing population for imported essential consumer goods. ”

“ Intensive and extensive scientific research is a necessary hand-maiden of both the utilization and conservation of natural resources. I, therefore, request more appropriations for scientific research. ”

“ The announced objective of establishing the highest pos­sible morality in the Government is slowly being realized, with the Presidential Complaints and Action Committee, the Department of Justice, and other agencies working hand .in hand to minimize graft and corruption in public service. To attain a higher level of morality and efficiency in public service, a thorough study was undertaken by the Government Survey and Reorganization Commission and its recom­mendations which were enacted by Congress are well in the process of implementation. ”

“ The community school, which has been developed after years of careful experimentation, has become the pattern for our country, particularly in the rural areas. Because of the improvement that this type of school has effected in the living conditions of the people in the community, it has elicited favorable comments from foreign educators who have observed how it works. ”

“ The Govern­ment will do all in its power to direct the main impact of this policy against, extravagant consumption and ostenta­tious living in a way that: will not affect the basic living standard of the ordinary individual. Curbing such con­sumption and eliminating wasteful and unproductive activ­ities the only safe and sound way by which we can move ahead in our development program without running the risk of national retrogression. ”

“ It will perhaps be necessary to withhold the release of cut timber from sale until after the concessionaire has complied with reforestation requirements. Mining must be scientific so that extraction is thorough. Unextracted ores in abandoned or collapsed tunnels or pits are in most cases forever given up and lost. . Lands must not be allowed to reach exhaustion but must be constantly kept productive by contour plowing, fertilizing, fallowing and other scientific measures. Our natural resources have been extended by the Almighty for the benefit of Filipinos until the end of time. ”

“ The combined savings of non-governmental employees augmented by the contribution, of employers have already placed in the coffers of the system the sum of P9 million which, invested in RFC bonds, has become available for economic development. In time, the system will be one of the richest sources of such capital. It appears advisable, however, that the law creating the system be amended to improve the benefits and conditions of membership and to make the system a more effective source of funds for eco­nomic development. ”