Economic history of the Philippines (1965–1986)
The economic history of the Philippines from 1965 to 1986 encompasses a period of significant political and social upheaval, impacting the nation's economic trajectory. This era spans the latter years of Ferdinand Marcos's initial presidential term (1965-1972), the subsequent period of martial law (1972-1981), and the years leading up to the People Power Revolution (1981-1986).
Early years under Marcos (1965-1972) saw a focus on infrastructure development and import-substitution industrialization. Government spending increased, funded in part by foreign borrowing. While growth was initially positive, structural problems, including income inequality and dependence on primary commodity exports, remained unaddressed. Inflation began to rise, and social unrest increased.
The declaration of Martial Law in 1972 marked a significant shift. Marcos consolidated power and implemented policies aimed at modernizing the economy through infrastructure projects and attracting foreign investment. However, cronyism and corruption became deeply entrenched, with favored individuals and businesses gaining preferential access to resources and contracts. Major infrastructure projects, while creating some jobs, also led to massive debt accumulation.
The 1970s were characterized by fluctuating economic fortunes. The oil crises of 1973 and 1979 significantly impacted the Philippine economy, increasing import costs and contributing to inflation. Despite efforts to diversify exports and develop industries, the Philippines remained vulnerable to external shocks. The Marcos regime relied heavily on foreign loans to finance development projects and maintain economic stability, leading to a ballooning national debt.
The early 1980s saw a severe economic crisis. Declining commodity prices, rising interest rates, and capital flight exacerbated the already precarious financial situation. The assassination of Benigno Aquino Jr. in 1983 triggered widespread protests and further eroded investor confidence. The Philippine economy contracted sharply, leading to widespread unemployment and poverty.
The Marcos regime attempted to implement austerity measures and negotiate debt restructuring agreements with international financial institutions, such as the International Monetary Fund (IMF). However, these measures proved insufficient to address the underlying structural problems and restore economic stability.
By 1986, the Philippine economy was in deep crisis. The People Power Revolution, which ousted Marcos from power, ushered in a period of political and economic transition. The new government inherited a massive debt burden, a weak financial system, and a deeply polarized society. The period laid the groundwork for subsequent reforms aimed at restoring economic growth and stability, but the legacy of the Marcos era continued to shape the Philippines' economic development for years to come.