Ferdinand E. Marcos, Twelfth State of the Nation Address, September 21, 1977

“The Years of Crisis Government: Review and Preview”
Message of His Excellency Ferdinand E. Marcos
President of the Philippines
On the State of the Nation

[Delivered at Rizal Park, Manila, on September 21, 1977]

On this important day of national observance, one cannot think of a happier way to celebrate the fifth year of our New Society than to be among you today—joined with all the youth of the land in the proclamation of the new Constitution of the Kabataang Barangay, and linked to such a vibrant expression of support to our national endeavors.

Practice has made of this anniversary an annual occasion for the Presidency to report upon the state of the nation. It is entirely fitting that I should now make this report to our people from this forum, for so much of what I have to say has to do with our youth and their concerns—the fate of our rising generations and the hopes and aspirations of the future.

We complete today the first five years of crisis government, yet it is not towards the past to which our thoughts are beamed. We think of the many changes and developments that have taken place in our country during this half-decade, but they only call to mind the labors and the tasks ahead.

I have just returned from a 10-day journey through Central and Northern Luzon, and in the course of that journey I talked with many of our countrymen—farmers, laborers, teachers, students, and government officials. And these encounters could not have reinforced me more in the conviction that the last five years have really meant something to our people and to our young nation, that they have really counted for much in changing their lives and their hopes for the future. And more important, I have yet to experience a more concrete expres­sion of the kind of optimism and confidence that is resurgent in our country today.

We are a nation that is changing before our very eyes; five years have not settled us in the cake of habit and custom. Regardless of what we have accomplished, we continue to be young, enterprising, and vigorous.

This to me is what matters most as I look at our country today.

Yet it was not so long ago when this country tottered helplessly in chaos and paralysis.

Five years ago, when we began our program of national transformation, it was our lot to launch under the shroud of many auguries of failure the tasks we had set before ourselves. At home, we were detained by grave challenges to the very authority of government and the survival of the Republic. There were voices everywhere predicting the dissolution of martial rule into further chaos and conflict in the land. Abroad, we were looked upon as another nation lost to the forces of social disintegration and revolution. But the nation has survived and endured.

And we are a society today whose hopes are raised not just towards meeting the crisis of the hour, but to the challenges of the rest of the decade and beyond. Regardless of the many uncertainties that international life hold out today to many nations, we approach with confidence the many problems that confront us, and we know our national prospects to be better than they have ever been in the past.

This decisive change in national outlook and national prospects did not take place overnight. It is the result of years of patient and resolute effort. And if we stand today upon anew threshold of possibilities, it is because we have not denied the nation the kind of nurture and vigilance that it required.

Five years ago today, when we took that decisive turn of the path, there was no doubt in my minds as there soon came to be in yours that it was a path we had to take, even if it was a path we had not travelled before and for which we had no certain guide. Today, five years later, there is no doubt in my mind as there can be no doubt in yours that the path we took has led us out of the dark forest of our past, a forest where every object and vegetation had conspired to deny us a way to survival and progress as a nation. We have escaped from that dark forest; but let us not forget its shape lest we stumble into it once more. How effective in fact has crisis government been in the last five years? How different is our condition today from our condition five years ago?

The answers to these questions may be suggested by the following facts:

1. National security has been maintained against insurgency, the national territorial integrity has been preserved against secessionism, and peace and order have been decisively recovered from the private armies, the criminal syn­dicates, and the ordinary criminals.

2. The gross national product has more than doubled from $8,325,000 in 1972 to nearly $18 billion today. In 1972, the rate of GNP growth was 4.9%. In the last five years, the GNP has grown yearly by an average rate of 3%. This average rate of growth under the management of the crisis government was raised up to 9.6% when the world economy was booming and kept from falling below 5.9% when the world economy was in severe recession.

3. The per capita gross national product has increased from $213 in 1972 to more than $400 today, an increase of nearly 200%.

4. Our government tax revenue has increased by more than 250% from P6.4 billion pesos in 1972 to nearly P17 billion today and our total budget has correspondingly increased from P5,589,000, to more than P26,200,000 in the same period—an increase by 4.7 times.

Our balance of payments deficits have been reversed to surpluses and our foreign exchange reserves increased by about $1 billion in the first two years of martial law.

5. In 1972 the government spent only over P3 billion of its budget for social and economic development. Today, it is spending P15 billion of its budget for that purpose—an increase of nearly five times.

6. In 1972 the government expenditures were on a 3-to-1 basis in favor of the urban areas. Now it is 4-to-1 in favor of the rural areas.

7. Our agrarian reform program has taken an irreversible momentum, covering the entire country of almost 1 million tenants in 1.7 million hectares of farmland. At the end of 1976, the government issued land transfer certificates to 62% of the total number of eligible tenants.

8. Today the government spends for health and social services five times that spent in 1972 less than P1 billion. Today it is spending P5 billion.

9.  Inflation has been brought down from the high of more than 40% to 7 or 8%.

10. During the last five years, we have significantly cut down unemploy­ment. From about 8% of the labor force before martial law, total unemployment is now down t0 4.5%. In 1975, it was down to 3.6%. In Metro Manila, according to a survey of the Bureau of Employment Services, 2.2 members of the family are employed. Again, in Metro Manila, a worker with any employable skills can land a job in less than three months from the time he begins looking for work. In the provinces, of course, almost all members of the family are involved in the day-to-day effort of making a living.

But the New Society has not only opened up new jobs for the workers; It has also shielded them from the damning effects of inflation. Thus, during the last five years, the minimum wage has more than doubled from the daily wage before martial law of P4.00 to P5.00.

For the minimum wage today actually consists of the following: (1) for nonagricultural workers, P10 in Metro Manila, P9 in the provinces, and P11 in the sugar industry; for agricultural workers, P7 a day, except in the sugar industry where it is a P8 in some localities; (2) the 13th month pay under PD 851, which is actually an increase of 8.33% in basic pay; (3) the P50, P30, or P15 emergency allowance under PD 525, depending upon the capitalization or total assets of an employer; (4) the P60 emergency allowance under PD 1123; (5) the 10 paid holidays; 6) the 30% premium pay for work on special hol­idays and rest days; (7) the 100% premium pay for work from 10 o’clock at night to 6 o’clock the following morning; and (9) the five-day service incentive leave with pay.

All these mandatory benefits add up to an average take home pay of P16.30 for nonagricultural workers in Metro Manila, P15.00 for nonagricultural workers in the provinces, P17.00 for nonagricultural workers in the sugar industry, P13.30 for agricultural workers in general and P14.30 for some agricultural workers in the sugar industry.

Since 2.2 members of the family are employed in Metro Manila, then the family take-home pay in Metro Manila is actually more than P30 a day. In the provinces, the family take-home pay is definitely higher than the combined minimum wage and benefits because of their traditional nonwage sources of income.

There is a corresponding increase in savings and time deposits from P7 billion to about P24 billion.

If extremist agitators or the Left and the Right have found it difficult to stampede workers into illegal rallies, demonstration, and strikes, it is because the combined effects of rising employment and wages have reinforced the faith of the workers in themselves, in their future and the New Society.

But the New Society has protected not only the wages of the workers but also their total sense of economic security. As employees, they now enjoy security of employment tenure. They cannot be dismissed without just cause and without the permission of the Secretary of Labor, unlike before martial law when the employer could virtually dismiss them at will by merely paying their separation pay. They are now more adequately secured against sickness, injury, death, and maternity under the SSS, Medicare, and ECC. Not only have the benefits increased during the last five years but the delivery of the benefits has been speeded up.

In the field of unionism, the New Society has given the Filipino workers the first optimum opportunity for self-development. The dismantling of Congress, the private armies, and the whole apparatus of oligarchy at the inception of martial law opened up new, vast areas for unionization. Hundreds of sugar plantations, logging camps, fishing ventures, and industrial enclaves were for the first time made accessible to unionism. Hence, martial law has, in fact, expanded the right of the Filipino workers to self-organization and free collective bargaining.

11. In five years, we built more roads, schoolhouses, bridges, public build­ings, electric power plants, and irrigation than what we had built in the past 100 years before 1972.

12. In 1972 institutional credit was not widely available to tenants, small farmers, and rural entrepreneurs. Since then literally billions of pesos have been channeled to them through the DBF, the PNB, and the 800 rural banks now in operation.

13. We have attained self-sufficiency in rice after seemingly endless years of dependence on imports; we have struck oil and gas, whose real commercial value even now is being analyzed, and despite the falling prices of our exports in the world market, added on to the soaring prices of oil, which we continue to import, we have been able to manage our trade imbalances, successfully reducing them progressively to tolerable limits.

14. We have successfully curbed inflation, which is the many-headed hydra of our modem economic world, from an alarming figure of 40% in 1972, to 7.2% at present. Our international reserves have risen to a phenomenal US$1.5 billion from the moribund position in 1972.

15. There is a boom in investments, from domestic as well as foreign sources, reflecting confidence in our economy—in the way it is being managed and in the long-term possibilities it holds for the investor.

16. Tourism has multiplied by nearly 600%—from a measly 168,000 in 1972 to nearly 700,000 in 1977—and despite the economic crisis that hit the world at the same time that we were building the tourism infrastruc­ture of our country, we continue to attract a fair share of the world’s travelers. Manila has become the center of international assemblies and meetings.

17. The streamlining of government to suit the temper and the demand of the times has made it possible for us to render service outside the old calculus of official possibilities and public expectations, and today the highest official of the land is mandated to go down to the rural areas and serve the people. In institutionalizing this practice, we hope to find a lasting bond between govern­ment and the people.

18. Not only incomes—both urban and rural—have increased; the desire and the capacity of individual wage earners to save has been enhanced, and in the five-year period from 1972 to 1977, savings and time deposits countrywide have risen P7 billion to P23 billion—or from 7 million account holders to 15 million account holders, which constituted over one-third of the national population.

In the last five years, we have succeeded in consolidating political authority in the face of rebellion, secession, and anarchy. We have succeeded in effective­ly employing this authority to begin to establish the infrastructure of a New Society in the acceleration of economic growth, in the democratization of land, public resources, and economic opportunities, in the reform of institutions and in the reestablishment of a stable public order where the rights of all, especially of the majority, can be protected. Finally, we have succeeded on a broad front, economic, political, and social, in imparting a momentum for change that will soon be difficult to reverse.

I have often thought in the past five years of the man who is the object of all our efforts in establishing the New Society. Because he is the average Filipino, he lives in the barrio and works at a farm. When all the programs we have launched and all the changes we have sought will reach him, and I am determined that this will be sooner rather than later, he will be able to lead a life of dignity without any unfulfilled basic wants. He now owns the farm which he used to cultivate as a mere tenant. He will be able to raise two to three crops in a year through irrigation because water will be made available all year round. The barangay in which he lives will not be without the services of electricity for his modest house, of a schoolhouse for the education of his children, and of a health center for the sick members of his family. His children will be able to choose to farm or to make their living employed in some small-scale industry. In the intimate solidarity of the barangay, he and his family and his neighbors as well as his friends can plan to build the road they would need to reach the next barangay or to call on the town officials to extend municipal help.

He can hope. More than that there is no limit to his achievements. The future ahead is bright.

Is this a dream for some distant day in the future? No, it is the New Society we are building today.

In five years, we have taken decisive steps towards the transformation and development of our national life and the building of our New Society. We have seen our vision whole, and we have moved considerably towards its fulfillment.

But our journey is not finished. And we stand at this midpoint of our first decade face to face with new challenges and new burdens.

The agenda for our nation is marked by three basic plans. There is first, the political normalization process and the strengthening of the barangays and the participation in the plans of the youth of the land specially through the Kabataang Barangay; second, the greater emphasis on rural development; and third, the long range socioeconomic development plans.

Development, as we have seen during all these past years, generates its own dynamic, multiplying the tasks and cares of the nation, even as it alters the circumstances of our lives and our society.

To this effort—of defining new goals for national achievement, of crystallizing the work that must yet be done, and of clarifying the struggles that must yet be waged—we must now move, resolute and undivided.

This is of the utmost importance first in the sphere of our enlarging relation­ships in the family of nations.

It must therefore be our paramount concern now to increase, to expand, and to promote our productive participation in ASEAN, in keeping with the long-term program which the member countries have enunciated for the regional community.

As we clarify our role and our place in regional affairs, so also must we readjust our outlook vis-á-vis the other nations of the world and the problems of international affairs in our time.

Though we have taken the momentous step of opening ties with the Com­munist countries and of identifying our cause with the nations of the Third World, we see many problems in international relations that require more than ever the steadfast pursuit of an independent foreign policy.

The old fears of Communist aggression have considerably died down, but we have yet to forge a strong and beneficial relationship with the Communist countries, particularly with the new regimes in Indochina. And there are dangers that the old fears may be resuscitated by certain elements in our coun­try, or by untoward developments in mainland Southeast Asia.

We have reason to believe that what we have achieved during the past few years in our relations with the Communist countries, particularly the People’s Republic of China and the Union of Soviet Socialist Republics, constitutes a significant start towards building peace and progress in our part of the world. And it should be of paramount importance that in the coming years, our relations with these nations should vigorously be promoted.

This initiative should not weaken by any means our ties with the Western nations, with the United States and Europe. Though it is manifest that there has been a definitive end to the ties of dependence that once joined us to the United States, the new relationship has gained much strength and meaning from the reorientation of these ties.

The world is passing through a period of transition in which many of the old issues that once decreed the patterns of our relationship have become irrele­vant. Food and development, not politics, are the central issues of our time. And the dangers to the peace obtain foremost from the problems of poverty and underdevelopment so rampant in the world.

For this reason, the campaign for reform of the international economic order must be placed high in our national agenda. And we must strive to strengthen and nourish the bonds that we have created between ourselves and the rest of the Third World.

Largely because of remaining problems in the area of peace and order and national security, it is not possible for us to implement at this time the full lifting of martial law. The overall situation is not sufficiently stabilized to warrant it; this however, should not prevent us from undertaking various policies related to full normalization.

The normalization process is an ineluctable development of the progress towards growth and stability we have made during the past five years, and it re­mains mainly a question of how wisely and prudently we can manage this transition to full normality.

For this is preeminently the time to turn our experience during the last five years of crisis leadership into new viable structures of our political life. This is the time to test whether the efforts devoted to rebuilding political relations between government and governed, to molding new forms for citizen participa­tion, can now find life in more permanent structures and policies.

This is why we have set the holding of elections by 1978.  I am resolved that we implement this plan.

And this is also why following my announcement of the holding of elec­tions, there has been fresh discussion of the form of government that our evolv­ing political system must finally take.

When I announced the holding of elections by next year, I originally envisioned the progressive implementation of the mandate written in our Constitution. Since that announcement was made. however, numerous sugges­tions have been made—that a national referendum should first be held on the matter of the form of government, that the elections should be national rather than local—and these all require study and resolution by our electorate.

On the matter of the form of government, however, it is my intent that gov­ernment itself should not take part in the settlement of this issue. The people must decide. If there is need for the Constitution to be amended, the people must decide whether it should be done through the Batasang Bayan or through a Constitutional Convention.

And the government shall fully abide by the people’s verdict.

In any event, it is vital that we commence immediately the series of public discussions on these matters and that enabling policies be formulated for their full resolution.

Here, as before, it is our firm vow that so long as martial law continues it will be used to attain reforms. And it will always be exercised with restraint, tolerance, and compassion.

And where a decision has been fully rendered for the holding of national or local elections, we shall take the step of lifting martial law during the conduct of the campaign and the polls.

In all this, we must not lose sight of the fact that our objective here is not to satisfy merely the desire for normalization or to mollify critics of martial law. We are committed to this process of normalization because we believe the time for it is now, and that the operations of a permanent political order will serve our vital goals of economic modernization, social change, and national transforma­tion.

We have demonstrated during the last five years the ability of our crisis government to govern. But we must always remember that crisis leadership, however effective, is a temporary exercise of constitutional power, fit for an unsettled time.

Now, we must demonstrate the full capacity of our society to marshal its resources and its experiences towards the building of a more stable political order.

There will of course always be the danger that in this critical transition, we may lose many of the vital gains we have made and the society will dissolve once more into the factionalism and chaos of the past. But this is not a case for us of rushing heedlessly into normalization; we have worked long and hard at creating the infrastructure of our national democracy. And we need not fear either that in the process of transition there will be an interregnum in which public authority will again retreat meekly to the sidelines. Crisis leadership, as in the past, will be the anchor of our hopes.

Together with this plan is a 10-Year Development Plan for 1978-1987, and a Long-Term Development Plan up to the year 2000.

These plans have been evolved with the participation of the whole government machinery at all levels—national, regional, and local. Moreover, the active involvement of the private sector has been an indispensable element in these planning efforts. Every effort was taken to involve our people in the planning process.

The importance of these plans is self-evident. This is the first time that we have undertaken the effort of planning national development on a broad time frame. All our previous plans covered only a period of four to five years. And these plans do not represent merely a plan for economic growth and develop­ment; they are rather a blueprint for the whole society.

The kind of development we want and need is not merely economic advance. In the past, development has all too often been considered merely as economic growth, measured in terms of sustained increases in per capita income and gross national product. We know, however, that economic growth does little to stabilize the national community where it does not result also in the improvement of the well-being of the broad masses of our people. We know that we must gel down to the business of reaching the poorest segment of our populations—the urban and the rural poor, the unemployed, the underemployed, the homeless dweller, the out-of-school youth, the landless worker, the sacada, the sustenance fisherman.

This is to my mind the most important part of the national agenda: the achievement of national development and its full democratization.

First, in order to ensure the balanced growth of the whole economy and the whole country, the new national plan sets forth the vigorous development of the rural sector.

In line with this, we have adopted the integrated area development approach which ensures the linkage of various factors critical to the uplift of depressed areas—infrastructure, rural electrification, irrigation, credit facilities, market­ing networks, basic social services, and community development projects.

To stimulate agricultural production, we shall step up further our ongoing Masagana 99 and Masaganang Maisan programs, and intensify various programs relating to cattle development, dairy development, animal dispersal, expanded fish production, cotton development, land reform, and cooperative development.

To ensure the dispersal of industry towards the countryside, vital industrial projects will be developed on a regional scale, taking advantage of indigenous resources within the various regions. A copper smelter project will be set up in Batangas; an integrated iron and steel mill in Misamis Oriental; ammonia-urea, nuclear power, and petrochemical plants in Bataan; long kraft fiber plant in Abra; ship repair in Zambales; an export processing zone in Mactan, Cebu; and various other projects for the other regions.

And with equal emphasis, greater stress will be given to the promotion of agribusiness enterprises throughout the country.

Secondly, we must place high priority on trade diversification and rational­ization in order to stabilize the position of our foreign trade. It is our traditional exports that will require the utmost effort to obtain better terms in the interna­tional economy, but full trade expansion requires intensive effort to develop manufactures and semimanufactures for the world market.

The high importance of this objective will become more telling as the development process accelerates, demanding new and greater infusions of investments, which fundamentally must be provided by our export sector.

Third, in order to keep up with the demand for greater productivity, scienti­fic and technological skills must be vigorously developed to meet the require­ments of growth.

Greater technology transfer from the advanced countries obviously must seep into the national economic effort, but there must also be development from within of appropriate science and technology. We must invest substantially in research and technological development, and we must strive to utilize indigenous materials in agriculture and industry.

Fourth, we must progressively transform our energy source structure in order to utilize more effectively energy supplies for development purposes, and to achieve a safer mix of primary supplies. Our development program cannot afford the risk of supply disruptions, nor can it allow the wasteful utilization of expensive oil supplies.

Fifth, we must adopt a more effective program for the management of the environment. Development activities must be properly located to meet environ­mental standards for air, water, and land. Human settlements must be properly sited with due consideration for maintaining the ecological balance, for development can easily make hazardous the lives of individuals in our society, and generate social and economic problems on a grand scale.

Finally, our new plan seeks to harness the tremendous human resources potential of the country. To develop these resources, however, calls for vigorous effort to improve the physical, intellectual, and material well-being of the indi­vidual.

It is here where the economic development and social development must move in concert. For economic growth to fully take off, we must mobilize to the full the resources of our population; on the other hand, for our population to deliver vital inputs into the economic endeavor, it must be nourished and developed.

The development of human resources requires three stages of nurture, each of which is vital and paramount.

Firstly, we shall need to devote more and more attention to the problems of health, nutrition, and housing in our country. The delivery of basic social services, particularly in the rural sector, must be considered as a sine qua non to the total rural development program. We have to improve our area coverage, from the biggest of our cities to the remotest of our rural communities.

Secondly, we must invest a greater portion of our resources in the education and cultural development of our people. Recent reforms undertaken in the educational system to reorient and improve the quality of education must now be followed by intensive efforts to develop workable programs particularly for out-of-school youth, and for adult education. Manpower development must strive to cover a wider circle of beneficiaries and must include a greater number of skills and crafts.

Finally, it is all important that we expand the access of individuals to job opportunities, and that we fully give them the protection of our laws concerning wages, work security, and social security.

Together, these various activities constitute our national strategy for development for the next five years. And the framework is embodied in various key policies. I shall refer here only to the most vital of these.

Firstly, on the matter of the roles of the private and the public sectors. In line with the national development plan, the public sector will continue to engage in activities which are capital-intensive, high risk, and vital to the national interest. This is of critical importance because various areas of enterprise will conceivably not move without the vigorous activity of government.

But while we recognize this to be an imperative in certain areas, the private sector will continue to be the prime mover of development activities. It must and will remain the backbone of our economic life.

Secondly, it must be a matter of national policy that we maintain population growth at levels conducive to national welfare. This policy will be pursued without prejudice to the health status and religious beliefs of individuals. But we must clearly strive now to bring our population growth rate down to 2.1% by 1982, and to 1.8% by 1987.

Thirdly, it is a matter of national policy that economic activities be designed to promote the greater utilization of our human resources. The development of manpower skills will be aligned with the requirements of growth. And labor exports which have been temporarily allowed to ease underemployment will increasingly be restrained as productive domestic employment opportunities are created.

Fourthly, domestic and foreign investments will continue to be encouraged especially in defined areas of priority. Current investment incentives as well as new incentives will be further rationalized or promulgated in order to stimulate and expand economic activity.

Finally, we shall pursue as a matter of international economic policy the achievement of greater economic cooperation with other countries, and the re­form of the international economic order.

On the whole, the 10-year plan period from 1978-1987 is designed to solidify the gains from the institutional and administrative changes introduced during the first five years of crisis government, and to create greater national self-reliance, more balanced regional development, and greater social equity. In the external sector, we envision our national export promotion drive to relieve the pressure on the country’s balance of payments.

This vision of the future is no idle musing. It is embodied in specific targets for national achievement.

In the next five years, total gross national product is projected to grow by 7.7% per year. From a 7% growth rate expected in 1958, we envision it to rise to 7.5% in 1979 and 1980, and then accelerating by 8% per year in the next two years of the five-year plan period.

From the 1976 level of P1,667 or $103, per capita income is projected to reach P2,155 by 1982. This represents a projected growth rate of 4.7% per year, and it is based on a projected population growth rate of 2.9% per year.

To finance the investment requirements of the plan will require the steady accumulation of resources for the building-up process. For the five-year period of 1978-1982, we envision a near doubling of investment.

We envision also a drop in net foreign capital inflow from the present 6.5% of GNP to about 3% by 1982, as a result of export diversifica­tion and the increased capability of the economy to raise funds from domestic sources.

Between 1978 and 1979, we expect a major turning point in the economy to occur. Agriculture and industry will exhibit almost equal shares of total net domestic product. And after 1979, industry will account for an increasing share of total net domestic product while agriculture will register an oppositive trend.

Industry is projected to grow by 9.8% annually during the next five years, and by 10.5% in the rest of the 10-year plan period.

Agricultural production, however, is projected to remain high, though it is projected to rise by approximately 5.3% annually during the 10-year period.

The foregoing review of the plan—its objectives, strategies, policies, and targets—provides us a picture of the decisive changes we project to occur in the national economy during the next five years, and up to 1987.

This is a blueprint for the future that fully takes into account the various problems and challenges that the society will face in the coming years. But it also presumes a great degree of harmonization among the various sectors of national life, and a totality of effort on the part of our people particularly those in the rural areas.

Crucial to this whole design is the revitalization of our long-neglected rural sector, which only recently has risen to claim its rightful role in national endeavors, and which will continue to bear the greater focus of our plans and programs of action.

When joined to our goals and programs in foreign affairs, national security, peace and order, and political life, they form a whole agenda for the nation on which we must now lavish our individual and collective efforts.

The agenda is vast as befits a nation that has grown to aspire for better things.

For this is where the ledger of the past five years has inexorably led us.

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