Bulletin of Concerned Asian Scholars

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American neo-colonialism in the Philippines

Usha Mahajani

To cite this article: Usha Mahajani (1974) American neo-colonialism in the Philippines, Bulletin of
Concerned Asian Scholars, 6:4, 62-64, DOI: 10.1080/14672715.1974.10413011

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American Neocolonialism
in the Philippines
by Usha Mahajani

The Lichauco Paper, Imperialism in the Philippines, by in every sphere through t h e instrumentality of a new native
Alejandro L i c h a u c o . N e w York and L o n d o n : M o n t h l y Review elite. Its significance is global since w h a t L i c h a u c o says of t h e
Press, 1 9 7 3 , $ 6 . 5 0 , p p . xv, 1 1 1 . Philippines applies to some degree to every Third World
c o u n t r y t h a t has been associated with t h e United States. At
This is o n e of those rare b o o k s t h a t are small in size b u t the same t i m e , as n o t e d on the b o o k j a c k e t , his is n o t a Marxist
heavy in s u b s t a n c e and should be read a n d studied widely. It or a New Left i n t e r p r e t a t i o n of Philippine-American relations,
presents a w e l l - d o c u m e n t e d i n d i c t m e n t of American neo- nor does his analysis contain a n y t h i n g of t h e internal
colonialist imperialism in t h e Philippines since its indepen­ e c o n o m i c c o n t r a d i c t i o n s within t h e Philippine society.
d e n c e in 1 9 4 6 . Several earlier w o r k s have described in detail
1 Lichauco was formerly President of t h e Philippine P e t r o l e u m
t h e classical form of A m e r i c a n imperialism in t h e Philippines Association a n d Executive Vice President of the Anglo-
t h r o u g h military c o n q u e s t and direct colonial rule and have Philippine Oil a n d Mining C o r p o r a t i o n . As a lawyer, business
executive a n d politician, h e was a m e m b e r of t h e Philippine
helped suggest a close parallel between the c o n d u c t of the
establishment and a powerful figure in the national capitalist
Philippine-American war and the American-Vietnamese war.
system. He was o n e of the seven delegates from the 1st
However, America's c o n t i n u i n g , pervasive d o m i n a t i o n of
District, Rizal, to t h e Constitutional Convention t h a t o p e n e d
Philippine national life since 1 9 4 6 has n o t been well
in J u n e 1 9 7 1 t o change the current C o n s t i t u t i o n established in
a p p r e c i a t e d e x c e p t b y a few perceptive a n d persistent
1935. T h e r e he was elected a m e m b e r of t h e C o m m i t t e e on
observers of t h e Philippine scene. T h e neocolonial status of t h e
Declaration of Principles and Ideology which voted for the
Philippines in relation t o t h e United States has generally
a d o p t i o n of a proposal making it m a n d a t o r y for the
remained concealed b e h i n d t h e facade of Philippine
g o v e r n m e n t and people of the Philippines to "resist and r e p e l "
" i n d e p e n d e n c e " and " s o v e r e i g n t y . " Filipino presidents and
imperialism. Lichauco prepared this "staff p a p e r " as an
o t h e r m e m b e r s of t h e Philippine establishment have helped
ideological and intellectual p r o p for t h a t proposal. ( F r o n t a n d
hide t h e t r u t h b y proclaiming pro-Americanism as t h e
back j a c k e t ) .
c o r n e r s t o n e of their policy. President Manuel Roxas in 1946
n o t only vindicated American rule over the Philippines by Lichauco did n o t write this book-length " p a p e r " t o
expressing g t a t i t u d e for D e w e y ' s victory over t h e Spanish a t t a c k foreign capitalism per se. In fact, he even advocates an
forces in 1 8 9 8 , b u t also affirmed close alignment w i t h t h e alliance b e t w e e n international finance and Filipino financiers,
United States in foreign affairs. This has m e a n t t h a t n o t only operating within a capitalist framework, and claims t h a t such
did the Philippines refuse t o affirm Afro-Asian solidarity b u t , an alliance would be beneficial to the Philippine e c o n o m y
were it n o t c o r r o d e d b y neocolonialist, u n e q u a l relationships
worse, it often t o o k a simulated " i n i t i a t i v e " in p u t t i n g forth
b e t w e e n American and Filipino capitalists (p. 78). In short, he
proposals designed to subserve American cold war interests.
w a n t s t o s u b s t i t u t e a national Philippine capitalist e c o n o m y
One e x a m p l e was t h e p r o p o s e d Pacific Pact of 1 9 5 0 ,
for t h e current imperialist A m e r i c a n capitalist e x p l o i t a t i o n .
calculated t o stem Chinese c o m m u n i s t " e x p a n s i o n . " Close
alignment with t h e United States discredited the Philippines as This stand has inevitably incurred Marxist and New
o d d - m a n - o u t in Asia. In t h e Philippines itself, t h e p e r p e t u a t i o n Leftist attacks. Paul M. Sweezey and Harry Magdoff, in the
I n t r o d u c t i o n , claim t h a t L i c h a u c o ' s "left-bourgeois critique
of American d o m i n a n c e had tragic effects for the Filipino
remains essentially b o u r g e o i s " because of " a ) the absence of
people and t h e Philippine nation-state. Foreign observers,
an analysis of p o w e r relations and class struggle; b) t h e virtual
especially from non-aligned countries, were puzzled and
neglect of the e x t e n t , n a t u r e and causes of the misery of t h e
angered b y the pro-Americanism of Philippine foreign policy.
masses; and c) t h e advocacy of a scale of priorities in which
Filipinos themselves vented their frustration and fury in an
first and overwhelming i m p o r t a n c e is placed on t h e
intellectual, nationalist o u t b u r s t against the lingering "colonial
d e v e l o p m e n t of i n d u s t r y . " T h e y are critical of Lichauco's
mentality."
thesis a b o u t industrialization as the only m e a n s of increasing
What L i c h a u c o has s h o w n is t h a t this "colonial
p r o d u c t i o n and productivity, t h e r e b y overcoming poverty,
m e n t a l i t y " is n o t t h e cause of t h e national malaise b u t a
because " t h i s view, which resolves a c o m p l e x of issues t o one
manifestation of a deeper underlying malady, America's of imperialist d e p e n d e n c y versus native industrialization t e n d s
neocolonialist grip over his c o u n t r y . His s t u d y presents a vivid t o overlook or u n d e r e s t i m a t e the essential c o n n e c t i o n b e t w e e n
pen portrait of h o w neocolonialism operates at every level and
62
capitalism a n d i m p e r i a l i s m . " ( p p . xi-xiii). and t h e World Bank. In short, imperialism-neocolonialism n o t
This is n o t at all t o c o n d e m n L i c h a u c o o r t o u n d e r r a t e only exploits t h e Third World b u t also drugs it i n t o believing
t h e great, overriding significance of his e x t r e m e l y well- t h a t all this e x p l o i t a t i o n is for its o w n g o o d !
presented paper b u t merely t o appreciate his o w n views in Lichauco charges t h a t a policy of m o n e t a r y austerity
their correct perspective. F o r , as Sweezey and Magdoff p o i n t crushes t h e local e n t r e p r e n e u r i a l c o m m u n i t y by denying
o u t , despite their major differences with L i c h a u c o , t h e y capital t o its m e m b e r s and placing t h e m at a distinct
decided t o bring o u t his p a p e r in b o o k form for circulation t o disadvantage vis-a-vis their well-financed foreign c o m p e t i t o r s .
t h e wider world precisely because it n o t only c o n t a i n s a w e a l t h A policy of fiscal austerity, he complains, prevents t h e
of factual i n f o r m a t i o n b u t also reflects t h e intensity of g o v e r n m e n t from pursuing n e e d e d public projects (p. 4 0 ) . T o
anti-imperialist s e n t i m e n t and struggle in t h e Philippines. T h e y r e m e d y t h e s i t u a t i o n , h e advocates strong trade and foreign
have also t a k e n pains t o reinforce the b o o k b y providing exchange restrictions (p. 4 1 ) . T h a t he is c o n c e r n e d strictly
f o o t n o t e s which did n o t a p p e a r in t h e original t e x t (p. xv). with national e c o n o m i c i n d e p e n d e n c e rather t h a n with a
Sweezey a n d Magdoff have n o t only helped t h e cause of socialist e c o n o m y for t h e Philippines is evidenced b y his
anti-imperialism b u t have also struck a b l o w for a sorely a d m i r a t i o n for b o t h China (a c o m m u n i s t e c o n o m y ) and J a p a n
n e e d e d feeling of u n i t y b e t w e e n t h e radical left and the (a capitalist e c o n o m y ) which, he claims, are t h e only t w o
not-so-radical " b o u r g e o i s anti-imperialists." F o r t h e y b o t h face countries in Asia t h a t have " p r o d u c e d their own e c o n o m i c
a powerful c o m m o n e n e m y of t h e n a t i o n a l liberation which is miracles" and have " p u r s u e d a d e v e l o p m e n t strategy
t h e first step to any internal revolution. c o m p l e t e l y t h e o p p o s i t e of t h a t prescribed by imperialism,"
The Lichauco Paper has nine sections, dealing with: b y a d o p t i n g an elaborate system of bans and restrictions on
"imperialism a n d o u r political e s t a b l i s h m e n t ; imperialism a n d i m p o r t s and capital transactions (p. 4 3 ) . In contrast, Indonesia
o u r military e s t a b l i s h m e n t ; e c o n o m i c imperialism and the (especially since 1965) a n d the Philippines have been m o s t
m e c h a n i c s of o u r e x p l o i t a t i o n ; imperialism and the national permissive and generous t o w a r d s foreign private investment
crisis; t h e i n s t r u m e n t s of imperialism; imperialism's strategic (p. 4 3 ) .
policy t o w a r d s t h e Philippines; t h e activities and techniques of In so far as L i c h a u c o ' s a t t a c k is directed against foreign
imperialism; foreign investment and military bases; s u m m a r y capitalist d o m i n a t i o n a n d t h e draining off of Philippine wealth
and concluding r e m a r k s . " L i c h a u c o begins with a critical t o fill t h e coffers of foreign treasuries, his thesis
analysis of neocolonialism and imperialism a n d shows h o w represents n o t a Marxist critique of capitalism b u t an
imperialism, in its latest manifestation as neocolonialism, expression of Philippine e c o n o m i c nationalism, a philosophy
w o r k s principally, and m o s t effectively, only t h r o u g h the or ideology t h a t seeks t o assert and u p h o l d the e c o n o m i c
g o v e r n m e n t s and nationals of its neocolonies a n d t h u s i n d e p e n d e n c e of o n e ' s o w n nation-state against the e c o n o m i c
p e r p e t u a t e s itself while the o u t e r shell of nominal c o n t r o l of a n o t h e r s t a t e . E c o n o m i c nationalism, strictly
i n d e p e n d e n c e and sovereign status of t h e n e o c o l o n y is k e p t speaking, could include a d h e r e n c e t o local capitalism, though
intact. Specifically, in t h e Philippines, he claims t h a t American it generally carries overtones of socialism such as nationaliza­
neocolonialism pervades all levels of national life, exercises a tion of industries. J a p a n e s e e c o n o m i c policies have been b o t h
stranglehold over t h e Philippine e c o n o m y and m a n i p u l a t e s its capitalist and imperialist b u t t h e y d o represent e c o n o m i c
workings a n d exploits its Philippine w o r k e r s in order to nationalism against Western capitalism. 2

subserve A m e r i c a n e c o n o m i c interests. This neocolonialism is In so far as Lichauco exposed American neocolonialism

sustained b y a whole s p e c t r u m of Filipino agents including a n d t h e C o m m i t t e e on Declaration of Principles and Ideology
Presidents, heads of g o v e r n m e n t b u r e a u s and agencies, military a d o p t e d a proposal t o resist imperialism history was repeating
leaders, m e m b e r s of certain t h o u g h n o t all m e d i a and even of itself in t h e Philippines. Ever since American rule was
t h e e d u c a t i o n a l establishment. A m o n g the new, sophisticated established and t h e American program of e c o n o m i c imperial­
agents of neocolonialism are t h e native, d y n a m i c t e c h n o c r a t s , ism in and b e y o n d t h e Philippines was e x p o s e d , the Filipinos
3

whose sharp intellect is well-trained t o proffer a vigorous struggled to resist it. As soon as t h e y acquired legislative p o w e r
defense of foreign private investment and o t h e r neocolonialist in 1 9 0 7 t h e y s o u g h t t o limit m a x i m u m ownership of land by
practices as being actually a beneficial a n d a necessary t o o l of individuals and c o r p o r a t i o n s (the t h r e a t came largely from the
e c o n o m i c d e v e l o p m e n t . E c o n o m i c teachings at prestigious American sugar i n d u s t r y ) and v e h e m e n t l y o p p o s e d American
Philippine universities are designed t o inculcate in the s t u d e n t s proposals t o establish free t r a d e which, as Lichauco p o i n t s o u t ,
an a d m i r a t i o n for t h e capitalist (or "free e n t e r p r i s e " ) system was imposed on the Philippines. During 1909-12, n u m e r o u s
which, in t h e neocolonies, entails foreign capitalist d o m i n a t i o n Filipino newspapers, for e x a m p l e El Ideal, El Renacimiento,
and e x p l o i t a t i o n of t h e local p o p u l a t i o n . and La Vanguardia, and even conservative leaders like Q u e z o n
Imperialism, L i c h a u c o charges, engages in brainwashing expressed grave fears of d o m i n a t i o n b y American capital
m e m b e r s of t h e Third World into accepting four "strategic especially since t h e Philippines, as an American colony, was
c o n c e p t s as integral principles of their d e v e l o p m e n t program, helpless against its onslaught. Q u e z o n even added t h a t the
and o p e r a t i n g their e c o n o m i e s on t h e basis of these p r i n c i p l e s " American people themselves " h a d n o t yet succeeded in
(p. 2 1 ) , t h u s a d o p t i n g " t h e policies which comprise four t h r o w i n g off t h e heavy y o k e of great c o r p o r a t e capital. What,
c o n c e p t u a l tools of imperialist e x p l o i t a t i o n " (p. 4 5 ) . All these t h e n , can the Filipinos h o p e for in t h e u n d o u b t e d l y
entail a capitalist e c o n o m y in t h e n e o c o l o n y ; an o p e n f o r t h c o m i n g struggle b e t w e e n t h e m a n d these powerful
e c o n o m y , freely receptive t o heavy foreign (i.e. largely c o r p o r a t i o n s in the Philippines . . . considering the fact t h a t
A m e r i c a n ) investment, geared t o t h e policy of fiscal and the Filipinos have n o c o n t r o l of their g o v e r n m e n t , which is in
m o n e t a r y a u s t e r i t y ; and finally, a close integration of the local t h e h a n d s of an alien p e o p l e ? " T h e main fear was t h a t
e c o n o m y i n t o t h e international capitalist bloc, d o m i n a t e d by A m e r i c a n capitalist d o m i n a t i o n would n o t only spell
t h e United States t h r o u g h t h e I n t e r n a t i o n a l M o n e t a r y F u n d e x p l o i t a t i o n of t h e Philippines b u t would also block the moves
63
 t o w a r d s i n d e p e n d e n c e which were then the chief concern of tion. American businessmen w h o regarded Marcos as a reliable
Filipino nationalists. So deep-seated and widespread was this friend of their interests were greatly relieved by his actions and
resentment that t h e r e were n u m e r o u s strikes against a n n o u n c e m e n t s . T o reinforce this confidence, President
A m e r i c a n - o w n e d businesses in Manila. 4
Marcos s u b m i t t e d t o the Philippine voters, o n 15 J a n u a r y
When at last t h e Filipinos f o u n d an occasion t o frame 1 9 7 3 , a n e w C o n s t i t u t i o n (dutifully ratified b y the voters)
their o w n C o n s t i t u t i o n at t h e C o n v e n t i o n in 1935 their which i n c o r p o r a t e d assurances of creating " a n a c c e p t a b l e
deliberations were infused with nationalist-cum-socialist s i t u a t i o n " for A m e r i c a n businessmen and which revalidated
s e n t i m e n t s . Some Marxists might dismiss these sentiments as American titles t o p r o p e r t y even after 1 9 7 4 , t h u s reversing t h e
bourgeois nationalist-capitalist in o r i e n t a t i o n , b u t t h e y did, as decision of t h e Philippine S u p r e m e C o u r t . T h e n e w
does Lichauco's Paper in 1 9 7 1 , r e p r e s e n t a sincere t h o u g h C o n s t i t u t i o n also reversed a n o t h e r C o u r t ruling barring
limited f o r m of e c o n o m i c nationalism a n d resistance t o e m p l o y m e n t of foreign nationals in certain kinds of
imperialism. T h e 1935 C o n s t i t u t i o n a l Convention also companies, even with 4 0 % foreign e q u i t y . It further allowed
a p p o i n t e d a C o m m i t t e e " t o consider, formulate and p r o p o s e u p t o 4 0 % foreign participation in certain c o r p o r a t i o n s and
everything relative t o t h e normalization and conservation of associations exploiting or utilizing Philippine n a t u r a l resources.
t h e land and n a t u r a l resources of t h e c o u n t r y . " It T h e C o n s t i t u t i o n also provided t h a t t h e National Assembly, to
r e c o m m e n d e d e n s h r i n e m e n t of four f u n d a m e n t a l principles in be elected u n d e r this C o n s t i t u t i o n , m a y allow such
t h e C o n s t i t u t i o n : n a t u r a l resources were t o be preserved u n d e r c o r p o r a t i o n s t o enter i n t o service c o n t r a c t s for financial,
technical, m a n a g e m e n t and o t h e r forms of assistance with any
Philippine n a t i o n a l sovereignty; big landed estates caused
foreign person or e n t i t y for t h e e x p l o r a t i o n , d e v e l o p m e n t ,
e c o n o m i c inequality; small holdings were conducive to social
e x p l o i t a t i o n or utilization of any national resource. It also
peace; land distribution d e s t r o y e d the evils of caciquism and
recognized all existing c o n t r a c t s t o t h a t effect. These
prevented absentee landlordism. Article XII, section 1 t o 5,
provisions would facilitate additional U.S. i n v e s t m e n t s ,
and Article XIII, section 6, of the C o n s t i t u t i o n , as a d o p t e d , set
especially in oil e x p l o r a t i o n , land and offshore. A m e r i c a n
forth these principles and asserted t h e right of the State t o
t e l e c o m m u n i c a t i o n c o m p a n i e s have b e e n assured b y t h e
take over private enterprises and p r o t e c t labor.
C o n s t i t u t i o n t h a t t h e y should only have Filipino "governing
In 1 9 7 1 - 7 2 , A m e r i c a n neocolonialism h a d reached
b o d i e s " while actual ownership can r e m a i n in foreign h a n d s .
staggering p r o p o r t i o n s . A m e r i c a n s h a d acquired " p a r i t y r i g h t s "
w i t h Filipino citizens in e c o n o m i c enterprises u n d e r t h e 1946 N o t surprisingly, t h e United States i m m e d i a t e l y m a d e it
a m e n d m e n t t o t h e Philippine C o n s t i t u t i o n and the 1 9 5 4 trade clear t h a t she w o u l d " n o t i n t e r f e r e " in Philippine " i n t e r n a l
a g r e e m e n t b e t w e e n t h e United States and t h e Philippines. This affairs." S t a t e D e p a r t m e n t s p o k e s m e n described U.S.-Philip-
m a d e a cruel m o c k e r y of Philippine sovereignty. By 1972, pine relations t o be excellent with n o foreseeable t h r e a t to
American investors c o n t r o l l e d about 7 5 % of foreign U.S. business interests or t o t h e 4 3 , 0 0 0 A m e r i c a n s in t h e
i n v e s t m e n t in t h e Philippines. T h e Philippine Securities and Philippines, plus 2 0 , 0 0 0 American t r o o p s . 7

Exchange Commission e s t i m a t e d t h a t the American c o m p a n i e s It is in this said way t h a t m a t t e r s stood in S e p t e m b e r

in t h e c o u n t r y , n u m b e r i n g 8 0 0 , had a total investment w o r t h 1 9 7 2 , and t h e situation only m a k e s L i c h a u c o ' s Paper s t a n d o u t
$2 billion. Filipino u p r o a r against U.S. e c o n o m i c d o m i n a t i o n in its intellectual brilliance a n d moral courage. T h e Philippines
had also reached a n e w pitch. Many legislators d e m a n d e d have b e c o m e still m o r e deeply e n m e s h e d in the neocolonialist
legislation t o a u t h o r i z e nationalization of U.S.-owned land trap of t h e United States. But t h e L i c h a u c o Paper remains an
w i t h o u t c o m p e n s a t i o n . In August 1 9 7 2 , t h e C o n s t i t u t i o n a l i m p o r t a n t a n d lasting c o n t r i b u t i o n t o t h e growing anti-
C o n v e n t i o n , following o n e year of slow deliberations, had imperialist literature and is an a u t h o r i t a t i v e e x p o s e of
c o m p l e t e d only half of t h e task of drawing u p the n e w imperialism in its newest a n d m o s t dangerous form of
C o n s t i t u t i o n . On August 2 1 , t h e Philippine S u p r e m e C o u r t
5 neocolonialism.
ruled t h a t American citizens, individuals or c o r p o r a t i o n s ,
Notes
could n o t legally a n d solely o w n private residential p r o p e r t i e s
and enterprises in t h e Philippines after 3 J u l y 1 9 7 4 , w h e n the 1. James Blount, American Occupation of the Philippines,
1898-1912 (New York: Oriole Editions, 1 9 7 3 , first published in 1 9 1 2 ;
Parity A g r e e m e n t expired, e x c e p t in cases of h e r e d i t a r y
Usha Mahajani, Philippine Nationalism: External Challenge and Filipino
succession. At last it seemed t h a t Philippine e c o n o m i c
6

Response, 1565-1946 (Brisbane, Australia: Queensland University

nationalism, of which Lichauco and o t h e r nationalists were Press, 1 9 7 1 ) ; Daniel B. Schirmer, Republic or Empire, American
a r d e n t e x p o n e n t s , was o n t h e verge of t r i u m p h . Resistance to the Philippine War (Cambridge, Mass.: Schenkman,
But history does n o t repeat itself exactly. In 1 9 3 5 , 1972).
2. For an analysis of Philippine economic nationalism see
President Roosevelt of t h e United States could have b u t did
Mahajani, 5, 6 0 - 6 2 , 1 2 1 , 266-67, 315-23, 3 6 8 - 6 9 , 4 6 7 - 6 8 .
not veto t h e Philippine C o n s t i t u t i o n although he disapproved 3. American conquest of the Philippines was motivated by both
of s o m e of its provisions. On 23 S e p t e m b e r 1 9 7 2 , President strategic and economic considerations which are detailed in ibid.,
Marcos declared Martial Law, dismissed t h e C o n s t i t u t i o n a l 217-221.
Convention and arrested several of its delegates, including 4. Ibid., pp. 3 1 8 - 3 2 0 ; Peter Stanley, A Nation in the Making,
The Philippines and the United States, 1899-1921 (Cambridge, Mass.:
L i c h a u c o , w h o was released in D e c e m b e r b u t k e p t u n d e r h o u s e
Harvard University Press, 1 9 7 4 ) , pp. 1 4 0 - 1 5 1 .
arrest. Marcos i m m e d i a t e l y assured A m e r i c a n s owning land 5. The progress was slowed by the controversy over President
and business in t h e Philippines t h a t t h e y would be allowed to Ferdinand Marcos' political intentions after his term expired in 1 9 7 3 .
c o n t i n u e doing so even after t h e provisions of the Rumors said that under the proposed new Parliamentary system,
U.S.-Philippine t r a d e pact of 1 9 5 4 expired in 1 9 7 4 ; and t h a t Marcos would stand for election as Prime Minister and continue in
power. New York Times, 16 July 1 9 7 2 .
he w e l c o m e d U.S. investment especially in oil e x p l o r a t i o n and
6. Ibid., 2 2 August 1 9 7 2 .
mining. Earlier, h e h a d publicly o p p o s e d d e m a n d s for 7. Ibid., 25 August, 26-27 September, 4 October, 3 November
nationalization of A m e r i c a n - o w n e d land w i t h o u t compensa- and 25 December 1 9 7 2 .
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