Professor Maria Socorro Gochoco-Bautista responded to a series of wide-ranging questions regarding the economy under martial law in an interview with CNN Philippines on 24 September 2018.

Some excerpts:

Maria Socorro Bautista, a professor at the University of the Philippines Diliman, told CNN Philippines that the economy did not do well [under martial law].

“The country’s average GDP during the 1972-1980 period was at 5.98 percent, while our neighbors in the ASEAN (Association of Southeast Asian Nations) performed better during the same period. These include Thailand (7.15%), Indonesia (7.49%), Malaysia (8.11%) and Singapore (8.76%),” Bautista said.

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Bautista said current conditions still bear the impact of economic events during the Marcos regime. She said the country “has lost an entire decade of development in the 1980s” as it struggled to keep pace with Asian neighbors. Thailand, Japan and Korea, for example, went through an industrialization phase, developed their export sector and attracted investments with good returns.

“We have not become world-class exporters of manufactured goods except for computer chips. We are not an export-led growth economy in the sense of the Asian economies, except labor export. We cannot go back in time to reclaim these missed opportunities,” she said.

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“During the Marcos regime and especially under martial law, there is evidence to show that the productivity of capital was declining rapidly, and that ICOR or the incremental capital-output ratio was highest in the region, meaning investment was inefficient,” Bautista explained.

She pointed out the mothballed $2-billion Bataan Nuclear Power Plant completed in 1985. It took 20 years for the government to pay off the debt, reaching $22 billion in 2007. Filipinos are still paying for the plant’s maintenance at ₱27 million per year.

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Bautista said there were hard lessons during martial law, and these should prompt policy makers to improve on what was done in the past.

“If we operate in a highly protected economic environment, it sets up the wrong incentive structure and we end up with inefficient industries who cannot specialize and realize scale economies. Specialization is limited by the size of the market,” she said

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