Created: 8/10/1950

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DIflTRIB; OQVe of Uie President National Gecurlty Council National Security Resources Board Department of State Ofllec or Secretary ol Defense Department of the Army Department of the Navy Department of lhe Air Force Joint Chiefs ol Siad Atomic Enrrey Commliaion Research and Dorelopment Board



a consequence of the decline In Phtlip-pine stability which is expected to continue and accelerate, President Quirino is in danger of being deprived of real power or Impeached before his term of office expireshortomplete US debacle In Korea and further Communist expansion in the Far East directly threatening the Philippines, such emergencies as arise ln the Far East will probably not cause the Filipino people to rally In support of Quirino and thus stabilize his regime, Qulrino's probable successor. Vice President Lopez, should be able to halt the declinebut there Is no assured prospect that he will be willing or Rble to effect the' long-range reforms necessary to cure the country's basic Ills. Nevertheless, tbeof some real reforms, followed by reasonably honest electionsouldcontinuanceon-Communist pro-US regime. Ii, on the other hand, no realat reform ore undertaken and3 elections arc again marked by fraud andIt Is probable that an authoritarianwill come to power and an even chance that an eventual accommodation to Communism will be made-.

The young nationorkingsystem from the period of USas wellairly experienced bureaucracy and relatively efficient armed forces. The Philippine economy is naturally richrotected market for its products Is provided by the US. Postwar US expenditures ln the Philippines have been large, amounting toillion dollars.

Much of the eflect of such elementsstability ln the Philippines, however, has been offsetariety of governmentalAt the base of these is anruling class which exercises economic and political power almost exclusively ln its own Interest. Other elementseak President ln ill health who has lost thcof the public and of most politicalorrupt and inefficient officialdom, lawlessness, arbitrary misuse of governmental power,9 election frauds, disorganized political parlies,ariety of economic problems.

The most visible (and thc only militant one) of the various elements seeking theof the government are the Huks, agroup of disgruntled peasants and bandits under Communist leadership who as yet. however, pose no Immediate threat to the government. Potential Huk allies include the Overseas Chinese, radical labor groups, unorganized lawless elements throughout the islands, and dissatisfied veterans. Political opponents of Qulrino's administration include his Vice President and some members of his cabinet, the majority of thc Philippine Senate, thc opposition Nacionalista Party led by Jose laurel, and thc independent press.

US political and economic influence remains altabilizing external factor. The successes of Communism in China and thepossibility of on attack on Taiwan, however, have frightened the Filipinosown the seeds of doubt regarding an ultimate western success ln thc containment of Com-

bleusnnancuiorouier ^ Plne Republic beyond existing commitments The tnV'h

concurred in this report, it contains Information available to CIA as ofuly

toward expanding CrLmuiitoilL tie^rS

was veryong delay or faUunTof eS. ^ ot*mal

8 EC


Probable Future Developments.

Ineffective Philippine leadership In the face of markedly Increased domestic Instability provides the opportunity for oppositionunder the leadership of Vice President Lopez, to restrict or eliminate Presidentauthority priorlthoughhealth may bring about Qulrino'sat any time, political pressures continue which may relieve him from authorityhe devicelongradual delegation of power to Vice Presidentorced resignation;f these means fall. Impeachment. Assassinationoup d'ttat, although unlikely, cannot be ruled out entirely.

President Qulrino's stubbornness andindicate he ls not likely tolong vacation" or resign. It Is more likely that Vice President Lopez and his supporters will force Quirino to concede such extensivethat the Vice President will assume actual executive power leaving Quirino merely the vestiges of his ofSce. If Lopez, who isIncreasingly popular, should succeed to power he would probably be able initially toorem in ison and toeasure of public confidence In tbe Philippine Government thusinternal political stability. Like most present Philippine political leaders, however, Lopez Is personally Identified with vestedand political interests. Por this reason, there Is no assured prospectopez or similar regime would be willing or able to in stitute thc broad political and economicnecessary to cure tbe basic ills or the country and to obtain thc continuingof the increasingly articulate andpeople.

The invasion of South Korea momentarily strengthened the Quirino administration. Initial public reaction indicated support for whatever emergency measures themight undertake in order to safeguard

Philippine national security. However, prompt announcement of US assistance to, the South Koreans coupled with pledges toTaiwan, to expedite MDAP old to the Philippines, and to Increase US forcesall have tended to allay Philippine fears. In consequence, opposition to the Quirino regime is already reasserting Itself. Additional crises In the Far East and elsewhere, however, mayimilar temporary unifying effect within the Philippines. ShortS debacle In Korea and further Communist domination of thc Far East resulting In an actual Invasion threat to the Philippines, however, suchfactors, In themselves, will probably not greatly strengthen Qulrino's position or bring about the necessary Increase Inefficiency which would halt theof stability in tbe Philippines.

The next national elections In thewill be held Inf, by that time, necessary reforms are Instituted,easure of confidence In the Philippine Government has been restored, and If tbepeople are permitted and encouraged to express their will freely at the polls, another non-Communist pro-US administration will probably emerge. Continuing stability ofovernment would depend uponimplementation of basic political andreforms. If, on the other hand,are not begun and the Filipino people are prevented from expressing their willraudulent election, tbe consequent full loss of public confidence In the government will probably permit the forcible seizure of power by some authoritarian group.egime would most probably be opportunistic and its initial orientation would thus be dependent on the existing power positions of the US and the USSR In thc Far East. In any case, it is quite likely thatovernment would eventually be replacedommunistby voluntaryor by forcefullt

shouldore substantial measure of success than Its predecessors In coping with the country's basic problems.

trong and Weak Points Inherent In tho Government.

a. Elements of Strength.

In contrast to other newly created Asian nations, lnearth of experienced leadership seriously Impedes governmental operations, the Philippine Republicorking governmental system closelyafter that of thc US, as well as analthough not always effective, bureaucracy. It has not been necessary, therefore, for the young country to undergo the disastrous political experimentation which often characterizes newly independent states. The Philippine economy is rich inmineral, and forest resources;rotected market for Its products Is provided by thc US. Food ls plentiful, and, although small Imports arc still required, rice and corn production has Increased significantly over average prewar levels. Production of major export crops has also Improved.

Postwar US aid to the Philippines has been generous. Most US expenditures have gone, not to thc government, but directly Into the Philippine economy through such means as employment of Filipino civilians by the US armed forces, benefits for Filipino veterans, back pay to guerrilla units, and war-damage payments to private citizens. Total USexpenditures in the Philippines by thc end9 amounted to almost onealf billion dollars. Loanshave been advanced, whileorth of military and other property has been transferred to thc Philippine

The Philippine Armed Forces andare efficient by Southeast AsianThe high-level staffs function well, and training of officers and men Ls rated asby US observers. Equipment Ls mostly that used by the US In World War D, and, while replacement parts and ammunition are needed, this modem armament provides Philippine security forcesistinctover dissident groups. S military

advisory mission Is stationed ln theand will supervise thc expenditure of MDAP funds which totaled approximatelyillion during fiscalationalHeadquarters recently directed the Philippine Ground Force tootal of ten battalion combat teams which also are toroportion of Constabulary troops. Creation of these forces ls aimed at theof more aggressive operations In Luzon. In contrast to tbe past pattern of ontl-Huk activity, which had resulted only In briefand the subsequent withdrawal and escape of dissident forces, the battalionteams arc to undertake determinedof Huk bands, as well as more active scouting and patrolling. Byll of the proposed battalions had been activated.

ChristianRomanfully nine-tenths of the entire population. Although the Churchtabulzmg factor Ln the Philippines, ItsIn combating tendencies towardand extreme radicalism is weak.

lements of Instability.

Much of the effect of such elements favoring stability Ln the Philippines has been offset by governmental abuse of power, weakcorruption, irresponsible politicaland economic mismanagement The trend toward Instability which followed the war and granting of Independence to tbe Philippines threaten US security Interests not only because the Philippine Republic is of obvious strategic importance to the US, but because success or failure of US tutelage there will be considered by Asian nations as aof the merits of western democracy as applied to Far Eastern countries. Hence, present trends, which could result in loss of US influence in the archipelago and elsewhere In Asia, could be extremely detrimental to US Interests.

Centuries of Spanish rule fosteredowerful landlord class which continues today as thc dominant element in the Philippine social and economic structure. Under US control, the landlord class retained Its economic and political power because it represented thc only educated Filipino group capable of assuming administrative rcsponsi-


mental weaknesses of the Philippine party system and damaged the government'sThe Issues presented to the electorate were not clear-cut and Quirino and his party followers, taking advantage of their control of tbe government machinery,ide variety of Illegal tactics to Insure their continuation In office. Coercion, fraudulent voting, and miscounting were so blatant as to cause frustration and disgust among theof Filipino voters, and the electioncontinue to contribute to thc common peoples' distrust of their government.

The Philippine Republic suffers from aof economic ills which create andpolitical problems. Agriculture, thc most Important segment of the Philippine economy. Is characterizedaldistribution of the farming populationeudalists land-tenure system, widespread usury and poverty, and by farms which are uneconoml-cally small. Failure of the government to make otber than nominal attempts to solve Uie worst of these agrarian problems Is thc cause of much of tbe present unrest In the Plulipplnes.

The Governments financial position is Heretofore, budgetary deficits have been financed by drawing on reserve funds and by borrowing from Uie Central Bank. Reserve funds are now virtually depicted, andfrom Uie Central Bank has reached Uie legal limit. Because there appears to be no possibility that thc deficit will be met bytaxation, future deficits willbe financed through devices which will have inflationary effects. Evasion of present income, excise, and customs taxes, is. in any case, practiced with impunity. CurrcnUy, thc government's financial plight is reported to beerious curtailment of public services, including education, and increased unemployment. This situation will Increase thc unjwpularity of the presentand accelerate the growing opposition to the Quirino regime.

Ill foreigneavily adverse balance-of-payment* position has been temporarily cased through the imposition of exchange controls, but this action has brought wtth it higher prices, reduced revenue, uncmploy-



oss of confidence on Uie part of the business community tu Uie country'sfuture.

lement? within lhe Philippines Seeking the Overthrow of the Government.

a. Insurgent and Communist Croups.

The most risible of the various threats to the Philippine Government are the Huks. Ledommunist, Luis Tame, assisted by two Philippine Communist' Party leaders, Balgos and Capadocia, the Huks are lhe onlyrevolutionary group presently opposing tho Philippine Government's authority.

Because Huk opposition to Uie government is armed and violent, lt receives morethan oUier opposition groups, but Uieuol nuk threat ls more potential lhanA peasant organization, evolved from guerrilla groups that resisted the Japanese In Central Luzon, the Huks continued to fight after thc war's end with Uie ostensible objee-Uvc of reforming Luzon's Inequitable agrarian system. Along with the disgruntled peasants In Huk ranks today are professional bandits and common outlaws. Although the Huks have considerable popular support, theirmembership is no morend their armed strength at any time probably totals no morehcfailure to alleviate the inequitablethat foster peasant discontent willthc Huks to maintain and increase their strength and to serveocal point of armed opposition to which other disgruntled groups may turn.

Thc Huks arc equipped with weaponsfor guerrilla operations, and theirsupply has been secured fromstocks or through purchases. Uicft. or seizure from government forces. Food and clothing, when not willuigly contributed by sympathetic peasants and villagers, arc easily obtained by force or mtirnidatlon. Hukand morale are difficult to assess. The fact that very few have taken advantage of past government amnesty offers, however,that the Communist leadership, by whatever means, has been able to retain the adherence of its followers. In the past, Huk activity took the form of series of raids, first

In one location and then in another,with periods of relaUveajor outbreak of Huk violence Inowever, was better coordinated and executed than had beenact which Is taken to Indicate the development of more centralized Huk control. The attribution of thisIn Huk efficiency to close direction and substantial material assistance from Peiping and Moscow, however, Is as yet unwarranted on Uie basis of existing evidence.

Potential Huk allies In theverseas Chinese, whoarge proportion of Uie nation's mercantile activity and,roup enjoywealth. Since Uie Communists have achieved power In China, It Is believedmall number of Philippine Chinese have aligned themselves with thc PeipingTheir numbers probably will Increase within tbe present Chinese population and through Illegal Immigration and they can be expected to facilitate Communistraise funds, engage In subversiveand render aid to Uie Huks.

Another source of support for the Huks is found In tbe Philippine labormall proportion of Uielabor forces Is organized at present, the trade union movement Ls growing In strength, labor's dissatisfaction with low real wages and conditions of work, however. Ls permitting exploitation of the union movement byorganizers. One of thc most aggressive labor organizalions in the Philippines, thc Congress ot Labor Organizationss Communist-dominated. CLO propaganda and strategy indicates Its revolutionary character, and ils leadership is currenUy reported to belabor battalion" to support Uie Huks If political and economic conditions grow worse,s anticipated that Uie CLO will obtain Increasing support.

The Huks. although they represent the only organized armed opposition to thedo not furnish the sole example ofin the Philippines. Firearms are plentiful throughout Uie archipelago, and this condition lias fostered widespreadand disorder. The Government'swith ami Huk operations in Luzon.


with rivalry between local police units (who are responsible to local bosses) and the Manila-directed Constabulary, haspolice action against bandit bands elsewhere. Abuses of police authority by both local and national law-enforcement groups, moreover, have resultedon-cooperative attitude toward the police on the part of the general public While professional banditry Is common in Luzon and the Vlsayas,among the Philippine Moslemsnhabitants of Mindanao and the Sulurepresents, at least in part, opposition to Christian Filipino authorities. Thcviolence in Moro territory combines such anti-Christian sentiment with traditionalactivity and, although now generally held inotentially seriousof opposition to governmental authority.

b. Political Groups.

Political opposition to the government aims either at the removal of Quirino personally, or at general reform of the administration. Vice President Lopez, partly because he desires toore important role In thethan Quirino will grant him, partlyhe wishes to protect his own and other extensive business interests byompetent and stable government, and partly because he evidentlyeeling offor the public welfare, leads those who seek Quirino's removal from power.

Backing him arc thc Philippinearge section of Quirino'sParty which no longer supports theThe Nacionalistas, led by Joseemagogue who collaborated with thchave always opposed Quirino. Inthe President is under attack by aproportion of politically articulatewho are without definite partyAll these opposition elements blame the President personally for Governmental corruption and Inefficiency, worseningproblems, and the9 election scandals. Their tactics take the form of press attacks, refusal to serve in public office,of Government graft, and the rejection of administration-sponsored legislation.

The independent Philippine press liascriticized Government corruption.

Such attacks arc constructive in their intent, however, and the same newspapers have been quick to applaud any administration efforts toward reform.

Veterans' organizations, as well as groups of World War II guerrillas whose war claims have not been honored, constitute another group that is critical of the Government for its failure to obtain more benefits for them. Although not strongly anU-admlnlstratlon at present, this large body Is easily influenced by unscrupulous leaders and could become an effective opposition bloc.

One outstanding Independent ln Philippine politics, Senator Lorenze Tanada, hasingle-handed campaign for honestAlthough he has followers among the young professional class and has created his own political group (The Citizens*is Influence Is small. If he maintains hisreputation, however, he may, ln the future, be able to attract considerable political support.

Jose Laurel, spokesman for the Nacionalista Party, has temporarily retired from politics and has recently been reported as givingbacking to Vice President Lopez. Laurel is still very popular and, despite hiscould quickly rally considerablesupport. While Laurel would probably notreform" movement of his own, he might attempt to capture the leadership of any such group.

4. External Influences.

US political and economic influence to the Philippines remains great. Many prominent Filipinos were educated to America anda deep respect and affection for thc US. Most Filipinos appreciate both the benefits which the Pliillppines have received from the US and the fact that their independence was willingly granted. Strong economic ties with the US continue to exist: Philippine exports willreferential US tariff for many years, for example, and the US market for Philippine products is essential to aPhilippine economy; US business andInterests to the Philippines areand have brought with them large and valuable capital investments. Thus, over and

above considerations of sentiment, theare not unaware of their economicon tho US. In addition, the US has promised to defend the Philippines In case of external attack, and tangible assurance of this Intent is provided by the continuedof US air and naval bases on the islands, by US military assistance to the Philippine Armed Forces, and by the present UScommitment against Communistln Asia, This is of particular importance because the Filipinos are convinced that only the US can successfully defend them fromaggression.

The Filipinos also find encouragement ln the fact that other Southeast and South Asian nations, while not mllitantly anti-Communist, are at least making efforts to remain non-Communist themselves. The Philippineattempted to exploit this resistance to Communism byonference of non-Communist Asian nations lno discuss the possibilities of non-Communist economic and cultural union. Although no really tangible results were achieved during the seven-nation meeting, it was agreed to consult on matters of common concern In tbe future,ilipino, UN Assembly President and Philippine Foreign Minister Carlos Romulo, was appointed to continue liaison with the seven governments. Whilewas not an issue at the meeting, it ls certain that thc Filipinos hope (hat any closer association growing out of the talks will have the effect of halting the spread of

Although US protection and the prospecton-Communist association provide thewith some measure of assurance,successes on mainland Asia havefrightened the Philippine leaders and people. While Philippine fears engendered by the threat to nearby Taiwan have been quelled somewhat by recent US action, generalIn the Far East has been reflected by two contrary reactions. Some influential Filipinos have demanded that. the nation loosen Its ties with the US andore independent course In the present East-West conflict. The majority, however, hasfor greatly Increased US military aid and additional assurances of US protection. The effect of this dual reaction has been toUS relations with the Philippines and to sow the seeds of distrust regarding anwestern success In the containment of Communism. In addition, the Philippine Government Ls exposed to charges by radicals and pacifists that It Is leading the nation Into another war throughjeallstlc" policy of enmity toward Communism ln Asia.

Despite these doubts and fears, the prompt declarationigorous US policy to repel the Invasion of South Korea and further strengthen non-Communist peripheral areas met with general popular and officialUS prestige increased greatly as aof the swift decision to assist ln theof the South Koreanong delay or failure of US forces to repel the invasion of South Korea wouldundermine Philippine amenability to US guidance in Internal and foreign affairs.


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