Journal. [1966]

It goes without saying, of course, that illegal, dishonest, and inordinate activities must be curbed.
The Budget as a Tool. Overriding all these should be a firm
attitude on the part of the Government that, paced by a recovering
balance of payments position, the National Budget need not balance
every year; that a budget in the red caused by public spending directed
toward the productive aspects of government service is actually a
necessity, especially when purchasing power is low, or at least entirely
desirable so long as the economy's actual production has not reduced
to a low percentage the level of unemployment.
Will prices not increase? Of course, they will increase. But they
will increase only proportionately to the intensity of purchasing power.
They will remain effectively proportionate to each other so long as
expenditures are for the increase of productive resources. This expansion of purchasing power will in turn provide our industries with expansion boosters.
This is nothing new. This is nothing to be feared, as long as we
maintain a sound relationship between the balance of payments position
and out ability to utilize a flexible budget.
Beginnings of Productivity. If we are to assume that we are
prepared to test our dexterity in the management of controlled inflation, where will productivity begin?
It begins with an assessment of our internal economy from the
perspective of an international complex of economic phenomena. In
other words, the sustenance of our own internal economy necessarily
depends on our ability to participate in the complex of international
economies.
This is an extremely vital realization. We must produce in order
to sell. But we must likewise buy what we can not economically produce.
If we are to accept this, then let us reassess the myriad of productive efforts that we are now undertaking, or hope to undertake in the
near future. Let us ever be aware that we do not have to produce
everything that we need. If it is uneconomic to produce what we need,
then let us buy it, whether it be a basic necessity, or a non-essential
consumer product. The idea is to concentrate our resource3 and efforts
on projects which are in our environments viable.
As a dramatic example, I ask you to consider our rice and corn
progrfm. There is no doubt that rice is a basic staple and our program
for sell-sufficiency in this produce is highly justified.
Corn is another product of extreme importance to our economy.
It is a rich source of carbohydrates when consumed directly, but it is
just as rich a source of protein when indirectly utilized for livestock
feed. And we do have a program for corn. But the question is: Is it
worthwhile at this stage of our development to plant corn extensively
in the Philippines? Is it worthwhile under prevailing conditions today
and for a long time to come to plant corn in tropical areas?
We say no. We believe it highly uneconomic to undertake an
extensive corn-producing program now. Half a century ago, it may
have been justified; when land was plentiful and when individual needs
were not as demanding. But today, when land must be used effectively
for maximum productivity, what is not suited for the land must be
discarded.
And I say that corn can not be produced economically in the tropics,
at this time, in the same manner that countries in the temperate zone
can not grow bananas and mangoes efficiently despite their experience
and knowhow in the field of technology.
Why dc. I say this? Studies and the experience of international
experts in agriculture have concurred in the conclusion that tropical
soil and climate are not suited for certain types of cereals. The eminent
French author, Pierre Gourou, of the College de France and the Free
University of Brussels, cites in his highly authoritative book, entitled
"The Tropical World", that unirrigated cereals do not grow well in
the tropics.
Thus, another renowned agriculturist, Englishman John Phillips,
categorically proposes in his book, "The Development of Agriculture
and Forestry in the Tropics", that a "more numerous population should
be fed by a more intensive cultivation of swamp rice or by importing
food from the temperate lands."
Both Phillips and Gourou agree that unirrigated cereals grow
better in the temperate zones, such as the corn belt in the United States
Mid-west.

They propose, instead, that the tropical areas utilize fully their
advantages over temperate zones by producing what comes naturally
to these areas, such as cane-sugar, oleaginous matters, various kinds
of latex and gum, and specifically tropical products like coffee, vanilla,
tea, cocoa, and rubber. These are commodities which we can supply
with maximum benefit to our economy.
We have a multitude of other examples. Some may be valid,
others perhaps not. But the point is to determine and pinpoint products that we can generate economically. Let us not precipitately plunge
into undertakings just because we need the products. Even traditional
methods should be given a close second look. Should we not restudy
our corn program and perhaps reconsider our stand in the banning of
corn imports?
But over and above economy, we must provide ourselves with the
tools of productivity. These involved not only the skills of production,
but the means to finance these skills as well.
In this regard, I propose that we not only utilize our limited financial resources selectively in the most productive undertakings, but
that we tap as well the resources of other nations.
In the area of selective utilization of financial resources, let us
be more exacting. Let us not diffuse our sparse resources to initiate
undertakings which are not viable.
Just as important, let us not perpetuate undertakings which were
conceived in error, which were ab initio malinvestments, and which
have little or no hope of becoming viable projects. We most certainly
must refinance viable projects which for some reason or another may
have been dislocated in the economic rush. But let us have the courage,
once and for all, to eliminate the wasteful, so that the productive may
thrive.
And if we are to bolster our productive resources, let free private
enterprise, without seeking or relying on government guaranty, top
sources of financial assistance from abroad, even as the Government
itself works for economic loans under Japanese reparations and pursues
offers of financial cooperation in the form of investment loans and
joint ventures.
The time to take advantage of these opportunities is now, not later.
It is important to hedge against the upward trend of world prices when
foreign loans will purchase less goods and materials needed in our program of development.
But it is even more important to actually generate productive
undertakings immediately, the type of undertakings which will provide
us with goods to sell and a revenue that will more than pay for the
obligation even before its maturity. The cost of productivity through
foreign financial obligations will be repaid ten-fold, not only in real
earnings, but in the spawning of new and allied undertakings.
Market Accessibility. But as a corollary to the imperatives of
producing to sell and buying what can not be produced economically,
market accessibility becomes extremely pertinent. Our Government
must provide the means and facilities for the continuous and faster
flow and inter-flow of goods and services from across the seas and among
our domestic primary and secondary markets. Ports and harbors
mechanized with modern equipment must be constructed in strategic
locales in the Philippines. Immediately a port in northern Luzon and
another in the vicinity of Quezon Province and the Bicol region on the
eastern seaboard are called for.
At this juncture, I must also caution against the imposition of
artificial trade barriers. More specifically, tariffs should be so designed
and so applied as not to impede or preclude our own abiliy to export.
There is, admittedly, a necessity to protect new enterprises-but
only to a degree -as well as to limit unnecessary goods for consump.
tion. But it is unrealistic to design a tariff program that unduly limits
the ability of our own economy to trade on a world-wide basis. The
essence of international trade is reciprocity. There must be a two-way'
flow of goods, services, and capital, - or trade will die.
A Policy of Expanded Exports. Again, we are all extremely
encouraged that after two decades of an import-oriented economy, our
Chief Executive, whose presence tonight we deeply treasure, has very
forthrightly advocated the expansion of export as the sound and effective measure to support dynamic stability of currency.
And if exports need be expanded, as they so imperatively have to

238

THE JOURNAL OF THE AMERICAN CRAMBER OF CaOMM'
2My, - 196,