"The Oil Bomb Maker"

"TO SAVE THE CENTER, DESTROY THE CENTER"

2026-10-19T09:11:54.260-07:00

"TO SAVE THE CENTER, DESTROY THE CENTER"

France’s upheaval, the failure of political moderation,

and the limits of Filipino restraint

The spectacle of France in turmoil has once again brought forth the familiar pronouncements of those who regard public order as the supreme achievement of civilized government. As buildings burn, demonstrators clash with police and shopkeepers confront the destruction of their businesses, the argument is readily made that whatever legitimate grievances originally brought people into the streets have now been overtaken by criminals, looters and political extremists. The same accusation has been extended to the disturbances in Italy, where demonstrations over economic hardship, public expenditure and other political questions have similarly descended into confrontation.

There is considerable truth in the observation that criminal elements take advantage of public disorder. Arson and looting are not transformed into admirable activities merely because they occur in the vicinity of a political demonstration. The destruction of a small shopkeeper’s livelihood is not an achievement of the working class, and an attack upon an ordinary citizen cannot be defended as an exercise in revolutionary justice. But those who consider this sufficient explanation for the present European disturbances have committed a rather elementary error. They have confused the criminal acts arising within a political crisis with the political crisis itself.

The more pertinent question is why an initially recognizable collection of grievances should develop into a confrontation in which the original demands no longer appear sufficient to explain the behavior of the crowds. In France, what began with students complaining about overcrowded classrooms, insufficient teaching personnel and deteriorating school facilities became inseparable from public dissatisfaction with rising living costs, the erosion of social services and the continuing demand for fiscal restraint. By October 17, 2026, more than half a million people had participated in demonstrations across the country, while the subsequent violence prompted arrests on a scale not seen in France for years. Similar unrest in Italy suggested that the dissatisfaction was hardly an exclusively French phenomenon.

There is a tendency to imagine that a demonstration is legitimate only so long as it remains within the boundaries originally prescribed by its organizers. Students are entitled to complain about schools, workers about wages, farmers about agriculture and pensioners about social security. But once these groups begin demonstrating together, and once the confrontation expands beyond their immediate demands, the movement is increasingly described as disorderly, infiltrated or manipulated. That judgment assumes that economic grievances exist in neat administrative compartments, each capable of resolution by the appropriate ministry. In reality, a society’s economic arrangements connect the classroom with the workplace, the supermarket with the public treasury, and the household budget with decisions taken by governments and financial institutions.

When these connections become apparent to the people experiencing their consequences, a protest ceases to be merely a petition for administrative improvement. It becomes an argument over the direction of society. That is precisely the development that makes governments uncomfortable, for it is one thing to negotiate with teachers over the number of classrooms and quite another to confront a population questioning the economic policies that have made those shortages a permanent feature of public life.

The situation cannot be expected to remain peaceful merely because governments insist upon peaceful conduct. This is not to suggest that violence is either inevitable or desirable. It is to recognize that public demonstrations do not take place in a political laboratory where every participant possesses identical motives, every grievance has a readily available remedy and every confrontation with authority concludes in orderly negotiation. The larger and more diverse a movement becomes, the more difficult it is for its original organizers to determine its character. Police actions, factional rivalries, political provocations, frustration with failed negotiations and the participation of opportunistic criminals can all change the course of events. A government that responds exclusively through police measures may restore control over the streets without resolving the conditions responsible for filling them.

The history of France should be sufficient warning against the belief that the distinction between legitimate protest and riot has always been as clear as contemporary commentators would prefer.

During the French Revolution, demands for constitutional reform and representative government became entangled with popular anger over the price and availability of bread. The women who marched upon Versailles in October 1789 were not conducting a polite seminar on constitutional government. They were responding to material hardship, and their confrontation with the monarchy acquired revolutionary significance precisely because the demand for bread could no longer be separated from the question of political authority. The revolution itself contained peaceful assemblies, popular insurrections, bread riots, political terror and eventually the violent destruction of the monarchy. It would be absurd to suggest that every act committed during those years was therefore justified. It would be equally absurd to maintain that the revolutionary process was illegitimate simply because it did not remain peaceful.

The events of May 1968 provide another example, although they were not bread riots in the strict historical sense. What began in the universities developed into a national confrontation as millions of workers joined strikes and occupations. Barricades appeared in Paris, students fought with police, and the government of Charles de Gaulle confronted a crisis that challenged not simply its immediate decisions but the prevailing organization of French social and political life. The movement was neither a single ideological organization nor an uninterrupted procession of peaceful demonstrators. It contained different interests, competing revolutionary visions, workers seeking material improvements and students rejecting the authority of institutions they regarded as archaic and oppressive. Its significance lay precisely in the inability of the established political system to contain those grievances within their original boundaries.

One may therefore ask whether the familiar accusation that contemporary demonstrations have become riots really explains very much. Certainly they have, in particular places and at particular moments. But the description is not an analysis of how the transformation occurred. To label a crowd a riot is to identify its immediate behavior, not necessarily to understand the political and economic process that brought it into existence.

The political center and the preservation of disorder

The greater danger for the established political order is that the present unrest exposes the exhaustion of the political center as it has come to be understood in much of contemporary Europe. For several decades, moderation has increasingly been associated with a particular combination of economic liberalization, fiscal restraint, institutional continuity and the avoidance of policies considered unacceptable to international financial markets. Political parties may differ substantially on immigration, culture, social values and the language in which they present their programs, yet considerable agreement frequently survives on the proposition that public expenditure must be disciplined according to prevailing economic orthodoxy.

This is particularly troubling in France, whose postwar prosperity was achieved not through the wholesale abandonment of the state but through an extensive tradition of economic planning, public investment, industrial modernization and social protection. The achievements of the Thirty Glorious Years rested upon a political settlement in which the state accepted substantial responsibility for the productive and social development of the nation. The French Republic was expected to do more than administer contracts and enforce commercial rules. It was an active participant in the construction of industrial capacity, infrastructure and a society in which economic advancement could be translated into improvements in ordinary living conditions.

The subsequent influence of neoliberal economic thought did not abolish the French social model, nor did every alteration of the postwar settlement constitute an act of betrayal. France still retains considerable public institutions and protections. Nevertheless, the steady elevation of fiscal discipline, privatization, competitiveness and market confidence has changed the political expectations placed upon governments. The citizen who once understood public services as an achievement of national development is increasingly instructed to regard them as financial commitments whose continued existence must be justified before the demands of budgetary balance.

This is where the supposed political center has encountered its crisis of legitimacy. The center presents itself as the reasonable alternative to ideological extremism, promising administrative competence and a pragmatic accommodation between markets and social welfare. In principle, such moderation need not be objectionable. A genuine third way could combine industrial development with social protection, economic initiative with public accountability, and fiscal responsibility with a clear obligation to preserve the material foundations of citizenship.

But there is an enormous difference between a third way that actually reconciles competing social interests and a centrism whose principal accomplishment is to protect the existing distribution of economic and political power. When the range of acceptable policies is already restricted by the priorities of powerful financial interests, moderation becomes less a method of achieving compromise than a means of preventing substantial change. The center is then no longer the meeting ground of society. It becomes the position from which society is instructed to accept the limitations imposed upon it.

Under such circumstances, remaining in the middle does not necessarily mean remaining impartial. A government that refuses to alter an unequal arrangement is taking a political position, even when it describes that position as neutrality. The decision to preserve an existing economic settlement is itself a decision about whose interests deserve protection. And when the settlement increasingly imposes hardship upon workers, pensioners, farmers and students, the claim that the center represents the national interest becomes progressively less convincing.

It is in this sense that the seemingly contradictory proposition acquires meaning: to save the center, one must destroy the center itself. This does not require the destruction of democratic institutions or the abandonment of constitutional government. It means that a political center which has become synonymous with the preservation of the status quo must cease to exist in its present form if a genuinely representative center is ever to emerge. Its monopolization of political respectability must be broken, its economic assumptions challenged and its claim to be the only reasonable custodian of national affairs rejected.

The task is not to abolish compromise but to make meaningful compromise possible again. There can be little genuine reconciliation between social interests when one side is repeatedly asked to adjust its demands while the basic privileges of the other remain beyond negotiation. What passes for moderation under these conditions becomes a continuing process by which the burdens of adjustment are distributed downward while the authority to determine economic policy remains concentrated above.

One can understand, therefore, why demonstrators cease to be satisfied with assurances that their concerns will be examined by the appropriate authorities. They may have reached the conclusion that the authorities themselves are part of the problem. The demand is no longer confined to correcting the administration of a particular service. It extends to challenging the political and economic arrangements that determine why the service remains deficient in the first place.

When the headquarters becomes the problem

There is an uncomfortable historical parallel in Mao Zedong’s famous injunction to “bombard the headquarters,” issued in August 1966 during the opening phase of China’s Cultural Revolution. Mao accused elements within the Communist Party leadership of suppressing revolutionary criticism and adopting positions that, in his account, served interests contrary to the socialist purposes of the revolution. His argument was that the institution supposedly entrusted with advancing a revolutionary project could itself become an obstacle to that project, particularly when officials acquired privileges and interests that depended upon preserving their own authority.

The notion that a governing institution can be captured by interests contrary to its declared purposes is hardly peculiar to Maoism. It can be found in criticisms of bureaucratic capitalism, oligarchic government and the degeneration of political parties that once claimed to represent workers and the poor. A political organization founded upon popular aspirations can become increasingly absorbed in appointments, internal privileges, access to public resources and the preservation of its own influence. Eventually, the organization may come to treat criticism from its supposed constituents as a threat to institutional stability.

In this limited sense, Mao’s accusation raises a question of enduring relevance: what happens when the headquarters of a political system becomes more committed to defending its occupants than fulfilling the purposes for which the institution was established?

But the history of the Cultural Revolution also supplies a devastating warning against treating Mao’s proposed remedy as a model for democratic politics. The assault upon the party establishment did not produce an orderly liberation of the Chinese people from bureaucratic privilege. It unleashed persecution, factional violence, the destruction of institutions and widespread suffering. Mao himself was hardly an innocent outsider confronting an entrenched establishment; he was the country’s supreme political figure, using revolutionary mobilization in a struggle that also served to reassert his authority. The consequences demonstrate how easily an appeal to popular rebellion can become an instrument of arbitrary power when political accountability is replaced by ideological denunciation.

The distinction matters. To recognize the danger of institutional capture is not to approve every method adopted by those claiming to combat it. A corrupted headquarters must be subjected to scrutiny, democratic pressure and genuine accountability, but a movement that destroys all restraints upon political power may merely replace one privileged hierarchy with another. The question is not whether society should tolerate a governing class that has abandoned its responsibilities. It is how society can reclaim authority over that governing class without surrendering its own freedoms to the next group claiming exclusive possession of revolutionary virtue.

Applied to contemporary Europe, the analogy concerns the political establishment’s increasing tendency to regard the preservation of its governing arrangements as an end in itself. The political center insists that its policies represent stability, yet many citizens experience that stability as the continuing deterioration of their economic security. Public expenditure is restrained in the name of responsibility, while the ordinary household is expected to accommodate rising costs and uncertain employment. The government claims to be protecting social order, while its critics contend that the existing order has become a mechanism through which insecurity is perpetuated.

For those who have reached this conclusion, the demand to preserve the center sounds less like an appeal to reason than a demand to preserve the privileges of those occupying it. The center cannot indefinitely maintain its authority by presenting every challenge from outside its established consensus as a descent into extremism. Its legitimacy must rest upon material achievements and responsiveness to public needs, not simply upon the inadequacies of its opponents.

Why the riot cannot be separated from the protest

It is here that the familiar denunciation of the French and Italian demonstrations as no longer legitimate protests becomes politically inadequate. The existence of criminals within a large mobilization does not abolish the grievances of those participating in it. Nor does the violence of one group necessarily establish the intentions of another. The student seeking improved school facilities is not automatically responsible for the masked individual looting a shop several streets away, just as the trade unionist demanding higher wages cannot be presumed to approve an attack upon a police officer.

Yet it would be equally mistaken to treat every violent incident as entirely external to the broader political confrontation. Demonstrations sometimes become riots because the relationship between protesters and public authority deteriorates to the point where neither side expects an accommodation. Police may encounter genuinely violent groups, while otherwise peaceful demonstrators may regard particular police tactics as provocative or excessive. Arrests, injuries and the circulation of dramatic images can intensify anger beyond the original grievance. Some individuals may then come to believe that peaceful demonstrations are incapable of attracting the attention that violent disorder commands.

There is no reason to assume that this belief is always correct. Violence can alienate potential supporters, weaken disciplined organizations and provide governments with an opportunity to shift the public discussion away from economic grievances toward security. It also creates conditions in which criminal opportunists may act without possessing the slightest commitment to the movement’s political demands. A smashed storefront cannot feed a hungry family merely because the person who smashed it claimed to be protesting inflation.

Nevertheless, the possibility of escalation must be treated as a political problem rather than simply a moral failure of the crowds. Governments that permit legitimate grievances to accumulate while treating organized demands as administrative inconveniences should not be surprised when public confidence in established methods of protest begins to weaken. The fact that violence is destructive does not eliminate the need to examine why some citizens have ceased to believe that peaceful methods will be heard.

France’s political tradition makes the contradiction particularly visible. Its citizens possess extensive social protections compared with those available in the developing world, yet they mobilize vigorously when they believe those protections are being eroded. The French recognize that the public institutions now taken for granted did not simply descend from the generosity of enlightened governments. Many were the products of prolonged struggles involving workers, organized political movements and generations of demands for social rights.

This makes the claim that the protests are somehow un-French because Palestinian banners appear among the crowds especially ridiculous. The French did not require immigrants, foreign activists or international causes to develop a tradition of insurrection. Their own history contains enough revolutions, barricades, general strikes and popular disturbances to make such an accusation historically illiterate. France has always been a country in which domestic political struggles intersect with broader ideological and international questions. The appearance of a Palestinian flag does not cancel the French citizenship of the person carrying it, nor does it invalidate the demands of a worker protesting the cost of living.

Those who insist that genuine French patriotism must confine itself to approved symbols appear to misunderstand the very republic whose traditions they claim to defend. One suspects that certain defenders of the tricolor are less troubled by the absence of a national flag than by the persistence of the republican and revolutionary traditions associated with it. Their ideal France may be closer to the old monarchy and its fleur-de-lis than to the turbulent political culture through which the modern Republic emerged.

France is not simply the country of Dior and Chanel, of magnificent boulevards and cultivated luxury. It is also the country of the socialist, the trade unionist, the republican radical, the communist veteran and the student who questions the legitimacy of established authority. The conservative image of France and the France of the organized left are not separate nations. They are competing expressions of the same historical society, and the conflict between them forms part of the country’s political character.

The Filipino who appears to be patient

For Filipinos, however, the more disturbing lesson lies not in the French habit of protest but in our own habit of restraint. We have grown accustomed to describing the Filipino as resilient, patient and capable of enduring adversity with remarkable good humor. These qualities are regularly celebrated by officials and commentators who appear to regard public endurance as sufficient compensation for inadequate services and deficient economic arrangements.

The Filipino commuter must rise earlier because transportation remains unreliable. The public school teacher must improvise because educational resources are insufficient. Families must borrow money when medical treatment exceeds their means, while workers are expected to accept wages that frequently fail to provide a satisfactory standard of living. Millions have sought employment abroad because the domestic economy has failed to generate enough productive opportunities for its own citizens.

These circumstances produce an extraordinary degree of individual adaptation. Yet they also permit the government to shift the responsibility for its shortcomings onto the people compelled to suffer their consequences. What should be a matter of national economic planning becomes a question of personal discipline. What should be an obligation of public administration becomes an occasion for charity. What should be a political demand becomes another demonstration of the Filipino’s admirable willingness to make do.

The apparent tranquility of Philippine public life should therefore be approached with considerable caution. A population that does not regularly paralyze its cities with nationwide strikes is not necessarily a population satisfied with the conduct of its government. It may simply be one that lacks the organizational resources, employment security and social protections necessary to sustain such action. A worker dependent upon daily earnings may have every reason to resent the prevailing economic arrangements while possessing equally compelling reasons not to miss a day’s employment.

There is also the more subtle constraint imposed by the national interpretation of legality and political respectability. Filipinos are repeatedly reminded that public grievances must be expressed within the limits of the law, that political disagreement must remain peaceful and that the institutions established by the Constitution must be allowed to perform their responsibilities. None of these propositions is objectionable in itself. Indeed, the protection of constitutional liberties is indispensable to democratic government.

The difficulty begins when appeals to the rule of law are employed not to defend citizens against arbitrary power but to discourage citizens from exercising effective pressure upon those who possess it. In such circumstances, law is gradually presented less as a protection of popular sovereignty than as a discipline imposed upon the sovereign people. Political criticism is welcomed so long as it does not substantially disturb those being criticized. Demonstrations are tolerated so long as they do not interfere with the normal operation of the institutions whose failures have provoked them.

The resulting conception of democracy is peculiar. Citizens are informed that they possess the ultimate authority in a republican state, yet they are frequently made to feel that any vigorous exercise of that authority constitutes a threat to stability.

The 1987 Philippine Constitution itself does not support so narrow an interpretation of political life. It declares that sovereignty resides in the people and that all government authority emanates from them. It protects freedom of expression and peaceful assembly, establishes the principle that public office is a public trust and provides mechanisms through which officials may be held accountable and removed from office. These provisions do not create an unrestricted legal license for violent overthrow or attacks upon persons and property. They do, however, make clear that government authority exists conditionally, under constitutional restraints and ultimately for the benefit of the public.

The rule of law was never intended to mean the indefinite political immunity of those who govern. Neither should the law be treated as an instrument through which the powerful can demand obedience while postponing accountability. Its authority depends upon the confidence that it provides meaningful remedies against abuses of power.

When citizens begin to perceive that legal institutions are exceedingly efficient at regulating ordinary conduct but remarkably slow in correcting official misconduct, that confidence becomes increasingly difficult to sustain. It is then that the distinction between the rule of law and the use of law to preserve an established political order acquires practical significance.

The Philippine experience makes the question particularly acute. The country has already demonstrated, most dramatically in February 1986, that popular mobilization can alter the direction of political authority. The People Power uprising was not understood merely as a routine expression of dissent. It was a confrontation with a dictatorship whose claim to legitimacy had been profoundly undermined. Its achievement was not that the population secured permission to complain, but that citizens, supported by a broad coalition of social forces, compelled a transfer of political power.

Yet the subsequent restoration of constitutional democracy did not eliminate the economic arrangements that had long concentrated wealth and political influence. Elections continued, institutions were restored and successive administrations presented competing visions of reform. Nevertheless, many of the structural problems confronting ordinary Filipinos survived the changes in national leadership.

This has contributed to the peculiar frustration of contemporary Philippine politics. The public is frequently encouraged to concentrate its dissatisfaction upon personalities rather than institutions and economic relationships. The replacement of a president becomes the principal expression of political change, while the underlying conditions of employment, land ownership, industrial weakness, public services and unequal opportunity remain comparatively resistant to alteration.

The Filipino may therefore become increasingly suspicious of the proposition that another election, another investigation or another promise of administrative reform will necessarily produce substantial improvement. He may not reject constitutional government. He may instead begin to doubt whether the existing political establishment possesses either the will or the capacity to make constitutional government serve its declared social purposes.

Deep beneath Filipino restraint lies the possibility of a more profound desire to express accumulated anger. It is not always expressed in organized political language. It appears in bitter humor, conversations among workers, denunciations of corruption and the growing suspicion that the respectable procedures of political life have become highly effective at preserving the privileges of those who already possess them.

Under such circumstances, some citizens may begin to imagine that only a disruption of normal political arrangements can force genuine change. Their dissatisfaction is directed not merely against particular officials but against the continued operation of institutions that appear incapable of correcting their own failures. The temptation is to seek a disorderly interruption of an already disorderly system, particularly when orderly methods seem to produce little beyond the reproduction of existing conditions.

That sentiment should alarm the political establishment, not because it is necessarily a revolutionary program, but because it indicates the possible collapse of confidence in conventional democratic remedies. A society does not become secure merely because its discontent remains largely invisible. Nor can the government assume that people who continue to obey the law have therefore accepted the justice of their circumstances.

There is, however, a danger in confusing the desire for rupture with a credible program of political transformation. The collapse of ordinary restraint may produce a mass democratic movement, but it can also produce criminal opportunism, sectarian violence or the rise of authoritarian figures who promise to impose order upon the confusion. A population that has lost confidence in existing institutions requires more than the satisfaction of seeing them humiliated. It requires the capacity to establish institutions that will answer to the public more effectively than their predecessors.

This is why organized labor, students’ associations, farmers’ organizations and independent civic institutions remain indispensable. Their value does not lie merely in their ability to assemble crowds. It lies in their capacity to translate diffuse grievances into sustained political demands, to prevent popular anger from becoming the private instrument of ambitious politicians and to create the conditions under which an existing settlement can be replaced by something more accountable.

An orderly society for whom?

Those who dismiss the present French and Italian disturbances as criminal riots frequently conclude by asking why similar events are not occurring on the same scale in the Philippines. The implied answer is that Filipinos remain more sensible, more disciplined or more respectful of law. It is an attractive explanation, particularly to those who equate the absence of visible confrontation with successful government.

But the relative absence of spectacular disorder is not an adequate measure of social stability. A country may experience few nationwide strikes while millions endure economic insecurity. Its government offices may operate without interruption while its public services remain inadequate. Its streets may be free from barricades while its households struggle under debt, insufficient income and the accumulated costs of failures that the state has not corrected.

There is also an element of class interest in the demand for uninterrupted order. Business establishments naturally depend upon predictable operations, and workers themselves require the continuity of employment and public services. Yet a conception of stability concerned exclusively with protecting commercial activity can neglect the economic conditions of the people upon whom that activity ultimately depends.

The worker who cannot afford adequate food, housing or healthcare does not experience social stability in the same manner as the investor whose principal concern is the security of financial returns. Their interests are not necessarily irreconcilable, but they cannot be reconciled merely by instructing one party to remain patient while assuring the other that economic policy will preserve its expectations.

A responsible political center ought to recognize this distinction. Its purpose should be to mediate social conflicts by changing the conditions that produce them, not merely to suppress their public expression. Economic growth must create productive employment and improvements in living standards. Fiscal policy must be judged not only by its effect upon borrowing and market confidence but also by its consequences for essential public institutions. Industrial development must become a national undertaking rather than a collection of isolated investments whose benefits fail to reach the wider economy.

If these obligations are neglected, the political center gradually forfeits its claim to represent moderation. It becomes instead the custodian of an arrangement whose inequities it is unwilling to disturb. That is the point at which the defense of the status quo ceases to be a stabilizing influence and begins to contribute to the instability it professes to oppose.

The French demonstrations are therefore significant not simply because of their size or the violence that has accompanied them. They are significant because they reveal a widening refusal to accept the proposition that existing economic arrangements are beyond substantial revision. Those marching in the streets do not necessarily possess a common political program, and some may eventually support movements whose objectives are mutually incompatible. But they increasingly share the conviction that the prevailing political settlement is not adequately serving their interests.

The presence of criminal elements within the disturbances does not erase that conviction. Nor can the authorities indefinitely rely upon the spectacle of burning vehicles to divert attention from the deeper causes of public dissatisfaction. The restoration of order may be an immediate necessity, particularly for ordinary citizens endangered by the violence. It cannot become the entire substance of public policy.

For the Philippines, the lesson is more uncomfortable. Our celebrated resilience has allowed society to survive the inadequacies of government, but it has also helped conceal the cumulative political cost of those inadequacies. The Filipino has too often been expected to compensate privately for failures that should have been addressed collectively. That arrangement has survived partly because the burdens of protest fall heavily upon those least able to bear them.

There may come a time when the population no longer accepts the claim that patience is the principal obligation of citizenship. Such a development need not involve the burning of buildings or the abandonment of constitutional order. But it would necessarily involve a rejection of the notion that the preservation of established political arrangements constitutes an adequate substitute for economic and social justice.

The true challenge is not to persuade people that disorder is preferable to democracy. It is to prevent the continued failures of democratic institutions from making disorder appear more effective than the lawful exercise of popular sovereignty.

This requires confronting a political center that has confused its own survival with the survival of the Republic. If the center is to remain worthy of public confidence, it must be prepared to dismantle the arrangements through which entrenched interests have come to dominate its decisions. It must recover the capacity to challenge privilege, redistribute the benefits of development and make the state answerable to the citizens whose authority it exercises.

In that respect, the destruction of the old center is not necessarily the destruction of constitutional democracy. It may be the precondition for restoring the social substance without which constitutional democracy becomes increasingly hollow.

The French have repeatedly demonstrated that public order is not an unconditional gift bestowed upon governments. It is a political relationship sustained by the belief that institutions remain responsive to the society they govern. When that belief deteriorates, protest becomes more difficult to contain, its demands become broader and the distinction between ordinary political disagreement and a crisis of legitimacy becomes increasingly uncertain.

Nobody does revolution quite like the French, although their history also reminds that revolutions are neither guaranteed to succeed nor guaranteed to produce the justice promised in their name.

For Filipinos, the greater danger may lie in believing that the absence of a French-style upheaval proves that the Republic is sufficiently stable. A population compelled to tolerate persistent institutional failures may remain outwardly restrained for many years, but such restraint should never be confused with permanent political consent.

The question confronting governments is not merely how to prevent the next demonstration from becoming a riot. It is whether the prevailing political order still possesses the willingness to correct the injustices that make increasingly radical opposition conceivable.

If the established center can answer that question only by demanding further patience, obedience and sacrifice from those who have already borne the greatest burdens, it should hardly be surprised when those citizens eventually cease to regard the center as a solution.

And if the political establishment insists that every challenge to its authority constitutes an assault upon democracy, the public may ultimately conclude that democracy itself must be rescued from the people who claim to speak exclusively in its name.

France Is Not a Postcard (Also a Barricade)

2026-10-19T02:50:36.612-07:00

France Is Not a Postcard (Also a Barricade)

The country of Chanel and Dior is also the country of the barricade. Its political and economic history cannot be understood merely through the castles, monuments and pageantry admired by outsiders.

By Lualhati Madlangawa-Guererro

There is something curious, if not altogether amusing, about the expressions of concern accompanying the latest disturbances in France. As demonstrators gather in the streets of Paris and other French cities, protesting deteriorating public services, educational conditions and the rising cost of living, a certain class of observers has found particular offense in the apparent absence of French national flags. Photographs showing red banners, trade-union insignia and the emblems of left-wing organizations have encouraged the familiar complaint that France is somehow losing its identity. The conclusion, presumably, is that French patriotism can be measured by the frequency with which the tricolour appears in a crowd, rather than by the political convictions or material interests of the people composing it.

One might wonder what these concerned observers have actually learned about France beyond what they have seen in travel advertisements, historical dramas and illustrated volumes on European royalty. Their conception of the country seems rooted in the picturesque: the Palace of Versailles, the gardens of the Tuileries, the old châteaux of the Loire Valley, the magnificent gowns and elaborate ceremonies of the Bourbon court. France, in this imagination, is a country of refinement, hereditary dignity and well-ordered public occasions. Its citizens are expected to preserve the atmosphere, maintain the scenery and conduct their disagreements without interfering with the visitor’s appreciation of the monuments.

It is an attractive picture, certainly, and one that France itself has cultivated with considerable commercial success. The French tourism industry has long understood the value of selling history, fashion and culture as components of a distinctive national product. Yet the trouble begins when the commercial representation of a country is mistaken for the country itself. France has never been merely a collection of architectural treasures, nor has its political development consisted of an uninterrupted succession of dignified ceremonies presided over by benevolent rulers. Much of what the world now recognizes as modern France was produced through precisely the kind of social conflict that some of its contemporary admirers regard as an embarrassing departure from national tradition.

Indeed, whether a demonstration comes from an industrial worker, a farmer, a university student, a pensioner or a public employee, the French have repeatedly shown a willingness to bring their grievances into the streets when ordinary political arrangements seem insufficient. The causes are seldom identical, and the participants may belong to movements whose economic and political objectives are incompatible. A farmer protesting agricultural imports may have little in common with a socialist student demanding greater public expenditure, while a pensioner opposing retirement reforms may reject the methods of militant trade unionists. Yet all participate in a political culture in which the public demonstration has remained an established means of asserting demands upon government.

Sometimes such demonstrations are peaceful, disciplined and conducted through recognized organizations. At other times they become incendiary, literally as well as politically, particularly when confrontations with police or the intervention of violent factions transform a public assembly into an occasion for destruction. There is no reason to romanticize the burning of shops, the assault of public officials or the devastation of private property. The immediate victims of such violence are often ordinary workers and small proprietors who have little influence over the policies being contested. Nevertheless, it would be equally mistaken to interpret every outbreak of disorder as proof that the political tradition from which the original demonstration emerged was itself illegitimate.

The distinction matters because the present unrest has brought together grievances extending well beyond a single ideological organization. The demonstrations of October 17 followed weeks of student protests over shortages of teachers, deteriorating classrooms and educational conditions, eventually attracting trade unions, public employees, Yellow Vest activists and others concerned with wages, pensions and household purchasing power. Although hundreds of thousands demonstrated peacefully, serious rioting, looting and attacks on public buildings occurred in several cities. The government is obliged to protect public safety and commercial property, but the origins of the movement cannot be adequately explained by treating the entire body of demonstrators as participants in criminal disorder.

One might imagine a young Frenchwoman named Chloé, a student of left-wing convictions who joins a demonstration demanding better schools and more affordable living conditions. She may carry a red banner rather than the tricolour, and her political opinions may be thoroughly objectionable to a conservative admirer of French grandeur. Yet her nationality does not become less authentic because she chooses the pavement rather than the salon as the venue for expressing them.

The France of Chanel and Dior is also the France of this leftist Chloé. There is no contradiction in recognizing both as parts of the same national society, except to those who have come to believe that a country’s commercial elegance must somehow exclude its political discontent. The boutiques, fashion houses and grand avenues of Paris are not inhabited by an entirely separate civilization from the people who clean them, staff them, transport their merchandise or attend the public schools and universities that sustain the city’s workforce.

To suggest otherwise is to confuse a picturesque image of France with the social and economic relationships that make the image possible.

The historical difficulty with this selective understanding of France is considerable. The Revolution of 1789 was hardly the conclusion of French political development. It inaugurated a prolonged struggle over sovereignty, property, representation and the organization of society that repeatedly brought the population into confrontation with governments of almost every description. The July Revolution of 1830 overthrew Charles X. Another revolution in 1848 removed Louis-Philippe. The Paris Commune of 1871 challenged the established political order under the red flag. In 1936, factory occupations and strikes accompanied the Popular Front’s introduction of landmark labor reforms. Then came May 1968, when students and workers occupied universities and factories while challenging the political and social assumptions of postwar France.

These movements were by no means identical, nor should their differences be dissolved into a sentimental account of one continuous revolution. The constitutional monarchists of 1830 did not necessarily share the objectives of the social republicans of 1848, while the Communards of 1871 advanced arrangements that many moderate republicans vigorously opposed. What they did share was an understanding that the relationship between the people and the state remained open to political contestation. Governments could claim legitimacy through constitutional forms, historical inheritance, military authority or electoral victory, but none could expect the French public to accept that political argument had been permanently settled.

The history of the national flag itself makes the present complaint particularly peculiar. The tricolour emerged from the Revolution, was displaced by the royal white flag during the Bourbon Restoration and returned following the upheaval of 1830. In 1848, revolutionaries debated whether the national emblem should be entirely red before Alphonse de Lamartine successfully defended the retention of the blue, white and red. The argument was not between Frenchmen and foreigners but between Frenchmen holding different conceptions of their country. To describe the red flags of the Commune or May 1968 as evidence of an alien political influence would therefore require one to dismiss substantial portions of France’s own political inheritance.

Even Napoleon Bonaparte, whose military achievements and imperial ceremonies are frequently admired by enthusiasts of European grandeur, complicates the nostalgic picture. Napoleon was a product of the Revolution and owed his extraordinary advancement to the collapse of the old system of hereditary privilege. His rise through the revolutionary armies would have been inconceivable under the social arrangements of the earlier Bourbon monarchy. Although he eventually established an empire, surrounded himself with elaborate ceremonies and created a new imperial nobility, he did not simply restore the institutional foundations of the Ancien Régime. His Civil Code consolidated important revolutionary achievements, including uniform civil law, legal equality for male citizens and the protection of private property.

Napoleon was certainly no advocate of unrestricted popular demonstrations. His government suppressed political opposition, censored newspapers and reinforced authoritarian rule, while also restoring slavery in French colonies where it had been abolished. His purpose was to contain the Revolution politically while preserving those elements of its social and legal settlement that could strengthen the state. Yet therein lies the historical contradiction for those who imagine that French greatness consists primarily of hereditary privilege and royal ceremony. Even the emperor understood that the institutions of pre-revolutionary France could not simply be reconstructed by restoring the costumes and symbols of an earlier age.

The more extreme expressions of contemporary nostalgia occasionally suggest that France requires the return of its monarchy. As a constitutional proposition, monarchism is a historical and political position that can be debated on its merits. But the mere restoration of royal titles would provide no obvious answer to the grievances of contemporary France. The Bourbons returned after Napoleon, only for Charles X to be overthrown in 1830. Louis-Philippe then became king, only to be removed in 1848. The French monarchy itself was not a single, politically unchanging institution but a succession of competing settlements over sovereignty, privilege and the distribution of political power.

Perhaps what some of these observers really desire is not monarchy as a functioning political institution but monarchy as spectacle: the château, the glittering chandeliers, the handsome uniforms, the gowns and the carefully arranged ceremonies. It is a France in which the public may admire the palace but should preferably refrain from troubling its occupants. The familiar suggestion that demonstrators ought to confine their grievances to their proper places and venues has an especially telling resemblance to the hierarchical assumptions associated with the old regime, under which public order was conceived in terms of social stations and established obligations.

The October 1789 march on Versailles offers an instructive historical comparison. Thousands of people, led by Parisian women protesting the scarcity and price of bread, marched directly to the residence of the king because it was there that political authority was concentrated. They did not consider the inconvenience to royal ceremony a sufficient reason to demonstrate somewhere less conspicuous. Modern democratic institutions ought to provide alternatives to insurrection and coercion, but the episode illustrates why the public visibility of grievances has always been central to political mobilization. A system that permits dissent only when it cannot inconvenience authority risks preserving the appearance of harmony without addressing the conditions producing discontent.

One might also wonder what such guardians of French respectability intend to do with the country’s intellectual inheritance. If the political traditions of dissent are to be disowned as an unfortunate source of disorder, perhaps Jean-Jacques Rousseau and Voltaire would eventually become unsuitable representatives of French civilization. Rousseau’s arguments concerning popular sovereignty questioned the foundations of political legitimacy, while Voltaire challenged religious intolerance, arbitrary injustice and abuses of established power. Neither participated in the Revolution of 1789, having died in 1778, and their intellectual differences were considerable. Nevertheless, their writings helped establish the climate of philosophical criticism in which inherited institutions could be subjected to rational examination rather than accepted as permanent facts of nature.

It would be a strange reading of French civilization to admire these figures as ornaments of its literary greatness while objecting to the unsettling consequences of their ideas. The Enlightenment was not merely an agreeable conversation among educated gentlemen in aristocratic salons. It was a sustained argument over authority, liberty, religion, reason and the claims of government upon society. By the twentieth century, the relationship between intellectual life and political mobilization had become more direct. During May 1968, Jean-Paul Sartre publicly supported the protesting students, addressed an occupied Sorbonne and associated himself with their challenge to established authority. One need not agree with Sartre’s politics to recognize that his participation represented an established French tradition in which intellectual criticism could extend into public political action.

Yet the current unrest deserves examination beyond the familiar historical arguments about flags, revolutions and national identity. An observer might suggest that the demonstrations also invite a much larger question concerning the direction of the French economy, particularly the gradual movement away from the state-directed developmental arrangements that contributed to the country’s extraordinary postwar transformation. The loss of confidence expressed in the streets may have several immediate causes, but it is difficult to separate these grievances from the longer history of economic restructuring, industrial decline in certain regions, fiscal restraint and the increasingly uneven distribution of prosperity.

There was a period when France presented itself not merely as a center of European elegance but as a major industrial power capable of combining technical advancement, national planning and social modernization. The decades between the end of the Second World War and the mid-1970s became known as Les Trente Glorieuses, the Thirty Glorious Years, a period of rapid growth, rising productivity, reconstruction and improvements in living standards. France developed industries, expanded infrastructure, modernized agriculture and built institutions through which the state sought to direct national resources toward defined economic priorities.

The French model was neither Soviet central planning nor a completely unrestricted capitalist market. The state exercised substantial influence through the Commissariat général du Plan, established in 1946 under Jean Monnet, and through public enterprises, financial institutions and sectoral policies that coordinated investment and modernization. Private enterprise continued to operate, but it did so within a framework in which the government regarded industrial capacity, energy, transportation and technological development as matters of national concern. The economy was expected to serve a conception of French development extending beyond the immediate profitability of individual enterprises.

Electricity generation, telecommunications, transportation and heavy industry received particular attention. Électricité de France became an instrument of national electrification, while the railway system and associated engineering industries benefited from public coordination and long-term investment. The aerospace and nuclear sectors subsequently demonstrated how the state could bring together scientific research, industrial production and national strategy. France eventually acquired internationally competitive capabilities in high-speed rail, civil aviation, energy technology, defense manufacturing and sophisticated consumer industries. These achievements did not arise from government spending alone, but from the interaction of public direction, private initiative, engineering expertise, skilled labor and sustained investment.

The significance of this arrangement was that France did not regard industrial development as merely the accumulation of profits by separate corporations. The state’s responsibility, at least in principle, was to act as steward of national productive capacity. The factory, the laboratory, the technical school, the transport network and the research institution were understood as related elements of a national economic system. Industrialization was expected to improve living standards, supply employment, strengthen national independence and support the public institutions upon which social cohesion depended.

There were important shortcomings. The benefits were not distributed equally among all communities, and migrant workers often endured appalling living conditions despite contributing to the expansion of French industry. Some sectors benefited excessively from protection, and bureaucratic coordination could become inflexible or expensive. Nevertheless, the central achievement was substantial: France demonstrated that a modern capitalist economy could develop advanced technological and industrial capabilities under strong public direction without eliminating the role of markets and private ownership.

The subsequent transformation of economic policy was not an overnight abandonment of that model. The oil shocks of the 1970s, inflation, the international monetary environment and intensified competition exposed weaknesses that the earlier growth period had partly concealed. The decisive political symbolism came in 1983, when François Mitterrand’s Socialist government, confronted by financial pressures and the constraints of maintaining the franc within the European Monetary System, adopted the tournant de la rigueur, or turn toward austerity. The change involved restraints on expenditure and consumption, measures to contain inflation and a greater emphasis on external competitiveness.

It would be inaccurate to describe this decision as the complete conversion of France into a neoliberal state. France retained substantial public ownership, a significant welfare system and extensive state involvement in economic affairs. Nevertheless, the shift reflected a broader alteration in the priorities of economic management. In the following decades, privatization, financial liberalization, European market integration and competition policy gradually reduced some of the instruments through which the French state had previously directed industry. Successive governments increasingly measured national economic performance through the language of market confidence, fiscal discipline, competitiveness and international capital flows.

Supporters of these changes argue that France could not indefinitely shelter its industries from global competition or sustain public expenditure without regard to inflation, debt and productivity. Their argument cannot be dismissed lightly. A national industrial strategy that ignores costs and commercial viability eventually becomes a burden upon the taxpayers it is supposed to benefit. But critics of the neoliberal turn raise another question: whether the pursuit of market efficiency has progressively weakened the productive and social foundations that made French competitiveness possible in the first place.

Industrial enterprises are not interchangeable entries in a national balance sheet. When a plant closes, the damage extends to suppliers, skilled workers, technical schools, small businesses and the community that has developed around it. A factory cannot always be replaced by a financial service or a tourist establishment without fundamentally changing the opportunities available to the local population. Likewise, the privatization of an enterprise may improve certain measures of financial performance while reducing the state’s capacity to coordinate investment in sectors requiring long periods of development and substantial initial capital.

The problem becomes particularly serious when an economy increasingly depends upon the profitable circulation of goods, services and financial assets while neglecting the domestic productive capacity necessary to sustain incomes. France remains a major industrial and technological economy, and it would be absurd to suggest that the country has been reduced entirely to hotels, fashion houses and monuments. Its aerospace, defense, energy, pharmaceutical, agricultural and luxury-goods industries retain considerable international importance. Yet the broader concern is whether the distribution of investment, employment and opportunity has become sufficiently uneven that the spectacle of continued national prosperity conceals significant social deterioration.

The tourist who visits Paris sees the Eiffel Tower, the Champs-Élysées, the Louvre and the boutiques of the great fashion houses. The visitor sees a country whose civilization remains commercially valuable, a Paris that continues to sell its history and elegance to the world. But the same metropolitan region contains overcrowded housing, precarious employment, neglected neighborhoods and people living in temporary encampments. It is not necessary to equate every suburb with a slum or to deny the vitality of working-class communities to recognize the considerable inequalities separating different portions of metropolitan Paris.

Indeed, the contrast between the postcard and the shantytown is not entirely a recent invention. During the very decades celebrated as the Thirty Glorious Years, migrant workers and their families lived in the bidonvilles of Nanterre and other parts of the Paris region, often without adequate water, sanitation or electricity. French industrial prosperity therefore contained exclusions of its own. The postwar developmental state achieved impressive advances, but it did not always distribute the resulting prosperity according to the universal claims of the Republic. Its successes should be remembered without transforming the period into another imaginary golden age.

The distinction today lies partly in the expectations produced by several decades of economic liberalization. France was promised that greater exposure to international competition, the free movement of capital and the discipline of markets would preserve prosperity by making its enterprises more efficient and adaptable. Some industries benefited, and consumers gained access to wider markets and products. Yet the social costs of restructuring did not disappear merely because they were transferred away from corporate accounts. They appeared in employment insecurity, regional disparities, pressures upon public services and a growing sense that the institutions charged with protecting national welfare were increasingly responsive to financial constraints imposed elsewhere.

The figures published by the national statistics institute provide some indication of the problem. In 2023, the monetary poverty rate in metropolitan France reached 15.4 percent, affecting approximately 9.8 million people living in ordinary housing. This was the highest rate recorded since the beginning of the comparable series in 1996. These statistics do not establish that neoliberal policies caused the deterioration, much less explain every grievance expressed during October 2026. But they provide grounds for examining whether the gains of the national economy have been distributed sufficiently broadly to support the social confidence upon which stable government ultimately depends.

There is another consequence of the changing economic order that cannot be ignored: the relationship between France and the countries once governed by its colonial empire. It has become common in some quarters to blame immigrants for the difficulties of the French economy, as though the movement of people from poorer countries toward wealthier ones were an entirely spontaneous phenomenon unrelated to earlier systems of labor recruitment, colonial administration, trade dependency and unequal opportunities for development.

The history is considerably more complicated. France recruited or admitted workers from abroad to meet the demands of reconstruction, industry, agriculture and construction. Its former colonies, particularly in North and West Africa, were connected to the metropolitan economy through language, administration, financial institutions, commercial networks and historical relationships that did not simply vanish with political independence. Migration was influenced by these ties, but also by personal ambitions, family networks, demographic changes, insecurity and the demand for labor within France itself.

During the postwar boom, migrant labor contributed to the construction of the very France now celebrated for its industrial achievements and modern infrastructure. Workers from Algeria, Morocco, Tunisia and other countries helped sustain factories, building sites and public services, even as many encountered discrimination and inadequate accommodation. The irony becomes especially pronounced when immigrants are accused of threatening national prosperity while their predecessors are omitted from the history of how that prosperity was produced.

This is not to deny that migration creates genuine administrative, economic and social challenges. Housing, language education, labor-market integration and the provision of public services require planning and resources. An effective immigration policy must consider the capacity of institutions and the rights and obligations of residents, citizens and newcomers. But it is intellectually unsatisfactory to assign responsibility for structural unemployment, housing shortages or underinvestment to immigrants without examining the policies governing land, capital, industry and public expenditure. To do so is to substitute a visible population for the less visible institutions that determine economic outcomes.

The colonial inheritance is equally relevant to the countries from which people depart. Political independence does not automatically produce economic independence when a country continues to export largely unprocessed commodities, import manufactured goods and depend upon foreign finance, technical services and markets. Such arrangements can persist through commercial structures that are entirely legal and ostensibly voluntary. Yet where domestic industrial capacity remains weak, governments possess limited means of expanding employment and raising wages beyond the constraints imposed by commodity prices and external demand.

It is in this context that the experiment now being undertaken in Burkina Faso becomes worth examining. Its military leader, Captain Ibrahim Traoré, frequently appears in camouflage and presents his administration as a campaign to recover economic sovereignty. Since coming to power through a coup in 2022, his government has emphasized local production, control over mineral resources, agricultural development and the processing of raw materials within the country. Recent initiatives in mineral refining and agricultural processing have been promoted as expressions of this policy, alongside greater state participation in mining.

There is an understandable developmental argument behind these measures, independent of any observer’s judgment of the government itself. A country that exports gold or agricultural commodities without developing the capacity to process, refine and manufacture domestically may surrender important opportunities for skilled employment, industrial learning and the accumulation of national capital. If a developing economy wishes to reduce the pressure on its population to seek livelihoods elsewhere, it must eventually create those livelihoods at home. Schools must lead to productive employment, infrastructure must serve domestic enterprises, and resource revenues must be translated into capabilities that remain after individual deposits have been exhausted.

Burkina Faso also illustrates why self-reliance should not be mistaken for a simple formula or an accomplished success. Most Burkinabé migration abroad has historically been directed toward neighboring West African countries, particularly Côte d’Ivoire, rather than principally toward France. The country continues to confront severe insecurity, internal displacement, poverty and difficulties in mobilizing capital and technical resources. Traoré’s government has also been criticized for repression of political opponents, restrictions upon journalists and serious human-rights abuses. An industrial program cannot be judged solely by the number of factories inaugurated or the nationalist language employed at official ceremonies. Its lasting value will depend upon actual production, employment, agricultural security, institutional competence and the extent to which its benefits reach ordinary citizens.

Nevertheless, the underlying question posed by such programs deserves attention far beyond Burkina Faso. Why should developing countries be expected to supply commodities and labor indefinitely while the higher-value stages of production remain concentrated elsewhere? Why should migration be treated as the principal problem when the absence of productive opportunities in countries of origin is rarely accorded comparable urgency? The international economy cannot reasonably expect poorer countries to remain dependent upon external markets and capital while simultaneously condemning their citizens for seeking better opportunities abroad.

It is here that the immigration anxieties expressed in France acquire a deeper political-economic dimension. Jean Raspail’s 1973 novel The Camp of the Saints imagined the arrival of an enormous fleet of impoverished migrants and the resulting collapse of Western civilization. The novel became influential within sections of the European and American far right because it transformed anxieties over immigration, cultural change and national decline into an apocalyptic narrative. Its racialized depiction of migrants has been extensively criticized, and fiction of this kind should not be confused with demographic or economic analysis.

Yet the continued interest in Raspail raises a question that deserves to be pursued beyond the argument over his literary intentions. Why did the prospect of migration from the developing world come to occupy such a prominent position in the imagination of national decline? What conditions produced the disparities in wealth, employment and opportunity upon which such anxieties depended? One can understand how Raspail’s story appealed to readers fearful of social change without accepting its representation of migrants as an invading force, or treating immigration as the principal cause of Western economic difficulties.

The difficulty with the apocalyptic interpretation is that it begins with the movement of people while giving insufficient attention to the international arrangements that precede and shape that movement. It depicts the migrant as the threatening consequence of global inequality while often leaving the institutions responsible for economic dependency, unequal exchange and failed development beyond comparable scrutiny. The person seeking employment becomes the immediate object of public resentment, while the policies that failed to create employment either in the country of origin or in neglected communities within the destination country receive considerably less dramatic attention.

This is not to argue that every migration flow arises from colonialism, or that the interests of migrants and existing citizens are always harmonious. The effects vary according to economic conditions, skills, institutions and the scale of migration. Rather, the argument is that the controversy cannot be understood through cultural fear alone. It is also a question of development, productive capacity and the relationship between the richer and poorer portions of the international economy.

There is considerable irony in the fact that France, once among the most determined practitioners of state-directed national industrial development, now finds itself debating the social consequences of an international economy in which many developing countries have been encouraged to liberalize markets without first acquiring comparable industrial capabilities. The French state helped organize investment, technology and infrastructure during its own postwar transformation. Countries that seek to exercise similar direction today are often required to explain their departures from policies emphasizing unrestricted markets, privatization and international competition.

The historical circumstances are different, and the achievements of the French planning system cannot simply be reproduced through administrative decrees. International trade, foreign investment and technological exchange remain indispensable to industrial development. Yet they need not exclude national strategy. A country may welcome foreign enterprises while insisting upon local training, infrastructure development and domestic industrial participation. It may cooperate with international financial institutions without abandoning the right to determine its productive priorities. Economic sovereignty, properly understood, is not the refusal to trade with the world but the capacity to participate in that trade without becoming permanently confined to its least rewarding activities.

The same principle deserves reconsideration within France itself. The country cannot recover its social confidence merely by preserving the attractiveness of Paris or the profitability of its most internationally recognized corporations. Its future depends also upon the ability of public institutions and private enterprises to provide productive employment, affordable housing, effective education and opportunities for technical advancement throughout the national territory. The economic achievements of the earlier dirigiste period suggest that industrial development and social welfare need not be treated as unrelated objectives, even if the instruments appropriate to the twenty-first century will necessarily differ from those employed after 1945.

For the business community, these considerations cannot be reduced to a romantic preference for planning over markets. Enterprises require the capacity to compete, innovate and earn returns sufficient to sustain further investment. Governments require credible finances, administrative competence and the ability to distinguish useful public expenditure from political patronage. But the market also requires workers who can afford its products, transport systems that permit goods and people to move, schools capable of producing technical competence and a society sufficiently confident in its institutions to support long-term economic commitments.

A government that concentrates upon financial indicators while neglecting these foundations may eventually discover that the appearance of stability has concealed the accumulation of discontent. Inflation may be contained while household insecurity increases. Capital markets may remain open while particular industries and communities experience prolonged decline. Tourism revenues may improve while residents encounter mounting difficulties obtaining adequate housing or public services. None of these outcomes is inevitable, and the relationships between them require careful examination. But neither can they be dismissed simply because aggregate indicators continue to suggest that the national economy remains functional.

This may also explain why the tradition of protest extends so widely across French society. The worker may perceive industrial decline in the disappearance of employment from his community, while the farmer may see his economic security threatened by prices, imported products or environmental regulations that alter production costs. The student experiences the condition of public institutions through overcrowded classrooms and uncertain prospects for employment. The pensioner measures economic policy through purchasing power, retirement provisions and the cost of essential services. Their political demands are not necessarily compatible, and no government can satisfy all of them without confronting difficult trade-offs. Nevertheless, their willingness to demonstrate arises from a common institutional fact: government decisions and economic arrangements have consequences extending into ordinary life.

The left does not possess a monopoly over this tradition, nor does the right stand outside it. French farmers have protested governments of different political orientations. The Yellow Vest movement brought together participants whose views ranged across the established political spectrum and whose grievances concerned taxation, fuel costs, purchasing power and the distance between governing institutions and the provinces. Trade unions have likewise mobilized under governments identified with both the left and the right. Students and pensioners may march together on one occasion and disagree fundamentally on another. Their demonstrations cannot be understood as expressions of a uniform ideological identity merely because they employ the same public space.

In this respect, the young leftist Chloé standing beneath a red banner is no more an invention alien to France than the farmer driving his tractor into a departmental capital or the pensioner carrying a placard against changes to retirement provisions. All may express themselves in ways that disturb the predictable rhythms of commerce and administration. Some may adopt methods that other citizens reasonably condemn. Yet their appearance in the streets belongs to a continuing political practice rather than an inexplicable departure from the national character.

The country of Chanel and Dior, therefore, is not separated by an invisible frontier from the country of the leftist Chloé. Its fashion houses depend upon designers, textile specialists, skilled workers, sales personnel, transport systems, international trade and the purchasing power of consumers. Its celebrated restaurants depend upon agriculture, food processing and service labor. Its monuments require public expenditure, maintenance and the revenues generated by productive activity. The economic system that sustains the picturesque France admired by visitors is inseparable from the people whose grievances periodically become visible upon its streets.

This is not an argument that every participant in a demonstration possesses a superior understanding of national interest, or that violence should be excused as an inevitable expression of economic dissatisfaction. The farmer demanding protection may advance policies that burden consumers, just as the worker seeking higher wages may propose arrangements that an employer considers unsustainable. The student demanding additional expenditure must ultimately confront the question of how that expenditure is to be financed. Responsible government consists in reconciling such claims through institutions that command sufficient confidence to make compromise possible.

The events in France should therefore be approached neither as a romantic reenactment of 1789 nor as proof that the country has surrendered to revolutionary disorder. They are an occasion to examine the connection between economic policy and political legitimacy. The business owner whose property has been damaged possesses an immediate and legitimate grievance against those responsible. But the demonstrator who believes that deteriorating public services have deprived him of economic opportunity also raises a question that deserves political consideration. The protection of property and the legitimacy of peaceful dissent are not mutually exclusive principles; indeed, a functioning republic requires both.

This is why the traditional distinction between public order and social justice remains important. France cannot permit criminal violence to become an accepted method of bargaining with government, since the immediate victims are frequently ordinary people whose economic security is already fragile. But an exclusive preoccupation with policing cannot supply an industrial strategy, improve deteriorating schools, restore household purchasing power or resolve the difficult allocation of public resources. Restoring calm is an important responsibility of government; securing the economic conditions under which that calm can endure is another.

The defenders of a picturesque France may reasonably desire that its museums, monuments, commercial districts and historic buildings remain protected. Such preservation is both a cultural obligation and an economic necessity. What cannot reasonably follow is that French citizens should be expected to behave as though their country’s history had ended at the most aesthetically pleasing moment of the eighteenth century. The people whose work sustains the modern economy are not merely custodians of an inherited national exhibition. They are participants in a political society whose institutions, industries and public policies continue to be contested.

Nor should the country be imagined as a civilization brought into existence exclusively by its monarchs, generals, financiers and prominent industrialists. The French nation was also formed by workers, farmers, engineers, teachers, philosophers, journalists and ordinary citizens whose demands helped alter the distribution of power and opportunity. Its commercial and technological achievements were produced through investment and enterprise, but also through public infrastructure, scientific education, organized labor and state direction. Its present difficulties cannot be examined adequately if one remembers only the palaces and the financial districts while disregarding the institutions and people upon which their continued prosperity depends.

The Revolution may indeed belong to history, as the concerned observers insist. So do the monarchy, the empire, the Paris Commune, the Popular Front and the student uprisings of 1968. Yet history does not become irrelevant merely because the events themselves have passed. The decisions taken during these periods established institutions, traditions and expectations that continue to influence the country’s political economy. Indeed, it would be particularly strange to demand that the French move beyond the Revolution while simultaneously proposing that they return to a monarchy that preceded it.

The more serious question is whether France can reconcile its traditions of national development and republican citizenship with the demands of an increasingly competitive international economy. The country that once demonstrated the value of state stewardship need not regard public planning as an obsolete doctrine, any more than it must reject private enterprise or international trade. The challenge is to determine how the benefits of productive development can be made sufficiently broad and durable to sustain the consent of the population.

As for those who look upon the latest disturbances and see only the disappearance of the tricolour or the disturbance of an elegant national landscape, they might consider that the Paris of the Eiffel Tower and the Champs-Élysées has always existed alongside another Paris whose residents do not necessarily share in the prosperity advertised to visitors. The old bidonvilles of Nanterre were already an uncomfortable presence during the celebrated years of French industrial expansion; contemporary poverty and precarious housing demonstrate that prosperity remains an uneven experience. It is not unreasonable for citizens to demand that the economic achievements of their country be reflected in their own conditions of life.

The castles, gowns, monuments and ceremonies will remain an important part of France’s inheritance, and there is every reason to preserve them. But they cannot substitute for productive industry, functioning public institutions and a population that believes its welfare matters to the state. France did not become a modern nation by remaining permanently within the social arrangements of Versailles, and it will not resolve its present difficulties by presenting itself merely as a magnificent collection of historical attractions.

The château and the barricade both belong to French history. The country’s industrial achievements belong there as well, particularly those decades when national economic development was understood as a responsibility of government and an undertaking involving society as a whole. If the latest demonstrations reveal anything beyond their immediate political grievances, it is the continuing difficulty of maintaining an appearance of national stability when a substantial portion of the population questions the economic arrangements beneath it.

For the admirer of French elegance, Chanel and Dior will remain familiar expressions of the country’s creative achievements. For the politically engaged Chloé, France may represent the unfinished business of republican citizenship and economic justice. Both belong to the same society, though neither can claim to represent it entirely. The France that produces international luxury goods is also the France that has repeatedly brought workers, farmers, students and pensioners into its streets to dispute the direction of national policy.

The historical relationship between these different Frances is not always harmonious, and it would be irresponsible to pretend otherwise. Yet their coexistence reflects the realities of a modern nation whose economic development has never eliminated conflicts over the distribution of its benefits. The task of government is not to turn the country into a placid historical exhibition, but to preserve public order while providing institutions through which those conflicts can be addressed.

France may be admired for its elegance, but it must ultimately be governed for the people who live and work within it. The postcard can preserve the appearance of a civilization. It cannot, by itself, preserve the economic and social foundations upon which that civilization depends.

The Courtesy of Contradiction

2026-10-10T12:31:15.819-07:00

The Courtesy of Contradiction

Leni Robredo, Palestine, and the Liberal Uses of “Political Purity”

The first refuge of an embarrassed political establishment is often a complaint about the manners of its critics. A troubling act becomes a misunderstanding; a demand for consistency becomes an exercise in extremism. In the controversy over Naga City Mayor Leni Robredo’s reception of Israeli Ambassador Dana Kursh, this familiar retreat has acquired a convenient name: “political purism.” The expression permits those who use it to appear worldly and reasonable while avoiding the substance of the objection. Instead of explaining what principles should govern an official welcome, they ask why progressives insist on bringing principles into the occasion.

Kursh’s October 5 courtesy call in Naga has drawn criticism because an official reception carries a public meaning beyond the conversation between its participants. Robredo’s defenders are entitled to argue that meeting an ambassador does not establish approval of the government that ambassador represents. But critics are equally entitled to ask whether the welcome helped confer an appearance of normality and respectability upon Israel’s official representation amid the devastation of Palestinian life. The meeting occurred; the dispute concerns its political significance.

Dismissing that dispute as political purism is philosophically shallow, politically evasive and morally impoverished. It assumes that an objection becomes unreasonable once it interferes with the routines of government. Yet routines themselves are political choices, especially when public officials lend their offices, reputations and publicity to visiting representatives. Courtesy does not suspend judgment. It requires judgment about whom an official receives, how the encounter is presented, and what the official chooses to say.

The Liberal Party’s statement, as circulated in this controversy, illustrates the difficulty. It begins by acknowledging public concern and disappointment, recognizes Palestinian suffering, and says that government officials should be sensitive to the messages conveyed by their engagements. It then argues that there is no evidence that Robredo’s reception amounted to agreement with Israel’s military operations in Gaza. Diplomatic engagement, it explains, differs from support for a government’s policies. Finally, it affirms human rights and Palestinian self-determination while reminding citizens that criticism carries a responsibility to be fair and truthful.

Taken separately, several of these propositions are defensible. Taken together, they leave the central objection unanswered. The statement recognizes that an official encounter conveys a message, then defends the encounter largely by observing that it contains no express endorsement of military operations. But the criticism need not depend on such an endorsement. A public reception can assist diplomatic normalization without its host approving every policy of the visiting state. Political symbolism works through association, setting and presentation as well as through explicit declarations.

This is why the statement invites accusations of contradiction. Its opening establishes a standard of sensitivity to public meaning; its defence retreats to the narrower question of whether Robredo announced support for Israel’s conduct. The party moves between two different tests without explaining why the more demanding one should cease to apply to its own political figure. It recognizes the importance of the message when addressing public anguish, then treats the absence of an explicit endorsement as sufficient when addressing accountability.

“Gaslighting” may be too imprecise a word for every inadequate political defence. Nothing in the supplied statement proves a deliberate attempt to make citizens doubt their perceptions. The more demonstrable fault is that it answers a narrower allegation than the strongest criticism actually makes. Citizens asking whether the reception contributed to Israel’s public legitimacy are told that there is no proof Robredo approved its military operations. Their concern is acknowledged, but its substance is displaced.

A serious defence would explain the purpose of the encounter, what public benefit it sought, and whether Palestinian rights were raised. It would distinguish whatever obligations attended the visit from whatever discretion the mayor retained over its tone and publicity. It would also recognize that the information presently available does not establish what was said privately. That uncertainty limits accusations about Robredo’s personal intentions; it does not place the public presentation beyond scrutiny.

Nor does the criticism require imagining that the mayor of Naga commands Philippine foreign policy. A local official cannot sever diplomatic relations on behalf of the republic. She can, however, determine how her office participates in an encounter and explain the principles guiding that participation. The choice need not be reduced to a cheerful reception or an undignified confrontation. Diplomatic engagement can carry an explicit statement of concern, a demand for civilian protection, or an affirmation of Palestinian self-determination. Those defending the visit as necessary should be prepared to explain why such clarity would have been impractical. The stakes extend beyond one mayor. Philippine liberal reformism has often presented itself through the language of decent government, transparent administration and humane leadership. These are valuable commitments. But their credibility depends on how they operate when the people seeking recognition stand outside the domestic constituency, and when taking their side may inconvenience an established diplomatic relationship. Palestine exposes the distance that can emerge between a politics of good administration and a politics willing to confront domination.

That distance should not be disguised by calling one side pragmatic and the other pure. Pragmatism is a method of pursuing an objective under constraints. It is not a substitute for identifying the objective or defending the compromises made along the way. A politician may reasonably conclude that engagement offers an opportunity to advance a principle. The public may then reasonably ask what principle was advanced and what evidence supports that conclusion. Merely receiving a representative does not demonstrate useful engagement any more than refusing a meeting automatically demonstrates an effective policy.

The charge of purity becomes especially convenient when directed at the left. It suggests that progressives demand spotless politicians, reject every compromise and prefer moral satisfaction to practical results. Some political criticism does fall into those habits. But disagreement about the legitimacy conferred by a public reception is not, by itself, evidence of them. Critics may understand the constraints perfectly well and still conclude that the official has assigned too little weight to Palestinian suffering.

The gravity of that suffering cannot honestly be reduced to partisan rhetoric. In September 2025, the United Nations Independent International Commission of Inquiry concluded that Israel had committed genocide against Palestinians in Gaza. Israel rejected the finding. The commission’s conclusion must be distinguished from a judicial judgment, but it gives the controversy a seriousness that no casual reference to ideological purism can dispose of.

Another evasion appears when solidarity with Palestine is treated as support for Hamas. The Palestinian people are not interchangeable with one organization, and their claim to freedom does not derive from that organization’s programme. Palestinian society includes competing political movements, secular nationalists, religious communities, workers, students and families whose rights cannot be made conditional upon their agreement with a faction. To collapse this society into Hamas is to deprive Palestinians of political individuality while pretending to assess their politics.

The Palestinian struggle also precedes Hamas. Its central questions concern dispossession, occupation, sovereignty and the denial of self-determination. In its July 2024 advisory opinion, the International Court of Justice concluded that Israel’s continued presence in the occupied Palestinian territory was unlawful and examined the violation of the Palestinian people’s right to self-determination. These questions cannot be answered by asking whether a Filipino critic approves of Hamas. (un.org⁠)

Condemning attacks on civilians and hostage-taking is entirely compatible with defending Palestinian freedom. Indeed, a consistent defence of civilian life requires both. The demand that supporters of Palestine continually prove their innocence of every association with Hamas becomes suspect when it functions chiefly to postpone discussion of Israeli responsibility. No population should have to establish the moral perfection of its political organizations before its children are entitled to safety.

Historical explanation must nevertheless be handled carefully. Israeli occupation, settlement policies, coercion and repeated violence belong to the conditions in which Palestinian resistance has developed and intensified. Removing those conditions from the account produces a distorted picture in which Palestinian action appears to arise without a history. But restoring that history does not mean declaring every subsequent act inevitable or legitimate. Armed organizations retain responsibility for their decisions, and attacks on civilians cannot acquire moral permission from earlier oppression.

The serious argument is therefore more demanding than the familiar exchange of accusations. It recognizes the accumulated violence of domination without excusing crimes committed in its name. It also rejects the use of those crimes to justify collective punishment or to erase an entire people’s political rights. Those who dismiss the left as supporters of Hamas often avoid precisely this distinction, because acknowledging it would require answering the Palestinian case on its merits.

Religious sentiment introduces a further confusion when modern Israel is granted a political immunity derived from Christian attachment to the Holy Land. Christians are entitled to their faith, their concern for sacred places and their interpretation of scripture. But a contemporary state exercises power through institutions, armed forces and policies. Its conduct must be assessed in those terms. Biblical association does not relieve a government of responsibility under international law.

To invoke Christian feeling as a ready defence of Israeli state conduct is also to narrow the moral reach of Christianity itself. Compassion cannot sensibly depend on whether the sufferer belongs to the community with which the observer most readily identifies. Palestinian Muslims and Christians possess rights as human beings; Israeli civilians possess the same rights. A defensible public position protects those rights without transforming theology into an exemption for state violence.

For Filipinos, the question has an additional resonance. A country whose political identity was shaped by resistance to colonial rule should be capable of recognizing why another people insists upon self-determination. This does not require pretending that the histories are identical. It requires understanding that domination is not made acceptable by diplomatic familiarity, and that the language of liberation loses credibility when its application depends on the convenience of the speaker.

Robredo’s action thus creates an appearance of contradiction that her defenders ought to address directly. A politician associated with humane and accountable government should expect those commitments to inform how her official engagements are judged. Her reputation cannot serve only as an argument for generosity toward her intentions. It also creates a reasonable expectation that she will explain how her actions express the standards on which that reputation rests.

The strongest criticism concerns that expectation, rather than an unsupported claim about what she privately believes. There is no need to invent a secret allegiance to establish that public symbolism matters. Nor is there any need to abandon fairness in order to demand consistency. Fairness requires accurate descriptions of the meeting, restraint about unknown intentions and an honest account of the objection. It does not require treating a popular politician’s choices as presumptively beyond challenge.

The anatomy of liberal opportunism becomes visible when universal principles remain available for declaration but grow difficult to apply at the point of inconvenience. Palestinian dignity can be affirmed in a statement, while those asking what that affirmation requires are reprimanded for excessive demands. The language of rights survives; its practical consequences are deferred. The resulting politics may remain courteous and administratively respectable, but it leaves those facing domination to wonder what the declared solidarity is intended to accomplish.

The proper response is a fuller explanation from Robredo and a more exact defence from her party. What did the encounter seek to achieve? How were Palestinian rights represented? What should the public understand from the welcome? These are ordinary questions of political accountability, sharpened by an extraordinary moral crisis.

Calling them “political purism” does not resolve the contradiction. It merely reveals how quickly the defence of a political personality can displace the examination of a political act. Philippine liberalism will have to decide whether its commitment to human dignity can bear the weight of such examination. Its critics are entitled to insist that Palestine remain part of that test.

An Economy of One’s Own: Foreign Capital and the Making of Productive Independence

2026-10-05T09:29:16.208-07:00

An Economy of One’s Own: Foreign Capital
and the Making of Productive Independence

By: Lualhati Madlangawa-Guererro

The opposition between attracting foreign investment and undertaking self-industrialization rests on a confusion about the meaning of development. Foreign direct investment describes a relationship of ownership and control across borders. Industrialization describes the acquisition and organization of productive capabilities. The first may contribute to the second, but neither its presence nor its volume establishes that the second has occurred. To announce a preference for foreign investment “rather than” self-industrialization is therefore to place an instrument and an objective on opposite sides of an argument. Before choosing between them, one must explain why a country’s effort to develop its own productive competence should exclude the use of foreign capital.

Self-industrialization, in the defensible sense of the term, means that a society assumes responsibility for building and reproducing that competence. It need not manufacture every machine it employs, prohibit foreign ownership, or finance every undertaking from domestic savings. It may import equipment, purchase licenses, borrow abroad, welcome foreign enterprises and enter international production networks. What makes the process its own is the deliberate cultivation of institutions, workers, suppliers and technical knowledge through which these external resources enlarge domestic possibilities. The criterion is the capacity increasingly to shape economic participation, rather than the geographical purity of every input.

Autarky addresses a different question. It seeks economic self-sufficiency through the exclusion or drastic reduction of external exchange. Productive self-reliance can instead increase a country’s ability to trade because it gives that country more to offer, more partners to approach and more activities in which to compete. A country that learns to manufacture components may import more sophisticated machinery than before; one that develops engineering competence may enter more international partnerships. Greater external exchange and greater domestic capability can develop together. Dependence is consequently not measured by trade alone, but also by the availability of alternatives and the distribution of knowledge and decision-making power within the relationship.

This distinction should govern the reply to the unnamed argument under consideration. Favoring foreign investment does not, by itself, constitute an admission that industrialization is unnecessary. Foreign investment can establish factories and support substantial industrial learning. The objection becomes justified when investment attraction is presented as sufficient, when domestic capability-building is dismissed as obsolete, or when existing comparative advantages are treated as a permanent national assignment. It is this stronger proposition that deserves criticism. Attributing it to every advocate of foreign investment would weaken the argument by making an enemy of people who may agree that investment must support domestic transformation.

A government’s investment statistics cannot settle the matter. The acquisition of an existing enterprise, the construction of a new factory and the establishment of an engineering center may all appear under the broad heading of foreign investment, although their developmental consequences differ. Even a new factory can vary greatly in its contribution: it may cultivate local suppliers and technical management, or perform a narrow operation whose equipment, inputs and principal decisions remain external. Neither arrangement is necessarily worthless. The question is whether the country has a strategy for moving beyond the capabilities it initially possesses, and whether public concessions purchase benefits that would otherwise be unlikely to occur.

The distinction becomes clearer when South Korea is invoked. Its early industrial ascent cannot accurately be reduced to a policy of making itself attractive to foreign equity. KDI’s account of Korean investment policy describes an early preference for foreign loans over direct investment, partly to preserve domestic control over industrial development, followed by greater openness to FDI and later extensive liberalization. That history demonstrates both the importance of external resources and the inadequacy of treating all forms of external capital as interchangeable. It also cautions against romanticizing borrowing: debt creates repayment obligations and financial vulnerabilities of its own.[1]

The inference is not that the Philippines should reproduce Korea’s historical financing arrangements. It is that a development strategy must decide how different financial arrangements serve industrial objectives. Foreign equity may be preferable where it brings expertise, access to customers and a willingness to bear commercial risk. Borrowing may preserve ownership while imposing risks that the borrower cannot safely absorb. Licensing may transfer particular knowledge without transferring an entire enterprise. The choice requires appraisal of the activity, institutional competence and bargaining position involved. Declaring a universal preference for attracting capital evades these differences.

Nor does Korea establish that industrial policy requires authoritarian government. That claim confuses a feature of a particular historical regime with a necessary condition of productive development. The relevant question is whether institutions can coordinate investment, acquire information, enforce performance and revise unsuccessful policies. Repression does not supply those capacities merely by suppressing opposition. It can also conceal failure, protect favored interests and deprive government of information. An industrial policy should be judged on the competence and accountability of its administration; the ability to silence criticism is no substitute for either.

France supplies an important corrective, provided its example is stated with historical care. France was already an industrial country before its postwar planning institutions were created. Its experience concerns modernization and reconstruction as well as the much longer history of industrial development; it should not be presented as though a single plan created French industry from nothing. Nevertheless, the Commissariat général du Plan, established in January 1946 under Jean Monnet, preceded Korea’s principal industrial drive and coordinated priorities that included electricity, steel, transport and agricultural machinery. Its methods brought public officials, engineers, academics and social partners into organized deliberation.[2]

Postwar French planning operated within a parliamentary republic, and subsequently within the institutions of the Fifth Republic. It therefore defeats the categorical assertion that deliberate industrial coordination belongs exclusively to extreme authoritarianism. This observation does not certify every French policy as efficient or every exercise of French state power as democratic. The narrower conclusion is sufficient: public direction of modernization and political dictatorship are not identical concepts. One can debate the scale, instruments and results of planning without pretending that the only alternatives are political liberty without industrial purpose or industrial purpose without political liberty.

France also exposes the artificial opposition between industry and the knowledge economy. In presenting France 2030 in October 2021, Emmanuel Macron connected innovation with the capacity to turn prototypes into industrial production in France. The policy’s stated ambition was not to substitute knowledge for productive activity, but to connect research, demonstration and production.[3] This is evidence of an official objective, not proof that every funded project succeeded. Yet the objective itself is instructive: an advanced economy can seek greater technological sophistication precisely by developing its industrial base.

The expression “knowledge economy” becomes misleading when it suggests that the material organization of production has ceased to matter. Software requires computing equipment and reliable electricity; medical research requires laboratories and the capacity to manufacture under exacting standards; sophisticated agriculture depends on machinery, storage, measurement and transport. Some of these requirements can sensibly be imported. The mistake is to infer from the possibility of importing them that no domestic competence is worth developing. Knowledge has economic force partly because institutions can embody it in reliable products, processes and services.

Services should consequently be treated with seriousness rather than contempt. Engineering, logistics, design, finance and software can contribute directly to industrial productivity, while internationally traded services can sustain valuable employment in their own right. There is no need to diminish Philippine achievements in services to argue for industrial development. The developmental problem is the weakness of connections among activities and the uneven distribution of opportunities to learn. A World Bank discussion of the Philippine economy identified precisely the missing connections between services, manufacturing and agriculture, while arguing for greater innovation and services content in production.[4]

The Philippines therefore need not retrace every stage of nineteenth-century industrialization. It can adopt newer technologies, combine services and manufacturing, and avoid investments whose environmental or commercial costs exceed their prospective benefits. What it cannot do is dispense with the acquisition of competence and describe the omission as advancement. A country may leap over a superseded technology; it cannot leap over the need to understand, maintain, adapt and organize the technologies on which its prosperity depends. The necessary developmental phase is a process of learning and institution-building, not a compulsory inventory of smokestacks.

Comparative advantage remains relevant to this process. Resources are scarce, and an economy that attempts everything simultaneously may dissipate its strength. But a comparison of present costs does not by itself answer which capabilities can profitably be acquired over time. Training, infrastructure, accumulated experience and coordinated investment can change the terms of that comparison. The argument for development begins where an existing pattern of specialization is mistakenly converted into a prohibition against changing it. Present advantage is information for judgment; it is not a constitutional settlement governing the occupations of future generations.

This does not give governments permission to disregard costs indefinitely. A prospective industry must have a plausible route toward improved productivity or supply a clearly specified public benefit that justifies its continuing expense. Support should be revisable, and failure must remain an admissible finding. An enterprise cannot prove its developmental value by attaching the word “national” to a demand for assistance. The case for building productive capabilities is strongest when it incorporates this discipline, because indefinite protection of poor performance consumes the resources that other learning opportunities require.

China and Vietnam enter the discussion at this point, although neither should be treated as an uncomplicated model. Their use of foreign investment demonstrates that market participation and external capital can be incorporated into a political project that retains objectives beyond the attraction of investors. The relationship between these instruments and the proclaimed socialist destination remains open to criticism. What cannot reasonably be inferred is that the presence of foreign enterprises establishes an official abandonment of developmental purpose in favor of the unrestricted authority of international capital.

China’s official position states the compatibility directly. In June 2023, Xi Jinping linked self-reliance to stronger connections between domestic and international markets and declared, “Only by opening up can China realize modernization.”[5] The statement should be read as evidence of the government’s declared approach, not as an independent verdict on its conduct. It nevertheless contradicts the suggestion that self-reliance must mean a closed economy. In that formulation, international participation is meant to contribute to national modernization, while domestic strength provides the basis for sustaining the relationship.

Vietnamese official political-economic discussion makes a related connection. A 2026 article published under the Ho Chi Minh National Academy of Politics describes the relationship between an independent, self-reliant economy and extensive international integration as a problem to be resolved in the process of building socialism.[6] The significance is conceptual: integration and self-reliance are presented as objectives requiring reconciliation, not as mutually exclusive choices. Whether particular policies actually strengthen domestic enterprises, improve working lives and reduce vulnerability requires further evidence; the declared relationship does not settle those empirical questions.

Here the idea of necessary conditions deserves careful treatment. Foreign investment, infrastructure, export access and industrial employment may create conditions for further transformation without constituting that transformation in full. In an officially socialist account, such conditions are justified partly through the material possibilities they are expected to open. A government with a different political philosophy might justify similar instruments through employment, national independence or regional development. The instruments do not determine the ultimate purpose by themselves. Their meaning depends on what institutions are expected to do with the capacities and resources they create.

Neither necessity nor sequence guarantees an eventual destination. An export enclave does not automatically become an integrated industrial system; a growing productive economy does not automatically become socialist; a successful factory does not automatically generate effective social provision. The word “transitional” can conceal permanent arrangements if there is no mechanism for moving beyond them. Anyone defending foreign investment as a necessary condition must therefore explain the connection to the next stage: how suppliers improve, how workers acquire transferable skills, how public revenue supports wider development and how domestic institutions gain the ability to undertake more demanding activities.

That requirement sharpens the criticism of a certain globalist political economy. The difficulty is not its recognition that international cooperation can be beneficial. It is its tendency, where that tendency occurs, to judge national policy chiefly by the convenience it offers mobile capital. Public purposes then become permissible insofar as they attract investors, while investors’ requirements acquire the standing of public purposes. It would be inaccurate to attribute this position to every liberal economist or supporter of open trade. It is nevertheless a coherent position, and one that can be identified whenever a government is encouraged to surrender developmental judgment while remaining energetic in providing concessions.

Such a government is not necessarily a small government. Preparing investment locations, financing infrastructure, administering incentives and protecting commercial arrangements can require extensive public action. The issue is the direction of that action. A state may be highly active in making a country usable by investors while remaining passive about the capacities its population acquires. Calling this arrangement neutral obscures a substantive choice: the allocation of public effort toward securing investment, with the broader developmental outcome entrusted to effects that may or may not materialize.

The pandemic made the consequences of fragile supply arrangements harder to ignore. OECD research on the COVID-19 shock found that foreign supply disruptions had particularly large effects where supplying countries and firms were highly concentrated. Its simulations also found substantial benefits from supplier diversification, with only limited additional benefits from partial onshoring.[7] This evidence supports neither complacency nor a universal retreat behind national borders. It requires a more discriminating discussion of resilience, in which the distribution of suppliers matters alongside the location of production.

The charge of autarky is therefore misplaced when directed indiscriminately at domestic capacity-building. A proposal to develop selected capabilities, maintain essential inventories or reduce dependence on a single source must be evaluated on its actual design. It is not equivalent to a proposal to abolish foreign trade. Conversely, the experience of disruption cannot justify every demand for domestic production. A locally concentrated supply chain can also fail, and attempting to internalize an entire international production system may introduce costs and vulnerabilities greater than those it removes. The objective should be credible alternatives under stress.

The post-pandemic debate has also exposed the weakness of portraying domestic industrial ambition as an anachronism reserved for poorer countries to outgrow. France’s contemporary efforts to link innovation and production illustrate that advanced economies continue to regard productive capacity as a matter of policy. The appropriate inference is not that every French subsidy should be copied, but that the substantive question cannot be dismissed by announcing the arrival of a knowledge economy. A developing country is entitled to inquire which capacities it should acquire even when established economies already possess them.

For the Philippines, that inquiry should begin with identifiable constraints and opportunities. Reliable power, workable freight connections, technical education, testing facilities and access to finance can make existing enterprises more productive while allowing new ones to emerge. Public policy should examine how these provisions connect agriculture, manufacturing and services across regions. Their value should not depend solely on whether they serve a celebrated foreign investment. Infrastructure that local producers cannot effectively use may improve an enclave without sufficiently improving the economy surrounding it.

Foreign investors can participate constructively in such a program. Supplier development, technical training, research partnerships and opportunities for local managers can be supported where they make commercial and developmental sense. The state must recognize that investment involves negotiation: demands unsupported by local capabilities may deter useful activity, while concessions without scrutiny may subsidize activity that would have occurred anyway. A realistic policy builds the host economy’s competence and bargaining position rather than assuming that either generosity or severity invariably produces the desired result.

Domestic ownership requires equally careful judgment. A locally owned enterprise may innovate, train workers and reinvest, or it may preserve a protected position while relying on imported equipment and seeking rents. A foreign-owned enterprise may make a substantial contribution to domestic competence. Ownership matters because it affects control, income and strategic choices, but it cannot substitute for an examination of conduct. Self-industrialization should enlarge the productive abilities available within the country, rather than merely distribute privileges to citizens who happen to own firms.

Education belongs at the center of this undertaking. A development policy cannot be satisfied with adapting successive generations to the immediate requirements of whichever employers arrive. It must cultivate literacy, numeracy, scientific understanding and the capacity for further learning. Specialized training has its place, but a population whose knowledge is confined to a narrow task remains vulnerable when that task changes. The purpose of education extends to citizenship and personal development; even in economic terms, its value exceeds the production of compliant labor for present vacancies.

A democratic industrial policy must also make its commitments answerable to those who bear their costs. Workers, consumers, taxpayers and affected communities should be able to question the terms of assistance and the distribution of its benefits. That scrutiny can improve the information available to government and expose arrangements that survive through patronage rather than performance. The response to the authoritarian objection is therefore not to promise that national purpose will excuse arbitrary power, but to make the acquisition of productive capacity compatible with public examination and correction.

Self-industrialization is best understood as the assumption of responsibility for this continuing work. It permits foreign capital because foreign capital can help. It permits imports because imports can make domestic production more capable. It permits specialization because resources must be used intelligently. What it refuses is the conversion of these practical arrangements into an argument that the country need not develop the ability to choose, adapt and undertake more for itself. The distinction concerns who accepts responsibility for development and what evidence will establish that development is occurring.

The proper answer to the preference for investment attraction “rather than” self-industrialization is consequently a demand for a fuller account of purpose. Investment should be welcomed where it contributes to employment, learning and an expanding range of productive possibilities. Its success should be assessed through those contributions, not presumed from its arrival. A country becomes more self-reliant when participation in the world economy enlarges its alternatives and strengthens its institutions. That achievement may require extensive international cooperation. It also requires a domestic developmental undertaking that no foreign investor can be expected to conduct on the nation’s behalf.

***

References and source notes

[1] SaKong, I., & Koh, Y. (2026, August 26). Evolution and strategic impact of South Korea’s foreign direct investment (FDI) policy. K-Developedia. https://www.kdevelopedia.org/k-db-originals/evolution-and-strategic-impact-of-south-koreas-foreign-direct-investment-fdi-policy

[2] France Stratégie. (2016, January 7; updated 2025, September 8). Du Plan à France Stratégie. Haut-commissariat à la stratégie et au plan. https://www.strategie-plan.gouv.fr/du-plan-france-strategie

[3] Macron, E. (2021, October 12). Présentation du plan France 2030 [Speech]. Élysée. https://www.elysee.fr/emmanuel-macron/2021/10/12/presentation-du-plan-france-2030

[4] World Bank. (2017). The Philippines: Resurrecting manufacturing in a services economy. https://blogs.worldbank.org/en/eastasiapacific/philippines-resurrecting-manufacturing-services-economy

[5] Xinhua. (2023, June 28). China’s self-reliance is not a closed-door policy, Xi says. State Council of the People’s Republic of China. https://english.www.gov.cn/news/202306/28/content_WS649b6b4ac6d0868f4e8dd46f.html

[6] Ho Thanh Thuy. (2026, August 27). Ensuring and maintaining an independent and self-reliant economy in the new era of national development. Political Theory, Ho Chi Minh National Academy of Politics. https://politicaltheory.hcma.vn/ensuring-and-maintaining-an-independent-and-self-reliant-economy-in-the-new-era-of-national-development-13765.html

[7] Schwellnus, C., Haramboure, A., & Samek, L. (2023). Policies to strengthen the resilience of global value chains: Empirical evidence from the COVID-19 shock. OECD Science, Technology and Industry Policy Papers, 141. https://doi.org/10.1787/fd82abd4-en

"The Nation Is Not an Investment Portfolio": Political Economy, Industrial Development, and the Limits of Market Rule

2026-10-05T09:00:28.747-07:00

"The Nation Is Not an Investment Portfolio":

Political Economy, Industrial Development, and the Limits of Market Rule

The dispute between the advocates of foreign investment and the advocates of national industrialization has been conducted, too often, as though the nationality of capital determined the purpose of an economy. One party discovers independence in the domestic ownership of every important enterprise; the other discovers progress in the willingness of foreign corporations to establish themselves within the country. Both possess a fragment of the truth, but neither fragment supplies a sufficient account of development. An enterprise may be domestically owned and remain dependent upon foreign credit, machinery, patents and distribution. A foreign enterprise may, under appropriate conditions, enlarge the technical competence of its host society. The decisive question concerns the productive powers acquired by the nation and the authority through which their development is directed.

A nation cannot be adequately described as an investment portfolio because its continuity involves obligations that no portfolio is constituted to discharge. It must reproduce the institutions through which people learn, work, govern themselves and transmit an intelligible common life. Its economic decisions affect the survival of communities, the formation of skilled occupations, the provision of essential goods and the material foundations of political independence. These purposes do not disappear when they become inconvenient to an accountant. Nor does acknowledging them establish that every proposed factory deserves a subsidy. It establishes that the selection of economic instruments presupposes a judgment about the community they are intended to serve.

The policy disputed here must be identified more precisely than the general defense of markets. It is a particular neoliberal prescription in which the existing international division of labor becomes the presumptive boundary of national ambition. A country exporting workers is encouraged to improve their employability and the mechanisms through which their earnings return home. Foreign capital is welcomed as the principal agent of productive change. Government is assigned the task of facilitating its entry, maintaining reassuring conditions and refraining from an independent judgment about the productive structure that ought to emerge. The prescription is considered here as a type of policy argument; attributing it to a particular author or government would require evidence more specific than the label neoliberal.

Such a government is not inactive. It supplies infrastructure, alters regulations, negotiates concessions and may spend considerably to establish an attractive investment environment. Its abstention concerns the direction and obligations of development. The role of facilitator becomes inadequate when it declines to distinguish investment that builds domestic competence from investment that leaves the country dependent upon the next external decision. Apparent neutrality then shelters a substantive choice: the purposes of mobile capital receive institutional support, while alternative national purposes must justify themselves as departures from an order whose creation is itself political.

This judgment has particular urgency in countries still engaged in the formation of national institutions. Their problem is not simply to allocate a mature stock of productive resources more efficiently. It is to create resources, acquire knowledge, connect territories, establish reliable administration and enable enterprises to undertake activities that would otherwise remain beyond their reach. The distinction between the allocation of existing capabilities and the construction of new capabilities is therefore fundamental. An economic doctrine may illuminate the former while remaining inadequate to the latter. The error begins when a useful theory of exchange is promoted into a comprehensive philosophy of national destiny.

The standpoint of this essay is contemporary, although its governing questions are older than the present vocabulary of competitiveness. Writing in this present time permits a comparison of arguments separated by several generations: the classical liberal defense of exchange, the European New Right's criticism of economism, and the developmental left's insistence that production must answer to the needs of peoples historically placed at the margins of accumulation. Their conjunction is an occasion for judgment, rather than evidence of a concealed identity. They disagree about the individual, the nation, equality and the legitimacy of authority. What warrants their consideration together is the inadequacy of an economic discussion that presumes its political purposes to have been settled before discussion begins.

The nation invoked here is consequently a community whose institutions owe obligations to its members, including those whose ancestry, faith or occupation differs from the majority's. The capacity to undertake development should not depend upon the invention of a homogeneous people. A government may claim to speak for the nation while excluding substantial parts of it from the benefits of national construction. The distinction between a public purpose and the self-description of a ruling group must remain visible throughout the argument. Otherwise sovereignty becomes a term through which the possession of power is mistaken for the fulfillment of its obligations.

Friedrich List supplied an older vocabulary for this distinction when he wrote that "the power of producing wealth is therefore infinitely more important than wealth itself." His argument concerned the institutions and accumulated abilities that permit a society to generate wealth repeatedly, rather than merely possess it temporarily. The relevant inheritance includes scientific knowledge, practical competence, public administration and the relationships among different branches of production. List's historical judgments need not be accepted in their entirety for this distinction to remain instructive. A country may receive a large sum of money and remain technically dependent; another may sacrifice some immediate consumption while acquiring powers that enlarge its future choices.1

List's distinction does not abolish the problem of opportunity cost. Resources devoted to productive powers must come from somewhere, and the promised powers may fail to appear. A society can impoverish itself by purchasing expensive symbols of industrial adulthood. The developmental contention is narrower: some investments yield benefits that are dispersed among enterprises, emerge over time, or depend upon other investments that no isolated firm can coordinate. A testing laboratory can improve several industries; a technical school can furnish skills whose beneficiaries cannot be known in advance. The public case arises from the character of those benefits, and must be tested against the possibility that less costly arrangements would achieve them.

Raúl Prebisch placed this question within the unequal international distribution of technical progress. His 1950 report for the United Nations challenged the expectation that specialization in primary commodities would automatically transmit the gains enjoyed by industrial centers to the periphery. Yet his formulation was deliberately instrumental: "Industrialization is not an end in itself." It was a means of obtaining a larger share of technical progress and improving the living standards of the population. Primary exports remained important, including as a means of paying for equipment. The structuralist objection therefore concerned the conditions of participation in trade, rather than a prohibition upon trade itself.2

The distinction between List and Prebisch deserves preservation. List addressed productive powers through the development of national institutions; Prebisch examined a structure of international relations in which the distribution of gains could impede that development. A country may require internal reform and changes in its external position together. Neither diagnosis excuses every tariff. Both oblige the observer to ask whether current prices adequately register the consequences of a productive activity for future competence and for the distribution of income. A protected industry that raises the cost of essential goods without generating learning or better employment would disappoint both the productive and the social justification.

For a developing country such as the Philippines, the acquisition of productive capabilities cannot be bypassed by a change in economic description. The presence of industrial establishments is not equivalent to the development of an industrial structure with extensive domestic connections. Nor does the prominence of services establish that the country has completed the productive transformation associated with a mature economy. The relevant question concerns what its enterprises and institutions can actually accomplish: produce to demanding specifications, maintain and adapt equipment, organize suppliers, generate knowledge and employ that knowledge in activities yielding sustained improvements in ordinary life.

This is the defensible meaning of a necessary phase of development. It does not prescribe an identical sequence of industries for every country, or require a repetition of nineteenth-century European industrial history. Some technologies permit older methods to be bypassed; sophisticated services can contribute directly to productive transformation. What cannot be bypassed is the work of acquiring the skills, institutions and complementary capacities upon which such transformation depends. A country may shorten an apprenticeship through access to external knowledge. It cannot establish that the apprenticeship has been completed merely by announcing its participation in a modern sector.

The Philippine problem should therefore be described as an incomplete and uneven transformation, rather than the literal absence of industry. A World Bank analysis of manufacturing in the Philippine services economy emphasizes weak connections between services, manufacturing and agriculture, alongside the possibility of increasing the knowledge and services embodied in production. Its significance lies in the relationship among activities. Manufacturing can purchase sophisticated services, services can improve agricultural and industrial performance, and domestic enterprises can acquire more demanding functions within international production. None of these relationships is secured simply by classifying a country as a services economy.3

The distinction remains pertinent to present policy. At the Philippine Industrial Policy Forum in May 2026, the World Bank identified a heavy reliance on fiscal incentives and special economic zones alongside insufficient investment in skills, logistics, standards, digital infrastructure and quality certification. This is a criticism of the composition of public action, rather than a claim that no public action exists. It also shows why investment promotion cannot be treated as a sufficient developmental program. The capabilities that make investment productive must be supplied and connected; an incentive cannot substitute for them merely because it is administratively easier to announce.4

The warning against skipping development is consequently a warning against substituting visible signs for underlying abilities. An export total, an office district or a group of assembly plants may register real economic activity and still conceal limited domestic learning. To recognize that limitation is not to deny the work already performed by Philippine enterprises and workers. It is to refuse the inference that their present position exhausts what the country should seek to become. Industrial policy should build upon existing competence while making the acquisition of additional competence an explicit and assessable purpose.

This writeup's interest in industrialization arises from this question of continuity through acquired capacity. Industry is not valuable merely because a smoking chimney appears more substantial than a countinghouse. It matters where it generates technical knowledge, sustains useful occupations, supports essential infrastructure and reduces vulnerabilities that the political community has reason to avoid. A steelworks without customers, a machine shop incapable of meeting specifications or a subsidized enterprise protected from every consequence of failure does not become a national achievement through the attachment of a flag. Industrial development requires a more exacting standard than patriotic ownership.

Equally inadequate is the contention that a country can dispense with such development by producing professionals for the international economy. Physicians, teachers, accountants and lawyers perform indispensable functions; engineers and technicians are themselves constituents of industrial competence. The objection concerns the substitution of educational credentials for a productive structure capable of employing acquired knowledge. A country may train engineers while importing the engineering of its major installations, educate chemists while possessing few laboratories connected with production, and graduate administrators whose most attractive opportunities lie elsewhere. The resulting mismatch cannot be resolved by increasing the number of diplomas alone.

The treatment of education reveals the deeper consequence. When the school is understood principally as a mechanism for supplying employable labor, its success is measured by the student's fitness for an existing demand. That demand may originate in a foreign corporation or an overseas labor market whose requirements the country has little influence upon. Adaptation to those requirements can be useful to a particular graduate and still be inadequate as a national educational purpose. The problem arises when education's other responsibilities—understanding, judgment, historical memory and the capacity to initiate unfamiliar work—are treated as dispensable embellishments.

The phrase taming a generation for the needs of labor describes this reduction, rather than education itself. It implies that the young should learn to accommodate themselves to an economic position determined elsewhere, while the possibility of altering that position disappears from their formation. Discipline, reliability and practical skill are not objectionable qualities. They become politically diminished when obedience is cultivated without the intellectual means to question the arrangement being obeyed. A citizen must be able to understand an account, assess an argument and recognize when an institution's declared purpose differs from its conduct. Those capacities cannot be supplied by the training of a compliant employee alone.

Freire's criticism of the banking conception of education approaches this danger from the left. Teaching organized around deposits of knowledge into passive recipients reproduces a relationship of dependence; his alternative of problem-posing education makes the learner a participant in inquiry. This is not the conservative account of inherited formation employed elsewhere in the essay. It nevertheless asks a question that the conservative should recognize: does education develop the person's judgment, or simply prepare the person to occupy a predetermined place? The answer cannot be inferred from the market value of the resulting credential.5

The comparison requires a qualification on both sides. Intellectual independence does not eliminate the need for accurate knowledge, disciplined practice or skilled teaching. The transmission of a cultural inheritance need not make the student passive, provided the inheritance is encountered as something to understand and judge. Conversely, a rhetoric of liberation can become another official instruction if learners are permitted to discover only the conclusions their educators have already authorized. An education that strengthens national competence should form people able to examine technical and political claims, including claims made in the name of the nation itself.

Neither literacy nor development follows automatically from the multiplication of university places. Literacy requires sustained elementary education, competent teachers and the circumstances in which families can keep children at school. Development requires that the knowledge so acquired encounter institutions capable of putting it to increasingly productive use. A professional minority can flourish amid deficient mass education, just as widespread literacy can coexist with a narrow economic base. Education and productive transformation should therefore reinforce one another. The school enlarges what an enterprise can attempt; the enterprise supplies practical experience, revenue and occupational opportunities that help sustain the school.

Where a society also confronts a literacy problem, reducing education to labor-market preparation becomes particularly incoherent. Literacy provides a foundation upon which occupational training and civic understanding both depend. The UNESCO Institute for Statistics' conception extends beyond recognizing words to understanding, interpreting, creating and communicating through written materials in differing contexts. Its breadth matters: the ability to complete a familiar task is not equivalent to the ability to comprehend an unfamiliar instruction or evaluate a written claim. School participation, certificates and reading proficiency should therefore be examined separately.6

A government cannot establish the adequacy of education merely by citing enrollment, graduation or the employability of a selected group. A technically trained minority can coexist with widespread difficulty in reading with comprehension. Public policy must attend to the foundation as well as the credential, including teacher preparation, access to books, conditions for sustained study and support for learners whose schooling has left essential abilities insecure. Assessments should make their definitions and coverage explicit, so that a population's ability to use written knowledge is not obscured by administrative measures of participation.

The corresponding national investment need not oppose practical training to humane education. A technician benefits from mathematical competence and the ability to understand specifications; a citizen benefits from language, history and the habit of testing evidence. Scientific education supplies more than a certificate for an existing vacancy when it enables experimentation and inquiry. Literature supplies more than a decorative cultural identity when it enlarges the ability to understand human circumstances. The demand that every educational activity demonstrate an immediate employer is therefore a poor account of how a society acquires the abilities upon which future employment will depend.

There is no warrant here for treating services as inherently inferior to manufacturing. Engineering consultancies, scientific laboratories, transport, communications and sophisticated commercial services may generate substantial productive knowledge. Agriculture likewise demands research, machinery, processing and distribution. The objection is directed against an economy organized around a restricted set of subordinate functions, whether those functions occur in a factory, an office or a plantation. A foreign-owned assembly plant may offer fewer opportunities for learning than a domestic engineering firm. What matters is the depth of competence, the quality of employment and the range of decisions that can be made within the country.

Emigration introduces a further ambiguity. A professional who works abroad may acquire skills, support a family and eventually establish an enterprise at home. Such movement need not be regarded as national injury in every instance. Yet a policy that depends indefinitely upon the departure of its trained citizens risks confusing a means of supporting household consumption with a method of developing national production. Remittances can finance useful investment, but they cannot by themselves supply an industrial organization, a research institution or an administrative system. A society must examine what its citizens are enabled to build, as well as what their absence enables others to buy.

The appeal to comparative advantage does not settle these questions. Properly understood, the principle explains how exchange may benefit parties whose relative costs differ. It does not require every country to manufacture everything, and it does not imply that a poor country must possess an absolute advantage before it can trade. Nor, however, does it establish that the conditions determining relative costs should remain unchanged. Schools, transport, accumulated experience, technology and the organization of credit affect those conditions. The relevant dispute concerns the means by which they can be altered and the costs that an alteration justifies, rather than the elementary proposition that exchange can produce gains.

The doctrinaire application converts an explanation into an injunction. Because a country can presently supply inexpensive labor or agricultural commodities, it is advised to organize its future around those activities; because another country already manufactures machinery efficiently, the acquisition of domestic competence is dismissed before its possible benefits are considered. Such reasoning treats historically produced differences as though they were permanent properties of geography. A responsible industrial policy must account for present costs, but it must also investigate learning, dependence and the possibilities opened by complementary investments. Its justification lies in demonstrable benefits that private calculation may fail to capture, not in contempt for calculation itself.

The particular abuse of comparative advantage is now easier to state. A proposition about relative costs is made to govern the permissible future of a society. Because exporting labor presently provides income, labor export becomes its assigned vocation; because advanced production is presently concentrated abroad, domestic acquisition of that competence is regarded as presumptively wasteful. The possibility that today's pattern expresses inadequate infrastructure, unequal access to finance or the absence of institutions for learning receives insufficient consideration. Historical disadvantage is then presented as economic instruction.

The inference is not contained in comparative advantage itself. Relative costs can change, and trade can accompany the investments through which they change. Nor does criticism of that inference establish that every ambition to industrialize is sound. The country must still assess which capabilities are feasible, what learning can reasonably be expected and which sacrifices are defensible. The objection is to a doctrine that forecloses that assessment by treating the existing pattern of specialization as an authoritative answer. A theory of the gains from exchange cannot, without additional premises, decide which capabilities a nation should seek to acquire.

Labor export warrants an equally exact distinction. Migration can be an exercise of personal freedom and a rational response to inadequate opportunities. Migrants should not be burdened with blame for deficiencies in national institutions. The problem is a development strategy that comes to rely upon their departure so extensively that creating suitable work at home loses urgency. Household income then provides relief from an economic weakness that the state has ceased trying to overcome. A remedy for present necessity is converted into a principle of permanent organization.

The consequences extend beyond the accounting of remittances. Training expenditures are incurred at home while much of the resulting productive service is delivered elsewhere. Families must organize care across distance; domestic institutions may struggle to retain experienced personnel. These outcomes differ among occupations and migration arrangements, and cannot be inferred from the gross amount remitted. The relevant assessment asks what migration enables and what deficiencies it sustains. A policy that broadens a person's choices differs from one that celebrates departure because it cannot offer a practicable alternative.

Foreign investment and labor export can therefore coexist without generating an adequate domestic developmental structure. An enclave may employ a limited range of workers while trained citizens depart for occupations unavailable locally. Neither the factory's existence nor the remittances' arrival establishes that the links between education, production and public provision have been built. Those links require deliberate attention to supplier capabilities, technical institutions, research and opportunities for domestic enterprise. Government becomes a fencesitter in the relevant sense when it presides over these flows without accepting responsibility for the relationships among them.

This criticism is compatible with welcoming useful external capital. Its admission can provide resources and knowledge that domestic efforts need. The difference concerns the public authority's intention and capacity: whether it merely removes obstacles identified by investors, or also identifies the institutions and obligations through which their activities can contribute to an independently considered developmental purpose. The latter undertaking includes refusal where terms are unfavorable, revision where experience disappoints expectations and investment in capacities for which no external corporation has an immediate interest. Facilitation is one function of government; it is inadequate as the whole of government’s economic judgment.

At this point a difficulty emerges within contemporary conservatism. Some of its representatives deplore the weakening of inherited communities while accepting an economic philosophy that affords those communities little standing beyond the preferences of their individual members. They defend continuity in cultural discussion and celebrate incessant mobility in economic discussion. They invoke the historical nation, then treat its attempt to acquire a more complete productive structure as an intrusion upon a supposedly natural order. This is not a contradiction possessed by every defender of markets. It is a contradiction in a particular political synthesis, and it becomes more conspicuous when that synthesis borrows the language of the conservative revolution.

Bastiat, Mises, Hayek, Rand and Friedman should not be compressed into a single author. Their accounts of knowledge, freedom, government and social obligation differ substantially. Their strongest arguments concern real dangers: the invisibility of sacrificed alternatives, the scarcity of capital, the dispersion of knowledge, the coercive power of government and the misuse of other people's resources. A developmental argument acquires no strength by pretending that these dangers disappear when an enterprise is declared national. It must specify why a proposed public action is warranted and how the difficulties identified by its critics will be confronted.

Bastiat's distinction between what is seen and what is not seen supplies a first discipline. The employment visibly created by expenditure cannot be counted without considering the activity displaced by the same use of resources. A subsidized factory is conspicuous; the household consumption or alternative enterprise forgone to sustain it may remain dispersed and politically mute. The argument against waste is decisive as far as it goes. Its developmental application must nevertheless examine both sides with equal patience: productive learning and the advantages furnished to later enterprises can also remain unseen in an account restricted to the first recipient's balance sheet. The proper response is a fuller accounting of alternatives and benefits, rather than an exemption from accounting.7

Mises is particularly ill served by an interpretation that makes him indifferent to industrial advancement. In his discussion of economic progress he states that "The prerequisite for more economic equality in the world is industrialization." His explanation emphasizes the accumulation of capital and the contribution foreign investment can make where domestic savings are insufficient. International capital permits machinery and productive methods to reach places that could not quickly finance them from their own resources. The developmental reader should acknowledge the force of this argument: a shortage of capital cannot be remedied merely by declaring its prospective owners politically undesirable.8

The disagreement concerns what follows from the arrival of capital. Its quantity does not determine its allocation, the distribution of its returns or the extent of domestic learning. A profitable extractive installation can coexist with deficient transport between domestic producers, just as an advanced foreign plant can coexist with a weak local supplier base. Mises's argument identifies an indispensable means of increasing productivity; it does not, by itself, establish that every arrangement through which capital enters produces the same national result. The developmental question begins where the aggregate category of investment gives way to particular contracts, occupations and institutions.

Mises's defense of free trade also requires a serious answer. In Liberalism he opposes the political redirection of production away from the international allocation that economic conditions would otherwise produce. Protection may enrich particular producers while diminishing the gains available through exchange. That objection bears heavily upon entrenched industries whose claim to infancy survives for generations. The counterargument is that some of the conditions determining location can themselves be altered by acquired skills, infrastructure and cumulative experience. The dispute is therefore about the costs and feasibility of altering those conditions, rather than whether their existing configuration has consequences.9

Hayek's account of knowledge deepens the objection. He directs attention to information dispersed among persons who understand local circumstances that no central authority can possess in their entirety. Prices help coordinate decisions without requiring each participant to know the whole. His phrase "particular circumstances of time and place" identifies an important limitation of abstract administrative knowledge. A ministry may know a national output target while misunderstanding maintenance problems, the availability of particular skills or the changing needs of customers. No serious industrial policy can assume that such knowledge will become complete merely because the ministry's intentions are admirable.10

It does not follow that dispersed knowledge makes every common undertaking impossible. The organization of a harbor, a technical college or a network of testing facilities can enable independent actors to use knowledge that would otherwise remain unproductive. The state need not determine every transaction in order to influence the conditions under which transactions become possible. Indeed, the developmental function may be to provide arrangements through which firms discover and communicate difficulties, with support revised as experience accumulates. Hayek's objection then becomes a rule against administrative omniscience and against the suppression of contrary information. It remains an objection to comprehensive command; its application to more limited coordination requires further analysis.

The most dangerous misunderstanding occurs when policy converts a provisional judgment into a permanent entitlement. An official decision that an industry deserves initial assistance must remain open to the discovery that it cannot attain useful competence. Competing enterprises, alternative technologies and independent technical assessments preserve information that a protected monopoly may conceal. Failure should become a reason for revising the undertaking, rather than an accusation against those reporting it. This is one point at which a developmental state can learn from a liberal critic without accepting that all public purposes are reducible to the transactions of individuals.

Friedman's celebrated argument about business responsibility is similarly more qualified than its popular reception. The manager, acting on behalf of owners, should pursue their purposes within established rules; Friedman explicitly includes "both those embodied in law and those embodied in ethical custom." His objection is directed against executives who claim public authority to spend resources entrusted to them for other purposes. It does not establish that the political community lacks authority to set obligations through law. The distinction is between a corporate officer's mandate and the legitimate determination of the rules under which corporations operate.11

This distinction strengthens rather than dissolves the developmental question. A host country need not expect an investor to become an unsolicited guardian of its industrial future. It can require conditions through taxation, procurement, competition law and negotiated concessions, provided those conditions are legitimate, intelligible and practicable. The difficulty is deciding which obligations advance public purposes at an acceptable cost, and preventing the rule-making authority from becoming an instrument of favored firms. Corporate responsibility cannot substitute for political institutions; political institutions cannot excuse incoherent demands by invoking corporate responsibility.

Friedman's wider liberalism also recognizes public functions in maintaining competition, enforcing agreements and addressing circumstances in which ordinary exchange does not adequately secure the relevant benefits or costs. His account gives the individual and the family a central place, and regards voluntary exchange as a means of coordination that can preserve freedom. The developmental critic should contest the sufficiency of that framework for building capabilities and sustaining common institutions, rather than invent a Friedman for whom government literally has no functions. A political argument improves when the disagreement concerns the scope and purposes of those functions.12

Ayn Rand introduces a different emphasis: objective rights and government constrained to the protection of persons against force. Her account of government opposes arbitrary coercion and does not endorse political anarchy. It raises a direct objection to making individuals instruments of a collective undertaking simply because rulers invoke a higher purpose. The developmental response must therefore explain the legitimacy of taxation and common obligations, rather than imply that national necessity supplies an unlimited title to command. Rand's premises leave little room for the conception of inherited social obligation employed here, but the danger she identifies remains pertinent to a nation-building project.13

The argument among these authors and their critics concerns more than the size of the state. It concerns what counts as a reason for action, which responsibilities attach to institutions, and how authority can be exercised without destroying the information or liberties upon which competent action depends. A public authority can be modest in its operational reach while serious about long-term development. Conversely, a government that praises markets can distribute extensive concessions and guarantees without demanding useful performance. Counting interventions does not disclose their purpose or their beneficiaries.

The notion of an organic society is itself impoverished when it excludes purposeful construction. A living institution adapts, establishes disciplines and acquires new capacities; it is not authenticated by remaining helpless before every change in its environment. National markets required law, communication and the removal of internal obstacles. Public education required institutions and expenditure. The deliberate character of these undertakings did not necessarily make them hostile to historical continuity. A late-developing nation may have to create the material circumstances in which its inherited communities can survive without being reduced to picturesque residues of an economy organized elsewhere.

Armin Mohler's discussion of postwar conservatism provides a useful corrective to the assumption that conservative thought must be merely preservative. In his 1974 essay he invokes Jünger's phrase "organischen Konstruktion," or organic construction, and, recalling Moeller van den Bruck, writes: "Man will Dinge schaffen, deren Erhaltung sich lohnt"—one seeks to create things worth preserving. These formulations do not establish an industrial program. They do establish that, within this tradition, creation and conservation need not be mutually exclusive. The developmental application proposed here is an inference: institutions that are absent cannot be preserved, and capacities essential to a community's independence may first have to be acquired.14

The French Nouvelle Droite supplies a related criticism of the reduction of collective life to a uniform scale. In the introduction to Vu de droite, Alain de Benoist identifies "la disparition progressive de la diversité du monde"—the progressive disappearance of the world's diversity—as a central danger. The relevance to political economy requires argument rather than mere quotation. Different societies can exchange goods while retaining distinct institutions and purposes. But their differences become precarious if every productive decision is subjected to an identical external criterion and if communities lack the means to sustain activities that express their own needs. Economic dependence does not erase a culture immediately; it can progressively narrow the circumstances in which that culture remains practicable.15

De Benoist's 1979 statement in Le Monde extends his concern for cultural renewal to the young nations of the Third World. This provides a historical basis for considering development as something more than the imitation of a wealthy society's consumption. It supplies no ready-made endorsement of centralized nation-building, still less of every national government's conduct. The French and German currents discussed here contain disagreements about the state, regional identity, technology and authority; their accounts of collective identity are often far removed from a civic conception of equal membership. The present argument draws upon their criticism of economic reduction without treating their wider doctrines as an indivisible inheritance.16

Guillaume Faye makes the issue explicit in Contre l'économisme, whose introductory account declares that "l'économie devient le destin"—the economy becomes destiny. The complaint concerns the elevation of economic organization into the governing horizon of civilization. A society may submit to this elevation under private capitalism or administrative socialism. Production remains necessary in either case, but the increase of production cannot decide what human purposes deserve pursuit. From this perspective, the industrial argument advanced here requires a qualification: productive power is a condition of political freedom and social continuity, not their complete content. An industrial state that treats its people solely as inputs has reproduced the reduction it claims to oppose.17

The later joint statement of Alain de Benoist and Charles Champetier makes the criticism of liberalism more explicit. Its account describes the movement "from market economics to market societies": exchange becomes a model for interpreting relationships whose meaning is not exhausted by exchange. This argument concerns an anthropology as much as a policy preference. A person appears as the bearer of preferences and interests, while associations and inherited obligations are understood through the individual's selection of them. The authors regard that transformation as a dissolution of the social setting in which persons first acquire their language, loyalties and purposes.18

Their contention should neither be reduced to a demand for larger ministries nor accepted as a complete developmental theory. A social institution can deserve protection while being hierarchical, exclusionary or poorly adapted to contemporary needs. Its inherited character does not settle the claims of those who bear its burdens. The liberal emphasis on individual rights can expose abuses concealed beneath the language of solidarity; the communitarian objection can expose losses that a catalogue of individual transactions fails to describe. Public judgment must confront both, especially where an economic undertaking distributes its benefits unevenly among regions and social groups.

The Nouvelle Droite's insistence upon subsidiarity and plural associations also complicates any attempt to recruit it into a uniform program of centralized national mobilization. In their 1999 statement, de Benoist and Champetier connect their criticism of economism with institutions below and beyond the centralized state, and criticize the confinement of economic life to market exchange. Their references to reciprocity and redistribution permit an account of provision broader than commercial purchase. Yet this remains a different political project from an administration directing national industrial accumulation. Its relevance lies partly in reminding the developmental state that a society contains forms of cooperation it should support rather than absorb.19

There is a tension here that should remain unresolved rather than concealed by an ingenious label. A country may require coordinated infrastructure and a common fiscal capacity while its communities require room to govern their own affairs. Industrial concentration can improve technical performance while increasing the power of distant institutions over local life. The criticism of economism cannot decide these conflicts in advance. It provides a reason to consider the social consequences of organization, after which a judgment about the appropriate scale and limits of authority must still be made.

Such a qualification distinguishes the acquisition of competence from the cult of mobilization. An exhausted labor force, a devastated countryside and enterprises sustained by compulsory sacrifice may increase output without establishing a durable common good. Social peace cannot be reduced to the absence of strikes, nor national discipline to the inability of workers to defend their conditions. The authority capable of directing capital must also restrain the temptation to regard every objection as sabotage. Otherwise the national project becomes a convenient name for obligations imposed upon the weak while advantages accumulate among those who possess access to the state.

The developmental left approaches these questions through a different historical experience. Its concern is not principally the erosion of European cultural difference, but the position of societies whose labor and resources have been organized around accumulation elsewhere. It asks whether the national economy can sustain improvements in the lives of the majority, and whether domestic elites have interests opposed to that result. A shared objection to unrestricted capital mobility does not make this perspective identical to the European New Right. Similar instruments can be proposed in the service of substantially different conceptions of membership, equality and emancipation.

Samir Amin's account of delinking supplies a particularly useful distinction. In Maldevelopment he defines the undertaking through the "subjection of external relations to the logic of internal development." Delinking is not simply withdrawal from international exchange. It concerns the authority to order external relations according to a domestic project, rather than treating the requirements of participation in the world economy as the source of that project's purposes. Amin's framework places this question within the polarization of accumulation between centers and peripheries, not merely a disagreement over which country possesses a factory.20

The formulation clarifies the difference between importing equipment to strengthen domestic production and reorganizing domestic production solely to satisfy an external purchaser. Either arrangement can generate exports; their developmental implications may differ. The distinction is not observable from the nationality of the purchaser alone. It requires attention to the links between production, domestic demand, public provision and the distribution of income. A country whose modern sector serves external markets and elite consumption may possess impressive installations without providing a corresponding improvement in the productive opportunities of the majority.

In his later account of a sovereign popular project, Amin insists that the class content of sovereignty must be specified. Sovereignty can serve a domestic ruling bloc within global capitalism, or protect a project directed toward popular needs and a transition beyond that order. The national state is important in his argument because political struggles develop unevenly and cannot wait upon a simultaneous transformation of the entire world. The claim is emphatically not that every national government is emancipatory. It is that national authority can provide a terrain upon which a different social purpose becomes effective.21

This supplies a necessary correction to a conservative argument that treats the nation as though its members had a single economic interest. A domestic bank, an industrial workforce and a rural producer may bear different consequences from the same concession or exchange-rate policy. To call all three national does not reconcile them. The public purpose must be expressed through arrangements that can be judged: wages and working conditions, access to basic provision, the position of smaller producers and the distribution of the risks undertaken. Popular welfare cannot remain a promise postponed until the accumulation of capital is declared complete.

The distance between Amin and the Nouvelle Droite nevertheless remains substantial. Amin's horizon is a universal emancipatory project pursued through historically situated national struggles; de Benoist's criticism stresses plural identities and the dangers of universalizing political models. Neither should be rewritten as the other's obscure precursor. Their encounter is instructive precisely because they expose different inadequacies in the same reduction: one examines the social relations that determine who gains from accumulation, the other questions the authority of accumulation to define a civilization's purposes. The present essay accepts neither account without qualification, and draws a political conclusion that requires its own defense.

Karl Polanyi supplies another route into the dispute. His observation that "Laissez-faire was planned" challenges the representation of an extensive market order as the simple absence of political construction. The institutions that enable markets in labor, land and money require deliberate legal and administrative action. Protective responses arise as societies confront the consequences of organizing their existence through those markets. This historical argument does not prove that every protection is desirable. It does discredit the assumption that intervention alone is artificial while the institutions permitting extensive market dependence are innocent of political choice.22

Polanyi's objection also bears upon national productivism. If human labor is treated simply as a resource to be moved at the planner's convenience, public ownership can reproduce the social dislocation attributed to market rule. A development program must account for the practical circumstances of the household, the village and the workplace. These are not sentimental additions to an otherwise complete industrial calculation. They help determine whether acquired capacity can be sustained without imposing losses that undermine the community supposedly being strengthened. The economic means remains accountable to a social purpose.

South Korea should be examined with this distinction in mind. Its experience does not demonstrate industrialization without foreign resources. A contemporary IMF study records the importance of external private borrowing and reports government guarantees covering nearly 95 percent of outstanding private medium- and long-term foreign loans in the period under discussion. The state also investigated projects and their relationships with infrastructure and other industries. Domestic ownership therefore coexisted with dependence upon external finance. The Korean case concerns a particular method of organizing international resources and allocating responsibility for their use, rather than the successful exclusion of the foreigner from economic development.23

The allocation of risk is crucial. An equity investor ordinarily bears the commercial loss on the capital invested; a borrower owes repayment according to the terms of the loan, even when an undertaking disappoints its expectations. Government guarantees can transfer part of a private enterprise's financing risk to the public balance sheet. The difference deserves attention in countries whose capacity to obtain foreign exchange is limited. Domestic ownership may preserve managerial authority and a larger claim upon future profits, yet the means used to obtain it may expose public institutions to liabilities that outlast the enterprise. Nationality and financial independence must therefore be examined separately.

Foreign direct investment does not, conversely, make failure costless to the host society. A foreign corporation can abandon its investment while leaving unemployed workers, specialized infrastructure and environmental liabilities. Tax concessions and subsidized utilities can place public resources at risk before the plant begins operating. Guarantees, local borrowing and contractual commitments can further complicate the presumed distinction between foreign equity and national debt. The sound case for FDI is that it may distribute some risks and supply capabilities otherwise difficult to obtain. The claim that foreigners bear all risk is an invitation to careless bargaining.

The Korean debt intervention of August 1972 illustrates how a strategy of rapid accumulation can generate financial obligations demanding extraordinary action. It should not be treated as interchangeable with a sovereign default or as conclusive evidence that the entire method was economically irrational. Nor should the repression associated with Park's government be elevated into a universal prerequisite of industrial progress. A historical judgment must distinguish the institutions that supported learning and investment from the political practices through which burdens were imposed. The existence of both in the same regime does not establish that they were inseparable in every possible developmental order.24

Singapore offers a different arrangement of external capital and public purpose. Its Economic Development Board, established in 1961, and the construction of Jurong provided institutional and physical foundations for industrial investment. The establishment of DBS, Jurong Town Corporation and Intraco in 1968 further differentiated the functions of finance, industrial infrastructure and trade. These undertakings do not resemble the withdrawal of government from production's prerequisites. They show a public authority arranging the circumstances in which enterprises could operate, while foreign firms supplied capital, management, technology and access to markets that the small domestic economy could not readily provide.25

The significance of Singapore is consequently more exact than the familiar claim that it welcomed investors. The public authorities sought to connect external enterprises with an economy whose institutions they were actively constructing. Foreign ownership was compatible with a deliberate national undertaking, though such compatibility was neither effortless nor guaranteed. It would be equally misleading to describe the system as a paradise without taxes or to assume that its reliance on multinationals removed questions of labor discipline and political restriction. The useful comparison concerns the organization of productive resources, rather than a moral division between a coercive national model and an innocent foreign one.

Singapore's openness must be read within this institutional history. Its acceptance of foreign direct investment did not dispense with the developmental task; it supplied an instrument through which that task could be pursued. A government seeking investment could also organize industrial land, technical education, infrastructure and the movement toward more demanding activities. The foreign enterprise and the directing state were therefore not mutually exclusive explanations. The question was how public action could obtain a developmental contribution from an enterprise whose own responsibilities and purposes remained commercial.

The continuing description of the Economic Development Board's role makes the point plainly. The agency identifies its work as planning and executing strategies for economic competitiveness, while its investment programs support higher-value production and the development of industrial skills. These are activities of a state seeking to shape productive outcomes. Calling this dirigism means the deliberate direction and coordination of development; it need not mean that every price or production decision is settled administratively. The distinction permits Singapore's extensive use of markets to be acknowledged without making the public authority disappear from the explanation.26

Singapore thus supplies poor evidence for the libertarian paradise sometimes imagined by its admirers. Commercial openness and business-friendly administration do not establish a minimal state. The error consists in taking one characteristic of a system—its welcome to international enterprise—and treating it as the explanation of the whole. A government that constructs the circumstances of investment, cultivates capabilities and influences the direction of upgrading performs more than the role of an impartial host. The developmental lesson concerns the purposeful combination of these functions, not a supposed liberation of economic life from political judgment.

The opening of China likewise cannot be explained by asserting that the mainland possessed no industrial capabilities because some entrepreneurs and their capital had departed after 1949. Private enterprise had been radically restricted, and the subsequent political upheavals inflicted profound damage. Yet state industry, engineering institutions and technical personnel existed before the new opening. The question was how to reform and supplement an existing productive order, obtain external knowledge and establish new commercial connections. The distinction matters because investment can yield more substantial learning where a host already possesses the institutions required to understand and adapt what arrives.27

China's special economic zones are similarly intelligible as instruments within a larger transformation. They permitted differentiated arrangements for investment and commercial activity, but their importance cannot be explained by the mere suspension of constraints. A China Development Bank account prepared for the 2015 Investing in Africa Forum stresses the combination of local problem-solving with governmental support, and the connections among infrastructure, research, learning and production. Its account identifies organized conditions under which firms could acquire and exercise productive competence. A zone was therefore a potential means of accomplishing development, rather than a territorial certificate that development had already occurred.28

The Chinese case also resists the inference that admitting market coordination entailed abandoning national direction. The relationship among public authority, enterprise and local experimentation changed over time; that complexity should not be flattened into either unmodified command or an eventual disappearance of the state. Even in 2026, the announced five-year program for specialized smaller firms links state support to innovation, employment and industrial capabilities. This continuing effort to influence the direction of accumulation supports the description of a dirigist agenda, although the effectiveness and costs of particular measures remain questions for investigation.29

The comparative lesson from Korea, Singapore and China is therefore more demanding than an instruction to borrow abroad, admit multinationals or designate zones. These arrangements helped supply conditions under which productive transformation could proceed. Their contribution depended upon institutions capable of converting access into learning and investment into a more capable domestic economy. They did not abolish the developmental phase. In different ways, they organized parts of it. The analogy becomes misleading when a latecomer copies the concession offered to capital while neglecting the technical, administrative and social arrangements that gave the concession a developmental purpose.

Nor should phase be understood as a period after which a country can cease acquiring capabilities. The initial movement into more complex production establishes institutions that must continue to learn as technologies, markets and public needs change. The danger for a late developer is to mistake admission to an international production chain for the completion of this work. Participation can remain confined to a narrow function unless firms and public institutions acquire the means to undertake others. The developmental claim rests upon that enlargement of competence, rather than upon the prestige of the foreign enterprise with which the country has become associated.

Chen Yun's economic thought permits this issue to be considered from within a socialist administration rather than solely from outside it. His well-known image of the bird and the cage contains a warning against both excessive constraint and uncontrolled movement. In his 1982 formulation, "The bird cannot be held in the hand; it will die if held there." The cage represents the framework of planning within which economic activity can move. The metaphor is often remembered only for its restriction; the warning about killing the bird through direct restraint is equally important. An authentic reading must retain both parts.30

Chen's argument acknowledges that market activity can supply variety and responsiveness that administrative allocation fails to provide. It also insists that its operation occur within an overall framework of balance and public control. This differs from the liberal presumption that a market order should supply the principal coordination and planning should bear a special burden of justification. It differs, too, from a command economy that mistakes instructions for the knowledge required to carry them out. The scope of the framework and the room allowed within it are themselves matters of judgment, with the danger that those controlling the cage can constrict it to protect their own authority.

His attention to economic balance adds substance to the metaphor. Chen criticized excessive investment demands and the pursuit of quantities without adequate attention to quality, assortment and actual needs. The relevance to industrialization is immediate: tonnage can rise while the economy lacks the materials and goods that households and enterprises require. A growth target detached from those relationships can create shortages, unfinished commitments and burdens upon consumption. Prudence in this account is a condition of sustained development, rather than a renunciation of socialist objectives.31

Chen Yun should not be made to certify every policy subsequently undertaken in China. His contribution here is a set of problems: the relation of planned priorities to commercial initiative, the discipline imposed by balance, and the need to preserve activity that direct control can extinguish. A contemporary developmental state must also confront questions his metaphor does not resolve, including how affected citizens contest priorities and how officials are held accountable. The preservation of an economic framework cannot justify indefinite administrative immunity. A cage whose custodians cannot be questioned supplies a very poor institution for discovering that its dimensions have become mistaken.

The comparison with Hayek is therefore more demanding than the opposition of freedom to planning suggests. Hayek asks how dispersed knowledge can be coordinated without concentrating decisions in an authority incapable of possessing that knowledge. Chen asks how initiative can operate without dissolving the framework intended to preserve economic balance. Their answers remain different, but each exposes a danger the other side must address. The developmental argument must specify which decisions require common coordination, which should remain decentralized, and how information moves between them. A metaphor, whether of spontaneous order or of the caged bird, does not perform that institutional work.

No country should convert these examples into an obligation to reproduce another society's institutions entire. The size of the home market, the stock of savings, access to external finance, administrative competence and strategic circumstances alter what can prudently be attempted. A small trading state may require foreign markets from the outset. A large country may have greater scope to develop production around domestic demand. Both may combine public enterprises, private domestic firms, licensing, external borrowing and FDI. The relevant criterion is the contribution each arrangement makes to a coherent undertaking, together with the liabilities it creates.

Historical comparison further cautions against presenting the policy prescriptions of established economies as a faithful description of their own ascent. Ha-Joon Chang's examination of developmental policy argues that today's wealthy countries frequently employed protections and interventions inconsistent with the simplified history offered to latecomers. The argument challenges the retrospective mythology of an uncomplicated laissez-faire rise. It does not establish that a measure is appropriate now because an earlier government once used it. Historical evidence expands the range of admissible questions; the present costs, institutions and international circumstances must still determine the answer.32

The useful lesson is therefore methodological. Countries do not enter development from the same position, and policies change their character as capabilities accumulate. Protection that helps an enterprise acquire competence can become a barrier to improvement once competence exists. Foreign investment that initially provides scarce technical knowledge can later confine domestic firms to subordinate functions if contractual arrangements never change. Public institutions should be capable of recognizing those transitions. The relevant historical analogy concerns the changing relationship between instruments and productive abilities, rather than the reproduction of another country's policy catalogue.

Foreign investment is, in this account, a means of inducing conditions under which a country becomes less dependent upon the perpetual arrival of new foreign investors. This should not be confused with a prediction that successful development necessarily causes foreign investment to diminish. A more capable country may attract more of it, precisely because it offers skilled labor, sophisticated suppliers and productive institutions. Independence consists in a greater capacity to proceed, negotiate or refuse without intolerable loss. Investment becomes more optional in the strategic sense even when it remains substantial in the statistical sense.

The conditions to be induced are concrete. Workers acquire practical familiarity with machinery and standards; engineers learn how to organize production; local enterprises encounter specifications that require them to improve; banks obtain experience in evaluating industrial undertakings; technical schools discover the abilities that employers actually require. These processes can connect an initially isolated plant with a wider domestic economy. Their cumulative effect is to enlarge the range of activities that local firms can undertake. Yet every link in the sequence requires institutions, incentives and effort. The mere presence of a foreign factory does not guarantee its occurrence.

An investor has no general obligation to create future competitors. It may find it more convenient to import components, reserve design functions for its headquarters and employ local workers in operations that generate little transferable competence. These choices can be commercially rational while disappointing the host country's developmental hopes. The public authority must therefore distinguish what an enterprise is likely to accomplish voluntarily from what requires encouragement, negotiation or separate domestic investment. To call the multinational a tutor is acceptable only if the country has identified what is being taught and has supplied pupils capable of learning it.

Supplier development illustrates the difficulty. A demand for domestic purchasing accomplishes little if local firms cannot meet tolerances, delivery schedules or volumes. The response requires testing facilities, access to equipment, credit, technical assistance and opportunities to demonstrate competence. Preferential treatment may help an enterprise cross an initial threshold, but indefinite preference can remove the incentive to improve. The object is a supplier capable of serving several customers and eventually competing beyond its protected relationship. A national policy that merely changes the nationality of an intermediary while leaving its functions shallow has mistaken ownership for development.

Training presents a similar problem. A requirement to employ local people should be distinguished from a program through which local people acquire authority over increasingly complex operations. Apprenticeships, engineering experience and participation in maintenance, process improvement and management can generate abilities that survive the departure of an investor. The movement of experienced employees into domestic enterprises may then diffuse those abilities. But it requires financing, customers and conditions in which the new firm can operate. Knowledge does not become a domestic industry through the act of being learned; institutions must make its independent application possible.

The same reasoning applies to technology. Purchasing a machine conveys neither the entire knowledge embodied in its construction nor an unrestricted right to reproduce it. A license may permit production while reserving important modifications to the original owner. A joint venture may share management without sharing research. The host society must therefore examine the particular arrangement rather than rely upon the general phrase technology transfer. Its objective should be progressive competence in using, maintaining, adapting and, where feasible, designing productive systems. For some activities this may justify substantial domestic research; for others, continued purchase from abroad may be entirely sensible.

Public procurement can create an initial market, especially where infrastructure and essential services require substantial investment. It can also become an instrument for rewarding political friends with expensive contracts. Developmental procurement consequently requires technical specifications, inspection and an account of the capabilities that public spending is expected to build. A railway ordered abroad may be justified by urgency or scale; an associated program for local maintenance, components and engineering may still enlarge national competence. Conversely, the insistence that every part be domestic can delay an essential undertaking beyond the value of the learning supposedly obtained.

Public enterprise deserves the same discrimination. It may undertake infrastructure whose benefits extend beyond the revenue it can collect, or establish capacity where private investors will not accept the risks. Its public ownership does not excuse technical incompetence, obscure accounts or political patronage. Private domestic champions are no more automatically virtuous. Assistance should be attached to purposes that can be assessed, and the state should retain the capacity to terminate support when those purposes are persistently frustrated. A policy of disciplining capital loses its meaning if the politically connected can claim permanent exemption from discipline.

Foreign and domestic firms need not receive identical arrangements in every circumstance, but neither should nationality settle every dispute. A domestic monopoly can impoverish the country while invoking patriotic necessity. A foreign enterprise can broaden the supply of essential goods and improve technical standards. The relevant judgment combines commercial performance with public purposes that commerce alone may not secure. It also recognizes that an authority able to bargain effectively must offer reasonably dependable rules. Sovereignty is weakened when official discretion degenerates into arbitrary interference, since enterprises then organize themselves around influence rather than competence.

Such dependability does not require surrendering the possibility of change. A state can specify the duration of concessions, the conditions governing their renewal and the obligations associated with assistance. As domestic capabilities improve, new terms can be negotiated without pretending that every revision is either confiscation or betrayal. The country should also examine whether its infrastructure is so specialized that one corporation's departure would render it useless. Facilities serving several industries and firms improve both productivity and bargaining strength. The material foundations of independence often consist of institutions that preserve alternatives.

This analysis also requires a more exact account of finance. Credit does not become developmental because its lender is publicly owned. Its contribution depends upon the ability to evaluate undertakings, distinguish temporary learning costs from persistent incompetence, and insist upon performance without reducing every decision to immediate collateral value. Long-lived infrastructure and industrial learning may require arrangements that ordinary short-term lending cannot supply. Yet patient finance should not be confused with indefinite indulgence. A borrower protected from meaningful review can absorb resources that would have made another undertaking feasible.

Foreign-currency borrowing introduces an additional constraint: an enterprise can sell successfully in the domestic market and still fail to generate the currency needed to service its debt. The relation between the country's external earnings and its financial commitments consequently deserves an assessment beyond the profitability of each project considered separately. Public guarantees should be recognized as obligations, even before a call upon them occurs. If losses are socialized while the gains remain private, the public should at least know what performance and return justified the risk. Concealing that bargain beneath the designation national champion weakens the developmental case.

The same discipline applies to concessions intended to attract equity investment. A tax holiday, publicly supplied land and infrastructure devoted to one enterprise represent uses of public resources even when the headline investment figure appears large. The developmental return should therefore be examined alongside the commercial return: additional skills, domestic linkages, reliable provision and revenues that can sustain shared institutions. Negotiation must also consider what would probably have occurred without the concession. A government cannot claim the entire value of an enterprise as the achievement of an incentive that merely transferred income to an investor already disposed to establish it.

Questions of resilience have similar limits. Some redundancy in essential production may be justified where interruption would inflict disproportionate harm. It does not follow that every import is a strategic danger or that self-sufficiency is affordable in every field. Several foreign suppliers, stocks of critical inputs, repair competence and regional cooperation may provide better security than an expensive domestic monopoly. The object is the capacity to withstand disruption and retain practical alternatives. Sovereignty becomes an operational question concerning those alternatives, rather than an assertion that territorial ownership removes vulnerability.

The transition from investment attraction to development must therefore be judged through more than the annual sum of inflows. Investment directed toward a productive installation differs from the acquisition of an existing asset; a plant integrated with local suppliers differs from one whose inputs and expertise remain almost wholly external. A rise in exports may conceal a narrow domestic contribution. These distinctions require inquiry into wages, learning, purchases, reinvestment and the functions actually performed within the country. An impressive aggregate can coexist with little improvement in the host society's ability to organize its own production.

Conversely, falling dependence should not be equated with the obligation to produce every good at home. A technically capable society can choose to import because domestic production would be wasteful, while retaining competence in activities that matter more to its development or security. It can participate in international specialization without treating the existing division of labor as sacred. The purpose is a larger range of practicable choices. An economy that has acquired this range may remain deeply involved in trade and foreign investment, but its involvement need no longer be governed by the desperation of having no alternative.

This distinction clarifies the constitutional question. Parliamentarism, federalism and decentralization may have substantial merits, including improved accountability and a more appropriate distribution of authority. They do not determine whether a government will establish technical education, coordinate infrastructure or support the acquisition of industrial competence. A presidential state can fail at those tasks; a parliamentary state can perform them. The conservative objection is to the presentation of constitutional rearrangement as a sufficient economic program, especially when the rearrangement is accompanied by an assumption that national productive policy should be surrendered to whatever private investment finds immediately profitable.

A related reduction appears when the nation itself is imagined as a manageable commercial city: compact, administratively convenient and judged principally by its ability to attract mobile business. Such an image can be useful for the limited discussion of urban services. It becomes inadequate when elevated into a theory of political community. A nation must reconcile relations among regions, sustain provision beyond the most profitable locations, and discharge obligations to people whose lives cannot be organized around their immediate attractiveness to investors. Territorial and social continuity are part of its responsibilities, including where neither produces a competitive commercial return.

Singapore's existence as a city-state supplies no reason to erase these responsibilities from the concept of a nation. Its scale and geography affect the instruments available to it; its public institutions still pursue collective purposes. A large archipelagic country cannot treat the success of a concentrated commercial district as an adequate measure of national development. Ports and metropolitan centers must be connected to productive opportunities elsewhere, while public services and political membership cannot be confined to the places capital finds most convenient. The imitation of a city's appearance may conceal a failure to perform the work of national integration.

The fondness of certain market-centered prescriptions for reducing the state to a facilitator can thus extend into a reduction of the nation to an investment location. Its citizens appear chiefly as workers and consumers, its territory as a collection of assets, and its institutions as instruments for lowering the costs of transactions. The invisible hand is then asked to discharge responsibilities that have never been specified as obligations of any participant. Yet the aggregation of commercially intelligible decisions does not by itself guarantee the development of neglected regions, the reproduction of public knowledge or the availability of essential capabilities.

Organized anarchy describes the resulting contradiction, provided the phrase is used with care. It does not mean that markets lack coordination or that every decentralized order is chaotic. It means that elaborate administrative effort can organize the conditions of private accumulation while leaving the direction of the common undertaking officially unattended. Concessions are coordinated, commercial rights enforced and investment sites prepared, but responsibility for the country's productive future is dispersed until no institution accepts it. The frustration arises from this combination of energetic facilitation and strategic abstention, followed by the assertion that the resulting pattern is simply what economic order ought to be.

The answer is not a government pretending to know every desirable outcome. It is a government capable of stating public purposes, coordinating the institutions necessary to pursue them and revising its instruments in the light of results. Its authority should be proportionate to its competence and answerable to those bearing the consequences. A nation acquires greater freedom when it can undertake this work effectively. Redefining the work out of existence does not make the nation freer; it makes its future more dependent upon decisions for which no public authority has accepted responsibility.

Constitutional institutions nevertheless affect the possibility of implementing a program. A government unable to coordinate transport across jurisdictions or resist capture by established interests may find its industrial objectives repeatedly frustrated. The question is therefore which arrangement supplies legitimate and competent action, rather than which constitutional name possesses a mystical developmental property. Changes in cabinet formation or regional powers should be assessed against the functions that the state must perform. Institutional reform becomes an evasion when it promises transformation while leaving those functions unspecified.

Decentralization contains a further possibility of disappointment. Provinces may receive wider formal powers while competing to offer the same investors cheaper land, lower taxes and weaker obligations. Political authority becomes dispersed, yet the bargaining position of mobile enterprises may become more concentrated. This outcome is not inherent in federalism; it arises where regional initiative lacks effective coordination and where each jurisdiction can gain temporarily by undermining the terms sought by the others. A federal order requires national arrangements for shared infrastructure, fiscal solidarity and common standards if local freedom is to become more than a competition in concessions.

The treatment of inherited protections also requires discrimination. Some restrictions preserve monopoly privileges and obstruct useful investment. Others protect essential functions or create space in which competence can develop. Their existence does not establish their wisdom, but neither does their removal establish progress. A sound reform examines the particular restriction, the problem it addresses, the interests it serves and the more effective arrangements that might replace it. General declarations of openness can conceal a failure to perform this examination, just as invocations of sovereignty can conceal the preservation of private privilege.

The conservative borrowing from Jünger and Evola becomes particularly strained when it supplies a dignified language for withdrawal from these political questions. Jünger's Anarch is not simply the anarchist renamed, and Evola's Cavalcare la tigre is not a defense of bourgeois economic optimism. Both offer ways of considering personal independence amid circumstances judged profoundly compromised. Such considerations do not amount to a program for the construction of national productive institutions. The distinction must be preserved if their work is to be read seriously rather than employed as decoration for an economic philosophy developed elsewhere.33

The individual may seek an interior distance from the age, but a nation must still decide how its trains operate, its hospitals obtain equipment and its young people acquire useful occupations. When the language of riding the tiger becomes an excuse for accepting every economic tendency as irresistible, the metaphor ceases to illuminate the problem. Personal composure does not settle the terms under which capital enters a country. Nor does the cultivation of a sovereign self guarantee that the community retains the institutions necessary to exercise collective judgment. The inward refuge may be defensible; its conversion into national policy requires an argument its admirers too seldom supply.

Spengler's civilizational vocabulary can be borrowed just as superficially. A writer may deplore decline in the language of historical destiny, then prescribe an economy in which communities must accept whatever position current prices assign them. The borrowed grandeur does not resolve the inconsistency. If the survival of a particular civilization matters, the material circumstances sustaining its institutions must also matter. It does not follow that such circumstances can be secured by unlimited state power, but it does follow that their preservation cannot be left entirely outside political judgment.

The question of the common good thus returns to the center of the argument. Property, exchange and enterprise are institutions within a society; they are not a sufficient definition of society. An economic policy should help maintain the conditions in which families can endure, communities remain habitable and work contributes to a life extending beyond subsistence. Industrial expansion that destroys those conditions cannot vindicate itself merely through higher tonnage. Equally, the conservation of a village becomes rhetorical if its inhabitants lack water, transport, health care and remunerative work. Continuity requires the capacity to provide for contemporary needs without surrendering every inherited relationship to immediate commercial calculation.

Agriculture consequently belongs within the developmental undertaking. Industrialization should improve the tools, energy, processing and transport available to rural producers, rather than treat the countryside solely as a reservoir of cheap labor. A society that weakens food production to sustain subsidized urban enterprises may exchange one dependence for another. Domestic demand also deserves a place beside exports. Housing, electrification, public transport and basic equipment can improve ordinary life while creating opportunities for local production. The choice of activities should reflect productive feasibility and social need together.

There remains a serious practical objection: a weak state may lack the competence to perform the judgments demanded of it. This cannot be answered by describing the state as sovereign and expecting competence to follow. Administrative capacities must be developed through recruitment, training, clear responsibilities and procedures that expose failure. Industrial commitments should be proportionate to what institutions can evaluate and supervise. An initial program concentrating on reliable electricity, transport, technical education and a limited number of supplier opportunities may accomplish more than a grand scheme whose execution depends upon abilities the government does not possess.

The objection also applies to the policy of indiscriminate investment attraction. Selecting tax concessions, appraising land, supplying infrastructure and negotiating contracts require capable administration. A weak state does not escape the need for judgment by inviting foreigners; it may merely exercise judgment badly while disclaiming responsibility for its consequences. The practical alternative is therefore not between omniscient planning and a government without economic duties. It is between different distributions of initiative, knowledge and risk, all of which depend upon institutions whose competence must be cultivated.

A practical developmental order must consequently make its own claims examinable. The authority proposing assistance should identify the capability it expects to create, the institutions through which learning is likely to occur and the circumstances under which support will end. Those requirements need not imply that every benefit can be reduced to one numerical indicator. They do require enough specificity for disagreement to become possible. If a policy can be defended equally well after any outcome, it is an article of political allegiance rather than a disciplined economic judgment.

Participation in that judgment should extend beyond the assisted enterprise and the ministry negotiating with it. Workers understand aspects of production and its burdens that balance sheets can conceal. Technical institutions can assess claims that political patrons are poorly placed to test. Communities know the consequences of relocation, pollution and altered access to land. Their testimony does not make every preference decisive, but excluding it deprives the state of relevant knowledge and legitimacy. A development program intended to strengthen the common life must permit those living it to question the terms of its supposed improvement.

Ecological limits reinforce the need for such inquiry. A productive installation whose operation damages the water upon which other livelihoods depend has costs outside its own accounts. The same is true of energy systems and land use whose burdens persist beyond an investor's planning horizon. The criticism of economism becomes practical where policy insists that these consequences enter the judgment. Industrial competence can include the capacity to produce more efficiently, repair equipment and sustain essential provision with fewer destructive effects. The acquisition of productive power should enlarge the possibility of responsible choice, rather than license the exhaustion of its material foundations.

The contemporary undertaking is thus neither a return to an imagined closed economy nor a promise that international competition will dissolve every public problem. It is an effort to establish institutions through which external resources, domestic initiative and common provision can support one another without making the population an instrument of accumulation. The liberal objections discipline its treatment of knowledge, scarcity and coercion. The New Right's criticism tests the tendency to elevate economic means into civilizational purposes. The developmental left asks whose purposes and whose gains have been sheltered by the invocation of national development. These are persistent questions, not authorities whose juxtaposition relieves the author of answering them.

This writeup's defense of industrialization is strongest when it recognizes these limits. It does not require a domestic replica of every advanced industry, nor does it promise that a sufficiently resolute government can manufacture competence by command. It requires the political community to consider which abilities it ought to acquire, which investments can help acquire them and which burdens can responsibly be borne. Foreign equity, domestic savings, public enterprise and technological licensing are then evaluated as means within a developmental undertaking. Their usefulness varies; the obligation to judge their usefulness remains.

Foreign investors accordingly remain welcome where their presence enlarges the country's productive possibilities. Their participation should be assessed by what can endure beyond the original concession or corporate decision: knowledge, skilled occupations, useful infrastructure and enterprises capable of finding customers independently. Successful development may deepen relations with foreign firms rather than diminish them. The decisive change is that the host society increasingly possesses the competence and alternatives required to shape those relations. It can collaborate without making collaboration the indispensable condition of every further advance.

The test of the argument returns, finally, to the young person leaving school. Has education supplied enough literacy and knowledge to permit further learning? Does the economy offer opportunities to apply that knowledge at home? If the person chooses to work abroad, is that choice among credible alternatives, or the consequence of a productive structure never seriously developed? These questions join the educational and industrial argument. They prevent the convenient separation through which one ministry counts graduates, another counts investments and a third counts remittances, while no institution answers for the common result.

A nation that accepts the permanent export of its labor as an unalterable comparative advantage has diminished the scope of its own political judgment. A nation that forbids migration while failing to create useful opportunities has merely imposed the burden of that failure upon its citizens. The defensible undertaking is to enlarge their effective choices through literacy, productive competence and institutions capable of sustaining worthwhile work. Its achievement can include migration, international trade and foreign ownership. What it must overcome is the presumption that the population's adaptation to external demand constitutes a sufficient national future.

An investment portfolio can abandon a holding whose return has disappointed expectations. A nation cannot abandon its people on comparable terms. It must consider what becomes of them when an enterprise closes, when a market contracts or when a lender demands payment. Its economic policy therefore bears responsibilities extending beyond the valuation of assets. Development is achieved where institutions and productive abilities enlarge the community's capacity to discharge those responsibilities. The scale of foreign investment may record part of that achievement; it cannot define the achievement itself.

***

References:

List, F. (1885). The national system of political economy (S. S. Lloyd, Trans.), Book II, chap. 12. Longmans, Green. Original German work published 1841. The quoted sentence appears in the Lloyd translation; chapter references are preferable to page numbers that vary among editions. Digital text: https://davidmhart.com/liberty/OtherWorks/List/1909-EnglishTrans/index.html

Prebisch, R. (1950). The economic development of Latin America and its principal problems (E/CN.12/89/Rev.1), p. 2. United Nations. The quotation refers to industrialization as a means of obtaining technical progress and improving living standards. Text: https://archivo.cepal.org/pdfs/cdPrebisch/002.pdf

World Bank. (2017). The Philippines: Resurrecting manufacturing in a services economy. The discussion concerns weak connections among sectors and opportunities to increase the services and knowledge content of production. https://blogs.worldbank.org/en/eastasiapacific/philippines-resurrecting-manufacturing-services-economy

World Bank. (2026, May 15). Philippine Industrial Policy Forum 2026. Opening remarks identify the reliance on incentives and zones, and the need for foundational public goods. https://www.worldbank.org/en/news/speech/2026/05/15/philippine-industrial-policy-forum-2026

Freire, P. (1970). Pedagogy of the oppressed (M. B. Ramos, Trans.), chap. 2. Herder and Herder. The discussion paraphrases the distinction between banking and problem-posing education. Publisher description and contents of the later anniversary edition: https://www.bloomsbury.com/us/pedagogy-of-the-oppressed-9781501314162/ .

UNESCO Institute for Statistics. (n.d.). Glossary: Literacy. The definition covers identifying, understanding, interpreting, creating, communicating and computing with written materials in differing contexts. This conceptual reference is not evidence for any particular country’s literacy rate. https://databrowser.uis.unesco.org/resources/glossary?search=literacy

Bastiat, F. (1850). What is seen and what is not seen. In Selected essays on political economy, chap. 1 (S. Cain, Trans.). Foundation for Economic Education. The application to learning benefits is the present essay's argument. Text: https://www.econlib.org/book-chapters/chapter-chapter-1-what-is-seen-and-what-is-not-seen/

Mises, L. von. Economic progress. In The Mises reader unabridged, chap. 18. Mises Institute, online edition. The quoted sentence and the discussion of foreign investment occur in this chapter. Text: https://mises.org/online-book/mises-reader-unabridged/chapter-18-economic-progress

Mises, L. von. (1927). Liberalism, part 3, sec. 7, Free trade. Online English edition, Liberalism: The classical tradition. Mises Institute. Text: https://mises.org/online-book/liberalism-classical-tradition/3-liberal-foreign-policy/7-free-trade

Hayek, F. A. (1945). The use of knowledge in society. American Economic Review, 35(4), 519–530. The distinction between comprehensive planning and particular public institutions is the argument of the present essay, not a claim that Hayek endorsed its proposed industrial policy. Text: https://www.econlib.org/library/Essays/hykKnw.html

Friedman, M. (1970, September 13). The social responsibility of business is to increase its profits. The New York Times Magazine. The quotation appears in the description of the executive's responsibility to owners. Text: https://public.websites.umich.edu/~thecore/doc/Friedman.pdf

Friedman, M. Old school liberalism. Excerpt republished by the Hoover Institution from Milton Friedman on freedom (R. Leeson & C. G. Palm, Eds.). The passage outlines voluntary exchange and the functions of government; the present essay's developmental criticism is interpretive. Text: https://www.hoover.org/research/milton-friedman-old-school-liberalism

Rand, A. (1963). The nature of government. The Objectivist Newsletter; subsequently collected in The virtue of selfishness (1964). Text supplied by the Ayn Rand Institute: https://courses.aynrand.org/works/the-nature-of-government/

Mohler, A. (1974). Deutscher Konservatismus seit 1945. In G.-K. Kaltenbrunner (Ed.), Die Herausforderung der Konservativen. Herder. Quotations are from the opening section on the conservative revolution. Mohler attributes organic construction to Jünger and the creation of things worth preserving to Moeller van den Bruck. English translations here are editorial. The online republication identifies three annotations added in 1995; the quotations here belong to the original discussion. Text: https://scholien.wordpress.com/lizentiatur/praeceptum2/2016085-2/

Benoist, A. de. (1977). Vu de droite: Anthologie critique des idées contemporaines. Copernic. The quotation from the original introduction is reproduced by the author in his 2002 preface; the quotation is identified as part of the original introduction. Translation here is editorial. Verification text: https://alaindebenoist.s3.amazonaws.com/pdf/preface_nouvelle_edition_vu_de_droite.pdf

Benoist, A. de. (1979, September 29). Ce que nous disons. Le Monde. The paragraph above gives a limited interpretation of this period statement, rather than attributing the essay's entire economic program to its author. Text: https://www.lemonde.fr/archives/article/1979/09/29/ce-que-nous-disons_2783433_1819218.html

Faye, G. (1983). Contre l'économisme: Principes d'économie politique. Le Labyrinthe. The quotation is reproduced in the publisher-associated presentation of the work; translation here is editorial. Its application to the industrial argument is the fictional author's interpretation. Verification text: https://www.revue-elements.com/produit/contre-leconomisme-pdf/ . Related period work: Faye, G. (1981). Le système à tuer les peuples. Copernic; publication record: https://catalogue.bnf.fr/ark:/12148/cb366025452

Benoist, A. de, & Champetier, C. (1999). Manifesto for a European renaissance. Telos, 115, 117–144. The short quotation is from the discussion of liberalism, reproduced in the publisher's excerpt Liberalism: The main enemy (2023), from the later English book edition. Text: https://arktos.com/2023/09/04/liberalism-the-main-enemy/

Benoist, A. de, & Champetier, C. (1999). Manifesto for a European renaissance. Telos, 115, 117–144. Discussions of subsidiarity and economic relations are consulted in the later English book edition (Arktos, 2012). Text: https://rabbimayerschiller.com/collectedarticles/pdf/12

Amin, S. (1990). Maldevelopment: Anatomy of a global failure. Zed Books. The delinking formulation is reproduced in the online chapter extract hosted by Róbinson Rojas. Text: https://rrojasdatabank.info/uu32me08.htm

Amin, S. (2017). The sovereign popular project: The alternative to liberal globalization. In October 1917 revolution: A century later, chap. 5. Daraja Press. Publisher-author open edition: https://pressbooks.pub/october1917/chapter/the-sovereign-popular-project-the-alternative-to-liberal-globalization/

Polanyi, K. (1944/1957). The great transformation: The political and economic origins of our time, chap. 12, p. 141. Beacon Press. Page number follows the scanned Beacon edition. Text: https://knowledgehub.ghamfin.org/wp-content/uploads/2024/06/Karl-Polanyi_The-Great-Transformation_book.pdf

Kanesa-Thasan, S. (1969). Stabilizing an economy—A study of the Republic of Korea. IMF Staff Papers, 16(1), 1–26. The guarantee figure refers to the study's historical reporting period, not to every year of Korean industrialization. Source: https://www.elibrary.imf.org/view/journals/024/1969/001/article-A001-en.xml

The August 3, 1972 intervention restructured private debt; it should not be described simply as sovereign default. Historical verification: Corporate restructuring during times of crisis in South Korea, chap. 20, in IMF, Current developments in monetary and financial law, vol. 6 (2012). This later historical account documents the 1972 intervention. Source: https://www.elibrary.imf.org/display/book/9781616350819/ch020.xml

Singapore government historical accounts verify the pre-1984 institutional chronology: SG101, 1959–1965: Early economic strategies, https://www.sg101.gov.sg/economy/surviving-our-independence/1959-1965/ ; and 1965–1970: Singapore's development plan, https://www.sg101.gov.sg/economy/surviving-our-independence/1965-1970/ . These official historical accounts verify the institutional chronology. A period discussion identified there is Goh Keng Swee's 1976 essay, A socialist economy that works.

Singapore Economic Development Board. (n.d.). Work with us; Development and expansion incentive for manufacturing; Incentives and facilitation programmes. Official descriptions of strategic planning, higher-value manufacturing and company training support. https://www.edb.gov.sg/en/setting-up-in-singapore/working-with-edb.html ; https://invest.edb.gov.sg/gov-support/development-and-expansion-incentive-for-manufacturing ; https://www.edb.gov.sg/en/incentives-and-programmes/incentives-and-facilitation-programmes.html

Editorial historical verification: IMF. (1993). China at the threshold of a market economy, chap. 2, Initial conditions and special characteristics of Chinese reform. Its account describes a substantial industrial base before the reforms. The passage concerns the industrial inheritance before the reform-era opening, rather than a claim that all subsequent capabilities were already present. Source: https://www.elibrary.imf.org/view/book/9781557753496/ch02.xml

China Development Bank. (2015). Experience gained in the development of China’s special economic zones. Investing in Africa Forum, hosted by the World Bank. The account emphasizes governmental support, infrastructure, innovation and connections between learning and production. https://www.worldbank.org/content/dam/Worldbank/Event/Africa/Investing%20in%20Africa%20Forum/2015/investing-in-africa-forum-chinas-special-economic-zone.pdf

Reuters. (2026, September 3). China to support “little giants” and other emerging companies in plan to boost jobs and innovation. The reported five-year program is evidence of continuing public direction, not proof of the effectiveness of every intervention. https://www.reuters.com/world/asia-pacific/china-vows-support-small-midsize-firms-employment-innovation-2026-09-03/

Chen, Y. (1995). Chen Yun wenxuan [Selected works of Chen Yun], vol. 3, p. 320. Renmin Chubanshe. The December 1982 statement is reproduced with this reference in Chen Yun’s contribution to the transition from a planned economy to a market economy (2009), republished by the Institute of Party History and Literature in 2019. English translation for this essay. Verification: https://www.dswxyjy.org.cn/n1/2019/0228/c423964-30916668.html

Chen Yun jingji sixiang de jige yaodian [Several key points of Chen Yun's economic thought]. Shanghai Party History research website. This institutional discussion reproduces and contextualizes Chen's arguments about balance, quality and market regulation. These claims are limited to his historical thought. Text: https://www.ccphistory.org.cn/shds/bydt/content/3037f3a6-4aa6-4bea-8b84-56362d9c479d.html

Chang, H.-J. (2003). Kicking away the ladder: Infant industry promotion in historical perspective. Oxford Development Studies, 31(1), 21–32. https://doi.org/10.1080/1360081032000047168 . The paragraph draws on the article's historical thesis; the qualifications concerning contemporary application are the present essay's argument.

Jünger, E. (1977). Eumeswil. Klett-Cotta. Evola, J. (1961). Cavalcare la tigre. Vanni Scheiwiller. These are predecessors and influences, not interchangeable members of the postwar Neue Rechte or Nouvelle Droite. No direct passage from Eumeswil is quoted. The distinction drawn here is the fictional author's interpretive application. Evola's opening discussion is available in the later English translation, Ride the tiger (J. Godwin & C. Fontana, Trans., 2003), published by Inner Traditions: https://www.simonandschuster.com/books/Ride-the-Tiger/Julius-Evola/9780892811250

The Cost of Leaving

2026-09-26T06:17:00.000-07:00

The Cost of Leaving

Mary Jane Veloso, citizenship abroad,
and the economics of protection

When Ferdinand Marcos Jr. told reporters in Eastern Visayas that he had signed an absolute pardon for Mary Jane Veloso, the announcement was almost striking for how little ceremony it required. “I signed her pardon yesterday,” he said. The document had been signed on September 24, 2026; the following evening, after the Department of Justice transmitted the release order to the Bureau of Corrections, Veloso walked out of the Correctional Institution for Women in Mandaluyong. A case that had occupied presidents, prosecutors, diplomats, courts, churches, migrant organizations and two governments for more than a decade had reached its legal conclusion in the most ordinary way available to executive power: a paper had been placed before the President and the President had put his name on it.

There was nothing ordinary about what preceded the signature. Veloso was arrested at Yogyakarta’s airport in April 2010 after Indonesian authorities found 2.6 kilograms of heroin in her luggage. She was convicted and sentenced to death later that year. From the beginning she maintained that she had not knowingly carried narcotics, saying that recruiters who had promised her employment abroad had given her the suitcase. In April 2015 she was brought within hours of execution by firing squad before Indonesia unexpectedly spared her. She remained imprisoned there for nearly another decade and returned to the Philippines only in December 2024, after Manila and Jakarta negotiated her transfer. She was forty-one by the time Marcos pardoned her.

It is tempting to regard the pardon as the end of an unusually long humanitarian drama, and in the personal sense it is. No theory of development is needed to explain what freedom means to someone who has spent almost sixteen years imprisoned, much of that time under a death sentence. Children grew up while their mother was in prison. Parents aged while they waited. Appeals that once concerned whether Veloso would still be alive the following morning gradually became arguments about testimony, trafficking, prisoner transfer and finally clemency. The vocabulary changed because time changed the problem.

But the Veloso case has never fitted comfortably inside the boundaries of one criminal conviction. It began with something considerably more ordinary in Philippine economic life: a woman needed work, and the work appeared to exist somewhere else. Between the worker and the promised livelihood stood recruiters, unfamiliar destinations, documents and travel arrangements she did not control, and people who knew considerably more about the proposed journey than she did. Veloso’s claim was that she trusted those intermediaries and accepted a suitcase whose illicit contents she did not know. Whether one approaches that account through criminal law, labor economics or the law of trafficking, the underlying asymmetry is familiar. A worker with few alternatives must often depend upon the person who claims to possess an opportunity.

The extremity of Veloso’s eventual predicament can obscure how conventional its beginning was. The Philippines has spent decades learning to regard departure as one of the normal ways a household improves its circumstances. A job in Hong Kong, Saudi Arabia, Singapore, Europe or aboard a ship may pay several times what the same worker can obtain at home. The first remittance can finance tuition, medicine, a roof repair, debt repayment or a small business. Overseas employment has become sufficiently ordinary that the elaborate institutional architecture surrounding it—recruitment agencies, training centers, government offices, remittance companies, banks, insurance products—can make the original economic fact seem almost invisible. Someone leaves because the expected return from leaving appears better than the expected return from staying.

Most of those journeys do not end in an Indonesian prison. That is precisely why Veloso’s case is useful. Catastrophes reveal relationships that normal transactions conceal. The recruiter who honestly matches a worker to a foreign employer performs an economic service, reducing the cost of information and access. The dishonest recruiter exploits the same advantage. The worker usually knows less about the employer, the destination and the route. She may already have borrowed money. Her family may be waiting for the promised income. The intermediary may control not only access to the job but the documents, transportation and possessions accompanying the worker across a border. The same arrangement that makes labor mobility possible can, under sufficiently unequal conditions, make exploitation unusually easy.

By April 2015, the economics of Veloso’s departure had been replaced by the mechanics of capital punishment. Indonesia was preparing to execute a group of prisoners convicted of narcotics offenses. Veloso was among them. Philippine appeals for clemency had failed. Then the circumstances changed. Maria Kristina Sergio, the recruiter accused of deceiving Veloso, surrendered to Philippine authorities, and Manila found itself in possession of a new argument. Veloso was no longer useful merely as a condemned prisoner asking for mercy; she might be a necessary witness against the people alleged to have trafficked her.

Benigno Aquino III, then attending an ASEAN summit in Malaysia, appealed directly to Indonesian President Joko Widodo. Philippine officials argued that both countries had an interest in going beyond a courier and pursuing the network allegedly responsible for using her. Indonesian authorities halted Veloso’s execution while the other condemned prisoners were put to death. Reuters reported at the time that officials on the Philippine side understood the reprieve as an agreement, in effect, to pursue the larger trafficking network rather than simply punish what Cabinet Secretary Rene Almendras called a “mere courier.”

The intervention deserves neither sentimental embellishment nor dismissal. Aquino’s critics were correct to note that the rescue came extraordinarily late. Migrant organizations had been raising questions about the case before the final hours. A state that arrives only when a citizen is already awaiting a firing squad cannot easily present itself as a model of preventive administration. Those who believed Veloso had been trafficked understandably wanted something more than a stay of execution. Their argument was not simply that Indonesia should postpone killing her, but that the circumstances surrounding her recruitment should fundamentally alter the way the case was understood.

Yet timing does not make outcome irrelevant. The appeal came at the eleventh hour, but the eleventh hour has unusual importance when the twelfth is execution. Aquino did not compel Indonesia to repudiate its legal system. The Philippine government instead supplied Jakarta with another interest that could operate within Indonesian sovereignty: a living Veloso could testify in a criminal case involving the people alleged to have arranged the journey. Indonesia retained jurisdiction. It retained its judgment. But diplomacy created room within the exercise of Indonesian authority.

This distinction becomes important because the reprieve was followed almost immediately by an uglier argument at home. When Celia Veloso returned to the Philippines after her daughter had been spared, she was expected by some supporters of the Aquino administration to speak principally in gratitude. Instead, she thanked the people, churches, migrant groups and others who had rallied to her daughter’s cause and then spoke angrily about the government. She said the case had been neglected and that the family had questions for officials now that they were back in the country. “There are many things we will demand answers for from the government,” she said in substance at the May 1 press conference.

The reaction was remarkable. Celia was denounced as "ingrata"—an ingrate. Social-media users attacked the family for criticizing an administration that, they argued, had just prevented Mary Jane’s execution. Some posts went beyond criticism into fantasies of punishment. The hashtag politics of the moment included calls for Celia herself to face a firing squad. Contemporary reporting recorded the intensity of the backlash; days later, Celia publicly appealed for understanding, explaining that her anger came from the experience of watching a daughter she believed innocent sit in a foreign prison and nearly die.

One pro-Aquino comment from the period captured the political psychology better than any formal defense of the administration could have done. It scoffed at the Veloso family for suggesting that Aquino had failed them, arguing that without his breaking protocol Mary Jane would have been “riddled with bullets” along with the other foreigners executed that night. It then moved beyond defending Aquino and questioned Veloso’s innocence itself: perhaps, the writer suggested, she knew what was in the suitcase and had been blinded by money; perhaps the family would have enjoyed the commission had the shipment succeeded. The family were then called ingrates. Yet the same political voice could later express surprise that Veloso remained alive after Duterte had taken a markedly harder position toward her case.

It would be unfair to treat one social-media comment as representative of Aquino’s constituency, just as it would be careless to assume that every person who criticized Celia was part of an organized operation. But the episode became notable enough to generate subsequent academic study. A 2016 article in the University of the Philippines journal Daluyan, “#ingrata at si Mary Jane Veloso: Mga Bakas ng Trolling sa Spreadable Media,” examined the controversy specifically as a case involving political trolling and the circulation of the ingrata label. A contemporaneous Pinoy Weekly investigation also argued that some suspicious accounts participating in the attack appeared to behave like organized political trolls, while acknowledging that many genuine users shared the same views. What these materials establish is the existence of a trolling controversy and a recognizable pattern of political messaging; they do not establish, on their own, that Malacañang centrally ordered an “ingrata” campaign. That is an important distinction in a history already overburdened with partisan certainty.

The more interesting fact is that such coordination was not necessary for the argument to flourish. The moral intuition behind ingrata was already culturally familiar. A powerful figure had helped someone in distress; the beneficiary should therefore exhibit gratitude. Criticism after receiving assistance appeared unseemly, almost treacherous. Translated from the household or patron-client relationship into politics, however, the idea produces an unusual theory of citizenship. It suggests that when a government performs an obligation successfully, the citizen incurs a personal political debt to the officials who performed it.

This is where the Veloso affair becomes more than another partisan quarrel from the Aquino years. A democracy cannot easily operate on the proposition that citizens petition the state as clients approaching a patron. A president does not spend his private fortune when the foreign service intervenes abroad. Diplomats, prosecutors and officials act under public authority and are paid from public funds. If they save a citizen’s life, that achievement can be acknowledged without transforming the rescued family into political dependents.

Gratitude and accountability can exist simultaneously. Celia Veloso could recognize that Aquino’s final intervention mattered while still asking why the case had reached the firing squad before such urgency appeared. The two propositions do not cancel each other. A family whose house is saved by firefighters may thank the firefighters and still ask why building inspections failed. A business protected from fraud by regulators may recognize the enforcement action while still questioning why the warning signs were ignored. Public administration is evaluated over a sequence of actions; a successful final act does not purchase immunity from examination of everything preceding it.

This was particularly obvious when one looked beyond Philippine partisan politics. More than a decade ago, support for Veloso was hardly confined to Filipinos or to the domestic opposition. Indonesian migrant workers became prominent participants in the campaign to save her. Migrante International later thanked Indonesian migrant organizations for helping lead the effort in Indonesia and said their appeals to Widodo had been crucial to the suspension of the execution. Reporting at the time described Indonesian migrant groups, women’s organizations and other activists holding vigils and lobbying Indonesian authorities.

Their involvement made intuitive sense. Indonesian migrant workers did not need to share Philippine party allegiances to recognize the structure of the story. Many had themselves left home through recruitment networks, worked under foreign employers and lived in countries where a misunderstanding, abusive contract or confiscated document could suddenly become a legal crisis. The argument that Veloso might have been a trafficking victim rather than an intentional drug smuggler resonated because the underlying vulnerability was not uniquely Filipino. It belonged to migrant labor.

I remember that atmosphere in Hong Kong around the eve of May Day in 2015. At an interfaith gathering, Indonesian migrant women were crying over the prospect that Mary Jane might be executed. Elsewhere in Hong Kong, Indonesian and Filipino migrant workers demonstrated together; Antara reported Indonesian workers joining Filipinos outside the Indonesian consulate to demand that the execution be stopped. They carried the issue not as an abstraction about Philippine presidential performance but as something recognizably close to their own lives.

It is difficult to reconcile that scene with the online desire to punish Celia for insufficient gratitude. The women crying in Hong Kong were not asking whether Aquino deserved credit in the next election. They were reacting to the possibility that a migrant worker might be killed despite credible indications that she had been used by others. Yet in Manila the argument was rapidly being translated into the grammar of partisan loyalty: the President had acted, therefore the family should know whom to thank; criticism of the administration was treated almost as a betrayal of the rescue itself.

The strange consequence was that some defenders of Aquino began to reproduce a punitive logic that would become much easier to recognize during the Duterte era. If Mary Jane carried the drugs, perhaps she deserved the consequences. If the President saved her, the family should stop complaining. If they continued to complain, perhaps they did not deserve sympathy in the first place. The rhetoric differed from Duterte’s later language, but one premise was surprisingly durable: once the state had acted, the citizen’s claim to challenge the state became morally suspect.

Rodrigo Duterte approached the case from another direction, although the eventual destination could look familiar. During his September 2016 visit to Indonesia, Duterte met Widodo. Indonesian reports subsequently quoted Widodo as saying that Duterte had given a “go-ahead” concerning Veloso’s execution. Philippine officials disputed that account. Presidential spokesman Ernesto Abella said Duterte had told Widodo, “Follow your own laws. I will not interfere.” Foreign Affairs Secretary Perfecto Yasay likewise denied that Duterte had issued an explicit green light. The Palace position was that Duterte had accepted Indonesia’s right to follow its judicial process rather than personally authorized Veloso’s death.

That qualification matters. Political memory has a habit of simplifying ambiguous exchanges until the version most useful to one faction becomes common knowledge. It would be inaccurate to state as proven fact that Duterte directly instructed Indonesia to execute Veloso. Indonesian and Philippine accounts differed. Duterte himself initially kept the details of the closed-door conversation private and said publicly after the visit that the Philippines and Indonesia would continue to respect each other’s judicial processes because “the rule of law is what matters.”

His later remarks, however, make the underlying view considerably easier to understand. In a December 2016 interview, Duterte said he could not ask for a reprieve for someone convicted in a drug case. “A criminal is a criminal,” he said. His formulation was reciprocal: Filipinos should not interfere with another country’s laws if they did not want foreigners interfering with Philippine law. On drugs, his answer was essentially that offenders had to face the consequences.

This was more than a statement about narcotics. It reflected a particular conception of citizenship abroad, one closer to the classical territorial understanding of sovereignty than to the increasingly expansive language of consular protection. A Filipino remained Filipino after entering Indonesia, but Philippine nationality did not travel with her as a portable legal enclave. Indonesian territory meant Indonesian law. Indonesian courts determined criminal responsibility. Indonesian penalties followed Indonesian judgments. The Philippine passport identified her nationality and entitled her to consular representation, but it did not place a second criminal jurisdiction around her.

The familiar expression is “When in Rome, do as the Romans do.” It is useful if one does not push it too far. A Filipino entering Indonesia does not stop being Filipino, any more than an Indonesian entering Manila loses Indonesian nationality. What changes is the governing jurisdiction. Citizenship does not give the traveler the option of choosing between two legal systems according to convenience. Territorial sovereignty supplies the first answer to the ordinary criminal-law question: whose law applies here?

Duterte’s formulation therefore possessed a certain austere coherence. The state might act vigorously when an overseas Filipino was abused by an employer, abandoned by a recruiter or mistreated outside the law, while showing much greater restraint when the host state had already investigated, tried and convicted the Filipino through its own institutions. In that sense, protection had limits. The government could help its citizen navigate the foreign system, but it should not behave as though the foreign system ceased to matter merely because the accused possessed a Philippine passport.

This view also sat comfortably beside Duterte’s broader foreign-policy doctrine. Returning from regional meetings in September 2016, he repeatedly emphasized “sovereign equality, non-interference and commitment to peaceful settlements of disputes” as principles of his independent foreign policy. The point was larger than Veloso. Duterte wanted relations among states understood as relations among sovereign equals rather than as hierarchies in which one government lectured another about its internal affairs.

The Veloso case exposed the difficulty hidden inside the elegance of that principle. If she were simply an intentional drug courier, the territorial argument was straightforward. Indonesia had arrested her, tried her and imposed a sentence under Indonesian law. But if she were a trafficking victim who had been deceived into carrying the suitcase, then the fact of conviction did not exhaust the factual problem. Philippine authorities were prosecuting people alleged to have recruited her. Her testimony had become relevant to those proceedings. The categories no longer aligned neatly: the person whom one jurisdiction had convicted as an offender might simultaneously be treated by another as a victim and witness.

Aquino’s 2015 intervention worked precisely because his government exploited that ambiguity. He did not claim that Indonesia lacked jurisdiction. Manila instead argued that Indonesian interests and Philippine interests intersected: keeping Veloso alive could help expose the network alleged to have placed the drugs in her luggage. The reprieve therefore demonstrated something that the phrase “follow your own laws” can easily obscure. Vigorous diplomatic advocacy and respect for foreign sovereignty are not necessarily opposites.

This is the difference between recognizing jurisdiction and treating jurisdiction as the end of diplomacy. Governments routinely ask one another for clemency, sentence commutation, humanitarian treatment, evidentiary cooperation and prisoner transfers. None of these requests requires the supplicant government to claim that its own law supersedes the law of the host state. The very existence of diplomacy reflects the fact that sovereign legal systems can have overlapping interests without sharing jurisdiction.

Duterte’s harder formulation gave greater weight to the conviction itself. “A criminal is a criminal” compresses a complicated set of facts into a status: once law has determined guilt, the political question changes. In the setting of his domestic anti-drug campaign, punishment also had an exemplary function. The offender was not only someone receiving a penalty but someone through whom a warning could be communicated.

It would go beyond the evidence to conclude that Duterte personally wanted Veloso to die. His government denied that he had ordered such an outcome, and the disputed Widodo account does not prove otherwise. But the political logic of deterrence is visible in Duterte’s own language. Once drugs were involved, his sympathy narrowed. Whether a courier said she had been deceived or exploited became less politically salient than the danger of appearing to excuse a narcotics offense. Punishment instructed others.

There is a curious continuity here with the earlier ingrata controversy. Some people who opposed Duterte politically had already accepted a related penal intuition while defending Aquino: Mary Jane had been convicted; she had drugs in her luggage; the Aquino government had nevertheless saved her; therefore her family had little standing to demand more. Under Duterte the partisan alignment changed, but the idea that the citizen had reached the limit of what she could reasonably demand from the state remained surprisingly portable.

The contradiction becomes clearer if one asks a basic democratic question. Does pressuring a government to defend or free a citizen require patronage? If the state acts, is the citizen then indebted to the administration? Such a view makes sense within a system of personal favors: a political patron intervenes, the beneficiary remembers the debt, loyalty follows. It makes much less sense within the theory of republican government. The government is not an independent benefactor. Its diplomatic service exists partly to represent nationals abroad. Its officials exercise delegated authority. The citizen may owe appreciation to individuals who worked exceptionally hard, but gratitude cannot logically extinguish the right to criticize policy.

Nor does democracy require the family of a prisoner to adopt the government’s preferred interpretation of events. Celia Veloso had watched her daughter approach execution. Her anger may have been politically inconvenient and, at times, rhetorically excessive. That did not create an obligation to become an administration spokesperson after the reprieve. A government confident that its intervention was successful ought to be able to withstand criticism from the family it helped.

This point matters because patronage thinking and punitive thinking can reinforce one another. The first says that protection is a favor and therefore gratitude is owed. The second says that protection can be withheld from those judged unworthy. Together they transform citizenship from a durable legal relationship into a moral assessment conducted by the state or its supporters: the obedient and grateful citizen deserves help; the troublesome citizen may be left to the consequences.

Yet citizenship abroad is valuable precisely because governments cannot know in advance which citizen will become inconvenient. Consular protection would mean little if it existed only for people whose innocence was obvious, whose behavior was exemplary and whose families praised the administration. The difficult cases test the institution. They are precisely the cases in which the government must separate its political preferences from its public obligations.

Duterte’s own foreign policy adds another layer to the problem because he repeatedly described international relations in practical and economic terms. His administration courted investment in China, Japan, Malaysia and Singapore and told business leaders that the Philippines was open for business. In Singapore he emphasized infrastructure, energy, competition and a more investment-friendly environment. At APEC he linked foreign engagement to infrastructure, rural development, human capital and the competitiveness of Philippine business. After his China visit, the administration explicitly said that foreign relations should help create an economy in which working abroad became “an option and no longer a need.”

There is much that is sensible in such an approach. Foreign relations cannot subsist on ceremonies and communiqués alone. Developing countries require markets, investment, technology, energy security and infrastructure finance. A government that neglects those interests in favor of permanent geopolitical theater does not necessarily serve its citizens better. Economic diplomacy is diplomacy.

The problem arises when the definition of economics becomes too narrow. Trade, investment, loans and infrastructure are easily classified as economic because they appear in familiar financial categories. A migrant worker in legal trouble is classified as consular or humanitarian. Yet for the Philippines this division is artificial. Labor itself is one of the country’s major international economic flows.

The numbers make the point without requiring romantic language about modern-day heroes. The Bangko Sentral ng Pilipinas reported roughly $39.6 billion in personal remittances in 2025, including about $35.6 billion in cash remittances sent through banks. In the first half of 2026, remittance inflows continued to support household income and domestic demand. These are not incidental sums. They influence consumption, housing, education, savings, creditworthiness and the country’s supply of foreign exchange.

If foreign relations are to be treated substantially as economics, then the overseas worker cannot be placed outside the economic relationship the moment something goes wrong. The worker is not a sentimental attachment to a commercial foreign policy. The worker is part of the commercial relationship. Employers abroad obtain labor; Philippine households obtain wages; banks and remittance firms process the transfers; recruiters and training providers earn income; the balance of payments records the result.

This is why “respect their laws,” although entirely defensible at one level, can become too convenient at another. It allows a government to separate the pleasant parts of labor mobility from the difficult ones. Wages sent home are economic. A worker sentenced abroad becomes a legal problem belonging to the other country. Investment is bilateral. Consular protection is humanitarian. The classification makes sense bureaucratically, but the underlying economy does not observe it.

A company cannot reasonably count the income from an activity while insisting that the risks created by the activity belong to someone else. Supply-chain security is part of the cost of trade. Fraud prevention is part of banking. Safety systems are part of manufacturing. Insurance is part of transportation. In the same way, legal assistance, anti-trafficking cooperation and credible consular intervention are costs associated with an economy that sends large numbers of workers into foreign jurisdictions.

Mary Jane Veloso provides an extreme illustration of what happens when those costs are recognized only after failure. The state eventually deployed enormous institutional resources. Diplomats made representations to Jakarta. Presidents spoke directly. Lawyers pursued parallel proceedings. Prosecutors investigated alleged recruiters. Indonesian migrant organizations joined the campaign. Indonesian officials halted an execution, maintained the prisoner for years and later negotiated her transfer. What had begun as one person’s employment journey became an intergovernmental affair stretching across administrations.

From a business perspective, this resembles the familiar problem of privatized gains and socialized losses, although the phrase must be used with care. The recruiter who successfully places a worker receives a fee. The foreign employer gets labor. The family receives remittances. The state gains foreign exchange. But when the labor-migration transaction collapses catastrophically, the expenses move outward. The worker loses years. The family pays legal and emotional costs. Courts, diplomats and agencies expend resources. Political capital may be consumed in negotiations with another government.

Prevention is usually cheaper than rescue, but the institutions benefiting from a transaction do not always bear the entire cost when it fails. This is why better regulation of recruitment matters, but also why regulation by itself cannot answer the entire problem. It treats the point at which vulnerability is exploited; it does not necessarily change the economic conditions producing vulnerability.

Francis Pangilinan’s response to Veloso’s pardon concentrated on the first level. Illegal recruiters, human traffickers and drug syndicates, he said, should face stronger action because they exploit people seeking work abroad. Sarah Elago of Gabriela placed the case within a broader structure, arguing that Filipinos would remain vulnerable while cheap labor and economically compelled migration continued to shape the labor market. Their political traditions are different, but the two observations need not contradict each other. One asks how predators operate inside the overseas-employment system. The other asks why the system continually produces workers whose need for opportunity weakens their bargaining position.

The Philippines does not need to romanticize staying home in order to consider this question seriously. Migration is often an exercise of freedom. A nurse who prefers London, a software engineer who chooses Singapore or a seafarer who enjoys an international career is not proof that the Philippine economy has failed. Wealthy societies also send workers abroad. The relevant distinction is between migration as an attractive option and migration as the ordinary household remedy for insufficient opportunity.

When the second condition becomes widespread, the recruiter acquires unusual economic power. A prospective migrant may know little about the employer beyond what the agency says. She may not understand the host country’s legal system. She may already have borrowed money to obtain documents and transportation. Her relatives may be counting on income that has not yet been earned. Turning down the offer therefore imposes a cost even before departure.

The intermediary stands in a different position. He knows—or claims to know—the employer, the destination and the process. An honest agent reduces information costs. A dishonest one exploits them. The same asymmetry that allows efficient matching also allows fraud. Veloso’s account that she accepted luggage from people arranging her journey is an extreme version of the point. The person controlling access to the opportunity can acquire influence over details that would otherwise appear absurdly personal: which route the worker takes, which document she presents, which bag she carries.

Economic desperation does not erase personal responsibility, and one should be cautious about turning every migrant who encounters legal trouble into a passive victim. But desperation alters bargaining power. A person with credible alternatives can decline a suspicious offer. A person who believes this is the only route out may accept conditions that would otherwise appear unreasonable. That difference matters to any serious analysis of trafficking.

Regulation operates against this imbalance. Governments can license recruiters, investigate agencies, verify contracts, provide pre-departure education, negotiate labor agreements and fund legal assistance abroad. These measures reduce risk. Yet the strongest protection remains the ability to say no. A labor market that provides productive employment at home gives the worker an exit option before the journey begins.

This is where the celebration of remittances requires business discipline. The inflows are valuable and measurable. They appear each month in central-bank releases and enter discussions of consumption, reserves and the balance of payments. The costs are more dispersed. Recruitment debt appears in household budgets. Separation appears in family life. Abuse becomes a labor or criminal case. Legal emergencies become consular expenditures. Years lost to detention disappear almost entirely from conventional economic accounting.

A corporation that reported revenue without discussing contingent liabilities would not be regarded as especially sophisticated. Yet national discussion of labor export often comes close to doing precisely that. The foreign exchange is visible; the risks are treated as individual tragedies occurring outside the economic model that helped produce the movement in the first place.

Duterte’s own government seemed aware of the contradiction. Its economic diplomacy explicitly pursued the kind of investment and domestic growth that, in its language, would eventually make overseas employment an option rather than a necessity. That aspiration deserves to be separated from the administration’s more restrictive view of intervention in foreign criminal cases. The two positions reveal a tension rather than a simple inconsistency. Duterte wanted a sovereign state whose citizens would not have to leave for economic survival; at the same time, when a citizen abroad became subject to another sovereign’s criminal law, he placed unusual weight on non-interference.

The classical appeal of this position is easy to understand. Citizenship tells you which republic you belong to; territory tells you which law governs you at a given moment. The Philippine state cannot follow every citizen overseas with an invisible boundary around her. But nationality does not become meaningless merely because territorial jurisdiction shifts. If that were so, consular diplomacy itself would be difficult to explain.

Citizenship abroad has always contained this dual condition. The citizen is subject to the laws of the host state while remaining a national of the home state. Those two facts create the problem that diplomacy exists to manage. A consul cannot overturn the foreign court, but the consul can seek access, ensure representation, transmit evidence, request humane treatment or ask that extraordinary circumstances be considered. A president cannot issue an order to a foreign prison, but a president can ask another president to exercise discretion available under that country’s own law.

Seen from this perspective, “When in Rome” is not an answer to the Veloso case so much as the beginning of the question. Of course a visitor to Rome obeys Roman law. But suppose the visitor says someone secretly placed contraband in her possession. Suppose alleged recruiters are subsequently arrested in her own country. Suppose her testimony is required to prosecute them. None of these facts abolishes Roman jurisdiction. They do, however, create reasons for the visitor’s own government to speak.

The dispute between Aquino and Duterte can therefore be described without turning either into a moral caricature. Aquino’s intervention was consequential and very late. Duterte’s theory of territorial sovereignty was coherent and risked becoming too rigid. Aquino demonstrated that diplomatic pressure could operate within respect for Indonesian law. Duterte demonstrated the political appeal of a bright line: the host country’s judgment should normally be accepted, particularly where drugs were concerned.

Marcos encountered the case at yet another stage. By the time his administration dealt with Veloso, there was no execution scheduled for that week. Years of delay had transformed the problem. The relevant questions were now whether Indonesia would transfer the prisoner, what legal effect the transfer would have and whether the Philippine president could ultimately exercise clemency. Jakarta agreed to send Veloso home in December 2024. Marcos then faced a decision unavailable to Aquino in 2015 and unnecessary to Duterte in 2016: whether to pardon a woman physically in Philippine custody but carrying an Indonesian sentence. On September 24, 2026, he did.

The three administrations therefore confronted different versions of Mary Jane Veloso. Aquino confronted an execution measured in hours. Duterte confronted a continuing sentence and a question of how aggressively Manila should challenge another state’s penal policy. Marcos confronted a prisoner transfer and clemency. Any comparison that ignores those differences in circumstance risks becoming merely partisan bookkeeping.

The more useful comparison concerns the conception of the state underneath each moment. Aquino’s final intervention treated diplomatic advocacy as compatible with foreign sovereignty. Duterte stressed that Philippine citizenship did not give a person exemption from another country’s laws. Marcos eventually exercised the sovereign discretion available to the Philippines once Veloso had been returned. These were different instruments applied to different stages, and each tells us something about what government believes citizenship entitles a person to expect.

The "ingrata" episode adds another dimension because it asks what government believes the citizen owes in return. The answer in a democratic state should be limited. Citizens can be grateful. They can also remain angry. They may praise one action and condemn another. The state does not lose legitimacy when a rescued citizen refuses to become a grateful client.

There is, after all, something odd in demanding political gratitude from a family while simultaneously celebrating the state for fulfilling a public function. If Aquino’s intervention was admirable because the Philippine government protected a Filipino, then protection was being treated as part of legitimate government. If it was instead a personal favor for which political gratitude was owed, the democratic basis for the praise becomes much weaker.

The issue extends beyond one administration. Patronage language survives changes of party because it is older than any party. Philippine politics has long blurred the distinction between public service and personal benefaction. A scholarship funded by taxes acquires the politician’s name. Relief goods become evidence of generosity. Access to public institutions is narrated as the accomplishment of a patron. The beneficiary is encouraged to remember who “helped.”

The danger is not merely symbolic. Once public obligations are recast as favors, selective protection becomes easier to justify. A grateful citizen is deserving; an angry citizen appears less so. A politically inconvenient family can be portrayed as unreasonable even when its substantive complaint remains unanswered.

Celia Veloso’s refusal to perform gratitude therefore mattered in ways that were easy to miss amid the anger of 2015. She was not arguing that Aquino’s final intervention had no effect on the execution. She was asserting, however crudely, that one successful act did not erase years of frustration. The ferocity of the response revealed how uncomfortable that distinction can be in a political culture accustomed to treating access to state power as a personal transaction.

The Indonesian migrant women who supported Mary Jane offered, unintentionally, a different model. They had no patronage relationship with Aquino. Many had no political relationship with the Philippines at all. Their solidarity rested on shared economic conditions. They saw a migrant worker whose vulnerability resembled their own. To the extent that the campaign succeeded in making Indonesian authorities look at Veloso differently, it did so by moving her out of the abstract category “drug trafficker” and into the concrete world of recruitment, migration and unequal power.

That is perhaps the most consequential transformation in the entire case. A legal category had to be reopened by economic facts. The suitcase contained heroin; that was never in dispute. The deeper question was how the suitcase came to be in Veloso’s hands and what she knew about it. The business of recruitment, usually treated as background, became central to the meaning of the crime.

This is also why the case should resist easy conclusions. “Respect foreign law” is correct but insufficient. “Protect every Filipino” is morally appealing but too broad to function as a legal doctrine. “End labor export” captures one critique of economic dependence but can overlook the agency and genuine benefits experienced by many migrants. “Celebrate remittances” recognizes their economic importance while ignoring the costs distributed outside the national accounts.

The more useful approach is to hold the contradictions together. The Philippines benefits from labor mobility and should therefore invest in the institutions that make mobility safer. Citizens abroad remain subject to foreign jurisdiction and should therefore be warned clearly that a passport is not immunity. Governments should respect foreign legal systems while retaining the diplomatic confidence to ask for exceptions, clemency or reconsideration when particular facts warrant them. Migrants should possess greater bargaining power before departure so that the need for rescue arises less often.

This is where foreign relations understood as economics must become broader rather than narrower. Duterte was correct that trade, investment and infrastructure belong at the center of statecraft. But labor mobility means that workers belong there too. A foreign policy that can spend presidential attention securing an infrastructure loan should not regard the legal security of its migrant labor force as extraneous to economics.

Good relations are not the same as quiet relations. Mature bilateral relations should be capable of accommodating disagreement about a prisoner without threatening trade. If a request for clemency is treated as an unacceptable disruption to commerce, then the commercial relationship has begun to dictate national policy rather than serve it.

The same is true of sovereignty. Sovereignty does not mean never asking another state for anything. It means that the answer remains the other state’s to give. Aquino could ask; Widodo could refuse. Duterte could decline to ask; Indonesia retained its authority either way. Marcos could negotiate a transfer only because Indonesia agreed to one. Diplomacy occurs precisely in that space between what one government cannot command and what another government may nevertheless be persuaded to do.

Mary Jane Veloso’s case lasted long enough for every stage of that process to become visible. First there was migration and recruitment. Then arrest and conviction. Then appeals. Then an alleged trafficking network. Then an eleventh-hour reprieve. Then an argument over gratitude. Then another president’s doctrine of non-interference. Then years of waiting, a transfer agreement and finally a pardon.

The unusual length of the story is what makes it valuable to business policy. Nearly sixteen years separate the original employment journey from the presidential pardon. During that time the Philippines continued to rely heavily on overseas labor, administrations changed, the language of foreign policy shifted and remittance flows kept arriving. Veloso’s ordeal was exceptional; the economic structure that sent her abroad was not.

This does not mean that the Philippines should aspire to stop its people from leaving. A government that attempted to trap labor at home would merely replace one problem with another. The more ambitious objective is to improve the domestic economy sufficiently that departure ceases to function as compulsion. That requires productive investment, industrial employment, services capable of paying competitive wages, infrastructure, education and the ordinary institutions of a functioning labor market. It is a more difficult program than regulating recruitment agencies because it reaches the source of bargaining power.

A worker who has alternatives does not become invulnerable, but she becomes harder to exploit. She can question a dubious contract. She can decline to borrow against a promise. She can walk away from a recruiter who asks her to carry something she does not understand. Economic development becomes, in this sense, a form of anti-trafficking policy.

The Veloso affair also suggests a more disciplined way of thinking about the economic contribution of migration. Remittances should be valued for what they are: income earned by workers and transferred to households. They should not be mistaken for a development strategy in themselves. They may finance private advancement without necessarily creating the domestic productive capacity that would allow the next generation to stay if it wishes.

For decades, the Philippines has been extraordinarily good at producing workers capable of succeeding in other economies. The harder question is whether it can become equally good at producing enough high-productivity work for them at home. The answer determines whether the overseas worker is principally an expression of Filipino competitiveness or an adjustment mechanism for domestic economic weakness.

Mary Jane Veloso entered this system at its most precarious end. She was not an engineer recruited by a multinational corporation with a legal department, nor an executive transferred within a global company. She was a worker seeking employment through informal or poorly protected networks, the part of migration in which information asymmetry is greatest and bargaining power weakest. The disaster that followed was extreme, but the vulnerability was structurally ordinary.

The pardon cannot repair that structure. Nor can it make the politics surrounding the case disappear. Aquino’s role in the 2015 reprieve remains significant. Duterte’s remarks remain part of the record. Marcos’s pardon is now the act that formally closes the sentence. Supporters of each administration will naturally emphasize different parts of this history.

But the most important lesson lies outside presidential credit. A modern state cannot promise that its citizens will never encounter foreign law, nor should it pretend that nationality overrides territorial jurisdiction. It can, however, build an economy in which fewer citizens must accept opaque arrangements simply because they need work. It can make recruitment more transparent. It can treat migrant protection as economic infrastructure. It can use diplomacy without confusing advocacy with interference. And it can perform those functions without expecting citizens to repay public service with partisan loyalty. That last point may be the simplest and the easiest to lose. The Veloso family did not receive the reprieve because a president owned the power of mercy as private property. Aquino exercised the office of the Philippine presidency. Duterte later exercised the same office according to a different conception of sovereignty. Marcos now exercises it in granting clemency. Presidents leave; the state remains. A democracy depends upon maintaining that distinction. The citizen may petition the state, criticize it, embarrass it and still retain a claim upon its lawful protection. That is not ingratitude. It is the difference between citizenship and patronage. And abroad, citizenship acquires an even more complicated meaning. The Filipino who enters Indonesia is obliged to obey Indonesian law. The Philippines cannot shield that person from the existence of another sovereign. Yet the citizen does not become politically orphaned at the immigration desk. The home state continues to possess interests and obligations, particularly when credible allegations of trafficking or coercion arise.

The old advice remains sound: when in Rome, do as the Romans do. What Mary Jane Veloso’s sixteen-year ordeal demonstrates is that this is a rule for travelers, not a complete theory of foreign policy. The difficult work begins when obedience, guilt, exploitation and citizenship cease to fit neatly together. Veloso left the Philippines looking for work. By the time she was finally free, the journey had passed through a recruiter, an Indonesian airport, a death sentence, a last-minute presidential appeal, an international migrant campaign, an ugly dispute over whether her mother was sufficiently grateful, a second president’s doctrine of non-interference, years of diplomatic negotiation, a prisoner transfer and an absolute pardon. Few employment journeys could accumulate a heavier institutional cost.

For a country that has made labor mobility an important part of its economic life, that cost belongs in the ledger. The money sent home is real. So is the obligation created when the people earning it cross borders into legal systems the Philippines cannot control. The point of economic diplomacy should not be to choose between commerce and citizens. It should be to understand that, in a labor-exporting country, the citizens themselves are part of the commerce—and that protecting them is part of the price of doing business with the world.

One China, Two Perspectives: Rethinking What the Policy Means for the Philippines

2026-09-21T10:19:11.889-07:00

One China, Two Perspectives:

Rethinking What the Policy Means for the Philippines

Source: the Economist

The “One-China Policy” is often invoked in Philippine foreign-policy discussions as though its meaning were self-evident. The conventional formulation is familiar: there is one China, the People’s Republic of China (PRC) is the government representing China, Taiwan is part of China, and countries that recognize Beijing are expected to observe that position in their diplomatic relations.

There is, however, a problem with treating that formulation as the complete explanation. The phrase “One China” has a history that predates the PRC’s present diplomatic formulation. It emerged from a much longer contest over who had the political legitimacy to represent China. For much of the second half of the 20th century, the relevant dispute was not simply between Beijing and Taiwan as two separate political entities. It was a contest between the PRC in Beijing and the Republic of China (ROC), whose government relocated to Taiwan, with both governments claiming to represent China.

That history is important because it changes the question being asked. The issue is not merely whether there is “one China.” It is also which conception of China, which government’s claim to representation, and which historical interpretation provide the basis for saying that there is one China.

For Beijing, the answer is clear. The PRC is the sole legal government of China, Taiwan is part of China, and there cannot be “two Chinas” or an independent Taiwan. Taipei's position has evolved considerably over the decades, particularly as Taiwan developed its own democratic institutions and political identity, but the ROC's original position was itself based on a competing claim to represent China.

The international system eventually resolved the question of China's representation in favor of Beijing. But resolving representation is not necessarily the same thing as resolving every historical, political or legal question that has grown out of the Chinese civil war.

That distinction is particularly relevant when the United Nations is invoked as the definitive foundation of the contemporary One-China narrative.

Is the issue really about the United Nations?

United Nations General Assembly Resolution 2758 of 1971 is central to the history of the issue. The resolution restored the PRC's rights in the United Nations, recognized the representatives of the PRC government as the lawful representatives of China in the organization, and removed the representatives of Chiang Kai-shek. In institutional terms, it was decisive: Beijing obtained China's seat at the United Nations, while Taipei lost the ROC's representation there.

But the resolution raises a question that is often overlooked in public discussion: "is the Taiwan question fundamentally a question about the United Nations?" It is not. The UN is an important part of the history, but it is not the entirety of the history. Resolution 2758 settled who would represent China within the United Nations system. It did not, merely by determining the occupants of China's UN seat, erase the political history that produced the competing governments in the first place.

Nor should a resolution concerning representation automatically be treated as though it were a comprehensive international adjudication of every question concerning Taiwan's sovereignty, political status or future.

This is where the use of the United Nations as a kind of diplomatic alibi can become problematic. It allows a complicated historical contest over legitimacy to be reduced to an institutional outcome: the UN recognizes Beijing, therefore the broader One-China question is considered settled on Beijing's terms.

That conclusion goes beyond what the institutional question itself necessarily establishes. Beijing certainly has a broader interpretation. Chinese authorities regard Resolution 2758 as affirming the One-China principle and supporting the position that Taiwan is part of China. Taiwan and other governments and analysts have disputed that interpretation, particularly the proposition that the resolution itself constitutes a determination of Taiwan's sovereignty.

The existence of this dispute does not make Resolution 2758 irrelevant. Quite the opposite. It demonstrates why the resolution must be understood in its proper context.

The UN resolved the question of "who represents China in the organization". It did not transform a decades-long contest over Chinese legitimacy into a simple matter of historical nonexistence. The distinction may appear technical, but international relations frequently turn on precisely these technical distinctions. Representation, recognition, sovereignty and territorial claims are related concepts, but they are not interchangeable.

The historical problem of “One China”

The contemporary phrase can also obscure the fact that “One China” historically had competing meanings. For the PRC, the principle meant that there is one China, that the PRC is the sole legal government of China, and that Taiwan is part of Chinese territory. For the ROC, particularly during the earlier decades after 1949, the proposition was framed differently. The ROC did not initially regard itself as merely the government of Taiwan. It claimed to be the legitimate government of China.

Thus, the historical dispute was not simply “Beijing versus Taiwanese independence.” For a substantial period, it was a contest between two governments making competing claims to represent the same China.

That distinction matters because it shows why the phrase “One China” cannot simply be detached from the question of political legitimacy. The PRC ultimately prevailed in the international contest for diplomatic recognition. Most states shifted recognition from Taipei to Beijing, and the PRC assumed China's UN seat. Taiwan, meanwhile, continued to be governed separately under the ROC government and gradually developed a political system and identity distinct from the mainland.

The international community consequently arrived at a diplomatic arrangement that is inherently more complicated than the slogan suggests. Most states recognize Beijing as the government of China while maintaining various forms of unofficial relations with Taiwan.

The Philippines is part of this diplomatic system. But being part of that system does not necessarily require Manila to adopt every proposition contained in Beijing's broader political narrative.

What did the Philippines actually agree to?

The Philippine position has a clear historical foundation. When Manila established diplomatic relations with Beijing in 1975, the two countries issued a Joint Communiqué. The Philippines recognized the PRC as the sole legal government of China and stated that it understood and respected the Chinese position that Taiwan is part of Chinese territory.

This is an important commitment and should not be minimized. It forms part of the foundation of Philippine-China diplomatic relations and explains why official Philippine policy does not recognize Taiwan as a separate sovereign state.

But a diplomatic commitment should be read according to what it actually says and the context in which it was made. There is a meaningful difference between recognizing the PRC as the government representing China and accepting that every subsequent interpretation Beijing places upon the One-China principle automatically becomes a Philippine position.

The distinction is not unique to China. In international diplomacy, recognition of another government does not ordinarily mean that the recognizing state adopts every historical claim, territorial interpretation, strategic objective or political doctrine advanced by that government. Diplomatic recognition establishes a relationship between states and governments. It does not eliminate the independent foreign policy of the recognizing state.

This is where the Philippine discussion could benefit from greater precision. The relevant question is not whether Manila has a One-China Policy. It clearly does. The more useful question is "what the Philippine One-China Policy actually requires Manila to recognize, and what it does not require Manila to surrender." That is particularly important because the Philippines has interests of its own.

A policy cannot be separated from national interest

Philippine policy toward China cannot be considered exclusively through the prism of diplomatic recognition. China is one of the Philippines' most important economic and trading partners, while the Philippines is simultaneously a maritime state with its own territorial claims, security interests and obligations.

Taiwan is also not an abstract issue for Manila. Its geographic proximity means that instability in the Taiwan Strait could have direct consequences for Philippine commerce, shipping, supply chains, investment and energy security. The Philippines also has substantial people-to-people and economic ties with Taiwan, including a large Filipino workforce there.

From a business perspective alone, this makes excessive simplification undesirable. Companies do not operate according to diplomatic slogans. They deal with shipping routes, insurance premiums, supply-chain exposure, investment decisions, labor mobility, market access and political risk. A significant disruption in the Taiwan Strait would not remain a theoretical geopolitical problem; it could become an economic problem for the Philippines.

This does not mean that Manila should abandon its One-China Policy. It means that the policy has to coexist with the Philippines' responsibility to protect its own interests.

There is no inherent contradiction in maintaining official diplomatic relations with Beijing while sustaining substantial unofficial economic, commercial, cultural and people-to-people relations with Taiwan. Indeed, this is broadly how many governments manage the practical consequences of the cross-Strait divide. The question is therefore one of diplomatic scope.

Recognition is not the same as deference

There is a tendency in some discussions to treat the One-China Policy as though it were a comprehensive commitment to Beijing's worldview. That is where a diplomatic policy can quietly become something much larger than its original purpose.

Recognizing Beijing does not necessarily mean that Manila must accept Beijing's interpretation of every development involving Taiwan. Nor does it mean that the Philippines must treat every Chinese statement concerning the Taiwan Strait as though it were an authoritative interpretation of Philippine obligations.

There is an important distinction between "acknowledging another state's position" and "adopting that position as one's own".

The Philippine formulation in its 1975 diplomatic agreement is instructive precisely because it used language concerning the Philippine government's understanding and respect for the Chinese position. That language belongs to the diplomatic history of the relationship and should be taken seriously. But it should also be distinguished from the broader and more categorical formulation Beijing uses when describing its own One-China principle.

This distinction becomes particularly important when the issue intersects with Philippine sovereignty. A sovereign state cannot reasonably be expected to regard its own foreign policy as infinitely elastic simply because another state attaches a broader meaning to a diplomatic commitment.

The Philippines can recognize China's government while retaining an independent assessment of what its own national interests require. It can avoid taking a position on Taiwan's ultimate political status while still preparing for the economic and security consequences of developments across the Taiwan Strait. It can maintain its diplomatic relationship with Beijing while continuing practical relations with Taiwan. That is not necessarily a contradiction. It is the normal complexity of statecraft.

The problem with making Beijing the default definition

The deeper issue, then, is the tendency to treat Beijing's interpretation of “One China” as though it were the definition of the term itself.

This is understandable from Beijing's perspective. The PRC is the internationally recognized government of China and holds China's seat at the United Nations. It is therefore unsurprising that Beijing would present its interpretation as the authoritative one.

But other countries do not have to surrender the distinction between "China's position" and "their own policy". This is particularly important for the Philippines because diplomatic language has practical consequences.

If Manila says that it recognizes the PRC as the government of China, that establishes one thing. If Beijing then says that this recognition necessarily requires Manila to accept every element of the PRC's interpretation concerning Taiwan, regional security, military activities or Philippine policy, that is a second proposition. The second proposition requires its own justification.

It should not be smuggled into Philippine policy simply by repeating the phrase “One China.” This is why the debate over terminology is not merely semantic. The language used in diplomatic statements establishes the boundaries within which governments later interpret their obligations.

A broad interpretation may produce a very different foreign policy from a narrower one.

What about Taiwan?

None of this requires the Philippines to recognize Taiwan as an independent sovereign state. That would be a separate policy question. Nor does it require Manila to reject the PRC's position.

The more modest argument is that Taiwan's practical existence cannot be wished away simply because most countries do not recognize it diplomatically as a sovereign state. Taiwan has its own government, legal and economic institutions, political system, armed forces and international economic relationships. Its political status is contested, and its international participation remains constrained by the diplomatic consequences of the PRC's position and by the policies of other states. These facts coexist. The Philippines can acknowledge these practical realities without altering its formal diplomatic recognition of Beijing.

Indeed, this distinction is essential for business and economic policy. Philippine companies dealing with Taiwan do not cease to exist because Manila maintains a One-China Policy. Trade does not become illegitimate. Educational exchanges do not become illegitimate. Investment does not cease to have economic value.

The challenge for government is to maintain these practical relationships without creating unnecessary conflict with its formal diplomatic commitments. That requires careful policy, not slogans.

The danger of confusing international recognition with historical finality

There is also a broader lesson in the way the One-China issue is discussed. International recognition can settle the practical question of which government other states will deal with. It does not necessarily settle every historical argument surrounding legitimacy.

The PRC won the international contest for recognition as the government representing China. That is an established feature of the present international system. But the historical fact that another government once made the same claim does not disappear because the international balance changed.

Nor does the separate political development of Taiwan disappear. This is why describing the history simply as “China and Taiwan” can itself be misleading. It projects today's political geography backward onto a period in which the central dispute was explicitly about which government represented China.

Understanding that history does not require endorsing the ROC's former claim, nor does it require rejecting the PRC's current position. It simply makes the analysis more accurate.

What should matter to Manila?

For the Philippines, the practical issue is ultimately one of policy autonomy. Manila does not need to choose between Beijing's entire political narrative and Taipei's historical narrative. It needs to determine what its own diplomatic commitments mean and how those commitments interact with Philippine national interests. That means maintaining the One-China Policy where it forms part of the country's established diplomatic position, while being precise about its scope.

It means recognizing the PRC as the government with which Manila maintains official diplomatic relations without assuming that recognition transfers to Beijing the authority to define Philippine policy on every issue. It means understanding Resolution 2758 as an important part of the history of China's representation at the United Nations without using it as a substitute for analysis of the broader Taiwan question.

And it means recognizing that Philippine sovereignty and national interest remain distinct from the diplomatic question of which government represents China. This last point is particularly important as economic and security questions increasingly overlap.

The Philippines is not an abstract observer of the Taiwan Strait. It sits near one of the world's most important commercial and strategic waterways. Its economy is integrated into regional supply chains. Its workers, companies and consumers are exposed to developments in both mainland China and Taiwan.

Foreign policy therefore has an economic dimension that cannot be ignored. A policy that is diplomatically neat but analytically imprecise can create problems when geopolitical tensions reach the level of trade, investment, logistics and national security.

A more precise way of looking at One China

The One-China Policy need not be discarded. But neither should it be treated as though its meaning were self-evident. A more precise reading begins by distinguishing several questions that are frequently collapsed into one.

First, "which government does the Philippines recognize as the government of China?" The answer is the PRC.
Second, "what position does Beijing take regarding Taiwan?" Beijing maintains that Taiwan is part of China and that the PRC is the sole legal government representing China.
Third, "what does UN Resolution 2758 establish?" It establishes the PRC's representation of China in the United Nations and removed the ROC representatives from China's UN seat. The broader implications of the resolution for Taiwan remain a matter of competing interpretation.
Fourth, "what did the Philippines itself agree to when it established diplomatic relations with Beijing?" That question should be answered from Philippine diplomatic documents, not simply from Beijing's subsequent characterization of the agreement.
And finally, "what remains within the Philippines' own sovereign policy discretion?" That last question is often the least discussed and perhaps the most important.

A country's foreign policy cannot consist solely of accepting the interpretations of larger powers. Diplomatic relationships necessarily involve accommodation, but accommodation is not identical to surrendering policy autonomy.

Beyond the slogan

The One-China question is therefore more complicated than the standard formulation suggests. Historically, it emerged from a contest in which two governments claimed to represent China. The PRC ultimately secured international recognition as the government representing China and took China's seat at the United Nations. Taiwan, under the ROC government, subsequently developed along a separate political and economic trajectory.

That history matters because it explains why “One China” is not simply a geographical statement. It is also a question of representation, legitimacy and diplomatic recognition. The United Nations is an important part of that story, but it should not become a substitute for the story itself. Resolution 2758 answered the institutional question of who represents China at the UN. It did not eliminate the historical circumstances that produced the dispute or automatically determine the meaning that every country must attach to its own One-China Policy.

For the Philippines, the prudent approach is therefore neither to discard the policy casually nor to treat it as an unlimited commitment to Beijing's interpretation.

The better approach is to recover the distinction between recognition and endorsement, representation and sovereignty, diplomatic commitment and national interest. That distinction allows Manila to maintain its established diplomatic relationship with Beijing while preserving the policy space necessary to protect Philippine economic and security interests.

It also avoids a false choice. The Philippines does not have to decide whether Beijing or Taipei is the country's preferred historical narrator of China. It has to decide what the Philippine government recognizes, what it has agreed to, what it remains free to determine for itself, and how those choices serve Philippine interests.

For a country whose economy is deeply connected to the wider East Asian system, that is not a philosophical distinction. It is a practical one. And perhaps that is where the One-China debate should begin: not with the assumption that Beijing's interpretation is the only possible meaning of the phrase, but with the more basic question of what the Philippines itself means when it says it has a One-China Policy—and whether that meaning is being defined in Manila or elsewhere.

September 21 and the Continuing Past

2026-09-21T09:40:03.853-07:00

September 21 and the Continuing Past

There was something appropriate about the route taken through Manila on September 21.

Activists and multi-sectoral groups gathered at Liwasang Bonifacio before marching toward Mendiola for the 54th commemoration of the declaration of martial law. Their grievances did not stop at 1972. Corruption, human rights violations, the flood-control controversy and the proposed Pax Silica development all appeared in a protest that sought to connect an unhappy past with an equally unsettled present.

The contingent was initially blocked by authorities along Recto near Mendiola before proceeding with its final program. Elsewhere around the capital, police and barricades had already become part of the scenery as thousands were expected to join various September 21 demonstrations. Accountability over corruption, political dynasties and civil liberties figured prominently in the day's mobilizations.

It would be tempting to treat all this as another annual ritual: speeches, placards, the familiar chants of “Never Again,” followed by the inevitable arguments over what martial law accomplished and what it destroyed.

Yet September 21 persists precisely because the argument has never really been confined to martial law. It is also an argument over how power presents itself, how development is sold, how corruption survives political transitions and how easily the language of national salvation can become the language through which entrenched interests protect themselves.

That is why the starting point must still be 1972. Martial law was imposed with promises of order, discipline, reform and national reconstruction. What followed included widespread arrests and detention, torture, enforced disappearances and killings of people considered opponents or critics of the government. Amnesty International documented such patterns during the period; Philippine law itself later formally recognized victims of summary execution, torture, enforced disappearance and other gross human-rights violations committed under the Marcos regime.

These facts need not be embellished. Their weight is sufficient. But the more interesting question today is how such a system explained itself.

Martial law did not advertise repression as its objective. It offered instead a grander proposition: the republic had to be saved and society remade. The old political order was supposedly exhausted. Oligarchs had corrupted democracy. Disorder had become intolerable. Only a more disciplined state could sweep aside the failures of the past and construct something new.

The phrases associated with the period — the “New Society,” the need to “save the republic,” even the notion of a “revolution from the center” — reveal something important about political power. Measures that concentrate authority seldom arrive carrying labels that say concentration of authority. They arrive as solutions to disorder. And the vocabulary was clever because it borrowed the grievances of ordinary people.

The old society really was unequal. Oligarchic power really was a problem. Poverty, landlordism, political patronage and dependence on outside interests were not inventions of martial-law propaganda. The failure lay in claiming that concentrating political authority would solve these problems.

Instead, the attack on the old oligarchy became associated with the rise of cronies and favored interests surrounding the new regime. One arrangement of privilege gave way, in significant respects, to another.

That distinction is worth remembering because it prevents September 21 from becoming merely an argument over whether roads, hospitals or cultural buildings were constructed during the dictatorship. Of course things were built, as Governments build things. But the more serious questions concern lies in how they were financed, who benefited, what institutions were weakened in the process and whether visible construction compensated for costs carried elsewhere by the population. Concrete is an inadequate unit with which to measure political legitimacy.

The same caution applies in the present. The Philippines of 2026 is not the Philippines of 1972. There is no useful analysis in pretending that every controversy involving government is simply martial law reborn. Institutions differ, political competition exists, circumstances change and contemporary abuses require examination on their own terms. But the persistence of certain questions is difficult to ignore. Extrajudicial killings, red-tagging, alleged trumped-up charges, anti-terror laws and the treatment of political dissent have replaced some of the terminology associated with the dictatorship. They are not interchangeable phenomena, and they should not be lazily collapsed into one historical category. Yet they keep alive the older dispute over where legitimate state power ends and political coercion begins.

So does corruption. Every generation seems to discover corruption as though previous generations had somehow neglected the subject. Scandal is exposed, hearings are held, officials denounce wrongdoing, prosecutions begin and reforms are promised. A few years later the country discovers that public money has once again acquired a remarkable talent for finding its way toward private interests.

That recurring spectacle explains why corruption occupied such a prominent place in the September 21 demonstrations. The commemoration became not merely a retrospective condemnation of what happened half a century ago but a convenient occasion for asking why the political structures that permit patronage, concentrated wealth and weak accountability remain so difficult to dislodge.

Pax Silica entered the march from this direction. Opposition to it should not be mistaken for the whole protest, nor should criticism of Pax Silica be reduced to hostility toward technology or foreign investment.

The proposed initiative is tied to semiconductor manufacturing, artificial intelligence infrastructure, critical minerals and other strategic supply chains, with a major hub planned in New Clark City. Supporters see an opportunity to place the Philippines inside higher-value technological industries. Critics, including labor, environmental, church and other civil-society groups, have raised questions about control, land and water use, environmental costs and the extent to which the project aligns Philippine development with the strategic objectives of the United States.

There is a serious economic argument buried beneath the slogans. A semiconductor plant on Philippine soil is not automatically Philippine industrialization. Neither is an artificial-intelligence complex necessarily technological sovereignty. A mine producing strategic minerals may generate exports without developing downstream industry. A data center may attract capital without producing Filipino ownership of the technologies running inside it.

None of this makes such investments undesirable by definition. Foreign capital can create employment. Integration into sophisticated supply chains can expose local firms and workers to new technologies. Industrial parks, transport corridors and energy projects can become foundations for something larger.

But the outcome depends on the terms. That is the part of development policy that ribbon-cuttings tend to obscure. If land, labor, minerals, electricity and public infrastructure are supplied locally while technology, intellectual property, financing and commanding corporate decisions remain elsewhere, then the country may host advanced industry without acquiring much industrial power of its own.

The factory may be modern while the economic relationship remains old. That concern explains why Pax Silica has become useful to a broader critique of Philippine development. Protesters opposing the initiative have explicitly argued that development should occur on Philippine terms rather than those set by foreign powers and large corporations.

Whether that criticism ultimately proves justified will depend on the actual agreements, technology transfers, ownership structures, environmental obligations and industrial policies attached to the project. But the question itself is legitimate.

It is also much older than Pax Silica. Philippine governments have spent decades navigating between domestic oligarchic interests and competing foreign centers of economic and strategic power. Washington retains deep security and commercial links with Manila. Beijing has become a major economic actor and geopolitical rival. Japanese, Korean and European capital occupies important sectors. Global finance exerts its own disciplines through investment, debt and access to markets.

The danger lies in confusing movement between these interests with independence from them. For critics marching on September 21, the issue is not simply American influence, nor should it be. Replacing Washington with Beijing would hardly constitute economic sovereignty. Nor would replacing one set of foreign investors with another while leaving the basic domestic structure untouched.

The problem is less geographical than structural. Wall Street or Shanghai, Washington or Beijing: the relevant economic question is what the Philippines gains beyond the immediate transaction.

Does foreign investment create domestic suppliers? Does it transfer technology? Does it produce engineers and researchers capable of building the next generation of industry? Does it deepen Filipino capital formation? Does it strengthen local control over strategic sectors? Does dependence diminish as development proceeds? Or does the country remain primarily a supplier of labor, land and resources while celebrating each new investment announcement as evidence that industrialization has finally arrived?

Those questions become harder to avoid when set against the conditions experienced by ordinary Filipinos.

The country has changed enormously since 1972. Cities have expanded. Industries have developed. Millions now work in sectors that hardly existed half a century ago. Infrastructure has improved, technology has transformed daily life and the Philippine economy is far larger and more complex.

Yet familiar problems remain stubbornly recognizable: insecure employment, inadequate wages, landlessness, housing shortages, unequal public services, political dynasties and recurring corruption.

This persistence gives every new language of transformation a burden of proof. There was once the New Society. Later governments had their own formulas for national recovery, modernization and reform. "Philippines 2000", "Angat Pinoy 2004", "Daang Matuwid", and more recently came "Build, Build, Build" and now "Bagong Pilipinas". Every administration naturally requires a vocabulary with which to explain itself.

The trouble begins when vocabulary substitutes for examination. Order is not necessarily justice. Discipline is not necessarily consent. Investment is not necessarily industrialization. Infrastructure is not necessarily development. Stability is not necessarily legitimacy.

Nor does questioning these terms require rejecting what they can genuinely accomplish.A useful road remains useful. A functioning railway improves lives. A productive factory creates employment. Foreign partnerships can serve Philippine interests. Public authority is necessary for any functioning society.

The point is precisely to distinguish the thing itself from the political mythology built around it. A road can be necessary and overpriced. A factory can create jobs while transferring little technology. A foreign partnership can be mutually beneficial or profoundly unequal. An administration can construct useful public works and still deserve scrutiny for abuses committed elsewhere.

One does not cancel the other. That is also why arguments defending martial law by listing infrastructure have always been inadequate. They treat repression and development as entries in the same ledger, as though enough bridges might eventually balance an enforced disappearance.

For the families of those arrested, tortured, killed or never seen again, September 21 necessarily means something more intimate than a historical debate over economic statistics. The Philippine state has already recognized that such violations occurred.

For the rest of the country, however, the date poses a different challenge. It asks how a political order promising to destroy oligarchy could produce new concentrations of privilege; how repression could be marketed as discipline; and how policies presented as national development could coexist with enormous private accumulation and continuing poverty.

Those are historical questions, but they are not antiquarian ones. The Marcos dictatorship did not invent inequality, oligarchy or foreign dependence. Its overthrow did not eliminate them. EDSA restored democratic institutions without magically resolving the political economy beneath them. Subsequent administrations operated within many of the same unresolved structures, even as each modified them in important ways.

That is the more sober meaning of a “continuing past.” History does not simply repeat 1972. It does something more complicated. Old problems survive while acquiring new institutions, new personalities and new slogans.

The result is not another New Society but the recurring temptation to believe that political concentration can cure political failure, that foreign alignment can substitute for national strategy, or that impressive construction can settle the argument over who actually benefits from development.

Seen this way, the September 21 march from Liwasang Bonifacio toward Mendiola was less a reenactment of an old struggle than an argument about unfinished business. Pax Silica was part of it, but only part. So were corruption, inequality, state violence, foreign influence and the continuing ability of entrenched interests — domestic or foreign — to adapt themselves to whichever language happens to dominate the moment.

This does not mean that nothing has changed since martial law. Much has. It means instead that democratic memory is most useful when it does more than remember villains and victims. It should also examine the arrangements that made abuse politically possible and economic dependence durable.

“Never Again” remains an important warning. But perhaps the harder lesson of September 21 is that the past rarely announces its return under its old name.

It usually arrives rephrased for the present.

The Price of Order: Remembering September 21 and the Political Economy of Authoritarian Rule

2026-09-20T02:24:08.391-07:00

The Price of Order: Remembering September 21

and the Political Economy of Authoritarian Rule

There are dates in the history of a country that resist conversion into ordinary anniversaries. September 21 belongs to that category in the Philippines, not simply because Proclamation No. 1081 bears that date, but because it has come to represent a political rupture whose consequences extended far beyond the formal declaration of martial law. The arrests, the closing of newspapers and broadcast stations, the detention of political opponents, the enlargement of executive authority, and the subsequent institutionalization of authoritarian rule transformed what had been presented as an emergency measure into a new arrangement of political life. General orders issued immediately afterward directed the arrest and continued detention of persons whom the government considered connected with rebellion, subversion and threats to national security, while other orders placed important categories of offenses within the jurisdiction of military tribunals.

The commemoration of September 21 therefore cannot be separated from the experience of those who were arrested, detained, tortured, killed or disappeared during the years of dictatorship. This is no longer merely a matter of competing recollections between admirers and opponents of the Marcos government. The Philippine State itself, through Republic Act No. 10368, subsequently recognized victims of summary execution, torture, enforced or involuntary disappearance, arbitrary detention and other gross violations of human rights committed during the Marcos regime, and acknowledged a moral and legal obligation to restore their honor and dignity and provide recognition or reparation. The significance of that law lies not merely in the compensation it authorized but in the institutional acknowledgment that the injuries of the period were not simply unfortunate episodes attached to an otherwise conventional administration. They formed part of the historical record of the State and consequently of the obligations inherited by the democratic republic that followed it.

Such remembrance necessarily carries grief and anger, particularly among those whose families experienced detention, disappearance or death. Yet its importance extends beyond the emotional claims of memory. September 21 remains intellectually and politically relevant because the authoritarian experiment of 1972 was justified not merely through the language of emergency but through an ambitious theory of national reconstruction. Martial law was presented as a means of saving the Republic from disorder while simultaneously creating what the government called a New Society. The rhetoric appealed to discipline, social reform, economic development and national regeneration. General Order No. 15, for example, explicitly described one objective of the martial-law proclamation as the achievement of social, economic and political reforms and the transformation of the country into a new society supposedly infused with discipline and social conscience.

The argument had considerable political force because many of the conditions against which it was directed were real. The pre-1972 Republic was hardly an egalitarian democracy. Political parties were frequently personalistic machines, elections were expensive and violent, landed interests retained considerable influence, poverty remained widespread, and access to public authority was substantially conditioned by family, wealth and patronage. Rural insurgency and separatist conflict were real security problems rather than later inventions of official propaganda. The social discontent of the period was likewise genuine. To acknowledge these conditions is not to accept the authoritarian solution that followed; it is instead necessary to understand why the rhetoric of national reconstruction could acquire plausibility among sections of the population dissatisfied with the old order.

The New Society presented itself as a repudiation of precisely these defects. Its official argument held that an exhausted political order dominated by oligarchic interests could no longer reform itself through the conventional mechanisms of liberal democracy. What Ferdinand Marcos would describe as a “revolution from the center” proposed that the State itself would become the principal agent of transformation, disciplining both the political class and society from above while directing the resources necessary for modernization. The old oligarchy was to be restrained, administrative authority centralized, economic development accelerated and the population incorporated into a disciplined national project.

It was an ambitious proposition, but it contained a contradiction that became more apparent as authoritarian rule matured. The concentration of authority that was supposed to free the State from entrenched private interests also made access to the State itself more valuable. Once the executive possessed extraordinary discretion over credit, licenses, contracts, foreign exchange, monopolies, franchises, government guarantees and appointments, the problem of oligarchic influence did not disappear. It changed its institutional location. Competition among established interests was increasingly replaced by a system in which economic advantage depended upon access to an unusually centralized presidency and the networks surrounding it.

The resulting arrangement has frequently been described as crony capitalism, although the phrase itself can conceal as much as it reveals if used merely as an insult. Its more useful meaning concerns the transformation of the boundary between public authority and private advantage. World Bank retrospectives on the Philippine private sector later observed that the distinction between public and private activity had become blurred during the Marcos administration, with selected firms receiving directed credit, foreign-exchange access, tax privileges and other forms of state support. Some investments were productive, while others were inefficient and became liabilities ultimately absorbed by public financial institutions. The broader problem was therefore not state intervention as such, since successful developmental states elsewhere in East Asia also intervened extensively, but the absence of sufficiently impersonal institutions capable of disciplining beneficiaries of state assistance and withdrawing privileges when they failed to serve wider developmental purposes.

This distinction is important because criticism of the Marcos economic order need not proceed from the assumption that government intervention in economic life is inherently undesirable. Such an assumption would itself distort the development experience of much of Asia. Japan, South Korea, Taiwan and Singapore all employed different combinations of state direction, industrial policy, public investment, controlled finance and collaboration between government and business. The decisive distinction was not between an interventionist State and a laissez-faire one, but between intervention governed by developmental discipline and intervention subordinated to privileged political access. A State that directs credit toward an industry while requiring exports, technological upgrading or measurable increases in productivity performs a different economic function from a State that socializes the liabilities of enterprises because their proprietors possess political connections.

The Philippine case under martial law increasingly revealed the latter danger. State power could be used to reorganize industries, grant monopolistic privileges and extend financial support, yet the State itself lacked effective independent mechanisms through which these decisions could be publicly contested. Congress had ceased to function in its old form; media institutions operated under severe restrictions; opposition figures were imprisoned, marginalized or forced abroad; and the political environment discouraged the kind of scrutiny that might otherwise have exposed the costs of favored economic arrangements at an earlier stage. The suppression of political accountability therefore had economic consequences. Authoritarianism was not simply a question of what government could say or whom it could imprison; it affected the distribution of resources and the ability of society to examine how those resources were being used.

This is why the enduring argument over martial law cannot adequately be resolved by inventories of infrastructure. Roads, bridges, irrigation systems, hospitals, schools, cultural buildings, power plants and other public works were built during the period, and any serious historical assessment has to acknowledge their existence and, where appropriate, their continuing usefulness. Yet physical accomplishment by itself is an insufficient measure of development. Every public structure embodies a financing decision, an allocation of scarce resources and an opportunity cost. A project paid for through foreign borrowing continues to impose obligations long after the inauguration ceremonies have ended. A government guarantee extended to an unsuccessful private enterprise may later become public debt. An industrial undertaking protected from competition may produce employment while simultaneously imposing higher costs elsewhere in the economy. A large infrastructure program may increase productive capacity, but it may also become economically burdensome if projects are poorly selected, contracts are inflated or foreign liabilities accumulate faster than the country's capacity to service them.

The relevant question is therefore not whether public works existed, because they plainly did. The question concerns the economic and institutional terms under which they were undertaken and the distribution of their benefits and costs. The developmental State cannot be evaluated through concrete alone. It has to be examined through employment, productivity, industrial capability, technological acquisition, agricultural transformation, real wages, public health, educational access and the long-term capacity of the economy to reproduce growth without repeatedly depending upon unsustainable external financing.

The external debt accumulated during the 1970s and early 1980s consequently belongs within the discussion. Borrowing is not inherently evidence of economic failure; developing economies commonly borrow to finance investments whose returns are expected to exceed the eventual cost of repayment. The difficulty arises when the quality of investment deteriorates, when borrowed funds sustain politically protected enterprises without corresponding increases in productive capacity, or when the structure of debt leaves the economy dangerously exposed to changes in international interest rates, export conditions and investor confidence. World Bank reviews of the Philippine economy have noted that a number of large investments during the period contributed to the external debt burden without producing commensurate increases in output.

The eventual economic crisis cannot be attributed to a single cause. The oil shocks, the changing international credit environment, higher global interest rates, deteriorating terms of trade, weaknesses in domestic industry, policy errors, capital flight and political instability all formed part of the deterioration. The assassination of Benigno Aquino Jr. in 1983 then intensified an already serious crisis of confidence. Any useful economic history must resist the temptation to explain the collapse entirely through either foreign circumstances or domestic corruption. Both external vulnerability and internal institutional weakness mattered, and they interacted with one another. A heavily indebted economy could have endured international shocks more successfully had investment returns been stronger and public confidence greater, while even competent domestic policy would have confronted severe pressures from the global environment of the period.

What remains particularly relevant is that the promise of authoritarian efficiency did not insulate the Philippines from either economic crisis or political decay. The restriction of political competition removed certain obstacles to rapid decision-making, but it also weakened the mechanisms through which bad decisions might be corrected. Administrative speed and administrative quality are not identical. A government may acquire the capacity to decide quickly while simultaneously losing the institutional capacity to determine whether the decision is correct, because officials become reluctant to transmit unwelcome information upward, private interests cultivate access to concentrated authority, and public institutions become increasingly identified with the political survival of the regime.

The language of the “revolution from the center” deserves particular scrutiny in this regard. It attempted to appropriate grievances traditionally associated with movements seeking structural transformation while insisting that such transformation could be accomplished without transferring political initiative to the population itself. The State would attack oligarchy, direct development and reorganize society, but the citizen would participate largely within structures defined by that same State. The contradiction was obvious: the New Society claimed to act in the name of ordinary Filipinos while narrowing the independent political spaces through which ordinary Filipinos might contest the policies being implemented on their behalf.

This contradiction was most visible when the language of social reform encountered the continuing realities of inequality. The regime promised agrarian transformation, national discipline and economic modernization, yet the structure of landed and commercial power proved more resilient than its rhetoric suggested. Existing oligarchs were weakened in some sectors, but politically favored economic groups emerged or expanded in others. The result was not the abolition of elite economic power but its partial recomposition. A more centralized State altered the manner in which wealth and influence interacted with government without necessarily democratizing ownership or substantially redistributing control over the productive resources of the country.

The experience also demonstrates why the political and economic dimensions of democracy cannot easily be separated. Freedom of the press, judicial independence, freedom of association and political opposition are sometimes treated as liberal luxuries distinct from the material problems of employment, wages and development. In practice, they are among the institutional instruments by which economic power is made answerable to society. Independent journalists investigate questionable contracts and monopolies. Legislatures examine public expenditure. Labor organizations contest wage policies and conditions of work. Farmers' groups challenge land arrangements. Universities subject official development theories to criticism. Courts establish limits upon executive action. When these institutions are weakened, those already possessing administrative or economic power encounter fewer obstacles to converting public authority into private advantage.

The human-rights question thus belongs within the political economy of martial law rather than in a separate moral appendix. Arbitrary detention, torture, disappearance and political intimidation affected not only individual liberties but the capacity of society to organize around competing economic interests. A worker who fears association, a peasant organizer exposed to military suspicion, a student movement constrained by surveillance, or a journalist unable to investigate politically connected firms operates within an economic system in which bargaining power has already been altered by coercive political arrangements.

This is also why the commemoration should avoid a simplistic nostalgia for the constitutional order preceding 1972. The failures of that order were among the conditions that permitted authoritarianism to present itself as an attractive alternative. Restoring elections by itself could not eliminate oligarchy, just as removing martial law could not automatically resolve landlessness, low wages, unemployment, inadequate housing or regional inequality. The deeper historical question concerns whether Philippine democracy has developed institutions capable of addressing these structural problems without repeatedly inviting the argument that political liberty must be suspended because democratic government is supposedly too disorderly to undertake serious reform.

More than half a century after the proclamation, many of the issues that gave force to the language of the New Society remain recognizable, even though the country itself has undergone profound political, demographic and economic change. Questions concerning unequal development, precarious employment, insecure housing, agrarian conflict, the concentration of wealth and dependence upon external sources of capital continue to influence political life. It would be inaccurate to suggest that nothing has improved since the 1970s, just as it would be misleading to treat every contemporary social conflict as a repetition of martial law. The more useful conclusion is that the endurance of these problems continues to create political opportunities for those who promise order as a substitute for difficult institutional reform.

The persistence of practices such as red-tagging demonstrates the relevance of this institutional caution. The Supreme Court has recognized that red-tagging, vilification, labeling and guilt by association may constitute threats to life, liberty or security, while civil-society monitors continue to report cases in which activists, journalists, environmental defenders and organizations are publicly associated with communist or terrorist movements. These contemporary practices do not make the present constitutional order identical to the dictatorship, and historical differences should not be erased for rhetorical convenience. They do, however, show how the vocabulary of national security can extend beyond armed groups and affect individuals engaged in lawful political, labor, environmental or community activity.

The lesson of 1972 therefore lies less in searching for exact repetitions than in recognizing recurring institutional temptations. Governments facing disorder will naturally invoke security, and the State possesses a legitimate responsibility to confront rebellion, terrorism and criminal violence. The democratic question concerns how that authority is exercised, whether accusations are supported by evidence, whether defendants receive due process, whether legitimate dissent remains distinguishable from armed activity, and whether the language of security becomes a convenient instrument against criticism that may be uncomfortable but lawful.

The same caution applies to the rhetoric of discipline. Discipline has frequently possessed an almost mystical place in Philippine discussions of development, as though national poverty were principally a consequence of insufficient obedience among the population. Yet development is not merely the accumulation of personal virtues. It depends upon institutional capability, productive investment, land use, industrial organization, technology, infrastructure, education, public health and the distribution of bargaining power. A poorly paid worker cannot be disciplined into a high-wage industrial economy; a tenant cannot practice his way into land ownership; a country cannot moralize itself into technological independence without institutions capable of financing, coordinating and protecting long-term productive investment.

Authoritarian political language nevertheless finds discipline attractive because it relocates responsibility downward. Structural failures can be attributed to the supposed indiscipline of citizens rather than to deficiencies in government policy or economic organization. Poverty becomes a problem of individual conduct; protest becomes evidence of disorder; demands for redistribution become obstacles to stability. This moralization of economic failure can coexist comfortably with policies that protect powerful interests, since the burden of adjustment is placed primarily upon those with the least influence over the design of policy.

The memory of martial law consequently becomes relevant to the continuing debate over what development means. If development is measured chiefly through highly visible projects, the State can present itself as benefactor while leaving largely unexamined the manner in which those projects are financed and administered. If development is understood more broadly as the enlargement of productive and human capacities, however, then the condition of the worker, farmer, small entrepreneur and household becomes central. The issue is no longer simply how many projects were completed but whether the economic structure enabled ordinary citizens to obtain secure employment, adequate wages, housing, education and meaningful opportunities for advancement.

The infrastructure defense of authoritarian government becomes especially problematic when it implicitly asks that political repression be weighed against economic accomplishment, as though a sufficient quantity of public works could compensate for abuses of state power. This is conceptually mistaken. Public infrastructure is one responsibility of government, while the protection of basic rights is another. The construction of a dam or highway cannot retroactively provide due process to a detainee or restore a person who disappeared in custody. Nor does the existence of human-rights violations establish that every economic undertaking of the same government was without value. Historical judgment need not choose between these two simplifications. It can acknowledge useful public investments while still recognizing that such investments did not confer upon the government a license to violate rights or eliminate political accountability.

For the victims and their descendants, the distinction is especially important because developmental nostalgia can transform their suffering into an incidental cost of modernization. Such reasoning effectively requires those who suffered to justify their claims against an accounting of buildings, roads and statistical growth. Republic Act No. 10368 rejected that logic by recognizing that human dignity created obligations independent of whatever material accomplishments the regime might claim.

At the same time, remembrance gains analytical strength when it refuses to treat every person who initially supported martial law as either malicious or foolish. Some Filipinos welcomed the declaration because they feared crime, insurgency and political disorder; others believed that strong government could finally break the control of entrenched families; sections of the business community initially valued administrative predictability; and some technocrats saw centralization as an opportunity to implement reforms previously obstructed by congressional patronage and electoral politics. These expectations form part of the historical record and should be understood rather than caricatured. Their eventual disappointment also reveals how authoritarian systems acquire legitimacy: not simply through force, but by attaching themselves to genuine social frustrations and promising solutions that existing institutions have failed to provide.

It was precisely this combination of legitimate grievance and concentrated authority that made the New Society politically significant. The regime did not invent the poverty of the countryside, the weaknesses of Philippine industry, the corruption of electoral institutions or the dominance of established families. Its historical responsibility lay in claiming that these problems required the concentration of political power while subsequently reproducing important elements of privilege under a more centralized arrangement.

The lesson is broader than the fate of any single administration. Political systems frequently survive by appropriating the language of those who criticize them. Demands for social justice can be converted into programs administered from above; nationalism can be invoked while external dependence continues; anti-oligarchic rhetoric can accompany the emergence of new privileged networks; and appeals to popular welfare can be used to legitimize institutions in which the population possesses limited influence over decisions supposedly undertaken in its interest. The contradiction between rhetoric and structure is therefore one of the most important subjects of any serious commemoration of September 21.

This also explains why remembrance cannot consist solely of remembering repression. The economic promises of the regime must be remembered alongside the repression because the two were components of the same political project. The New Society justified extraordinary authority partly through the assertion that ordinary democratic procedures had become obstacles to transformation. Evaluating that claim requires attention to the economy produced under extraordinary rule, including the development projects that succeeded, the enterprises that failed, the debt that accumulated, the industries that received protection, and the social groups that gained or lost bargaining power.

Such an evaluation also guards against the opposite historical error: the notion that the restoration of formal democracy in 1986 resolved the social conditions that had preceded authoritarianism. Many of the economic structures inherited from both the pre-martial-law republic and the dictatorship remained intact or were reorganized rather than abolished. Oligarchic politics did not disappear with the return of elections. Foreign dependence did not disappear with the restoration of Congress. Rural poverty and unequal landholding did not vanish with the new Constitution. The democratic restoration was indispensable because it reopened political space and restored institutional restraints upon executive authority, but it did not by itself complete the social transformation that generations of Filipinos had demanded.

The continuing task is therefore more difficult than either defending or condemning a single historical period. It requires a conception of democracy that extends beyond periodic elections without diminishing the importance of elections, and a conception of development that extends beyond economic growth without dismissing the necessity of growth. Political liberty and material security have to be treated as mutually reinforcing components of a democratic society rather than competing objectives between which the country must permanently choose.

Under such a conception, the dignity of the person acquires both political and economic content. It involves freedom from arbitrary arrest and coercion, but also access to the material conditions necessary for meaningful citizenship. It includes freedom of expression and association, but also the practical capacity of workers, farmers, communities and professional groups to organize around their interests. It requires due process against the power of the State while also requiring institutions capable of preventing private wealth from exercising disproportionate power over public decisions.

September 21 therefore remains a difficult but necessary date precisely because it forces Philippine society to examine the relationship among order, development and freedom. The dictatorship claimed that extraordinary authority could save the Republic and reconstruct society. Its history demonstrated instead the danger of attempting social transformation while weakening the institutions through which society itself can scrutinize those entrusted with transformation.

The commemoration need not become an annual exercise in partisan accusation, nor should it be reduced to a contest between nostalgic inventories of infrastructure and equally mechanical lists of abuses. The record is sufficiently important to demand more serious treatment. The period should be examined as an experiment in authoritarian development whose achievements, failures, contradictions and human costs remain relevant to any discussion of Philippine state-building. Its victims deserve remembrance not because memory requires the country to remain imprisoned by the past, but because a political community incapable of recognizing the injuries committed through its own institutions becomes more vulnerable to repeating them under new circumstances and new language.

The enduring significance of September 21 consequently lies in the unfinished character of the Republic. The conditions invoked in 1972—inequality, insecurity, political corruption, concentrated economic power and social conflict—were not abolished by martial law, just as they were not abolished by the restoration of democratic government. Their persistence should not be used to romanticize authoritarianism or to dismiss democratic politics as futile. It should instead encourage a more demanding understanding of democracy, one capable of confronting economic concentration and social deprivation while preserving the rights through which citizens participate in that confrontation.

Such a democratic order would have little need to describe repression as discipline, exclusion as stability or privilege as development. Its legitimacy would rest upon institutions sufficiently strong to permit disagreement, sufficiently impartial to restrain both public and private power, and sufficiently developmental to demonstrate that political liberty need not condemn the country to economic stagnation. The remembrance of September 21 would then cease to be merely an argument over whether the past was good or bad and become what historical commemoration ought to be: an examination of the choices that produced that past and of the institutional safeguards necessary to prevent its most destructive features from acquiring new forms.

In that sense, the struggle associated with the memory of martial law is not adequately understood as a struggle against one family, one party or one generation. Its more enduring content concerns the effort to construct a political order in which the State can be strong without becoming arbitrary, development can be directed without becoming patronage, security can be maintained without converting dissent into criminality, and economic growth can be pursued without treating the common citizen merely as the taxpayer, debtor, laborer or passive beneficiary of decisions made elsewhere.

The victims of authoritarian rule occupy an indispensable place in that continuing national argument because their experiences reveal what happens when the authority to define the national interest becomes excessively concentrated. The economic record occupies an equally necessary place because it demonstrates that the legitimacy of government cannot be established through physical accomplishment alone. A Republic worthy of preservation requires both the material capacity to improve the conditions of its people and the political restraint to recognize that those people are citizens rather than instruments of policy.

The commemoration of September 21 thus remains neither an antiquarian exercise nor a demand that succeeding generations inherit every bitterness of those who came before them. Its value lies in historical vigilance: in understanding how legitimate demands for order, reform and development can be absorbed into political arrangements that gradually narrow the space available for public judgment, and how the vocabulary of ordinary people can itself be appropriated to justify concentrations of power from which ordinary people remain distant.

More than five decades after 1972, that is perhaps the most important reason the date continues to matter. The historical problem was never simply that a government promised to save the Republic and build a new society. The deeper problem concerned the terms under which that Republic was to be saved, the distribution of authority within that proposed new society, and whether citizens themselves retained sufficient freedom and institutional power to determine whether the transformation being undertaken in their name was genuinely their own.

Any durable democratic settlement must answer those questions differently. It must make social justice compatible with political freedom, public investment compatible with accountability, national development compatible with human dignity, and effective government compatible with the participation of those whose lives are most affected by its decisions. The continuing relevance of September 21 lies in the fact that these questions remain unfinished business, and that the lessons of authoritarian rule become useful only when remembrance is joined to the construction of institutions capable of addressing them.

The State, the Dead, and the Record: How the Philippines is Still Arguing With Duterte's War on Drugs

2026-09-17T11:26:19.071-07:00

The State, the Dead, and the Record:

How the Philippines is Still Arguing With Duterte's War on Drugs

By Kat Ulrike

Photo from ICC

The difficulty with political violence is that it rarely ends when the violence itself subsides. Governments change, policemen are reassigned, slogans disappear from official speeches and the emergency vocabulary of one administration gives way to the managerial vocabulary of the next. Yet the arguments that justified the violence, the grievances of those who suffered from it and the loyalties formed around those who ordered or defended it tend to survive. What had once been a contest over policy becomes, in time, a contest over memory.

The Philippines has entered precisely such a period over Rodrigo Duterte’s war on drugs. The raids and nightly casualty reports that defined much of his presidency no longer occupy the center of national political life, but the country has not arrived at an agreed understanding of what happened. Thousands of deaths remain embedded in police records, court complaints, family recollections and human-rights investigations. At the same time, a substantial political constituency continues to remember the campaign not principally as an episode of abuse but as a period in which the state recovered an authority that previous governments had seemed unwilling or unable to exercise. The disagreement is therefore not simply over Duterte. It concerns the older Philippine question of how much coercion a weak or frustrated state may employ in the name of restoring order.

The appearance of Duterte before the International Criminal Court has given this argument a new institutional setting without resolving it. The Hague can determine criminal responsibility within the limits of the charges and evidence before it. An independent Truth Commission in the Philippines has begun the broader work of documenting cases that may never reach an international courtroom. Between them remains the political nation itself, still divided over whether the drug war should be remembered primarily as a campaign against criminal disorder or as a period in which the state permitted violence to outrun law. That division was visible even before a single witness at Duterte’s trial had been called.

Two Audiences

There were at least two Philippine audiences watching Rodrigo Duterte when he appeared in person before the International Criminal Court in The Hague, and the distance between them was considerably greater than the miles separating Manila from the Netherlands. Duterte, now 81, sat in a dark suit and white shirt behind his lawyers while the judges discussed witnesses, evidence, scheduling and the practical arrangements for a trial expected to begin on Nov. 30. It was his first physical appearance before the tribunal since he was taken into ICC custody in March 2025. He did not address the court. For much of the hearing, the drama lay less in what Duterte said than in the fact that he was physically there at all.

For his allies, the images revived a familiar political language. Robin Padilla posted photographs of Duterte accompanied by the word Tatay—“Father”—while Christopher “Bong” Go, his aide for more than two decades, used the affectionate “Father Digong.” The vocabulary was revealing. Duterte was not presented merely as a former chief executive awaiting trial but as the paternal figure around whom a political family and constituency had long organized their loyalties. His own public response was more explicitly political: “Everything I did, I did it for my country.” The sentence compressed into eleven words the defense that had surrounded much of his presidency—that whatever harshness attended the anti-drug campaign had to be understood through the purpose his supporters attributed to it: the restoration of order and the protection of the public.

Another audience had gathered in Quezon City. Families of people killed during the anti-drug campaign watched the proceedings with lawyers, church representatives and human-rights advocates. Their attention was directed toward the same face and movements, but they drew from them almost the opposite reassurance. Llore Pasco, whose sons Crisanto and Juan Carlos Lozano were killed in a police operation in 2017, said she had been surprised but pleased to see Duterte appear. Translated into English, her reaction was practical rather than triumphant: “We were surprised, but of course we were happy that he finally appeared, and we saw that he looked well. He even gained weight. So we expect that he really is capable of facing trial.”

Dahlia Cuartero, whose son Jesus Cuartero III was also killed during the drug war, expressed a similar hope in the language of prayer. “Our prayer was answered—that he would remain strong so that all his victims could be given justice,” she said. “We were happy to see that he was strong.” The peculiar moral geometry of the moment was difficult to miss. These relatives were not hoping to see an accused adversary diminished by illness. They wanted him healthy enough to remain before the judges, understand the proceedings and stay alive long enough for the judicial process to run its course.

Neri Colmenares, who represents some alleged victims, converted those impressions into a legal argument. In his view, Duterte’s behavior in court suggested that he understood what was happening and recognized supporters in the gallery. Translated into English, Colmenares said: “It showed that President Duterte can do this, that he is fit for trial because he understands what is happening. He still knows how to wave to his supporters. He knows where in the gallery his supporters are.” He added that forgetfulness alone should not automatically be treated as proof that a defendant cannot stand trial. That is an advocate’s interpretation rather than a clinical finding, but it demonstrates how an ordinary human gesture could immediately acquire evidentiary and political meaning.

The defense has presented a sharply different picture. Duterte’s lawyers say significant memory impairment prevents him from reliably retaining recent information and from giving meaningful instructions about a complicated criminal case. Prosecutors, relying on a three-member medical panel, have argued that he remains capable of exercising his procedural and fair-trial rights. The question belongs properly to medicine and law rather than to photographic interpretation. An accused person’s fitness cannot depend upon whether relatives of the dead want a trial to continue or whether his admirers see an elderly statesman enduring detention with dignity. Yet outside the chamber politics had already done what politics normally does: it had given the same image several meanings.

Even politicians who did not speak as either prosecutors or unconditional defenders found themselves responding to the human image. JV Ejercito said he felt sadness at seeing Duterte after a long absence, describing him as extremely thin and frail. Translated, Ejercito said: “I felt sad when I saw him for the first time in a long time because he was very thin and very frail, with his hair grown long.” But when asked about the families of those killed during the drug campaign, he stopped short of converting personal sympathy into a judgment on the proceedings. “Let justice take its course,” he said.

The multiplicity of these responses matters because there was no single Rodrigo Duterte visible on the screen. There was the accused before an international tribunal, the aging former president who elicited ordinary human sympathy, the paternal political figure remembered by loyalists, and the architect of an anti-drug campaign associated with thousands of deaths. One audience saw endurance. Another saw the possibility of accountability. Neither image, by itself, tells us what the court will decide. Together, however, they tell us why the drug war has remained politically unsettled long after Duterte ceased to exercise presidential power.

What Was the “War”?

The most important division is not over Duterte’s present condition but over the past that placed him in The Hague. Nearly a decade after the anti-drug campaign became the organizing drama of his presidency, Filipinos continue to disagree not only about individual killings but about what the campaign represented. To its critics, it became a period of unlawful violence, institutional impunity and the erosion of due process. To many of its defenders, it remains a necessary response to a narcotics and criminality problem that ordinary institutions had failed to contain.

Ronald dela Rosa, Duterte’s first national police chief, has stated the second position more candidly than most. In October 2024, asked whether he regretted implementing the campaign, he replied: “No regrets. If you are going to give me the chance to do it again, I will do it again. The same approach.” He went further, arguing that a campaign against drug personalities could not succeed through gentleness. “You have to be forceful enough,” he said, for the government’s message to reach criminals unmistakably.

Three months later, dela Rosa offered a more qualified but substantively similar defense. Loss of life was regrettable, he said, including the deaths of police officers during operations, but that did not mean the campaign itself should never have been undertaken. Without it, he claimed, the Philippines might have become a “narco-state,” with powerful drug lords exercising influence over provinces, cities and politicians. His conclusion was emphatic: “We have to do that. We had to do that.”

Such statements are significant because they show that severity was not merely an accidental embarrassment later disowned by the campaign’s principal implementers. Severity formed part of the governing argument. Dela Rosa’s defense begins from the premise that criminality had become emboldened because the state had ceased to command sufficient fear. The solution was therefore not simply better police administration or more efficient prosecution but a restoration of the psychological asymmetry between government and those it regarded as lawbreakers. The criminal was to understand, in unmistakable terms, that the state had recovered its capacity to punish.

Dela Rosa has also insisted that the campaign was not designed selectively to spare one class of offender while targeting another. “We didn’t discriminate as to who we are going to arrest,” he said in 2024, arguing that drug lords, pushers, traffickers and users were all targets of enforcement. He has acknowledged that human-rights violations occurred in some cases and argued that these should be investigated individually rather than used to classify the entire campaign as a crime against humanity. That distinction is central to the defense mounted by many Duterte supporters: abuses may have occurred, they say, but abuses committed within a policy do not necessarily define the legal or moral character of the policy itself.

This interpretation cannot be understood merely as the retrospective self-defense of officials facing international scrutiny. Duterte’s rhetoric possessed a genuine constituency because it answered frustrations that preceded his presidency. Many Filipinos experienced the criminal-justice system as slow, unequal and vulnerable to local influence. Police could appear corrupt or ineffective; prosecutors and courts moved at a pace far removed from the immediacy of neighborhood crime; wealthy or politically connected defendants could seem capable of manipulating procedure. Within such circumstances, a politician promising uncomplicated force could present himself not as the destroyer of government but as the man finally willing to make government work.

The political attraction of Duterte therefore lay partly in the collapse of distinctions that liberal institutions normally try to preserve. He spoke about narcotics, crime, corruption, weak policing and cumbersome legal process as aspects of a single disorder requiring executive will. What his critics heard as contempt for procedure, supporters frequently heard as impatience with institutional paralysis. What critics interpreted as menace could be heard by supporters as reassurance.

Dela Rosa later accused legislators of opportunism for having praised the anti-drug campaign while Duterte was politically dominant and condemning it after circumstances changed. In his recollection, lawmakers had once thanked the administration for restoring peace, tranquility and safer streets, only to reverse themselves later. The accusation is partisan, but it points toward a historical fact that should not be overlooked: the drug war did not initially exist outside respectable Philippine politics. It enjoyed substantial public and institutional support. Any serious reconstruction of the period must explain that support rather than treating it merely as an embarrassing national aberration.

This is what makes the language of “war” important. Calling anti-drug enforcement a war was not merely colorful rhetoric. War has enemies, casualties, sacrifices and emergency measures. Criminal law has suspects, warrants, evidence, defendants and trials. Once policing is imagined as warfare, the restraints associated with ordinary criminal procedure can begin to look like impediments placed upon those defending society.

Duterte’s supporters can reasonably object that the metaphor did not automatically suspend the law. Police still operated under statutes, arrests still occurred, courts continued to function, and officers retained a lawful right to defend themselves when confronted by armed suspects. Forcefulness and illegality are not synonymous. But critics begin from the opposite institutional concern: a suspected dealer remains a citizen, suspicion does not amount to conviction, and precisely because the state possesses overwhelming coercive power, restraints upon lethal force become more rather than less important.

The argument is therefore more substantial than the familiar opposition between “security” and “human rights.” Both sides claim an idea of order. The defenders of Duterte emphasize the capacity of government to protect ordinary people from criminal disorder. His critics emphasize the legal restraints necessary to protect ordinary people from arbitrary state power. One camp fears a state too weak to govern; the other fears a state powerful enough to escape accountability.

The Archive of the Dead

The families watching in Quezon City carry another archive of the drug-war years. It is composed not principally of crime statistics or political speeches but of bodies, wakes, disputed police reports, exhumations, witnesses and the long bureaucratic aftermath of violent death. Where a defender of the drug war may remember a neighborhood dealer disappearing from a street corner, a mother may remember a son who never returned home.

The phrase nanlaban became one of the essential words of the period. Literally, it meant that a suspect “fought back.” In police reports it could describe an officer responding to armed resistance during an operation. Among many families and human-rights advocates, however, it became shorthand for an official explanation they believed was repeatedly used to justify killings after the fact. The significance of the word lay precisely in this collision of narratives. A police report and a family testimony might describe the same death in incompatible ways, and the issue became not merely whether a person had died but whether the state’s own record could be trusted.

It is in this unresolved space that the independent Philippine Truth Commission has begun its work. Formally launched in May 2026 by Church leaders, lawyers, academics and human-rights advocates, the commission describes itself as independent, civilian-led, survivor-centered and trauma-informed. Raul Pangalangan, a former ICC judge, chairs it; its commissioners include forensic pathologist Raquel Fortun, trauma specialist Al Fuertes, theologian Daniel Franklin Pilario and human-rights advocate Carlos Conde. Cardinal Pablo Virgilio David serves as adviser. Its stated mission is to document and preserve evidence of violations associated with the anti-drug campaign while providing spaces in which victims and witnesses can place their experiences on the public record.

The commission says it has documented more than 7,500 incidents. That number must be understood with care. It describes the scope of the commission’s documentation; it is not a judicial determination that 7,500 crimes have been legally established. The distinction is essential because a truth process earns authority not by converting every testimony into a finding but by separating allegation, corroboration and conclusion.

The commission’s first public truth-telling session concerned Luzviminda Siapo and her 18-year-old son Raymart, who had a congenital clubfoot that affected his ability to walk and run. According to the commission’s account, Raymart was taken hours after a neighbor accused him of selling marijuana and was later shot. The hearing sought not merely to establish the circumstances of his death but to restore the biography that death had eclipsed: he was a son and brother, was preparing to work with an uncle and had discussed continuing his education. The session combined family testimony with documentary and forensic material in an attempt to create a record that would survive beyond the emotional force of recollection.

Its second session examined the death of 17-year-old Darwin Hamoy in Payatas during a 2016 police operation. His family disputed the police claim that Darwin and others had fought back during a buy-bust operation. Years later, according to the commission, examination of his exhumed remains documented injuries consistent with gunshot wounds and classified his manner of death as homicide. The inquiry extended beyond the instant of death into the family’s attempts to find the body, complaints against police officials and the psychological, social and economic consequences of the killing.

These are questions a criminal indictment may never need to answer. A court asks whether the prosecution can establish the elements of a crime and connect them to the accused. A broader historical inquiry may ask what happened to a family after the funeral, how children understood the disappearance of a father or brother, how barangay officials compiled lists of suspected drug personalities, what policemen believed their superiors expected of them and how repeated presidential rhetoric changed the range of violence that citizens were willing to tolerate.

Pangalangan’s argument for the truth-telling sessions rests largely upon this difference. Many victims and survivors, he has said, will never have cases before the ICC. Their stories therefore cannot depend upon whether an international prosecutor finds them necessary to proving a particular charge against Duterte. The court and the commission are not substitutes for one another because they are engaged in different kinds of inquiry.

Yet the commission’s historical burden extends beyond giving the dead back their names. If it is to explain the period rather than merely memorialize one side of it, it must also take seriously the experience of citizens who insist that the anti-drug campaign improved their lives. Their testimony cannot determine whether a particular killing was lawful, but neither should it be excluded from the social history of the policy. A resident who says the street became safer after a dealer disappeared is describing a political experience. That claim may be compared with crime data, surveys and local evidence, but it remains part of the reason Duterte’s program acquired democratic support.

The important distinction is between recording a claim and accepting it. A policeman who says a suspect fired first makes a claim that may be tested against ballistics, autopsy findings, witnesses and scene evidence. A family alleging execution makes another claim requiring corroboration. A politician who says crime fell because of the campaign makes an empirical assertion that can be tested against data. A supporter who says the campaign restored dignity or peace to a neighborhood makes a more subjective statement but one that nevertheless belongs in the historical record.

Listening broadly does not require concluding that every account is equally well supported. Indeed, a truth commission becomes useful precisely when it refuses the lazy convention by which journalism sometimes places two contradictory statements beside each other and calls the resulting symmetry balance. Evidence can strengthen one account, weaken another or leave matters genuinely unresolved.

What The Hague Can Decide

The ICC operates under a different discipline. It is not writing the final history of the Duterte presidency. It must determine whether specified charges against a particular accused have been proved according to the Rome Statute while preserving the accused’s procedural rights. Duterte faces crimes-against-humanity allegations connected with killings during periods in which the court says it possessed jurisdiction. He denies the charges. The upcoming trial will be governed by rules of evidence, legal responsibility and proof rather than by the larger political question of whether Filipinos approve or disapprove of the drug war.

The status conference itself illustrated the practical narrowness of the task. Presiding Judge Joanna Korner discussed the prosecution’s witnesses, evidence, disclosures and the sitting schedule. The chamber is also considering arrangements shaped partly by Duterte’s age and health. The problem facing the judges is not whether the entire Philippine drug war was morally acceptable; it is how to conduct a manageable and fair criminal trial concerning the charges before them.

The dispute over Duterte’s mental fitness reinforces the distinction. Families may reasonably interpret his courtroom behavior as indicating awareness. Supporters may reasonably interpret the same scene as the stoicism of an old man determined to acknowledge them. Neither observation settles the medical question. The judges must examine expert reports and decide whether Duterte possesses the capacity required to understand proceedings and meaningfully assist his defense.

This is also why the rights of the accused and the interests of victims should not be treated as competing moral luxuries. A proceeding in which an incapable defendant could not understand or answer the case would satisfy little beyond vengeance. Conversely, a system in which age, political stature or loyal public support shielded an otherwise capable accused from trial would hardly satisfy the principle of accountability. Fair process is not a concession granted to Duterte by his critics; it is part of what gives any eventual judgment legitimacy.

The same caution will be necessary once the trial ends. A conviction would establish criminal responsibility for charges proved to the court’s standard. It would not prove every allegation ever made about every police operation under Duterte. An acquittal would mean that the prosecution failed to establish the particular charges to the required standard; it would not retroactively declare every contested drug-war death lawful.

Courts necessarily exclude more history than they include. Prosecutors select representative incidents, documents and witnesses because no trial can become infinite. Some deaths will fall outside jurisdictional dates. Others may lack evidence. Still others may be unnecessary to a prosecution theory already supported by stronger cases. This is not indifference; it is the architecture of adjudication.

The danger lies in asking the judgment to carry a political meaning it cannot logically bear. Duterte’s supporters may be tempted to interpret an acquittal as vindication of the entire drug war. His opponents may be tempted to interpret a conviction as judicial confirmation of every accusation ever made against the administration. Neither conclusion follows automatically. The law is more precise, and therefore in some respects less emotionally satisfying, than political memory.

Truth Without Monopoly

The Truth Commission faces almost the reverse problem. The court must narrow; the commission must broaden without losing rigor. It is attempting to construct a record capable of containing personal testimony, police documentation, forensic examination, public rhetoric and institutional behavior without collapsing these different forms of evidence into a single moral narrative.

The presence of Fortun is especially important because forensic evidence imposes a discipline upon both state narrative and family memory. A bullet trajectory cannot explain why Duterte won an election or why citizens supported aggressive policing, but it may indicate whether a particular account of a shooting is physically possible. Exhumed remains cannot establish the moral legitimacy of the drug war, but they may recover information neglected or concealed in an original investigation. The physical record is limited, but it is often resistant to rhetoric.

The commission’s trauma-informed procedures address another problem. Participants are not merely sources of data. They may remain vulnerable to intimidation, political abuse and renewed psychological distress. Its media rules therefore restrict unsolicited interviews around truth-telling sessions and emphasize the privacy, security and well-being of participants. This may appear to be a peripheral procedural matter, but it reflects an important difficulty of public truth processes: suffering can be exploited even by those who believe themselves to be documenting it.

The commission must nevertheless avoid becoming an institution whose conclusions are determined by the political identities of those who created it. If it appears to Duterte supporters simply as the organized voice of people who had already decided that the former president was guilty, its findings will persuade mainly those who required no persuasion. Conversely, if calls for “balance” become a demand that documented evidence always be offset by an unsupported denial, then balance becomes another mechanism of obscuring fact.

The harder standard is openness without false equivalence. Dela Rosa’s assertion that the campaign was necessary belongs in the record because it reveals the governing logic of the policy. His claim that the Philippines risked becoming a narco-state can be examined historically. His acknowledgment that some human-rights violations occurred can be placed alongside his insistence that those cases should be investigated individually. Duterte’s statement that everything he did was for the country belongs in the record as an assertion of political intention. None of these statements proves the lawfulness of a particular killing, but excluding them would impoverish an account of why the campaign happened and why it retained adherents.

The same principle applies to Pasco, Cuartero and other relatives. Their testimony explains the human meaning of accountability to those who have waited years for formal proceedings, but testimony is not automatically a judicial finding. Their accounts become historically stronger when connected to independent witnesses, documents and physical evidence.

This is what distinguishes truth seeking from merely collecting narratives. A society may possess many memories, but evidence gives those memories different weights.

The Politics of Remembering

The Philippines has never suffered from a shortage of narratives. Governments manufacture them, oppositions construct counter-narratives and political families transmit selective memories from one electoral generation to the next. A fact invoked solemnly while one coalition holds power can become propaganda after a realignment, only to be rediscovered when political usefulness changes again. History often functions less as a public archive than as an arsenal from which present factions select convenient weapons.

The drug war is unusually vulnerable to this tendency because it remains recent and most of its protagonists are still politically active. Duterte’s children and allies remain in public life. Police officers who implemented the policy can still defend it. Families of the dead continue to campaign. Human-rights organizations remain engaged in litigation and documentation. The institutions being asked to interpret the period are institutions that themselves lived through it.

There has therefore been no clean historical distance between the event and the argument over the event. The same citizens who once voted during the drug-war years are being asked to interpret their own choices. Some former allies have become critics; some critics have entered alliances with former supporters. The facts consequently compete not only with ignorance but with changing political interest.

Dela Rosa has complained precisely about this instability. His recollection of politicians once thanking the administration for safer streets and later condemning the campaign is intended as an accusation of opportunism. It is also an inadvertent reminder that political memory is frequently retrospective. Policies that appear normal while power is consolidated can acquire very different meanings after power disperses.

A useful historical record must therefore preserve what political actors said at the time, not merely how they explain themselves later. Duterte’s speeches, police directives, legislative hearings, contemporaneous surveys, crime statistics, autopsy reports, court records and accounts from poor communities must all be treated as part of the record. The post-Duterte reinterpretation of the drug war is itself historically relevant, but it cannot substitute for contemporaneous evidence.

Here the continuing loyalty of Duterte supporters also matters. Padilla’s and Go’s use of “Father” is not evidence in the ICC case, but it is evidence of the paternal political relationship Duterte cultivated. Dela Rosa’s refusal to repent is not proof that the campaign was lawful, but it is evidence that the governing philosophy of the drug war survives its presidency. Those reactions prevent the historian from writing a convenient story in which the entire country awoke after 2022 and unanimously repudiated what had occurred.

Likewise, the testimonies of families prevent the story from becoming an uncomplicated tale of popular order restored. They demonstrate that the same policy experienced as security by one household could be experienced as terror by another. The question is not which emotion should be deleted from history but what happened in the specific cases from which those emotions arose.

This is why the best description of the conflict may not be between law and order, or even between rights and security. It is between different fears. The Duterte constituency feared the failure of the state: drugs, criminality, corrupt institutions and the apparent immunity of offenders. Many victims’ families came to fear the success of an unrestrained state: armed officers, lists, accusations, raids and official explanations they believed they had no power to challenge.

Neither fear should be romanticized. Fear of crime can become a justification for arbitrary authority; fear of authority can obscure the real violence criminality inflicts upon communities. A serious account must be capable of holding both propositions simultaneously without allowing either to predetermine the facts of individual cases.

The War After the War

The anti-drug campaign no longer occupies the Philippine presidency in the form it did between 2016 and 2022. Subsequent police leadership publicly shifted emphasis toward supply chains and high-value targets rather than street-level users, explicitly describing the recalibrated policy as less bloody and more attentive to human rights. The Marcos administration has itself contrasted its approach with lethal enforcement, emphasizing large drug seizures in operations in which no one was killed.

But the political conflict created by the Duterte years has not disappeared with the policy’s alteration. It has changed arenas. The first war was conducted through police operations, presidential speeches and the language of emergency. The second is being conducted through court filings, testimony, forensic reports, historical documentation and struggles over public memory.

For the ICC, the final question will be bounded: what has been proved against Rodrigo Duterte under the law governing the charges? For the Truth Commission, the question is broader: what happened to people and institutions during the anti-drug campaign, including those whose cases will never enter an international courtroom? For the Philippine public, the unresolved question is broader still: what relationship between authority, legality and social order did the country accept during those years, and how should that acceptance be remembered?

The responses to Duterte’s courtroom appearance reveal why no single institution can provide all three answers. Pasco and Cuartero saw a defendant apparently strong enough for proceedings to continue. Colmenares saw behavior he believed relevant to fitness. Ejercito saw the physical decline of a former president and felt sadness while still insisting that justice should proceed. Padilla and Go saw the political father they continued to recognize. Dela Rosa, in his repeated defenses of the campaign, has made clear that he regards its central methods as necessary and would not repudiate them merely because the political climate has changed.

These statements belong in the same history, but they do not perform the same evidentiary function. A mother’s account of losing a son is testimony about a death and its consequences. A former police chief’s declaration that the campaign was necessary is evidence of governing philosophy. A senator’s sadness is a political and human reaction. A former president’s claim that he acted for his country is an assertion of intention. None can replace forensic evidence, documentary proof or a judicial finding, but each helps explain the political world in which those forms of evidence must now be interpreted.

That distinction may be the most important protection against turning the aftermath of the drug war into another partisan mythology. The task is not to find a sentence capacious enough to make one side disappear. It is to construct a record sturdy enough that neither loyalty nor hatred can easily rewrite it.

The same photograph from The Hague may continue to mean different things. One viewer can see an old leader enduring confinement; another can see an accused finally present before judges. Those are interpretations. What happened during particular operations, who gave particular orders, what police reports omitted or accurately recorded, what the forensic evidence shows and what responsibility the law ultimately assigns are questions susceptible, at least in part, to proof.

The first drug war was justified by its architects as a struggle to restore order. The struggle that follows concerns the order of memory itself: which facts survive, which testimonies are tested, which claims are corroborated and whether the historical record can resist the recurrent Philippine habit of changing with the government presently in power.

The ICC trial may eventually produce a judgment. The Truth Commission may eventually produce an archive and a set of findings. Neither will abolish political disagreement, nor should either be expected to do so. Their more modest but more durable contribution would be to make future disagreement answerable to evidence.

That may be the real war after the war. It is less dramatic than midnight raids, presidential threats or courtroom photographs, but it is likely to last much longer. It will determine not whether Filipinos are permitted to admire or condemn Rodrigo Duterte, but whether the period over which they continue to argue can eventually be remembered as history rather than indefinitely recycled as political ammunition.

Of Empty Chairs and Full Powers

2026-09-16T02:24:50.610-07:00

Of Empty Chairs and Full Powers

Sara Duterte’s Impeachment, the Senator-Judges,
and the Constitutional Burden of Attendance

(Photo from the Manila Times)

The constitutional controversy now confronting the Senate impeachment court has been presented, perhaps inevitably, as a dispute over arithmetic. Article XI of the 1987 Constitution requires the concurrence of two-thirds of all members of the Senate for conviction in an impeachment trial. Since the Senate is constitutionally composed of twenty-four members, the conventional calculation produces sixteen votes. Presiding Officer Francis Escudero adopted that construction when the trial of Vice President Sara Duterte began. Yet the subsequent inability or failure of several senators to participate has exposed a problem which arithmetic alone cannot answer: whether the Constitution intended the numerical composition of the Senate to remain wholly detached from the legal and practical capacity of its members to perform the judicial function assigned to them.

The four retired Supreme Court justices invited as amici curiae did not merely provide competing formulas for determining the denominator. Their respective positions disclosed several different theories of constitutional government. Retired Associate Justice Adolfo Azcuna defended what may be called the institutional-textual view: membership itself determines the denominator, and so long as a senator remains legally a member of the Senate, that senator continues to count in computing the two-thirds requirement. Retired Chief Justices Hilario Davide Jr., Artemio Panganiban and Reynato Puno, though differing among themselves in important respects, questioned whether constitutional interpretation could stop at that formal proposition when certain members are legally restrained, physically unavailable or substantially absent from the very proceedings in which they are expected to exercise judgment.

Azcuna’s proposition is intellectually stronger than its critics sometimes admit. “As long as they are members of the Senate, they constitute the denominator in computing the threshold of two-thirds because all means all,” he said. The argument is founded upon an essentially conservative understanding of constitutional safeguards. A supermajority requirement was not placed in the Constitution for decorative purposes. It exists precisely to make removal difficult and to prevent impeachment from being converted into an instrument by which an ordinary legislative majority disposes of a constitutional officer whom it dislikes. Azcuna therefore warned that “the supermajority rule protects against factional and partisan abuse,” because conviction should rest upon an agreement wider than the combination ordinarily sufficient to legislate, organize the chamber or control its committees. In this reading, twenty-four is not merely the number of chairs physically occupied on a particular afternoon; it is the constitutional size of the institution whose extraordinary power is being exercised.

There is an important principle here. Constitutional safeguards should not become variable quantities whenever their application causes political inconvenience. If two-thirds of the Senate means sixteen when the chamber is complete and politically tranquil, it would be dangerous to permit a temporary configuration of absence, detention, illness or political estrangement automatically to produce a smaller constitutional threshold. Such a doctrine could itself become susceptible to manipulation. A faction interested in conviction might discover that strategic nonattendance by several members conveniently reduces the votes required. Any interpretation which permits the constitutional protection of an accused official to depend upon attendance tactics must therefore be approached with considerable caution.

Yet the opposite construction produces difficulties no less serious. If every sitting senator must count regardless of whether he is legally capable of performing the functions of a senator-judge, absence itself may begin to exercise political force. A member who hears no witness, examines no exhibit and participates in no proceeding may nevertheless increase the number of affirmative votes required from those who actually do. The empty chair would not formally vote for acquittal, but it could have an equivalent numerical consequence. What was designed as a supermajority safeguard could then become something different: a system under which incapacity, evasion or deliberate nonparticipation acquires the constitutional value of a negative vote.

It is this difficulty which gives Davide’s intervention particular significance. His position was that the phrase “all the Members of the Senate” cannot be interpreted as though membership were an abstraction unaffected by legal disability. Senators who have resigned or been expelled plainly cannot count. More controversially, Davide argued that those who are detained, suspended, beyond the jurisdiction, missing or otherwise legally incapable of exercising their senatorial functions may likewise have to be excluded from the denominator. He invoked jurisprudence stating that “the performance of legitimate and even essential duties by public officers has never been an excuse to free a person validly in prison.” From this he drew a broader proposition: public office does not suspend the ordinary operation of law merely because the detained official happens to possess important responsibilities.

That proposition has substantial republican pedigree. Philippine political life has too often encouraged the opposite understanding—that election converts office into a species of personal property, accompanied by privileges which survive even when the officer is unable or unwilling to perform the corresponding duties. The constitutional language of public office, however, points in another direction. Office exists for the performance of public functions. Its authority is fiduciary rather than proprietary. The citizen elected to the Senate receives extensive powers precisely because those powers are to be exercised for constitutional purposes; he does not acquire a private entitlement to deploy the prestige of his position whenever useful while asking the state to disregard circumstances that make the performance of that position impossible.

The issue becomes particularly important because attendance is not foreign to the constitutional understanding of legislative duty. In ordinary legislative proceedings, the Constitution permits a smaller number of members to compel the attendance of absent colleagues in such manner and under such penalties as the chamber may provide. The Senate also possesses disciplinary authority over its members. These provisions do not by themselves resolve an impeachment question, because the Senate sitting as an impeachment court performs a function distinct from ordinary legislation. They nevertheless demonstrate that Philippine constitutionalism has never regarded attendance as a matter of purely private discretion. Membership carries an institutional expectation of presence, and the chamber has been given means by which that expectation may be enforced.

Panganiban brought this question into sharper relief by moving beyond the denominator and asking what judgment itself requires. His argument was not merely that some absent senators should be excluded because their presence is numerically inconvenient. He asked whether it is fair, or even faithful to the adjudicative character of impeachment, for senators who have not attended the proceedings to exercise the same final voting power as colleagues who have heard the evidence and studied the submissions.

“Thus the Senate must hear the prosecution and the defense witnesses as it already does, allow their counsels to argue verbally and in writing, and study their presentations deeply,” Panganiban said. “Only thereafter should it issue its orders and decisions. In this connection, is it truthful and fair to allow senators to cast their votes despite being absent from the proceedings?”

His examples were deliberately vivid. He referred to senators who might be “looking at the pyramids along the Nile,” shopping in Paris or riding gondolas in Venice while their colleagues remained inside the chamber performing the tedious work of adjudication. He extended the problem to those who are hiding, detained, hospitalized, abroad or otherwise unable to examine documentary evidence or observe witnesses. Behind the picturesque imagery lay a conventional judicial principle: the authority to decide derives not simply from possession of office but from engagement with the record upon which the decision is supposed to rest.

“You are tasked with a constitutional duty that cannot always be reduced to abstract arithmetic, neither can such duty be performed in the shadows of absence nor from legal impediments,” Panganiban said. “Indeed, meaningful adjudication requires active participation in the search for truth and fairness.”

This should not be mistaken for the crude proposition that only a senator physically present at every moment of testimony may vote. Puno’s observations are important precisely because they prevent such an argument from becoming doctrinaire. Judges in ordinary courts sometimes decide matters from transcripts, affidavits and records even when they did not personally hear every witness. Modern adjudication could scarcely function otherwise. Davide similarly emphasized that a senator’s failure to interrogate witnesses is not evidence of nonparticipation, observing that judges should often refrain from questioning except where clarification is necessary. A senator who has quietly attended, read the record and considered the arguments may have participated more seriously than one who has filled hours with questions intended principally for political display.

The relevant distinction therefore lies not between physical visibility and invisibility, nor between senators who speak and senators who remain silent. It lies between genuine performance of adjudicative duty and the attempt to retain adjudicative power without undertaking the work necessary to exercise it responsibly. The Senate must eventually determine how much participation satisfies that duty, but it cannot avoid defining the relationship altogether.

The controversy becomes politically more charged because the absent senators are not neutral abstractions. Rodante Marcoleta and Jinggoy Estrada are detained while facing plunder cases. Ronald “Bato” dela Rosa has remained beyond the reach of the impeachment proceedings while facing an International Criminal Court arrest warrant arising from alleged crimes against humanity in the drug war. These circumstances are separate from the accusations against Duterte and do not establish the guilt of any senator concerned. They nevertheless create a practical constitutional question because the chamber must decide whether members constrained by criminal process, international process or voluntary absence continue to exercise the same impeachment powers as colleagues who are present and participating.

Marcoleta has insisted upon his continued status and voting authority as a senator-judge despite detention and has favored the retention of the sixteen-vote requirement. His position can be defended in institutional terms: he was elected, has not been removed from office, and therefore remains constitutionally part of the Senate. Yet the same facts inevitably invite a political interpretation, especially because the mathematical consequence of retaining all twenty-four members in the denominator makes conviction more difficult. Critics therefore see the claim of institutional completeness as politically convenient to Duterte’s defense.

A similar partisan reading surrounds other senators identified, fairly or unfairly, with positions sympathetic to the vice president. Imee Marcos has repeatedly adopted positions which Duterte’s critics interpret as favorable to the defense. Members of the Villar family have likewise been associated with political formations and procedural positions viewed as friendly to Duterte. Loren Legarda has raised institutional and evidentiary objections which some partisans interpret in the same fashion, although it would be unwarranted to conclude from those interventions alone that every question she raises is reducible to support for acquittal. Political alignment, procedural skepticism and legal interpretation may overlap without being identical.

The distinction matters because a constitutional rule cannot be responsibly constructed upon allegations of motive. A senator may sincerely believe that twenty-four must remain the denominator and simultaneously prefer Duterte’s acquittal. Another may sincerely favor excluding legally incapacitated members and simultaneously desire conviction. The coincidence between legal interpretation and political advantage does not by itself prove bad faith. Indeed, most constitutional disputes arise precisely because principled arguments have distributive political consequences.

What the Senate must guard against is not political preference as such—politicians are not expected to cease having political commitments—but the adaptation of constitutional rules to produce a desired partisan result. The proper test of any proposed doctrine is whether its advocates would continue to defend it if the political alignments were reversed. If several absent senators were firmly opposed to Duterte, would those who now insist that every member must count still insist upon twenty-four as the denominator? If an administration used dubious criminal proceedings to detain hostile senators on the eve of an impeachment vote, would proponents of excluding detained members remain equally comfortable with reducing the threshold?

Those counterfactuals demonstrate why the question cannot be settled by determining which interpretation presently favors which faction. Constitutional law worthy of the name must be capable of surviving a change of government.

This returns the discussion to the concept of institutional completeness. There is an understandable desire within the Senate to maintain the proposition that it remains a twenty-four-member constitutional body notwithstanding the legal difficulties of particular members. Institutions depend upon continuity, and the temporary incapacity of individual officeholders should not casually dissolve the structure of the chamber. Yet institutional continuity cannot be reduced to maintaining a complete list of names while disregarding whether those names correspond to functioning members capable of performing the duty at issue.

A Senate which insists upon being counted as complete must confront what completeness requires in practice. If all twenty-four members remain constitutionally relevant because membership continues despite detention, absence or other impediments, then the institution has reason to insist with equal seriousness that members who can lawfully participate actually do so. Otherwise the concept becomes asymmetrical: membership remains absolute when it increases the threshold for conviction but becomes optional when attendance, study, deliberation and submission to lawful process are considered.

This asymmetry becomes especially difficult where members are themselves under accusation or restraint by the state. No democratic legal order should presume guilt from accusation. Detention before conviction must remain subject to judicial scrutiny, and criminal process must never be manipulated merely to alter legislative arithmetic. A government capable of neutralizing opposition senators through convenient prosecutions would pose an obvious danger to impeachment as an independent constitutional mechanism.

But the converse is equally troublesome. Election cannot create an automatic exemption from the consequences of valid legal process. A senator detained pursuant to lawful judicial authority cannot simply say that his constitutional importance requires the ordinary rules applicable to other detainees to be relaxed whenever an important vote arises. Ordinary citizens in detention also possess employment, dependents, contractual responsibilities and public obligations which confinement prevents them from fulfilling. Representative government would be difficult to defend if election alone transformed this general consequence of detention into a privilege from which legislators were uniquely exempt.

The same principle applies, although in a different form, to a senator who avoids legal process. The existence of an accusation or warrant does not establish guilt, and the rights of the accused remain intact. But due process does not logically entail that a legislator may remain outside the effective reach of legal institutions while simultaneously demanding that his office be treated as fully operative for every constitutional calculation. If voluntary absence has no consequence for membership, participation or the denominator, political actors may acquire an incentive to convert evasion itself into a procedural strategy.

The solution therefore cannot simply be the mechanical exclusion of inconvenient members. The categories of absence must be distinguished. Serious illness is different from deliberate flight. Hospitalization differs from political travel. Detention under judicial order differs from unexplained nonattendance. Suspension differs from resignation. A senator who has participated substantially but misses several hearings presents a different case from one who has never attended at all. Constitutional interpretation is weakened, not strengthened, when all these circumstances are collapsed into the single word “absent.”

A workable institutional rule would accordingly have to address both attendance and legal capacity. If the Senate determines that all twenty-four members remain within the constitutional denominator until death, resignation, expulsion or formal vacancy, it should consider corresponding rules governing compulsory attendance, justified absence, access to the record and the minimum participation necessary before a senator may cast a final impeachment vote. Where members can lawfully be compelled to attend, institutional completeness may reasonably demand compulsion. Where they are legally detained, the chamber must determine whether participation can be accommodated without granting privileges incompatible with the ordinary operation of criminal justice. Where attendance is genuinely impossible, the rules should identify whether the member nevertheless remains entitled to vote after reviewing the complete record.

Conversely, if the Senate adopts Davide’s functional interpretation and concludes that certain legally disabled members do not belong in the denominator, the grounds for exclusion must be defined with similar care. A vague doctrine allowing the presiding officer or a temporary majority to decide who is “capable” of voting would be more dangerous than the problem it seeks to solve. Any rule of exclusion must be narrow, objective and prospective enough that the majority could not manipulate it merely to obtain the required number.

The old case of Avelino v. Cuenco remains useful mainly because it reminds us that constitutional language about membership and quorum has always had to contend with the untidy circumstances of actual legislators. The Senate contemplated by constitutional text is stable and complete; the Senate encountered by history is composed of men and women who become ill, travel abroad, resign, are detained, refuse to attend or disappear from effective jurisdiction. Avelino does not mechanically resolve impeachment under the 1987 Constitution, as the amici broadly recognized, but it demonstrates why literalism and institutional reality cannot be wholly separated.

There is consequently an element of both conservatism and egalitarianism in the more demanding understanding of legislative duty. The conservative element insists that constitutional procedures cannot be rewritten in the middle of a political conflict simply because one faction dislikes their consequences. The egalitarian element insists that election does not create a privileged legal caste entitled to enjoy authority without exposure to the obligations and restraints applicable to public officers and citizens generally.

These principles are not contradictory. They become compatible once public office is understood not as property but as an institution whose powers exist for defined purposes. A senator does not lose legal rights merely because he holds office; neither does he acquire an unrestricted constitutional immunity from the ordinary consequences of his conduct. The protection of senatorial independence should preserve the capacity of legislators to deliberate and vote without intimidation. It should not be enlarged into a doctrine under which an officeholder may disregard lawful restraints while continuing to insist that the Republic count his absent seat whenever the arithmetic is politically useful.

This is why the present controversy should ultimately be treated as an institutional problem rather than merely a Duterte problem. The vice president will eventually be convicted or acquitted according to the evidence and whatever threshold the Senate determines the Constitution requires. The amici’s debate does not properly answer that substantive question. Its importance lies elsewhere: it has exposed the absence of a sufficiently developed doctrine connecting senatorial membership with senatorial participation when the chamber exercises its impeachment power.

Those who insist that the Senate must appear complete are therefore entitled to demand the preservation of its full constitutional identity. But that demand carries a reciprocal obligation. If twenty-four senators must be counted because twenty-four senators constitute the institution, then the Senate must explain what it expects those twenty-four senators to do. It cannot indefinitely maintain that every member has full constitutional significance for determining the denominator while treating attendance and participation as matters left almost entirely to political preference.

The issue becomes particularly sensitive when the senators concerned are identified with one side of the impeachment dispute. Marcoleta’s insistence upon participation from detention, dela Rosa’s continued absence, and the positions taken by senators regarded as sympathetic to Duterte will understandably be read by opponents as efforts to preserve a defensive bloc around the vice president. Their supporters will answer that excluding those senators would itself amount to manipulating the institutional composition of the court. Both interpretations are politically intelligible, but neither supplies a sufficient constitutional rule.

What the Senate requires is a doctrine which makes such partisan calculations less important. Members should know before the next impeachment, and regardless of the identity of the accused, whether unjustified nonattendance can be sanctioned; whether a senator legally detained remains entitled to vote; whether a member who has never participated may enter only for judgment; whether examination of transcripts can cure substantial absence; and whether legal incapacity alters the denominator. Clear rules would not remove politics from impeachment, which is impossible, but they would narrow the field within which political convenience may masquerade as constitutional interpretation.

The deeper question raised by the amici is therefore not simply whether sixteen votes are required. It is whether the Constitution’s grant of power to senator-judges presupposes an enforceable conception of duty. The constitutional authority to compel attendance in ordinary Senate business suggests that the answer cannot be that presence is wholly voluntary. The judicial character of impeachment suggests that participation cannot be entirely nominal. The principle of equality before the law suggests that detention, legal restraint and criminal accusation cannot be neutralized merely because the person affected possesses an electorally valuable office.

At the same time, those principles must be administered in a manner which prevents the executive, the prosecution or a Senate majority from manufacturing incapacity in order to change the result. The institutional objective should therefore be neither to preserve sixteen votes at all costs nor to reduce the denominator whenever absence becomes inconvenient. It should be to ensure that no faction gains an artificial advantage from either strategic absence or opportunistic exclusion.

A mature Senate would address this problem by making the obligations of membership as definite as the privileges of membership. Senators who can attend should ordinarily be required to attend proceedings in which they exercise the power of judgment. Those unable to attend should fall within clearly defined categories of justified absence, legal incapacity or substantial participation through the official record. Those subject to lawful detention should not receive extraordinary privileges solely because political arithmetic makes their presence desirable, although procedures consistent with judicial orders may be considered where the law permits them. Those who deliberately remain outside lawful process should not be allowed automatically to convert that circumstance into an indefinitely consequence-free constitutional position.

Such an arrangement would preserve Azcuna’s legitimate concern that impeachment not be made easier through casual manipulation of the denominator while taking seriously Davide’s insistence that legal capacity matters, Panganiban’s demand for meaningful participation and Puno’s warning that adjudication need not depend upon theatrical physical presence at every moment. Properly understood, the four positions are not merely mutually exclusive answers to a numerical puzzle. Together they reveal the elements of a more coherent institutional doctrine.

The Republic would gain little from settling this dispute merely by declaring either that “all means all” or that sixteen is not immutable. Those formulations are beginnings rather than conclusions. The more durable settlement would define the constitutional relationship between membership, capacity, participation and legal accountability, so that future senator-judges cannot select whichever understanding happens to protect their faction at the time.

If the Senate wishes to insist upon its completeness as an institution, it must be willing to require completeness in function as well as in enumeration. The point is not to punish absence as though physical presence were itself a moral virtue, nor to treat accusation as guilt. It is to prevent public office from becoming a peculiar arrangement in which the holder may invoke every privilege attached to membership while declining, evading or becoming legally unable to perform the duty for which that membership is constitutionally important.

That question will remain after Sara Duterte’s trial is over. It concerns not merely the fate of one vice president or one alignment of senators, but the older republican problem of whether legislative power is something an officeholder owns or something he is obligated to exercise under law. A constitutional order which answers that question clearly will be better protected both against partisan prosecution and against partisan evasion, because it will have established in advance that the authority to judge carries with it a corresponding obligation to be present in law, to engage seriously with the record, and to accept the legal consequences which attach to the officeholder as surely as the constitutional privileges of office do.

The Gospel According to Capital: The Moralized Market and the Philippine Illusion

2026-09-15T01:46:56.757-07:00

The Gospel According to Capital: The Moralized Market
and the Philippine Illusion

A political economy of the attempts
for a "Social Market Economy" in the Philippines

By Kat Ulrike

Few economic doctrines have travelled to the Philippines with a more respectable passport than the Social Market Economy. It arrived clothed in the language of constitutional democracy, private initiative, Christian humanism and concern for the poor. It offered the business community a vocabulary in which profit could coexist with stewardship, while offering a post-dictatorship state a way to defend markets without appearing indifferent to social justice. The formula was politically attractive precisely because it seemed to avoid both the discredited dirigisme of the Marcos years and the revolutionary socialism that frightened the property-owning classes. It promised enterprise with conscience, competition with solidarity and growth disciplined by moral purpose.

Economist Bernardo Villegas became one of the doctrine's best-known Philippine advocates, but the argument should not be reduced to one economist or one school. It became part of a wider post-1986 common sense shared, in different proportions, by technocrats, business associations, Catholic intellectuals and governments seeking credibility with creditors and investors. In public, this common sense spoke of subsidiarity and the common good. In practice, it placed much greater confidence in privatization, tariff reduction, deregulation, foreign investment and the moral self-restraint of owners than in organized labor, public enterprise, industrial coordination or redistribution before the market had completed its work.

The result was not a faithful copy of Germany's Social Market Economy. Nor was it pure laissez-faire. The Philippine state remained deeply involved in granting franchises, rescuing banks, building infrastructure, negotiating concessions, supplying incentives and protecting property. What emerged was more selective and more contradictory: a market order whose hard institutions were liberal, whose social obligations were often pastoral, and whose developmental direction was substantially delegated to investors responding to global demand. It appeared to observe the encyclicals while practicing Hayek and Mises, with Friedman supplying much of the managerial confidence that private ownership would outperform bureaucratic direction.

This is the Philippine illusion examined here. The issue is not whether individual businessmen are sincere Catholics, whether private enterprise is legitimate, or whether every state corporation deserves preservation. The issue is institutional. A Social Market Economy is not established by attaching a moral adjective to a liberalized economy. It exists only when competition is defended against private concentration, labor is treated as an economic citizen, social rights are enforceable, and public authority possesses enough autonomy to direct markets toward purposes that markets cannot select for themselves.

A German Doctrine and a Manila Adaptation

The original German conception was born from distrust of two concentrations of power: the total state and the private cartel. Walter Eucken and the ordoliberals did not imagine a competitive order arising spontaneously from the withdrawal of government. Competition had to be constituted and preserved through law. The state was to be strong enough to prevent monopolies, establish stable rules, restrain abuses of economic power and maintain the conditions under which prices could perform their coordinating function. Alfred Müller-Armack's phrase Soziale Marktwirtschaft added the social purpose: a market economy embedded within institutions capable of securing social balance, political legitimacy and human freedom (Feld et al., 2021).

The postwar German settlement accordingly became more than private ownership plus charity. It included competition law, social insurance, collective bargaining, codetermination, works councils and a state capable of coordinating long-term reconstruction. Its several elements arose from different political traditions and were frequently contested, but they shared a conviction that economic freedom would become socially destructive if concentrated capital could write its own rules. The market was not the constitution. It operated inside an economic constitution.

The Manila adaptation took the least troublesome portions of this settlement and left much of the institutional burden behind. Private property, entrepreneurship, price signals, monetary stability and subsidiarity travelled well. Codetermination, organized countervailing power, public development finance, sectoral coordination and the active construction of domestic productive capabilities travelled less comfortably. The result was a Social Market Economy interpreted less as an architecture of power than as an ethic of personal conduct. Owners were asked to be socially responsible; workers were urged to become productive; families were encouraged to save; corporations were praised for philanthropy; and the state was instructed to create the conditions in which responsible private initiative might flourish.

This difference is not semantic. It marks the point at which an institutional doctrine became a moralized market. The German question was how public law could prevent political and economic domination. The Philippine version too often asked how private actors could be persuaded to behave well after the distribution of property, bargaining power and opportunity had already been settled. One approach attempted to structure economic power. The other placed unusual weight upon virtue among those who possessed it.

The distinction also separates an idealist reading from a historical-materialist one. The idealist begins with intentions: the entrepreneur as steward, the manager as servant leader, the firm as social institution. The materialist begins with incentives, ownership and power: who controls credit, land, technology, franchises, supply chains and the state. The first asks whether capitalists possess a conscience. The second asks what happens when conscience is costly and competitors are not obliged to share it. In the Philippines, where wealth and political access have long reinforced each other, the second question is not ideological discourtesy. It is the elementary test of whether a doctrine can survive contact with the society it claims to govern.

Subsidiarity Without Solidarity?

The theological argument is particularly revealing because subsidiarity has often been treated in Philippine economic discourse as though it were a Catholic synonym for privatization. If a family, community, association or business can perform a task, the higher authority should refrain from doing it. From this correct beginning, however, an incorrect conclusion is sometimes drawn: that the normal duty of government is withdrawal and that public provision is presumptively an intrusion upon civil society.

Quadragesimo Anno, the classical source, says something more demanding. Pius XI warned higher bodies not to absorb functions that smaller associations could perform, but he also required social activity to furnish help rather than destroy those associations. He then described the responsibilities belonging to public authority alone as “directing, watching, urging, restraining” whenever necessity demanded (Pius XI, 1931, paras. 79–80). Subsidiarity is derived from subsidium, assistance. It protects lower institutions from unnecessary absorption, but it does not abandon them when they lack the resources to meet a social need.

The wider Catholic tradition is equally inconvenient for theological laissez-faire. Rerum Novarum rejected the proposition that a formally voluntary labor contract necessarily produced a just wage. Laborem Exercens treated just remuneration as a principal test of whether the socioeconomic system itself functioned justly. It developed the concept of the “indirect employer”: the network of state policies, institutions, contracts and international relationships that shapes the bargaining conditions within which a direct employer sets wages. John Paul II's point was structural. Justice could not be reduced to the private morality of the employer because the employer also operated within an institutional order (John Paul II, 1981, paras. 17–19).

The same pope's qualified defense of capitalism in Centesimus Annus is frequently remembered more clearly than its qualification. A market economy was legitimate when it recognized business, private property and human creativity, but not when economic freedom escaped a “strong juridical framework” and ceased to serve the whole of human freedom (John Paul II, 1991, para. 42). Pope Francis sharpened rather than invented this institutional criticism. Fratelli Tutti states that the marketplace cannot resolve every problem and calls for proactive policy favoring productive diversity and job creation (Francis, 2020, paras. 168–169).

Catholic Social Teaching therefore recognizes markets without canonizing their outcomes. It recognizes property while insisting upon its social function; enterprise while defending worker organization; subsidiarity while requiring public support; and charity while distinguishing it from justice. A system in which liberalization is enforceable but solidarity is exhortative cannot claim the full tradition merely because businessmen attend Mass or corporate foundations build classrooms. It may be market liberalism accompanied by Catholic pastoral language.

The Philippine Sequence

The market turn did not begin at EDSA. The World Bank approved the first Philippine structural adjustment loan in 1980; a second followed in 1983. The program promoted tariff reform, import liberalization, export orientation and changes intended to encourage private industrial investment. These measures operated alongside International Monetary Fund stabilization and were overwhelmed by the debt and political crises of the early 1980s, but the institutional direction preceded the fall of the dictatorship (World Bank, 1985).

The Aquino government inherited an economic wreck: insolvent state corporations, behest loans, captured monopolies, weakened banks and a public sector compromised by crony appropriation. Privatization was not therefore a simple act of doctrinal submission. It was also an effort to dispose of failed assets, restore financial credibility and separate the democratic government from the corporate machinery of the dictatorship. Yet Proclamation No. 50 of December 1986 established a presumption that would outlive the emergency. It declared that the private sector should be given “primacy” while government assumed a “supplemental role” in entrepreneurial activity, and created the institutions through which state assets would be disposed (Republic of the Philippines, 1986).

Under Fidel Ramos, this presumption broadened into a modernization program covering telecommunications, aviation, oil, water, infrastructure and power. Many reforms answered real failures. Manila's water system suffered inadequate coverage, high leakage, weak collection and chronic underinvestment. The National Water Crisis Act of 1995 explicitly listed privatization of state-run water facilities among the policy options and authorized the reorganization or privatization of MWSS segments where necessary (Republic of the Philippines, 1995). The case for change was substantial. What matters here is the chosen direction: public incapacity was answered primarily through private participation and concession rather than through the construction of a more capable public utility.

Power reform followed the same trajectory. The Electric Power Industry Reform Act of 2001 was not a crude deregulation statute; it included consumer protection, lifeline rates, independent regulation and public-interest language. Its desired structure was nevertheless unmistakable: private capital, competition where feasible, and the orderly privatization of the National Power Corporation's assets and liabilities (Republic of the Philippines, 2001). By 1998, a Philippine memorandum to the IMF reported that average nominal tariffs had fallen from 28 percent in 1990 to 13 percent in 1997 and committed the government to continued trade and investment liberalization, capital-market development, privatization and power-sector restructuring (Government of the Philippines, 1998).

Across administrations, the vocabulary varied—globalization, competitiveness, democratization of capital, public-private partnership, good governance—but the operational sequence was stable. Ownership was liberalized, barriers were lowered and public assets were transferred or concessioned. Social correction and competitive discipline were expected to follow.

Liberalization Before Competition

This sequence reveals one of the sharpest contradictions in the Philippine claim to ordoliberalism. An ordoliberal does not regard privatization as equivalent to competition. A transfer from public to private ownership changes the proprietor; it does not necessarily change the structure of the market. Where entry costs are high, infrastructure is naturally monopolistic, franchises are exclusive or regulation is capturable, privatization may replace a public monopoly with a private one, or a government oligopoly with a private oligopoly.

The Philippines liberalized major sectors long before it created a comprehensive national competition regime. The Philippine Competition Act became law only in 2015. Its declaration of policy almost reads as an official acknowledgment of the sequencing problem: earlier measures liberalizing key sectors, it states, needed to be “reinforced by measures that safeguard competitive conditions” (Republic of the Philippines, 2015, sec. 2). For decades, then, the country opened, privatized and deregulated without an economy-wide authority fully equipped to police anticompetitive agreements, abuses of dominance and anticompetitive mergers.

Rafaelita Aldaba reached the same conclusion before the statute was enacted. Trade liberalization, deregulation and privatization might be necessary, she found, but they were insufficient to generate effective competition without attention to structural, regulatory and behavioral constraints (Aldaba, 2008). The World Bank later described Philippine markets as more concentrated than those of regional peers, linking restricted competition to weaker job creation and slower poverty reduction (World Bank, 2019).

This is nearly the reverse of the ordoliberal sequence. The German tradition insisted that competition must be legally protected against concentrations of private power. The Philippine tendency was to assume that reducing the state's direct economic role would itself create a competitive market. That expectation ignored the society into which liberalization was introduced. Capital, land, credit, political influence and access to professional expertise were already distributed unequally. Opening the auction did not make the bidders equal.

The Market in an Oligarchic State

Philippine political economy cannot be understood through the elementary opposition between state and market. Paul Hutchcroft's “booty capitalism” describes a weakly autonomous state penetrated by powerful private interests, especially in finance. Alfred McCoy's An Anarchy of Families documents the durability with which family wealth converts into public power and public power reproduces wealth across political regimes (Hutchcroft, 1998; McCoy, 2009). The problem is not merely too much government or too little market. It is the relationship between concentrated capital and a state whose decisions are repeatedly available for private appropriation.

In that setting, “less state” does not automatically mean “more market.” When public authority retreats from production without gaining the capacity to regulate concentrated private capital, political leverage is not abolished; it is privatized. A franchise, concession, tariff decision, land conversion, infrastructure contract or fiscal incentive becomes another arena in which incumbent firms possess advantages over hypothetical entrants. Established conglomerates bring capital, banking relationships, legal teams, administrative experience and political access. The small entrepreneur brings the formal liberty to compete.

This is why an authentic ordoliberal critique can sound unexpectedly left-wing in Manila. Its central concern is not the nationality or nominal ownership of the enterprise but the concentration of power. A private monopoly is no more competitive because it is listed on the stock exchange. A concession is no more socially accountable because the state retains legal title to the pipes or rails. The relevant tests are whether consumers possess real alternatives, regulators possess independence, workers possess voice and the public possesses the power to demand investment and performance.

Philippine conservatives have often feared a strong state because oligarchs may capture it. The fear is historically justified. Yet weakening public authority does not dissolve the oligarchy; it can remove one of the few institutions theoretically capable of disciplining it. What the country required was not a larger state in every activity, but a stronger and more autonomous one: constrained by law, staffed by competent bureaucracies, able to enforce competition and capable of negotiating with capital from a position other than dependence. That is closer to Eucken than simply selling the assets.

Labor Without Economic Citizenship

The distance from the German settlement becomes wider on labor. The Philippine Constitution recognizes labor as a primary social and economic force, guarantees organization and collective bargaining, and commits the state to social justice. Yet Philippine corporate governance contains no general equivalent of German board-level codetermination, nor a comprehensive works-council system through which employees participate inside the governing structure of the enterprise. Labor rights exist, but worker influence generally remains outside the room where investment, automation, restructuring and profit distribution are decided.

The Wage Rationalization Act of 1989 created regional wage boards and a tripartite process for setting minimum wages according to regional conditions. It cannot fairly be called laissez-faire. It recognizes labor representation and authorizes public intervention. But its institutional logic balances subsistence and social policy against regional competitiveness, employment effects and employers' capacity to pay (Republic of the Philippines, 1989). Labor consequently enters policy as both citizen and cost, but the second identity often dominates when investment promotion becomes the overriding objective.

Catholic Social Teaching poses a more severe standard. Laborem Exercens describes a just wage as a “key means” of verifying the justice of the socioeconomic system, not as a desirable residual payable after competitiveness is secured (John Paul II, 1981, para. 19). Its indirect-employer concept also prevents government from disclaiming responsibility by pointing to a private payroll. Trade policy, education, infrastructure, monetary policy, labor regulation and international agreements shape the field in which wage bargains occur. A low-wage outcome is not merely a contract between two private parties; it is partly the product of the economic order that made one side more dispensable than the other.

The Manila model frequently moralized this imbalance. Workers were urged to improve skills, accept flexibility, save, acquire credentials and become globally competitive. Education was presented as emancipation through employability. Yet when the structure of production offered too few advanced domestic jobs, schooling could become a system for sorting citizens into external labor markets rather than enlarging national capability. Market participation pacified political discontent by promising individual mobility: learn the demanded skill, accept the available work, become relevant abroad. The object subtly shifted from national uplift to the management of a surplus population whose ambition had to be made compatible with the existing economy.

Liberalization Without Industrial Transformation

The industrial question exposes the moralized market most clearly. Trade liberalization can discipline inefficient firms. Foreign investment can provide capital, technology and market access. Export manufacturing can become a ladder toward industrialization. Japan, South Korea, Taiwan, China, Singapore and, more recently, Vietnam all used external trade and foreign capital. None simply opened and waited for comparative advantage to issue instructions.

Their institutions differed, but their governments coordinated some combination of credit, procurement, technology acquisition, education, infrastructure, export performance and domestic enterprise formation. Even the United States, long the principal sponsor of liberal economic rules, deploys subsidies, domestic-content provisions, public research, strategic procurement and technology controls when national capability is at stake. The advanced economies advise comparative advantage most confidently in sectors where earlier public policy has already made them competitive.

The Philippine post-1980s settlement adopted not monetarism in the narrow technical sense, but a broader American-led market liberalism associated with the Washington Consensus. Monetary stabilization was joined by tariff reduction, deregulation, privatization, openness to foreign capital and reliance on investor choice to determine specialization. This was where the appropriation of the Social Market Economy became selective. Private initiative, subsidiarity and opposition to excessive state ownership were accepted. The German insistence upon constituted competition, labor participation and public power capable of directing reconstruction was weakened. The encyclicals supplied the language; Hayek and Mises supplied the suspicion of planning; Friedman supplied confidence that private ownership and open markets would expose inefficiency and allocate resources more rationally.

Liberalization without productive direction was itself a direction. It channeled capital toward opportunities offering the highest private return within the existing structure: property, utilities, retail, finance, importation, consumer goods, low-risk franchises, export assembly and internationally traded services. None of these activities is inherently unproductive. The problem is that their profitability did not necessarily construct the capabilities needed to transform the economy.

Philippine development discourse repeatedly oscillated between an agrarian image of the nation and a service-oriented image of modernity. Agriculture was treated as a natural comparative advantage; tourism, overseas employment, finance, real estate and business-process outsourcing were later presented as evidence that the country could leapfrog the difficult stages of industrial deepening. Modern agriculture and sophisticated services can be powerful components of development. They become evasions when used to argue that the archipelago need not build the machinery, transport equipment, electrical systems, materials industries, engineering firms and technological institutions upon which both agriculture and services ultimately depend.

Persistent demands for industrialization were not ignored so much as accommodated within narrow limits. Manufacturing was welcome when tied to consumer markets, assembly lines, subcontracting, semiprocessing and the schedules of multinational production networks. The country could assemble rather than design, package rather than control the process, fabricate a component rather than own the platform, and host a factory without creating the system around it. Production was organized according to “global demand” before the state asked what industrial capacities were necessary for national needs.

A factory is not yet an industrial system. An export platform may contain technically advanced plants while remaining dependent upon imported machinery, foreign patents, external design centers and sourcing decisions made elsewhere. An industrial economy develops a dense domestic ecology of engineers, toolmakers, component suppliers, standards laboratories, development banks, research institutions and firms capable of retaining knowledge when a multinational changes its location.

Aldaba's review after two decades of liberalization found weak manufacturing performance, limited contributions to value added and employment, and an industrial structure that remained “hollow” or “missing” in the middle. Medium-sized enterprises had not seriously challenged entrenched incumbents, linkages between large firms and local SMEs were limited, and major export groups remained concentrated in lower-value segments (Aldaba, 2013). Rene Ofreneo described the larger pattern as deindustrialization without a prior complete industrial transformation: openness proceeded without the institutions required for domestic integration, technological upgrading and broadly rooted employment (Ofreneo, 2015).

The policy substitution was subtle but decisive. Market access became industrial policy. Foreign investment became technology policy. Participation in global value chains became evidence of structural transformation. Education became a means of supplying the skills multinational employers or foreign labor markets presently demanded. The state did not cease making choices; it chose to let external demand define the feasible horizon.

This was often defended as realism. Government need not choose industries, build difficult technical bureaucracies or confront importers, conglomerates and foreign investors. It needed only to secure stability, improve infrastructure and human capital, and allow entrepreneurs to reveal the economy's future. But markets reveal profitable opportunities under existing conditions. They do not automatically disclose the productive capabilities a nation must acquire to electrify its islands, build railways and ships, house its population, mechanize farms, process minerals or maintain strategic equipment twenty years later. That intertemporal and political judgment is what industrial policy exists to make.

Crony Capitalism as Explanation and Alibi

The strongest objection to purposeful industrial policy is also the most historically serious: Marcos attempted state-directed capitalism and produced cronyism. The dictatorship abused government banks, guarantees, monopoly franchises, import licenses, commodity funds and public corporations for favored business groups. Any later proposal for directed credit or protection therefore entered debate shadowed by behest loans and presidential favorites. Post-1986 reformers reasonably asked why a state lacking bureaucratic autonomy should be trusted to choose national champions.

The warning gradually hardened into an alibi. The state should not direct development because oligarchs could capture it; because the state was not strengthened enough to discipline those oligarchs, their continuing influence became further proof that public authority must remain weak. An emergency diagnosis became a circular doctrine.

Cronyism did not arise simply because government intervened. It arose because concentrated property, family-based electoral power, weak bureaucracy and access to the presidency enabled particular interests to capture intervention. Removing one policy instrument did not remove the interests. They migrated. A group denied a protected industrial monopoly could acquire a privatized utility, dominate commercial banking, obtain an infrastructure concession, enter property development or partner with foreign capital. Lower tariffs did not redistribute land. Asset sales did not equalize finance. Deregulation did not prevent wealthy families from financing candidates and cultivating regulators.

The distinction between crony capitalism and oligarchic capitalism is essential. Cronyism describes privileged proximity to a ruler. Oligarchic capitalism describes a distribution of wealth sufficiently concentrated that large families and conglomerates reproduce influence under different rulers, parties and economic doctrines. A democratic administration can replace the cronies without transforming the oligarchy. Indeed, established groups may be best positioned to purchase privatized assets because they already possess capital, credit and political knowledge.

The use of crony capitalism as a universal objection to industrial policy therefore disregards the deeper system that created cronyism while preserving the foothold of the oligarchy. Japan did not answer corruption by abandoning industrial strategy. South Korea did not answer chaebol favoritism by concluding that technological upgrading was illegitimate. Taiwan did not treat every inefficiency in directed credit or state enterprise as proof that capability-building should cease. These states revised instruments, imposed performance requirements and, with varying success, disciplined recipients.

The choice is not between Marcosian discretion and passive openness. Development policy can be rules-based, transparent, conditional and temporary. Firms receiving credit, tariff support, procurement preferences or fiscal incentives can be required to meet targets for exports, localization, productivity, research, training and wages. Support can expire; audits can be published; procurement can be competitive; beneficiaries can be barred from related-party abuse; and the state can withdraw assistance from firms that fail. The historical lesson of cronyism is the need to build institutions capable of disciplining capital, not the impossibility of national direction.

The OFW as a Macroeconomic Institution

Where domestic industrial employment failed to absorb labor, overseas migration expanded from emergency valve into macroeconomic institution. Remittances stabilized household consumption, foreign exchange and external accounts. They financed tuition, housing, medicine and small businesses, and millions of families gained opportunities that the domestic economy could not provide. It would be perverse to dismiss those achievements or blame migrants for the conditions that made migration rational.

The developmental question is different. Ernesto Pernia observed that labor export began in several Asian countries as a stopgap response to unemployment, poverty and foreign-exchange shortage but became a durable Philippine policy plank even as neighboring economies transformed their domestic employment structures (Pernia, 2011). The persistence of migration is not mechanically caused by liberalization, but it reveals the productive deficit that services and remittances were asked to manage.

The family absorbed risks that a developmental economy might otherwise confront collectively. A nurse in London, seafarer on a foreign vessel, engineer in the Gulf or caregiver in Hong Kong constructed a private welfare and foreign-exchange system for relatives at home. Remittances supported consumption and property, stimulated retail and finance, and reduced the immediate political pressure created by insufficient domestic employment. What began as a response to underdevelopment became one of the mechanisms through which underdevelopment remained socially tolerable.

Subsidiarity acquired an unintended meaning. The state did not need to solve the employment problem completely because the Filipino family internationalized itself. Education increasingly prepared citizens for outside relevance, sometimes regardless of whether the resulting occupational structure met national needs. The worker was celebrated as globally competitive, and the nation praised his sacrifice, while the economy continued to export the human capabilities it had paid to develop.

Charity After Distribution

The same institutional weakness appears in the prominence of corporate social responsibility. Philippine business foundations have built classrooms, funded scholarships, supplied disaster relief, financed community organizations and provided health services where the state has failed. These activities accomplish real good. The criticism begins only when philanthropy is asked to substitute for distributive institutions.

Corporate Social Responsibility (CSR) is discretionary; a wage law is enforceable. A donation can be redirected; social insurance creates a claim. A feeding program relieves deprivation after income has been distributed; collective bargaining changes the distribution produced by the enterprise itself. Research on CSR warns that corporate benevolence can legitimize managerial power without altering the structures from which it arises (Banerjee, 2008). Philippine scholarship similarly finds that philanthropy often becomes prominent where public institutions have not adequately addressed unemployment, hunger and poverty (Habaradas, 2013).

Catholic doctrine does not allow a charitable act downstream automatically to cancel an injustice upstream. Its recurring concern with wages, associations, property obligations and public authority places justice within production rather than appending benevolence after profit. A company may fund schools while resisting a union; sponsor housing while benefiting from land concentration; distribute relief while demanding contractualization; or proclaim stewardship while lobbying against regulation. The good performed remains good, but it cannot settle the prior question of power.

The moralized market reverses this order. It treats the distribution generated by property and bargaining power as economically objective, then treats redistribution as a matter of conscience. Structural advantage becomes invisible because generosity is visible. The corporation appears as benefactor precisely where citizens lack enforceable rights against it or against the state.

Ritual Catholicism and Social Calvinism

The elite culture produced by this arrangement may be described, deliberately and metaphorically, as ritualistically Catholic but socially Calvinist. This is not a theological account of Calvinism. It is a Weberian description of a social psychology in which success becomes evidence of discipline, foresight and merit while poverty is interpreted through deficient savings, education, productivity, planning or character.

Catholic forms remain everywhere: corporate Masses, Marian devotions, chapels, religious schools, papal quotations, foundations and the language of stewardship. The contradiction is not that Catholics make profits. Catholic teaching has never prohibited legitimate profit. The contradiction arises when market outcomes acquire moral authority simply because those who benefit from them appear industrious and charitable.

The poor household is advised to economize, reskill, endure congestion, accept flexible work, start a small business and educate its children for global competition. Each recommendation may be individually prudent. Together they relocate political economy inside personal behavior. Wages, transport costs, rent, land ownership, public services and bargaining power retreat from view. Social failure is translated into a deficiency of household management.

Philanthropy can then resemble a modern economy of indulgence—not in the literal ecclesiastical sense, but as political metaphor. The wound created upstream by unequal power is treated downstream by a donation. The firm may become exceptionally generous without surrendering control over investment, wages or the workplace. The moral ledger is privatized with the economy.

Hayek Friedman and Mises Without Saying So

The Philippine model's philosophical identity is slippery because its language and mechanisms come from different traditions. Its vocabulary invokes solidarity, stewardship, subsidiarity and the Social Market Economy. Its operating assumptions often resemble twentieth-century market liberalism.

From Hayek comes suspicion that administrative direction will replace dispersed knowledge and impersonal prices with political discretion. From Friedman comes the belief that private ownership and competition generally allocate resources more effectively than bureaucracy, along with the proposition that corporate managers should pursue profit within the rules of the game rather than exercise public functions on their own authority (Friedman, 1970). From Mises comes the stronger warning that intervention generates distortions that invite further intervention.

These thinkers should not be caricatured. Hayek accepted a social minimum and a legal order; Friedman accepted public rules and some income support; Mises's argument concerned the cumulative logic of intervention rather than the abolition of law. Nor does every privatization prove their influence. The family resemblance lies in the presumption that public economic direction is epistemically dangerous, that state ownership is normally inefficient and that voluntary exchange carries a strong claim to legitimacy.

Catholic Social Teaching begins from a different moral threshold. It does not ask only whether exchange is voluntary, but whether the institutions surrounding exchange are just. Property is legitimate but social; work is not a commodity; unions are legitimate counterweights; public authority must protect the weak; and distribution cannot be understood solely as the retrospective outcome of market productivity. Economic freedom is one element of human freedom, not its governing principle.

The Philippine settlement attempted to inhabit both worlds. It sought the discipline of markets, security of property, attractiveness to foreign capital and legitimacy of Catholic solidarity. When the two sides conflicted, however, the hard mechanisms usually belonged to the liberal side. Privatization, debt contracts, concessions, property rights and investment agreements were enforceable. Solidarity was a value, stewardship an exhortation, a living wage an aspiration, corporate responsibility voluntary, and technology transfer something foreign investment was expected eventually to deliver. The result was not a synthesis but an asymmetry between law and sermon.

The Technocratic Calculus of the Lesser Evil

The arrangement endured because it answered the fears of a particular historical moment. After Marcos, state banking evoked behest loans, industrial policy evoked cronies, and public enterprise evoked debt. Communist insurgency remained powerful enough that redistribution appeared to important sections of the elite as an existential threat. Foreign creditors demanded stabilization, while the democratic government urgently needed capital, legitimacy and recovery.

Liberalization could therefore be understood as the lesser evil. If officials could not be trusted to choose industrial champions, let competition choose them. If state corporations became patronage machines, privatize them. If bureaucrats manipulated prices, deregulate prices. If protected firms grew complacent, expose them to imports. If planning had become synonymous with dictatorship, replace discretion with rules. There was genuine rationality in this response.

Its weakness was the conversion of a historically contingent cleanup into a permanent theory of development. A policy suitable for dismantling a crony monopoly is not automatically an industrial strategy. Selling an insolvent corporation does not prove that public enterprise is always undesirable. Removing a tariff protecting an inefficient producer does not prove that performance-conditioned protection can never create a capability. Inviting foreign investment does not ensure domestic technological absorption. Decentralization does not decentralize property.

The avoidance of state failure gradually took precedence over the construction of state capacity. Philippine policy became sophisticated at stating what government should no longer do and uncertain about what productive transformation it should accomplish. This negative industrial policy became self-confirming. Weak manufacturing justified a turn toward services. Overseas labor proved the international competitiveness of Filipino skills. Imported consumer and capital goods demonstrated the benefits of openness. Assembly exports demonstrated participation in global value chains. Each response could be individually rational while the combined economy remained technologically shallow and externally directed.

Education and market participation performed a political function within this settlement. They promised that the individual could escape structural scarcity by becoming employable, entrepreneurial or internationally relevant. The promise did not need to transform the nation so long as it provided enough routes of private advancement to reduce the appeal of subversion. Social mobility became a form of pacification: not a collective alteration of the economic structure, but an invitation to succeed within it, even when the training offered bore only a weak relationship to national productive needs.

This helps explain why the Philippine Social Market Economy could be neither genuinely ordoliberal nor wholly neoliberal. The state remained active in producing market society—guaranteeing contracts, building roads, offering fiscal incentives, training workers and negotiating access—while reluctant to direct the purposes toward which private accumulation should move. It was strong in the defense of claims and weak in the reorganization of power.

A Social Market Worth the Name

A Philippine Social Market Economy worthy of the name would be more institutional and less sentimental. It would begin with competition policy rather than assuming market opening creates competition. Regulators would possess the salaries, information, technical competence and political protection required to discipline utilities, banks, platforms and conglomerates. Merger review would be integrated with an understanding of family ownership, cross-directorships and control over credit. Public concessions would contain measurable investment and service obligations, with credible penalties and reversion when contractors failed.

It would treat labor as an economic citizen. The Philippines need not reproduce German codetermination mechanically, but it can accept the underlying principle that workers are not merely inputs whose future is decided solely by owners. Sectoral bargaining, stronger protection for organization, employee representation, works councils, profit-sharing and worker ownership- even that of self-management can move labor from the exterior of the enterprise toward its constitutional center. A living wage would be connected to productivity policy, housing, transport and social insurance rather than debated as an isolated cost imposed upon employers.

It would treat healthcare, education, transport, housing, social insurance and basic infrastructure as institutions of freedom. Universal provision is not necessarily a violation of subsidiarity. It can be the subsidium that allows families, cooperatives, local governments and small firms to act. A commuter cannot exercise entrepreneurial freedom while losing hours to congestion; a small manufacturer cannot compete without reliable power; a family cannot accumulate capital when illness destroys its savings.

It would restore industrial policy without restoring crony privilege. The starting point should be a national inventory of productive requirements: electrification, inter-island transport, rail, shipbuilding and repair, mass housing, agricultural machinery, food processing, pharmaceuticals, telecommunications equipment, mineral processing and climate resilience. Not every item should be produced domestically, but the decision should follow an assessment of capability, scale, security and learning rather than passive acceptance of current comparative advantage.

Support for chosen sectors would be conditional. Development banks and public procurement could lower the cost of learning; tariffs and incentives could be time-limited; joint ventures could be required to develop suppliers, train engineers and place research locally. Public enterprises could operate where natural monopoly, strategic need or capital intensity makes private provision inadequate, while facing professional management, transparent accounts and legislative oversight. Cooperatives and employee-owned firms could receive institutional support rather than praise alone.

Foreign investment would remain welcome, but as an instrument inside a domestic accumulation strategy. An assembly plant would be evaluated not only by exports and jobs but by supplier development, technical training, local research, domestic value added and the capacity retained when the investor leaves. The aim would not be autarky. It would be the ability to choose interdependence rather than experience it only as dependence.

Most importantly, the country would take seriously the doctrine it quotes. Subsidiarity would empower lower institutions rather than excuse higher ones. Solidarity would receive budgets, laws and bargaining machinery. The social function of property would become an operational principle. The common good would occasionally override private return not because profit is sinful, but because markets are political institutions whose legitimacy depends upon outcomes citizens can live with.

The Moralized Market

The deepest problem is not personal hypocrisy. Many businesspeople sincerely believe in stewardship. Many technocrats sincerely believe that openness expands opportunity. Many Catholic economists genuinely seek a reconciliation between enterprise and social justice. Sincerity does not resolve the contradiction because an economy cannot depend upon the moral excellence of those occupying its commanding heights.

Managers answer to owners, creditors, customers and competitors. A firm that voluntarily assumes costs its rivals do not bear will face pressure from firms that do not share its conscience. Charity can moderate consequences but cannot rewrite incentives. Civilization developed labor law, taxation, competition policy, social insurance and public regulation precisely because virtue is unreliable as an economic constitution.

The original Social Market Economy understood that markets possess productive virtues only inside a prior legal and political order. Catholic Social Teaching goes further: economic life must serve the human person, and the justice of work, property and distribution cannot be postponed until after profit is calculated. The Philippine illusion reversed the relationship. It sought to construct the market first and moralize its consequences afterward.

Thus the peculiar architecture: liberalized sectors accompanied by seminars on values; privatized infrastructure accompanied by corporate foundations; labor flexibility accompanied by lectures on human dignity; overseas employment accompanied by praise for family sacrifice; oligopolistic concentration accompanied by appeals to entrepreneurship; and low-value assembly accompanied by declarations that the Philippines had industrialized because factories stood inside export zones. The rhetoric says Müller-Armack, solidarity and Catholic Social Teaching. The operating instinct too often says Hayek, Friedman and Mises. Beneath both lies the older Philippine reality: concentrated property working through a state too weak to discipline capital consistently yet strong enough to protect its claims.

If the Philippines truly intends to build a Social Market Economy, it does not need more moral instruction addressed to the market. It needs institutions through which moral claims and material basis become economic law. Until then, the social in the Philippine social market will remain chiefly an adjective attached to a market economy, and the Gospel According to Capital will continue to promise that what structure has denied, conscience may someday provide.

***

References

Aldaba, R. M. (2008). Assessing competition in Philippine markets (Discussion Paper No. 2008-23). Philippine Institute for Development Studies. https://doi.org/10.62986/dp2008.23

Aldaba, R. M. (2013). Twenty years after Philippine trade liberalization and industrialization: What has happened and where do we go from here (Discussion Paper No. 2013-21). Philippine Institute for Development Studies. https://doi.org/10.62986/dp2013.21

Banerjee, S. B. (2008). Corporate social responsibility: The good, the bad and the ugly. Critical Sociology, 34(1), 51–79. https://doi.org/10.1177/0896920507084623

Feld, L. P., Köhler, E. A., & Nientiedt, D. (2021). Ordoliberalism and the social market economy (Freiburg Discussion Papers on Constitutional Economics No. 21/5). Walter Eucken Institut. https://www.econstor.eu/handle/10419/232067

Francis. (2020). Fratelli tutti: On fraternity and social friendship. Libreria Editrice Vaticana. https://www.vatican.va/content/francesco/en/encyclicals/documents/papa-francesco_20201003_enciclica-fratelli-tutti.html

Friedman, M. (1970, September 13). A Friedman doctrine: The social responsibility of business is to increase its profits. The New York Times Magazine.

Government of the Philippines. (1998, March 11). Memorandum on economic and financial policies of the Government of the Philippines. International Monetary Fund. https://www.imf.org/external/np/loi/031198.htm

Habaradas, R. B. (2013). Corporate social initiatives in the Philippines: Experiences of four major corporations. Journal of Legal, Ethical and Regulatory Issues, 16(2), 1–19.

Hutchcroft, P. D. (1998). Booty capitalism: The politics of banking in the Philippines. Cornell University Press.

John Paul II. (1981). Laborem exercens: On human work. Libreria Editrice Vaticana. https://www.vatican.va/content/john-paul-ii/en/encyclicals/documents/hf_jp-ii_enc_14091981_laborem-exercens.html

John Paul II. (1991). Centesimus annus: On the hundredth anniversary of Rerum novarum. Libreria Editrice Vaticana. https://www.vatican.va/content/john-paul-ii/en/encyclicals/documents/hf_jp-ii_enc_01051991_centesimus-annus.html

Leo XIII. (1891). Rerum novarum: On capital and labor. Holy See. https://www.vatican.va/content/leo-xiii/en/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum.html

McCoy, A. W. (Ed.). (2009). An anarchy of families: State and family in the Philippines (Rev. ed.). University of Wisconsin Press.

Ofreneo, R. E. (2015). Growth and employment in de-industrializing Philippines. Journal of the Asia Pacific Economy, 20(1), 111–129. https://doi.org/10.1080/13547860.2014.974335

Pernia, E. M. (2011). Is labor export good development policy? Philippine Review of Economics, 48(1), 13–34.

Pius XI. (1931). Quadragesimo anno: On reconstruction of the social order. Holy See. https://www.vatican.va/content/pius-xi/en/encyclicals/documents/hf_p-xi_enc_19310515_quadragesimo-anno.html

Republic of the Philippines. (1986). Proclamation No. 50. https://lawphil.net/executive/proc/proc1986/proc_50_1986.html

Republic of the Philippines. (1989). Republic Act No. 6727: Wage Rationalization Act. https://lawphil.net/statutes/repacts/ra1989/ra_6727_1989.html

Republic of the Philippines. (1995). Republic Act No. 8041: National Water Crisis Act of 1995. https://lawphil.net/statutes/repacts/ra1995/ra_8041_1995.html

Republic of the Philippines. (2001). Republic Act No. 9136: Electric Power Industry Reform Act of 2001. https://lawphil.net/statutes/repacts/ra2001/ra_9136_2001.html

Republic of the Philippines. (2015). Republic Act No. 10667: Philippine Competition Act. https://lawphil.net/statutes/repacts/ra2015/ra_10667_2015.html

World Bank. (1985). Program performance audit report: Philippines—First and second structural adjustment loans. World Bank.

World Bank. (2019). Fostering competition in the Philippines: The challenge of restrictive regulation. World Bank Group. https://www.worldbank.org/en/country/philippines/publication/fostering-competition-in-the-philippines-the-challenge-of-restrictive-regulation

THE PHILIPPINES IN THE SILICON ORDER (AND THE LIMITS OF THE ENCLAVE)

2026-09-14T20:22:32.960-07:00

THE PHILIPPINES IN THE SILICON ORDER
(AND THE LIMITS OF THE ENCLAVE)

Or: why the Philippines Needs a National Industrial Program

Beyond the whims from Washington and Beijing

The controversy surrounding Pax Silica has become more revealing than the proposed development at New Clark City itself. What initially appeared to be another dispute over foreign investment has gradually exposed a much older argument over the nature of Philippine development. The disagreement is not adequately described as a contest between those who favor factories and those who oppose them, nor between supporters and critics of the United States. Four broadly distinguishable positions have emerged. There are those prepared to support Pax Silica substantially as it stands because incorporation into an American-led technological and economic-security system is considered economically advantageous and strategically desirable. There are those who support it more conditionally, believing that technology transfer, Filipino supplier development, research partnerships, and higher-value employment can eventually transform the foreign-led undertaking into something approximating a Philippine industrial project. There are critics who arrive at opposition from a very different direction, arguing that the Philippines is fundamentally an agricultural and commercial society which need not reproduce the industrial structure of Northeast Asia so long as agriculture, services, professional employment, and international trade provide the income with which industrial goods can be purchased elsewhere. Finally, there is a nationalist-developmentalist position which rejects both enclave industrialization and agrarian resignation and argues instead for a Philippine industrial program whose priorities are determined domestically before either Washington, Beijing, or an international corporation arrives with an investment proposal.

These positions involve more than different assessments of Pax Silica. They imply different answers to the question of what development itself is supposed to accomplish. One conception measures progress substantially through the arrival of capital and the integration of Philippine territory into advanced international production. Another assumes that such integration can eventually generate domestic technological capability if the right conditions and incentives are imposed. A third measures development more heavily through the prosperity and mobility of individuals: productive farmers, successful entrepreneurs, licensed professionals, and internationally employable graduates who can obtain from the world market whatever the domestic economy does not manufacture. The nationalist-developmentalist conception takes a different unit of analysis. It asks whether the productive system of the country itself is becoming more capable of reproducing the machinery, technology, firms, research organizations, skills, and capital upon which modern economic life depends.

This distinction matters because the promises attached to Pax Silica are considerable. The Bases Conversion and Development Authority has projected that the approximately 1,620-hectare development at New Clark City could eventually attract between US$40 billion and US$70 billion in investment and generate more than 130,000 high-quality direct jobs. BCDA President Joshua Bingcang has presented the project as a means of reversing the familiar Philippine “brain drain,” arguing that engineers, researchers, computer scientists, and other technically trained Filipinos should be able to build careers in the country rather than leave for better opportunities abroad (Presidential Communications Office [PCO], 2026a). The government's description of Pax Silica is equally ambitious: semiconductors, artificial intelligence, critical minerals, advanced manufacturing, and logistics would be assembled into a large technological and production ecosystem linked to the Luzon Economic Corridor and to international markets.

There is nothing trivial about these objectives. The inability of the Philippine economy to employ enough of its educated population in highly productive domestic industry has imposed enormous social and economic costs. Labor migration may increase household income, and foreign employment has provided indispensable foreign exchange, but an economy that repeatedly educates engineers, nurses, seafarers, programmers, and other professionals principally for productive systems located elsewhere cannot reasonably regard the export of human capital as the ultimate measure of success. The case for creating technologically demanding employment inside the country is therefore substantial. The problem arises when the location of that employment is equated automatically with the location of industrial power.

The question that should concern Philippine business is consequently not whether Pax Silica might create real jobs, exports, and technical experience. It almost certainly could if major investments materialize. The more difficult question is whether a project conceived within an externally organized technological architecture can generate a productive system increasingly commanded from within the Philippines, or whether it will enlarge a familiar structure in which sophisticated production occurs on Philippine soil while the firms, patents, research, equipment, capital allocation, and strategic markets remain controlled elsewhere.

The Attraction of Pax Silica “As It Is”

The most straightforward case for Pax Silica rests upon the belief that the Philippines should position itself decisively within the American-led restructuring of global technology supply chains. The argument is partly commercial and partly geopolitical. The United States remains a major market, a treaty ally, a source of investment and technology, and an increasingly important counterweight to Chinese economic influence. Supply-chain diversification away from excessive concentration in China creates opportunities for countries possessing skilled labor, favorable geopolitical relationships, strategic location, and existing electronics capacity. The Philippines possesses all four.

From this standpoint, the American origin of Pax Silica does not constitute a defect requiring apology. It is part of the opportunity. The December 2025 Pax Silica Declaration explicitly speaks of building “secure, prosperous and innovative global technology supply chains” and identifies semiconductors, advanced manufacturing, artificial intelligence, information infrastructure, transportation logistics, minerals refining, processing, and energy as elements of a new economic-security order. The declaration further emphasizes investment security and the mobilization of the “complementary industrial and technological strengths” of participating economies (Australian Department of Industry, Science and Resources, 2025).

There is a recognizable historical disposition behind the enthusiasm with which some Philippine commentators receive such proposals. The country's political and business culture retains a Cold War-era tendency to associate American capital, institutions, and strategic sponsorship with entry into the technologically advanced world. Under this interpretation, a project linked to Washington is not simply an investment proposal; it is evidence that the Philippines has been included in the preferred industrial geography of an allied economic system. The geopolitical association itself acquires developmental meaning.

Such reasoning should not be dismissed merely as sentimentality, because alliances and political trust do affect investment. A semiconductor company placing billions of dollars in fixed assets will consider political risk, export controls, security relationships, and access to major markets. A Philippines regarded as a reliable participant in an American-centered supply network may obtain investments that would otherwise locate elsewhere. The weakness begins when strategic affinity substitutes for examination of the actual productive relationship being created.

The difficulty is particularly evident because contemporary American policy bears progressively less resemblance to the market orthodoxy that shaped much Philippine economic thinking after the 1980s. Washington no longer assumes that the geographical location of strategic production can safely be determined solely by comparative cost and international markets. In January 2026, the White House concluded under Section 232 that imports of semiconductors and semiconductor-manufacturing equipment threatened to impair American national security. It imposed a 25 percent tariff upon certain advanced chips and explicitly contemplated broader tariffs and preferential treatment for investments contributing to United States semiconductor production and domestic manufacturing capacity. The policy's stated purpose included reducing dependence upon imports and encouraging domestic technological and manufacturing capabilities (White House, 2026).

The contradiction is more complicated than the familiar accusation that the United States preaches free trade abroad while practicing protectionism at home. Pax Silica itself is not laissez-faire. It is a consciously managed international arrangement involving state policy, economic security, investment screening, incentives, supply-chain coordination, and strategic technology. The more significant asymmetry is that the United States increasingly reserves for itself the right to identify industries whose domestic location matters sufficiently to justify tariffs, subsidies, reshoring, and state intervention, while economies such as the Philippines continue to demonstrate their attractiveness largely through openness to foreign investment, tax incentives, export production, skilled labor, and the willingness to perform complementary functions within international corporate networks.

American industrial policy increasingly asks which productive capabilities must be retained or reconstructed within the United States. Philippine investment policy still too often begins by asking which internationally mobile productive activity can be induced to locate in the Philippines. The distinction is not anti-American; it is an observation about the different positions occupied by the two economies inside the same international system.

The More Idealistic Case: Technology Transfer and Filipino Participation

A second position accepts much of this criticism but reaches a more optimistic conclusion. Its proponents argue that Pax Silica should not be accepted passively but can be transformed through policy. Foreign investors can be required or encouraged to develop Philippine suppliers, undertake local research, train Filipino engineers in increasingly advanced functions, collaborate with universities, and create greater domestic value. Given enough time, this process might move Philippine electronics from assembly, testing, and packaging into design, advanced materials, semiconductor equipment, research, and possibly selected fabrication.

The present administration increasingly speaks in these terms. At the September 10, 2026 Luzon Economic Corridor Investment Forum, President Ferdinand Marcos Jr. said that the government's objective was “not simply to attract investment” but to obtain investment that strengthened Filipino enterprises and expanded Filipino capability. He called upon investors to transfer knowledge and technology, develop Filipino talent, and work with local suppliers. In the same speech, he stated that the government wanted Filipino enterprises to become producers, innovators, exporters, and investors in their own right rather than remain secondary participants in the value created inside the country (PCO, 2026b).

This is a considerably more serious formulation than the simple equation of foreign investment with development. It acknowledges that the location of capital inside Philippine territory does not necessarily mean that the technological and entrepreneurial capabilities generated by that capital become Philippine. It also corresponds with the country's own stated industrial-policy aspirations. The Board of Investments' Comprehensive National Industrial Strategy calls for stronger forward and backward linkages, technological and human-resource upgrading, stronger supply chains, and integration of manufacturing with agriculture and services. PIDS economist Rafaelita Aldaba has likewise argued that the country requires a renewed industrial policy capable of deepening linkages among domestic firms, SMEs, large enterprises, and foreign investors because manufacturing failed for decades to generate the structural transformation and employment expected of it (Board of Investments [BOI], n.d.; Aldaba, 2013).

The difficulty is that the Philippines has already spent more than half a century waiting for essentially this process to occur in electronics. The country has not merely begun to host semiconductor production. Foreign semiconductor companies have operated in the Philippines since the 1970s. Generations of Filipino engineers have acquired experience inside sophisticated multinational facilities. Export earnings have become enormous. Yet the domestic technological structure surrounding those plants remains comparatively shallow.

Myrna Austria's 2006 PIDS study identified the structural weakness with unusual clarity. Philippine participation in global electronics production had become the country's largest source of merchandise-export earnings, yet the country had “hardly progressed beyond the lowest level of the production chain,” with activity concentrated heavily in labor-intensive, import-dependent assembly and testing and with relatively limited domestic value added (Austria, 2006). Twenty years later, the World Bank's April 2026 East Asia and Pacific Economic Update reached a strikingly similar conclusion: the Philippine semiconductor footprint remains concentrated in assembly, testing, and packaging, with comparatively limited participation in front-end fabrication and design-related activities and an ownership structure characteristic of foreign-direct-investment-led production (World Bank, 2026).

The persistence of substantially the same diagnosis across two decades should temper the assumption that another generation of multinational semiconductor investment will automatically produce a qualitatively different result. The Philippines has already demonstrated that Filipinos can operate internationally competitive semiconductor facilities. What remains insufficiently demonstrated is the ability of Philippine institutions to convert that accumulated experience systematically into domestically controlled firms, intellectual property, research organizations, equipment suppliers, materials companies, and sources of long-term industrial finance.

This is the point at which the conventional language of “technology transfer” becomes inadequate. Foreign factories unquestionably transfer some knowledge. Engineers learn processes. Managers acquire organizational experience. Technicians master advanced equipment. Suppliers become familiar with exacting quality standards. These are valuable benefits, and an argument denying them altogether would be factually weak.

But the transfer of operational knowledge is not identical to the transfer of technological command. A Filipino engineer may understand a semiconductor process without owning the patents governing it. A Filipino plant manager may understand every production stage inside a factory without possessing authority over the corporation's research agenda, product strategy, capital budget, or international customer relationships. The plant may operate in the Philippines for decades without becoming a Philippine technological institution.

Intel's experience provides a particularly clear illustration. When Intel announced in 2009 that it would close its Cavite assembly and test facility, the company described the decision as part of a broader international restructuring intended to align manufacturing capacity with “current market conditions.” The Philippine operation was one part of a global production system, and its continuation was determined accordingly. Filipino employees retained experience and skills, but the patents, research organization, corporate technology, and global customer relationships did not pass into Philippine hands when the plant closed (Intel Corporation, 2009).

The issue is therefore not whether technology transfer occurs in an everyday occupational sense. It is whether the Philippine economy acquires institutions capable of reproducing and redirecting the technology after the original foreign corporate relationship changes.

Why a Concession-Based Project Cannot Simply Be “Filipinized”

This historical experience also complicates the idea that Pax Silica can simply be “Filipinized” through improved contractual provisions. Stronger supplier programs, research partnerships, employment commitments, local procurement, and training requirements can undoubtedly improve the benefits received from particular investments. The state should negotiate such provisions where they are technically and commercially realistic.

Yet there is a structural difference between localizing the benefits generated by an externally conceived project and nationalizing the developmental purpose of the project itself.

Pax Silica is being created through long-term investment commitments, leases, tax and regulatory arrangements, corporate rights, intellectual-property rules, and an international production architecture designed before the Philippine factories themselves are established. Investors require precisely this stability because semiconductor plants, data centers, mineral-processing facilities, and other advanced industrial projects involve large fixed costs. Once contractual rights and productive purposes have been established, later governments cannot simply redefine the technological mission of the investment without confronting the legal and commercial arrangements upon which it was based.

A concession can therefore be improved considerably without ceasing to be a concession. A foreign manufacturer may employ overwhelmingly Filipino workers, purchase more locally, establish a research center, and conduct training while the decisive matters of product strategy, capital allocation, ownership of patents, and ultimate market orientation remain with the foreign enterprise. The resulting operation may be deeply embedded in the local economy and still not amount to a nationally directed industry.

A genuine Philippine industrial program would reverse this order of causation. The state would first identify the productive capabilities the domestic economy required and organize public research, financing, procurement, infrastructure, and enterprise policy accordingly. Foreign corporations would then enter as investors, contractors, licensors, technology suppliers, or joint-venture partners inside a program whose objective had already been established domestically.

Under the present model, Philippine policy frequently asks what developmental benefits can be extracted from an industrial architecture already determined by foreign corporate and geopolitical requirements. Under the nationalist-developmentalist model, foreign capital would instead be asked what contribution it could make to a Philippine industrial architecture determined beforehand.

The distinction is not semantic. It is the difference between negotiating a share of somebody else's project and deciding what project the country itself intends to construct.

Semiconductor Production Without a National Semiconductor Policy

The Philippine semiconductor sector should therefore be described with greater precision. The Philippines undoubtedly produces semiconductors, but the physical presence of semiconductor manufacturing does not by itself prove that the country possesses a semiconductor policy comparable to that of the economies which have deliberately constructed semiconductor firms and institutions of their own.

For much of the sector's history, Philippine policy was concerned primarily with attracting the multinational manufacturer that happened to require additional assembly, testing, or packaging capacity. Industrial estates were provided, incentives granted, capital equipment imported, and export-processing arrangements streamlined. This model produced substantial benefits and allowed the Philippines to become highly competent at particular functions in global electronics production. It did not produce a correspondingly deep national semiconductor structure.

The continuing orientation toward external demand can be seen even in recent official language. In 2023, then-Trade Secretary Alfredo Pascual encouraged American firms to invest in Philippine semiconductors and emphasized the country's competitive business environment, skilled labor, strategic market access, and ability to serve international clients profitably. He also sought greater Philippine participation in the American semiconductor value chain and movement toward higher-value functions. The desire to upgrade was sound, but the reference point remained the international production network rather than a semiconductor program originating from domestic technological requirements (DTI, 2023).

The result is an economy that can contain advanced semiconductor plants while remaining a reserve production base for multinational markets. Production is expanded because foreign corporate demand requires capacity. Investment occurs because a multinational enterprise finds Philippine labor, incentives, logistics, and political relationships attractive. The Philippine economy's own requirements for power electronics, industrial controls, railway systems, telecommunications, agricultural electronics, medical devices, shipbuilding, and defense play a comparatively smaller role in determining the evolution of the sector.

That is successful participation in international production. It is not necessarily the same thing as possession of an industry whose direction is increasingly determined by Philippine demand and Philippine institutions.

The Agrarian and Professional Critique

A third view arrives at opposition to Pax Silica from almost the opposite direction. It does not complain that Pax Silica industrializes the Philippines insufficiently; it questions whether extensive industrialization is an appropriate Philippine objective in the first place.

One expression of this view argues that the Philippines was “naturally built” to prosper as an agricultural nation and that government has repeatedly neglected one of the country's greatest strengths in its pursuit of industrial modernity. Its more sophisticated version does not advocate subsistence agriculture or economic backwardness. It imagines a modern agro-commercial society based upon productive agriculture, fisheries, agribusiness, food processing, tourism, trade, finance, digital services, and a large professional sector. Sophisticated manufactured goods can be imported from economies possessing greater scale and technological advantages.

There is considerable historical logic behind the argument. Philippine agriculture has been neglected repeatedly. Irrigation, logistics, storage, agricultural research, rural finance, mechanization, and food-processing capabilities remain inadequate. Productive farmland and watersheds constitute genuine economic assets and should not be converted casually merely because urban or industrial land commands a higher market price. Opposition to environmentally destructive or socially unjust industrial projects is therefore not equivalent to opposition to development.

The problem emerges when agricultural strength becomes a doctrine of permanent economic specialization. Modern agriculture itself requires machinery, chemicals, electricity, electronics, transport equipment, refrigeration, irrigation systems, processing plants, and sophisticated logistics. PIDS economists Roehlano Briones and Ivory Myka Galang have argued that agricultural transformation requires deeper relationships among farming, agricultural services, industrial inputs, and agro-processing—in effect, an entire “agro-industrial complex” rather than an agricultural sector insulated from manufacturing (Briones & Galang, 2013).

An agriculture-first Philippines that purchases practically all of the machinery required to modernize agriculture has not escaped industrial dependence. It has merely located the industries upon which agriculture depends outside the country.

The professional-service component of this worldview raises a related problem. A society need not, according to this approach, reproduce the complete industrial structure of Japan, Korea, China, or Germany if it can educate doctors, engineers, accountants, architects, lawyers, nurses, programmers, managers, and other professionals capable of earning enough income to purchase the products those industrial economies manufacture.

This is a coherent economic philosophy. At the level of the household, it is frequently sensible. A family need not manufacture a motorcar to acquire one; it needs sufficient income to buy it. A hospital need not own a medical-device factory if it can purchase superior equipment internationally. An engineering company can import high-quality machinery more cheaply than attempting to manufacture the equipment itself.

The difficulty is that an individual's rational purchasing decision cannot simply be scaled upward into a national development strategy.

The Individualization of Self-Reliance

The agro-commercial and professional model tends to define self-reliance primarily at the level of the individual or family. Education, professional credentials, employment, savings, property, and purchasing power provide economic security. If domestic opportunities are inadequate, the professional can migrate. If a machine is unavailable locally, income earned through agriculture, services, commerce, or overseas work can purchase the imported equivalent.

This conception has deep roots in Filipino middle-class experience. The family seeks security by educating children for medicine, engineering, accountancy, law, nursing, architecture, management, or another recognized profession. The professional credential becomes a form of portable capital. It belongs to the individual and can travel to whichever market values it most highly.

Carlos P. Garcia made a strikingly different distinction in 1958. In his address to the Second Labor-Management Conference, Garcia argued that development meant the increasing ability to produce needed commodities through effective use of national resources and identified science, technology, and industrialization as the means through which productivity could be raised. He then called for “a high degree of self-reliance—not only individual but also national self-reliance” and described the government's objective as “the shaping of our economy according to our own best interests” (Garcia, 1958).

The distinction between individual and national self-reliance deserves renewed attention because contemporary Philippine development has become highly individualized. A Filipino engineer may be professionally successful while the country remains dependent upon imported machinery. A doctor may practice sophisticated medicine while the hospital relies upon foreign diagnostic equipment and pharmaceutical technology. A farmer may become commercially prosperous while tractors, pumps, fertilizer, refrigeration, and agricultural electronics are sourced abroad.

At the household level, purchasing power compensates for the absence of domestic productive capacity. At the national level, the absence remains.

This does not make professional success meaningless. It simply means that a successful individual and a productive national economy are not interchangeable concepts.

A Credential Economy and a Knowledge Economy

The same distinction applies to the increasingly fashionable phrase “knowledge economy.” Knowledge can reside primarily in individuals who sell professional services, or it can become embodied in institutions capable of producing technology repeatedly.

The Philippines is already proficient at producing the first kind. Filipino doctors, engineers, accountants, architects, programmers, nurses, managers, and seafarers compete internationally. Their education constitutes genuine human capital.

But a semiconductor design house, pharmaceutical company, machine-tool manufacturer, industrial laboratory, advanced-materials company, or engineering enterprise represents something different. Knowledge in such institutions becomes attached to patents, machinery, brands, laboratories, supplier relationships, and organizational routines that remain in the country even when an individual employee departs.

The Philippine weakness has historically been the conversion of world-class individual talent into world-class domestic productive institutions.

This is why migration can appear simultaneously as personal success and national failure. The engineer solves his employment problem by moving to an economy that has already built an engineering industry. The nurse joins a health system with greater capital. The programmer works for an international client. The individual adapts successfully to the global economy while the structure that made migration economically attractive remains unchanged at home.

Pax Silica appears to offer an alternative by moving advanced foreign production to the worker rather than moving the worker abroad. This is an improvement, particularly for family life and domestic employment. Yet the deeper question persists if the worker remains principally an employee of productive institutions owned and directed abroad.

The geography of employment has changed; the ownership of industrial capability may not have changed with it.

The Common Premise behind Three Apparently Opposed Positions

The unconditional Pax Silica supporter, the idealized technology-transfer supporter, and the agro-commercial professionalist appear to occupy very different political positions. Yet they can share a surprisingly similar assumption: that the larger productive structure surrounding Filipino labor should be determined substantially by the world market.

The unconditional supporter accepts the external industrial architecture because association with it is economically and strategically desirable. The idealized supporter accepts the same basic architecture but hopes that sufficient learning, localization, and technology transfer will gradually create domestic capability within it. The agro-commercial professionalist considers much of that industrial structure unnecessary to reproduce domestically at all, provided Filipinos can earn sufficient income through agriculture, commerce, services, or professional work to purchase its products.

The common result is that the world market remains the principal arbiter of the structure of production.

The nationalist-developmentalist alternative begins by challenging precisely that assumption. International trade is indispensable, but the market is not an economic constitution determining the maximum productive ambitions available to a country. The set of industries in which a country possesses comparative advantage at any particular moment reflects its inherited technology, infrastructure, accumulated capital, historical policy, and institutional capabilities. Comparative advantage can therefore be altered by deliberate investment and technological learning.

The economic histories of the major industrial states make this difficult to deny.

The International Return of Protection, Champions, and Technological Sovereignty

The most striking feature of the present international economy is that nearly every major economic power now pursues some form of policy intended to preserve or create domestic technological capabilities. The terminology differs according to political tradition. Washington uses the language of national security, reshoring, supply-chain resilience, and domestic manufacturing. Beijing speaks of technological self-reliance, modernization of the industrial system, and breakthroughs in core technologies. Brussels uses the language of technological sovereignty and strategic autonomy. New Delhi speaks increasingly of self-reliance, domestic ecosystems, production-linked incentives, and Indian intellectual property.

These are not identical economic systems, and they should not be treated as though they were. Their policies differ significantly in the relationship between state and market, the scale of subsidies, the role of public enterprises, tariff policy, financial institutions, and political organization. Yet they share a proposition that is highly relevant to the Philippines: productive capability, intellectual property, domestic firms, and control over selected technologies have value beyond the immediate price at which the corresponding product can be purchased internationally.

The American semiconductor case is particularly explicit. Washington has concluded that excessive dependence upon imported semiconductors represents a national-security vulnerability and has adopted tariff and domestic-production measures accordingly. The issue is no longer whether an imported chip can be purchased more cheaply than one manufactured domestically. The American state has assigned strategic value to the possession of production capacity itself.

China reaches a similar conclusion through different institutions. Its 2026 policy documents call for greater scientific and technological self-reliance and “decisive breakthroughs” across integrated circuits, machine tools, high-end instruments, basic software, advanced materials, and other core technologies. The objective is not simply that Chinese engineers work inside the international technological system; it is that Chinese organizations increasingly command crucial portions of that system (State Council of the People's Republic of China, 2026).

The European Union has moved in the same direction. In June 2026, the European Commission defined technological sovereignty as Europe's ability to act independently by developing and controlling key technologies, data, and infrastructure while reducing reliance on non-European providers. Its Chips Act 2.0 seeks to strengthen the European semiconductor ecosystem, reduce strategic dependencies, encourage semiconductor design and production, and increase domestic demand. The earlier Chips Act had already helped mobilize more than €52 billion in public and private semiconductor investment. European policymakers therefore no longer regard access to global suppliers as an adequate substitute for the possession of strategic technological capacity (European Commission, 2026a, 2026b).

India supplies an especially revealing comparison because its development constraints are closer to those of emerging economies than those of the United States or Europe. The Indian government announced Semiconductor Mission 2.0 in 2026 with the explicit objective of producing semiconductor equipment and materials domestically, designing “full stack Indian” intellectual property, strengthening domestic supply chains, and creating industry-led research and training centers. The wider 2026 manufacturing agenda includes domestic electronics components, rare-earth processing and manufacturing, chemical parks, construction equipment, and other sectors in which New Delhi seeks to reduce dependence and develop nationally rooted industrial capability. In July 2026, the Indian Cabinet approved a much larger Semicon 2.0 program intended to deepen the semiconductor design and manufacturing ecosystem over the long term (Press Information Bureau [PIB], 2026a, 2026b).

There is an important lesson in the Indian example. India already possesses a formidable body of semiconductor design talent. Government sources estimate that Indian engineers account for a substantial share of the global semiconductor design workforce and work on advanced processes within global capability centers. Yet New Delhi has not concluded that this success makes domestic semiconductor manufacturing, equipment, materials, or intellectual property unnecessary. It has reached almost the opposite conclusion: if the country possesses such extensive engineering talent, that talent should increasingly become embedded in Indian firms, Indian IP, Indian production capabilities, and Indian technological institutions rather than remain principally a service supplied to foreign companies.

The implications for the Philippines should be uncomfortable. Philippine governments and business leaders frequently speak with pride about world-class Filipino talent. Multinational companies routinely praise the quality of Filipino engineers and technical workers. Yet that confidence in Filipino individuals is often accompanied by much greater skepticism toward the possibility of Filipino industrial institutions. The engineer is considered capable of operating the world's most sophisticated equipment, but domestic machinery manufacture is dismissed as unrealistic. Filipino programmers and designers are internationally competitive, yet nationally rooted technological firms remain treated as exceptional rather than as an object of deliberate policy.

If the country's human capital is genuinely as capable as official rhetoric maintains, the appropriate policy question should not end with how efficiently that talent can be supplied to the world market. It should also ask how a greater portion of that talent can be converted into firms, patents, laboratories, machinery, brands, engineering organizations, and accumulated domestic capital.

Patents, Champions, and the Ownership of Knowledge

This is why the language of national champions, though sometimes abused, cannot simply be dismissed. The United States, China, Europe, India, Japan, Korea, and Taiwan all attempt in different ways to preserve or create firms and institutions capable of owning strategic knowledge. Their objective is not merely to employ talented nationals but to ensure that some of the value created by that talent remains embodied in institutions located within the national economy.

The distinction between skill and ownership is fundamental. A worker's expertise creates income for the worker. A domestic corporation possessing intellectual property, research capability, equipment, suppliers, brands, and markets creates an institutional asset capable of generating income repeatedly and employing successive generations of workers.

This does not mean that national champions should be protected indefinitely from competition. Philippine history supplies ample warning against a nationalism reduced to protecting domestic oligarchs. A Filipino-owned company that merely imports components or finished products behind tariff walls contributes little to technological sovereignty merely because its shareholders possess Philippine citizenship.

A developmental industrial policy must therefore impose performance discipline upon domestic capital just as firmly as it bargains with foreign capital. Firms receiving development finance, procurement preference, research assistance, or temporary protection should be required to improve productivity, invest in engineering, develop suppliers, increase technological content, and eventually compete internationally.

The object is not national ownership in the abstract but national productive ownership.

The Fourth Position: A Nationalist-Developmentalist Alternative

The nationalist-developmentalist position therefore begins neither with Washington nor with Beijing, neither with a foreign investor nor with inherited comparative advantage. It begins by asking what productive structure Philippine development itself requires.

This does not mean attempting to manufacture everything domestically. Such a policy would waste scarce capital and reproduce the worst failures of indiscriminate import substitution. A middle-income archipelagic economy cannot and need not reproduce every industrial technology available internationally.

A serious program would instead identify a limited set of mutually reinforcing capabilities whose development would raise productivity across the economy. Electrical equipment, power electronics, industrial controls, cables, transformers, and grid technologies deserve consideration because the Philippines must invest enormously in electricity generation and transmission regardless of Pax Silica. Railway expansion should create markets for signaling, electrical systems, fabrication, maintenance, communications equipment, and eventually more sophisticated transport manufacturing. Shipbuilding and marine engineering possess obvious relevance in an archipelagic country requiring commercial vessels, ferries, fishing fleets, coast-guard craft, and naval capability.

Agricultural modernization should create sustained demand for pumps, irrigation systems, refrigeration, processing machinery, fertilizer, sensors, and agricultural electronics. Industrial chemicals and materials require greater attention because practically every advanced industrial activity depends upon them. Semiconductor production itself requires gases, chemicals, precision equipment, reliable power, water treatment, and industrial services. A semiconductor enclave surrounded by dependence upon imported machinery and materials may be technologically sophisticated while creating fewer national linkages than its physical appearance suggests.

The aim should consequently be industrial density rather than industrial spectacle.

Agriculture inside the Industrial Program

The fourth position also offers a more satisfactory answer to the agricultural critique than simply converting farmland into industrial estates. Philippine agriculture requires modernization, and food security remains a legitimate national objective. Productive irrigated land, watersheds, and rural communities should not be treated as expendable merely because industrial or real-estate use generates higher immediate land values.

But agriculture should be understood as part of an agro-industrial system. Briones and Galang's formulation is useful precisely because it refuses the false distinction between farm and factory. Agricultural transformation requires industrial inputs, services, processing, storage, transportation, and technology (Briones & Galang, 2013).

The industrial question is therefore not whether agriculture should disappear but whether the modernization of agriculture will create additional industries inside the Philippines or merely create additional import demand. Pumps can be imported forever, or an expanding irrigation program can help sustain domestic electrical and machinery enterprises. Agricultural processing machinery can be purchased entirely abroad, or national demand can be used gradually to build engineering and fabrication capability at home.

No serious program would insist upon domestic production regardless of cost or quality. The purpose would be to identify those products for which repeated domestic demand, technological spillovers, and linkages to other industries justify a deliberate learning process.

That is economic development in the dynamic rather than static sense.

A Filipino Semiconductor Policy Would Begin with Filipino Requirements

The same principle should govern semiconductors. A Filipino semiconductor strategy need not begin by asking how many foreign fabs or packaging plants can be attracted. It would begin by examining the electronic requirements generated by Filipino infrastructure and industry.

The expansion of the electricity system requires sensors, controls, smart meters, power electronics, and communications equipment. Railways require signaling, traction controls, and embedded systems. Agriculture increasingly requires sensors, automated irrigation, drones, and processing controls. Hospitals require medical electronics. Shipbuilding requires navigation, communications, and industrial-control systems. Telecommunications and defense require increasingly sophisticated electronic systems.

No rational policy would attempt to fabricate every semiconductor used in these applications domestically. The semiconductor industry is too internationalized and capital-intensive for such an objective. But these domestic requirements could support selected capabilities in semiconductor design, power electronics, sensors, advanced packaging, embedded systems, testing technologies, and related engineering.

The crucial difference is that a portion of the industry would exist because the Philippine economy itself required its output, not merely because a multinational company happened to require a production site serving customers elsewhere.

Exports would remain essential. Domestic demand would provide an additional anchor.

Taiwan and the Institutional Meaning of Technology Transfer

Taiwan remains instructive because it demonstrates the difference between importing foreign technology and hosting foreign technology. Taiwan's government and Industrial Technology Research Institute deliberately selected integrated circuits as a field in which technological capability should be acquired. ITRI signed a technology-transfer and licensing agreement with RCA in 1976, sent teams of Taiwanese engineers to learn design, manufacturing, verification, and equipment, established a domestic demonstration factory, and subsequently transferred acquired capability into Taiwanese enterprises. UMC was established in 1980 with technology and an R&D team transferred from ITRI; TSMC followed in 1987 with the transfer of facilities, equipment, technology, and personnel. Taiwan's semiconductor ecosystem therefore emerged from an institutional process designed to convert foreign knowledge into nationally rooted production (ITRI, 2023a, 2023b).

The important lesson is not that Taiwan associated itself with American technology. It did. The important lesson is that Taiwanese institutions already possessed a national purpose for the technology they acquired. The foreign relationship was an instrument of that program.

The Filipino sequence has more often been reversed. The foreign company arrives with the production system, and Philippine policy then seeks training, supplier opportunities, and spillovers from its presence.

That difference explains why the phrase “technology transfer” can describe very different economic realities.

Development Finance, Procurement, and the Domestic Market

A national industrial program also requires institutions capable of financing activities that ordinary commercial banking will not automatically undertake. Semiconductor design, machinery manufacturing, advanced materials, chemicals, and industrial research frequently require long investment horizons, expensive equipment, and uncertain returns. Real estate and trade may offer faster and more predictable profits.

Development banking therefore remains relevant. The Development Bank of the Philippines and other appropriate institutions could support technically credible firms entering industries with strong developmental linkages, provided that finance is tied to transparent performance criteria and insulated as far as possible from political favoritism.

The failures of politically directed credit are well known, but they do not demonstrate that industrial finance is unnecessary. They demonstrate that institutional quality determines whether industrial finance creates productive enterprises or cronies.

The domestic market should likewise become a more deliberate industrial asset. Government, state corporations, utilities, and private enterprises already purchase enormous quantities of railway equipment, electrical systems, ships, buses, communications equipment, medical devices, construction machinery, and agricultural technology. Procurement need not be turned into crude protectionism, but public expenditure can be structured to develop local engineering, maintenance, supplier participation, and manufacturing where commercially feasible.

The domestic market should neither become a sanctuary for permanently inefficient firms nor remain merely a showroom for foreign industrial products. Properly administered, it can provide the initial scale through which firms learn before facing international competition.

Where Pax Silica Would Fit?

Under such a national program, Pax Silica would cease to carry the burden of representing Philippine industrialization. Particular investments associated with it could still be assessed and, where useful, contracted. A semiconductor investment might contribute to design, packaging, power electronics, materials, or research capabilities the country had already decided to build. A critical-minerals project might be useful if it contributed to downstream metals, battery, electrical, or advanced-material industries. Infrastructure developed around the Luzon Economic Corridor could reduce costs for Philippine firms as well as foreign exporters.

The difference would be the hierarchy of policy. The Philippines would no longer ask what industrial role Pax Silica offered the country and then attempt to maximize local participation within that role. It would possess its own industrial objectives and determine which portions of Pax Silica, Chinese investment, Japanese finance, Taiwanese semiconductor expertise, Korean manufacturing, European technology, or any other external relationship happened to serve them.

This is not economic isolation. It is the opposite. It requires extensive international engagement but refuses to allow any one international relationship to determine the country's productive structure.

Beyond Washington and Beijing

The case for going beyond Washington and Beijing should consequently not be understood as equidistance for its own sake. The Philippines possesses different security, political, and commercial relationships with the two powers, and some forms of investment may properly be limited by legitimate security concerns.

The economic principle is narrower. Neither American nor Chinese industrial policy exists principally to industrialize the Philippines. Washington seeks secure American-centered supply chains and renewed domestic manufacturing capability. Beijing seeks Chinese technological self-reliance, Chinese firms, and Chinese industrial strength.

European governments likewise pursue European technological sovereignty; India pursues Indian semiconductor IP, equipment, materials, and manufacturing. None of these governments would reasonably be criticized for doing so. They are performing one of the ordinary functions of a serious economic state.

What would be peculiar is for the Philippines to conclude that precisely because others are pursuing national industrial strategies, the appropriate Philippine response is to specialize more completely according to the requirements those strategies create.

Such a conclusion would convert Filipino comparative advantage into foreign industrial policy by another name.

The Opportunity Hidden in “World-Class Filipino Talent”

The recurring official celebration of Filipino talent should therefore be taken more seriously than it usually is. If Philippine engineers are sufficiently capable to operate multinational semiconductor plants, work in advanced design centers, manage global shipping, build software, practice medicine internationally, and staff sophisticated research organizations abroad, then the principal constraint upon Philippine technological development cannot be an inherent lack of human ability.

The question becomes institutional. Does the country possess research organizations through which knowledge can accumulate? Does it possess development finance willing to support technologically risky domestic firms? Does public procurement provide a market through which new industrial companies can learn? Are universities connected to industrial commercialization? Are firms rewarded for creating intellectual property and supplier networks rather than merely importing and distributing?

A country that repeatedly describes its citizens as world-class should eventually ask why so much of their world-class ability becomes productive capital for institutions headquartered elsewhere.

The proper objective is not to prevent Filipinos from working abroad or for foreign firms. Such restrictions would be economically absurd. The objective is to create enough Philippine productive institutions that remaining in the country and building something locally becomes a credible alternative.

Conclusion: From Talent to Productive Power

The argument over Pax Silica therefore reveals four different approaches to Philippine development, but it also exposes the limitations of the first three. Unconditional support for Pax Silica recognizes the opportunities created by American technology and geopolitical realignment but risks allowing alliance sentiment and investment enthusiasm to substitute for industrial analysis. The idealized Pax Silica position correctly demands technology transfer, supplier development, and Filipino participation but tends to underestimate the difficulty of transforming a contract- and concession-based foreign production architecture into a national industrial system after the fundamental investment structure has already been determined. The agro-commercial and professional alternative properly emphasizes agriculture, education, and individual enterprise but ultimately relies upon the proposition that the products of industrial civilization can be purchased indefinitely from societies that chose to develop the industries producing them.

The nationalist-developmentalist alternative begins from a different premise. It treats development not merely as the prosperity of Filipino individuals or the productivity of foreign factories located in the Philippines but as the accumulation of productive capability within the national economy. It does not reject the world market, foreign investment, professional services, or agriculture. It seeks to organize them around a domestic process of technological and industrial accumulation.

The contemporary international environment makes this argument considerably less eccentric than it might have appeared during the high period of neoliberal globalization. The United States protects semiconductor manufacturing and treats productive dependence as a national-security issue. China seeks self-reliance in integrated circuits, machine tools, software, instruments, and advanced materials. Europe explicitly seeks technological sovereignty and reduced strategic dependence. India, despite possessing a vast pool of internationally competitive engineers, finances semiconductor fabrication, domestic equipment and materials, and “full stack Indian” intellectual property.

These countries differ profoundly in political system and economic philosophy, yet each has concluded that nationally rooted productive capability matters.

The Philippines should ask why it should be the exception. A country which takes legitimate pride in local talent should not regard the highest possible use of that talent as supplying engineers to whichever foreign corporation or labor market happens to offer the strongest demand. Nor should it regard the ability to purchase sophisticated products internationally as an adequate substitute for learning how to create selected technologies domestically.

There is nothing irrational about buying from the world market. The irrationality lies in assuming that every existing dependence should remain permanent merely because importing is currently cheaper.

Garcia's distinction between individual and national self-reliance remains pertinent because Philippine development has too frequently solved structural problems at the level of the household. The engineer migrates, the family receives remittances, the farmer buys imported machinery, the hospital purchases foreign equipment, and the state attracts foreign corporations to employ domestic talent. Individuals adapt successfully to the economic structure that exists.

National development requires asking whether the structure itself should change. The Philippines now confronts a particularly opportune moment for doing so. Global supply chains are being reorganized; major powers have returned openly to industrial policy; large infrastructure projects are under construction; the country possesses a substantial domestic market, an established electronics base, mineral resources, and a technically capable labor force. Those circumstances can again be offered principally as locational advantages to external industrial systems, or they can become the raw materials of a coherent Philippine program.

The issue is not whether every Philippine company must become a national champion or whether every imported product must be replaced. It is whether enough firms, laboratories, technologies, and production capabilities are deliberately cultivated that the Philippines becomes increasingly capable of bargaining with the international economy rather than simply adapting itself to whatever role that economy presently offers.

Only then would the familiar phrase “world-class Filipino talent” acquire an economic meaning larger than employability.

It would describe not merely talented Filipinos, but a Philippine productive system capable of retaining, organizing, and multiplying their talent into national industrial power.

***

References

Aldaba, R. M. (2013). Why a new industrial policy for the Philippines is critical. Philippine Institute for Development Studies.

Araneta, S. (1965). Economic nationalism and capitalism for all in a directed economy. Araneta University Press.

Austria, M. S. (2006). Enhancement and deepening of the competitiveness of the Philippine electronics industry under a bilateral setting. Philippine Institute for Development Studies.

Australian Department of Industry, Science and Resources. (2025, December 12). The Pax Silica Declaration by countries attending the Pax Silica Summit. Australian Government.

Board of Investments. (n.d.). Comprehensive National Industrial Strategy. Department of Trade and Industry.

Briones, R. M., & Galang, I. M. R. (2013). Urgent: A road map for agro-industrial development in the Philippines. Philippine Institute for Development Studies.

Department of Trade and Industry. (2023, November 16). DTI chief Pascual encourages US companies to invest in the semiconductor industry. Government of the Philippines.

European Commission. (2026a, June 3). Strengthening Europe's tech sovereignty. European Union.

European Commission. (2026b, June 3). Chips Act 2.0. European Union.

Garcia, C. P. (1958, October 16). Speech of President Garcia before the opening of the Second Labor Management Conference. Official Gazette of the Republic of the Philippines.

Industrial Technology Research Institute. (2023a). Adopting technical knowledge from RCA to develop Taiwan's IC capabilities. ITRI.

Industrial Technology Research Institute. (2023b). Developing semiconductors from scratch: Taiwan's semiconductor industry hall of fame. ITRI.

Intel Corporation. (2009, January 21). Intel to consolidate manufacturing operations; company to halt production at five older factories.

Press Information Bureau. (2026a, February 7). India Semiconductor Mission 2.0: A major push towards semiconductor self-reliance. Government of India.

Press Information Bureau. (2026b, July 15). Cabinet approves Semicon 2.0—Government delivers on its commitment for long-term policy support to semiconductors in India. Government of India.

Presidential Communications Office. (2026a, July 23). BCDA says Pax Silica project could generate over 130,000 high-quality jobs. Government of the Philippines.

Presidential Communications Office. (2026b, September 10). PBBM: Government seeks to empower Filipino enterprises, capture greater value from investments. Government of the Philippines.

State Council of the People's Republic of China. (2026, March 5). China to make breakthroughs in core technologies, achieve sci-tech self-reliance. Government of the People's Republic of China.

White House. (2026, January 14). Adjusting imports of semiconductors, semiconductor manufacturing equipment, and their derivative products into the United States. Executive Office of the President.

World Bank. (2026, April). East Asia and Pacific economic update. World Bank Group.

Power, Impunity and the Republic: The Long Crisis of Accountability

2026-09-09T19:19:22.309-07:00

Power, Impunity and the Republic: The Long Crisis of Accountability

Or: "All After Imelda Marcos’s Acquittal, Martin Romualdez's Arrest, and the still Ongoing Trial of Sara Duterte: The Old Uses of Power and the Persistence of Abuse"

There is a peculiar quality to Philippine political scandals in their old age. They cease to resemble scandals and begin to resemble institutions. They acquire archives, jurisprudence, generations of lawyers, changes of government and, eventually, the faint sepia tone of history. The original outrage becomes something younger citizens encounter through inherited arguments, yellowing newspaper clippings and the occasional anniversary program, while the litigation itself continues at the more stately pace of geology. By the time judgment finally arrives, the country is no longer quite the country in which the case began, although the families, curiously enough, are often still there.

So it is with Imelda Marcos and the Swiss foundations.

The Supreme Court’s acquittal of the former first lady on seven counts of graft is therefore difficult to regard as merely the disposition of seven criminal informations. The First Division, speaking through Associate Justice Rodil Zalameda and joined by Associate Justices Ramon Paul Hernando, Henri Jean Paul Inting, Ricardo Rosario and Jose Midas Marquez, concluded that the prosecution had failed to establish guilt beyond reasonable doubt. The case turned in considerable measure upon the authentication of Swiss documents and upon the meaning to be assigned to the foundations in which Mrs. Marcos allegedly maintained financial interests while occupying public office.

There is nothing inherently sinister in these legal propositions. Criminal guilt must be proved beyond reasonable doubt. Documents must be authenticated according to law. Penal statutes cannot simply be stretched because the accused is famous, disliked, historically notorious or politically inconvenient. A constitutional republic that discards procedure whenever public indignation becomes sufficiently intense will eventually discover that procedure was protecting more than the unpopular defendant.

But the Philippine difficulty begins where the textbook proposition ends. A technical requirement experienced after a year of litigation is procedure. The same requirement discovered after three or four decades begins to resemble an indictment of the institutions responsible for the prosecution itself. The cases against Mrs. Marcos were already part of the national landscape before many of today’s voters were born. Governments changed, constitutions settled into middle age, prosecutors retired, judges died, witnesses disappeared, and the family that had once fled Malacañang returned to it. Only then did the legal process arrive at the conclusion that the State had not proved its case in the manner criminal law requires.

Reasonable doubt remains indispensable. Forty years to discover reasonable doubt is another matter entirely.

This is the distinction that partisan argument habitually refuses to make. The Court may have reached a conclusion defensible within the law while the justice system that required decades to reach it remains indefensible as a system. Both things may be true at once. Indeed, the more intellectually serious criticism of the acquittal does not require imagining five magistrates secretly assembling to rescue the mother of a president. Institutional failure is usually less theatrical. It consists of delay, poor prosecution, evidentiary decay, bureaucratic incompetence, political interruptions, procedural exhaustion and the extraordinary capacity of powerful defendants to remain standing until the State has forgotten how it intended to prosecute them.

The political circumstances nevertheless cannot be wished away by judicial syntax. Ferdinand Marcos Jr. has occupied Malacañang for four years, and it is during his presidency that his mother has obtained this reversal. No evidence has been produced showing that the President personally dictated the judgment, and criticism becomes unserious when suspicion is casually promoted into proof. But public confidence does not depend solely upon the absence of a discoverable conspiracy. Courts live within political history even when they properly refuse to decide cases according to it.

There is another irony, and Philippine politics has lately become unusually rich in them. Every justice participating in the acquittal was appointed to the Supreme Court by Rodrigo Duterte. That circumstance proves no corruption and should prove none; the independence of a judge would mean little if every decision were assumed to belong permanently to the president who signed the appointment. Yet the fact acquires an almost literary quality now that the Marcos and Duterte houses have become enemies. The mother of the Marcos president has been acquitted by Duterte appointees while supporters of Duterte prepare to use the acquittal as evidence against the Marcos order.

One Duterte supporter supplied the argument with unusual economy, imagining “the anti-Marcos crowd, Kakampinks, Dilawans, and company, going apoplectic” over the judgment and wondering whether they might instead respect the Supreme Court because, after all, “Principles don’t depend on who wins, right?”

It is a clever taunt because its premise is correct. Constitutional principle cannot mean respecting courts only when courts injure one’s enemies. Due process does not become dispensable because the defendant’s surname is Marcos. Those who defended institutional independence when courts frustrated Rodrigo Duterte, or when legal processes protected his adversaries, cannot logically demand that those same institutions become instruments of historical vengeance when Imelda Marcos appears before them.

Yet a principle becomes interesting only after it is permitted to cross the aisle.

For the Duterte camp has lately developed its own elaborate vocabulary of necessity. The controversy over Vice President Sara Duterte’s confidential funds has repeatedly been met by arguments invoking national security, intelligence gathering, insurgent recruitment, communist subversion and the need to protect schools and state institutions from threats invisible to ordinary accounting. During her tenure at the Department of Education, the department itself justified confidential expenditures partly through threats involving terrorism, violent extremism and insurgent recruitment. The explanation supplied a familiar Philippine political doctrine: exceptional dangers require exceptional instruments.

That proposition is not absurd. Intelligence cannot be administered as though it were the purchase of blackboards. A government cannot publish the names of informants, operational targets and covert sources and still pretend to possess an intelligence service. Yet the secrecy of an expenditure cannot become an alibi for the expenditure. National security may explain why details cannot be made public; it cannot answer whether the money was lawfully spent, properly liquidated and actually used for the purpose claimed.

The anticipated gloating over the Marcos acquittal therefore aggravates a tension already running through the entire system. At one end stands a scandal as old as the Marcos restoration itself, sustained through decades of litigation until its legal foundations finally gave way. At the other stands the much fresher controversy over Duterte’s confidential funds, where another political camp asks that necessity and security be given their due weight. Between them has opened the flood-control scandal, with its ghost projects, inflated contracts, contractors, politicians, allegations of kickbacks and that almost grotesquely Philippine image of suitcases said to have been filled with cash and carried from one important address to another.

Former Ako Bicol representative Zaldy Co has become one of the central names in the flood-control investigations. The Ombudsman has pursued cases involving projects alleged to have been nonexistent or anomalous, while testimony and counter-testimony concerning cash deliveries have produced their own bewildering subplot of bodyguards, affidavits, recantations and accusations of fabricated testimony. The Sandiganbayan has also issued attachment orders over properties in a case involving Co, while an Anti-Money Laundering Council witness testified that hundreds of millions of pesos moved from a contractor to him. These remain matters for adjudication rather than editorial conviction, but their political meaning is already obvious: public works, appropriations, private contractors and political power have again become almost indistinguishable characters in the same national drama.

Martin Romualdez, too, now confronts serious flood-control allegations and a plunder case, which he denies. The details may ultimately establish guilt, innocence, partial responsibility or another long Philippine excursion through procedural uncertainty. But even before the courts finish their work, the spectacle has revealed the inadequacy of partisan morality. To say that Marcos corruption absolves Duterte corruption would be nonsense. To say that Duterte abuses somehow cleanse Marcos history would be equally absurd. To call Romualdez a crook, whether rhetorically or eventually by judicial finding, does not automatically make Zaldy Co innocent; and evidence against Co would not automatically make Romualdez guilty. Criminal responsibility remains individual even when political systems are collective.

This is precisely why the vulgarity beneath all the competing defenses begins to look remarkably similar. One faction says that the Marcos cases were politicized and poorly prosecuted. Another says confidential funds were necessary to protect the nation against subversion. Another says the flood-control accusations are inventions of rival political camps. Witnesses appear, disappear or recant. Documents become decisive and then questionable. Money is alleged to have traveled through foundations, confidential accounts, contractors or suitcases. Every camp develops an intricate jurisprudence of why its own scandal is complicated and the opponent’s scandal perfectly simple.

If one may ponder the matter, this is where the bullshitry becomes substantially the same, because the protagonists belong to the same system even when they occupy opposing wings of it.

The system does not require Marcos and Duterte to be friends. It does not require Romualdez and Co to remain allies. Indeed, political rivalry may be one of its normal operating mechanisms. Yesterday’s coalition becomes today’s prosecution witness; yesterday’s prosecutor becomes tomorrow’s defendant; yesterday’s defender of executive discretion discovers legislative oversight when another family reaches Malacañang. The factions may fight ferociously because they are competing for possession of the same state, not because they represent fundamentally different understandings of what that state should be.

This is why the familiar questions ought to be asked without partisan qualification. Just because Marcos is corrupt, whether as historical judgment or as an accusation in a particular case, does that make Duterte clean? Obviously not. Just because Romualdez may be implicated in wrongdoing does that establish the innocence of Zaldy Co? Of course not. Nor does a case against Co establish Romualdez’s guilt merely by association. The point is almost embarrassingly elementary, yet Philippine political argument repeatedly proceeds as though corruption were a championship in which proving that the opposing team cheated automatically awards moral innocence to one’s own.

The Marcos-Duterte quarrel has made this habit unusually visible. Each camp now rummages through the record of the other with the diligence it rarely displayed while they governed together. Duterte supporters rediscover the Swiss accounts, martial-law wealth and dynastic privilege. Marcos supporters rediscover confidential funds, drug-war accountability and the discretionary habits of the previous administration. Their researchers have become excellent. Their memories have improved. Their principles have acquired an admirable sharpness, provided the telescope remains pointed across the street.

The flood-control scandal widens the view because it refuses to fit neatly into either family mythology. Contractors, legislators, officials and intermediaries occupy a world older than the present Marcos-Duterte feud. The alleged cash-filled suitcases are almost too picturesque, a form of corruption imagery apparently designed by a novelist lacking confidence in subtlety. Yet even here caution is required: some witnesses who alleged such deliveries later recanted, others maintained allegations, and investigators themselves have at various moments questioned whether testimonial claims were sufficiently corroborated. The uncertainty does not diminish the need for investigation; it demonstrates why investigations must be competent enough to survive politics.

A republic therefore requires two propositions to remain true simultaneously. The accused must receive due process, whether named Marcos, Duterte, Romualdez or Co. And due process must not become the civilized vocabulary by which powerful people consume enough time to make accountability impossible. Confidentiality may protect legitimate intelligence operations, but it must not become invisibility. Evidentiary rules protect defendants from arbitrary conviction, but the State cannot invoke its own decades of incompetence as though they were acts of God.

Here Philippine history supplies an old and rather indecent epigraph.

In 1949, Senate President José Avelino was reported in the Manila Chronicle as protesting investigations ordered during the Quirino administration. The passage subsequently found its way into the Supreme Court reports in Avelino v. Cuenco, which preserved the extraordinary complaint: “Why did you have to order an investigation Honorable Mr. President? If you cannot permit abuses, you must at least tolerate them. What are we in power for?” Avelino continued by rejecting the pretense that politicians were saints or angels. Whatever the circumstances and disputes surrounding the episode, the phrase survived because it possessed the brutal efficiency of an accidental national motto.

“What are we in power for?” has outlived Avelino because it identifies something deeper than ordinary greed. It expresses the belief that political victory purchases not merely the temporary authority to govern but a zone of tolerance around those who possess power: appointments to distribute, contracts to influence, funds to classify, relatives to protect, investigations to encourage or discourage, and institutions whose independence is loudly proclaimed so long as their independence produces convenient results.

The modern politician is unlikely to speak as candidly as Avelino was reported to have spoken. Philippine political language has improved considerably since 1949. Abuse is now reform, patronage is assistance, discretion is flexibility, secrecy is national security, political protection is due process, and factional prosecution is accountability. The vocabulary is cleaner. The appetite is recognizably the same.

This is what connects a Swiss foundation from another political age to a confidential fund spent under a vice president, and both of them to a flood-control project that exists beautifully in government paperwork and less convincingly on the ground. The instruments differ because government itself has changed. The logic remains remarkably persistent: public authority creates opportunities; political affiliation arranges the defenses; and once scrutiny begins, every interested faction explains why its own circumstances are exceptional.

That is also why the Duterte supporter’s question deserves to be preserved rather than dismissed. “Principles don’t depend on who wins, right?” Quite so. The proposition should be accepted in full and then applied without mercy.

If the Supreme Court’s acquittal of Imelda Marcos must be respected because proof beyond reasonable doubt and evidentiary rules do not change according to political preference, then Sara Duterte’s confidential expenditures must likewise be subjected to the governing rules without assuming guilt merely because her enemies demand it. But if confidential funds require accountability notwithstanding claims of national-security necessity, Marcos partisans cannot suddenly treat documentary scrutiny as persecution when their own family history is examined. If Romualdez is entitled to challenge witnesses, affidavits and allegations against him, then Zaldy Co is entitled to the same protections. If evidence ultimately condemns one, it does not cleanse the other.

Principle, if it deserves the name, has no surname.

The real division is therefore not between a clean faction and a corrupt faction, because Philippine politics has rarely offered the electorate so charitable a choice. It is between an institutional order capable of investigating everyone according to durable rules and a political order in which accountability functions as a weapon periodically captured by whichever coalition possesses sufficient power to wield it.

Marcos and Duterte may today appear to be opposite wings. Romualdez and Co may become bitter antagonists. Their followers may spend the coming years cataloguing one another’s scandals and describing every unfavorable investigation as persecution. Yet from the distance at which history eventually views such quarrels, the resemblance may prove more significant than the differences. The wings beat against one another, but the bird remains airborne.

Avelino’s old question thus returns, stripped of its period costume and made respectable by modern bureaucratic vocabulary. What are they in power for? The answer supplied publicly will involve service, security, development, democracy and the national interest. The answer implied whenever accountability becomes selective is considerably older.

The tragedy of the Republic is not that it lacks laws against corruption. It possesses them abundantly. Nor does it lack investigators, auditors, courts, committees, commissions or righteous speeches. What it has lacked with depressing regularity is the ability to apply these instruments quickly, competently and without regard to political genealogy.

Until that changes, the acquittal of a Marcos, the confidential funds of a Duterte, the flood-control allegations surrounding a Romualdez or a Co, and whatever scandal succeeds them will continue to be debated as though each were an unprecedented moral emergency. They are not. They are recurring symptoms of an old constitutional illness whose most candid diagnosis may still have been uttered, or at least attributed, in 1949.

The country has spent three quarters of a century pretending to be shocked by the question.

It has spent rather less time answering it.

Of Bailout and Baloney: When VP Sara Duterte Plays the Victim Card to Evade the Law

2026-09-06T03:35:15.566-07:00

Of Bailout and Baloney: When VP Sara Duterte Plays the Victim Card to Evade the Law

If there is one thing the Duterte political dynasty excels at, it is turning basic legal accountability into a prime-time soap opera. Vice President Sara Duterte proved that once again when she swept into the Quezon City Hall of Justice, transforming a standard court appearance into a high-stakes, tear-jerking thriller. Facing three counts of grave threats involving President Ferdinand Marcos Jr., First Lady Liza Marcos, and House Speaker Martin Romualdez, the embattled Vice President did not merely arrive to post bail—she came to put on a show.

Claims that she feared for her life, open expressions of distrust toward both the courts and the police, and dramatic pleas for news reporters to escort her to the fifth floor were all part of the act. She even left the press gallery with a chilling cliffhanger: "Who will be held accountable if I die tonight?"

It is an old trick straight out of her father’s playbook. When pressed to explain questionable actions—whether it is the politically charged millions in "confidential funds" under congressional scrutiny or her controversial stint as Education Secretary—the response remains identical: posture as the victim, attack the institution, and rally the loyal base. House Prosecutor Representative Terry Ridon delivered the exact reality check the Vice President so desperately needed: Cut the theatrics and face the music.

"Who will be held accountable?" Ridon asked, firing Duterte’s own melodramatic question back at her. "You, Madam Vice President, are the one who must be held accountable and answer the allegations facing you. Enough with the drama. There would be no grave threats case today if not for the statements that formed the basis of the charges filed against you. Face the legal process and present your defense in court."

The sharp exchange lays bare the central hypocrisy of the Duterte political brand. While ordinary citizens caught in the cogs of the justice system face strict, unyielding procedures, the political elite enjoy a tailored version of the law.

Duterte walked out after posting her ₱360,000 bail without ever taking a standard mugshot. As Ridon pointed out, even high-profile politicians like Senator Rodante Marcoleta underwent the standard booking procedure, mugshot included, upon surrendering to the authorities. Yet, for the Vice President, the Philippine National Police quietly waived the rules.

"Let us not hold back on the descriptions: When an ordinary accused individual undergoes the booking process, there is a mugshot. But when the Vice President is the accused, suddenly there is no mugshot," Ridon snapped. "If there is a legal basis for an exemption, let them explain it. If there is none, that is special treatment. The law should treat all accused equally: an ordinary person, a Senator, or the Vice President. No special treatment."

"I do not feel safe," Duterte protested to the press crowd. "They harassed the place where my mother and my child are staying. Where am I supposed to go? If I post bail, the harassment will not stop. If I do not post bail and go to the police, I have no trust in the police. In fact, I have no trust in the court."

It is time to pull the curtain down on the theatrics. The core issue is not a shadowy conspiracy to derail her; it is her own on-the-record statements and her refusal to transparently justify the use of public funds. A true leader respects the rule of law rather than weaponizing paranoia to evade it.

Duterte wants the public to believe she is a victim of a rigged system. In reality, she is simply an official being called to answer for her actions—and no amount of courtroom drama should grant her a free pass.

"From Dimasalang to Balsac: When Secrecy and History Becomes an Excuse"

2026-08-26T13:53:41.280-07:00

"From Dimasalang to Balsac: When Secrecy and History Becomes an Excuse"

A public controversy can begin with a laugh and end with a constitutional question. A name may sound improbable, a receipt may appear suspicious, and a coincidence may seem so extravagant that it belongs in satire. But when such a name appears in documents used to liquidate public funds, the issue is no longer merely amusing. It becomes a matter of accountability.

That is why the exchange in the Senate impeachment court between Robin Padilla, prosecution counsel Mae Divinagracia, and Bam Aquino deserves more than the amusement it naturally produced.

Padilla invoked history. He reminded the prosecution that Filipino heroes used aliases: Dimasalang, Siling Labuyo, Tikbalang, and the many noms de guerre by which revolutionaries concealed themselves from the colonial police. He later invoked the alias “Marcial Bonifacio,” used by Benigno “Ninoy” Aquino Jr. when he returned to the Philippines in 1983. Padilla’s argument was essentially that aliases have a legitimate place in dangerous and confidential work, and that even the armed insurgency of the present era furnishes examples of people operating under assumed names. (Inquirer.net)

Bam Aquino did not dispute the history. He merely restored the missing context.

Ninoy Aquino did use Marcial Bonifacio, he said, but Ninoy had no confidential funds, and his alias did not appear among the acknowledgment receipts now before the impeachment court. (GMA Network)

It was a humorous intervention, but beneath the humor lay a serious distinction that the Senate would do well to preserve. An alias adopted by a revolutionary to escape an occupying authority is one thing. An alias supposedly attached to the receipt of taxpayers’ money is another. Jose Rizal was not submitting Dimasalang to the Commission on Audit. Andres Bonifacio did not ask the Treasury to liquidate a government cash advance payable to Maypagasa. Ninoy Aquino used Marcial Bonifacio because he was attempting to return to a country ruled by a government that had imprisoned him, sentenced him to death, and driven him into exile. These historical circumstances cannot simply be transplanted into the accounting system of a constitutional republic.

Indeed, there is an additional oddity. The prosecution clarified after Padilla’s questioning that it had not asserted that the questionable names in the receipts were aliases, and that the defense itself had not established such a proposition either. (Inquirer.net) The result is a risk of constructing an elaborate historical defense of an explanation that has yet to be proved.

And this controversy did not begin yesterday.

The woman who could not be found

Mary Grace Piattos entered the national imagination in 2024, when her name appeared on acknowledgment receipts connected with confidential expenditures of the Office of the Vice President. The name immediately acquired an almost folkloric quality because it appeared to combine the name of a well-known restaurant with that of a familiar snack. But Congress did not merely laugh. It asked whether the person existed.

The Philippine Statistics Authority subsequently certified that its Civil Registry System contained no birth, marriage, or death record under the name Mary Grace Piattos. The PSA prudently added that a more extensive search could be conducted if additional identifying information—parents’ names, dates, or places of vital events—were supplied. That qualification is important. A negative database search is evidence deserving inquiry; it is not, standing alone, metaphysical proof that no human being could ever have borne the name. (GMA Network)

But what began as one bizarre name did not remain one bizarre name.

When the impeachment trial reached the confidential-fund records this August, Mary Grace Piattos returned, this time before the Senate itself. Former COA auditor Roderick Wamil identified her receipt as among the 845 acknowledgment receipts he examined in relation to the OVP’s ₱125-million confidential fund for the closing days of 2022. (Philippine News Agency)

Then came the procession. The selected receipts presented in court included Mary Grace Piattos for ₱70,000, Renan Piattos for ₱110,000, Mico Harina for ₱295,000, Patty Ting for ₱150,000, Andy Lim for ₱50,000, and Sisfrunio Balsac for ₱70,000, among others. (DZRH News) The names by themselves prove neither fraud nor guilt. There are Filipinos with unusual names, unfortunate names, amusing names, and names whose parents displayed an imagination that no civil registrar could restrain. The law cannot convict a person because a surname happens to resemble lunch.

But government accounting does not operate on the presumption that the more ridiculous a coincidence becomes, the less necessary it is to explain.

In subsequent proceedings, still more curious names appeared in selected 2023 receipts: Miggy Mango, Jay Kamote, Matthew Keso, Ralph Josh Bacon, and others whose collective effect caused the evidentiary record to resemble, at moments, less the supporting documents of an intelligence operation than the inventory of a grocery basket. (Philippine News Agency)

This is where ridicule becomes dangerous, because ridicule can distract from the larger issue. The republic is not prosecuting a menu. It is examining money.

Confidential is not synonymous with unknowable

There is a legitimate case for confidential funds. Every serious government recognizes that intelligence work cannot be conducted entirely in public. Informants may have to be protected. Operations may fail if their objects, participants, or methods are disclosed prematurely. A state that cannot keep a secret will soon discover that its adversaries can.

But this principle produces the opposite conclusion from the one sometimes drawn from it.

Precisely because confidential expenditure is hidden from ordinary public inspection, the internal mechanisms of accountability must be stronger, not weaker. The taxpayer may properly be denied the identity of an intelligence source. It does not follow that the state itself may be unable to establish that the source exists.

Wamil put the distinction with admirable simplicity during his testimony. What is confidential, he said, is the purpose or operation; that does not automatically render the identity of an ordinary supplier confidential. The OVP, he testified, was still expected to produce the appropriate supporting documentation for purchases. (Philippine News Agency)

That distinction is the heart of the controversy.

A secure government audit system can know what the public must not know. It can assign codes, restrict access, seal records, and protect sources while retaining a verifiable chain between the pseudonym and the real individual. Otherwise, “confidential” ceases to describe information protected from public disclosure and begins instead to describe information incapable of verification.

An alias may protect an informant, but the government must still be capable of proving, to the officials legally authorized to know, that there was an informant to protect.

That is why the argument cannot end with the discovery that aliases have been used by heroes, rebels, spies, journalists, actors, and revolutionaries. Of course they have. The question is not whether aliases exist. The question is whether an alias written on a government acknowledgment receipt corresponds to a real person, whether that person actually received the stated amount, whether the expenditure served an authorized confidential purpose, and whether an auditable record exists somewhere within the state establishing those facts.

These are accounting questions before they are historical questions.

The danger of making heroes into bookkeepers

Padilla’s historical excursion also illustrates a recurring Philippine weakness: public officials sometimes invoke national heroes where ordinary administrative competence would suffice.

Rizal and Bonifacio belong to the history of a people deprived of their own sovereign state. Their secrecy was directed against a colonial state they sought to overthrow. The officials now before the impeachment court operate inside the Philippine state, exercise powers created by its Constitution, and spend revenues collected under its laws.

The difference is not semantic. It is the difference between conspiracy against colonial authority and fiduciary responsibility under republican authority.

The Katipunan kept secrets from the Guardia Civil because discovery could mean imprisonment or execution. A constitutional office keeps certain intelligence information from public circulation because disclosure could compromise legitimate operations. But that office remains accountable to the republic whose money it spends.

The romance of revolutionary secrecy therefore requires caution. Taken too far, it converts a principle of resistance into a theory of public administration.

Almost anything could be justified by that method. Revolutionaries met secretly; therefore government meetings need no minutes. Revolutionaries concealed their finances; therefore government expenditures need no audit. Revolutionaries used assumed identities; therefore names on official liquidation papers need never be traceable. The absurdity becomes apparent as soon as the analogy is completed.

The heroes of the Revolution used secrecy because they had no republic of their own.

The officials of the present republic have no such excuse.

The receipts themselves must answer

There are other facts that make the demand for explanation more serious. Wamil testified that the liquidation of the initial ₱125 million was marked by deficiencies in supporting documents. He also described as “unusual” a pattern in which 111 transactions totaling about ₱17 million were recorded in a single day, with the amounts appearing in round figures. (GMA Network) COA has separately affirmed a notice of disallowance covering roughly ₱73.28 million in 2022 confidential expenditures, although questions of ultimate liability and the legal effect of the audit findings remain matters subject to the proper processes. (GMA Network)

None of these facts authorizes anyone to skip the trial and pronounce a verdict from a newspaper column. The Vice President is entitled to a defense. Her lawyers are entitled to challenge the prosecution’s interpretation of the documents, the auditors’ conclusions, the provenance of the receipts, and the inferences being drawn from unusual names. Impeachment, however political in character, must not become conviction by meme.

But neither can accountability become acquittal by euphemism.

Calling Mary Grace Piattos an “alias” does not answer who used the alias. Calling Patty Ting an “alias” does not establish the real person behind Patty Ting. Calling Sisfrunio Balsac an “alias”—however valiantly one may attempt to pronounce the name with a straight face—does not demonstrate that ₱70,000 reached a legitimate recipient for a legitimate confidential purpose.

The alias theory, if the defense eventually adopts it, creates a new question rather than answering the old one: alias of whom?

And somewhere in a functioning government there must be an answer.

The answer need not be announced from the Senate gallery. It need not be televised. It need not be printed tomorrow morning beside the name of an intelligence operation. There are legitimate secrets that a mature republic should be mature enough to keep.

But secrecy from the public and secrecy from accountability are not the same thing.

The fillers in a trial that is supposed to be swift

Meanwhile, supporters of Padilla’s position appear to be treating the issue as little more than filler in a trial that is supposed to be swift and speedy. Some seem to have been carried away by the phrase “confidential alias,” as though the mere invocation of secrecy were enough to settle the matter.

One apologist even responded by citing history:“Be careful about calling people stupid, because even lawyers can be stupid, especially when it comes to history. We are all ignorant about different things...Always remember the lessons of the Katipunan so that you will not be deceived by people who are small-minded, as you see them…”

The translation is clear enough, but so is the irony. The statement warns against intellectual arrogance while using history as a rhetorical shield rather than engaging the central accounting question. It invokes the Katipunan, but does not explain how revolutionary aliases establish the identity of people who received public money. It cautions others against being “small-minded,” yet treats a demand for documentary verification as though it were an insult to history.

A trial intended to be swift and speedy should not be burdened by arguments irrelevant to the actual issue. The question is not whether lawyers can be foolish, whether critics can be arrogant, or whether the Katipunan taught Filipinos to distrust people of poor character. The question is whether the receipts identify real recipients, whether the money was actually disbursed to them, and whether the expenditures were lawful and properly documented.

Historical references may illuminate a legal argument. They cannot substitute for one.

The Senate should be especially wary of allowing such diversions to consume time. A proceeding that is supposed to determine constitutional accountability cannot afford to become a contest of patriotic quotations, personal insults, and improvised lessons in revolutionary history. If the defense has evidence that the names were aliases, it should present the evidence. If it has a secure record identifying the persons behind those aliases, it should explain how that record satisfies the requirements of confidential auditing. If it does not, then the invocation of history remains precisely what it appears to be: a distraction.

What Bam Aquino actually exposed

This is why Bam Aquino’s remark worked. Its effectiveness did not lie merely in political wit or family history. It exposed the category error in Padilla’s comparison.

Yes, Ninoy Aquino used an alias. But Marcial Bonifacio was not offered as a receipt for public money.

No auditor had to ask whether the government gave Marcial Bonifacio ₱70,000, ₱150,000, or ₱295,000. No liquidation report depended upon proving that Marcial Bonifacio bought information for the Office of the Vice President. No constitutional officer asked the republic to accept his assumed identity as documentary support for an expenditure.

Ninoy was hiding himself from the state. The persons behind these receipts, if aliases they truly are, were receiving money from the state. That distinction is everything.

The Senate should therefore resist both temptations now competing for attention. It should not convict because the names are funny. And it should not cease asking questions because someone has remembered that Bonifacio, Rizal, the Katipunan, Ninoy Aquino, and the NPA also used aliases.

The republic can tolerate an alias. What it cannot safely tolerate is an expenditure without an accountable human being behind it.

Mary Grace Piattos may someday be identified. Patty Ting may prove to be somebody. Sisfrunio Balsac may yet emerge from the documentary shadows with an identity, an explanation, and a perfectly legitimate story. If so, the evidence should establish it, and fairness should acknowledge it.

But until the receipts can be connected to real persons and lawful purposes through a credible and protected audit trail, invoking the heroes of the Revolution does not elevate these documents.

It merely reminds observers how far the country has traveled from Dimasalang to Piattos—and how dangerous it would be if, somewhere along the journey, the Philippine government began mistaking secrecy for accountability.

The Trouble With a Witness Who Remembers Too Selectively

2026-08-25T14:16:00.000-07:00

The Trouble With a Witness Who Remembers Too Selectively

There is an old courtroom difficulty which no amount of legal polish can completely conceal: a witness may answer every question put to her and yet leave the public knowing less than when the questioning began. That, in substance, was the complaint raised by members of the prosecution panel after the testimony of Gina Acosta, former special disbursing officer of the Office of the Vice President, concerning the handling of roughly ₱500 million in confidential funds.

Acosta’s answer, repeated often enough to become the most memorable feature of the proceedings, was that the money had been turned over to Col. Raymund Dante Lachica, former head of the Vice Presidential Security and Protection Group. There is, of course, nothing inherently suspicious about repeating an answer if that answer happens to be true. A witness should not be expected to invent a new version merely to satisfy the impatience of counsel. But repetition acquires a different character when distinct questions, directed at different portions of a financial transaction, seem always to arrive at precisely the same terminus.

This was what irritated the prosecution.

Lorna Kapunan called the testimony a “broken record,” or plakang sira. Amando Virgil Ligutan used another familiar expression: de kahon. “Many questions, one answer,” he observed. Joel Chua dispensed even with those qualifications and said the answers appeared “coached.” “Her answer is obviously scripted,” Chua said. Whatever was asked, he complained, the direction of the answer remained Lachica.

These are serious criticisms, and they should not casually be converted into findings of fact. To say that testimony sounds rehearsed is not to prove that somebody rehearsed it. To say that a witness appears coached is not proof that a lawyer supplied the answers. The distinction matters, particularly in an impeachment proceeding where partisan conclusions tend to form long before evidentiary ones.

But the prosecution’s point deserves more than a shrug precisely because its concern was not confined to one repeated name. What caught its attention was the apparent pattern of recollection surrounding that name.

Ligutan questioned Acosta about her earlier work as special disbursing officer when Sara Duterte was mayor of Davao City. On several details, Acosta said she could no longer remember. Yet, according to Ligutan, when the defense pursued a similar period of her service, her recollection appeared considerably less troubled. “You said you could no longer remember when you were in Davao,” he told her, before pointing to answers concerning the years 2018 to 2022 that he believed had come with greater ease.

Thus entered into the proceedings that wonderfully diplomatic courtroom phrase: “selective memory.”

Selective memory is an accusation frequently made and rarely easy to prove. Human recollection is not an accounting ledger. A person may remember an office procedure and forget an amount; remember the existence of an audit document and forget the date on which a transaction was made. Acosta herself offered essentially this explanation. She said she could remember that no Commission on Audit memoranda had been issued concerning certain matters, while being unable to recall the exact amounts of confidential funds from Duterte’s years as Davao mayor.

That explanation is possible. It is also precisely the kind of explanation that becomes more difficult for a witness when the contrast in memory appears to correspond too neatly with the identity of the questioner.

Benjamin Tolosa made this the prosecution’s practical complaint. When prosecution lawyers were asking, he said, Acosta sometimes seemed to have difficulty answering or understanding. When defense counsel took over, he observed, comprehension appeared faster and the responses more immediate. Chua’s conclusion was harsher: de kahon. Kapunan supplied the imagery of the defective phonograph. Ligutan, more cautiously, left judgment to those watching.

One need not endorse every prosecutorial flourish to recognize why this matters.

Senator-judge Erwin Tulfo on Monday raised doubts about Acosta’s supposed difficulty speaking in Filipino or English at the Senate impeachment trial of Vice President Sara Duterte.

Acosta, a former special disbursing officer of the Office of the Vice President and currently a member of its staff, answered questions in Bisaya on Monday morning, prompting the Senate impeachment court to try to find a translator.

Describing the apparent language barrier as “deception,” Tulfo asked the court to compel Acosta to respond in Filipino.

“I know, Ms. Witness, that you can understand Tagalog and that you can speak Tagalog because this is several pages long,” he said, holding up a transcript of the 2024 House hearing.

He noted that Acosta had also responded in English to questions asked in English.

“Why does it seem that you are having such a hard time now, that your answers have to be translated from Tagalog into Bisaya? We will take a year here, Mr. President,” Tulfo said.

Tulfo’s intervention added a new dimension to the prosecution’s concern. The issue was no longer only whether Acosta remembered selectively or repeated a prepared answer. It was also whether the witness was presenting a language difficulty that did not appear consistently across the proceedings.

That, too, requires caution. A witness may be more comfortable speaking in one language when discussing technical or unfamiliar matters. She may understand a question in Filipino or English but prefer to answer in Bisaya, particularly under the pressure of a public trial. Language preference is not, by itself, evidence of deception.

Still, the contrast noted by Tulfo was not trivial. If Acosta could understand Tagalog, speak it in prior proceedings and answer English questions in English, the court was entitled to ask why a translator had suddenly become necessary. The answer may be innocent. But the court should not be expected to ignore a change in communicative ability when that change affects the pace and substance of testimony.

The problem of confidential funds has always been that secrecy, though sometimes justified by the nature of intelligence work, creates an extraordinary burden of institutional trust. Ordinary government expenditure travels under the discipline of invoices, contracts, names, quantities and deliverables. Confidential expenditure necessarily removes some of these things from public inspection. Precisely because the usual windows are shuttered, the remaining mechanisms of accountability must be stronger, not weaker.

When hundreds of millions of pesos pass through an office under a regime of confidentiality, “I turned it over” cannot automatically become the end of institutional inquiry. It may be the beginning of the answer, but it is not the whole answer. Turned over under whose authority? By what procedure? With what documentation? Who thereafter assumed responsibility for custody, disbursement and liquidation? What did the disbursing officer understand her duty to be before and after the transfer?

Those are not necessarily accusations of theft. They are the ordinary questions that follow public money.

This is why Acosta’s repeated reference to Lachica became so important to prosecutors. The issue was not merely whether she named the same man several times. It was whether the repetition functioned, intentionally or otherwise, as a wall beyond which the questioning could not travel. A bureaucracy cannot permit responsibility to dissolve simply by moving money from one official hand to another. If Officer A says the money went to Officer B, and Officer B points elsewhere, public accountability can rapidly become a children’s game of pass-the-parcel, except that the parcel contains taxpayers’ money.

The prosecution acquired another reason for suspicion when Acosta acknowledged meeting Lindon Bacquel, one of Duterte’s defense lawyers, roughly two weeks before she took the witness stand. Bacquel subsequently conducted her cross-examination. Acosta said she had merely asked about Senate procedure and what to expect in the proceedings. She denied being supplied questions or answers.

Michael Poa, speaking for the defense, said the lawyers had been careful in dealing with potential witnesses, especially after subpoenas had been issued. Discussions, he said, would be limited to broad procedural matters and would avoid the substance of testimony for ethical reasons. He also said he had no personal knowledge of what transpired between Bacquel and Acosta because he was not present.

Again, a meeting is not proof of coaching. Lawyers routinely explain procedure to people who must enter intimidating legal proceedings. It would be irresponsible to leap from acquaintance to conspiracy. Chua’s “coached” should therefore be understood for what it was: the conclusion of a prosecutor observing the witness, not yet an independently established fact.

But neither can appearances simply be declared irrelevant. Impeachment is a constitutional proceeding conducted partly in the language of law and partly in the language of public confidence. A witness who meets a defense lawyer shortly before testimony, then appears markedly more fluent under defense questioning than under prosecution questioning, inevitably invites scrutiny. That scrutiny may ultimately prove unfair. The way to dispel it, however, is not indignation but clarity.

There is something almost quaintly bureaucratic about the phrase de kahon. It belongs to an older Filipino vocabulary of suspicion, reserved for statements that emerge too perfectly formed, too conveniently uniform, like papers produced from the same government stencil. Perhaps Acosta’s answers were simply consistent because the underlying events were simple. Perhaps she really did transfer the funds to Lachica and genuinely knows little of what followed. If so, further testimony and documentary evidence should establish that without difficulty.

Perhaps, too, her use of Bisaya was simply a matter of comfort rather than strategy. But if a witness can speak and understand Filipino or English in some portions of the record and then appears unable to proceed without translation in others, the court is entitled to examine that inconsistency with the same care it applies to inconsistencies in financial testimony.

But if a public officer entrusted with hundreds of millions can describe her responsibility principally by saying that she handed the money to somebody else, the impeachment court has stumbled upon a problem larger than the credibility of one witness.

It has stumbled upon the old Philippine problem of administrative responsibility: everybody participated in the process, yet at the crucial moment nobody seems to possess the whole story.

Kapunan called it a broken record. Ligutan called it de kahon. Chua called it coached. Tulfo called the apparent language barrier deception. The prosecution may eventually prove too suspicious, or it may prove prescient. For the moment, the more important question is simpler.

Five hundred million pesos should leave behind something more substantial than an echo.

A "Pax Silica" Without "Filipino Viribus"?

2026-08-23T15:14:00.000-07:00

A "Pax Silica" Without "Filipino Viribus"?

Why a Silicon Strategy Without Filipino First Risks Modernizing Dependency

The Philippines is once again being invited to imagine industrial destiny through the language of advanced technology. The vocabulary has changed. Earlier generations spoke of foreign-exchange controls, import substitution, infant industries, and economic decolonization. Today, the dominant terms are semiconductors, artificial intelligence, critical minerals, secure supply chains, advanced manufacturing, data infrastructure, and strategic technological partnerships.

Pax Silica, particularly as it is envisioned around New Clark City, is therefore being presented as more than an investment program. It is being framed as an opportunity to reposition the Philippines within the commanding industries of the twenty-first century.

That ambition deserves serious support. The Philippines needs manufacturing, foreign capital, advanced machinery, research partnerships, modern infrastructure, and technically sophisticated employment. It also needs access to technologies that domestic industry cannot yet reproduce at scale. Economic nationalism that rejects foreign knowledge merely because it is foreign would not be a program of national advancement. It would be an exercise in self-imposed backwardness.

Yet from the perspective associated with Filipino First tradition, the proposal also warrants profound skepticism. The decisive question is not simply whether billions of dollars will enter the country, whether advanced factories will stand on Philippine soil, or whether tens of thousands of Filipinos will be employed inside them. The more important question is what Filipino productive strength will exist after those investments have matured.

Pax Silica must therefore be judged not merely by the amount of silicon it brings into the Philippines, but by the amount of Filipino viribus—Filipino strength, capacity, and economic power—it leaves behind.

If the arrangement requires the Philippines to provide land, electricity, water, infrastructure, labor, tax incentives, and political accommodation while the decisive machinery, software, intellectual property, financing, and industrial command remain foreign, then the country may construct something technologically impressive without becoming technologically sovereign.

That would not be industrialization in the fullest sense. It would be the modernization of dependency.

Filipino First Was Never Simply Filipino Only

Garcia’s Filipino First Policy is often caricatured as an attempt to exclude foreign capital and reserve business exclusively for Filipinos. That interpretation is historically incomplete and economically superficial.

The deeper concern behind Filipino First was the imbalance between political independence and economic control. The Philippines had achieved sovereignty in constitutional terms, yet much of the commanding economy remained dependent upon foreign capital, foreign trading networks, foreign technology, and inherited colonial commercial structures. Filipino First therefore sought to increase Filipino participation in the national economy, particularly in sectors where domestic capital had remained subordinate.

The policy had serious flaws. Foreign-exchange allocation and protection could be manipulated by politically connected interests. Protected businesses could become complacent. Nationality could substitute for efficiency, while political access became more valuable than technical improvement. A Filipino-owned firm that survived indefinitely through government favoritism while refusing to innovate contributed little to genuine industrial power.

Those defects should not be romanticized. Neither, however, should they be used to dismiss the central problem that Filipino First attempted to confront. The failure of some nationalist policies does not prove that economic nationalism is unnecessary. It proves that nationalism without discipline can become rent-seeking.

The proper lesson is therefore not Filipino First in its crudest form, but Filipino capability first.

Ownership matters because ownership determines where profits accumulate. Profits determine who possesses capital for the next generation of investment. Yet ownership alone is insufficient. A meaningful national industrial policy must also develop technological competence, managerial expertise, financing capacity, engineering institutions, industrial suppliers, research organizations, and firms capable of competing beyond the protection of the state.

The twenty-first-century form of Filipino First should neither expel foreign capital nor kneel before it. It should use foreign capital to expand Filipino power.

When the Philippines Learned to Host Industry

One of the central problems in Philippine economic development is that the country became considerably better at hosting industrial production than at possessing industrial systems.

The export-processing-zone model demonstrated this distinction. Industrial estates could attract multinational firms, employ Filipino workers, generate foreign exchange, and produce goods counted among Philippine exports. Electronics became one of the country’s most important export industries. The Philippines acquired considerable competence in assembly, testing, packaging, manufacturing services, and related operations.

These achievements should not be dismissed. They created employment, generated income, developed technical skills, and connected the country to global production networks. But they should not be confused with control over the commanding heights of technological production.

A semiconductor may be processed or assembled in the Philippines while its architecture is designed elsewhere. The machinery may be imported, the production software may be proprietary, the specialized chemicals may come from foreign suppliers, the financing may originate in international capital markets, and the patents may belong to an overseas corporation. Strategic decisions may be taken in California, Tokyo, Seoul, Taipei, Amsterdam, or another commercial center.

The finished product can legitimately carry the label “Made in the Philippines,” yet most of the highest-value decisions surrounding that product may remain outside Philippine ownership. This is the distinction between participation in a production network and command over productive capacity.

The Philippines has often treated the first as though it automatically produces the second. It does not.

The country may possess a large electronics-export sector and still lack a dense ecosystem of Filipino semiconductor-design companies, precision-equipment manufacturers, specialty-chemical firms, industrial-software developers, robotics companies, machine-tool producers, power-electronics firms, and advanced-material suppliers.

This is the “hollow middle” that has repeatedly characterized Philippine industrial development. At one end stand large conglomerates and multinational corporations. At the other are millions of small enterprises. What remains insufficiently developed is the thick middle layer of technically capable domestic firms that make industrial economies resilient.

Germany has its specialized Mittelstand manufacturers. Japan possesses extensive networks of component and precision suppliers. Taiwan did not become a semiconductor power merely by hosting foreign factories; it developed domestic institutions and firms capable of mastering increasingly sophisticated stages of production. South Korea gradually transformed itself from a licensee and assembler into a producer of internationally competitive industrial corporations.

The Philippines cannot expect Pax Silica to produce the same outcome merely because foreign factories occupy Philippine land.

The Cold Law of Transaction

The most uncomfortable principle must be stated plainly: foreign investors will not arrive in the Philippines to complete Philippine economic independence. They will arrive to conduct business.

There is nothing immoral about this. It is the cold law of transaction.

A corporation that has spent decades and billions of dollars developing a technological advantage does not ordinarily transfer the entirety of that advantage to a customer so that the customer may eventually cease purchasing from it. The corporation will sell the machine, the license, the software required to operate the system, and the replacement components. It will provide technical support and may train Filipino engineers and technicians extensively enough to operate the system efficiently.

But it possesses no inherent commercial obligation to teach the Philippines everything necessary to eliminate future dependence upon the supplier.

The seller wants a customer. The developing nation should eventually want to become a producer. Those interests are not identical.

This is why promises of “technology transfer” must be treated with care. Technical instruction is not necessarily technological independence. A Filipino engineer may learn how to operate a machine without learning how to design one. A Filipino technician may become highly skilled in maintaining a proprietary production line while remaining dependent upon foreign components and software. A multinational corporation may establish an engineering center in the Philippines while keeping its most valuable research and intellectual property abroad. A foreign semiconductor producer may employ thousands of Filipinos while retaining architectural, financial, and commercial control of the product.

None of these arrangements is necessarily undesirable. They may represent meaningful progress. But none should be mistaken for sovereignty.

The proper industrial question is therefore not whether foreign companies will voluntarily give the Philippines their most valuable technologies. They generally will not. The question is whether Philippine institutions are strong enough to learn from the technologies that enter the country, develop complementary capabilities, finance domestic competitors, and reduce dependence over time.

A country does not become technologically capable by expecting generosity from the seller. It becomes capable by learning faster than the seller expects.

They Will Keep Filipinos Working for Them Until the Contract Ends

Employment is another area in which shallow measures of success can obscure deeper dependency.

Foreign firms will employ Filipino workers because Filipino workers are useful to production. They will train them because trained employees increase productivity. They will retain them as long as operating in the Philippines makes commercial sense.

The Philippines should welcome those jobs. They can raise household incomes, develop technical skills, and provide workers with experience that would otherwise be unavailable. But employment itself does not constitute national industrial strength.

Contracts expire. Technologies change. Factories relocate. Automation reduces labor requirements. Tax incentives end. Supply chains shift. Geopolitical relationships change. A multinational corporation that finds better commercial conditions elsewhere is not bound by sentimental obligation to remain in the Philippines.

If the investor leaves after twenty years and the entire productive activity disappears with it, the country did not truly possess the industry. It rented it.

If the machines are removed and production stops, the Philippines possessed employment but not productive command. If the software license expires and domestic firms cannot reproduce the process, the country used technology without mastering it. If a foreign supplier withholds a critical component and Filipino industry cannot manufacture or substitute it, the country’s apparent industrial sophistication is revealed as dependence.

Employment should therefore be regarded as the beginning of industrial development, not its culmination. The real measure is what Filipino workers become capable of creating independently after acquiring experience. Will technicians become engineers? Will engineers become entrepreneurs? Will those entrepreneurs establish specialized suppliers? Will some suppliers progress into designers? Will Filipino firms eventually develop products, patents, machinery, and export markets of their own?

If not, labor has been deployed without being converted into national productive power.

The Manufacture of Shallow Pride

There is an additional political danger in the rhetoric surrounding foreign-led industrialization: the manufacture of national pride without the manufacture of national control.

There will undoubtedly be photographs of Filipino technicians wearing clean-room suits, Philippine flags placed beside semiconductor wafers, statements celebrating “Filipino-made chips,” and speeches praising Filipino talent while declaring that the country has joined the technological future.

Much of this pride will be sincere. Some of it will also be shallow.

What exactly constitutes a Filipino-made microchip? Is it a chip designed by a Filipino company, financed by Filipino capital, based on intellectual property substantially developed in the Philippines, fabricated using technologies over which Filipino enterprises possess meaningful control even studied abroad just to enrich it, and sold into international markets by a Filipino firm?

Or is it a foreign-owned chip manufactured with Filipino hands, using foreign machinery and licensed processes, perhaps incorporated into a Chinese-manufactured cellular telephone operating under intellectual-property licenses from a corporation headquartered in California?

The latter product can legitimately be described as manufactured in the Philippines. But it is not evidence that the Philippines commands the productive system.

The Filipino worker may perform an advanced and valuable operation. The country’s export statistics may rise. Employment may improve. Technical competence may increase. All are genuine achievements.

Yet the Filipino hand touching a product does not automatically make the surrounding industrial structure Filipino. The critical distinction is between made by Filipino hands and made through Filipino power.

A nation can manufacture sophisticated components without owning the designs. It can assemble world-class products without controlling the machinery. It can export high-technology goods while importing most of the technology that makes those goods high technology. It can become indispensable to another country’s supply chain without possessing a complete supply chain of its own.

The danger is not that the Philippines begins in these subordinate stages. Many successful industrial nations did. The danger is that it remains there permanently while congratulating itself for having already arrived.

Shallow pride tells the country that participation is ownership. A serious industrial policy insists that participation must become a staircase toward ownership.

Technology Transfer Must Be Measured

If Pax Silica is genuinely intended to strengthen Philippine industry, technology transfer cannot remain a ceremonial phrase. It must become measurable public policy.

The government should be able to answer concrete questions. How many Filipino engineers will receive advanced technical training? How many Filipino researchers will participate in commercially meaningful research and development? How much Research and Development expenditure will occur inside the Philippines? How many Filipino firms will become qualified suppliers? How much local technological content will be achieved after five, ten, and fifteen years?

The government should also measure how many Filipino managers reach technical decision-making positions, how many patents involve Filipino inventors, and how many domestic companies eventually export products independently of the multinational firms that first trained them.

These indicators should be treated with the same seriousness as investment figures and employment targets. A government that proudly announces US$50 billion of investment while remaining unable to quantify the domestic technological capability created by that investment has reported only one side of the transaction. The other side, however, is national power.

Foreign Investment Should Be a School, Not a Permanent Condition

The proper role of foreign investment in a developing economy is transitional in one important sense. Foreign corporations need not disappear, but domestic dependence upon them should gradually diminish.

Foreign investment should function as a school. The investor brings advanced machinery, production methods, capital, management systems, supplier standards, and access to international markets. The state should ensure that Filipino firms learn from this presence and progress through increasingly sophisticated stages of production.

A local supplier should move from simple components to sophisticated ones. Maintenance should progress toward machine design. Testing should progress toward testing-equipment production. Assembly should progress toward fabrication. Fabrication should progress toward design. Design should produce intellectual property. Intellectual property should support Filipino corporations capable of selling beyond the Philippines.

The objective is not national purity. It is cumulative capability.

Japan imported technology. South Korea licensed it. Taiwan learned through foreign partnerships and built domestic institutions. China opened itself selectively to foreign capital while simultaneously constructing enormous domestic technological and industrial capacity.

None of these countries became industrial powers by assuming that foreign corporations would spontaneously manufacture their future competitors. They used foreign investment while creating institutions capable of eventually challenging the investors themselves.

The Philippines must do the same. It should not reject buying foreign technology. It should reject buying the same technology forever.

Land, Power, Water, and Labor Are Philippine Capital

Another weakness in Philippine investment policy is the tendency to regard foreign capital as the only meaningful capital in the transaction.

This is incorrect. Land is capital. Electricity is capital. Water is capital. Roads are capital. Ports are capital. Tax exemptions are capital. Public guarantees are capital. Political stability is capital. An educated labor force is capital. Communities that accept environmental and land-use changes are contributing something of economic value.

If the Philippines provides these resources to strategic investors, it is not begging for development. It is participating in an exchange. That means it has every right to demand developmental returns.

If investors obtain preferential access to land, fiscal incentives, infrastructure, and strategically important locations, the Philippines should seek commitments in technology, supplier development, research, workforce progression, local procurement, and domestic capital formation.

The negotiation should not begin only with the question, “What more must the Philippines offer so that investors will come?” It should also ask, “What must investors leave behind so that the Philippines becomes stronger?”

That is the bargaining posture of an independent country.

There Must Be Filipino Capital Behind Filipino Capability

Technological development cannot occur without finance. Pax Silica should therefore include an explicit strategy for creating Filipino industrial capital.

Government financial institutions should provide patient but disciplined financing to domestic firms capable of entering advanced manufacturing. Pension funds and institutional investors should be permitted, under prudent rules, to participate in productive infrastructure and qualified industrial ventures. Universities should become partners in commercialization rather than merely recruitment pools for multinational corporations.

Filipino engineering graduates should have pathways not only into salaried employment but also into entrepreneurship. The financial system should support hardware, industrial software, semiconductor design, precision manufacturing, materials science, robotics, machine tools, and other capital-intensive fields whose development periods are longer than those of consumer applications.

The Republic should be able to identify not only the multinational companies expected to enter Pax Silica but also the Filipino firms expected to emerge from it.

Where is the future Filipino semiconductor-design company? Where is the Filipino industrial-equipment manufacturer? Where is the Filipino power-electronics firm? Where is the Filipino specialty-materials company? Where is the Filipino company that enters the ecosystem as a subcontractor and, twenty years later, competes internationally?

If no pathway exists toward such firms, Pax Silica remains an industrial-estate policy rather than a national industrial strategy.

Protection Must Be Disciplined

The answer is not a return to indiscriminate protection. The establishment's interpretation of "Filipino First" itself provides the warning.

Protection without performance becomes cronyism. A Filipino corporation that receives preferential financing but does not raise productivity is not advancing nationalism. A domestic company that benefits from procurement preferences while refusing to meet international quality standards is not serving economic sovereignty. A firm that survives because of political connections rather than technical competence is merely replacing foreign dependency with domestic oligarchy.

Support must therefore be conditional. Credit should require productivity targets. Tax privileges should require investment and training. Procurement preferences should require quality and delivery standards. Technology grants should require research outcomes. Protection should contain milestones and sunset provisions.

The Filipino entrepreneur may deserve assistance while learning. He does not deserve protection from the obligation to learn.

This is where the old nationalist state and the modern developmental state must differ. Nationality may justify attention. Performance must justify continuation.

Nor Should Liberalization Become Surrender

Yet the opposite doctrine has also failed. For decades, Philippine policy frequently assumed that openness itself would generate development. Liberalize trade, reduce restrictions, invite foreign investors, expand exports, join global value chains, and industrial upgrading would supposedly follow.

But the market has no patriotic obligation to create Filipino technological sovereignty. A multinational corporation will allocate production according to efficiency, risk, profitability, and corporate strategy—not according to the developmental needs of the Philippine Republic.

The Philippines may remain indefinitely within the labor-intensive or lower-value portions of the chain if no national policy forces upward movement.

This is why the debate cannot be reduced to protectionism versus liberalization. Both can fail. Protection without discipline creates inefficient oligopoly. Liberalization without industrial strategy creates hollow openness.

The necessary alternative is conditional openness directed toward national capability. Foreign capital should enter, but Filipino capacity must rise with it.

The Geopolitical Dimension

Pax Silica is inseparable from geopolitical competition. Semiconductors, artificial intelligence, critical minerals, data infrastructure, and advanced manufacturing are now treated by major powers as elements of national security.

The United States has its interests. China has its interests. Japan, South Korea, Taiwan, India, and Europe have theirs. The Philippines should have its own.

There is nothing objectionable about participating in an American-led technological framework if Philippine and American interests substantially coincide. But economic cooperation must not be confused with strategic guardianship.

An allied power will naturally design supply chains that strengthen its own economic security. The Philippines must simultaneously ask what strengthens Philippine economic security. Those objectives may overlap, but they are not synonymous.

The Philippines should therefore avoid exchanging one dependency for another. A genuinely Filipino First interpretation of Pax Silica would cooperate with the United States where useful, with Japan where advantageous, with Taiwan and South Korea where complementary, with Europe and India where beneficial, and with China where national security and legitimate economic interests permit.

Strategic autonomy does not mean equidistance for its own sake. It means possessing the capacity to determine Philippine policy according to Philippine interests.

No foreign country, however friendly, carries the primary responsibility for building Filipino industrial strength. That task belongs to the Philippines.

The Test Is What Happens When the Supplier Says No

Ultimately, the most revealing test of any industrial strategy is not what happens while international markets are functioning smoothly. It is what happens when access is interrupted.

If spare parts are unavailable, can Philippine firms produce substitutes? If a software license is withdrawn, are local alternatives possible? If export controls are imposed, can Filipino engineers redesign part of the process? If a geopolitical conflict interrupts a critical supply chain, can production continue?

If the answer is always that Manila must telephone another capital and request permission to purchase what Philippine industry requires, then strategic autonomy does not yet exist.

The dependency is simply administered through contracts, licensing agreements, and invoices rather than colonial decrees. That may still represent progress compared with the past. But the Republic should be intellectually honest about the difference between progress and completion.

A Filipino Pax Silica Must Produce Filipino Viribus

The Philippines does not need silicon without sovereignty. Nor does it need sovereignty without silicon. It needs both.

Pax Silica should therefore be judged twenty years after its inauguration, not merely at the moment investors sign agreements. Are Filipino firms designing chips? Are Filipino companies manufacturing advanced industrial components? Do Philippine universities produce commercially significant semiconductor and materials research? Can domestic companies maintain and increasingly manufacture production equipment? Have Filipino firms accumulated enough capital to invest abroad? Have local suppliers progressed beyond labor contracting and basic services toward technologically sophisticated production? Has infrastructure built for Pax Silica reduced industrial costs throughout the wider Philippine economy? Have capabilities diffused beyond Clark into other regions?

If so, Pax Silica will have served its purpose. If not, the country may awaken one day to discover that it possessed world-class factories but not world-class industrial power.

It supplied the land, the electricity, the water, the workers, and the fiscal incentives. Foreign firms supplied the decisive technology. The Republic then celebrated the resulting products as Filipino because Filipino hands happened to manufacture them.

That pride would be understandable. It would also be incomplete.

The proper question is not whether Filipinos helped manufacture the future. It is whether Filipinos acquired enough productive power to shape that future themselves.

This is the meaning that Filipino First can still offer an age of semiconductors and artificial intelligence. It need not mean Filipino isolation, nor hostility toward foreign capital. It means that every foreign investment should enlarge the space within which Filipino capital, knowledge, ownership, and technological competence can eventually stand on their own.

Foreign investors will transact according to their interests. They will sell what the Philippines is willing to buy. They will employ Filipinos while the contract remains commercially useful. They will transfer enough knowledge to operate their investments efficiently. They will not voluntarily surrender every advantage that keeps the Philippines dependent upon their products.

That is neither conspiracy nor betrayal. It is the cold law of transaction.

The responsibility therefore rests with the Filipino state to transform every transaction into an opportunity for accumulation, learning, and eventual independence.

The Philippines should accept the factories, the capital, the machines, and the technology. It should cooperate with its allies and welcome the opportunities that Pax Silica can create. But it must also bargain, learn, finance, design, manufacture, improve, own, and eventually compete.

The ultimate purpose of industrial policy is not to make the Filipino indispensable as somebody else’s worker. It is to make Filipino industry capable of standing without permanent dependence upon somebody else’s contract.

A “Filipino-made microchip” can be an impressive beginning. But the Republic should never confuse the beginning with the destination.

The final ambition must be more demanding: not merely a foreign-owned microchip made with Filipino hands, but an industrial system in which Filipino hands are joined by Filipino capital, Filipino engineering, Filipino intellectual property, Filipino firms, and Filipino strategic command.

Only then would Pax Silica become more than an enclave of modern technology. Only then would it possess Filipino viribus.

Beyond Practicalism: Pax Silica, Functional Extraterritoriality, and the Struggle for Philippine Industrial Sovereignty

2026-08-02T07:55:59.465-07:00

Beyond Practicalism: Pax Silica, Functional Extraterritoriality,

and the Struggle for Philippine Industrial Sovereignty

The proposed Pax Silica Industrial Hub has been presented as a historic opportunity to position the Philippines within the emerging global value chains of artificial intelligence, semiconductors, critical minerals, advanced manufacturing, and digital infrastructure. Its defenders argue that the country cannot afford to reject a time-bound geopolitical opening, particularly when neighboring Southeast Asian states are competing for the same investments. Opposition is consequently characterized as economic “doomsaying,” anti-American reflex, or “anachronistic Leftism.”

This argument confuses pragmatism with what may be called practicalism: the acceptance of the immediately available arrangement without first establishing the principles, institutional safeguards, and long-term national objectives by which that arrangement should be judged. The practicalist position begins with real Philippine weaknesses—limited industrial depth, expensive electricity, inadequate research capacity, fiscal constraints, and dependence on foreign technology—but turns those weaknesses into reasons for preserving the structures that produced them.

Pax Silica should therefore be evaluated not merely according to projected investments or employment, but according to its consequences for domestic ownership, technological learning, environmental sustainability, data sovereignty, regulatory autonomy, and Philippine bargaining power. The central question is not whether advanced industrial facilities will be geographically located in the Philippines. It is whether the resulting industrial system will become meaningfully Philippine.

The Official Promise

President Ferdinand Marcos Jr. placed Pax Silica at the center of his administration’s industrial and technological agenda during his fifth State of the Nation Address on July 27, 2026. He declared that the proposed hub would “bring quality jobs to our people, accelerate our industrial competitiveness, and revitalize our economy.” He further described it as an advanced manufacturing and logistics center integrated into the global artificial-intelligence and technology value chain. (Philippine News Agency)

The scale of the proposal is correspondingly ambitious. The planned development covers approximately 1,620 hectares, or about 4,000 acres, within New Clark City. The Bases Conversion and Development Authority has projected that the hub could attract between US$40 billion and US$70 billion in investments and eventually generate more than 130,000 skilled jobs. The planned industries include semiconductor manufacturing, critical-mineral processing, advanced electronics, artificial-intelligence infrastructure, logistics, and supporting research facilities. (Philippine Information Agency)

These promises deserve serious consideration. The Philippines requires productive investment, higher-value employment, industrial infrastructure, technical education, and opportunities capable of reversing the persistent migration of engineers, scientists, and other highly trained workers. It would be unserious to dismiss these needs merely because the initiative is American-led or because large corporations will profit from it.

The issue is not whether foreign investors will receive benefits. Investment necessarily involves returns. Nor is the issue whether environmental and social costs can be eliminated completely. Every large industrial transformation imposes costs that must be identified, distributed, mitigated, and regulated.

The issue is whether the sacrifices demanded from the Philippines will produce a proportionate accumulation of Philippine productive capacity—or merely secure another country’s supply chains.

Practicalism Without Principle

Supporters of Pax Silica commonly present themselves as pragmatists standing between ideological opposition and economic necessity. In their telling, critics exaggerate hypothetical dangers while ignoring the country’s immediate need for jobs, technology, infrastructure, and foreign capital.

One formulation of this defense states: “This is a once-in-a-lifetime economic opportunity. It could create development even if it meant sacrifices. If this will not push through here, it will simply go to other ASEAN countries.”

Another insists: “It is just too expensive at the moment to pursue domestic-based development. Given the time-bound nature of the current Cold War, technological mastery is hard to pursue without being cornered.”

A further geopolitical justification argues: “Our neighbors are currently more interested in joining the Chinese sphere of influence than creating their own bloc. ASEAN is also shaken by the Thai-Cambodian border disputes and the Burmese Civil War.”

These arguments identify genuine constraints. Domestic semiconductor fabrication, metallurgical processing, industrial power, machine-tool production, artificial-intelligence infrastructure, and advanced research facilities require immense capital and institutional coordination. The Philippines cannot simply declare technological sovereignty and expect a fully integrated industrial system to appear.

Nevertheless, the practicalist conclusion does not necessarily follow from the practicalist diagnosis. The practicalists assume that they are pragmatic because they accept what is immediately possible. In reality, they are often merely “practical” in a way that justifies an unprincipled stance. Their practicality consists of rationalizing the arrangement already preferred by the economic and foreign-policy establishment.

They defend Pax Silica on grounds ranging from the absence of domestic industry to the preservation of the Philippines’ longstanding relations with the United States. Because the country lacks technological capacity, it supposedly must accept foreign technological leadership. Because it depends on American security cooperation, it should avoid imposing conditions that might inconvenience Washington. Because ASEAN is divided, regional strategic autonomy must be postponed. Because the investment may relocate elsewhere, Manila should negotiate as though it has no leverage.

Every weakness is transformed into an argument for preserving that weakness. The Philippines lacks an integrated industrial base; therefore, it supposedly cannot require measures intended to create one. It remains dependent on foreign technology; therefore, it should avoid policies that might offend the owners of that technology. It possesses limited bargaining power; therefore, it should begin negotiations by behaving as though it possesses none.

This is not pragmatism in the serious political sense. Pragmatism recognizes existing limitations while asking how they can be overcome. It distinguishes a temporary compromise from a permanent condition. It asks whether an arrangement contributes to a defined long-term objective.

Practicalism without principle merely asks whether an arrangement can be made to proceed. A principled policy may accept foreign investment, but it specifies what capabilities must result from that investment. It may enter a strategic partnership, but it defines limits beyond which the partnership cannot pass. It may recognize fiscal and technological constraints, but it refuses to elevate those constraints into a permanent constitution for Philippine economic life.

The practicalist position is therefore not ideologically neutral. It embodies its own ideology: the belief that the realistic role of the Philippines is to adapt itself to plans formulated elsewhere.

Sacrifice for Whom?

The assertion that “sacrifices are necessary” is politically incomplete. It does not identify who will make the sacrifices, who will receive the benefits, or who will decide when the balance has become unacceptable.

An aggregate cost-benefit calculation can conceal profound inequalities. A project may generate substantial national income while imposing concentrated environmental costs on particular communities. It may create thousands of technical jobs while transferring land, electricity, water, mineral resources, and fiscal privileges to a relatively small number of corporations. It may increase exports without substantially increasing Filipino ownership or technological authority.

The statement that “the benefits outweigh the risks” therefore cannot be accepted without examining distribution. Whose benefits? Whose risks? Whose water is consumed, whose land is converted, whose electricity system is reorganized, and whose public funds finance the supporting infrastructure? Who owns the resulting patents, fabrication processes, industrial software, logistics networks, and research outputs?

BCDA has stated that the project’s estimated water requirement could range from 65 million to 90 million liters per day. It proposes a surface-water harvesting facility initially capable of supplying as much as 120 million liters daily, with possible expansion to 300 million liters. BCDA maintains that the system would rely on collected surface water and rainwater rather than groundwater and could potentially share surpluses with surrounding communities. These are important assurances, but they remain proposals that must be subjected to independent hydrological, environmental, and social evaluation. (Philippine Information Agency)

The Department of Energy has likewise acknowledged that the hub may require very substantial generating capacity and is preparing measures to meet future demand. Energy officials have stressed that supplying Pax Silica must not place the rest of the country at a disadvantage. That qualification is crucial: the relevant question is not simply whether enough electricity can technically be produced, but whether the cost of new generation, transmission, and distribution will be transferred to ordinary consumers or publicly financed for the benefit of privileged industrial locators. (Philippine News Agency)

Sacrifice cannot be treated as an abstract patriotic duty when its burdens are socially concentrated and its returns are privately appropriated.

There are also certain values that cannot be reduced neatly to monetary compensation. Effective sovereignty, constitutional authority, indigenous rights, environmental security, and democratic accountability are not merely expenses in an investment ledger. A sufficiently large projected investment cannot automatically cancel them.

The practicalist calculus becomes dangerous when every concern can be answered with the same formula: the benefits are greater, the opportunity is rare, and sacrifices are necessary. Such reasoning possesses no internal limit. It can justify almost any concession, provided the promised investment is large enough.

What Pax Silica Actually Is

Pax Silica is not simply a conventional investment-promotion program. Its founding declaration explicitly joins industrial cooperation to economic and national security.

The declaration describes reliable supply chains as indispensable to mutual economic security. It envisions cooperation across what it calls the strategic “stack” of the technology economy: software platforms, artificial-intelligence models, network infrastructure, computing, semiconductors, advanced manufacturing, logistics, mineral refining, and energy. It also calls for coordinated enforcement of policies intended to protect sensitive technologies and critical infrastructure from “undue access, influence, or control.” (Industry.gov.au)

The initiative therefore represents more than the construction of factories. It is an attempt to reorganize strategic production around states and corporations considered trustworthy by the United States and its partners.

Its conceptual vocabulary is revealing. It speaks not merely of trade but of investment security; not merely of supply but of trusted suppliers; not merely of competitiveness but of protection against undesirable access and control. It seeks an “economic security order” based on trust, technological complementarity, and shared interests. (Industry.gov.au)

This framework may provide genuine benefits to participating states. Diversifying supply chains can reduce exposure to coercion, disruption, monopolistic pricing, and political instability. Philippine participation may attract investments that would otherwise have gone elsewhere and may provide access to research networks, industrial demand, and advanced technical systems.

But the strategic interests of the organizing power and those of the host country are not automatically identical. A supply chain can become more secure for the United States without becoming more sovereign for the Philippines. A Philippine facility may help reduce American dependence on Chinese mineral processing or semiconductor production while leaving Manila dependent on American technology, software, standards, financing, and export-control decisions.

Security for one participant may coexist with dependence for another. The central issue is therefore not whether Pax Silica is geopolitical. Its own declaration establishes that it is. The issue is whether the Philippines will participate as an industrial partner with independently defined objectives or as a strategically useful location within an externally designed system.

“Accept It or It Goes Elsewhere”

The warning that the project will relocate to another ASEAN country is one of the strongest arguments advanced by supporters. It is also one of the most intellectually limiting.

The statement is plausible. Capital is mobile, governments compete for high-technology investments, and corporations compare land prices, taxes, energy costs, regulatory conditions, labor pools, infrastructure, and political risk. An investor dissatisfied with Philippine conditions may indeed choose Malaysia, Thailand, Vietnam, Indonesia, or another location.

Yet this possibility does not settle the question of what conditions the Philippines should accept. The “it will go elsewhere” argument transforms industrial development into an auction in which the winning state is the one that demands the least from capital. Governments are encouraged to offer cheaper land, lower taxes, subsidized utilities, fewer performance requirements, and more accommodating regulation because another government may offer even more.

This creates a race not toward industrial sophistication but toward state-sponsored investor convenience. Successful industrialization in East Asia did not result simply from indiscriminate openness. Japan, South Korea, and Taiwan employed varying combinations of directed credit, import discipline, export requirements, government procurement, research support, licensing, public enterprises, technology acquisition, and selective protection. Their institutions were imperfect and their strategies differed, but they treated foreign capital as an instrument of national development rather than allowing national development to be defined as the attraction of foreign capital (Amsden, 1989; Wade, 1990).

The relevant question is therefore not merely whether an investment arrives. It is what the host economy learns, owns, and retains. Foreign investment can provide capital, technical knowledge, export markets, training, and supplier opportunities. Its developmental effects, however, depend heavily on domestic absorptive capacity, institutional quality, linkages with local enterprises, and the ability of local firms to acquire and use new knowledge. Research on foreign-investment spillovers consistently shows that benefits are not automatic; they are conditioned by the technological capabilities of domestic firms and by public policies strengthening supplier linkages and learning. (World Bank)

The Philippines should therefore ask what will remain after the investment has been depreciated, the tax incentives have expired, and geopolitical priorities have changed. Will Filipino firms enter the supply chain as substantive producers rather than service contractors? Will universities acquire laboratories and continuing research programs? Will engineers gain access to design, fabrication, equipment maintenance, process development, and materials research? Will the state obtain equity, licensing rights, or strategic influence over infrastructure financed partly by public resources? Or will the Philippines merely provide the site on which somebody else’s industrial sovereignty is constructed?

A country that accepts every condition for fear of losing an investment does not necessarily acquire development. It may acquire little more than occupancy.

The Semiprocessing Problem

The Philippine semiconductor sector is not starting from nothing. The country is the world’s ninth-largest chip exporter, and electronics remain its largest merchandise-export category. The industry has operated in the Philippines since the 1970s, when companies such as Fairchild, Intel, and Texas Instruments established back-end manufacturing facilities. Domestic firms have since emerged in assembly, testing, packaging, electronics manufacturing, and, to a more limited degree, integrated-circuit design. (OECD)

This history demonstrates that the Philippines possesses a genuine industrial foundation. Assembly, testing, and packaging are not fictitious activities. They require quality control, process engineering, technical workers, logistics, specialized equipment, and integration with demanding international clients.

The problem is not that the industry performs no valuable work. The problem is that decades of participation have not automatically produced movement into the commanding portions of the value chain.

The OECD’s assessment describes a mixed record. Semiconductors remain a major Philippine export, but the sector has struggled to sustain growth, improve labor productivity, attract substantial new greenfield investment, and strengthen its position within global value chains. Electricity and logistics remain expensive, research capacity is limited, and the industry is concentrated heavily in downstream assembly, testing, and packaging. (OECD)

The semiconductor value chain includes design, wafer production, fabrication, assembly, packaging, testing, equipment, materials, and specialized software. These segments differ substantially in capital requirements, technological complexity, profitability, and strategic importance. Design and intellectual property can capture immense value without requiring the same physical capital as a frontier fabrication plant. Fabrication requires extraordinary investment and process mastery. Equipment and materials industries possess their own technological chokepoints. Assembly and testing remain necessary but generally operate within more competitive and externally directed markets. (OECD)

Pax Silica could become a means of moving beyond the existing pattern. It could expand integrated-circuit design, advanced packaging, photonics, power semiconductors, sensors, printed circuit boards, industrial software, materials engineering, equipment maintenance, and mineral refining.

It could also reproduce the same structure on a larger scale. Semiprocessing is not inherently undesirable. It becomes a problem when it is presented as the completion of industrialization rather than one stage within it. A country can refine minerals, assemble components, package semiconductors, and operate foreign-owned machinery while remaining dependent on imported equipment, foreign patents, proprietary software, external orders, and decisions made at overseas corporate headquarters.

Production may occur in Philippine territory without transferring strategic authority to Philippine institutions.

The practicalist answer is often that some processing is better than no processing. That is true but insufficient. The proper comparison is not between Pax Silica and absolute inactivity. It is between an enclave-oriented form of processing and a cumulative program designed to transform processing into technological ownership.

The question is whether semiprocessing becomes a ladder or a ceiling.

The Export Enclave Reappears

Philippine development policy has repeatedly treated geographical concentration of investment as a substitute for national industrial integration. Export-processing zones, special economic zones, logistics parks, and industrial estates may produce impressive export figures while remaining weakly connected to domestic firms, agriculture, infrastructure, and consumer industries.

The enclave is not defined only by fences. It is defined by economic relationships.

An industrial estate becomes enclave-like when it imports most of its machinery and intermediate inputs, exports most of its output, relies on foreign corporate strategy, enjoys exceptional fiscal treatment, and purchases relatively little from domestically controlled producers.

Pax Silica risks becoming a technologically advanced version of this structure: an export-processing zone dressed in the language of artificial intelligence and economic security.

Its activities may be more sophisticated than garments or basic assembly. Its factories may process critical minerals, package advanced chips, host cloud infrastructure, or manufacture components for artificial-intelligence systems. Yet technological sophistication within the enclave does not necessarily produce structural transformation outside it.

A genuine industrial system requires vertical and horizontal linkages. Mineral processing should connect to machinery, chemicals, transport equipment, energy systems, construction materials, electronics, and domestic capital-goods industries. Semiconductor production should connect to telecommunications, medical equipment, agricultural machinery, transport systems, energy management, public infrastructure, and local consumer electronics.

The purpose should not be merely to increase the value of exports before they leave the country. It should be to deepen the productive relationships within the country.

If the Philippine economy remains divided between a highly modern foreign-controlled enclave and a weak domestic productive sector, the technological appearance of the enclave cannot conceal the persistence of underdevelopment.

Industrialization is not the importation of modern factories. It is the diffusion of productive capability through society.

Is Domestic-First Development Too Expensive?

The claim that domestic-oriented industrialization is “too expensive at the moment” is attractive because it appears fiscally responsible. But it obscures the enormous public costs required to sustain the foreign-led alternative.

Pax Silica will require land preparation, transport links, electricity, water systems, telecommunications, regulatory administration, security, technical education, and possibly extensive fiscal incentives. These are forms of state intervention regardless of whether the participating corporations remain privately owned.

The state will intervene either way. The question is on whose behalf it intervenes and what assets its intervention creates.

There is a contradiction in declaring that the Philippines cannot afford domestic industrial policy while preparing public infrastructure for an externally directed industrial ecosystem. If the state can finance roads, water facilities, energy connections, research support, and workforce programs for foreign firms, it can require that those expenditures produce domestic supplier networks, publicly accessible laboratories, Filipino equity, and technological learning.

The OECD has recommended precisely the creation of a coherent long-term national semiconductor strategy. It calls for increased research and development, sustainable access to technological infrastructure, stronger industry-academic cooperation, improved logistics and electricity, and demand-driven workforce development. It also emphasizes that publicly funded facilities must be linked to actual ecosystem requirements and provided with durable financing. (OECD)

Domestic-first industrialization does not require the immediate construction of a fully Filipino-owned frontier fabrication plant. Such a project might be financially and technologically premature.

A realistic program could begin where barriers to entry are lower and existing capabilities are stronger:

integrated-circuit and systems design;
analog and mixed-signal devices;
power semiconductors;
sensors and industrial controls;
printed circuit boards;
photonics;
advanced packaging;
testing equipment;
semiconductor materials;
equipment maintenance and refurbishment;
industrial software;
agricultural, medical, energy, and transport electronics.

These sectors can be supported through development-bank credit, public procurement, university laboratories, Filipino private capital, diaspora recruitment, foreign joint ventures, and long-term research agreements.

Industrial policy exists precisely because strategic activities are expensive, risky, and difficult for private domestic firms to undertake independently. Rodrik (2004) argues that industrial policy should be understood as a process of discovering and coordinating productive opportunities rather than as the indiscriminate selection of corporate favorites. The solution to uncertainty is disciplined experimentation, transparent evaluation, and institutional learning—not government passivity. (Harvard Kennedy School)

To say that an industry is too expensive is not, by itself, an argument against industrial policy. It is often the reason industrial policy is necessary.

What Kind of Cold War Is This?

The practicalist invocation of a new Cold War also requires scrutiny. The phrase recalls the twentieth-century conflict between the United States and the Soviet Union: two superpowers claiming to represent different social systems, leading opposing military alliances, and competing through ideology, armed intervention, economic aid, propaganda, and nuclear deterrence.

The contemporary United States-China rivalry is not simply a revival of that structure. It contains ideological rhetoric and carries genuine military danger, particularly in the Taiwan Strait and the South China Sea. But many of its principal instruments are economic and technological: tariffs, subsidies, sanctions, patents, investment screening, industrial standards, export controls, critical minerals, shipping networks, semiconductors, cloud infrastructure, and control over technological chokepoints.

To use the deliberately irreverent formulation raised in the debate, this is not merely “ideological shitposting coupled with guns.” It is economic warfare conducted through deeply interconnected markets.

Mao Zedong is increasingly treated as Sun Tzu by businessmen. The phrase is rhetorical, but it captures an important transformation. Revolutionary and socialist vocabulary is interpreted through corporate strategy, national competitiveness, market access, industrial capacity, and supply-chain control.

China remains governed by a communist party, but its geopolitical power rests heavily on manufacturing, trade, technology, infrastructure financing, private and state capital, mineral processing, and participation in global markets. The United States, in turn, does not oppose China merely because Beijing retains communist symbols. Washington is primarily concerned that Chinese industrial and technological capabilities may weaken American economic and military primacy.

Farrell and Newman (2019) call the resulting condition weaponized interdependence. States occupying central positions in global networks can use those networks to obtain information, deny access, impose sanctions, and pressure rivals. The infrastructure of globalization becomes an infrastructure of coercion. (MIT Press Direct)

American semiconductor restrictions illustrate this logic. U.S. export controls cover specified advanced chips, high-bandwidth memory, semiconductor-manufacturing equipment, software, end users, and certain foreign-produced items connected to American technology through foreign-direct-product rules. These measures operate beyond the straightforward territorial export of American goods because technological networks themselves create jurisdictional leverage. (Bureau of Industry and Security)

Pax Silica belongs within this geoeconomic conflict. It is an effort to construct a trusted technological system less vulnerable to Chinese control over minerals, processing, manufacturing, infrastructure, or markets.

This does not make the initiative inherently illegitimate. China also pursues industrial self-reliance, supply-chain influence, and strategic advantage. The Philippines must understand that both great powers are acting according to their own national interests.

The mistake would be to imagine that participating in one power’s strategy automatically constitutes a Philippine strategy.

China Is Not the Soviet Union

Cold War nostalgia simplifies the conflict into a moral map inherited from another era. China is placed where the Soviet Union once stood; every dispute becomes a front in a worldwide confrontation with communism; and smaller states are expected to demonstrate loyalty to one of two supposedly coherent blocs.

This analogy obscures more than it explains. Contemporary China combines the political supremacy of the Communist Party with markets, global trade, private accumulation, foreign investment, industrial subsidies, corporate competition, and enormous integration into international production networks. Its system cannot be understood simply as Soviet central planning reproduced on a larger scale.

Nor is the current conflict primarily about the worldwide expansion of communist revolution.

Beijing seeks access to markets, control over strategic technologies, greater influence over international institutions, protection of its political regime, military power in its near seas, and what it describes as national rejuvenation. These objectives may conflict sharply with Philippine interests. They may involve coercion, excessive maritime claims, and pressure against neighboring states. But they are predominantly nationalist, strategic, and economic.

The distinction is important because inaccurate diagnosis produces inaccurate policy. Treating every Chinese action as ideological communist expansion allows policymakers to substitute Cold War slogans for analysis. Conversely, recognizing the economic and nationalist content of Chinese power does not excuse coercion or require political sympathy for Beijing.

It simply means that the Philippines must respond to China as China exists, not as a nostalgic reconstruction of the Soviet Union.

Taiwan and the Unfinished Civil War

The Taiwan question further exposes the limitations of simplistic Cold War language.

The government of the People’s Republic of China presents Taiwan as the unfinished product of the Chinese Civil War and describes reunification as a historic mission connected to national rejuvenation. Beijing’s 2022 white paper explicitly places the division across the Taiwan Strait within the history of civil war, foreign intervention, territorial unity, and Communist Party leadership. (State Council of China)

That is Beijing’s official interpretation, not an uncontested legal or historical conclusion. Taiwan has its own government, military, courts, political parties, elections, and democratic population. Its people cannot ethically be reduced to an object within another government’s historical mission.

Recognizing Beijing’s framing does not validate military coercion. It does, however, demonstrate why the Taiwan dispute cannot be explained adequately as a simple attempt to spread communism. The People’s Republic frames the issue through nationalism, territorial integrity, regime legitimacy, civil-war history, and strategic geography.

Whether one accepts or rejects Beijing’s claims, the dispute is not equivalent to a Soviet attempt to establish a communist government in an unrelated foreign country.

Cold War nostalgists frequently complain about “communism” without addressing this distinction. Their rhetoric converts an extremely complex conflict over sovereignty, identity, deterrence, nationalism, and strategic power into a comforting ideological replay. The result is not clarity. It is historical daydreaming.

The Vietnam Problem for Cold War Nostalgia

Vietnam presents one of the clearest contradictions in the attempt to interpret contemporary Asia through the ideological categories of the twentieth-century Cold War. The country remains governed by the Communist Party of Vietnam and formally defines itself as a socialist republic. It also maintains extensive party-to-party, state-to-state, commercial, and institutional relations with the People’s Republic of China. In April 2026, Hanoi and Beijing reaffirmed their comprehensive strategic cooperative partnership, expanded political coordination, and signed agreements covering party relations, trade, infrastructure, science, technology, education, and other areas of bilateral cooperation.

These close relations, however, have never eliminated the structural tensions between the two states. Vietnam continues to contest Chinese maritime claims and actions in the South China Sea, which Hanoi calls the East Sea. It asserts sovereignty over the Paracel and Spratly Islands, defends the rights of Vietnamese fishermen, and insists that maritime disputes be resolved in accordance with international law, particularly the 1982 United Nations Convention on the Law of the Sea. In May 2026, the Vietnamese Ministry of Foreign Affairs again called on China to respect the lawful activities of Vietnamese fishermen and to refrain from actions that could further complicate the regional situation.

Vietnam therefore combines cooperation with resistance. China is simultaneously a major trading partner, a fellow socialist state, an important political interlocutor, and the principal external power against which Vietnam must defend its maritime claims and strategic autonomy. Party solidarity does not erase territorial rivalry, historical memory, asymmetry of power, or conflicting national interests.

At the same time, Vietnam has substantially expanded its relationship with the United States. In September 2023, Hanoi and Washington elevated their relations to a Comprehensive Strategic Partnership. Their joint statement identified semiconductors, digital infrastructure, science, technology, innovation, education, resilient supply chains, climate policy, trade, and investment as major fields of cooperation. The United States explicitly recognized Vietnam’s different political system, while Vietnam accepted closer economic and strategic cooperation without renouncing socialism or entering a formal American alliance.

The partnership has remained active. In July 2026, the American and Vietnamese foreign ministers reaffirmed their commitment to deepening cooperation under the Comprehensive Strategic Partnership. Vietnam has also pursued advanced-technology relations with Japan, the European Union, South Korea, and other partners. This is consistent with Hanoi’s declared policy of independence, self-reliance, multilateralization, and diversification rather than exclusive alignment with a single great power.

Vietnam is consequently socialist, commercially interdependent with China, politically connected to China, territorially opposed to China in important areas, and strategically cooperative with the United States. It maintains relations with rival powers without allowing any one relationship to define the totality of its foreign policy.

This is not necessarily an ideological contradiction. It is an expression of national strategy. Vietnamese foreign policy formally places the preservation of national independence, sovereignty, territorial integrity, regime continuity, and economic development above automatic participation in great-power blocs. Its official doctrine emphasizes “independence, self-reliance, multilateralisation and diversification,” while its frequently invoked metaphor of “bamboo diplomacy” combines firm strategic roots with flexible external relations. Vietnamese leaders describe the objective as cooperating broadly while avoiding confrontation, isolation, or dependence.

Its defense policy reinforces this orientation. Vietnam’s “Four No’s” reject membership in military alliances, alignment with one country against another, foreign military bases or the use of Vietnamese territory against another state, and the use or threat of force in international relations. Although the practical application of these principles necessarily responds to changing circumstances, they demonstrate that closer cooperation with Washington is not officially understood in Hanoi as enlistment in an American containment bloc.

This presents a serious problem for Cold War nostalgia. If the present international struggle were fundamentally a renewed ideological crusade against communism, then the Socialist Republic of Vietnam should logically be classified as an adversary. It remains governed by a communist party, rejects multiparty liberal democracy, maintains close relations with Beijing, and explicitly connects national independence with the preservation of its socialist system.

Yet Cold War nostalgists often praise Vietnam when it resists Chinese maritime pressure, attracts manufacturing away from China, cooperates with American semiconductor firms, or contributes indirectly to the strategic balancing of Chinese power. Vietnam’s communist character is temporarily overlooked whenever Vietnamese national interests coincide with those of Washington.

The inconsistency is revealing. Vietnam is treated as communist when its domestic political system is criticized, but as a strategic partner when its geography, economy, and maritime disputes make it useful to the United States. The categories are applied selectively according to strategic convenience.

This does not mean that criticism of Vietnam’s political system, human-rights record, or restrictions on political activity is necessarily illegitimate. Nor does it mean that American engagement with Vietnamese civil society amounts automatically to a conspiracy against the Vietnamese state. A serious analysis must distinguish principled criticism of government conduct from the continued ideological refusal to recognize the historical and political reality of contemporary Vietnam.

The inconsistency becomes more pronounced among those who continue to romanticize the former Republic of Vietnam as the only politically legitimate Vietnamese state. In this interpretation, the fall of Saigon in 1975 is treated not as the conclusion of a particular war and state division but as an ideological wound that should never be considered historically settled. The existing Socialist Republic is reduced to an illegitimate continuation of the victorious North, while the former Saigon government is preserved as the authentic Vietnam in exile.

Such a position substitutes Cold War memory for analysis of the existing Vietnamese state. It says little about Hanoi’s contemporary diplomacy, industrial policy, relations with China, or changing position within the regional economy. Instead, it imagines that present-day Vietnam can be understood only through the political legitimacy disputed during the war.

The legacy of the former Republic of Vietnam remains especially important within sections of the Vietnamese-American community. Symbols such as the former South Vietnamese flag have acquired meanings extending beyond the defunct state itself, including refugee memory, anti-communism, community identity, and commemoration of those who fought or fled after 1975. Congressional initiatives have periodically sought to recognize that flag as a symbol of Vietnamese-American heritage and political freedom.

This symbolic persistence should not be confused with official American support for restoring the former Saigon regime. The United States normalized diplomatic relations with the Socialist Republic of Vietnam in 1995 and now officially describes the two countries as trusted partners. Washington recognizes and conducts diplomacy with the government in Hanoi, not with a South Vietnamese government in exile.

Nevertheless, American domestic politics sometimes allows residual Cold War narratives to coexist uneasily with strategic rapprochement. Members of Congress may support closer security and economic relations with Hanoi while also endorsing former South Vietnamese symbols or introducing legislation pressuring the Vietnamese government over human rights and political freedoms. Recent congressional proposals have explicitly combined recognition of the growing strategic relationship with demands for stronger American action concerning political prisoners, religious freedom, labor rights, and civil society.

This produces a dual political language. Official diplomacy treats the Socialist Republic of Vietnam as an increasingly important partner in the Indo-Pacific, while certain domestic constituencies continue to interpret Vietnam through the historical memory of Saigon, communist victory, exile, and lost legitimacy.

Washington does not consistently seek to resurrect the former regime, but it sometimes accommodates, invokes, or politically instrumentalizes the unresolved memories surrounding it. The memory of South Vietnam can serve community recognition, legitimate human-rights advocacy, partisan mobilization, or renewed anti-communist rhetoric. These purposes should not be treated as identical, yet together they preserve a Cold War vocabulary that sits awkwardly beside the strategic partnership with Hanoi.

The result is an uneasy duality. Vietnam is accepted as the sovereign state with which the United States must cooperate, while the political memory of the defeated southern state remains symbolically present in sections of American public life. Hanoi is treated as a useful partner in the present, but its historical victory and political legitimacy remain contested within certain ideological communities.

This duality does not necessarily make American policy incoherent. States frequently cooperate with governments whose domestic systems they criticize. What becomes incoherent is the attempt to portray the wider United States–China rivalry as a consistent ideological struggle against communism while simultaneously cultivating communist Vietnam as an economic and strategic partner.

Should Vietnam be considered an enemy of an imagined “new American century” because it remains socialist? Or should it be regarded as a friend because it opposes Chinese maritime pressure? Must Washington accept the legitimacy of the existing Vietnamese state, or should it continue to behave as though Saigon represents an unfinished political alternative?

These questions expose the inadequacy of the framework rather than any inherent inconsistency in Vietnamese conduct. Vietnam does not resist China because it has ceased to be socialist. Its disputes with Beijing arise from geography, territorial sovereignty, historical experience, asymmetry of power, maritime resources, and the requirements of national security. Nor does Hanoi cooperate with Washington because it has embraced the political legacy of the former Republic of Vietnam. It cooperates because American technology, markets, education, investment, and diplomatic weight can contribute to Vietnamese development and help prevent excessive dependence on China.

The country’s strategic behavior is therefore better understood as a continuous effort to preserve autonomy under conditions of unequal power. Hanoi seeks Chinese commerce without accepting Chinese primacy, American technology without becoming an American client, and international integration without formally relinquishing its socialist system.

This does not mean Vietnam has achieved complete autonomy. Its economy remains substantially exposed to Chinese trade and intermediate goods, while its growing relations with the United States and other developed economies introduce new dependencies and political pressures. Strategic multiplicity is not the elimination of dependence; it is an effort to prevent any one dependence from becoming absolute.

Vietnam nevertheless demonstrates that national interest, geography, historical memory, territorial conflict, economic requirements, and regime security cannot be reduced to a capitalism-versus-communism binary. Its conduct is not evidence that ideology has disappeared entirely. The Communist Party’s survival and socialist legitimacy remain central objectives of the Vietnamese state. But ideology operates within, rather than above, the requirements of national power and state survival.

The Philippines should draw a careful lesson from this experience. Strategic autonomy does not require mechanical equidistance from every power, neutrality on every dispute, or refusal to form meaningful partnerships. It requires the institutional and political capacity to cooperate selectively without allowing cooperation to become subordination.

Vietnam engages China without conceding every Chinese claim. It engages the United States without becoming an anti-communist client state. It cultivates relations with Japan, Europe, India, Russia, South Korea, and ASEAN while officially rejecting exclusive military alignment.

Its political system differs fundamentally from that of the Philippines, and its successes should not be romanticized. But its diplomatic behavior illustrates the possibility of strategic multiplicity: the deliberate use of several external relationships to protect national autonomy, acquire technology, expand markets, and reduce dependence on any single patron.

The contradiction lies less in Vietnam than in the Cold War categories imposed upon it. Those categories demand that a socialist state behave as China’s natural subordinate or America’s permanent enemy. Vietnam’s actual conduct refuses both assignments.

ASEAN’s Weakness and the Wrong Conclusion

The practicalists are correct that ASEAN is under serious strain. The continuing conflict in Myanmar has exposed the limitations of the Five-Point Consensus and ASEAN’s ability to produce compliance from a member state. ASEAN leaders have repeatedly acknowledged the persistence of violence and the difficulty of achieving a comprehensive political settlement. (ASEAN Main Portal)

The Thailand-Cambodia border conflict has likewise required ceasefire appeals, diplomatic intervention, and proposals for ASEAN observation. ASEAN foreign ministers called for restraint and an immediate ceasefire, while regional diplomacy involved not only ASEAN but also participation from the United States and China. (ASEAN Main Portal)

These developments demonstrate institutional weakness. They do not demonstrate that Southeast Asian states are simply entering a Chinese sphere of influence. ASEAN members maintain different combinations of trade with China, security relations with the United States, investment partnerships with Japan and South Korea, institutional links with Europe, and independent national policies. Their behavior is more accurately described as hedging, diversification, and selective alignment than as unified bloc membership.

Regional fragmentation does not make national industrial strategy unnecessary. It makes it more urgent. The Philippines does not need to wait for ASEAN to become a centralized strategic bloc before developing independent productive capability. Nor does it have to choose between an unrealistically unified ASEAN and total dependence on a great power.

Cooperation can proceed through narrower arrangements:

joint semiconductor research;
regional training and faculty exchanges;
common technical standards;
complementary industrial specialization;
coordinated infrastructure;
development financing;
shared testing facilities;
supply-chain information systems;
bilateral and plurilateral joint ventures.

Thailand’s own contribution to an ASEAN semiconductor roadmap demonstrates that regional cooperation remains possible even amid political division. Thai policy institutions have proposed clearer collective targets, high-skill workforce exchanges, joint research, photonics and printed-circuit-board development, and common institutional mechanisms. (Nxpo)

ASEAN’s weakness is therefore not an argument for Philippine dependence. It is an argument for building the national capacities without which regional autonomy will remain rhetorical.

The Extraterritorial Temptation

Supporters of Pax Silica may reasonably believe that remaining disagreements can be resolved through negotiations, that the benefits will outweigh the risks, and that appropriate safeguards can be inserted into final agreements.

But this confidence raises a deeper question: how much effective sovereignty are they prepared to compromise before the initiative begins to operate like an extraterritorial enclave?

The presently available public record does not establish that the proposed hub will possess formal diplomatic immunity, territorial exemption, or independence from Philippine law.

BCDA has expressly stated that the project will be “purely commercial,” will not be used for defense-related activities, and will remain subject to Philippine law, including the BCDA Charter and the Investors’ Lease Act. It has also stated that project components will be required to secure environmental compliance certificates and undergo continuing DENR oversight. (Philippine Information Agency)

Those assurances must be acknowledged. A scholarly critique should not transform a potential risk into a proven legal fact.

Formal jurisdiction, however, is not identical to effective sovereign control. A project may remain formally within Philippine territory while becoming politically exceptional because of its importance to a treaty ally, its integration into foreign economic-security arrangements, its control over essential technology, or the host state’s fear of losing investment.

This article uses functional extraterritoriality as an analytical term rather than as a settled legal conclusion. It describes a condition in which Philippine law continues to apply formally but its effective enforcement becomes constrained by asymmetric power, technical dependence, contractual restrictions, diplomatic pressure, or regulatory self-restraint.

Environmental rules may remain legally binding while violations are downplayed to avoid disturbing a strategic investor. Labor protections may continue to exist while enforcement is moderated because a facility is considered indispensable. Competition rules may be applied leniently because a corporation controls essential technology. Data-protection investigations may be delayed because enforcement is characterized as a threat to cybersecurity cooperation or alliance relations.

No treaty provision needs to abolish Philippine jurisdiction for such a condition to arise. Sovereignty can be narrowed gradually through exemptions, confidential arrangements, investor privileges, technical opacity, dependence, and the accumulation of issues that regulators are discouraged from touching.

Krasner (1999) described sovereignty as “organized hypocrisy,” emphasizing the distance between formal juridical equality and the actual operation of international power. Strange (1988) similarly argued that structural power arises through control over security, production, finance, and knowledge—not merely through possession of territory.

In this sense, the language of “lord and vassal” should be understood as a metaphor for asymmetric strategic dependence, not a literal description of the legal relationship. The weaker state retains the ceremonies of jurisdiction but increasingly hesitates to exercise its authority whenever enforcement conflicts with the stronger partner’s preferences.

The danger is not necessarily that Philippine law will disappear. The danger is that Philippine institutions will be trained not to use it.

When Every Microchip Becomes National Security

The sovereignty question becomes particularly serious because the boundary between commercial technology and national security has become increasingly porous. Semiconductors are used in consumer goods, medical systems, power infrastructure, communications, industrial machinery, artificial intelligence, surveillance systems, and weapons. Data centers host ordinary commercial services but may also contain information relevant to cybersecurity, law enforcement, intelligence, financial regulation, or critical infrastructure. Artificial-intelligence systems may be developed for civilian purposes but classified later as dual-use technologies.

Pax Silica itself treats minerals, energy, semiconductors, network infrastructure, artificial intelligence, communications, software, and data centers as interconnected components of economic security. It calls for cooperation in protecting critical technologies and infrastructure from undesirable access or control. (Industry.gov.au)

This does not prove that every microchip or every item of stored data in New Clark City will be commandeered for foreign national-security purposes. Such a claim would be too absolute. The concern is that the category of national security has become broad enough to encompass nearly every major component of the digital economy.

Promises that the initiative will remain “purely commercial” may be sincere when made. But commercial facilities can later become subject to export controls, sanctions, cybersecurity directives, end-use restrictions, intelligence requests, foreign court orders, or new strategic requirements.

American export controls already demonstrate how legal authority can travel through technology. Specified foreign-produced items may become subject to U.S. controls because they are produced using American software, equipment, or technology, or because they are intended for particular end users. (Bureau of Industry and Security)

Cross-border data governance creates similar complexity. The U.S. CLOUD Act establishes procedures under which service providers subject to American jurisdiction may be compelled through lawful process to produce electronic evidence within their possession, custody, or control, including in circumstances involving data stored abroad. The law also creates mechanisms for bilateral agreements governing cross-border access to electronic evidence. (Department of Justice)

This does not authorize arbitrary seizure of all foreign data. Legal process, jurisdiction, privacy safeguards, and opportunities to contest orders remain relevant. But it demonstrates that the physical location of a server does not by itself determine which state may assert legal authority over the data it contains.

Philippine law also possesses extraterritorial features. The Data Privacy Act may apply to processing conducted abroad when the information concerns Philippine citizens or residents and the entity has relevant links with the Philippines. Philippine authorities have also developed model contractual clauses and mechanisms for cross-border data transfers and enforcement cooperation. (National Privacy Commission)

The resulting problem is therefore not simple foreign lawlessness but overlapping jurisdiction. A company operating within Pax Silica could be subject simultaneously to Philippine law, foreign corporate obligations, export controls, cybersecurity requirements, contractual restrictions, and lawful foreign demands.

This is why broad verbal assurances are insufficient. If every microchip, server, communications network, algorithm, or dataset can potentially be described as relevant to national security, then the promise that the initiative will not be used for security-related ventures may become fragile. It can be narrowed, reinterpreted, or superseded when geopolitical circumstances change.

Without enforceable limits, the promise risks becoming a hollow phrase—affirmed while the investment is being negotiated and disregarded once infrastructure and dependence make refusal costly.

Sovereignty Must Be Operational

It is not enough for an agreement to declare that Philippine law applies. Philippine institutions must possess the practical capacity to enforce it.

A regulator cannot exercise sovereignty over a system it does not understand. Formal inspection powers mean little if government agencies lack qualified engineers, cybersecurity experts, environmental scientists, auditors, and legal specialists capable of evaluating proprietary industrial systems.

Operational sovereignty requires:

access to relevant technical information;
independent inspection rights;
authority to audit data flows;
knowledge of ownership and subcontracting structures;
power to review foreign-government requests;
capacity to test environmental and cybersecurity claims;
authority to suspend operations;
public and legislative oversight.

The state should not be dependent entirely on information supplied by the regulated corporations themselves.

Confidential commercial information may require protection, but confidentiality cannot become a means of excluding Philippine authorities from systems operating in Philippine territory.

Any final agreement should specify that Philippine constitutional and judicial authority cannot be displaced by undisclosed contractual provisions. Investor-state or private arbitration arrangements should not prevent the enforcement of labor, environmental, competition, privacy, taxation, and national-security laws.

Foreign legal demands involving Philippine facilities or data should be reported to designated Philippine authorities, subject to narrowly drawn exceptions. Requests should be reviewed under Philippine law, relevant treaties, and principles of due process rather than complied with automatically.

The state must retain the right to refuse. Sovereignty that cannot produce refusal is merely ceremonial.

Thailand’s Siam Silica Alternative

Thailand provides a useful comparison because it is not rejecting foreign capital, international partnerships, or semiconductor supply chains. It is attempting to incorporate them into a national framework.

The Siam Silica Framework identifies specific areas in which Thailand intends to build capability: photonics fabrication, advanced packaging, silicon design, quantum photonics, and power devices. It links these priorities to research, innovation, workforce development, international cooperation, investment attraction, and technology transfer. (Nxpo)

The framework includes concrete targets for 2030:

eight integrated-circuit design operations;
one fabrication facility;
two advanced-packaging facilities;
152 additional university instructors;
950 researchers, specialists, and senior engineers;
553 skilled engineers;
1,330 technicians.

Thai agencies have been assigned particular responsibilities involving research grants, international partnerships, training facilities, startup incubation, graduate programs, industrial research, workforce planning, and conditions linking investment incentives to human-capital development and technology transfer. (Nxpo)

Thailand’s broader semiconductor strategy focuses on sectors compatible with its existing economic structure and prospective domestic demand, including power semiconductors, sensors, photonics, discrete devices, and analog chips. Its declared aim is to move toward a fuller national value chain rather than merely attract isolated production facilities. (Board of Investment)

Siam Silica does not represent autarky. Thailand is actively pursuing partnerships with foreign research centers and industries, including institutions in the Netherlands and Belgium.

The difference is authorship. Thailand begins by identifying the capabilities it wants and then seeks external partners to help develop them.

Pax Silica begins as an external economic-security architecture into which the Philippines is being inserted.

These approaches are not necessarily incompatible. The Philippines could participate in Pax Silica while developing its own nationally authored semiconductor and advanced-industries framework. But without such a framework, Pax Silica becomes the Philippine strategy by default.

That is the critical distinction. Siam Silica is Thailand’s initiative, designed around Thai targets, Thai institutions, Thai workforce requirements, and Thai industrial priorities.

It is not merely somebody else’s agenda established on Thai soil and afterward described as Thai industrialization.

Lessons from Europe and the Developed States

The practicalist argument often implies that deliberate national industrial policy is too expensive or outdated for the Philippines. Yet the states that preach openness most loudly are themselves returning to strategic industrial intervention.

The European Union’s Chips Act was designed explicitly to strengthen technological sovereignty, secure semiconductor supplies, increase research and manufacturing capacity, and reduce dependence on foreign supply chains. The EU has mobilized tens of billions of euros in public and policy-driven investment and, in 2026, proposed further measures under Chips Act 2.0 to strengthen advanced production and reduce strategic dependencies. (Digital Strategy Europe)

Europe has not concluded that domestic capability is too expensive. It has concluded that dependence is too dangerous.

Japan has likewise committed major public resources to semiconductor production, materials, research, artificial intelligence, and supply-chain security. Its support includes direct subsidies, investment financing, government-backed research, and policies intended to ensure that semiconductor investment strengthens national industrial competitiveness. (Ministry of Economy, Trade and Industry)

South Korea has combined private conglomerate investment with state-supported infrastructure, policy financing, testing facilities, research support, and semiconductor-cluster development. (Ministry of Trade and Industry)

The United States itself has rediscovered industrial policy through semiconductor subsidies, procurement, export controls, research funding, defense-linked innovation, and infrastructure support.

None of these states waits passively for foreign investment to define its technological future.

The lesson is not that the Philippines can match their expenditure immediately. The lesson is that national capability is considered legitimate when powerful states pursue it but dismissed as unrealistic when developing states propose the same objective.

The Philippines is told that it cannot afford strategic industrial policy precisely when its partners are spending enormous sums on their own. This asymmetry should be rejected.

A Principled Philippine Alternative

A principled alternative to Pax Silica as presently framed does not require hostility toward the United States, exclusion of foreign firms, or withdrawal from global value chains.

It requires that Philippine participation be subordinated to a Philippine industrial program.

The first step should be the publication of a national semiconductor, critical-minerals, data-infrastructure, and advanced-manufacturing strategy before binding long-term commitments are concluded. The strategy should identify specific capabilities, institutions, timelines, ownership targets, environmental limits, and domestic applications.

It should answer several basic questions:

Which technologies must the Philippines be able to design, produce, maintain, and modify within five, ten, and twenty years?
Which industries can realistically be developed through Filipino ownership, joint ventures, public corporations, or mixed enterprises?
Which mineral-processing activities should be linked to domestic manufacturing rather than organized exclusively for export?
How will semiconductor development serve Philippine energy, agriculture, transport, housing, health, communications, and defense?
How will public expenditures generate public or Filipino-controlled assets?
What measurable technological transfers must investors provide?
What environmental and resource limits cannot be negotiated away?

A domestic-first program should not attempt to produce every component immediately. It should select strategic areas in which existing capabilities, domestic demand, public procurement, and attainable technologies can reinforce one another.

The country could prioritize power electronics for renewable energy and transport; sensors and controllers for agriculture and disaster management; medical electronics; telecommunications equipment; printed circuit boards; advanced packaging; industrial automation; and semiconductor design.

Domestic demand matters. An industry oriented exclusively toward export orders remains vulnerable to decisions made abroad. Government procurement in transport, power, telecommunications, health, agriculture, and public infrastructure can provide stable markets for Filipino-designed products.

This was central to the development of many successful industrial economies: the state was not merely a regulator but an early customer, financier, coordinator, and source of technological demand.

Conditions for Participation

At minimum, Philippine participation in Pax Silica should be conditioned upon the following:

Philippine industrial authorship
Pax Silica projects must operate under a published Philippine industrial strategy rather than substitute for one.
Domestic equity
Strategic infrastructure should include meaningful Philippine private, cooperative, public, or development-finance equity. Where public resources create value, the public should possess a corresponding claim upon that value.
Supplier development
Investors should be required to publish and implement programs enabling Filipino firms to meet procurement, certification, quality, and technological standards.
Technology transfer
Incentives should be linked to licensing, joint research, faculty development, engineer training, equipment access, and measurable technological upgrading.
Research institutions
A portion of project revenues or fiscal incentives should fund Philippine laboratories, universities, and shared technology facilities available to domestic firms.
Workforce progression
Employment targets should not be limited to the number of jobs. They should include the movement of Filipinos into senior technical, research, design, and managerial positions.
Environmental limits
Water, electricity, mineral, chemical, emissions, and waste requirements must be independently assessed and disclosed. Environmental approvals should be facility-specific rather than granted through generalized promises.
Data sovereignty
Cross-border data transfers, foreign legal demands, cybersecurity access, and government requests should be governed by transparent procedures consistent with Philippine law.
Prohibition of undisclosed security use
Any military, surveillance, intelligence, or dual-use activity outside the publicly approved purpose of the project should require separate Philippine authorization.
Regulatory supremacy
Philippine agencies and courts must retain authority over labor, competition, environment, taxation, land, privacy, and criminal law.
Transparency
Long-term leases, fiscal incentives, infrastructure commitments, ownership arrangements, and government guarantees should be disclosed to Congress and subjected to audit.
Periodic developmental review
The project should be reviewed according to domestic value added, technology acquisition, Filipino ownership, supplier growth, environmental performance, and research output—not merely gross investment or export figures.
Sunset and termination clauses
The government should retain the right to withdraw incentives, revise agreements, or terminate operations when investors fail to satisfy developmental or legal obligations.
Diversified partnerships

The Philippines should retain the freedom to cooperate with the United States, Japan, South Korea, Taiwan, Europe, China, India, and ASEAN partners where such cooperation is consistent with Philippine law and interest.

These conditions are not anti-investment. They define why investment is being accepted.

Neither American Enclave nor Chinese Extraction Zone

The alternative to a Chinese-centered extractive economy is not an American-centered export enclave.

China has benefited from the export of Philippine minerals and from its dominance in downstream processing and manufacturing. Replacing Chinese firms with American or allied firms does not automatically transform the developmental structure.

The nationality of the foreign beneficiary matters geopolitically, but it does not by itself determine whether the arrangement develops Philippine capacity.

A mine owned by one foreign power and a processing zone controlled by another may still leave the Philippines in a subordinate position.

The country should cooperate with all major economies while refusing the monopolization of strategic sectors by any one of them.

This is not equidistance for its own sake. Different powers pose different risks and offer different opportunities. The United States is a treaty ally; China is a major economic partner and a maritime adversary; Japan, South Korea, Taiwan, and Europe possess distinct technologies and interests.

Philippine policy should distinguish among them intelligently. But the organizing principle must remain Philippine sovereignty, not sentimental loyalty.

A longstanding relationship with the United States is not a substitute for contractual safeguards. Historical alliance does not eliminate conflicting economic interests. Friendship between states remains compatible with hard negotiation.

Indeed, a relationship that cannot withstand Philippine bargaining is not a partnership worthy of preservation.

Beyond the “New American Century”

The practicalist defense sometimes rests upon a broader belief that Philippine security and development should be anchored permanently in American leadership.

This belief confuses familiarity with inevitability. The Philippines shares important defense, economic, cultural, and institutional relations with the United States. Those relations should not be discarded carelessly. But neither should the country organize its entire industrial future around the expectation of a new American century.

Great-power policy changes with administrations, economic crises, domestic politics, and strategic priorities. Technologies considered shareable today may become restricted tomorrow. Markets promised today may be closed through tariffs or national-security rules later.

The same warning applies to China. Chinese capital, infrastructure, and markets may be useful, but they do not justify political silence, maritime concessions, extractive dependence, or technological subordination.

A Philippine strategy must survive changes in Washington and Beijing. The lesson of Vietnam is strategic multiplicity. The lesson of Thailand is national authorship. The lesson of Europe, Japan, and South Korea is that international cooperation does not require abandoning national industrial planning.

The Philippines should deal with every power while becoming the possession of none.

Conclusion

The practicalist case for Pax Silica begins from an understandable anxiety. The Philippines has missed industrial opportunities. It remains concentrated in services, overseas labor, consumption supported by remittances, mineral extraction, and selected stages of export manufacturing. It faces expensive power, inadequate infrastructure, weak research expenditure, limited industrial finance, and persistent policy discontinuity.

Neighboring states compete aggressively. The technological rivalry between the United States and China is reorganizing supply chains. Investment opportunities may not remain open forever.

But anxiety is not a strategy. To accept Pax Silica merely because it is available, because another ASEAN country may receive the investment, or because the United States is a longstanding partner is not pragmatism. It is practicalism: the elevation of immediate convenience over long-term national purpose.

The contemporary great-power rivalry is not simply the ideological Cold War reborn. It is an economic and technological conflict conducted through tariffs, subsidies, sanctions, infrastructure, standards, data, minerals, export controls, and supply chains.

China cannot be understood merely as a reincarnated Soviet Union. Nor can every American initiative be understood automatically as the defense of Philippine freedom.

Socialist Vietnam’s resistance to Chinese maritime pressure demonstrates that national interest is not reducible to ideological labels. Thailand’s Siam Silica Framework demonstrates that foreign cooperation can be organized under a national plan rather than allowed to replace one. Europe, Japan, South Korea, China, and the United States themselves demonstrate that industrial sovereignty is not an obsolete Leftist fantasy but a central policy objective of every serious technological power.

The Philippines therefore does not face a choice between Pax Silica and isolation. It faces a choice between accepting Pax Silica as an externally authored economic-security framework and subordinating it to a Philippine industrial strategy.

The decisive question is not whether semiconductors will be assembled, packaged, or processed within Philippine territory. It is whether Filipino institutions will acquire the knowledge, machinery, capital, research capacity, firms, and legal authority necessary to direct the industry on Philippine terms.

An industrial estate can be located in the Philippines. An industrial system must belong to the Philippines.

***

References

Amsden, A. H. (1989). Asia’s next giant: South Korea and late industrialization. Oxford University Press.

Association of Southeast Asian Nations. (2025a). ASEAN Foreign Ministers’ statement on the Thailand–Cambodia border dispute. ASEAN Secretariat.

Association of Southeast Asian Nations. (2025b). ASEAN leaders’ review and decision on the implementation of the Five-Point Consensus. ASEAN Secretariat.

Bases Conversion and Development Authority. (2026). New Clark City to serve as AI hub under the US-led Pax Silica initiative. Government of the Philippines.

Bureau of Industry and Security. (2024). Commerce strengthens export controls to restrict China’s capability to produce advanced semiconductors for military applications. U.S. Department of Commerce.

Bureau of Industry and Security. (2026). Revised license-review policy for semiconductors exported to China. U.S. Department of Commerce.

Chang, H.-J. (2002). Kicking away the ladder: Development strategy in historical perspective. Anthem Press.

Department of Industry, Science and Resources. (2025). The Pax Silica Declaration by countries attending the Pax Silica Summit, 12 December 2025. Australian Government.

European Commission. (2026). European Chips Act and Chips Act 2.0. European Union.

Evans, P. (1995). Embedded autonomy: States and industrial transformation. Princeton University Press.

Farrell, H., & Newman, A. L. (2019). Weaponized interdependence: How global economic networks shape state coercion. International Security, 44(1), 42–79.

Government of Viet Nam. (2023, September 11). Joint leaders’ statement on elevating Viet Nam–United States relations to a comprehensive strategic partnership.

Government of Viet Nam. (2026, April 17). Viet Nam and China issue joint statement on deepening the comprehensive strategic cooperative partnership in the new era.

Krasner, S. D. (1999). Sovereignty: Organized hypocrisy. Princeton University Press.

Lall, S. (2004). Reinventing industrial strategy: The role of government policy in building industrial competitiveness (G-24 Discussion Paper Series No. 28). United Nations Conference on Trade and Development.

Marcos, F. R., Jr. (2026, July 27). Fifth State of the Nation Address. Office of the President of the Philippines.

Ministry of Foreign Affairs of the Socialist Republic of Viet Nam. (2026a, May 5). Viet Nam calls on China to respect sovereignty over Hoang Sa.

Ministry of Foreign Affairs of the Socialist Republic of Viet Nam. (2026b). Official stresses proactive implementation of the 14th Party Congress Resolution in foreign affairs.

Ministry of National Defence of the Socialist Republic of Viet Nam. (2019). Vietnam national defence white paper.

National Higher Education, Science, Research and Innovation Policy Council Office. (2026). Siam Silica Framework and the development of Thailand’s semiconductor and advanced-electronics workforce. Government of Thailand.

National Privacy Commission. (2012). Republic Act No. 10173: Data Privacy Act of 2012. Government of the Philippines.

National Privacy Commission. (2024). Model contractual clauses for cross-border transfers of personal data. Government of the Philippines.

Organisation for Economic Co-operation and Development. (2024). Promoting the growth of the semiconductor ecosystem in the Philippines. OECD Publishing.

Rodrik, D. (2004). Industrial policy for the twenty-first century. Harvard University.

State Council Information Office of the People’s Republic of China. (2022). The Taiwan question and China’s reunification in the new era. Government of the People’s Republic of China.

Strange, S. (1988). States and markets. Pinter Publishers.

Thailand Board of Investment. (2026). Thailand maps long-term semiconductor strategy, pushes toward full value chain. Government of Thailand.

United States Congress. (2023). H. Res. 560: Recognizing the Vietnamese Heritage and Freedom Flag as the official symbol of the Vietnamese-American community in the United States.

United States Congress. (2025). H.R. 3122: Vietnam Human Rights Act.

United States Department of Justice. (2019). The purpose and impact of the CLOUD Act. Government of the United States.

United States Department of State. (2025). U.S. relations with Vietnam.

Wade, R. (1990). Governing the market: Economic theory and the role of government in East Asian industrialization. Princeton University Press.

World Bank. (2013). Does FDI work for Africa? Assessing local spillovers in a world of global value chains. World Bank Group.

World Bank. (2023). Foreign direct investment, backward linkages, and productivity spillovers: What governments can do to strengthen linkages and their impact. World Bank Group.

Reject Pax Silica: A Strategy for Philippine Industrial Sovereignty

2026-07-31T20:22:27.910-07:00

Reject Pax Silica: A Strategy for Philippine Industrial Sovereignty

Artist's conceptual rendering of Pax Silica Complex presented
by the Bases Conversion and Development Authority
(Source: RTVM)

The alternative to Chinese-centered mineral extraction is not an American-centered export enclave. Manila should pursue ASEAN strategic autonomy and a domestic-first industrial program built around energy, transportation, housing, agriculture and vertically integrated Philippine industries.

“It will bring quality jobs to our people, accelerate our industrial competitiveness, and revitalize our economy,” President Ferdinand Marcos Jr. said when he introduced the proposed Pax Silica Industrial Hub during his fifth State of the Nation Address on July 27, 2026. Marcos described the project as an artificial-intelligence-centered industrial ecosystem and an advanced manufacturing and logistics component of the Luzon Economic Corridor (Marcos, 2026).

The promise is appealing because it addresses genuine Philippine economic weaknesses. The country possesses a large and experienced industrial workforce, but much of its manufacturing remains dependent on imported machinery, foreign intellectual property and decisions made by multinational corporations. Its electronics sector generates a large share of merchandise exports, yet activity remains concentrated in stages such as assembly, testing and packaging. Mineral resources are extracted domestically, while much of their refining and downstream industrial use occurs elsewhere. Overseas employment, remittances, business-process outsourcing, retail and real estate continue to compensate for the weakness of domestic productive accumulation.

Against that background, a 1,620-hectare complex containing semiconductor facilities, mineral-processing plants, artificial-intelligence infrastructure, research laboratories and logistics installations appears to offer an overdue transition from extraction and externally oriented services toward advanced production. The Board of Investments has presented the proposed Golden Node as a means of placing the Philippines closer to the center of the global AI supply chain, while the Bases Conversion and Development Authority has estimated that the estate could attract between $40 billion and $70 billion in investment and directly create at least 130,000 jobs when fully developed (Board of Investments [BOI], 2026a; Presidential Communications Office [PCO], 2026).

The issue, however, is not whether advanced factories are preferable to exporting unprocessed ore, or whether semiconductor employment is preferable to permanent dependence on low-productivity work. They plainly are. The issue is whether the institutional design of Pax Silica would allow the Philippines to accumulate ownership, technological authority and productive capabilities—or whether it would principally make Philippine territory a strategically useful location within an industrial system directed from abroad.

That distinction is fundamental. Investment is not synonymous with industrialization. Production occurring within national territory is not the same as national control over production. Participation in a global value chain does not necessarily mean that a country possesses the authority to determine its position within that chain.

Pax Silica is not a Philippine industrial strategy that happens to include American investment. It is a United States-led economic-security initiative within which the Philippines is being assigned an important production role. The U.S. Department of State calls Pax Silica its flagship initiative on artificial intelligence and supply-chain security. Its declared scope extends across the “minerals-to-models” system: critical minerals, energy, advanced manufacturing, semiconductors, data infrastructure and artificial intelligence. The initiative is designed to organize states, capital and technology around supply chains regarded as secure and trusted by Washington (U.S. Department of State, 2025a, 2026a).

That is not an incidental description. It identifies the project’s governing purpose. Pax Silica was conceived in response to the growing treatment of semiconductors, computing capacity, energy and minerals as strategic assets in the technological competition between the United States and China. It may generate commercial opportunities for participating countries, but its architecture begins with the security requirements of an American-led network.

The Philippines should reject the Golden Node in its present coalition-bound form. It should replace it with two mutually reinforcing policies. The first is ASEAN-centered strategic autonomy, under which Manila accepts technology, capital and trade from the United States, Japan, China, South Korea, Europe and other partners without assigning a critical national-security zone to one exclusive coalition. The second is domestic-first industrialization, under which minerals, energy, infrastructure and technical capability are directed first toward the productive requirements of the Philippine economy.

This is not an argument for autarky. The Philippines cannot independently produce every machine, chemical, software platform and industrial process required by an advanced economy. Foreign technology, investment and access to international markets will remain necessary.

The difference concerns sequencing and control. A national industrial strategy should begin by identifying what the Philippine economy must produce, which capabilities Filipino institutions must acquire and which industries domestic companies should eventually control. Foreign capital should then be selected and disciplined according to those objectives.

Pax Silica reverses that sequence. It begins with the requirements of an international coalition and asks what Philippine territory, resources and labor can contribute to them.

An International Supply Chain Is Not a National Industrial Policy

For the ordinary Filipino, Pax Silica is best understood not as a single factory, corporation or investment fund but as an international organization of the production systems required for artificial intelligence. Those systems begin with mines, electricity and industrial materials; continue through semiconductor design, wafer fabrication, assembly, testing, packaging, data centers and advanced manufacturing; and culminate in computing platforms, software and end-use technologies.

The Philippine Golden Node would be a physical production district within that larger system. Depending on the companies eventually recruited, it could include mineral-processing facilities, semiconductor assembly and packaging plants, electronics factories, data centers, laboratories, warehouses, dedicated power installations and supporting urban infrastructure.

BCDA has said that the development would be manufacturing-led rather than principally a data-center estate. Public discussions, however, still describe a preliminary project whose final combination of industries, locators, financing and supporting infrastructure has not been settled. Expressions of interest may indicate commercial curiosity, but they are not equivalent to binding capital commitments.

The distinction between projection and commitment matters. A company visit does not establish a factory. A memorandum does not guarantee technology transfer. A projected position is not yet a job with wages, training and security of tenure.

Nor should gross investment figures be confused with domestic economic value. A multibillion-dollar semiconductor plant may depend heavily on imported machinery, foreign engineering services and overseas financing. Its output may be recorded as Philippine production even when substantial portions of its value are paid abroad through imported components, royalties, interest, software licenses, management charges and profit repatriation.

A proper public assessment should therefore ask not only how much investment enters the estate but how much productive capability remains in the country. It should measure Filipino wages, taxes actually paid after incentives, domestic procurement, local equity, research expenditure, patents, engineering authority and the number of Philippine-controlled companies capable of supplying or competing with foreign locators.

The more spectacular the projection, the greater the need for a public balance sheet.

The government’s case is not wholly implausible. The Philippines already possesses an established semiconductor workforce. New Clark City is located near Clark International Airport, Subic Bay and existing electronics operations. The country has nickel, copper and other industrial resources. Filipino engineers are familiar with multinational production systems, while the technical diaspora provides a large reserve of knowledge and experience.

A concentrated industrial estate could reduce coordination costs and generate economies that isolated plants cannot. Semiconductor production depends on dense relationships among materials suppliers, equipment manufacturers, designers, assembly firms, universities, logistics companies and customers. Clusters can create cumulative effects as one investment attracts another.

But clustering is not automatically national industrialization. An enclave may also contain a dense network of foreign firms whose strongest relationships are with one another and with overseas headquarters rather than with the surrounding domestic economy.

The key question is therefore the direction of integration. Will foreign locators be integrated into Philippine research, finance, procurement and final-product manufacturing? Or will Philippine labor, minerals and infrastructure merely be integrated more efficiently into an externally commanded network?

The buildings might look identical under either arrangement. Their developmental effects would be very different.

Legal Sovereignty and Economic Extraterritoriality

The first major controversy surrounding the Golden Node involved reports that the United States had requested the application of American legal principles and protections resembling diplomatic immunity for personnel operating within the estate.

BCDA President Joshua Bingcang said the Philippine side rejected the request and would grant no special arrangement to the United States. U.S. Undersecretary of State Jacob Helberg later said his remarks had been taken out of context and denied that diplomatic immunity had been the American objective. The publicly released Pax Silica declaration and BCDA proposal letter did not themselves establish American jurisdiction or diplomatic immunity, although a separate supplemental agreement governing the final operating terms had not yet been concluded (Bases Conversion and Development Authority [BCDA], 2026; Chi, 2026).

BCDA’s proposal included a two-year rent-free lease period described as a Philippine in-kind contribution. Rental rates from the third year onward remained subject to negotiation. Permanent improvements were proposed to revert to the Philippine government when the agreement ended without renewal. Personnel arrangements were to be negotiated consistently with Philippine law (BCDA, 2026).

In the absence of a signed extraterritorial agreement, Pax Silica should not be described as American territory. The Philippine government has expressly rejected such an arrangement.

The controversy nevertheless revealed how the negotiations were initially framed. Questions involving investor protection and the legal treatment of foreign personnel emerged before Filipinos had been provided with a definitive list of industries, locators, public costs and performance obligations.

A semiconductor manufacturer, data-center operator or mineral processor remains a commercial enterprise. It may receive fiscal incentives, streamlined customs procedures and a long-term lease, but it should remain accountable to Philippine courts, labor law, environmental rules, taxation and criminal jurisdiction.

Formal legal sovereignty, however, is only one dimension of sovereignty. An estate may remain completely subject to Philippine law while its productive decisions are made abroad. An overseas headquarters may determine the designs, machinery, software, suppliers, capital expenditure, production volume, customers and disposition of profits. Philippine agencies may regulate the physical estate without exercising meaningful influence over what is produced or where the output is sold.

This is a form of economic extraterritoriality rather than legal extraterritoriality. Philippine land, minerals, labor, water and electricity are integrated into an externally directed productive network. The flag and legal code remain Philippine, but the strategic direction of production does not.

The Security Question Requires Precision

Some opponents have characterized Pax Silica as an American weapons-production enclave. The available public evidence does not establish that claim.

BCDA says the proposed estate will be commercial and will not host defense-related activities. No publicly identified agreement shows that an American or Israeli company has been authorized to manufacture missiles, ammunition or weapons systems in New Clark City. Criticism should distinguish a possible strategic evolution from an already approved arms-production plan.

The more credible concern arises from the dual-use character of the industries involved. Semiconductors, artificial intelligence, cybersecurity, communications equipment, robotics and mineral processing have extensive civilian applications, but they are also indispensable to modern military systems. The U.S. defense establishment relies heavily on commercial semiconductor supply chains for radar, sensors, communications and other mission systems (National Academies of Sciences, Engineering, and Medicine, 2024).

Filipino and Israeli officials have discussed cooperation under Pax Silica involving critical minerals, mineral processing, semiconductors, artificial intelligence, advanced computing and cybersecurity. These discussions do not prove that Israeli weapons companies will manufacture in Clark, but they confirm that the project forms part of a strategic technology network rather than a politically neutral industrial-estate program (BOI, 2026b).

A commercially registered semiconductor company may supply components used in both household electronics and military communications. A data center may host ordinary business systems while also supporting defense-related computation. A mineral processor may supply battery or electronics manufacturers serving both civilian and military customers.

The relevant question is therefore not whether every factory will manufacture weapons. It is whether the zone may become materially integrated into American or Israeli defense and intelligence supply chains despite being formally described as commercial.

There is no sound basis for predicting that China would physically attack New Clark City merely because American-aligned technology companies operate there. The more immediate risks would probably involve cyberespionage, technology theft, commercial coercion, sabotage or disruption of supplies.

Nevertheless, strategic infrastructure does not remain politically neutral during a major confrontation. Concentrating mineral processing, computing, semiconductor production, energy and logistics inside an estate identified with one coalition would make the Philippines more exposed to the consequences of that coalition’s conflicts.

The country should not build such a concentration first and determine its security doctrine later.

The Palantir Connection

Helberg’s professional background is relevant, but it should not be overstated. Before entering the U.S. government, he served as senior adviser to the chief executive of Palantir Technologies. That documented connection does not prove that Pax Silica is a Palantir project, that Palantir will operate inside the Golden Node or that every supporter of the initiative belongs to a coherent Palantir faction (U.S. Department of State, 2025b).

It does help illuminate the strategic outlook surrounding the initiative: one in which commercial technology, national security, data integration and geopolitical power are increasingly treated as parts of a single system.

Palantir is a major data-analysis contractor serving defense, intelligence, policing and immigration agencies. It is also controversial among privacy, civil-liberties and migrant-rights organizations. Amnesty International has raised concerns regarding the use of Palantir-supported systems in immigration enforcement and the possible implications for privacy, expression, due process and nondiscrimination (Amnesty International, 2025).

The relevance to Pax Silica is institutional rather than conspiratorial. A technology initiative promoted by officials who view commercial data systems, artificial intelligence, defense and economic security as closely connected should not be evaluated as though it were an ordinary export estate.

The concern is not that Palantir secretly owns Pax Silica. It is that the project’s governing philosophy may progressively subordinate commercial infrastructure to the strategic requirements of a foreign security coalition.

The False Choice Between China and Pax Silica

It is understandable that many Filipinos may regard Pax Silica as a lesser evil compared with the country’s dependence on China-centered mineral supply chains. China accounted for approximately 66 percent of Philippine nickel exports in 2025. Such concentration exposes Philippine producers to the import policies, industrial cycles and geopolitical calculations of one external market (Philippine News Agency [PNA], 2026a).

The criticism should be stated accurately. The concentration of exports does not establish that most Philippine mines are directly Chinese-owned. The more important problem is that extraction has been heavily organized around demand from Chinese processors and manufacturers. The Philippines supplies ore while much of the refining, equipment production and downstream manufacturing takes place elsewhere.

Diversifying buyers is sensible. Domestic processing is also preferable to exporting unrefined ore. It can retain additional value, create technical employment and generate demand for engineers, chemists, maintenance workers and logistics services.

But diversification is not the same as sovereignty, and additional processing is not automatically industrialization.

Under Pax Silica, Philippine nickel may be converted into an intermediate chemical product in Central Luzon rather than exported directly as ore. Semiconductors may be assembled, tested or packaged in New Clark City before being incorporated into foreign-designed goods. These activities are more technically sophisticated than mining alone and could produce better wages.

Nevertheless, the plants may remain foreign-owned. Their machinery may be imported, their production systems licensed, their patents held abroad, their suppliers selected by overseas headquarters and their output committed to external customers. More production would take place in the Philippines, but the country might still exercise little authority over the complete chain.

The Philippines would no longer export raw minerals alone. It would export those minerals together with the Filipino labor, electricity, water and public infrastructure used to process them.

The choice is therefore not necessarily between crude extraction for China and sovereign industrialization under the United States. It may be a choice between exporting raw materials into a China-centered system and exporting semi-processed materials and intermediate components into an American-centered system.

The destination changes. The Philippine function may remain externally assigned.

Resource Extraction in a More Advanced Form

The government presents Pax Silica as a means of moving the Philippines from resource extraction into higher-value manufacturing. The objective is reasonable. The assumption that additional processing necessarily transforms the economic relationship is not.

A mineral does not cease to participate in an extractive system merely because it undergoes another industrial process before export. If Philippine nickel is converted into an intermediate compound and then shipped to a foreign battery manufacturer, the country retains more value than it would from exporting raw ore. But if the machinery, technology, financing and final market remain foreign-controlled, the decisive accumulation still occurs elsewhere.

The same applies to electronics. A chip assembled or packaged in Clark may be recorded as a Philippine export even though its design originated abroad, its production equipment was imported and its final integration into a branded device will occur elsewhere. The export statistic records the territorial location of one operation. It does not determine who commands the complete system.

IBON Foundation has repeatedly made this distinction in its criticism of Pax Silica. Its analysis argues that decades of foreign-oriented semiconductor and economic-zone development have produced substantial exports without proportionate technological transfer, domestic ownership or movement into more commanding stages of production. In IBON’s account, the proposed project risks extending a model in which the country supplies resources, infrastructure and labor while foreign firms retain the technology, financing and final markets (IBON Foundation, 2026a; Jarabe, 2026; Piedad, 2026).

IBON’s rhetoric is more confrontational than that normally found in business commentary, and some of its individual labor and investment claims require comparison with official or independent data. Its central structural question is nevertheless legitimate: after more than five decades of electronics exports, how much independent technological and corporate capacity has the Philippines accumulated?

The phrase “moving up the value chain” provides an incomplete answer. A country may move from one stage of a foreign-controlled chain into a more technically demanding stage without acquiring authority over the chain itself.

Better jobs, training and greater domestic value added are genuine gains. They are not substitutes for ownership, research, product design, equipment production and control over final markets.

The proper test is whether Philippine processing will feed industries required by the domestic economy. Will nickel and copper supply locally controlled grid equipment, railways, electric public transportation, shipbuilding, agricultural machinery, medical devices and telecommunications systems? Will semiconductor operations support Filipino firms producing industrial controls, power electronics and final goods? Or will their output be committed principally to overseas product lines and allied supply contracts?

Pax Silica is explicitly designed around global supply-chain requirements. The government has not yet demonstrated how those requirements will be subordinated to Philippine development.

The Philippine Semiconductor Record

The Philippines is not a newcomer to semiconductors. Fairchild, Intel, Texas Instruments and other multinational companies established back-end manufacturing operations beginning in the 1970s. Electronics subsequently became the country’s largest merchandise-export sector, and Filipino engineers and technicians accumulated substantial experience in assembly, testing and packaging.

The record is not one of complete failure. The country has locally owned firms in assembly, electronics manufacturing and integrated-circuit design. The OECD identifies companies including Automated Technology Philippines, Cirtek, Fastech, Integrated Micro-Electronics, ESi Labs and Xinyx. It ranked the Philippines as one of the world’s leading chip exporters and described the country as an important participant in assembly, testing and packaging (Organisation for Economic Co-operation and Development [OECD], 2024).

The structural problem is the depth of this ecosystem relative to the scale of its exports. Philippine activity remains concentrated in downstream assembly, testing and packaging. At the time of the OECD’s study, the country had no front-end semiconductor fabrication facility, while domestic capability in specialized equipment, materials and other upstream functions remained limited. Foreign investors accounted for a large majority of the capital of major semiconductor establishments. The report also identified electricity and logistics costs as important constraints and concluded that the country was not strengthening its position in semiconductor value chains as much as its early participation might suggest (OECD, 2024).

This is not an industry without Filipino capability. It is an industry whose domestic capabilities remain narrower than the scale of its exports implies.

Intel’s closure of its Cavite assembly-and-test facility in 2009 demonstrated the vulnerability of productive capacity governed by a multinational corporation’s global strategy. The plant generated employment, exports and technical experience for decades, but the decision to consolidate older facilities did not belong to Philippine workers, suppliers or policymakers.

The lesson is not that Intel’s investment produced no benefit. It is that a plant can operate productively for decades without becoming a national industrial system.

The meaningful measure of industrial development is what survives when a multinational restructures: domestic suppliers, patents, laboratories, design houses, equipment manufacturers and firms capable of continuing production through their own customer relationships.

Pax Silica may expand the existing semiconductor economy. It does not automatically correct the institutional weakness revealed by that history.

Taiwan and South Korea Were Not Export Enclaves

Defenders of Pax Silica may cite Taiwan and South Korea as evidence that export orientation and integration into global supply chains can produce industrialization. The comparison is useful only when the institutions supporting their development are included.

South Korea did not industrialize principally by inviting foreign companies into tax-privileged estates. Its government used planning, directed credit, import regulation, export targets, public investment and selective protection to build Korean-controlled firms capable of manufacturing and marketing increasingly complex goods. Exports provided foreign exchange, scale and competitive discipline, but the underlying objective was the accumulation of productive capability within national enterprises (Westphal, 1990).

The Korean system produced serious problems, including concentrated corporate power, preferential financing and close relations between state agencies and the chaebol. Nevertheless, export expansion strengthened companies headquartered in Korea and accumulated engineering, management, branding and marketing capability under domestic control. Korea did not permanently accept the role of subcontractor for foreign brands.

Taiwan’s semiconductor experience provides an even more direct comparison. Taiwan Semiconductor Manufacturing Company was not established simply because foreign corporations required a less expensive production location. It emerged from a deliberate state-backed effort to acquire semiconductor technology, train engineers and establish domestic manufacturing capability.

Taiwan’s Industrial Technology Research Institute obtained foreign technology, created demonstration facilities and developed engineering teams. When TSMC was established in 1987, ITRI transferred fabrication facilities, equipment, technology and personnel to the new company. TSMC’s regulatory filings describe its creation as a joint venture among the government of the Republic of China, Philips and other private investors (Industrial Technology Research Institute [ITRI], n.d.; Taiwan Semiconductor Manufacturing Company Limited [TSMC], 2001).

TSMC was globally oriented from the beginning. It was not established merely to supply Taiwan’s domestic market. The important distinction is that international demand was used to build a Taiwanese-headquartered corporation, a domestic research system, an engineering workforce, a supplier ecosystem and a center of technological decision-making located substantially within Taiwan.

That is fundamentally different from inviting a foreign parent corporation to operate a subsidiary whose strategic decisions remain overseas.

A Philippine equivalent would not consist merely of attracting TSMC, Intel or Samsung to build another plant in Clark. It would require a Philippine research institution capable of acquiring and developing semiconductor technology, domestic public and private equity in strategic companies, shared prototype facilities and long-term financing for Filipino suppliers and design firms.

The lesson from Taiwan and Korea is not that exports automatically produce industrialization. It is that international markets can support industrialization when the state uses them to construct firms and institutions that it can progressively own and direct.

Pax Silica begins with the requirements of an international coalition. Taiwan and South Korea began with the construction of national capability.

Lessons From Europe: Subsidies, Industrial Ecosystems

and Strategic Control

Europe’s semiconductor policy offers a broader comparison than Germany alone. The continent is attempting to reverse decades of declining manufacturing weight while reducing dependence on American and Asian suppliers. The European Chips Act seeks not merely to attract factories but to strengthen research, design, production, advanced packaging, skills and crisis-response capabilities across the European Union. Its stated ambition is to increase Europe’s share of global semiconductor production and reinforce technological sovereignty (European Commission, 2026a).

The strategy is neither a complete success nor a single coherent model. It combines supranational planning, national subsidies, foreign anchor investors, domestic companies, public research institutes and regional clusters. Member states also compete with one another for investment, while expensive energy, shortages of engineers, permitting delays and corporate bargaining power complicate implementation.

For the Philippines, the value of Europe’s experience lies precisely in these contradictions. Europe shows that foreign semiconductor investment can contribute to national and regional capability, but only when it is embedded in institutions that possess research capacity, equipment manufacturers, industrial customers, financing and negotiating power. It also demonstrates that large subsidies do not guarantee that a multinational will remain.

Germany: Corporate Optionality and Industrial Integration

Intel’s proposed Magdeburg complex illustrates the danger of organizing regional policy around the expectations of one multinational corporation. In 2023, Intel and the German government announced plans for more than €30 billion in investment for two advanced wafer-fabrication plants. The project was promoted as the largest foreign direct investment in German history and the center of a new European semiconductor corridor. Intel anticipated approximately 3,000 permanent positions, thousands of construction jobs and a wider supplier ecosystem (Intel Corporation, 2023).
The political language resembled that now surrounding Pax Silica. The project would generate skilled employment, stimulate suppliers, improve resilience and strengthen technological sovereignty. German institutions began planning land, infrastructure, workforce development and substantial public assistance around the promised investment.
In July 2025, however, Intel announced that it would no longer proceed with the proposed German and Polish projects. Chief Executive Lip-Bu Tan acknowledged that the company had invested too much, too soon, without sufficient demand and said that future factory expansion would be tied more closely to confirmed customer commitments (Intel Corporation, 2025).
The cancellation did not mean that Germany had already distributed every contemplated subsidy. It nevertheless demonstrated an important asymmetry. The host government may reorganize regional planning, reserve land, prepare infrastructure and create political expectations, while the multinational retains the option to postpone, reduce or abandon its investment when corporate strategy changes.
This is directly relevant to Pax Silica. The Philippine government should not organize electricity, water, transportation, education and land policy around nonbinding expressions of interest. Before public infrastructure is committed, anchor investors should make enforceable capital commitments, provide performance guarantees and accept clawback provisions covering public expenditure if they cancel or substantially reduce their projects.
Germany’s European Semiconductor Manufacturing Company project in Dresden presents a different model. TSMC owns 70 percent of the joint venture, while Bosch, Infineon and NXP—companies already embedded in European automotive and industrial production—each own 10 percent. Germany is providing up to €5 billion in aid toward an investment exceeding €10 billion. The facility is intended to manufacture chips for European industrial and automotive customers, while the participating European firms bring existing research, design, production and market relationships into the project (European Commission, 2024a).
The Dresden facility remains foreign-led and heavily subsidized. It does not make Europe independent of TSMC or guarantee complete technology transfer. Its advantage over a detached export enclave is that European companies possess equity and are positioned to use the output within industries headquartered in the region. The plant enters an existing industrial system composed of vehicle manufacturers, machinery companies, chemical firms, research institutes and semiconductor producers.
The comparison between Magdeburg and Dresden yields two different lessons. Magdeburg shows the fragility of a development strategy centered on a single foreign promise. Dresden shows that foreign investment becomes more developmentally useful when domestic or regional companies possess equity, established customers, technological capability and bargaining power.
The Philippines should not merely ask which foreign semiconductor company is willing to build in Clark. It should ask which Filipino institutions and companies will own part of the productive asset, absorb its technology and connect its output to Philippine transportation, energy, communications, medical and industrial-equipment requirements.

France: Public Aid in Exchange for Public Obligations

France offers a further lesson: public subsidies can be attached to explicit obligations extending beyond employment and factory construction.
The French government supported a €7.4-billion semiconductor project involving STMicroelectronics and GlobalFoundries at Crolles. The facility was intended to manufacture energy-efficient chips for automobiles, communications, aerospace, security and defense. The European Commission approved the aid partly because the project would introduce technologies and production processes not previously available at industrial scale in Europe (European Commission, 2023).
More significant than the project’s size were the conditions attached to public support. The companies agreed to give priority to designated European orders during supply shortages, continue investing in later generations of relevant technology and make production-scale testing and development capacity available to small and medium-sized companies and other third parties. The agreement also included a mechanism through which unexpectedly high profits could generate additional returns for the French state (European Commission, 2023).
These requirements demonstrate that public aid need not be treated as an unconditional gift intended only to make an investment location more attractive. The state can purchase public capabilities and strategic rights.
Applied to the Philippines, comparable conditions would mean that a publicly supported semiconductor or mineral-processing facility could be required to reserve capacity for domestic infrastructure during emergencies, provide laboratory and pilot-line access to Filipino companies, train local engineers in process development rather than operation alone, and continue investing in successive technological generations. Exceptional profits generated partly through public land, subsidies or guaranteed utilities could trigger higher public returns, equity conversion or reinvestment obligations.
The French case also shows the importance of connecting production to existing domestic research and industrial institutions. The Crolles project builds upon technology developed through earlier European microelectronics programs and is situated within the Grenoble semiconductor cluster, which includes STMicroelectronics, Soitec, the public research organization CEA-Leti, universities and specialized suppliers. The factory is not expected to generate an ecosystem from nothing. It expands an ecosystem constructed over decades through public research and industrial policy.
For Manila, the implication is clear. A foreign plant cannot substitute for a Philippine research and supplier system. Public support for production must be accompanied by investment in institutions capable of understanding, adapting and commercializing the technologies being introduced.

The Netherlands and Belgium: Own a Strategic Capability

The Netherlands provides perhaps Europe’s strongest demonstration that technological sovereignty comes from controlling a difficult and indispensable capability rather than hosting the largest number of factories.
ASML, headquartered in Veldhoven, supplies lithography systems required for advanced semiconductor production. Its position was not created by offering an empty industrial estate to foreign locators. It developed through sustained cooperation among private companies, universities, public research, specialized suppliers and European technology programs. ASML remains a center of engineering, system integration and manufacturing within a dense Dutch high-technology cluster, while working with an extensive network of suppliers and research partners (ASML, 2026a, 2026b).
The Dutch ecosystem illustrates the value of specialization. A relatively small country does not need to control every stage of semiconductor production to exercise strategic influence. It can concentrate resources on technologies in which domestic companies and research institutions can establish difficult-to-reproduce advantages.
The Dutch government’s semiconductor strategy accordingly emphasizes knowledge, public-private research, talent and the preservation of strategic positions in equipment and semiconductor technology. Its objective is not merely to increase the number of foreign-owned fabrication plants but to strengthen capabilities that make Dutch firms indispensable to the wider global system (Government of the Netherlands, 2026).
Belgium’s Imec provides a related example. Imec is a research institution that works with universities, equipment manufacturers, materials companies and chip producers on advanced semiconductor processes. Its joint High-NA extreme-ultraviolet lithography laboratory with ASML gives semiconductor firms and suppliers access to a prototype production environment before the technology enters broad commercial use (ASML & Imec, 2024).
Institutions of this kind allow European engineers, start-ups and suppliers to participate in technological development rather than wait for finished production systems to be imported from abroad. They reduce the separation between laboratory research and industrial manufacturing.
A Philippine technology policy should draw the same conclusion. The country does not need to begin by attempting to build the most advanced fabrication plant in the world. It should identify fields in which existing Philippine capability can be developed into strategic specialization: advanced packaging, power electronics, testing equipment, sensors, maritime electronics, industrial software or semiconductor systems for energy and transportation.
A Philippine counterpart to ITRI or Imec would operate shared pilot lines, clean rooms and prototype facilities accessible to universities, start-ups and domestic manufacturers. Its purpose would not be to provide inexpensive research services to foreign locators but to create technologies and companies capable of remaining in the Philippines.
The Dutch and Belgian experience therefore provides a different measure of industrial success. The relevant question is not only how many chips are manufactured within the territory, but whether domestic institutions possess knowledge without which the wider industry cannot easily function.

Ireland: The Benefits and Limits of Foreign Investment

Ireland offers a comparison closer to the development model historically followed by the Philippines. It used foreign direct investment, education, membership in a large regional market and an active investment-promotion agency to attract high-technology manufacturers and research operations.
Intel established manufacturing in Ireland in 1989 and later invested heavily in its Leixlip campus. Fab 34 represented an investment of approximately €17 billion and introduced Intel’s extreme-ultraviolet-based manufacturing process at commercial scale in Europe. Ireland also hosts semiconductor design, research and manufacturing operations involving Analog Devices, AMD, Infineon, Qualcomm and other companies (IDA Ireland, 2023, 2024).
The Irish experience demonstrates that foreign investment can become more valuable over time when a host country maintains policy continuity, develops skills, supports research collaboration and encourages companies to move from basic operations into advanced manufacturing and research. Analog Devices’ Irish research operations, for example, became an important component of its European innovation system (IDA Ireland, 2022).
This is considerably more substantial than an economic zone limited to low-value assembly. Ireland has accumulated engineers, managers, research institutions and experience operating advanced plants. Foreign corporations have repeatedly reinvested rather than using the country solely as a temporary low-cost location.
Yet Ireland also reveals the continuing limits of a multinational-centered strategy. The principal productive assets and intellectual property remain largely under foreign corporate ownership, and final investment decisions are made according to global corporate strategies. A host country can improve its position inside a multinational network without acquiring full authority over that network.
Ireland’s experience should therefore be interpreted neither as a failure nor as proof that foreign direct investment automatically creates sovereignty. It shows that a host economy can negotiate a more advanced and durable position through education, research, reinvestment and institutional competence. It also shows why foreign investment should be supplemented by domestically headquartered companies, public research institutions and national sources of patient capital.
For the Philippines, the comparison is particularly relevant. Manila has often reproduced the initial stage of the Irish model—tax incentives, export zones and foreign manufacturers—without consistently developing the later stages of research intensity, supplier upgrading and institutional continuity. Pax Silica risks repeating the attraction of the initial investment while assuming that the more important capabilities will follow automatically.

Italy and the Regional Division of Capability

Italy further demonstrates that a regional industrial strategy does not require every participating state to reproduce the entire semiconductor chain. European Chips Act projects in Italy include silicon-carbide production and advanced-packaging activity. These projects occupy particular technological positions within a wider European production and research system rather than operating as isolated estates (European Commission, 2026a).
This principle is relevant to ASEAN. The Philippines need not manufacture every machine, chemical and semiconductor domestically. It can specialize in areas connected to its existing capabilities while coordinating with neighboring economies possessing complementary strengths.
The difference between productive specialization and subordinate dependence lies in how specialization is organized. A country exercises strategic specialization when its own companies, workers and research institutions accumulate knowledge and bargaining power in the chosen field. It remains subordinate when foreign corporations assign it a narrow function that can be relocated once wages, subsidies or geopolitical conditions change.
Europe’s attempt to distribute fabrication, packaging, equipment, research and materials across several countries is imperfect and frequently distorted by competition for subsidies. It nevertheless offers a better principle than the creation of a foreign-commanded Philippine enclave: build complementary capabilities among states and institutions while ensuring that each participating economy retains assets, knowledge and companies of its own.
What Europe Does Not Prove
Europe’s semiconductor strategy should not be romanticized. Its programs depend on very large subsidies, and governments with greater fiscal capacity can outbid smaller economies. National leaders sometimes present foreign projects as technological sovereignty even when essential technology remains controlled abroad. Competition among European states may duplicate facilities or transfer public funds to companies that might have invested somewhere in the region regardless.
Europe also faces high energy costs, shortages of specialized labor and slow permitting. Intel’s withdrawal from Magdeburg shows that even wealthy governments cannot eliminate commercial risk. Export restrictions involving Dutch semiconductor equipment demonstrate that ownership of strategic technology may also subject a smaller state to pressure from larger allies and trading partners (Government of the Netherlands, 2024, 2025).
Technological sovereignty is therefore not achieved merely by declaring a strategic sector or providing subsidies. It requires domestic firms, public research, a skilled workforce, reliable infrastructure and institutions capable of imposing conditions on investors.
Nor should the Philippines attempt to imitate European spending levels. European governments can mobilize resources far beyond Philippine fiscal capacity. The useful lesson is not the amount of subsidy but what the subsidy is designed to purchase.
Public support in Europe has increasingly been tied to first-of-a-kind technology, supply commitments, continuing research, access for smaller companies, industrial customers and ecosystem development. These requirements are imperfect and unevenly enforced, but they establish an important principle: public money should create public capabilities.

Taken together, the European cases yield several lessons for Philippine industrial policy.

Germany shows that a foreign anchor investor can withdraw despite years of government preparation, and that joint ventures with domestic industrial companies are more valuable than detached wholly foreign-owned plants. France demonstrates that subsidies can be conditioned on priority supply, continued research, access for smaller firms and public participation in unexpected gains. The Netherlands and Belgium show that research institutions, specialized suppliers and ownership of a critical technology can provide more strategic power than the territorial presence of a large factory. Ireland shows that foreign direct investment can produce increasingly sophisticated manufacturing and research when supported by skills and institutional continuity, but that multinational ownership still limits national authority. Italy shows that countries can specialize in complementary technologies within a regional industrial framework rather than attempt to reproduce every stage independently.

The common European lesson is that a semiconductor plant is most valuable when embedded in an industrial system that the host economy already possesses or is deliberately constructing.

Pax Silica, by contrast, begins with an estate and assumes that the system will emerge around it.

The Philippines should reverse that order. It should first build public research, domestic capital, reliable electricity, transportation, industrial procurement and Filipino-controlled companies. Foreign plants can then enter an ecosystem whose direction is set by Philippine institutions rather than substitute for the absence of such an ecosystem.

If government nevertheless commits public resources to foreign semiconductor or mineral-processing projects, minimum conditions should reflect the strongest European precedents: enforceable capital schedules; repayment and clawback provisions for cancellation; Filipino public or private equity; guaranteed access to facilities for domestic companies and universities; obligations to fund subsequent technological generations; emergency domestic-supply rights; profit-sharing when public support produces exceptional returns; and measurable supplier-development requirements.

Europe’s experience does not show that foreign investment is incompatible with industrial sovereignty. It shows that foreign investment becomes compatible with sovereignty only when the host possesses the institutions, companies and negotiating capacity to discipline it.

The Industrial Version of the Service-Economy Trap

Pax Silica is politically attractive because a clean room, laboratory or semiconductor plant appears to represent the opposite of a service-dependent economy. Yet externally controlled manufacturing can reproduce several of the same structural weaknesses.

In business-process outsourcing, Filipino labor performs services for a foreign client that controls the customer relationship, software platform and commercial market. In enclave manufacturing, Filipino labor is embodied in an intermediate physical product whose design, financing and final market may likewise be controlled abroad.

Industrial production is more capital-intensive and can create greater technical learning. It should not be equated mechanically with call-center work. But both arrangements may leave the country dependent on decisions made at foreign headquarters.

The worker exchanges the headset for a clean-room suit while the economy continues to provide labor and infrastructure without commanding the complete commercial system.

IBON’s analysis describes Philippine economic zones as locations for import-dependent and export-oriented segments of transnational production, while research, product design and high-value technological functions remain insufficiently developed domestically. It proposes instead a coherent industrial policy based on public investment, technological upgrading and stronger relationships between agriculture and manufacturing (Piedad, 2026).

The problem is not the existence of a large service sector. Modern industrial economies also possess large service sectors. Their logistics, finance, insurance, engineering, software, research and wholesale activities are closely connected to domestic production.

Japan, South Korea and China did not abandon manufacturing as their service sectors expanded. Services grew around increasingly complex industrial systems. Norway used petroleum income not merely to finance consumption but to accumulate public financial assets and support domestic energy, maritime and engineering capability. Denmark’s strength rests not on an oil-fund model but on the interaction of advanced services with shipping, pharmaceuticals, food processing, machinery and renewable-energy industries.

The important distinction is not between manufacturing and services as statistical categories. It is between services that support domestic productive accumulation and services directed principally toward external clients and imported consumption.

Pax Silica reflects the shortcut mentality that has shaped Philippine development policy for decades. It assumes the country can move from incomplete electrification, fragmented transportation and shallow domestic manufacturing directly into data centers and an AI-centered export complex.

But data centers are not an alternative to basic infrastructure. They are among its most electricity- and water-intensive users.

A country that cannot resolve the foundational systems on which advanced computing depends is not skipping stages. It is constructing a technologically impressive enclave above an unfinished economy.

The Public Balance Sheet: Power, Water and Land

Pax Silica would require more than privately financed factory buildings. It would depend on public land, transport connections, electricity generation, transmission infrastructure, water systems, worker training, environmental regulation and government guarantees.

The possible electricity requirement remains extraordinarily uncertain. Philippine officials have discussed demand ranging from tens of megawatts to several thousand megawatts, depending on the eventual tenants. A project near the upper end of that range would require generation, transmission, substations, storage and reserve capacity on the scale of a regional power system (PNA, 2026b).

Dedicated generation may prevent the direct diversion of existing electricity, but it does not eliminate public costs. New plants still require land, transmission corridors, regulatory approvals, fuel or renewable resources, backup capacity and possibly government guarantees.

Power supplied to the estate should therefore be additional and financed primarily by the companies whose operations require it. Public guarantees, regulated charges and tax advantages should be disclosed so that Filipino households and existing businesses do not quietly subsidize uninterrupted electricity for multinational corporations.

Water requirements are also substantial. BCDA has discussed daily demand reaching tens of millions of liters and proposed surface-water infrastructure rather than reliance on groundwater extraction (PCO, 2026).

The proposal is more concrete than a general assurance of sustainability, but it still requires independent hydrological review. Surface water is not socially or ecologically unclaimed merely because it is not pumped from an aquifer. Collection may affect watersheds, downstream communities and agricultural users, particularly during dry periods.

The final assessment must distinguish among industries. Semiconductor packaging, wafer fabrication, data centers and mineral processing have different water requirements and wastewater profiles. A meaningful environmental review cannot be completed before the estate’s industrial composition has been established.

Land title likewise does not resolve every social issue. BCDA says the proposed site is public land titled to the agency and already designated for development. That is legally significant, but communities may cultivate, traverse or depend on land formally classified as part of a state estate. Infrastructure can alter water access, transport routes, livelihoods and neighboring land values even when no factory is placed directly on a household’s parcel.

The government should therefore publish a consolidated public balance sheet before concluding a long-term agreement. It should include the value of the land, rent concessions, fiscal incentives, roads, electricity systems, water infrastructure, training programs, security expenditures, environmental liabilities and government guarantees.

These contributions should be compared with enforceable returns: capital actually invested, taxes eventually paid, Filipino wages, domestic procurement, research expenditure, technology licensed, patents created, local equity accumulated and Philippine companies admitted into more advanced stages of production.

Foreign companies will calculate their expected returns from Philippine participation with precision. The Republic should do the same.

What Should Replace Pax Silica?

If the Golden Node is rejected, Manila should not respond by closing the economy or waiting until Filipino companies can independently reproduce every technology. It should use the comparative advantages the country already possesses—semiconductor assembly, maritime geography, shipping expertise, mineral resources, English-language capability and a large technical diaspora—and vertically integrate them into nationally useful productive systems.

At the same time, the country should complete three foundational tasks that have remained unfinished for generations: reliable and affordable electrification, an integrated archipelagic transportation system and durable mass housing connected to employment and public transport.

These objectives are less glamorous than an artificial-intelligence estate. They are also the material foundations without which a serious AI or semiconductor industry cannot exist.

A disciplined ten-year program, divided into two binding five-year phases, could complete universal household electricity access, establish reliable regional power systems and deliver major railway, maritime, housing and industrial corridors. It would not eliminate every national backlog within a decade. It could create enough physical and institutional momentum to make reversal difficult.

The Philippines has produced many development plans. The recurrent failure has been the absence of continuity, implementation capacity and an unapologetic commitment to timetables.

First Task: Reliable National Electrification

The Philippine electricity problem is no longer simply the complete absence of connections. It includes communities that remain unserved or underserved, high electricity prices, uneven reliability, weak island grids and dependence on imported fuel.
The Department of Energy’s electrification plans continue to identify off-grid and underserved areas requiring grid extensions, stand-alone systems or microgrids. Connection also does not necessarily mean dependable or affordable power. Philippine residential and industrial tariffs remain high relative to several neighboring economies (Department of Energy [DOE], 2025; World Bank, 2025).
Reliable electricity is not merely a social service attached to industrialization. It is one of industrialization’s fundamental inputs.
The state should therefore treat universal, affordable and reliable power as its first industrial project. This requires indigenous renewable generation, geothermal development, grid-scale storage, stronger transmission, resilient regional systems, island microgrids and modernized distribution.
The country’s geography does not necessarily require one physically unified grid at any cost. It justifies a combination of interconnected regional grids, microgrids and distributed generation. What matters is that households, farms, ports, hospitals, schools and industrial areas receive dependable electricity at prices compatible with productive development.
The fact that government can contemplate dedicated power on the scale discussed for Pax Silica demonstrates that the constraint is not purely technical. It is also political. Extraordinary coordination appears possible when foreign investors are involved, while universal productive electrification remains gradual and fragmented.
The correct sequence is to strengthen the national electricity system first. Advanced factories can then connect to a system developed for the country as a whole rather than operate inside a privileged island of reliability surrounded by a more expensive and vulnerable economy.

Second Task: An Archipelagic Transport System

An archipelagic railway should not be understood as one uninterrupted track physically joining every island. It should be an integrated rail-maritime network: railway spines on the major islands connected to ports, roll-on/roll-off routes, ferries, airports, logistics centers and urban mass transit.
The Philippine Development Plan recorded only four operational railway lines with a combined length of 76.9 kilometers at the beginning of the current planning period. Major projects have since entered construction or development, but the country remains far from having a national passenger and freight system (National Economic and Development Authority [NEDA], 2022).
The objective should be regional rail corridors in Luzon, Panay, Negros, Cebu and Mindanao integrated with modern ports and scheduled maritime services. Rail should connect industrial districts not only to export terminals but also to farms, mines, population centers and domestic markets.
Such a system would do more than improve passenger convenience. It would lower logistics costs, enlarge the effective domestic market and make it easier for Philippine manufacturers to serve customers outside their immediate regions. It would also make farm clustering, storage and food processing more viable by connecting producers with wholesale markets and urban demand.
Transportation planning should integrate freight rail, commuter systems, ports, housing and land use instead of treating each project as an isolated concession.
The country’s maritime and diaspora experience should be incorporated into this program. Filipino seafarers, engineers, construction professionals and logistics workers already participate in sophisticated systems abroad. Return fellowships, professional-transfer programs and productive investment instruments could turn the diaspora from a source of remittances into a distributed reserve of technological and managerial knowledge.

Third Task: Housing Connected to Economic Life

The official Philippine housing requirement has long been estimated at more than 6.5 million units. But the problem is not merely a shortage of structures. Housing built without transportation, employment, water, schools, clinics and commercial services may provide a formal unit while imposing an economically unsustainable daily life on its occupants (Department of Human Settlements and Urban Development [DHSUD], 2023).
Mass housing should therefore be treated as an industrial and urban-development program rather than a real-estate afterthought.
Public housing should be built around existing or planned railways, ports, industrial districts, universities and employment centers. It should use durable standardized components produced by Philippine cement, steel, glass, electrical-equipment, furniture and appliance manufacturers.
This would convert housing expenditure into industrial demand. Rather than subsidizing isolated land development and mortgages alone, the state would use mass construction to support materials industries, train workers and create scale for prefabrication, energy-efficient buildings and locally designed urban systems.
Transit-oriented development seeks to concentrate jobs, housing and services around public transportation. International experience indicates that this approach can improve accessibility, productivity and urban livability when transportation and land-use planning are integrated (World Bank, 2017).
Housing built in the middle of nowhere does not solve the housing problem. It transfers part of the cost from the housing budget to the family’s transportation expenses and lost time. A worker who spends several hours traveling from a remote relocation site to employment has not been fully housed in an economic sense.

Land Reform Through Cooperative Scale

Domestic-first industrialization also requires a revision of agrarian policy. This should not mean reversing land redistribution or rebuilding landlord estates. Secure tenure remains essential.
The problem is that the subdivision of agricultural land into very small, economically isolated holdings may obstruct mechanization, irrigation planning, storage, processing and collective marketing. The alternative is not corporate reconcentration but voluntary cooperative scale.
Farmers should retain ownership or secure tenure while pooling selected operations through cooperatives, block farming, machinery associations, producer companies and water-user organizations. The purpose is to give smallholders access to the scale required for modern production without stripping them of land or bargaining power.
The World Bank has found that clustering small farmers into cooperatives and other producer organizations can improve incomes and market access. Cooperative organization, however, is not sufficient by itself. It must be supported by irrigation, machinery, credit, storage, cold chains, agricultural research and reliable markets. Participation should remain voluntary, transparent and protected from political capture (World Bank, 2021).
Land reform should move beyond the distribution of titles as its principal measure of success. It should develop farmer-owned enterprises capable of buying machinery, operating mills and processing plants, negotiating input prices and supplying public institutions.
Agriculture should also become part of industrial policy. The country should manufacture irrigation equipment, dryers, milling machines, cold-storage systems, fertilizers, transport equipment and food-processing machinery.
Agriculture is not the sector that industrialization leaves behind. Properly understood, it is one of industrialization’s largest potential domestic markets.

Vertically Integrating Existing Advantages

The Philippines does not begin from zero. The central task is to connect strengths that are currently dispersed or subordinated to foreign demand.
In semiconductors, the country should use its experience in assembly, testing and packaging as the foundation for movement into advanced packaging, power electronics, sensors, testing equipment, industrial software and integrated-circuit design. Immediately attempting to reproduce the world’s most advanced fabrication plants would be financially unrealistic. Building adjacent capabilities is not.
Shared clean rooms, prototype facilities and testing laboratories should be accessible to universities and Filipino companies. Government procurement of telecommunications systems, railway electronics, grid equipment, medical devices and agricultural technology can provide early markets for domestic designs.
The OECD itself recommends a long-term national semiconductor strategy, improved logistics and electricity, stronger public and private research, access to technological infrastructure, industry-university collaboration and greater use of the Filipino diaspora (OECD, 2024).
In shipping, the Philippines should move from supplying seafarers to constructing and repairing more of the vessels they operate. Maritime labor expertise should be connected to domestic shipyards, marine engineering, navigation software, port equipment, ferries and coastwise logistics.
In mining, the objective should be progression from ore extraction into metallurgy, industrial chemicals, electrical equipment, battery materials and machinery. Processing should support Philippine grid expansion, public transportation, shipbuilding, telecommunications and construction rather than be committed almost entirely to foreign customers.
The technical diaspora should be mobilized through return programs, research appointments, industrial bonds, matching investment funds and professional exchanges. Overseas Filipinos need credible vehicles for investing in productive enterprises rather than being directed predominantly toward property and consumption.
These sectors should reinforce one another. Domestic mining can supply electricity and transportation projects. Reliable power can support machinery and semiconductor production. An integrated transportation system can lower costs for agriculture and industry. Mass housing can create demand for domestic materials and appliances. Cooperatives can supply food-processing companies and urban markets.
That is vertical integration at the level of the national economy.

ASEAN Hedging and Strategic Autonomy

Rejecting Pax Silica does not require a return to China-centered mineral dependence. A third course is available: diversified engagement without exclusive alignment.

The constitutional foundation is clear. Article II, Section 7 of the 1987 Constitution requires an independent foreign policy in which national sovereignty, territorial integrity, national interest and self-determination are paramount. Section 19 directs the state to develop a self-reliant and independent national economy effectively controlled by Filipinos (Constitution of the Republic of the Philippines, 1987).

These provisions do not prohibit foreign investment. They require government to determine the role of foreign capital according to Philippine objectives.

In international-relations scholarship, hedging refers to insurance-seeking behavior under conditions of high uncertainty and high stakes. Rather than fully balancing against one power or bandwagoning with another, a smaller state diversifies relationships, avoids irreversible dependence and preserves fallback positions (Kuik, 2021).

Hedging should not mean passivity or moral equivalence. The Philippines can defend its rights in the West Philippine Sea, resist Chinese coercion and maintain its defense relationship with the United States while refusing to place its mineral and industrial policy inside a Washington-led coalition.

It can accept American investment without granting exclusive access. It can consider Chinese investment in screened civilian projects without compromising maritime claims. It can acquire Japanese, Korean and European technology without allowing any one state to dominate strategic infrastructure.

The ASEAN Outlook on the Indo-Pacific offers an institutional vocabulary for this position. It emphasizes ASEAN centrality, inclusivity, respect for sovereignty and cooperation rather than zero-sum rivalry. ASEAN’s post-2025 vision similarly calls for resilience, connectivity, technological advancement and broad external partnerships (Association of Southeast Asian Nations [ASEAN], 2019, 2025).

The governing principle should be straightforward: cooperate with many, depend completely on none.

An ASEAN Critical Technologies and Minerals Framework

Instead of assigning New Clark City to Pax Silica, Manila should propose an ASEAN Critical Technologies and Minerals Framework.

The framework would not require a centralized regional planning bureaucracy. It could begin as a set of compatible standards and joint projects among willing member states, supported through ASEAN Plus Three and separate partnerships with the United States, Europe, India and Australia.

ASEAN governments could coordinate mineral traceability, environmental rules, strategic reserves, recycling, research funding and emergency supply. They could identify complementary industrial functions without permanently assigning each member state a subordinate place in an external power’s production hierarchy.

Indonesia and the Philippines could cooperate on nickel, metallurgy and battery materials. Malaysia and Singapore could contribute semiconductor design, fabrication services, finance and logistics. Thailand and Vietnam could provide automotive, electronics and machinery capacity. Regional research funds could support laboratories and technology licenses accessible to companies from several ASEAN economies.

External partners would compete to provide technology and capital within an ASEAN-led system. Japanese firms could participate in precision machinery, robotics and materials science. South Korean firms could contribute semiconductor, battery, shipbuilding and heavy-industrial technologies. American companies could provide chip design, software, aerospace and advanced computing. Chinese companies could participate in mineral processing, transportation, renewable energy and telecommunications under strict competition, cybersecurity and national-security rules.

Diversification would not eliminate foreign influence. It would improve bargaining power. An investor demanding excessive legal protection, exclusive access to minerals or weak domestic-content rules could be replaced by another partner.

ASEAN is not presently capable of replacing national industrial policy. Its consensus procedures, political differences and uneven development impose serious limitations. It can nevertheless provide diplomatic cover, common standards, pooled research and a larger market through which individual states preserve greater autonomy.

A Philippine ITRI and Public-Private Industrial Companies

The Philippines needs an institution comparable in ambition, though not necessarily identical in structure, to Taiwan’s ITRI.

Existing universities and government science agencies perform valuable work, but public industrial research remains fragmented and chronically underfunded. A Philippine Industrial Technology and Research Institute should be tasked specifically with acquiring foreign technology, developing prototypes, training engineers, operating shared pilot facilities and spinning off commercial companies.

It should not become another agency that produces studies without industrial authority. It would require multiyear financing, specialized laboratories, international recruitment, flexible procurement and the ability to acquire equity in companies emerging from publicly funded research.

A semiconductor program could begin with advanced packaging, sensors, power electronics, testing equipment and chip design rather than attempting immediately to reproduce leading-edge fabrication. Shared facilities should be accessible to universities and Filipino companies instead of being monopolized by multinational locators.

The public sector should also become an intelligent industrial customer. Government procurement of transportation electronics, energy systems, communications equipment, medical devices, agricultural machinery and housing components can provide early demand for domestic companies.

Domestic firms receiving public finance, protection or procurement must be disciplined by performance targets. Filipino ownership must not become a subsidy for oligarchy. Assistance should depend on investment, innovation, labor standards, environmental compliance and eventual competitiveness.

Domestic-first industrialization is not the replacement of a foreign corporation with a local rent-seeker. It is the construction of companies capable of learning, producing and competing.

Historical Industrialization Without Historical Repression

A deliberately provocative comparison can be made with Meiji Japan, Bismarckian Germany, the France of Napoleon III and Soviet industrialization under Stalin. These cases involved radically different institutions, political systems and human consequences. None should be copied literally.

The Soviet Experience: Planning and Development as Policy
The Soviet experience demonstrated with unusual clarity how development could be treated as a deliberate function of state policy rather than as the incidental outcome of private investment and market exchange. Electrification, industrialization, agricultural reorganization, mass literacy, technical education, public health and scientific research were conceived as interconnected parts of a national project. The objective was not merely to increase output, but to overcome inherited backwardness by mobilizing labour, capital, technology and administrative capacity toward a defined transformation of the productive structure.
Lenin expressed this conception most memorably when he declared that “Communism is Soviet power plus the electrification of the whole country.” Electrification was not regarded simply as another infrastructure program. It was the technical foundation upon which industry, transport, communications and mechanized agriculture could be constructed. Lenin insisted that political decrees alone could not produce socialism: without the reconstruction of industry on the basis of modern technology, socialist construction would lack an independent material foundation. The electrification program therefore had to become an “all-over plan covering many years,” coordinating the activities of the state, scientific institutions, industrial enterprises and regional authorities around a single developmental objective (Lenin, 1920a).
This conception was already apparent in Lenin’s 1918 instructions for scientific and technical planning. He called for the systematic study of Russia’s productive resources, the rational geographical distribution of industry, the concentration of production where appropriate, national access to essential raw materials and “special attention to the electrification of industry and transport.” Development, in this formulation, required the state to coordinate projects that private investors might otherwise undertake separately, unevenly or not at all. Power stations, mines, railways, machine-building plants and agricultural modernization had to be planned as complementary components of one economic system rather than as isolated commercial ventures (Lenin, 1918).
The Soviet project also recognized that machinery and infrastructure were insufficient without the cultivation of human capabilities. Lenin urged the government to “bring more engineers and agronomists to the fore” and to transform political institutions into bodies capable of measuring economic results and learning the practical work of development (Lenin, 1920b). He similarly told the Communist Youth League that its central task could be summarized in one word: “learn.” Modern industry, he argued, required literacy, science, technical education and the assimilation of accumulated human knowledge. What would now be described as investment in human capital was therefore treated as an essential part of economic construction rather than merely as a social benefit added after growth had occurred (Lenin, 1920b; Lenin, 1920c).
Lenin also linked socialism to a broader cultural transformation. The organization of peasants into cooperatives, he argued, required a sufficiently high standard of education, administration and material development. Social transformation could not be secured merely by changing formal ownership; it required what he called a “cultural revolution,” supported by literacy, organizational capacity and an adequate productive base (Lenin, 1923). In this sense, Soviet development was intended to produce not only factories and power stations but also the trained workers, teachers, doctors, engineers, administrators and scientists capable of operating a modern economy.
Under Stalin, this developmental logic became more urgent, centralized and coercive. Stalin presented accelerated industrialization as a matter of national survival: “We are fifty or a hundred years behind the advanced countries. We must make good this distance in ten years.” Backwardness, in this interpretation, left the Soviet Union economically dependent and militarily vulnerable. The state therefore had to compress into a decade a transformation that had taken older industrial powers several generations to accomplish. Heavy industry, machine-building, energy, transport and military production were privileged because they were understood as the sectors capable of reproducing and expanding the remainder of the economy (Stalin, 1931).
Collectivization formed part of this strategy because the Soviet leadership wanted to increase state control over agricultural surpluses, consolidate fragmented farms and facilitate mechanization. Stalin described collective farms as the “principal base for the employment of machinery and tractors in agriculture” (Stalin, 1929). In theory, larger agricultural units could support mechanization, release labour for the cities and provide grain for a rapidly growing industrial workforce.
The central feature of the Soviet model was consequently the enforced mobilization of resources for rapid structural transformation and national independence. Consumption was subordinated to accumulation; agricultural surpluses were redirected toward urban industry; state credit was concentrated in priority sectors; and scientific, educational and administrative institutions were reorganized around the requirements of economic construction. The state invested in activities that generated few immediate profits but possessed large strategic consequences: steel, electricity, transport, machine tools, technical education and research.
This demonstrated an important developmental principle. A poor and predominantly agrarian country could not necessarily rely upon scattered market incentives to create an integrated industrial system. Private capital might concentrate on commerce, raw-material exports, luxury consumption or activities promising quick returns, while neglecting power generation, basic industry, scientific research and nationwide education. State planning made it possible to direct investment toward complementary long-term projects and, as Stalin later explained, to rely upon the country’s internal resources rather than dependence on foreign lenders or colonial extraction.

The American School: Cultivating, Protecting Industry as Self-Determination

However, another historical tradition more directly relevant to a constitutional republic: the American School of political economy associated with Alexander Hamilton and Henry Clay and later systematized into a broader theory of national productive power by Friedrich List.
In his 1791 Report on the Subject of Manufactures, Hamilton argued that the newly independent United States should develop manufacturing partly to avoid dependence on foreign countries for military and other essential supplies. He also maintained that domestic manufacturing would enlarge the market for agriculture, diversify employment and increase the nation’s general stock of productive labor (Hamilton, 1791).
Henry Clay later organized related ideas into the American System. Its elements included protective tariffs for developing industries, a national financial institution and federally supported roads, canals and other internal improvements. The program was intended to connect the productive regions of the country and reduce economic subordination to established British manufacturing (U.S. House of Representatives, Office of the Historian, 1824).
Friedrich List, who lived in the United States during the 1820s, later distinguished a nation’s immediate exchange values from its longer-term productive powers: knowledge, institutions, infrastructure, machinery, technical skills and the capacity for coordinated production. A developing country, in his view, could rationally accept some short-term costs in order to acquire the productive capabilities necessary for future welfare and independence (List, 1841/1909).
Hamilton, Clay and List did not employ the modern postcolonial vocabulary of self-determination. Their argument nevertheless rested on a closely related material proposition: formal political independence remains incomplete when a country depends on more powerful foreign economies for essential manufactures, transportation, credit and technology.
Productive capacity, in this sense, is a condition of substantive sovereignty. General welfare cannot be secured by consumption and commerce alone. It requires the ability to organize domestic production and connect it to the needs of the national community.
The American School also corrects the claim that state-led industrialization must necessarily imitate Soviet central planning. Hamiltonian and Clayite development was articulated within a constitutional republic, albeit one marked by slavery, restricted suffrage and profound social exclusions. Its lasting contribution is not a model to be copied mechanically, but the recognition that public authority may legitimately coordinate finance, infrastructure and industrial development when fragmented private decisions cannot create the productive system required by the country as a whole.

The other historical cases reinforce the same narrower conclusion. Meiji Japan imported technology, expanded technical education, built transportation and communications systems and established state enterprises before transferring many activities to domestic private companies. Nineteenth-century Germany used banks, railways, technical institutions and state coordination to compress industrial development. Napoleon III’s France expanded credit, railways, public works and urban infrastructure. Soviet planning demonstrated that an agrarian economy could construct heavy industry rapidly, although it did so through coercion and suffering that must be rejected rather than romanticized (Allen, 2003; Gerschenkron, 1962).

The common lesson is neither protectionism for its own sake nor unlimited state control. It is that late industrialization requires sequencing, institutional construction and continuity. Governments must build the enabling systems—electricity, transportation, credit, research, technical education and domestic markets—through which public and private enterprises acquire increasingly complex capabilities.

Industrial protection should therefore be conditional and temporary rather than a permanent shelter for politically connected companies. Public credit should finance productive investment rather than speculation. State enterprises and public-private ventures should be evaluated according to technological learning, domestic linkages and their ability eventually to compete.

National development cannot become a pretext for oligarchic privilege any more than it can justify authoritarian repression.

The Philippine establishment has repeatedly tried to avoid this institutional discipline. It prefers investment announcements to production timetables, export estates to national coordination and private concessions to patient public planning. It is attracted to data centers and artificial intelligence because they appear to offer entry into the technological frontier without first completing electrification, transportation, housing, agricultural modernization and domestic manufacturing.

That is the recurring shortcut: the belief that the Philippines can skip the rudiments and proceed directly to the showcase project.

Hamilton, Clay and List would have recognized the error. A country does not obtain economic independence by importing a finished industrial system and renting it a site. It obtains independence by developing the productive powers that allow its own institutions and enterprises progressively to understand, reproduce and direct that system.

A Ten-Year Industrial Timetable

A credible alternative to Pax Silica should be expressed through measurable commitments rather than general aspirations.

During the first five years, government should complete remaining household electricity connections, improve reliability, expand indigenous generation and storage and begin major transmission and microgrid projects. It should establish transportation institutions capable of executing integrated railway and maritime corridors rather than isolated projects.

Transit-oriented public housing should begin in major metropolitan and industrial regions. Housing procurement should support Philippine cement, steel, glass, electrical-equipment, furniture and appliance production.

A Philippine industrial-technology institute should open shared facilities for semiconductor packaging, power electronics, sensors, agricultural machinery and marine engineering. Agrarian policy should expand voluntary clustering, block farming and farmer-owned processing enterprises around irrigation systems and agrarian-reform communities.

During the second five years, operating railway and maritime corridors should be extended, domestic mineral processing deepened and a larger proportion of grid, transportation and housing equipment produced locally. Semiconductor companies should move further into design, advanced packaging, testing equipment and power electronics.

Foreign investors would remain part of this program. But they would participate as technology and capital partners within a Philippine timetable rather than becoming the authors of that timetable.

Government should publish annual physical targets: households receiving reliable electricity, megawatts of dependable capacity, kilometers of railway completed, port turnaround times, housing units occupied near transportation, hectares under voluntary cooperative operations, domestic-procurement shares, patents developed and Filipino companies entering new industrial stages.

Industrial policy would cease to be measured primarily through investment pledges and gross export figures.

Common Rules for All Foreign Capital

Investors from the United States, China, Japan, South Korea, Israel, Europe and elsewhere should operate under the same basic conditions.

Projects involving strategic minerals, semiconductors, electricity, telecommunications or data infrastructure should include meaningful Filipino public or private equity where economically feasible. Representation should extend beyond nominal shareholding to board participation, technical management and engineering authority.
Domestic-procurement obligations should increase over time. They should cover machinery parts, chemicals, software, engineering, maintenance and substantive industrial inputs rather than merely construction, catering and security.
Research commitments should be contractual. Investors receiving public support should establish laboratories with Philippine universities, finance postgraduate technical education and provide access to equipment and production processes. Publicly subsidized research should generate Philippine licensing rights, joint intellectual property or equity claims.
Strategic facilities should reserve part of their output or capacity for domestic requirements during shortages and emergencies. A publicly supported factory should not be contractually incapable of supplying the Philippine economy because its entire production has been promised abroad.
Tax holidays, discounted leases and infrastructure support should be conditional. They should be reduced or withdrawn when companies fail to meet investment, employment, research, localization, labor or environmental targets.

These requirements may cause some investors to locate elsewhere. That should not automatically be considered a failure. Investment that depends on cheap labor, weak domestic linkages, unpriced ecological costs and unrestricted profit extraction may increase gross exports without creating sufficient national value.

Build the Country Before the Enclave

Pax Silica offers a seductive vision: artificial intelligence, clean rooms, data infrastructure, advanced factories and processed minerals replacing the familiar economy of raw-material exports, labor migration and outsourced services.

Its weakness is not that these technologies are undesirable. It is that the initiative begins from the industrial and security requirements of an external coalition.

The Philippine alternative should begin with national requirements. It should begin with reliable and affordable electricity for every community and productive enterprise. It should build an archipelagic rail, port and maritime system capable of creating a unified domestic market. It should construct durable housing around employment and public transportation rather than on isolated peripheral land. It should preserve land reform while providing farmers with cooperative scale, machinery and processing capacity.
It should connect semiconductor assembly to design and equipment; seafaring to shipbuilding and logistics; mining to metallurgy and national infrastructure; agriculture to machinery and food processing; and the diaspora to research, investment and technological return.

These tasks are not preliminary distractions from an artificial-intelligence economy. They are the material foundations of one.

The Philippines should not accept the false choice between exporting raw ore into a China-centered industrial system and exporting semi-processed minerals and electronic components into an American-centered one. It should trade with both, cooperate with Japan and South Korea, bargain through ASEAN and build capabilities that remain under Philippine authority.

Pax Silica represents the establishment’s continuing affection for shortcuts. It promises the visible symbols of advanced industry without requiring the state to complete the foundational systems that make industry nationally transformative.

The country does not need another serviced compound built principally for global demand. It needs a developmental state capable of setting priorities, meeting timetables and using foreign partnerships without becoming subordinate to them.

Philippine industrial policy should remain open to the world but commanded at home.

Only then will the country’s minerals, labor and strategic location cease to be advantages enjoyed primarily by others.

***

References

Amnesty International. (2025, August 21). USA/global: Tech made by Palantir and Babel Street pose surveillance threats to pro-Palestine student protesters and migrants. https://www.amnesty.org/en/latest/news/2025/08/usa-global-tech-made-by-palantir-and-babel-street-pose-surveillance-threats-to-pro-palestine-student-protestors-migrants/

ASML. (2026a). ASML 2025 annual report. https://www.asml.com/en/investors/annual-report/2025

ASML. (2026b). Innovation ecosystem. https://www.asml.com/en/company/sustainability/innovation-ecosystem

ASML, & imec. (2024, June 3). ASML and imec open joint High NA EUV Lithography Lab offering an early development platform to the leading-edge semiconductor ecosystem. https://www.asml.com/news/press-releases/2024/asml-imec-opening-high-na-euv-lithography-lab

Association of Southeast Asian Nations. (2019). ASEAN outlook on the Indo-Pacific. https://asean.org/wp-content/uploads/2021/01/ASEAN-Outlook-on-the-Indo-Pacific_FINAL_22062019.pdf

Association of Southeast Asian Nations. (2025). ASEAN 2045: Our shared future. https://asean.org/wp-content/uploads/2025/05/ASEAN-2045-Our-Shared-Future.pdf

Bases Conversion and Development Authority. (2026, April 9). Letter to the U.S. Department of State regarding the Pax Silica proposal [Letter]. https://boi.gov.ph/wp-content/uploads/2026/05/BCDA-Letter-to-US-Dept-of-State-re-Pax-Silica-Proposal_.pdf

Board of Investments. (2026a, April 20). Philippines, US partner in first-ever AI-native industrial acceleration. https://boi.gov.ph/philippines-us-partner-in-first-ever-ai-native-industrial-acceleration/

Board of Investments. (2026b, May 4). Philippines-Israel deepen strategic cooperation on critical minerals and AI development under Pax Silica, to forge framework. https://boi.gov.ph/philippines-israel-deepen-strategic-cooperation-on-critical-minerals-and-ai-development-under-pax-silica-to-forge-framework/

Chi, C. (2026, May 26). US official says immunity for Pax Silica Clark hub “taken out of context.” Philstar.com. https://www.philstar.com/business/2026/05/26/2530687/us-official-says-immunity-pax-silica-clark-hub-taken-out-context

Constitution of the Republic of the Philippines, art. II, §§ 7, 19 (1987).

Department of Energy. (2025). Missionary Electrification Development Plan 2024–2028. https://doe.gov.ph/articles/2515482--missionary-electrification-development-plan-medp-2024-2028

Department of Human Settlements and Urban Development. (2023). The Shelter: Official quarterly publication of the Department of Human Settlements and Urban Development. https://dhsud.gov.ph/wp-content/uploads/Publication/shelter/The%20Shelter%20March%20Issue%20updated%20as%20of%20071923%20-%20replace%20the%20old%20file.pdf

European Commission. (2023, April 28). State aid: Commission approves French measure to support STMicroelectronics and GlobalFoundries in building a new chip manufacturing facility. https://france.representation.ec.europa.eu/informations-et-evenements/informations/la-commission-autorise-une-mesure-francaise-visant-aider-stmicroelectronics-et-globalfoundries-2023-04-28_en

European Commission. (2024a, August 20). Commission approves €5 billion German State aid measure to support ESMC in setting up a new semiconductor manufacturing facility. https://digital-strategy.ec.europa.eu/en/news/commission-approves-eu5-billion-german-state-aid-measure-support-esmc-setting-new-semiconductor

European Commission. (2026a). European Chips Act. https://digital-strategy.ec.europa.eu/en/policies/european-chips-act

Gerschenkron, A. (1962). Economic backwardness in historical perspective. Harvard University Press.

Government of the Netherlands. (2024, September 6). The Netherlands expands export control measure for advanced semiconductor manufacturing equipment. https://www.government.nl/latest/news/2024/09/06/the-netherlands-expands-export-control-measure-advanced-semiconductor-manufacturing-equipment

Government of the Netherlands. (2025, January 15). Export controls on advanced semiconductor manufacturing equipment to be tightened. https://www.government.nl/latest/news/2025/01/15/klever-export-controls-on-advanced-semiconductor-manufacturing-equipment-to-be-tightened

Government of the Netherlands. (2026). National semiconductor vision 2035: Ambitions for the Dutch semiconductor industry. https://www.government.nl/documents/2026/04/01/national-semiconductor-vision-2035---ambitions-for-the-dutch-semiconductor-industry

Hamilton, A. (1791, December 5). Report on the subject of manufactures. Founders Online, National Archives. https://founders.archives.gov/documents/Hamilton/01-10-02-0001-0007

IBON Foundation. (2026, May 14). Will Pax Silica industrialize the Philippines? https://www.ibon.org/will-pax-silica-industrialize-the-ph/

IDA Ireland. (2022, March 9). Analog Devices announces investment of €630 million in semiconductor R&D and manufacturing facility. https://www.idaireland.com/latest-news/press-release/analog-devices-announces-investment-of-630-million-in-semiconductor-r-d-and-manufacturing-facility

IDA Ireland. (2023, September 29). IDA Ireland welcomes Intel’s Fab 34. https://www.idaireland.com/latest-news/press-release/ida-welcome-intel%E2%80%99s-fab-34

IDA Ireland. (2024, June 24). Inside the rise of the semiconductor industry. https://www.idaireland.com/latest-news/insights/chips-with-everything-ireland%E2%80%99s-semiconductor-story

Industrial Technology Research Institute. (n.d.). Developing semiconductors from scratch: Taiwan’s semiconductor industry hall of fame. https://50th.itri.org.tw/en/history/semiconductors/2/

Intel Corporation. (2023, June 19). Intel, German government agree on increased scope for wafer fabrication site in Magdeburg. https://newsroom.intel.com/corporate/intel-german-government-agree-magdeburg

Intel Corporation. (2025, July 24). Steps in the right direction. https://newsroom.intel.com/corporate/lip-bu-tan-steps-in-the-right-direction

Jarabe, L. G. (2026, June 27). Jobs and Pax Silica: The song remains the same. IBON Foundation. https://www.ibon.org/jobs-and-pax-silica/

Kuik, C.-C. (2021). Getting hedging right: A small-state perspective. China International Strategy Review, 3(2), 300–315. https://doi.org/10.1007/s42533-021-00089-5

Lenin, V. I. (1918). Draft plan of scientific and technical work. In Collected works.

Lenin, V. I. (1920a, November 21). Our foreign and domestic position and Party tasks: Speech delivered to the Moscow Gubernia Conference of the R.C.P.(B.).

Lenin, V. I. (1920b, December 29). Eighth All-Russia Congress of Soviets: Report on the work of the Council of People’s Commissars.

Lenin, V. I. (1920c, October 2). The tasks of the Youth Leagues. In Collected works (Vol. 31).

Lenin, V. I. (1923, January 6). On cooperation. In Collected works (Vol. 33).

List, F. (1909). The national system of political economy (S. S. Lloyd, Trans.). Longmans, Green, and Co. (Original work published 1841)

Marcos, F. R., Jr. (2026, July 27). Fifth State of the Nation Address of His Excellency Ferdinand R. Marcos Jr., President of the Philippines, to the Congress of the Philippines [Speech transcript]. Presidential Communications Office.

National Academies of Sciences, Engineering, and Medicine. (2024). Strategies to enable assured access to semiconductors for the Department of Defense. The National Academies Press. https://doi.org/10.17226/27624

National Economic and Development Authority. (2022). Philippine Development Plan 2023–2028: Chapter 12—Expand and upgrade infrastructure. https://pdp.neda.gov.ph/wp-content/uploads/2022/12/Chapter-12.pdf

Organisation for Economic Co-operation and Development. (2024). Promoting the growth of the semiconductor ecosystem in the Philippines. OECD Publishing. https://doi.org/10.1787/01497fea-en

Philippine News Agency. (2026a, March 26). PH nickel sector seen to expand role in global supply chains. https://www.pna.gov.ph/articles/1271834

Philippine News Agency. (2026b, July 28). DOE drafting circular for Pax Silica power requirement. https://www.pna.gov.ph/articles/1280533

Piedad, M. (2026, April 23). The curious case of Philippine manufacturing. IBON Foundation. https://www.ibon.org/the-curious-case-of-ph-manufacturing/

Presidential Communications Office. (2026, July 23). BCDA says Pax Silica project could generate over 130,000 high-quality jobs. Philippine Information Agency. https://pia.gov.ph/news/bcda-says-pax-silica-project-could-generate-over-130000-high-quality-jobs/

Stalin, J. V. (1929, December 27). Concerning questions of agrarian policy in the U.S.S.R.

Stalin, J. V. (1931, February 4). The tasks of business executives.

Stalin, J. V. (1933, January 7). The results of the first Five-Year Plan.

Taiwan Semiconductor Manufacturing Company Limited. (2001). Form 20-F for the fiscal year ended December 31, 2000. https://investor.tsmc.com/sites/ir/sec-filings/20F-2000.pdf

U.S. Department of State. (2025a, December 11). Pax Silica initiative. https://www.state.gov/releases/office-of-the-spokesperson/2025/12/pax-silica-initiative

U.S. Department of State. (2025b). Jacob Helberg. https://www.state.gov/biographies/jacob-helberg

U.S. Department of State. (2026a). Pax Silica. https://www.state.gov/pax-silica

U.S. House of Representatives, Office of the Historian. (1824, March 30–31). The 1824 “American System” speech by Speaker Henry Clay of Kentucky. https://history.house.gov/HistoricalHighlight/Detail/36803

Westphal, L. E. (1990). Industrial policy in an export-propelled economy: Lessons from South Korea’s experience. Journal of Economic Perspectives, 4(3), 41–59. https://doi.org/10.1257/jep.4.3.41

World Bank. (2017). Transforming the urban space through transit-oriented development: The 3V approach. https://www.worldbank.org/en/topic/transport/publication/transforming-the-urban-space-through-transit-oriented-development-the-3v-approach

World Bank. (2021, December 3). Strong producer organizations key to a vibrant farming sector. https://www.worldbank.org/en/news/press-release/2021/12/03/strong-producer-organizations-key-to-a-vibrant-farming-sector

World Bank. (2025). Philippines first energy transition and climate resilience development policy loan. https://documents1.worldbank.org/curated/en/099031025103522782/pdf/BOSIB-9d7c5271-5bf1-4f52-9622-889d8db8bf82.pdf

The Cross, The Sword, and the Estate that Justifies in it

2026-07-31T10:14:58.148-07:00

The Cross, The Sword, and the Estate that Justifies in it

There is a certain kind of colonial nostalgia that mistakes monuments for benevolence, obedience for consent, and religious faith for approval of the political system under which that faith was propagated. It points to churches, schools, hospitals, surnames, fiestas and devotional practices, and from these concludes that Spanish rule was essentially charitable and that Filipino resistance arose chiefly from Freemasonry, liberal propaganda and historical ingratitude.

Such an account is persuasive only when three centuries of colonial history are compressed into a single devotional tableau: the missionary teaching the catechism, the grateful indio kissing his hand, and “Mother Spain” presiding benevolently over both. Once the institutions of colonial government are examined, however, the tableau becomes considerably less innocent.

The problem is not that the religious orders accomplished nothing of value. The Dominicans founded the institution that became the University of Santo Tomas in 1611; missionaries produced grammars, dictionaries and devotional works in local languages; the Doctrina Christiana of 1593 remains the earliest known book printed in the Philippines; and religious foundations supported hospitals, schools, orphanages and other obras pías. These were substantial contributions and should not be erased merely because they were made under colonial rule.

But neither should charitable works be used as moral indemnity for political domination. A hospital did not cancel an unlawful exaction. A school did not excuse censorship. A church did not justify the suppression of the Filipino clergy. The performance of a friar’s religious duties could not absolve a system that transformed the parish priest into landlord, censor, electoral supervisor, police adviser and political informant.

That distinction—between missionary work and institutional power—is the point colonial apologetics habitually avoids.

Frailocracy was not a Fictional Creation

The term frailocracy did not mean that every friar was personally corrupt, violent or sexually immoral. It referred to a political arrangement in which the regular clergy, because of their permanence, organization, linguistic knowledge and proximity to the population, acquired powers far exceeding those of ordinary parish ministers.

Spanish governors-general, provincial officials and military officers ordinarily served limited terms. The friar-curate, by contrast, could remain in one locality for decades. He knew its families, landholdings, quarrels, tax records and political alignments. The colonial state, chronically undermanned and weak at the municipal level, therefore made the curate its indispensable intermediary.

The extent of this authority was acknowledged not merely by Rizal or Marcelo H. del Pilar but by Father Juan Villegas, provincial of the Franciscans, in testimony before the Philippine Commission in 1900. The parish priest inspected primary schools, sat on taxation and health boards, certified civil status and character, examined pupils, advised municipal councils, supervised the selection of police and censored plays. “By law the priest had to be present when there were elections for municipal duties,” Villegas testified.

These were not sacramental functions. They were functions of government. The priest possessed influence over a person’s cédula, tax status, school record, reputation and eligibility for local office. Parish registers served in place of an independent civil registry. Municipal budgets passed under clerical scrutiny. Certificates of character, especially in cases involving alleged disloyalty, could determine whether an individual was treated as a respectable subject or as a filibustero.

Marcelo H. del Pilar may have written as a partisan, but his description corresponded closely to this administrative structure: “The parish priest has no vote in these elections, but controls them because in his hands is the veto power.”

The essential abuse lay not simply in the occasional misconduct of a wicked priest. It lay in the absence of effective boundaries. The same man who heard confessions could influence police action; the same man who preached obedience could report political disaffection; the same religious corporation that instructed tenants in Christian morality could collect rents from them and contest their claims in courts administered by the colonial state.

This concentration of authority made private virtue an inadequate safeguard. A benevolent curate might use such power kindly. A vindictive one could use it ruinously. In either case, the townspeople possessed few institutional means of compelling accountability.

Patronato Real: When Religion is Used as State Instrument

The political foundation of frailocracy was the Patronato Real, the system by which the Spanish Crown financed and protected the colonial Church while exercising extensive control over appointments, territories and ecclesiastical administration. Church and state were not merely cooperating institutions. They had become interdependent components of the imperial order.

John N. Schumacher, himself a Jesuit priest and one of the foremost historians of nineteenth-century Philippine Catholicism, rejected the simplistic notion that nationalist hostility could be explained solely by lurid stories of individual friar misconduct. The deeper cause, he argued, was the “intermingling of the political and the religious” under the Patronato.

Spanish officials occasionally stated the principle with remarkable candour. Governor-General Valeriano Weyler wrote in 1891 that religion in Luzon and the Visayas should be used as “a means of government.” Rafael Izquierdo likewise conceded that the orders had “defects,” “vices” and “difficulties,” but maintained that their devotion to Spain and influence over the natives made them politically indispensable.

This admission is fatal to the romantic argument. The friars were supported not simply because they administered the sacraments or fed the hungry. They were protected because the colonial authorities regarded popular Catholic devotion as an instrument for maintaining Spanish sovereignty.

The Cross did not merely accompany the Sword. It was made to perform some of the Sword’s work. A Good Cop to compliment the Bad Cop. Using the faith and its teachings to compliment that of enforcing the tribute, the tax collection, or even the favors imposed to the faithful and calling it as saving souls.

This also explains why criticism of the friars was so readily treated as hostility to religion, and criticism of colonial policy as evidence of heresy or sedition. Once loyalty to Spain was fused with Catholic orthodoxy, political dissent could be presented as sin. The Filipino subject was not merely asked to obey the government; he could be made to fear that disobedience endangered his soul.

Governor Juan Alaminos reportedly praised the friars for making the indio believe that “only in loving the Spaniards can he save his soul in the next life.” Whatever the degree to which individual priests actually preached such a doctrine, its political logic was unmistakable.

To weaponize religious obedience in this fashion was to degrade religion itself. It made spiritual authority answerable to imperial necessity and converted pastoral trust into administrative leverage.

Education: Achievement and Restriction

The assertion that the regular clergy simply taught Filipinos Spanish and Latin also requires qualification.

Certain Filipinos—particularly members of the principalia, mestizo families and candidates for the priesthood or professions—did acquire Spanish and Latin. Religious institutions produced scholars, lawyers, physicians and priests. The Jesuits, especially after their return in the nineteenth century, introduced broader programs in languages, mathematics, history, literature and philosophy.

But this was not the same as providing the general population with access to the official language of government.

Missionaries commonly learned local languages because evangelization in the vernacular was faster and more practical than the mass teaching of Spanish. Their grammars and dictionaries helped preserve and standardize Philippine languages, but the friars did not create those languages. Tagalog, Cebuano, Ilocano, Bikol, Kapampangan and the other languages had existed before the colonial Church codified them for missionary use.

By the nineteenth century, the political consequences of language had become obvious. Knowledge of Spanish allowed Filipinos to read laws, petition authorities, follow debates in Spain, pursue advanced education and communicate without clerical mediation. It diminished the curate’s monopoly as interpreter between the pueblo and the state.

The 1863 educational decree mandated free primary schooling and instruction in Spanish, but implementation remained uneven. A shortage of qualified teachers played a part; so did resistance from regular clergy who feared secular instruction and the loss of their educational predominance. The Jesuits were a significant exception, which itself demonstrates why the orders should not be treated as a single undifferentiated body.

The careful historical formulation, therefore, is not that every friar deliberately prevented every Filipino from learning Spanish. It is that powerful sectors of the regular clergy resisted the broad diffusion of Spanish and secular learning when these threatened their authority. The contradiction was plain: the colonial system praised education as Christian uplift but restricted it when education produced subjects capable of understanding their legal and political subordination.

Del Pilar described the maintenance of the language barrier as a means “to impede popular instruction” and preserve antagonism between the governed and governing classes. His language was polemical, but the political advantage of linguistic dependency was real.

The Hacienda System and the Vow of Poverty

The friar estates presented a similar contradiction. The religious orders did invest in land, irrigation and agricultural development. It would be inaccurate to portray every estate as barren territory seized without legal form or every tenant as a serf in the strict European sense.

The word feudal should therefore be used cautiously. The more precise description is clerical landlordism, that, alongside those controlled by the other ruling Spanish order (including the locals supported by the Spaniards) operating within a colonial system of tenancy, tribute, privilege and unequal access to law.

Yet this qualification does not vindicate the system. It clarifies the nature of the grievance.

Religious corporations held extensive estates in areas such as Laguna, Cavite, Bulacan and the environs of Manila. Their tenants cultivated the soil while the corporations collected rent and exercised considerable influence over the institutions through which disputes were adjudicated. The conflict in Calamba was not invented by Noli Me Tángere. It involved questions over boundaries, rent collections and the extent of Dominican title. Paciano Rizal himself stated that the tenants did not seek to confiscate the entire hacienda; they sought the demarcation of its legitimate boundaries and reimbursement of rents collected from lands allegedly outside them.

The central scandal was moral as much as economic. A corporation composed of men professing poverty had become a great landlord. Priests who preached humility belonged to orders capable of confronting tenants with lawyers, administrators and influence at the highest levels of colonial government.

Charitable expenditure did not dissolve this contradiction. Obras pías could coexist with accumulated property, just as almsgiving could coexist with exploitative relations. Charity relieved particular forms of suffering; it did not necessarily alter the structure that produced dependency.

The Filipino Secular Clergy

The claim that Filipino secular priests were respected but “not on the same level” as Spanish friars inadvertently repeats the very racial hierarchy that produced the secularization controversy.

In Catholic doctrine, the sacramental character of priesthood did not become inferior because the priest was an indio or mestizo. The subordination of the Filipino secular clergy was institutional and political, not theological.

Horacio de la Costa emphasized that the formation of a native clergy was not a decorative afterthought but one of the principal purposes of missionary work. Yet the Patronato and the territorial privileges of the religious orders left little room for Filipino priests to administer parishes independently. Racial prejudice intensified the rivalry: the regular orders admitted very few natives, while the secular clergy became predominantly Filipino.

Even after qualified Filipino priests had emerged, they were frequently treated as inherently immature, unreliable or politically dangerous. De la Costa concluded that political expediency influenced “decisions injurious to the Church’s work,” especially the normal development of the native clergy.

The controversy surrounding Fathers Mariano Gómez, José Burgos and Jacinto Zamora cannot therefore be reduced to Masonic manipulation. It arose from a genuine conflict over whether Filipino priests would remain perpetual auxiliaries in their own country. The execution of the three priests in 1872 transformed an ecclesiastical grievance into a national wound precisely because many Filipinos saw the colonial state and the friar establishment acting together against the native clergy.

The failure to Filipinize the Church was, in the end, a failure of both justice and missionary purpose.

When Deference is not Consent

Hand-kissing, bowing and other gestures of respect cannot serve as proof that colonial society was just. Such customs could express sincere affection for a beloved priest. They could also express religious reverence, social convention, fear of authority or practical recognition of the curate’s power. The same population could kiss the priest’s hand on Sunday and resent his intervention in taxes, elections or land disputes on Monday.

A subordinate population normally observes the outward forms demanded by hierarchy. That hierarchy cannot then cite the performance it requires as proof of popular approval.

Historical records show principales who feared friar-curates, but also others who held meetings without them, opposed their candidates or refused expected gestures of submission. Respect was therefore neither uniform nor politically innocent.

More importantly, respect for priesthood is not identical to political submission to a priest. Catholic reverence for sacramental office does not require the faithful to accept clerical control of taxation, policing, elections or civil administration. To confuse the two is to turn respect into servility.

Anti-Friar doesn't mean necessarily Anti-Catholic

The colonial apologist commonly places Rizal, La Solidaridad, Freemasonry and the Katipunan into one undifferentiated category of anti-Catholic conspiracy. The historical record is less convenient.

The Propaganda Movement was predominantly anti-friar in its public program, but it was not uniformly anti-religious. Its principal demands included representation in the Spanish Cortes, equality before the law, freedom of the press, secularization of parishes and administrative reform. Filipino Catholicism had become too deeply rooted for nationalism to be reduced to a rejection of the faith.

Graciano López Jaena expressed the distinction succinctly: “No es una lucha por la religión ni contra la religión”—it was not a struggle for religion or against religion.

The criticism was directed against the use of religion as political authority and against the identification of Catholicism with the privileges of Spanish religious corporations. Rizal’s friars were fictional characters, but fiction does not become historically meaningless simply because its characters were invented. Noli Me Tángere and El Filibusterismo condensed recognizable institutions, attitudes and conflicts into literary form. Padre Dámaso need not have existed as one identifiable priest for the social power represented by Padre Dámaso to have existed.

Indeed, Schumacher observed that the most important source of nationalist hostility was not a statistical increase in personal immorality among friars, but the political-religious structure of the Patronato itself.

Spain did not create the people from Nothing

The proposition that Filipinos would not exist “without Spain” contains a limited truth and a larger deception.

The territorial name Filipinas came from Villalobos’s designation in honour of Crown Prince Felipe, later Philip II—not, as sometimes claimed, principally in honour of a saint. Spanish rule did bring much of the archipelago under one colonial administration and contributed to the later emergence of a common Filipino nationality.

But a colonial state did not create human communities out of emptiness. The archipelago already possessed settlements, rulers, trading networks, writing systems, customary laws, social ranks, religious traditions and relations with China, Japan, Brunei and the wider Southeast Asian world. Spain helped create the administrative territory against which Filipino nationality later defined itself; it did not create the inhabitants, their humanity or the whole substance of their culture.

The same applies to surnames. The Clavería decree of 1849 regularized family names in order to remove administrative confusion involving “justice, government, finance and public order.” It facilitated identification, taxation and record keeping. Its administrative usefulness is undeniable, but it was not simply a sentimental gift of identity from Spanish godparents to nameless people. Filipinos had personal names, kinship systems and genealogical identities before the decree.

Nor can the survival of Catholicism be treated as retrospective consent to colonization. A people may receive, transform and cherish a religion while rejecting the political domination under which it arrived. Filipino Catholics appropriated Christianity, translated it into local languages, incorporated it into community life and eventually placed it in the hands of Filipino priests and laypeople. The faith outlived the empire precisely because it ceased to belong exclusively to Spain.

Gratitude without Servitude

A mature historical judgment need not choose between two caricatures: the friar as pure monster and the friar as spotless civilizer.

There were courageous missionaries who defended communities against encomenderos and abusive officials. There were scholars who preserved languages, priests who cared for the sick, and religious men and women who lived their vows sincerely. There were also exploitative landlords, racial contempt, political surveillance, censorship, excessive fees and clerical interventions that corrupted both civil government and ecclesiastical ministry.

The decisive question is not whether every friar was an abuser. No serious critic requires such a proposition. The decisive question is whether the system granted the religious orders powers capable of protecting abuse, frustrating reform and subordinating the spiritual life of the people to colonial policy. The documentary evidence answers in the affirmative.

Frailocracy was not the claim that all friars were evil. It was the recognition that the colonial government depended upon the religious orders to perform administrative and political functions for which priests were neither spiritually ordained nor democratically accountable. It was a structure in which the curate could become more permanent than the governor, more informed than the magistrate and more influential than the elected town official.

This arrangement ultimately betrayed both the Filipino people and the Church. It invited the population to associate the sacraments with taxation, the convent with the hacienda, the confessional with political surveillance and Christian obedience with submission to Spain.

The nationalists did not invent that contradiction. They inherited it.

Thus the proper counternote to colonial nostalgia is neither hatred of Spain nor contempt for Catholicism. It is the refusal to confuse evangelization with conquest, charity with justice, authority with holiness, or gratitude with perpetual subordination.

The Filipino may acknowledge what was built without kneeling before the system that built it. He may treasure the faith without sanctifying the empire. He may respect the priest without restoring the friar as ruler of the pueblo.

For a Church faithful to its vows needs no frailocracy, and a people secure in its faith has no need to call colonization a grace.

***

References

Abinales, Patricio N., and Donna J. Amoroso. State and Society in the Philippines, chapter 4, “State and Societies, 1764–1898.”

Aguilar, Filomeno V. Jr. “Church–State Relations and the Philippine Revolution.” Southeast Asian Studies.

De la Costa, Horacio, S.J. “The Development of the Native Clergy in the Philippines.” Theological Studies 8, no. 2.

Del Pilar, Marcelo H. “The Friar Domination in the Philippines,” reproduced in Austin Craig and Conrado Benitez, Philippine Progress Prior to 1898.

Majul, Cesar Adib. “Principales, Ilustrados and the Filipino Nation.” Asian Studies.

Schumacher, John N., S.J. The Making of a Nation: Essays on Nineteenth-Century Filipino Nationalism.

Bad Business in the Disputed Sea: Superpower Rivalry, Racist Tropes, the Illusion of Independent Diplomacy and the Blatant Threat to Philippine Sovereignty

2026-07-29T09:06:52.494-07:00

Bad Business in the Disputed Sea: Superpower Rivalry,

Racist Tropes, the Illusion of Independent Diplomacy
and the Blatant Threat to Philippine Sovereignty

Late Thursday night (July 16, 2026), the Department of Foreign Affairs (DFA) drew a hard line in the sand. Beijing’s state-run China Daily sank to a grotesque low in its press strategy, publishing AI-generated videos and cartoons that depicted Filipinos as monkeys over the ongoing 2016 South China Sea Arbitral Award disputes.

“As a Chinese state-run media outlet, China Daily's conduct goes beyond legitimate political debate and employs blatantly demeaning, dehumanizing, and racist depictions of Filipinos,” the DFA stated. “The Philippines has consistently rejected false narratives and distortions regarding the Arbitral Award and the Philippines lawful positions in the South China Sea. But we draw a firm line at the depiction of Filipinos as monkeys in the 10 July 2026 video, which is deeply offensive, distressing, and unacceptable.”

The DFA rightly noted that legal and political friction "does not justify resorting to disturbing imagery, which has no place in the civil public discourse of a responsible state," warning that "such imagery and misinformation only serve to widen the distrust between the Philippines and China." Its demand was straightforward: "The Philippines demands that the offensive material be taken down, calls for the immediate cessation of such irresponsible content, and urges China to uphold dignity, respect, and truth in public discourse.”

Beijing deserves every ounce of backlash it receives. But for business leaders, investors, and taxpayers watching this spectacle unfold from Manila, the situation brings a bitter sense of déjà vu.

The False Choice of Two Empires

Whenever geopolitical tensions boil over, public commentary quickly descends into a binary trap, forcing observers to debate whether Beijing or Washington better serves Manila’s national interest. Yet a closer examination reveals that both powers have relied on the exact same playbook of racist propaganda to justify their hegemony over the Philippine archipelago.

China Daily’s video is not an isolated anomaly; it is a direct echo of American imperialist tactics from the early 1900s. When Washington established its colonial grip on the country, American officers and media outlets routinely derided Filipinos as "monkeys without tails" or worse. U.S. magazines ran caricatures depicting the population as "semi-savage others" or uncivilized animals needing white governance to justify military conquest and economic exploitation.

Over time, that open hostility was repackaged into the softer, patronizing label of the "little brown brother"—a polite cover for neocolonial control. In fact, historical commentary on Western prejudice notes that Filipinos who blindly embraced Western influence were often secretly viewed by Western eyes as nothing more than "overdressed monkeys."

This raises a fundamental question about the current political climate: why is the Philippine political class so quick to downplay Washington's past as "water under the bridge," while rightfully exploding in anger over Beijing? It appears many have simply accepted the role of the "little brown brother" because the white power structure wrapped its imperial expansion in a narrative of benevolence, even when its actions were fundamentally wrong.

The Price of Selective Memory

This selective amnesia is precisely what makes current defense leadership so concerning to economic observers. Defense Secretary Gilberto Teodoro and PCG Commodore Jay Tarriela were predictably swift to appear on television and condemn Beijing. The video, after all, was a direct personal attack on them, President Marcos Jr., and their defense policy.

However, their anti-Chinese rhetoric and close alignment with Washington succeeded in baiting China Daily to drop to new lows. Critics point out that the Marcos administration invokes the arbitral ruling not to pursue an independent diplomatic path, but to serve the U.S. geopolitical agenda of expanding its military presence in the South China Sea to provoke China and prepare for war.

Yet while Teodoro, Tarriela, and their pro-American cohorts rail against China, they remain dead silent on Washington’s latest military moves in the Middle East. Renewed U.S. armed attacks against Iran have once again sabotaged peace negotiations, driven up global oil prices, and inflicted grave hardships on the Filipino people.

Every time Washington stirs the geopolitical pot, local pump prices jump, shipping rates rise, and ordinary Filipinos pay the tab. The nation must ask whether the United States should be viewed as a "lesser evil" simply because it provides a façade of "democracy," even as it subjects the Philippines to the same historical slurs and economic fallout.

As historian Renato Constantino maintained in Neocolonial Identity and Counter-Consciousness: “With little comprehension of our past, we have no appreciation of its meaningful interrelation with the present.”

Exchanging a bully in Beijing for a master in Washington is neither sound national defense nor prudent economic policy; it is bad business and a total surrender of sovereign dignity.

***

References

Constantino, R. (1978). Neocolonial Identity and Counter-Consciousness: Essays on Cultural Decolonization. Routledge.

Department of Foreign Affairs. (2026, July 16). Statement of the Department of Foreign Affairs on the offensive media materials published by China Daily [Press release]. Republic of the Philippines.

The Cost of Stability: Feria 51, Utility Profiteering and the Pax Silica Economy

2026-07-28T21:45:15.593-07:00

The Cost of Stability: Feria 51, Utility Profiteering

and the Pax Silica Economy

The fifth State of the Nation Address of President Ferdinand Marcos Jr. was intended to project confidence, administrative competence and economic direction. Inside the halls of Congress, the nation was presented with the familiar language of stability, modernization, investment and progress. Outside, along Commonwealth Avenue and Feria Street, the government delivered a less flattering account of itself. Fifty-one individuals who had participated in the people’s SONA were arrested by the Philippine National Police, among them minors, artists, skaters, paralegals, journalists, elderly participants and ordinary citizens. Several were reportedly chased while resting after the main protest, dragged along the street, tightly restrained with cable ties and denied a clear explanation of the accusations against them or an immediate opportunity to consult legal assistance.

The arrests were not an isolated disturbance at the margins of a national ceremony. They revealed the growing distance between the government’s official description of the economy and the daily experience of the public. The protesters had gathered not merely to oppose a president or disrupt an event, but to express anger over rising electricity rates, expensive water and fuel, stagnant wages, environmental destruction and an economic policy that appears increasingly designed around the requirements of large corporations and foreign strategic interests. The violence used against them therefore carried a wider political meaning. It suggested that when economic frustration becomes visible and public, the first answer of the state is not explanation or reform, but restraint.

Among those arrested were participants associated with Hiphop United Against Corruption, Vandals United, Skaters United, Junkie Rebels Crew and other youth formations. Their protest became closely associated with the phrase “MERALCO SINDIKATO,” painted as a direct accusation against the power company and the political arrangements that have allowed electricity prices to remain a permanent source of public resentment. Officials may describe the act as vandalism and invoke laws governing public property, cleanliness and assembly. Yet no ordinance can erase the economic significance of the phrase. It resonated because it reduced a complicated structure of corporate privilege, regulatory weakness and recurring rate increases into language readily understood by the public.

The administration may object to the paint, but it cannot seriously claim that the grievance behind it is imaginary. Electricity is not an ordinary consumer product. Its price enters almost every part of production and household life. When power rates rise, bakeries pay more to operate ovens, stores pay more to keep goods refrigerated, factories pay more to run machinery, transport operators face higher operating costs and landlords pass expenses to tenants. The increase travels through the economy until it appears in the prices of food, rent, services and other daily necessities. A higher electric bill is therefore not merely an isolated household expense. It is a multiplier imposed across the entire system of production and consumption.

The same is true of water and fuel. These are basic inputs into modern existence, and their rising cost reduces the real value of wages even when nominal income remains unchanged. The worker may receive the same salary from one month to the next, but if electricity, transportation, food, rent and medicine become more expensive, that salary has already been cut in practical terms. Official statistics may still register growth, investment and increasing output, but the ordinary citizen measures the economy in a more immediate fashion: the amount of rice that can be bought, the fare required to reach work, the cost of keeping the lights on and the money left after rent.

This is the inflation that government speeches rarely describe with sufficient honesty. It appears in smaller meals, delayed medical treatment, unpaid utility bills, shortened business hours and families hesitating before switching on an electric fan. It is also felt by small enterprises that cannot easily absorb higher costs or pass them entirely to consumers. The neighborhood bakery, repair shop, eatery and convenience store are often caught between expensive utilities and customers whose wages remain too low to support higher prices. The result is a weakened domestic market in which both workers and small businesses are compelled to survive within narrower margins.

The government’s response has largely consisted of temporary subsidies, selected discounts, narrowly targeted assistance and publicity-heavy relief programs. Such measures may provide short-term support, but they do not correct the structure that produces the burden. A rebate does not reform the power industry. A cash grant does not challenge monopoly pricing. A temporary subsidy does not strengthen wages or alter the distribution of economic power. These programs often function as political decoration, providing the appearance of concern while avoiding a direct confrontation with corporations whose profitability is treated as more important than the affordability of basic services.

The contradiction becomes even more visible in the continuing debate over wages. Proposals to raise the minimum wage and abolish provincial wage disparities remain delayed by warnings that higher labor costs may undermine competitiveness, discourage investment or harm small businesses. Yet the argument is incomplete. Low wages also harm business because they suppress consumer demand. An economy composed of underpaid workers is an economy of weak customers. Small and medium enterprises cannot prosper indefinitely when the majority of households have little disposable income after paying for food, rent, electricity and transportation.

Cheap labor may attract investment, but it cannot provide a permanent foundation for development. A country that competes chiefly by offering low wages, tax holidays, inexpensive land and compliant regulation may become a convenient location for production without acquiring control over technology, capital or markets. It may record export growth and employment while remaining dependent on foreign firms for design, patents, machinery, branding and distribution. Under such conditions, the economy expands, but the nation’s command over production remains limited.

The arrest of the Feria 51 should therefore be understood as part of the political economy of the present administration. When citizens protest high electricity rates, they expose the failure of regulation. When workers demand higher wages, they challenge an investment model built around labor restraint. When scientists, engineers and environmental advocates oppose destructive projects, they question the distribution of economic costs and benefits. Police intervention occurs at the moment when these grievances cease to be private hardships and become public accusations.

The sequence is familiar. The economic burden is transferred to households and communities, and the complaint that follows is treated as a threat to order. The government does not act with equal urgency against excessive prices, concentrated ownership or abusive corporate practices. Instead, it often reserves its most immediate power for those who make the crisis visible. The monopoly remains protected by legal and commercial structures, while the protester is chased, tied and loaded into a police vehicle. The state claims to defend order, but the order being defended is not politically neutral. It is an order in which corporate returns are protected more effectively than household incomes.

This inversion was captured with particular clarity in the response to the “MERALCO SINDIKATO” protest. The state moved against those who painted the accusation rather than against the conditions that gave it meaning. It condemned the method of expression without answering the substance of the charge. The government may argue that protest must remain within legal limits, but legality cannot serve as a substitute for legitimacy. A law enforced selectively and violently against young people, minors, journalists, paralegals and ordinary demonstrators becomes less an instrument of public order than a mechanism for producing fear.

The same questions of ownership, regulation and public burden arise in relation to Pax Silica, the proposed technology and industrial hub in New Clark City. The project is promoted as a major step toward semiconductor production, advanced manufacturing, technological security and integration into strategic global supply chains. It is presented as evidence that the Philippines is moving beyond low-value production and entering a more sophisticated industrial future. The language is attractive and modern, but beneath it lies a much older economic arrangement.

The Philippines has hosted electronics and semiconductor operations for decades. These investments have created employment, generated exports and trained Filipino workers and engineers. Yet the country has remained weak in product design, capital equipment, intellectual property, research capacity and control over final markets. Much of the industry continues to operate within foreign production networks in which the highest-value functions remain abroad. Components may be assembled, tested or packaged locally, but the patents, brands, production strategy and major profits are often retained elsewhere.

Pax Silica risks reproducing this pattern on a larger and more sophisticated scale. The Philippines may provide the land, labor, electricity, water, roads, security, tax concessions and political guarantees, while foreign corporations retain control over technology, production decisions, intellectual property and market access. Such an arrangement may resemble industrialization because the factories are modern and the products are technologically advanced. However, if strategic control remains abroad, it is still fundamentally an export-processing enclave.

The country has already witnessed earlier versions of this model. Foreign manufacturers entered special economic zones, received fiscal incentives and employed Filipino labor to assemble or process goods for overseas markets. Export figures increased, but domestic ownership of technology remained limited. Products left the Philippines as components or intermediate goods and returned as expensive finished commodities bearing foreign brands. The country became a site of production without becoming the master of production.

This distinction is essential. Genuine industrialization is not measured solely by the presence of factories or the complexity of the goods assembled within them. It requires the development of Filipino-owned suppliers, domestic research institutions, engineering capacity, access to capital, public support for local firms and enforceable technology-transfer arrangements. It requires the ability to move from assembly and testing into design, fabrication, machinery production and final market control. Without these elements, the country may host advanced industry while remaining industrially dependent.

Foreign investment need not be rejected, but it must be evaluated according to the national capacity it creates. Employment is important, but jobs alone cannot be the entire measure of development. A project that employs thousands but leaves technology, ownership and decision-making outside the country may reduce unemployment without reducing dependence. A factory may stand on Philippine soil and still operate primarily according to the requirements of another economy.

The environmental and utility demands of Pax Silica also require close examination. Semiconductor and advanced electronics production are often presented as clean alternatives to mining and heavy industry, but they are neither weightless nor resource-free. They require dependable electricity, substantial water supplies, specialized chemicals, controlled industrial environments and extensive infrastructure. Their ecological damage may be less immediately visible than an open-pit mine, but the demand placed on land, water and energy can still be considerable.

This is why the debate over Pax Silica cannot be separated from the crisis in utility prices. The public is entitled to know how much electricity the project will require, where the power will come from and whether strategic investors will receive privileged rates or guaranteed supply while ordinary households continue to pay expensive bills. It is also reasonable to ask whether public funds will finance substations, highways, water systems and security arrangements whose principal beneficiaries will be private corporations.

The issue of water is equally serious. Large industrial projects may compete with farmers, residential communities and local businesses for limited supplies. If water is diverted toward export-oriented production while surrounding communities face shortages or higher rates, the costs of development will once again be socialized while the profits remain private. Environmental safeguards may also be weakened when they conflict with investment targets, particularly when the project is presented as a strategic national priority.

These are not merely activist objections. They are questions of sound business policy and public accountability. Every serious corporation performs due diligence before entering a major investment. The public is entitled to perform the same examination of a project that may consume public resources, reshape land use and influence the future direction of the national economy. If the state carries the cost of infrastructure, grants tax privileges, guarantees utilities and suppresses opposition while private firms retain technology and profits, then Pax Silica becomes less a national industrial program than a public subsidy for private accumulation.

The geopolitical character of the project deepens these concerns. Supporters may argue that Pax Silica will reduce the Philippines’ dependence on China and strengthen its position within a United States-led network of secure semiconductor and technology production. Such an argument may appear persuasive in an era of strategic rivalry, but exchanging one external dependency for another does not automatically create sovereignty. A factory serving a Chinese supply chain may be dependent, but a factory serving an American supply chain can be dependent as well.

The decisive question is not simply which foreign power is preferred. It is who owns the technology, who controls production, who receives the profit and who absorbs the ecological and social cost. The nationality of the dominant corporation does not determine whether the relationship serves Philippine development. An enclave directed toward Beijing remains an enclave, just as an enclave directed toward Washington remains an enclave.

The protest action at Tandang Sora dramatized this point through a carnival display portraying US President Donald Trump as the puppeteer of President Marcos and Vice President Sara Duterte. The imagery was theatrical, but the question behind it was serious. Industrial policy cannot be reduced to selecting which foreign power will organize Philippine land, labor, minerals, energy and markets. A sovereign development strategy must give the country the power to regulate investment, acquire technology, direct credit and production, and negotiate according to domestic priorities.

Without such capacity, the Philippines remains a platform within someone else’s strategic design. It becomes a location rather than an industrial power, a corridor rather than an economy, and a supplier of labor and resources rather than an owner of the productive system. The country may become important to global supply chains without gaining control over them. It may become indispensable to foreign production while remaining vulnerable at home.

The protests against Pax Silica and destructive renewable-energy projects must also be understood within this wider context. Environmental groups and progressive scientists are not necessarily opposing technology, energy development or industry. Their objection is directed at a model in which the language of sustainability is used to justify projects that displace communities, degrade ecosystems and redirect natural resources toward corporate use. A renewable-energy project may still be destructive if it damages forests, threatens livelihoods, disregards indigenous communities or supplies power mainly to industrial enclaves while local consumers continue to face high rates.

The government’s portrayal of development often assumes that any project described as green, strategic or technologically advanced is automatically in the public interest. This is a dangerous assumption. Industrial and energy projects must be judged by their ownership, environmental impact, labor conditions, contribution to domestic capacity and actual benefit to surrounding communities. Development is not a matter of labels. A destructive project does not become progressive merely because its technology is new.

The administration’s economic vision therefore contains a troubling contradiction. It offers large investors infrastructure, incentives and political protection while ordinary households are told to endure rising prices and restrained wages. It promotes advanced industrial enclaves while neglecting the domestic purchasing power required to sustain local enterprise. It speaks of science and innovation while treating Filipino scientists and engineers primarily as labor inputs into foreign-controlled production chains. It invokes democracy while using police force against those who question the distribution of national resources.

Business organizations frequently argue that political stability is necessary for investment, and they are correct. However, stability cannot be manufactured by police intimidation. A society is not stable merely because demonstrators have been removed from the road. It is stable when wages can support households, utilities remain affordable, communities trust public institutions and citizens believe that economic policy serves a broad national interest rather than a narrow alliance of corporations, political families and foreign powers.

Repression may silence a protest for one afternoon, but it cannot lower electricity rates. It cannot raise wages, strengthen domestic industry or produce technological independence. It cannot remove the resentment caused by expensive commodities and weak public services. At most, it can postpone the moment when that resentment returns in another form.

The Feria 51 are therefore not the source of instability. They are evidence of it. Their protest emerged from material conditions that no amount of police force can erase: expensive electricity and water, rising food and transport costs, inadequate wages, weak regulation, environmental destruction and an industrial policy whose benefits remain uncertain. The proper response is not to criminalize the complaint but to confront the structures that produced it.

The government should release those arrested without legitimate and clearly stated charges, withdraw fabricated cases and investigate allegations of excessive force. The treatment of minors, journalists, paralegals and ordinary demonstrators demands particular scrutiny. Police officers cannot claim to defend democracy while denying citizens the basic protections that democracy requires. The right to protest does not disappear because the message is uncomfortable or the method of expression is unattractive to those in power.

At the same time, the administration must answer the economic issues raised during the SONA protests. It must explain why basic utilities continue to consume an increasing share of household income, why wages are restrained in the name of competitiveness and why corporate interests appear to receive more effective protection than consumers. It must show that regulation exists to serve the public rather than merely supervise the profitability of monopolies.

Pax Silica must also be subjected to full public scrutiny. Its ownership structure, tax concessions, electricity requirements, water consumption, environmental impact, technology-transfer arrangements, labor conditions and obligations to local industry should be disclosed. A project of such scale cannot be justified by slogans about resilience, innovation or strategic partnership. The public deserves to know whether it will create Filipino productive capacity or merely expand the country’s role as a low-cost platform for foreign industry.

The fundamental question is whether Philippine development will continue to rest on cheap labor, expensive utilities, public subsidies and foreign-controlled enclaves, or whether the state will begin to construct a productive system in which Filipino workers, scientists, engineers and enterprises hold a meaningful share of ownership and control. This is not a secondary ideological dispute. It is the central business question of who produces, who owns, who profits and who pays.

A government that defends private property must also defend the public interest. A government that welcomes investment must demand national benefit. A government that speaks of science must ensure that Filipino scientific and engineering talent is used to build domestic capacity, not merely to service foreign supply chains. A government that invokes democracy must accept that dissent, including dissent expressed through music, protest or street art, is often the consequence of economic failures that cannot be concealed by official ceremony.

The administration would do better to address the price of electricity, the weakness of wages and the terms of Pax Silica than to treat the Feria 51 as enemies of order. Durable stability cannot be secured with cable ties, police buses and fabricated charges. It can only be built through an economy in which the public sees that development is not simply another name for private privilege, foreign dependence and the transfer of national resources away from those who bear the cost.

The Recycled State: SONA 2026 and the Political Economy of Permanent Reassurance

2026-07-27T20:48:00.000-07:00

The Recycled State: SONA 2026 and the Political Economy of Permanent Reassurance

By the time President Ferdinand Marcos Jr. entered the session hall to deliver his fifth State of the Nation Address, the public already knew the general shape of the performance. There would be a scandal to condemn, an external crisis to explain, subsidies and completed projects to enumerate, foreign investments to celebrate, and a final invocation of unity, sovereignty, and hope. There would be selected statistics suggesting movement, selected beneficiaries representing compassion, and selected prosecutions presented as proof that the government had rediscovered accountability.

The names, acronyms, technologies, and political targets might change, but the underlying structure would remain familiar. This has been the durable language of Philippine presidential government: the country is always recovering from a crisis, correcting the mistakes of unnamed predecessors, entering a new phase of modernization, and standing on the threshold of a prosperity that somehow never becomes the ordinary experience of its people.

The 2026 SONA was therefore not remarkable because it contained nothing. It contained almost everything: flood-control prosecutions, recovered assets, rice distributions, fuel subsidies, fare discounts, tax relief, housing loans, agricultural machinery, health benefits, artificial-intelligence training, electric vehicles, hydrogen, nuclear energy, free-trade agreements, investment corridors, Pax Silica, a spaceport, ASEAN cooperation, and the defense of the West Philippine Sea.

What it lacked was not activity but an organizing economic purpose beyond the continued management of the existing order.

The speech resembled an enormous administrative catalogue. One program followed another, each offering temporary relief or the possibility of future improvement, while the fundamental relations among landowners, contractors, banks, utility companies, importers, foreign investors, political dynasties, and working people remained largely beyond examination. The government demonstrated that it was capable of administering consequences. It did not demonstrate that it intended to transform causes.

The masses appeared repeatedly, but mainly as recipients. They were drivers receiving fuel assistance, consumers receiving discounts, borrowers receiving moratoria, farmers receiving machinery, students receiving devices, and patients receiving benefit packages. They seldom appeared as organized producers, workers possessing bargaining power, farmers demanding effective control over land, communities determining the use of natural resources, or citizens entitled to shape an independent national development policy.

The SONA was addressed to the people, but the economic system it described was not built around their power. This explains the sense of distance that surrounded the address even when it discussed the most immediate burdens of ordinary households. The speech spoke of their hunger, indebtedness, transportation costs, electricity bills, illnesses, and insecure employment. Yet the underlying political economy remained organized around the requirements of contractors, utilities, financial institutions, real-estate developers, importers, large conglomerates, foreign capital, and competing political families.

The people were offered protection from the worst effects of the arrangement. They were not offered control over it.

The annual liturgy of concern

The President opened the SONA with the flood-control scandal, using the investigation to establish the moral authority of the rest of the address. He reported that contractors, senior officials, and legislators had already been charged or imprisoned; that the Ombudsman was preparing additional cases; and that nearly ₱25 billion in assets had been recovered, frozen, or preserved, with more than ₱800 million returned to the Treasury.

He then declared: “I am not the President of my family. I am not the President of my friends. I am the President of the Philippines, and my duty is to you, my fellow Filipinos.”

The statement was politically effective because it addressed the most persistent suspicion surrounding Philippine government: that public office is administered through family loyalty, friendship, political debt, and personal obligation.

Yet the emotional force of the declaration also revealed the limitation of the reform being proposed. A republic cannot depend upon the President’s willingness to rise above family and friendship. The purpose of institutions is precisely to ensure that public accountability does not depend upon the character, conscience, convenience, or political calculation of a particular ruler.

A government that prosecutes a relative may demonstrate resolve. A government that reforms campaign finance, political dynasties, beneficial-ownership disclosure, legislative budget insertions, procurement, bank secrecy, party-list representation, whistleblower protection, and the discretionary distribution of infrastructure funds would demonstrate that it understands the structure from which the scandal emerged.

The SONA concentrated upon the visible participants in corruption while remaining less forthcoming about the institutions that join contractors, legislators, public-works officials, local dynasties, campaign financiers, and private corporations into durable networks of accumulation.

The administration cited its Transparency Portal, an “Integrity Chain,” market-price comparisons, project reviews, and partnerships with civil-society organizations as safeguards against future abuse. These may improve monitoring, but portals do not prevent collusion, published prices do not necessarily reveal bid-rigging, and civil-society observation cannot substitute for professional procurement services, independent prosecution, open contracting data, enforceable conflict-of-interest rules, and effective protection for witnesses.

The Makati Business Club, approaching the address from a conventional business-reform perspective rather than from the political left, similarly noted the absence of several institutional measures: a Right to Information Act, transparency in bicameral budget negotiations, limits upon unprogrammed and discretionary funds, bank-secrecy reform, and structural safeguards against abusive tax audits. It also warned that cash-assistance programs could reinforce dependency and political patronage when they substitute for long-term reforms.

The administrative mechanisms announced by the President are useful. The mistake is to present them as sufficient.

Corruption is not only the theft of money after a project has been approved. It begins in the power to decide which project will exist, where it will be built, how its cost will be calculated, which contractor will receive it, which legislator will sponsor it, and which political figure will claim credit for it. Patronage is embedded in allocation before it becomes visible as a kickback.

IBON Foundation has argued that the flood-control controversy must be understood through the broader use of the national budget for political consolidation and patronage. It cited the enormous expansion of unprogrammed appropriations during the early years of the Marcos administration and argued that control over bureaucracy and public expenditure enables political factions to reward allies, cultivate local machines, and strengthen themselves against rivals. IBON is an advocacy research institution with an explicit political position, but the institutional issue it raises is not easily dismissed: corruption does not begin only when cash changes hands; it also operates through the politically determined architecture of the budget.

The scandal is therefore not merely a story of dishonest engineers, contractors, or legislators. It concerns the use of appropriations, congressional influence, local political networks, private corporations, and executive discretion to transfer wealth upward while communities remain exposed to flooding.

The state constructs infrastructure, but political patrons construct the conditions under which infrastructure becomes private income.

The relationship recalls Paul Hutchcroft’s concept of “booty capitalism,” in which access to state authority becomes a principal means of private accumulation. The institutional form has modernized since the period Hutchcroft examined. Patronage now coexists with digital procurement, transparency portals, public-private partnerships, economic zones, and the language of good governance. But the persistence of contractor-politicians, dynastic control, discretionary appropriations, and oligarchic influence suggests that the underlying relationship has not disappeared.

The President’s declaration that he serves neither family nor friends was therefore a proper moral statement but an inadequate theory of reform. The question is not whether one Marcos can prosecute another. The question is whether the state can be reorganized so that no Marcos, Duterte, Romualdez, Cayetano, Co, or allied contractor possesses privileged access to public money in the first place.

Relief presented as transformation

The central economic theme of the address was organized around the government’s response to war in the Middle East and the resulting shocks to fuel, food, transportation, electricity, and overseas employment. The administration declared a state of national energy emergency, ordered agencies to economize, redirected funds toward social assistance, and transferred nearly ₱58 billion in additional resources to local governments. The slogan chosen for the response was “UPLIFT.”

The President then listed the emergency measures: diversification of oil supplies, fuel-price rollbacks, temporary suspension of excise taxes on kerosene and liquefied petroleum gas, limits upon rice-price increases, loan-payment extensions, lower digital transaction fees, rice distributions, electricity-bill installment plans, temporary restrictions upon disconnections, transport subsidies, fare discounts, free rides, service contracting, emergency employment, and assistance for overseas Filipino workers.

These interventions have real value. A family receiving rice, a driver receiving fuel support, or a household protected temporarily from electricity disconnection experiences a genuine if limited benefit. When a sudden price shock threatens food, transportation, or electricity access, the state has a duty to intervene.

The error lies not in providing relief but in confusing relief with development.

Emergency assistance addresses the consequences of an economic structure after those consequences reach the household. Structural policy changes the institutions that repeatedly expose the household to crisis. The SONA described an energetic government responding to injury. It did not offer an equally persuasive strategy for preventing the injury from recurring.

The economic conditions surrounding the speech made the distinction unavoidable. Philippine gross domestic product expanded by only 2.8 percent in the first quarter of 2026. Services grew by 4.5 percent, while agriculture, forestry, and fisheries contracted by 0.2 percent. The principal contributors to growth included wholesale and retail trade, financial and insurance activities, and public administration. The figures described an economy still capable of circulation and consumption but much less successful in expanding the agricultural and industrial foundations of productive capacity.

Headline inflation remained at 6.4 percent in June, after reaching 6.8 percent in May. The decline from one month to the next did not mean that prices had returned to previous levels; it meant only that they were rising at a somewhat slower rate.

IBON’s pre-SONA assessment was considerably harsher. It described an administration committed to a market-driven framework that favors large business interests while ordinary families absorb high prices, insecure employment, and deepening poverty. IBON Executive Director Sonny Africa argued that the prevailing path generates wealth for a few at the cost of joblessness and hardship for the majority.

IBON’s interpretation is openly critical and should be read as such. Yet the official data do not render its argument irrelevant. Weak agricultural growth, fragile industrial performance, falling year-on-year employment, high inflation, and millions of underemployed workers are matters of public record. IBON’s contribution is to connect these indicators to the structure of production rather than treating each as an isolated technical problem.

This is where the SONA remained conventional. The state promised to soften the price shock, facilitate credit, subsidize selected consumers, expand targeted social protection, and encourage individuals to adjust. Households were told to conserve, save, insure themselves, use digital platforms, and become more financially literate. Workers were told to reskill. Farmers were encouraged to mechanize and consolidate. Drivers were expected to modernize. Small enterprises were expected to formalize and digitalize.

The individual must become more resilient. The economic structure is not required to become less exploitative.

Neoliberalism should not be confused with the simple disappearance of the state. In dependent economies, it often produces an active state: one that protects markets, guarantees investments, builds commercially useful infrastructure, rescues strategic firms, disciplines labor, and distributes narrowly targeted assistance to those displaced or impoverished by the resulting system.

The state does not withdraw. It becomes a repair shop for the social damage caused by the market order it continues to preserve.

This is why the SONA could contain a remarkable number of subsidies, discounts, and social programs without departing from neoliberal policy. Social assistance can coexist with privatization, deregulation, trade liberalization, labor flexibility, investment enclaves, and the commodification of essential services. Relief makes the system politically survivable. It does not necessarily make it economically just.

The administration distributed assistance without redistributing power.

The cost of living and the privatization of adjustment

The official narrative treated the increase in prices largely as a consequence of war abroad, expensive oil, disrupted shipping, and a weakening peso. These were important factors. But external shocks become domestic crises through an existing economic structure.

Dependence upon imported petroleum, imported agricultural inputs, imported machinery, and foreign exchange magnifies international price movements. Weak public transportation forces households to absorb higher fuel prices through fares and commodity costs. A fragmented and privately organized electricity system passes expenses through generators, transmission operators, distributors, taxes, and regulatory charges. Low wages leave families with almost no margin against even a temporary increase.

IBON reported that the nationwide price of regular-milled rice rose from approximately ₱42 per kilogram in June 2025 to ₱50 in June 2026. It also cited increases in the prices of several vegetables and fish, a sharp rise in the cost of an 11-kilogram LPG cylinder in Metro Manila, and an increase in electricity rates from ₱12.16 to ₱14.48 per kilowatt-hour. For a household consuming 200 kilowatt-hours, that electricity increase amounted to roughly ₱466 per month.

The government’s temporary suspension of selected taxes, installment plans, transport discounts, fuel subsidies, and rice distributions may mitigate the immediate effects. They do not explain why the country remains so vulnerable after decades of promises concerning energy independence, food security, efficient logistics, and inclusive growth.

The President later announced that the government’s mission would move beyond “UPLIFT” toward “SECURITY and SELF-SUFFICIENCY.” The shift in vocabulary was significant. But self-sufficiency cannot mean merely finding more countries from which to import oil during a crisis.

A country does not become energy secure because it can purchase petroleum from Japan, South Korea, Oman, India, Russia, or China when one source or route is threatened. It becomes more secure when it reduces the quantity of imported energy required to transport people, manufacture goods, produce food, and maintain households.

Likewise, food security is not achieved merely by opening emergency rice reserves, lowering import tariffs, imposing temporary price limits, or distributing sacks of rice. It requires secure land tenure, irrigation, domestic seed and fertilizer capacity, storage, processing, public procurement, transportation, producer cooperatives, fair farm-gate prices, and protection from import policies that sacrifice farmers whenever urban prices become politically inconvenient.

The administration’s policies continue to ask the population to adapt to recurring scarcity. Consumers are told to conserve. Workers are told to acquire new skills. Farmers are told to adopt new technology. Drivers are told to purchase modern vehicles. Households are told to install solar panels. Small businesses are told to digitize.

Those with capital may adjust. Those without it remain dependent upon temporary aid. Adaptation becomes a private responsibility while structural vulnerability remains public policy.

When the wage is only a fraction of life

The most revealing contrast between the SONA and popular experience lies in the relationship between wages and the cost of living. The President discussed rice assistance, fare discounts, income-tax exemptions, loan moratoria, insurance, and social-security contributions. He did not place a substantial wage increase at the center of the government’s response.

IBON estimated that the national family living wage for a household of five had reached approximately ₱1,312 per day by June 2026. Its family living wage is not the government’s official poverty threshold. It is an advocacy estimate of the income needed for a decent standard of living rather than bare statistical subsistence. Business organizations and government agencies may contest its assumptions. But the estimate dramatizes a real and widely experienced gap between legal wage floors and household needs.

IBON also estimated the nationwide average nominal minimum wage at about ₱512 per day and its inflation-adjusted value at only ₱378. On those estimates, the average minimum wage covered far less than half the income required for a family of five to live decently.

Under such conditions, temporary discounts are not an income policy. A discount reduces one bill for a limited period while leaving the worker’s bargaining position unchanged. A rice distribution can alleviate hunger but does not provide a wage sufficient to purchase rice regularly. A fuel subsidy may help a driver survive a crisis but does not establish a remunerative public-transport system.

The proposed expansion of the personal income-tax exemption to employees earning no more than ₱350,000 annually may benefit sections of the formal lower-middle and middle classes. The proposal to exempt small enterprises from the minimum corporate income tax may likewise assist businesses facing weak demand.

But a worker already earning below the taxable threshold does not benefit from being exempted from a tax that the worker was not paying. A person in informal employment may receive no direct relief at all.

Tax relief is not necessarily unjust, but neither is it automatically progressive. Its beneficiaries must be identified, its revenue cost calculated, and its effects compared with alternatives: a legislated wage increase, stronger collective bargaining, enforcement of labor standards, lower indirect taxes on necessities, universal social services, or income transfers based on household need rather than formal tax status.

The government’s preferred response is to increase resilience rather than bargaining power. Workers are encouraged to contribute to the Social Security System, obtain insurance, open digital accounts, save, and prepare for retirement. These are prudent practices for households capable of maintaining them. Financial literacy, however, cannot compensate for insufficient income. A family cannot budget its way out of a wage that does not cover the cost of life.

The neoliberal moral of personal responsibility appears subtly in such appeals. The worker must prepare for illness, unemployment, retirement, and inflation through private discipline. Structural insecurity is recoded as inadequate personal planning. The person unable to save is encouraged to become more responsible, even when the inability to save is the direct consequence of low wages, unstable employment, high rent, and expensive utilities.

Bread, in this setting, is not simply a commodity to be subsidized. It is the economic right to an income sufficient for life. Until wages become central rather than supplementary to social policy, the government will continue to distribute relief for a poverty that its labor and industrial policies reproduce.

Employment without occupations

The administration emphasized job fairs, advertised vacancies, hired-on-the-spot applicants, emergency employment, livelihood programs, technical and vocational training, senior-high-school employability, and artificial-intelligence readiness. It reported nearly 300,000 advertised jobs during Labor Day fairs and more than 6,000 immediate hires, alongside temporary income support under TUPAD and related programs.

These numbers demonstrate administrative activity but reveal little about the quality of employment. A vacancy advertised at a job fair is not necessarily a new job created by government policy. A person hired on the spot may obtain employment, but the statistic does not disclose the wage, contractual status, working conditions, duration, social protection, or possibility of advancement.

The May 2026 Labor Force Survey estimated 2.50 million unemployed Filipinos, compared with 2.03 million a year earlier. Total employment fell from 50.29 million in May 2025 to 49.63 million in May 2026. Approximately 6.04 million employed persons were underemployed, meaning that they wanted additional hours, another job, or a different position offering more work. Services accounted for 61.8 percent of employment, while agriculture and industry represented only 19.9 and 18.3 percent, respectively.

The economy can therefore report a high employment rate while millions survive through insecure, intermittent, poorly paid, or self-created work. The distinction between having performed some work during the survey period and possessing a stable occupation is essential.

An occupation allows a worker to accumulate skill, seniority, social protection, bargaining power, and predictable income. Much of the employment celebrated in official discourse provides activity without security.

IBON argues that the labor market is considerably weaker than the headline unemployment rate suggests. Its broader estimates include millions in informal or insecure arrangements and point to discouraged people classified as outside the labor force. These are not the official unemployment definitions and should not be presented as such. But they expose the danger of treating any recorded work, however brief or precarious, as evidence of a healthy employment system.

This is why the fashionable emphasis on “reskilling” and “upskilling” can become evasive. Training is valuable when linked to a national program of production. It becomes an adjustment mechanism when workers are repeatedly instructed to acquire new qualifications for jobs that the economy does not create in sufficient quantity.

A rational skills strategy would begin with an industrial map. The country would determine which capabilities it intends to possess: agricultural machinery, railway equipment, shipbuilding, medical supplies, pharmaceuticals, electronics design, semiconductor fabrication, batteries, renewable-energy equipment, machine tools, food processing, and public digital infrastructure.

The state would then coordinate universities, technical institutes, public procurement, research institutions, development banks, industrial credit, and investment policy around those capacities.

The SONA largely reversed this sequence. It offered training first and assumed that the market would eventually provide an appropriate use for the trained worker. The individual is required to prepare for an economy whose direction is determined elsewhere.

Education becomes the production of adaptable labor rather than the construction of collective national capability.

The result is a familiar contradiction. Filipino workers are praised as globally competitive precisely because the domestic economy cannot absorb them productively. Their skill becomes an export commodity. Their departure for foreign employment is treated as proof of employability rather than evidence of the weakness of domestic production.

The old demand for bread is therefore not merely a demand for food assistance. It is a demand for wages sufficient to purchase food, secure occupations through which households can plan their futures, and a productive economy that does not treat labor export as one of its most dependable sources of foreign exchange.

Agriculture without agrarian power

The SONA claimed that agricultural production had been strengthening since 2023, citing irrigation, mechanization, processing systems, cold storage, crop insurance, coconut planting, National Food Authority procurement, land-title distribution, and the cancellation of agrarian-reform debts.

Many of these measures are useful. Debt cancellation can free agrarian-reform beneficiaries from obligations they should never have carried indefinitely. Titles can provide legal security to families that waited decades for formal recognition. Irrigation, storage, processing, insurance, and machinery can improve production when designed around the actual circumstances of farmers and fishing communities.

The official data nevertheless complicate the celebratory narrative. The value of agricultural and fisheries production declined by 0.3 percent in the first quarter of 2026. Crop production fell by 2.4 percent and fisheries by 6.1 percent.

Measured by volume, crop production declined by 4.6 percent. Sugarcane output fell by 8 percent, palay by 6.3 percent, and corn by 5.5 percent. Fisheries production fell by 15.3 percent from the same period a year earlier.

These results do not mean that every program cited by the President was fictional. They demonstrate that distributing inputs is not the same as achieving structural transformation.

Forty thousand machines do not automatically produce agricultural progress. Machinery may be inappropriate to farm size, unavailable when needed, poorly maintained, or dependent upon imported fuel and replacement parts. Irrigation infrastructure may exist without reliable water. Cold-storage facilities may be too distant from producers or controlled by private intermediaries. Insurance may be difficult to claim. Titles may be distributed without affordable credit, extension services, cooperative organization, or bargaining power.

Food security cannot be reduced to the physical quantity of output. It encompasses land tenure, producer income, credit, storage, processing, transportation, market power, public procurement, import timing, and the distribution of risk among farmers, traders, consumers, and the government.

The country uses imports to restrain consumer prices but often does so without a sufficiently strong long-term program to improve domestic productivity and farmer income. Cheap imports may temporarily benefit urban consumers while lowering farm-gate prices, discouraging local production, and increasing dependence upon the next round of imports.

The administration’s low-priced rice program illustrates the contradiction. Consumers understandably welcome cheaper rice. But when low retail prices are sustained through imports produced under conditions unavailable to Filipino farmers, the policy may assist one class of poor citizens by impoverishing another.

Food security requires a deliberate balance between consumer affordability and producer viability. It demands land reform, public procurement, buffer stocks, irrigation, research, extension, rural credit, domestic production of inputs, storage, processing, transportation, and protection against destructive import surges.

It cannot mean permanent protection for inefficient intermediaries. Neither can it mean permanent dependence upon the world market.

The promise to plant 100 million coconut trees demonstrates the same problem of treating a physical target as an industry. A coconut industry requires nurseries, disease-resistant varieties, scientific breeding, processing plants, product laboratories, quality standards, domestic brands, financing, and producer participation in high-value goods such as food ingredients, fibers, chemicals, pharmaceuticals, and engineered materials.

Without these institutions, the country may simply produce more raw or semi-processed material for firms that capture the greater value elsewhere.

Agrarian reform is likewise more than the distribution of documents. A farmer may possess a title while remaining dependent upon traders, landlords, lenders, processors, input suppliers, importers, and land developers. A formally titled but economically unviable farm can eventually be leased, mortgaged, fragmented, or reconcentrated.

The demand for land is therefore a demand for power over agricultural production. It means that those who cultivate the soil possess not only paper ownership but effective access to water, credit, technology, markets, processing, and political representation.

The SONA discussed agrarian beneficiaries. It did not confront agrarian power.

Electricity and the illusion of removing a charge

The President’s demand for amendment of the Electric Power Industry Reform Act and the prohibition of system-loss charges against consumers produced one of the strongest responses during the address. He said: “It is not the consumer’s fault that system losses occurred. It is therefore wrong to make consumers pay for them.”

He then shifted from requesting to demanding the immediate amendment of EPIRA, including removal of the value-added tax imposed upon system-loss charges.

The consumer’s grievance is legitimate. Households did not design the transmission and distribution system, negotiate power-supply agreements, determine generation investments, or select the structure of the electricity market. It is reasonable to require utilities and shareholders to bear losses caused by inefficient management, deficient maintenance, theft, poor metering, or inadequate investment.

Yet removing a line item from the bill does not make its underlying cost disappear. Technical losses occur in every electricity system. The relevant regulatory question is which losses are unavoidable, which arise from inefficiency, and who should absorb each category.

Without structural reform, the cost may simply return through another charge, a higher distribution rate, reduced investment, or a public subsidy.

IBON’s critique extends beyond system loss. It argues that 25 years of EPIRA shifted electricity away from the principle of public service and toward the revenue requirements of private generators, distributors, and traders. It describes Philippine electricity as possibly the most expensive in the region and argues that a small number of energy conglomerates have benefited from the privatized structure.

The precise regional ranking can vary according to exchange rates, subsidies, consumer categories, and the period measured. But the underlying burden is not in serious dispute: Philippine electricity is expensive relative to household income and poses a major obstacle to both social welfare and industrial production.

Electricity is not an ordinary commodity. It is an essential household service, an input into agriculture, and the foundation of industrialization. A system that produces high returns for private capital while imposing heavy costs upon households and domestic manufacturers weakens national development.

The proposed Sariling Kuryente Act, intended to make rooftop solar and battery systems easier to install, may assist some consumers. But it also illustrates the inequality of market-based escape. Households with sufficient capital or credit can purchase partial independence from the grid. Those without savings remain captive consumers.

A collective infrastructure problem is converted into an individual investment opportunity.

A developmental energy policy would ask not merely how Filipino households can purchase solar panels but how Filipino industries can manufacture panels, batteries, inverters, transformers, turbines, meters, and storage systems. It would connect public generation, grid development, renewable energy, industrial electricity rates, research, and domestic equipment manufacturing.

The SONA also promoted energy storage, natural-gas exploration, hydrogen, and renewed consideration of nuclear power. These technologies deserve serious evaluation. Nuclear energy in particular cannot be treated as an applause line. Any proposal must account for construction costs, financing risk, waste management, emergency planning, insurance, regulation, decommissioning, grid requirements, and the danger that delays or overruns will be transferred to the public.

The willingness to reopen EPIRA is welcome. Reform, however, should not be confined to removing one politically unpopular charge. It must examine market concentration, cross-ownership, long-term supply contracts, transmission bottlenecks, stranded costs, reserve requirements, regulatory capacity, public ownership, and the distribution of risks between consumers and shareholders.

Electricity is too important to be left entirely to the logic of private revenue.

Public service, private profit

The same conflict appears in transportation, water, housing, health, and education. The SONA praised service contracting, fare discounts, free rides, rail projects, public-vehicle modernization, toll reductions, port and airport fee relief, housing finance, and private-sector participation in classroom construction.

Each measure was presented as a technical response to a specific problem. The larger tendency was not examined: essential public services are increasingly treated as fields for private investment.

Transport, labor, consumer, and human-rights groups participating in an IBON-hosted forum summarized the tendency as “public service, private profit.” They raised the privatization of airport operations, toll increases, transport-network vehicle conditions, public-vehicle modernization, possible privatization of MRT-3, and infrastructure projects that threaten communities and livelihoods. Their proposed alternative was a mass-transport system that is accessible, affordable, safe, and publicly accountable rather than principally organized as a commercial opportunity.

The issue is not that private capital can never participate in infrastructure. The issue is the routine assumption that private provision is inherently more efficient and that public obligations can be fulfilled through commercially attractive contracts.

A private concessionaire must recover costs, service debt, satisfy shareholders, and produce profit. Unless the contract and regulator are unusually strong, these requirements are transferred to users through fares, tolls, fees, land development, guaranteed payments, or public subsidies.

Public-private partnerships may privatize decision-making and revenue while preserving public liability. The government supplies land, guarantees demand, finances connecting infrastructure, relocates communities, or absorbs political risk. The concessionaire receives a long-term revenue stream. The transaction is then described as development because a physical facility has been constructed.

The same principle applies to the SONA’s announcement that private partners would construct an initial 16,000 classrooms. The important questions include not only the number of rooms but also the financing structure, repayment obligations, maintenance arrangements, land use, procurement process, and long-term cost to the education budget.

A classroom is a public necessity. The means by which it is financed determine whether it becomes a durable social asset or another contractual revenue stream.

The neoliberal state is not merely a small state. It is a state that defines more areas of social life as opportunities for investment while using public resources to make those opportunities profitable.

Education: devices without mastery

The education portion of the SONA contained many defensible commitments: school feeding, counselor associates, teacher promotions, additional positions, classrooms, technical and vocational programs, scholarships, devices, digital connectivity, and artificial-intelligence literacy.

The danger is that the government continues to describe the education crisis through inputs and participation rather than learning.

A laptop is not literacy. A smart television is not mathematical competence. An artificial-intelligence seminar is not critical thinking. A university ranking is not proof that the average Filipino child can read an age-appropriate text.

The World Bank reported in April 2026 that 91 percent of Filipino ten-year-olds could not read and understand an age-appropriate passage, a condition described as learning poverty. It approved a $600 million project aimed at improving foundational literacy, numeracy, and mathematics for more than 21 million students and approximately 770,000 teachers.

In such circumstances, the first technology policy is still reading. The first artificial-intelligence policy is the capacity to distinguish evidence from assertion. The first innovation policy is a teacher with adequate preparation, manageable class sizes, appropriate materials, and sufficient time to teach.

The SONA should have established a limited number of measurable national learning obligations for the remaining years of the administration: the proportion of Grade 3 pupils reading at grade level, reductions in classroom congestion, teacher mastery of subject matter, remediation for learners promoted without minimum competence, and improvements in attendance and nutrition.

Devices and training participants can be counted immediately. Learning must be measured over time, and its results may be politically uncomfortable. That is precisely why it is the more important measure.

Health coverage without full financial protection

The President also reported the expansion of PhilHealth benefits, medicine programs, zero-balance billing, medical assistance, accredited providers, and treatment packages for cancer, heart disease, HIV, tuberculosis, and developmental disabilities.

These programs can materially reduce suffering. But enrollment and benefit expansion must be distinguished from genuine financial protection.

A person may be enrolled in PhilHealth yet continue to pay for medicines, diagnostic procedures, transportation, professional fees, or services unavailable in a public facility. A zero-balance policy in selected wards does not necessarily eliminate expenses incurred before admission, after discharge, or outside participating hospitals.

The government should therefore report not only how many families used PhilHealth or obtained zero-balance billing, but how much household out-of-pocket spending actually declined, how frequently claims were denied or remained incomplete, how long patients waited, whether medicines were available, and how access differed among regions.

Medical assistance should also be transformed from an act of discretionary political benevolence into an enforceable social right. The move toward electronic applications and fewer documentary requirements is welcome. The ultimate objective should be to make endorsements and guarantee letters unnecessary because the health system itself finances medically necessary treatment.

Pax Silica and the modernization of the enclave

The most revealing industrial promise in the SONA was Pax Silica. The President described the proposed industrial hub as an advanced manufacturing and logistics center with artificial intelligence at its core. It would supposedly create quality employment, strengthen industrial competitiveness, and place the Philippines within the global technology value chain.

The vocabulary was futuristic, but the economic model was familiar. The Philippines would provide strategic location, land, labor, infrastructure, energy, minerals, tax incentives, and access to regional markets. Foreign firms would provide capital, technology, and participation in international production networks. The government would call the resulting arrangement industrialization.

IBON’s analysis asks whether Pax Silica represents genuine industrial development or a higher-technology version of the export-processing enclave. The Philippines has offered approximately 1,620 hectares in New Clark City as a location for foreign-owned, artificial-intelligence-enabled firms. The wider initiative has been promoted with claims involving substantial foreign assistance, critical-mineral development, enormous private investment, and up to one million jobs under the Luzon Economic Corridor.

These possibilities are not impossible. They are not self-executing. Investment commitments are not the same as capital actually spent. Construction employment is not the same as permanent industrial occupation. A technologically advanced export facility is not automatically a nationally rooted industry. The presence of sophisticated equipment does not mean that domestic firms possess the technology.

The Makati Business Club identified similar omissions from a different ideological direction. It noted that the administration failed to distinguish facilitated investment commitments from actual capital inflows, that net foreign direct investment had declined during the first four months of 2026, and that the SONA offered no concrete Pax Silica roadmap covering governance, power, infrastructure, investors, skills, local supply chains, and safeguards. It also asked how the project would differ from conventional Philippine Economic Zone Authority enclaves and how domestic value added would be increased.

This convergence is significant. IBON approaches the issue from a nationalist and anti-imperialist perspective. The Makati Business Club approaches it from the standpoint of business feasibility, governance, and competitiveness. Both identify the absence of a clear mechanism connecting foreign investment to domestic industrial capability.

The history of Philippine electronics manufacturing provides reason for caution. The country has participated in semiconductor assembly and related industries for decades. Electronics remain a major export category. Yet domestic ownership, design capacity, machinery production, and technological control remain limited. Foreign firms can expand, automate, relocate, merge, or close according to corporate strategies formulated elsewhere.

The product may be technologically advanced while the host economy remains technologically dependent.

IBON has pointed to Intel’s departure and the collapse of Hanjin Heavy Industries in Subic as examples of the vulnerability created by dependence upon foreign corporate decisions. It also argues that technology transfer and worker training take place primarily according to the profitability requirements of foreign firms rather than according to a Philippine industrial plan.

The central issue is not whether foreign capital is inherently undesirable. A developmental state can use foreign investment to obtain machinery, skills, export access, and technology. But this requires conditions: local-content schedules, domestic supplier programs, technology-transfer obligations, Filipino engineering and management targets, worker training, public research partnerships, environmental safeguards, taxation, labor rights, and the development of nationally owned competitors.

Without such disciplines, Pax Silica may produce sophisticated facilities while preserving an underdeveloped national economy around them. The enclave will import machinery, use Philippine land and electricity, employ Filipino labor, process materials for international clients, and export the resulting products. The value chain will be global, but Filipino participation may remain concentrated in its least powerful segments.

The proposed movement from raw mineral exports to domestic processing is desirable only if processing enlarges domestic capability and social benefit. A foreign-controlled facility that consumes Philippine water, electricity, land, and minerals to produce goods for foreign markets may be more technically elaborate than direct extraction. But the decisive questions remain: who controls production, who receives the profits, who bears the ecological cost, and what productive knowledge remains in the country?

This is why the issue cannot be reduced to China versus the United States. Supporters of Pax Silica may argue that a United States-led semiconductor and artificial-intelligence network is preferable to Chinese purchase of raw Philippine nickel and copper. Yet replacing a China-centered chain with a United States-centered chain does not automatically produce Philippine industrial sovereignty.

The relevant comparison is not China against the United States. It is dependency against development.

Pax Silica could contribute to industrialization if the state imposes a national program upon it. Without such a program, it will place artificial intelligence, semiconductors, critical minerals, and geopolitical language around the old export-processing model.

Resource extraction remains resource extraction even when the mineral passes through an attractive factory before leaving the country. Export processing remains export processing even when the product is called artificial intelligence.

Investment commitments and the accounting of aspiration

The President stated that more than ₱6 trillion in projects had been facilitated through the government’s Green Lane system and that these investments were expected to generate more than 400,000 jobs.

The magnitude of the figure produced the intended impression. But a facilitated investment is not necessarily an operating factory.

According to the Board of Investments, 244 projects worth approximately ₱6.43 trillion had received Green Lane certification as of March 2026. Yet 171 projects worth ₱5.79 trillion remained in pre-development.

This does not mean that the projects are fictitious. Large investments require permitting, financing, construction, and coordination. But proposed, approved, certified, financed, under-construction, operational, and fully productive projects are different categories.

A businesslike report should distinguish them. The relevant questions are how much capital has actually entered the country, how much has been spent, how many permanent jobs have been created, what wages are being paid, what proportion of equipment and inputs is supplied locally, how much tax expenditure has been granted, and what amount of technology and profit remains in the Philippines.

The SONA treated the pipeline as development. This resembles the older practice of presenting loan packages, project costs, and investment pledges as though the amount passing through the project were itself a measure of success. Development cannot be judged solely by the magnitude of money announced. It must be assessed according to the productive capabilities, incomes, institutions, and public assets remaining after the expenditure.

The upper-middle-income illusion

The administration has also celebrated the Philippines’ statistical classification as an upper-middle-income economy. The World Bank category is based on average gross national income per capita and is a legitimate tool for international comparison. It does not describe how income is distributed, whether employment is secure, or whether ordinary families can afford food, housing, utilities, education, and health care.

IBON argues that the label conceals the contradiction between aggregate income and mass hardship. It cited Social Weather Stations data indicating an increase in self-rated poor families from 12.2 million in June 2022 to approximately 14.5 million in March 2026. It also noted that manufacturing had fallen to 17.4 percent of GDP in 2025 and agriculture to 7.9 percent, historically low shares reflecting the weakness of domestic production.

Self-rated poverty is not the same as the official poverty-incidence measure, and the distinction should be preserved. But self-rated poverty captures insecurity that average national income can obscure.

The country may cross an international income threshold while millions remain in informal work, wages lag behind living costs, public services remain inadequate, and domestic productive sectors continue to weaken.

The distinction is not an argument against growth. It is an argument about the composition and distribution of growth. An economy can expand through trade, real estate, finance, privatized utilities, remittances, business-process outsourcing, and foreign-controlled enclaves without constructing the agricultural and industrial base required for broad, secure, and sovereign development.

The government measures progress through average national income. The household measures it through the price of rice, electricity, transportation, rent, medicine, and schooling.

Both measurements are real. Only one determines whether a family eats adequately at the end of the month.

Tax relief, debt, and temporary generosity

The SONA proposed raising the personal income-tax exemption, reducing other income-tax liabilities, removing the minimum corporate income tax for small firms, and granting amnesty for several forms of unpaid taxes and penalties. These measures may support consumption and offer relief to formal enterprises. But the fiscal explanation was incomplete.

Permanent services require permanent revenue. Recovered corruption proceeds cannot finance recurring obligations indefinitely.

The administration repeatedly linked funds recovered or saved from flood-control corruption to education, food, health, PhilHealth, and medical assistance. The redirection of stolen or improperly allocated money is proper. It is not a sustainable fiscal system.

Schools, hospitals, pensions, public transport, and food programs require predictable annual revenue. Recovered assets are uncertain and nonrecurring.

Tax amnesties also raise questions of equity. An amnesty may encourage delinquent taxpayers to return to the system and may clear accounts that are otherwise difficult to collect. Repeated amnesties, however, can teach taxpayers that delay will eventually be forgiven. The salaried worker whose taxes are withheld automatically receives no comparable opportunity to withhold payment until a future settlement.

A progressive fiscal strategy would place greater weight upon concentrated wealth, inherited assets, property gains, monopoly profits, luxury consumption, speculative transactions, extractive rents, and the enormous value transferred through fiscal incentives and public-private partnership guarantees.

IBON’s criticism of the 2026 budget is that, despite the political theater surrounding supposed restraint and reform, the fiscal structure remained oriented toward patronage, political survival, debt service, and consumption-led growth rather than sustained investment in domestic agriculture, Filipino industry, and universal public services.

Its wording is polemical. The absence of a coherent industrial transformation program in the SONA gives the criticism weight.

Sovereignty at sea, dependency on land

The closing foreign-policy passages were among the strongest portions of the speech. The President reaffirmed the 2016 arbitral award, promised to defend it through peaceful and legal means, and honored the Armed Forces, Coast Guard, and fisherfolk who maintain the country’s maritime presence.

The defense of maritime rights is necessary. But sovereignty cannot be limited to maps, patrols, legal awards, and diplomatic declarations. It must extend to economic life.

A country is not fully sovereign when foreign powers determine the direction of its most advanced industries. It is not food-sovereign when farmers depend upon imported fertilizer, fuel, machinery, and unstable trade policy. It is not energy-sovereign when households and factories bear the cost of imported fuel and privately controlled electricity. It is not technologically sovereign when foreign corporations own the designs, equipment, software, and intellectual property upon which domestic production depends.

The contradiction in the SONA is that it used the language of self-sufficiency while deepening integration into foreign-led supply chains.

The President declared that Filipinos do not yield. But the address did not clearly state what conditions foreign investors must accept to protect domestic ownership, labor rights, natural resources, environmental integrity, and regulatory authority.

Sovereignty is not the refusal of international cooperation. No modern country produces everything it requires. Sovereignty is the ability to enter cooperation according to a national development plan rather than merely offering the country’s labor, land, minerals, and location to the plans of others.

Foreign policy must finally be judged by its developmental result. Do trade agreements build markets for Filipino-owned producers or merely expose them to more powerful competitors? Do technology partnerships create domestic knowledge or permanent dependence upon imported systems? Do security arrangements defend Philippine territory without surrendering diplomatic autonomy? Does foreign investment establish domestic industries or merely locate foreign production inside Philippine borders?

A nation exercises sovereignty not by refusing every alliance but by ensuring that each alliance enlarges its capacity for independent action.

The distorted opposition of the Dutertes

The inadequacy of the Marcos administration does not make the Dutertes a genuine alternative. It is unsurprising that diehard Duterte supporters would construct a distorted interpretation of the recent scandals, emphasizing whatever supports their own factional narrative while forgetting the continuities that implicate their political period.

They speak endlessly of flood-control corruption, the 18 alleged former servicemen presented as bagmen, and suitcases supposedly filled with money connected to former representative Zaldy Co. The purpose is often not to expose the political economy of corruption but to present the Dutertes as cleaner, more decisive, or more concerned with ordinary people than the Marcoses.

The available evidence does not permit such an innocent division. An Anti-Money Laundering Council investigator testified that approximately ₱802 million flowed from Sunwest Construction accounts to Co between 2019 and 2025. Prosecutors offered the transactions as evidence that Co remained a beneficial owner of the contractor despite his claimed divestment. The period spans both the Duterte and Marcos administrations.

The chronology is inconvenient to factional propaganda. It suggests that contractor influence and financial networks may survive changes in administration and alliances. A political-business network can operate under one president, adjust to another, and continue functioning even after the coalition between their families collapses.

The allegations of the so-called 18 Marines require similar discipline. The Armed Forces clarified that the individuals were no longer serving at the time of the alleged acts and that not all of them had been members of the Marine Corps. The National Bureau of Investigation later stated that the cash-delivery allegations remained unproven because of the absence of independent evidence, corroborating documents, and witnesses with direct personal knowledge.

This does not prove that every allegation was false. It establishes that an affidavit, a press conference, or a dramatic story about suitcases is not a substitute for corroborated evidence.

A viral video represented as footage of an actual suitcase delivery was also found to be unrelated footage from a repatriation flight. Other fabricated and artificial-intelligence-generated material involving Co circulated during the controversy.

A credible opposition must distinguish among authenticated bank records, sworn allegations requiring investigation, hearsay, circumstantial evidence, and manufactured digital propaganda.

Hatred of Marcos cannot transform false material into truth. Senator Alan Peter Cayetano supplied the more sophisticated version of the Duterte faction’s case. Discussing the detention or flight of members of the Senate minority, he said: “I believe that Senator Bato is in hiding unjustly because he cannot obtain justice. I believe that Senator Jinggoy Estrada and Senator Rodante Marcoleta are political prisoners and that, if the justice system had not been weaponized, they would at least have been allowed to post bail.”

He then asked: “Tell me that I am wrong, but should they be allowed to attend the impeachment trial? Tell me that I am wrong and that they are not political prisoners, but are they receiving justice? Is justice equal for everyone, or do we now have selective justice?”

Cayetano also called for the flood-control investigation to be completed, for those responsible to be held accountable, and for genuine institutional reforms. He asked: “Are we addressing the fact that whenever a Filipino needs a license, a business permit, pays real-property tax, or deals with customs, a payoff is expected? The culture of corruption continues to hold the country in its grip.”

The general questions are legitimate. Justice must indeed be equal. An anti-corruption campaign that prosecutes enemies while protecting allies is political vengeance administered through legal institutions.

But Cayetano weakened his principle by declaring powerful political allies to be political prisoners before the resolution of their cases.

Estrada and Marcoleta were detained in relation to accusations of plunder. Ronald dela Rosa was evading an International Criminal Court process connected with alleged crimes against humanity arising from the Duterte drug campaign. They possess rights to counsel, impartial proceedings, due process, and protection against unlawful treatment. Their political affiliation does not automatically convert criminal prosecution into political persecution.

Human-rights advocates objected that the use of political prisoner for politicians accused of corruption insulted hundreds of activists and organizers imprisoned because of their beliefs, advocacy, or political activity. Karapatan cited the experience of activists arrested during the Duterte administration and argued that prosecution for alleged plunder was not equivalent to imprisonment for organizing peasants, workers, indigenous communities, or political dissent.

The inconsistency is particularly striking because many Duterte allies displayed far less concern when activists, journalists, farmers, human-rights defenders, and opposition figures were red-tagged, prosecuted, threatened, or imprisoned under the previous administration.

Due process becomes sacred when its beneficiaries are senators. It was often treated as an inconvenience when its beneficiaries were poor, marginal, and politically inconvenient.

Cayetano’s intervention must also be understood in light of his long association with Rodrigo Duterte. He was Duterte’s vice-presidential running mate in 2016, served in his Cabinet, became House Speaker during his administration, and publicly defended major elements of the drug-war narrative. His concern over selective justice is not invalid merely because of this history. But the history requires the reader to ask why the language of civil liberty becomes most urgent when the persons in danger are members of his own political bloc.

Vice President Sara Duterte’s response to the SONA was less elaborate but more revealing. She said: “I did not watch the SONA, just as I did not watch it last year. I have no plan to read its contents or even a summary because I truly believe it is a waste of the Filipino people’s time.”

She reportedly made the remark while in The Hague on July 27, 2026. The statement was honest in a way she may not have intended. It exposed an opposition unwilling to perform the elementary intellectual work of opposition.

A presidential address may be misleading, selective, inflated, propagandistic, or dishonest. Those are reasons to examine it carefully, compare its claims with budgets and outcomes, and expose its contradictions. They are not reasons to refuse even to read a summary.

To dismiss the speech without scrutiny is to abandon the work of opposition: comparing promises with appropriations, statistics with household experience, declarations of reform with actual institutional change, and claims of national interest with the interests materially served.

One Duterte ally attempts to appear concerned with institutions, corruption, and equal justice. The other offers aloof contempt. Cayetano adopts the vocabulary of reform while directing it primarily toward the protection of political allies. Sara Duterte behaves as though hostility toward Marcos were itself a complete program of government.

What do their most enthusiastic supporters offer beyond opposition to Marcos? Another Duterte. That is not an alternative political economy. It is a competing claim upon the same state.

The Marcos and Duterte factions are not identical. They possess different styles, constituencies, regional networks, foreign-policy preferences, rhetorical methods, and relations with sections of the oligarchy. But both are deeply personalistic. Both rely upon political families, patronage alliances, police or military authority, discretionary public expenditure, and loyalty to personalities.

Both convert popular anger into allegiance to a dynasty. As their conflict is genuine as a struggle over office, protection, resources, succession, and control of state institutions. It is considerably less meaningful as a conflict between alternative social systems.

Neither faction proposes the redistribution of land, the strengthening of organized labor, the socialization of essential utilities, the dismantling of oligarchic monopolies, or a nationally controlled program of industrialization.

Their dispute is over who will administer the old structure, not whether the structure should survive. The Marcoses and the Dutertes are not identical coins. They are two sides of the same debased one.

Land, bread, justice, and sovereignty

The central absence of the SONA can be summarized through four demands older than its slogans: land, bread, justice, and sovereignty.

Land means more than distributing certificates while rural production remains subordinated to landlords, traders, lenders, importers, processors, land developers, and agribusiness corporations. It means effective control of the soil by those who cultivate it, protection against reconcentration, freedom from usurious debt, affordable credit, irrigation, domestic inputs, cooperative organization, and participation in processing and marketing.

Bread means more than rice assistance and temporary price limits. It means wages sufficient to maintain a household, secure employment, affordable electricity and water, public transportation, housing, health care, education, and an economy organized around producing what the domestic population requires. Bread is not charity. It is the material result of productive and distributive justice.

Justice means more than prosecuting the enemies of the administration. It includes accountability for contractors, legislators, and officials, but also justice for communities endangered by ghost infrastructure, for workers denied lawful wages, for farmers deprived of land, for households overcharged by utilities, for communities displaced by extraction and development, and for activists imprisoned or killed for challenging entrenched power. Justice cannot be selective between Marcos and Duterte camps. Neither can it be restricted to spectacular cases involving prominent personalities.

Sovereignty means more than defending maritime rights or invoking the arbitral award. It is the material capacity to determine how land, minerals, energy, water, labor, technology, finance, and industry will be used. It is the authority to impose national obligations upon foreign capital and to refuse arrangements that convert the country into an extraction site, military platform, labor reserve, or export enclave.

These demands are interconnected. Without land reform, food security remains dependent. Without decent wages and domestic production, bread remains precarious. Without institutional accountability, justice remains factional. Without productive capacity, sovereignty remains ceremonial.

The system of hope

It is not surprising that both Marcos and Duterte forces speak in the language of hope, concern, patriotism, justice, and national interest. Every ruling order must represent its own survival as the welfare of the nation.

The Marcos version is managerial and technocratic. It promises infrastructure, digitalization, foreign investment, artificial intelligence, clean energy, social protection, and orderly institutional reform. On the other hand, the Duterte version is combative and personalistic. It promises discipline, punishment, decisiveness, independence, and protection against enemies.

One offers modernization administered from above. The other offers anger administered from above. But Neither gives the people control from below.

This is why the 2026 SONA ultimately felt like a rehash. The details were new, but the sequence was old.

First, a crisis exposes the weakness of the economic structure. Second, the government attributes the crisis to war, world prices, corrupt individuals, or implementation failures. Third, temporary assistance is distributed. Fourth, foreign investment and infrastructure are announced as the long-term solution. Fifth, the President appeals for unity, patience, and confidence.

The country has waited through import liberalization, privatization, deregulation, export processing, public-private partnerships, Build, Build, Build, Build Better More, economic corridors, and now Pax Silica.

Each formulation promises that the next inflow of capital, the next infrastructure cycle, the next free-trade agreement, or the next position in a global value chain will finally produce development.

Yet land remains concentrated. Wages remain inadequate. Employment remains insecure. Electricity remains expensive. Agriculture remains vulnerable. Domestic manufacturing remains shallow. Political patrons continue to profit from budgets and contracts. Natural resources continue to be organized according to external demand.

Hope becomes an instrument of administration. It persuades people to interpret every failure as preparation for an approaching success. The promised future protects the institutions responsible for the present.

Beyond the recycled address

A serious State of the Nation Address would begin not with the number of beneficiaries reached but with the distribution of power that made so many people dependent upon assistance.

It would ask why farmers remain poor despite producing food; why workers remain insecure despite economic growth; why households pay so much for electricity; why public infrastructure becomes a source of kickbacks; why public services become revenue streams; and why decades of foreign investment have not created a deep Filipino-owned industrial base.

It would judge investment by actual capital spent, domestic value added, technology acquired, Filipino ownership, labor conditions, and ecological cost.

It would judge employment by wages, permanence, rights, and productive content.

It would judge agriculture by farmer income, land control, food affordability, and processing capacity.

It would judge health policy by the reduction of household medical spending, education by demonstrated learning, and anti-corruption policy by the ability to prosecute allies as well as opponents.

Most importantly, it would treat the people not merely as beneficiaries but as economic and political agents.

The 2026 SONA described an active administration. It did not describe a transformed state. It offered relief without redistribution, investment without industrial sovereignty, land titles without agrarian power, employment without secure occupations, and prosecution without the dismantling of patronage.

The country has heard this address before, spoken by different presidents under different slogans, with different foreign partners and political enemies.

Its central promise remains that development is approaching. Its central requirement remains that the people continue to bear the cost of waiting.

Until land, bread, justice, and sovereignty become the organizing principles rather than the ceremonial decoration of public policy, the annual State of the Nation Address will remain what it has too often been: an eloquent account of how the old order intends to survive another year.

***

References

Bello, W., Docena, H., de Guzman, M., & Malig, M. (2004). The anti-development state: The political economy of permanent crisis in the Philippines. Zed Books.

Board of Investments. (2026, April 7). Green Lane projects advance, supporting ₱6.43 trillion investment pipeline.

Harvey, D. (2005). A brief history of neoliberalism. Oxford University Press.

Hutchcroft, P. D. (1998). Booty capitalism: The politics of banking in the Philippines. Cornell University Press.

IBON Foundation. (2026a). 2026 budget: Sound and fury, signifying…

IBON Foundation. (2026b, February 10). Impeachment dismissal shields President from accountability, subverts people’s right to the truth.

IBON Foundation. (2026c, May 14). Will Pax Silica industrialize the Philippines?

IBON Foundation. (2026d, June 27). Jobs and Pax Silica: The song remains the same.

IBON Foundation. (2026e, July 1). Transport, consumer and rights groups call for people-centered mass transport ahead of SONA.

IBON Foundation. (2026f, July 3). EPIRA has delivered profits for a few, not affordable power to Filipinos.

IBON Foundation. (2026g, July 5). PH is upper middle-income, Filipinos aren’t.

IBON Foundation. (2026h, July 7). Higher prices for rice, LPG, electricity squeeze Filipino families.

IBON Foundation. (2026i, July 24). Rising hardship exposes deep cracks in Philippine policies ahead of SONA.

Karapatan. (2026, July 22). Former political prisoner twits Cayetano on his remarks on political prisoners in the impeachment trial.

Makati Business Club. (2026, July 28). President Ferdinand Marcos Jr.’s fifth State of the Nation Address: Hits and misses.

Marcos, F. R., Jr. (2026, July 27). Fifth State of the Nation Address [Speech]. Congress of the Philippines.

Philippine Statistics Authority. (2026a, May 6). Value of production in Philippine agriculture and fisheries declines by 0.3 percent in the first quarter of 2026.

Philippine Statistics Authority. (2026b, May 7). GDP grows by 2.8 percent in the first quarter of 2026.

Philippine Statistics Authority. (2026c, July 7). Summary inflation report: Consumer price index, June 2026.

Philippine Statistics Authority. (2026d, July 8). Underemployment rate declined to 12.2 percent in May 2026.

Philippine Statistics Authority. (2026e). Volume of production of agriculture and fisheries, January to March 2026.

Reuters. (2026, July 27). Philippines’ Marcos puts anti-graft campaign at center of address to Congress.

SunStar. (2026, July 28). Sara Duterte calls SONA “a waste of time.”

VERA Files. (2026, June 10). Repatriation flight video misrepresented as footage of “maleta” delivery.

World Bank. (2026, April 3). World Bank backs better learning for 21 million Filipino students.

The Debt You Owe Even When You Owe Nothing

2026-07-26T13:57:45.768-07:00

The Debt You Owe Even When You Owe Nothing

Neoliberalism’s defenders call it responsibility. Its critics call it discipline by insecurity. Both sides deserve to be heard—but only one side explains why success now feels like failure.

Capitalism once defended itself largely by pointing to what it produced: factories, trade, technological development, accumulated savings and expanding material abundance. Its neoliberal form makes a more intimate claim. It offers not merely an economic system, but a moral education.

The citizen must be responsible. The worker must remain employable. The student must invest in himself. The household must anticipate every emergency. The borrower must repay. The unemployed must retrain. The successful must keep growing. The struggling must improve his attitude.

Even the person who owes no money is encouraged to live as though he were indebted.

He must ask whether he has worked enough, saved enough, learned enough and planned far enough into the future. His education becomes an investment, his abilities become human capital, his personality becomes a brand and his future income becomes something to be managed in advance.

This is how debt becomes more than a financial instrument. It becomes a model of citizenship.

The neoliberal message is not simply, “Pay what you owe.” It is: live as someone who must perpetually justify his security through performance.

That claim deserves criticism. But criticism should begin by taking its defenders seriously.

The defenders’ case

To dismiss every market liberal as an apologist for creditors would be too easy. The defense of responsibility, interest and contractual obligation rests on arguments that are neither absurd nor entirely false.

Friedrich Hayek’s case begins with freedom. A society cannot genuinely grant individuals the right to choose, he argued, while systematically insulating them from the consequences of their choices. Liberty means both opportunity and burden. An individual, in Hayek’s words, “must bear the consequences of his actions” because responsibility allows learning, moral development and social coordination (Hayek, 1960, p. 71). (Institute of Economic Affairs)

This is the philosophical heart of the neoliberal defense. Without consequences, choice becomes theatrical. A person may claim the freedom to borrow, invest, resign, purchase, refuse or take risks, but others would be compelled to absorb every resulting loss. In that world, defenders argue, responsibility disappears while moral hazard expands.

Milton Friedman made a related argument against paternalism. The free citizen should not be treated as a dependent ward of government. Economic liberty requires that people be allowed to use their income, property and labor according to their own preferences. That freedom carries what Friedman called responsibility for one’s “own destiny,” rather than an expectation that political institutions should direct every outcome or repair every disappointment (Friedman, 1962/2002). (The New Yorker)

The point is not necessarily that all unfortunate people deserve their misfortune. It is that a system based on voluntary exchange cannot function when every undesirable outcome is retrospectively declared illegitimate. Contracts would lose credibility. Lending would become more expensive. Savings would be discouraged. People who acted prudently would be required to cover the decisions of those who did not.

The defense of interest follows the same reasoning. Ludwig von Mises rejected the idea that interest is simply a mysterious tribute paid to people who already possess money. Interest, in Austrian economics, arises from time preference: present goods are generally valued more highly than equivalent goods available only in the future. The lender gives up present command over resources and receives compensation for waiting, uncertainty and foregone alternatives (Mises, 1949/1998). (Mises Institute)

Mainstream defenses add risk, inflation, administration and opportunity cost. A lender may not be repaid. Money lent today may lose purchasing power. The capital could have been invested elsewhere. Interest therefore coordinates saving and investment by placing a price on the use of resources over time.

This argument has real force. A blanket prohibition on interest would not abolish the cost of lending. It could instead drive lending underground, restrict credit to personal networks, encourage hidden charges or deny financing to borrowers without wealthy relatives.

Credit can also enable production rather than merely extraction. A farmer may borrow for machinery, a household for a home, a student for training and a firm for equipment. The World Bank’s financial-inclusion framework argues that credit histories can create “reputational collateral,” allowing borrowers without conventional assets to demonstrate reliability and obtain better terms later (World Bank, 2016). (World Bank)

Gary Becker’s theory of human capital supplies another defense of individual investment. Education and training can increase a person’s productive capacity and earnings just as investment in equipment can increase a firm’s output. Treating education as investment does not necessarily mean denying its cultural or civic value. It can simply mean recognizing that acquiring knowledge has costs, benefits and long-term returns (Becker, 1993). (University of Chicago Press)

Defenders also warn that indiscriminate debt forgiveness can generate moral hazard. Borrowers may take greater risks when they expect future relief. Governments may postpone tax reform or continue unsustainable spending if creditors repeatedly cancel obligations. Creditors, anticipating nonpayment, may raise interest rates or refuse to lend to responsible borrowers as well.

This concern is not invented. IMF discussions of sovereign debt have long identified fear of moral hazard as a reason creditors resist relief, while empirical research has examined whether debt cancellation weakens subsequent fiscal effort. Ferry, for example, found evidence that governments increased tax effort before qualifying for multilateral relief but sometimes relaxed that effort afterward (Ferry, 2019; Guitián, 1992). (IMF eLibrary)

The neoliberal defense can therefore be summarized without caricature: Debt makes useful activity possible before sufficient savings exist. Interest compensates time and risk. Repayment creates trust. Consequences make freedom meaningful. Discipline prevents resources from being consumed without accountability. Personal agency matters because people are not merely passive victims of social forces.

All of that may be true. The problem begins when a partial truth becomes a complete theory of society.

From responsibility to responsibilization

There is a difference between saying that individuals possess agency and saying that social outcomes principally reveal personal merit. There is also a difference between recognizing contractual obligations and treating every contract as morally conclusive. And there is a difference between charging legitimate interest and declaring the creditor’s claim superior to every other human need.

Neoliberalism crosses these lines when responsibility becomes responsibilization: the transfer of risks and obligations from institutions to individuals, followed by the moral judgment of individuals according to how successfully they carry those burdens.

Research on neoliberal governance describes this as the construction of citizens and consumers as autonomous, calculating and entrepreneurial subjects. Problems once considered social or institutional are reframed as matters requiring financially literate, environmentally responsible, health-conscious and self-managing individuals (Giesler & Veresiu, 2014; Prothero et al., 2026). (OUP Academic)

A pension system is weakened, and the citizen is told to invest more wisely.

Employment becomes insecure, and the worker is told to become resilient.

Housing becomes unaffordable, and the household is instructed to budget.

Education becomes expensive, and the student is advised to calculate his return on investment.

Healthcare costs rise, and the patient is told to make better lifestyle choices.

The institution withdraws, but responsibility does not disappear. It is deposited onto the individual.

This is not freedom from government so much as government through self-discipline. The person becomes his own supervisor, auditor and collection agency.

The contract is not the whole story

The defenders’ strongest word is choice. The borrower chose the loan. The worker chose the job. The student chose the degree. The tenant signed the lease. The household accepted the mortgage. The sovereign government issued the bonds.

But a signed contract tells us that a choice occurred. It does not tell us how free that choice was.

A worker may choose between an inadequate wage and unemployment. A family may choose between expensive borrowing and an untreated medical emergency. A tenant may choose between excessive rent and homelessness. A country may choose between an austerity package and the collapse of its reserves.

These are decisions. They are not necessarily free decisions in the substantive sense.

The market-liberal defense often focuses on the instant of consent while treating the circumstances that produced consent as external to the moral calculation. The lender possessed capital, alternatives and time. The borrower possessed a deadline.

Both signed. Therefore, they were supposedly equal.

The older condemnation of usury asked whether it was just to profit from another person’s necessity. Modern financial morality asks primarily whether the borrower technically agreed.

The contract becomes a laundering machine for power.

This does not mean contracts should be ignored whenever one party later regrets them. It means consent cannot by itself settle questions of justice, especially when essential goods are involved. Formal choice is real, but it exists within structures of ownership, scarcity and bargaining power.

The creditor is also a moral agent

The moralization of debt is usually asymmetric.

The debtor is examined for irresponsibility. Did he borrow too much? Did he consume instead of invest? Did he understand the terms? Did he save sufficiently? Did he fail to anticipate unemployment, illness or recession?

The creditor is more often described technically. The loan was priced. Risk was modeled. Exposure was securitized. Losses were provisioned.

But irresponsible lending exists as surely as irresponsible borrowing.

A lender may extend credit knowing the borrower is vulnerable. A bank may assume that collateral can be seized. Financial institutions may rely on government rescue when widespread defaults threaten the larger system. Investors may receive high yields precisely because an asset is risky and then demand public intervention when the risk materializes.

If responsibility is inseparable from freedom, it must apply to the creditor as well as the debtor. The lender who freely pursued a high return accepted the possibility of loss. Yet neoliberal political practice has frequently treated private financial losses as systemic emergencies while treating household or sovereign losses as occasions for discipline.

The risk travels upward during profit and downward during crisis.

This asymmetry is why the language of moral hazard can sound selective. Debt relief for households is condemned because it may encourage future borrowing. Rescue for financial institutions is justified because their collapse could harm everyone.

The systemic argument may sometimes be correct. A disorderly bank failure can cause widespread damage. But the moral lesson is unmistakable: the powerful are interconnected, while the weak are irresponsible.

Interest: price or power?

The defense of interest is strongest when credit finances productive activity, rates reflect genuine costs and the parties possess reasonable alternatives.

It becomes weaker when credit replaces wages, public services or social insurance.

A household borrowing to purchase productive equipment is not in the same position as a household borrowing for food before payday. A government financing industrial infrastructure is not identical to one borrowing repeatedly to service previous loans. A student financing education in a labor market capable of rewarding that education is not identical to one buying credentials because every employer has shifted training costs onto applicants.

Interest may be the price of time, but it is also a claim on future income. The borrower does not merely return past money. He transfers part of future wages, profits or tax revenue to the creditor. When borrowing is widespread, finance acquires a standing claim over production that has not yet occurred.

This is why the old word usury should not be discarded merely because modern economics has legitimate explanations for interest. Usury can still describe the point at which compensation for risk becomes exploitation of dependency.

The boundary cannot be found through contract alone.

From human capital to the human corporation

Becker’s theory of human capital was analytically useful. Education and training do affect productivity and earnings. The problem arises when the metaphor escapes the textbook and becomes an anthropology.

The person is told that he is capital. He must invest in himself, enhance his market value and produce an acceptable return. Every year outside paid employment becomes depreciation. Every skill without a commercial use becomes suspect. Education is judged by salary. Health is judged by productivity. Social relationships become networks. Leisure becomes recovery time for future work. The worker is transformed into a miniature corporation, except that he cannot declare limited liability against his own life. When his investment fails, he cannot write it off as a bad portfolio decision made under uncertainty. The failure attaches to his identity.

The language of human capital therefore encourages what may be called effortism: the belief that economic outcomes mainly reveal the quantity or quality of personal effort.

Those who succeed are assumed to have worked harder, chosen better and delayed gratification. Those who fail are presumed to have lacked discipline, motivation or foresight.

But effort and reward are not identical. Many of the most exhausting forms of socially necessary work are poorly paid. Ownership income, rent, inheritance and asset appreciation can generate far greater rewards than direct labor. Piketty’s historical research demonstrates the persistent role of accumulated and inherited capital in structuring inequality, challenging any easy identification of wealth with personal exertion (Piketty, 2014). (JSTOR)

The effortist formula is circular: The successful must have worked hard because they succeeded. While the unsuccessful could not have worked hard enough because they failed.

Privilege disappears into biography. Family wealth becomes good upbringing. Connections become networking. Publicly funded education becomes individual investment. Favorable timing becomes vision. Luck becomes courage.

The winner remembers every sacrifice and forgets every subsidy.

Motivationism: politics turned into coaching

Effortism’s emotional partner is motivationism. Motivationism translates social problems into deficiencies of attitude. Poverty becomes a lack of financial discipline. Unemployment becomes insufficient employability. Low wages become a skills problem. Economic stagnation becomes an entrepreneurial deficit. Exhaustion becomes weak resilience.

The preferred remedy is therefore psychological: Work harder. Improve your mindset. Leave your comfort zone. Build your brand. Learn new skills. Stop blaming others.

There is nothing wrong with motivation as personal advice. Initiative can improve an individual life. It becomes ideology when motivation is offered as a substitute for political economy.

Confidence cannot create jobs that do not exist. Financial literacy cannot compensate indefinitely for wages below the cost of living. Resilience cannot construct public transportation. Networking cannot substitute for industrial policy. A morning routine cannot break a monopoly.

The structural problem is not denied outright. It is simply moved outside the frame until only the individual remains visible.

The evidence against pure choice

The empirical case against effortism does not require denying individual agency. It requires observing that economic mobility varies dramatically according to place and social environment.

Chetty, Hendren, Kline, and Saez examined administrative records covering more than 40 million children and their parents. They found substantial geographical differences in upward mobility. Areas with higher mobility tended to have less segregation, less inequality, stronger primary schools, greater social capital and greater family stability (Chetty et al., 2014). (OUP Academic)

This does not prove that choices do not matter. It proves that the consequences and effectiveness of choices depend on circumstances.

The same degree of effort can yield different results in communities with different schools, labor markets, transport systems, social networks and levels of violence. The person is active, but he is not acting on an empty stage.

A serious theory of responsibility must therefore hold two ideas simultaneously: People make choices. But People do not choose the full conditions under which their choices acquire consequences.

Neoliberal moralism normally preserves the first proposition and forgets the second.

Success on probation

The system does not merely blame those who fail. It teaches successful people to experience success as temporary.

The employee met the target—but must exceed it next year.

The graduate obtained a degree—but must acquire another credential.

The business became profitable—but must scale.

The household purchased a home—but must protect its value.

The worker has a job—but must remain employable.

The saver accumulated money—but not enough for every imaginable emergency.

Success does not provide arrival. It creates a maintenance obligation. This is not accidental. Security weakens discipline. A worker with savings, public services and reliable employment protection can refuse degrading conditions. A worker who fears falling must remain flexible, available and grateful.

Insecurity is therefore renamed motivation. Competition prevents laziness. Precarity encourages adaptability. Fear of unemployment rewards performance. Anxiety about retirement encourages saving. Dissatisfaction promotes growth.

The successful person becomes a debtor to his own future. Yesterday’s achievement is the principal. Tomorrow demands interest.

Social whataboutism

The everyday enforcement mechanism is social whataboutism. A person complains about his wage and is told that others are unemployed. A contractual worker asks for security and is told that somebody else would be grateful for temporary work. An exhausted employee is compared with somebody working two jobs. A struggling household is compared with another that survives on less.

This is the downward comparison: Others have it worse, so you have no right to complain.

Then comes the upward comparison: Others began with less and achieved more, so your failure is your fault.

Suffering is minimized by looking downward. Achievement is minimized by looking upward. The individual is instructed to feel grateful because someone possesses less and ashamed because someone has achieved more.

The exceptional success story becomes a weapon. One person escapes poverty, and the exception is presented as proof that poverty is voluntary. One entrepreneur survives adversity, and thousands of failures disappear from view.

But proof of possibility is not proof of equal opportunity. A man may swim across a dangerous river. That does not prove the bridge is unnecessary.

Social whataboutism also prevents solidarity. Public employees are turned against private employees. Regular workers are turned against contractual workers. Contractual workers are turned against the unemployed. Citizens debate who deserves less instead of asking why security has become scarce.

Deprivation becomes a competition in gratitude.

Austerity as national character-building

The moralization of debt scales from households to countries. A debtor state is told to restore credibility through spending restraint, wage control, subsidy reduction, privatization, liberalization and tax reform. Such policies may sometimes be necessary. Governments cannot indefinitely spend foreign exchange they do not possess or borrow without regard to repayment capacity.

But the language of adjustment is rarely neutral. It speaks of discipline, maturity, confidence and responsibility. The nation is treated like a disorderly household whose suffering is expected to improve its character.

Even economists writing in an IMF publication have acknowledged that parts of the neoliberal policy agenda—particularly capital-account liberalization and fiscal austerity—can increase inequality, impose significant welfare costs and potentially undermine the growth they are supposed to restore (Ostry et al., 2016). (IMF)

The central questions are political: Who incurred the debt? Who benefited from the expenditure? Who received the interest? What productive capacity was created? Whose income, employment and public services must be sacrificed?

The phrase national responsibility does not answer these questions. It often obscures them.

Debt service is treated as binding, while food, healthcare, education and industrial development become adjustable. The creditor’s contract is fixed. The citizen’s life is flexible.

Where the defenders remain right

A critique of neoliberal moralism should not become an apology for irresponsibility.

Promises matter. Fraud matters. Waste matters. Corruption matters. Borrowers can act recklessly. Governments can conceal liabilities, misuse loans and leave future generations with the bill. Debt relief can be poorly designed. Interest can compensate legitimate costs. Skills and effort can improve lives.

Nor should every inequality be treated as proof of oppression. People possess different preferences, accept different risks and make different decisions. A society that refuses to acknowledge agency can become paternalistic, bureaucratic and suffocating.

Hayek was right that freedom without any responsibility is incoherent. Friedman was right that citizens should not be reduced to wards of the state. Mises was right that time and risk have economic value. Becker was right that education and training can be investments. But their arguments become ideological when responsibility is demanded only from those below, while institutions above are treated as forces of nature.

The answer is not to abolish responsibility. It is to make responsibility reciprocal.

Responsibility to whom?

A democratic political economy would retain personal responsibility while widening its field.

Borrowers would be responsible for honest repayment, but lenders would be responsible for affordability, disclosure and reckless extension of credit. Workers would be responsible for competence, but employers would be responsible for adequate training, safe conditions and decent compensation. Citizens would be responsible for contributing to society, but society would be responsible for supplying the foundations that make contribution possible. Governments would be responsible for fiscal prudence, but creditors would share losses when they knowingly purchased risk.

Success would be respected without being confused with superior virtue. Failure would be examined without automatically becoming a judgment on character. Choice would matter, but the available choices would also be judged.

This is the difference between neoliberal responsibility and social responsibility: Neoliberal responsibility asks whether the individual adapted to the system. Social responsibility also asks whether the system fulfilled its obligations to the individual.

The first installs a creditor inside every mind. The second restores reciprocity between persons, institutions and communities.

The harshest achievement of neoliberal capitalism is not simply that it produces inequality. It is that it can make even successful people feel like failures-in-waiting. It moves the finish line, converts security into complacency and treats rest as an unpaid debt to the future.

The final command is no longer merely: "Pay what you owe." Instead it is: "Live as though your right to dignity, security and rest must be earned again every morning."

***

References

Becker, G. S. (1993). Human capital: A theoretical and empirical analysis, with special reference to education (3rd ed.). University of Chicago Press.

Chetty, R., Hendren, N., Kline, P., & Saez, E. (2014). Where is the land of opportunity? The geography of intergenerational mobility in the United States. The Quarterly Journal of Economics, 129(4), 1553–1623.

Ferry, M. (2019). The carrot and stick approach to debt relief: Overcoming moral hazard. Journal of African Economies, 28(3), 252–276.

Foucault, M. (2008). The birth of biopolitics: Lectures at the Collège de France, 1978–1979 (G. Burchell, Trans.). Palgrave Macmillan.

Friedman, M. (2002). Capitalism and freedom (40th anniversary ed.). University of Chicago Press. (Original work published 1962)

Friedman, M., & Friedman, R. (1980). Free to choose: A personal statement. Harcourt Brace Jovanovich.

Giesler, M., & Veresiu, E. (2014). Creating the responsible consumer: Moralistic governance regimes and consumer subjectivity. Journal of Consumer Research, 41(3), 840–857.

Guitián, M. (1992). Rules and discretion in international economic policy. International Monetary Fund.

Hayek, F. A. (1960). The constitution of liberty. University of Chicago Press.

Indarte, S., & Kanz, M. (2024). Debt relief for households in developing economies. Oxford Review of Economic Policy, 40(1), 139–159.

Lazzarato, M. (2012). The making of the indebted man: An essay on the neoliberal condition (J. D. Jordan, Trans.). Semiotext(e).

Mises, L. von. (1998). Human action: A treatise on economics. Ludwig von Mises Institute. (Original work published 1949)

Ostry, J. D., Loungani, P., & Furceri, D. (2016). Neoliberalism: Oversold? Finance & Development, 53(2), 38–41.

Peeters, R. (2019). Manufacturing responsibility: The governmentality of behavioural power in social policies. Social Policy and Society, 18(1), 51–65.

Piketty, T. (2014). Capital in the twenty-first century (A. Goldhammer, Trans.). Harvard University Press.

Prothero, A., McDonagh, P., O’Malley, L., & O’Shaughnessy, N. (2026). Beyond neoliberalism: The role of community in the responsibilization of citizen consumers. Journal of Consumer Research, 53(1), 70–98.

Sandel, M. J. (2020). The tyranny of merit: What’s become of the common good? Farrar, Straus and Giroux.

World Bank. (2016). How credit reporting contributes to financial inclusion. International Committee on Credit Reporting.