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UP honors martial law pillar

(Second of two parts )

THE University of the Philippines honors Cesar Virata by renaming its College Administration for him. By doing so, it is revering one of the main pillars of martial law and passing judgment that the dictatorship was on the whole good for the country. Virata was of course Marcos’ Finance secretary and Prime Minister.

If this is the belief of UP President Alfredo Pascual and the Board of Regents, then they should declare so, and let the academic community debate on it.

It is the height of intellectual dishonesty for the business college’s dean Ben Pascual Gutierrez, to justify the proposal by asserting that Mr. Virata is ”an influential man in the business community”, and that ”he laid the essential foundations for the development” of the college, and so on.

What defines Virata—his life’s work, as it were—was his deep involvement in the dictatorship as Marcos’ chief technocrat for 13 years from 1972 up to the minute he fled the country.

Marcos gave him full authority to run the economy, which fell into the deepest recession the country ever experienced, condemning millions of Filipinos to a life of poverty.

He never publicly protested then and now the killings and torture of Filipinos, many of whom were students and faculty of the university that is now about to honor him. He was a true believer of authoritarian rule, as his friend F. Sionil Jose inadvertently disclosed in his two-part puff piece on Virata in the Philippine Star:

“When asked by an American journalist what he thought of the [imposition of the martial law regime] Virata said, perhaps facetiously, that the Philippines had joined the rest of Asia.’ After all, many of the Asian governments at the time were openly authoritarian.”

Sionil quoted Virata: “The experience of our neighbors with their authoritarian governments was positive. I thought, perhaps, we would be able to do the same.”

A common description of Virata has been that he was untainted with corruption despite his enormous power during martial law. “I just did my duty,” Virata told Sionil.

But he certainly didn’t need to make money on the side. The Commission on Audit in 1983 reported that Virata was chairman or member of the board of directors of 22 government entities. If included were his posts representing the Philippines in the International Monetary Fund and World Bank, he would have 24 seats—beating Imelda Marcos who had 23 seats. If he got just P50,000 in salaries and honoraria from each of these government firms, he was making P1.2 million a month, a fortune during that time.

I asked Virata once in an open press conference to comment on this. He replied that the seats were ex-officio ones, that his post as Finance secretary required him to be there. Right. But he could have designated his underpaid undersecretaries and assistant secretaries to represent him, or maybe he could have waived his compensations in these firms to set an example for the bureaucracy.

The Supreme Court in a 1991 ruling involving the legality of government officials seating in many boards had harsh words for them: “Unscrupulous public officials who took advantage of this scheme for purposes of enrichment.”

Our GDP contracted 7 percent in 1984 and another 7 percent in 1985, a loss of economic output that set back the Philippine economy back a decade. This was the biggest factor that led to Marcos’ fall, as the elite made up their mind that the dictator would bring everyone to ruin, and therefore had to be overthrown.

Why did the economy collapse? In his Q & A with Sionil, Virata blamed it on so many factors: “The rapid increase in oil,” ”inflation”, “stress on the exchange rate and the foreign exchange reserves of the country. “

A word he didn’t mention even once: debt. From just 33 percent of our GNP in 1972, our foreign debt stock ballooned to 98 percent just before Marcos fell. Debt service as a percentage of the nation’s dollar income rose from 150% in 1972 to 326 percent—levels the country couldn’t afford.

The economy’s collapse was essentially a debt-crisis, similar to the ones that recently broke out in Greece and Cyprus. The country borrowed too much that it defaulted on the loans in October 1983, so that we were shut out as a pariah in the global financial community.

And who was in charge of the economy, in particular managing the country’s debts ? Finance Secretary Virata. In Sionil’s paean to Virata, he wrote, obviously clueless to its import:

“(Tired of Imelda’s complaints about Virata), Marcos said, ‘Without Virata, we cannot get the foreign loans we need since he is the man these institutions trust.’”

One of the biggest chunks in our foreign debt, and the most wasted, was the $2.2 billion loan contracted to finance the Bataan Nuclear Power Plant, which was aborted when Cory Aquino assumed power.

And who pushed for it together with Energy Secretary Geronimo Velasco? Virata.

Even after Marcos crony Herminio Disini was exposed in 1978 as to have received commissions from the supplier Westinghouse, Virata and Velasco were still negotiating with the company to lower the cost of the plant that had risen because of imposition of new safety regulations in the US in the wake of the 1979 Three-Mile island nuclear plant accident. As late as October 1982 Virata was even raising $250 million in the Euro-dollar market to cover partially the cost overruns of the nuclear plant.

Aside from Virata, the two other pillars of martial law were Defense Secretary Juan Ponce Enrile and Armed Forces Chief of Staff Fidel Ramos. But their consciences couldn’t let the killings – even the brazen assassination of Ninoy Aquino—go on. Enrile attempted a coup against Marcos, and when it failed Ramos went to defend him—and triggered the People Power Revolution.

In contrast, Virata remained Marcos’ true believer to the end. UP professor Teresa Encarnacion-Tadem in a paper published last year based on extensive interviews with Virata wrote:

“During this period (after Ninoy’s assassination) Virata said that members of the business community, such as Cesar Buenaventura of Shell Philippines and Jaime Ongpin of Benguet Mining Corporation, were pressuring him to resign to bring about the downfall of Marcos. Virata did not agree that the major issues to be addressed were corruption and the government’s economic policies and felt that these business leaders just wanted Marcos out.”

The Batasan Pambansa, first as an “interim body” and then as a permanent one supposedly authorized by the 1973 Constitution that Marcos had imposed, was the dictator’s grand scheme to fool the world that he lifted martial law in 1981 to create parliamentary democracy. It was a fake body, with a token opposition and packed with Marcos’ Cabinet members and his local political leaders elected in sham polls, in many cases through a show of raised hands.

Virata assumed there a new role as a politician, believing that he deserved to be member of parliament as he was elected to represent Cavite. In 1981, Marcos ordered the Batasan to elect Virata as Prime Minister, in his effort to portray to the world that a technocrat—the IMF, the World Bank, and Washington’s favorite boy in Manila—was in control of the economy.

It is astonishing how a man of Virata’s intelligence could delude himself into thinking that the Batasan was a genuine parliament and that he was elected by his peers, and not appointed by Marcos as his deodorizer to the world.

Tadem wrote: “Virata resigned as Minister of Finance on 16 February 1986… However, Virata did not resign as prime minister because he said he was elected to this position by the people and resigning would have meant a dereliction of his duty. Virata eventually learned later that Marcos offered the prime ministership to Juan Ponce Enrile to abort the military mutiny but Enrile refused the offer.” [Emphasis mine.]

“On 26 February 1986, Virata also resigned as prime minister although the president told him not to announce it, ” Tadem wrote. Marcos fled from Malacanang after midnight February 26. Virata was loyal to Marcos to the very last hour of the dictator’s rule.

After that, Virata, with his vast knowledge on and contacts in the Philippine bureaucracy and the financial world accumulated over more than a decade, was in high demand by the business sector and since 1986 had advised big businesses how to make bigger profits, until he settled down as corporate vice chairman of Rizal Commercial Banking Corp. I am not aware of any philanthropic project he has undertaken, nor any social cause he has championed.

Virata may be a nice, unassuming man with not a mean bone in his body. But a role model for the youth that the UP’s Board Regents named its business school for him?