Written Responses to Questions Submitted by Business Day and the Manila Chronicle of the Philippines

September 15, 1986

Philippine-U.S. Relations

Q. Did the United States switch its support from former President Marcos to President Aquino only at the 11th hour?

The President. U.S. support for the democratic process has been and continues to be the foundation of our Philippine policy. During the last years of the administration of former President Marcos, our specific policy goals, goals which enjoyed wide bipartisan support in Congress, were: to support Filipino efforts to reform and strengthen their political institutions; to encourage free-market reforms aimed at dismantling monopoly structures and reducing government intervention in the economy; and to support military reform aimed, particularly, at restoring military professionalism and ending military abuses of individual and human rights.

The culmination of our policy was the support and encouragement the United States gave to Filipino efforts to ensure that the February Presidential elections were free, fair, and credible. As you know, the United States support included sending an official delegation to observe those elections. Clearly, those elections were not conducted in a manner credible to the Filipino people. The events of February leading to the peaceful transition to a popular new government were a tribute to the deeply felt Filipino commitment to democracy. The United States moved swiftly to recognize the new democratic government of President Aquino. In so doing, we acknowledge the popular will of the Philippine people.

Philippine Internal Situation

Q. What is your attitude to President Aquino's approach to the insurgency, and what mix of military and economic assistance should support this approach?

The President. President Aquino's government has undertaken significant initial measures to revive the economy, whose previous decline had been one key contributing factor to the insurgency's growth. We hope these efforts will continue and that once the macroeconomic policies are in place additional measures targeted on the rural economy will be considered. Her government has also taken important steps to restore professionalism and capabilities to the Armed Forces. The ongoing efforts to explore the possibility of a cease-fire and amnesty with the Communist insurgents deserve a chance to be tested. At the same time, President Aquino has made clear from the outset that if her efforts to find a peaceful solution are rejected she will take appropriate measures, including whatever military action is necessary.

As for the nature of U.S. aid, we are in full agreement with President Aquino that priority must be given to economic aid to assist in economic recovery and equitable growth. This does not imply that military aid is not also required. U.S. Government officials, including the Secretary of State, have consulted closely with the Philippine Government on the need for continued military assistance to enhance the Philippine military's capacity to meet the threat posed by the Communist insurgency.

U.S. Military Bases

Q. How would the United States deal with a Philippine Government position against the extension of the tenure of U.S. military bases beyond 1991?

The President. The United States and the Philippines share the same interest in the preservation of freedom and democracy in the Pacific region. For this reason, I am confident that we will continue to enjoy a strong mutal defense relationship for the foreseeable future. President Aquino has pledged publicly to respect the military bases agreement through its current term. We understand and respect her position. We will discuss the future of our defense relations during the next scheduled review of these commitments in 1988.

Philippine Internal Situation

Q. How would the United States deal with the Aquino government if it achieved a modus vivendi with the left?

The President. The Philippine people must be the judge of the government they want in the Philippines. Given the Philippine people's deep and demonstrated commitment to democracy, I find it unlikely they would accept a government which included individuals whose goals are the very antithesis of democracy.

Nuclear Weapons in the Philippines

Q. How would you respond to a Philippine Government policy of banning U.S. nuclear weapons and nuclear capable ships from the U.S. facilities in the Philippines?

The President. I prefer not to deal with hypothetical situations. The United States policy is that we will neither confirm nor deny the presence of nuclear weapons aboard ships, aircraft, or stored in any facilities.

Philippine Economic Recovery

Q. Do you support President Aquino's economic recovery plan and her efforts to reduce the Philippines $26 billion debt vis-a-vis the private banks, the multilateral lending agencies, and in the Paris Club; and will the Baker plan benefit the Philippines?

The President. We strongly support the important actions that President Aquino and her government have taken to promote economic recovery in the Philippines. The government's tax reform program and the moves undertaken to break up the monopolies which have controlled the markets for certain commodities are vital steps toward restoration of a vigorous, growth-oriented, free-market economy. Significant steps are also being taken to liberalize existing trade restrictions and to bring public sector spending down to healthier levels. We anticipate continued progress in these essential areas as well.

Over the next few years, as the Philippine economy emerges from recession and begins to recognize its enormous potential, further Paris Club and private bank debt reschedulings may be necessary. This temporary adjustment period will give the Philippine Government the opportunity it needs to reestablish a solid basis for economic growth in the 1990's and beyond. The program for sustained growth proposed by Secretary [of the Treasury] Baker last year calls for the sort of structural economic reform now being initiated by the Philippines. Reforms such as these may be eligible for the lending support of the multilateral development banks.

U.S. Economic and Military Aid

Q. What is your government doing to assist the Philippines beyond the bases-related $900 million ``best efforts'' pledge?

The President. The aid package my administration has developed to assist the new Philippine Government in its economic recovery efforts includes and goes beyond the aid committed under the bases-related ``best efforts'' pledge. The major elements of the package include: an additional grant of $100 million in Economic Support Funds (ESF) during fiscal year 1986, recently appropriated by the Congress and which will soon be made available; the provision of $200 million of previous year ESF as direct support to the Philippine Government budget; conversion of $100 million of development assistance from loan to grant; and a supplemental grant of $50 million of military assistance in fiscal year 1986. The United States is increasing ``people-to-people'' assistance, such as feeding programs for infants and school children and health programs to reduce infant and child mortality. These programs are generally administered by private voluntary organizations.

U.S. Trade and Investment

Q. A growing number of Filipino businessmen want to see more trade and investment and less aid from the United States. Do you support this point of view?

The President. We are working hard to increase both trade with and investment in the Philippines. We believe that these are the real keys to the restoration of economic growth. In June Secretary [of State] Shultz gave a speech in New York to a group of U.S. business and banking executives in which he described the real potential for economic recovery in the Philippines and encouraged U.S. investors to participate. Businessmen, of course, will make their decisions on the basis of their own calculations of the Philippines economic potential. We believe the Philippine economy is on the road to recovery. We also believe businessmen will make a similar assessment.

Philippine Democracy

Q. Do you consider former President Marcos a threat to the Philippine democratic recovery, or are there other threats you perceive?

The President. The activities of the supporters of former President Marcos are not a real threat to the stability of the Philippine Government. The new Government enjoys the widespread support of the Filipino people and of the major sectors of Philippine society. Filipinos are now working at building new, democratically elected political institutions. The supporters of former President Marcos can best serve their country by working to strengthen Philippine democracy by participating in a constructive manner in the process of institution building. Clearly, the real threat to Philippine democracy is the threat posed by the Communist insurgency.

Note: The questions and answers were released by the Office of the Press Secretary on September 18.